|
on Labour Economics |
| By: | Farber, Henry (Princeton University); Rothstein, Jesse (University of California, Berkeley); Valletta, Robert G. (Federal Reserve Bank of San Francisco) |
| Abstract: | Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014. |
| Keywords: | extended unemployment benefits, job search, labor force |
| JEL: | J64 J65 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8784&r=lab |
| By: | Alex Bryson; Richard B. Freeman |
| Abstract: | Many large listed firms offer workers the opportunity to buy shares in the firm at discounted rates through employee stock purchase plans (ESPP). The discounted rate creates a gift exchange, where the firm hopes that workers who accept the gift reciprocate with greater loyalty and effort. But ESPPs diverge from standard gift exchange or efficiency wage models. Employees have to invest some of their own money by purchasing shares at the discounted rate to accept the gift. A sizeable number choose to reject the gift. In addition, the value of the ESPP gift varies with the share price and thus with the performance of the firm and the effort of workers in total. For workers who buy subsidized shares, an ESPP sets up a group incentive pay system analogous to profit sharing, all-employee stock options, or an employment ownership scheme that makes part of workers' compensation depend on company performance. |
| Keywords: | Share ownership; job search; quits; sickness absence; effort; gift exchange; incentives |
| JEL: | J24 J33 J54 J63 M52 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60524&r=lab |
| By: | Alexander M. Danzer |
| Abstract: | Large-scale pension reforms can have redistributive wage effects across generations and education groups when the labour market suffers from skill mismatch. A quasi-experimental ‘retirement shock’ in Ukraine illustrates the effect of labour scarcity on wage growth and returns to education: it reveals that young and well educated workers enjoyed significant wage growth accelerations while older workers with outdated skills did not benefit from the retirement of their comparable peers. The estimated wage effects are in line with predictions from a simple heterogeneous labour demand model applied to a cross-section of Ukrainian firms. The paper illustrates that general equilibrium wage effects can be estimated in a policy evaluation framework if quasi-experiments fulfil very restrictive preconditions. |
| Keywords: | Pension increase, wage growth, labour substitution, returns to education, skill-mismatch, Ukraine, quasi-experiment |
| JEL: | J2 J31 J14 P23 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp022015&r=lab |
| By: | Puhani, Patrick A. (Leibniz University of Hannover); Tabbert, Falko (Leibniz University of Hannover) |
| Abstract: | To estimate the effects of large cuts in pensions on the age of first benefit receipt, we exploit two natural experiments in which such cuts affect a group of repatriated ethnic German workers. The pensions were cut by about 12%, yet, according to our regression discontinuity estimates based on administrative pension data, there was no significant delay in the age of first pension receipt. Based on additional data sources, we find (i) that almost all pension recipients of our study population had left the labor force and (ii) that repatriated ethnic Germans hold similar jobs and exhibit similar retirement behavior as low-skilled Germans. The results are consistent with low-skilled workers in Germany being frozen in a corner-solution equilibrium in which the optimal choice is to retire as early as possible. |
| Keywords: | policy, evaluation, pension reform, labor supply, retirement |
| JEL: | J26 H55 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8787&r=lab |
| By: | Andreas Georgiadis; Alan Manning |
| Abstract: | The first contribution of this paper is to use UK monthly firm-level data to show that there is a large amount of transitory volatility in firm-level average earnings from month to month. We conclude that this cannot all be explained away as the consequence of measurement error, composition effects or variation in remunerated hours i.e. we suggest this volatility is real. The second contribution of the paper is to argue that this volatility cannot be interpreted as high flexibility in the shadow cost of labour to employers because of sizeable frictions in the labour market. Indeed we point out that it is the existence of frictions that allow the volatility to exist. Consequently we argue that this volatility would be expected to have only small allocational consequences and that measures of base wages are more useful in drawing conclusions about wage flexibility. |
| Keywords: | Wages; wage flexibility |
| JEL: | E24 J30 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60443&r=lab |
| By: | Gianmarco I. P. Ottaviano |
| Abstract: | This brief essay provides a selective discussion of how in recent years economists in the neoclassical tradition have addressed the questions whether and how immigration affects native workers’ labour market outcomes. In particular, it discusses: the distinction between the displacement, productivity and amenity effects of immigration; the issues that arise in using wage changes to identify those effects; and the problem of assessing a causal link from immigration to natives’ labour market outcomes. |
| Keywords: | Immigration; wages; productivity; cultural diversity |
| JEL: | F22 J31 J61 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60444&r=lab |
| By: | Pedro S. Martins |
| Abstract: | Several countries extend collective bargaining agreements to entire sectors, therefore binding non-subscriber workers and employers. These extensions may address coordination issues but may also distort competition by imposing sector-specifc minimum wages and other work conditions that are not appropriate for many firms. In this paper, we analyse the impact of such extensions along several margins drawing on firm-level monthly data for Portugal, a country where extensions have been widespread until recently. Drawing on the scattered timing of the extensions, we find that both formal employment and wage bills in the relevant sector fall, on average, by 2% - and by 25% more across small firms - over the four months after an extension is issued. These results are driven by both reduced hirings and increased firm closures. On the other hand, informal work, not subject to labour law or extensions, tends to increase. Our findings are robust to several checks, including a falsification exercise based on extensions that were announced but not implemented. JEL codes: J52, K31, J23 |
| Keywords: | Collective agreements, worker flows, labour law |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp589&r=lab |
| By: | Angana Banerji; Hannah Huidan Lin; Sergejs Saksonovs |
| Abstract: | The crisis has intensified what was previously a chronic unemployment problem in Europe; youth unemployment is now at unprecedented highs in some European countries. This paper assesses the main drivers of youth unemployment in Europe. It finds that much of the increase in youth unemployment rates during the crisis can be explained by output dynamics and the greater sensitivity of youth unemployment to economic activity than adult unemployment. Labor market institutions also play a significant role in explaining the persistently high levels of youth unemployment, especially the tax wedge, minimum wages relative to the median wage, spending on active labor market policies, the opportunity cost of working (measured by the unemployment benefits), vocational training, and labor market duality. This suggests that policies to address youth unemployment should be comprehensive and country-specific, focused on reviving growth and advancing labor market reforms. |
| Keywords: | Unemployment;Europe;Euro Area;Labor market characteristics;Labor market institutions;Migrations;Business cycles;Developed countries;Youth employment, youth unemployment, Okun’s law, business cycle, labor market factors |
| Date: | 2015–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:15/5&r=lab |
| By: | Yuelin Liu (School of Economics, Australian School of Business, the University of New South Wales) |
| Abstract: | How Structural Is Unemployment in the United States? |
| Keywords: | Aggregate matching efficiency, Mismatch, Structural unemployment, Timevarying parameter vector autoregression (TVP-VAR) |
| JEL: | C11 E24 E32 E37 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2014-42&r=lab |
| By: | Erling Barth; Alex Bryson; James C. Davis; Richard Freeman |
| Abstract: | This paper links data on establishments and individuals to analyze the role of establishments in the increase in inequality that has become a central topic in economic analysis and policy debate. It decomposes changes in the variance of ln earnings among individuals into the part due to changes in earnings among establishments and the part due to changes in earnings within-establishments and finds that much of the 1970s-2010s increase in earnings inequality results from increased dispersion of the earnings among the establishments where individuals work. It also shows that the divergence of establishment earnings occurred within and across industries and was associated with increased variance of revenues per worker. Our results direct attention to the fundamental role of establishment-level pay setting and economic adjustments in earnings inequality. |
| Keywords: | Earnings; earnings inequality; productivity |
| JEL: | D3 J3 J31 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60604&r=lab |
| By: | Maria da Conceição Figueiredo; Elsa Fontainha |
| Abstract: | The research aims to study the distribution of hourly wages for men and women in Portugal, adopting a quantile regression (QR) approach. Two databases are used for the estimation of the wage functions: the Quadros de Pessoal, Linked Employer-Employee Data (QP-LEED) and the Inquérito ao Emprego, Portuguese Labour Force Survey (IE-LFS). Three basic models are considered to explain the hourly wages for men and women: the first model, using each database separately, is estimated adopting education, tenure, potential experience, activity sector, and job as independent variables; the second, using data from QP-LEED, includes additional determinants related to firm (firm size and foreign social capital); and the third, using data from the IE-LFS, includes additional independent variables related to the worker's family (marital status and children). The results indicate that: (i) Regardless of the database used, the quantile regression (QR) shows superiority over OLS approach; (ii) In general, the same model specification estimated using each database - one administrative (QP-LEED), and the other based on a survey (IE-LFS) - present convergent results; (iii) Independently of the database used, the equations for men and for women reveal that the levels of education have a higher impact on wage determination; (iv) In general, the variables related to the firm contribute to the explanation of wages of men and women while those related to family only contribute to the explanation of men's wages; and (v) the clear different returns for the same characteristics found between men and women, and the pattern of differences which increase across quantiles strongly indicates that the present study should continue in the future, with the analysis of the explanation of the gender wage gap. |
| Keywords: | wage function; quantile regression; Linked Employer-Employee Data; Labour Force Survey; male-female wage differences |
| JEL: | J31 C21 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp012015&r=lab |
| By: | Marcus Hagedorn; Iourii Manovskii; Kurt Mitman |
| Abstract: | We measure the effect of unemployment benefit duration on employment. We exploit the variation induced by the decision of Congress in December 2013 not to reauthorize the unprecedented benefit extensions introduced during the Great Recession. Federal benefit extensions that ranged from 0 to 47 weeks across U.S. states at the beginning of December 2013 were abruptly cut to zero. To achieve identification we use the fact that this policy change was exogenous to cross-sectional differences across U.S. states and we exploit a policy discontinuity at state borders. We find that a 1% drop in benefit duration leads to a statistically significant increase of employment by 0.0161 log points. In levels, 1.8 million additional jobs were created in 2014 due to the benefit cut. Almost 1 million of these jobs were filled by workers from out of the labor force who would not have participated in the labor market had benefit extensions been reauthorized. |
| JEL: | E24 J63 J64 J65 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20884&r=lab |
| By: | Frederiksen, Anders (Aarhus University); Halliday, Timothy J. (University of Hawaii at Manoa) |
| Abstract: | "Glass ceilings" and "sticky floors" are typical explanations for the low representation of women in top executive positions, but a focus on gender differences in promotions provides only a partial explanation. We consider the life-cycle of executive employment, which allows for a full characterization of the gender composition of executive management. We establish that there are few women in executive management because they have lower levels of human capital, are underrepresented in lower-level jobs, and are less likely to be perceived as high-productivity employees. We do not find that women have uniformly unfavorable promotion and demotion probabilities. |
| Keywords: | discrimination, dynamics, gender |
| JEL: | J71 J62 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8797&r=lab |
| By: | Marco Cozzi (Queen's University); Giulio Fella (Queen Mary) |
| Abstract: | This paper is a quantitative, equilibrium study of the insurance role of severance pay when workers face displacement risk and markets are incomplete. A key feature of our model is that, in line with an established empirical literature, job displacement entails a persistent fall in earnings upon reemployment due to the loss of job-specific human capital. The model is solved numerically and calibrated to the US economy. In contrast to previous studies that have analyzed severance payments in the absence of persistent earning losses, we find that the welfare gains from the insurance against job displacement afforded by severance pay are sizable. These gains are higher if, as in most OECD countries, severance pay increases with tenure. The result is a consequence of the higher persistence of earnings losses for workers with a larger stock of job-specific human capital at the time of displacement. |
| Keywords: | Severance Payments, Incomplete Markets, Welfare |
| JEL: | E24 D52 D58 J65 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1338&r=lab |
| By: | Sidonia von Proff (Department of Geography, Philipps University of Marburg, Germany, Philipps University of Marburg, Germany,vonproff@staff.uni-marburg.de) |
| Abstract: | Economic factors and individual attitudes have an impact on the mobility of university graduates. At this point of the life, mobility is highest, but still little is known about the process leading to actually starting a job at a certain place. The paper at hand investigates the job search process by means of a graduate survey at two points in time: prior to graduation and one year later. We asked for individual characteristics and attitudes during the job search, ex ante preferred places, and actual locations of the first job. Hence, we are able to show that a spatial focus or certain attitudes during the search do not have an influence on finding a job, but on the duration of the job search. Furthermore, searching at a familiar place does not necessarily lead to a job actually at a familiar place. |
| Keywords: | graduate mobility, regional labour mobility, universities, Germany |
| JEL: | J61 I23 |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2015-02&r=lab |
| By: | Yuelin Liu (School of Economics, Australian School of Business, the University of New South Wales) |
| Abstract: | This paper develops a New Keynesian model with search frictions in which generated frictional unemployment is consistent with the time series of involuntary unemployment collected by the U.S. Bureau of Labor Statistics. Thus, it can shed light on the relevant impact of labor market frictions and policy interventions on the observed unemployment about which policy makers and the public are concerned. The data-consistent unemployment is achieved in the model via introduction of partial consumption insurance and an endogenous labor force participation channel. In particular, I find that allowing for endogenous labor force participation greatly improves the model fit for U.S. data. It appears that the price markup shock and matching efficiency shock are the two key driving forces of unemployment fluctuations. Monetary policy that stabilizes the participation gap can be welfare improving. |
| Keywords: | New Keynesian DSGE, Involuntary unemployment, Endogenous labor force participation, Search and matching, Bayesian inference |
| JEL: | C11 E24 E31 E32 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2014-41&r=lab |
| By: | Broadberry, Stephen (London School of Economics); Ghosal, Sayantan (University of Glasgow); Proto, Eugenio (University of Warwick) |
| Abstract: | Although the Industrial Revolution is often characterized as the culmination of a process of commercialisation, the precise nature of such a link remains unclear. This paper models and analyzes such link: the role of commercialisation in raising efficiency wages as impersonal and anonymous labour market transactions replace personalized customary relations. In the presence of an aggregate capital externality, we show that the resulting shift in relative factor prices leads to higher capital-intensity in the production technology, resulting in a faster rate of technological progress. We provide historical evidence using European data to show that England was among the most urbanized and the highest wage countries at the onset of the Industrial Revolution. We finally calibrate the model to quantify the impact of a higher degree of anonymity on industrial production growth in England between 1300 and 1800. |
| Keywords: | efficiency wages, anonymity, industrial revolution, commercialisation, learning by doing |
| JEL: | N13 O14 O43 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8791&r=lab |
| By: | Dueñas, Diego; Iglesias, Carlos; Llorente, Raquel |
| Abstract: | The expansion of services and the dissemination of information technologies and communication are identified as important factors that can improve employment opportunities for women, reducing labor by gender differences. The objective of the study is to determine the extent to which services and especially those most closely linked with the knowledge and ICTs such as Knowledge Intensive Services (KIS) are changing some of the basics of labor gender differences. To do it: a), we first measure and characterize employment related with Services and KIS; b), to compare thenn existing wage differentials in these activities with the observed in the whole economy; c), and conclude whether the Services and / or KIS introduce some significant improvement. |
| Keywords: | GENDER, ICT ,GENDER-WAGE-GAP, OAXACA-BLINDER, QUANTILE |
| JEL: | J16 J31 J71 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61628&r=lab |
| By: | Edward P. Lazear; Kathryn L. Shaw; Christopher Stanton |
| Abstract: | Why did productivity rise during recent recessions? One possibility is that average worker quality increased. A second is that each incumbent worker produced more. The second effect is termed “making do with less.” Using data from 2006 to 2010 on individual worker productivity from a large firm, these effects can be measured and separated. For this firm, most of the gain in productivity during the recession was a result of increased effort. Additionally, the increase in effort is correlated with the increase in the local unemployment rate, presumably reflecting the costs of losing a job. |
| Keywords: | Recession; productivity; sorting |
| JEL: | D20 E32 L22 M50 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:60617&r=lab |
| By: | Seth Gershenson (American University) |
| Abstract: | The 2001 No Child Left Behind Act (NCLB) increased accountability pressure in U.S. public schools by threatening to impose sanctions on Title 1 schools that failed to make adequate yearly progress (AYP) in consecutive years. Difference-in-difference estimates of the effect of failing AYP in the first year of NCLB on teacher effort in the subsequent year suggest that, on average, teacher absences in North Carolina fell by about 10 percent, and the probability of being absent 15 or more times fell by about 30 percent. Reductions in teacher absences were driven by within-teacher increases in effort and were larger among more effective teachers. |
| Keywords: | Performance standards,employee effort, teacher absences, accountability No Child Left Behind |
| JEL: | J45 J48 J22 I2 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:15-217&r=lab |