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on Labour Economics |
| By: | Caliendo, Marco (University of Potsdam); Künn, Steffen (IZA); Mahlstedt, Robert (University of Potsdam) |
| Abstract: | In many European countries, labor markets are characterized by high regional disparities in terms of unemployment rates on the one hand and low geographical mobility among the unemployed on the other hand. This is somewhat surprising and raises the question of why only minor shares of unemployed job seekers relocate in order to find employment. The German active labor market policy offers a subsidy covering moving costs to incentivize unemployed job seekers to search/accept jobs in distant regions. Based on administrative data, this study provides the first empirical evidence on the impact of this subsidy on participants' prospective labor market outcomes. We use an instrumental variable approach to take endogenous selection based on observed and unobserved characteristics into account when estimating causal treatment effects. We find that unemployed job seekers who participate in the subsidy program and move to a distant region receive higher wages and find more stable jobs compared to non-participants. We show that the positive effects are (to a large extent) the consequence of a better job match due to the increased search radius of participants. |
| Keywords: | evaluation, active labor market policy, labor market mobility, Instrumental variable approach |
| JEL: | J61 J64 J68 D04 C26 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9183&r=lab |
| By: | Frimmel, Wolfgang (University of Linz); Horvath, Thomas (WIFO - Austrian Institute of Economic Research); Schnalzenberger, Mario (University of Linz); Winter-Ebmer, Rudolf (University of Linz) |
| Abstract: | In general, retirement is seen as a pure labor supply phenomenon, but firms can have strong incentives to send expensive older workers into retirement. Based on the seniority wage model developed by Lazear (1979), we discuss steep seniority wage profiles as incentives for firms to dismiss older workers before retirement. Conditional on individual retirement incentives, e.g., social security wealth or health status, the steepness of the wage profile will have different incentives for workers as compared to firms when it comes to the retirement date. Using an instrumental variable approach to account for selection of workers in our firms and for reverse causality, we find that firms with higher labor costs for older workers are associated with lower job exit age. |
| Keywords: | retirement, seniority wages, firm incentives |
| JEL: | J14 J26 J31 H55 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9192&r=lab |
| By: | Stefan Jestl; Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Summary This paper presents a descriptive account of labour mobility across the EU economies. The focus of the paper is on different patterns between migrants (‘foreign born’) and natives with regard to mobility, exploring in particular the potential of migrants to ‘grease the wheels’ (Borjas, 2001) of labour markets by either themselves showing higher mobility rates or impacting on the mobility patterns of natives or existing migrants themselves. The main indicators examined are the gross mobility and net employment creation rates (GERR and NECR respectively) taken over from Davis and Haltiwanger (1992, 1999). This paper contains a descriptive assessment while a companion paper (Landesmann and Leitner, 2015) undertakes an econometric analysis of the determinants of mobility patterns. We differentiate between the EU-15 and the NMS-8 and further between sub-regions (OMS-North, OMS-South, NMS-Central, Baltics). We analyse differences in mobility patterns in OMS and NMS as regards age groups, skill groups, gender, length of job tenure, etc. Apart from overall labour market mobility we also examine inter-regional and inter-sectoral mobility. A second part of the analysis covers measures of ‘job-skill (mis) matches’, again with a focus of analysing differences between migrants and natives in this respect. |
| Keywords: | labour mobility, European Union, worker flow analysis, employment reallocation, international migration, regional migration, labour turnover, job-skill mismatch |
| JEL: | F22 J61 J62 J63 R23 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:403&r=lab |
| By: | Akguc, Mehtap; Ferrer, Ana |
| Abstract: | Using a recent survey of immigrants to France, we provide a detailed analysis of the educational attainment and labor market performance of various sub-population groups in France. Our results indicate that immigrants to France are less educated than the native born and that these differences can be tracked down to differences in socioeconomic background for most groups of immigrants. Similarly, there is a significant wage gap between immigrant and native-born workers, but this is reduced and sometimes disappears after correcting for selection into employment. In most cases the remaining differences in education and labor market outcomes seem related to the area of origin of the immigrant as well as where the education of the immigrant is obtained. |
| Keywords: | Immigration, France, educational attainment, labor market performance of immigrants |
| JEL: | F22 J15 J61 |
| Date: | 2015–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2015-11&r=lab |
| By: | John M. Abowd; Kevin McKinney; Ian M. Schmutte |
| Abstract: | We evaluate the bias from endogenous job mobility in fixed-effects estimates of worker- and firm-specific earnings heterogeneity using longitudinally linked employer-employee data from the LEHD infrastructure file system of the U.S. Census Bureau. First, we propose two new residual diagnostic tests of the assumption that mobility is exogenous to unmodeled determinants of earnings. Both tests reject exogenous mobility. We relax the exogenous mobility assumptions by modeling the evolution of the matched data as an evolving bipartite graph using a Bayesian latent class framework. Our results suggest that endogenous mobility biases estimated firm effects toward zero. To assess validity, we match our estimates of the wage components to out-of-sample estimates of revenue per worker. The corrected estimates attribute much more of the variation in revenue per worker to variation in match quality and worker quality than the uncorrected estimates. |
| Keywords: | Earnings heterogeneity, Mobility Bias, Latent Class Model, Markov Chain Monte Carlo |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:15-18&r=lab |
| By: | Isilda Mara (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Summary International migration from Croatia has a long tradition and has been diverse and complex. The labour migration initiated in the 1960s still has a lasting effect on subsequent migration flows, particularly with regard to destination countries. Despite transitional arrangements in place in the major destination countries – Germany, Austria, Italy and Slovenia – a preliminary assessment of recent data shows that employment of Croatian nationals in these countries (except Italy) has increased after Croatia’s EU accession. The main reasons for working abroad, as stated by potential movers, are the poor economic situation in Croatia, a better standard of living and higher career opportunities abroad as well as gaining work experience. The support of networks, e.g. friends, family and acquaintances living already in the country of destination, play a critical role for Croatian citizens wanting to work abroad and are important sources of information about job opportunities in other countries. Surveys indicate that potential migration in 2014 was much higher than it had been prior to accession. Typical (potential) migrants are young, unmarried, and highly educated. Different scenarios of potential migration have been projected. Under a scenario assuming the lifting of restrictions in accessing labour markets from July 2015, the stock of Croatian migrants is likely to increase by 217,000 (from 335,000 in 2013 to 552,000 in 2019). Accordingly, net migration because of the regime change is expected to be an additional 50,000 migrants compared to 167,000 projected under a scenario assuming that the status quo will apply to the entire seven-year period (July 2013 to July 2020) of transitional arrangements. In terms of origin-country population, net migration would account for a share of 3.9% and 5.1%, respectively, under the lower/upper bound of projections. Nevertheless, the stock of Croatian migrants as a share of EU population will continue to remain relatively low, hardly exceeding 0.1% under the different scenarios. Croatian migrants are expected to continue to migrate mainly towards those EU Member States that have been historically their main destination countries. |
| Keywords: | mobility from Croatia, potential migration surveys, migration projections, gravity model |
| JEL: | J11 J61 F22 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:402&r=lab |
| By: | Burkhauser, Richard V. (Cornell University); Daly, Mary C. (Federal Reserve Bank of San Francisco); Ziebarth, Nicolas R. (Cornell University) |
| Abstract: | Although industrialized nations have long provided public protection to working-age individuals with disabilities, the form has changed over time. The impetus for change has been multi-faceted: rapid growth in program costs; greater awareness that people with impairments are able and willing to work; and increased recognition that protecting the economic security of people with disabilities might best be done by keeping them in the labor market. Here we describe the evolution of disability programs in four countries: Germany, the Netherlands, Sweden, and the United States. We show how growth in the receipt of publically provided disability benefits has fluctuated over time and discuss how policy choices played a role. Based on our descriptive comparative analysis we summarize shared experiences that potentially benefit policymakers in all countries. |
| Keywords: | disability, disability insurance, cross-country comparison, Germany, US |
| JEL: | I10 I13 J14 J18 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9186&r=lab |
| By: | Kolsrud, Jonas (Uppsala University); Landais, Camille (London School of Economics); Nilsson, Peter (IIES, Stockholm University); Spinnewijn, Johannes (London School of Economics) |
| Abstract: | This paper provides a simple, yet general framework to analyze the optimal time profile of benefits during the unemployment spell. We derive simple sufficient-statistics formulae capturing the insurance value and incentive costs of unemployment benefits paid at different times during the unemployment spell. Our general approach allows to revisit and evaluate in a transparent way the separate arguments for inclining or declining profiles put forward in the theoretical literature. We then estimate our sufficient statistics using administrative data on unemployment, income and wealth in Sweden. First, we exploit duration-dependent kinks in the replacement rate and find that the moral hazard cost of benefits is larger when paid earlier in the spell. Second, we find that the drop in consumption determining the insurance value of benefits is large from the start of the spell, but further increases throughout the spell. On average, savings and credit play a limited role in smoothing consumption. Our evidence therefore indicates that the recent change from a flat to a declining benefit profile in Sweden has decreased welfare. In fact, the local welfare gains push towards an increasing rather than decreasing benefit profile over the spell. |
| Keywords: | unemployment, dynamic policy, sufficient statistics, consumption smoothing |
| JEL: | H20 J64 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9185&r=lab |
| By: | Bharadwaj, Prashant (University of California, San Diego); Lundborg, Petter (Lund University); Rooth, Dan-Olof (Linnaeus University) |
| Abstract: | This paper shows that health is an important determinant of labor market vulnerability during large economic crises. Using data on adults during Sweden's unexpected economic crisis in the early 1990s, we show that early and later life health are important determinants of job loss after the crisis, but not before. Adults who were born with worse health (proxied by birth weight) and those who experience hospitalizations (and especially so for mental health related issues) in the pre-crisis period, are much more likely to lose their jobs and go on unemployment insurance after the crisis. These effects are concentrated in the private sector that happened to be more affected by the crisis. The results hold while controlling for individual education and occupational sorting prior to the crisis, and for controlling for family level characteristics by exploiting health differences within twin pairs. We conclude that poor health (both in early life and as adults) is an important indicator of vulnerability during economic shocks. |
| Keywords: | early life, birth weight, economic crises, shocks, unemployment |
| JEL: | I10 I18 J65 E32 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9174&r=lab |
| By: | Jonas Kolsrud; Camille Landais; Peter Nilsson; Johannes Spinnewijn |
| Abstract: | This paper provides a simple, yet general framework to analyze the optimal time profile of benefits during the unemployment spell. We derive simple sufficient-statistics formulae capturing the insurance value and incentive costs of unemployment benefits paid at different times during the unemployment spell. Our general approach allows to revisit and evaluate in a transparent way the separate arguments for inclining or declining profiles put forward in the theoretical literature. We then estimate our sufficient statistics using administrative data on unemployment, income and wealth in Sweden. First, we exploit duration-dependent kinks in the replacement rate and find that the moral hazard cost of benefits is larger when paid earlier in the spell. Second, we find that the drop in consumption determining the insurance value of benefits is large from the start of the spell, but further increases throughout the spell. On average, savings and credit play a limited role in smoothing consumption. Our evidence therefore indicates that the recent change from a flat to a declining benefit profile in Sweden has decreased welfare. In fact, the local welfare gains push towards an increasing rather than decreasing benefit profile over the spell. |
| Keywords: | Unemployment, dynamic policy, sufficient statistics, consumption smoothing |
| JEL: | H20 J64 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1361&r=lab |
| By: | Picard, Pierre M. (University of Luxembourg); Zenou, Yves (Stockholm University) |
| Abstract: | We develop a model where workers both choose their residential location (geographical space) and their social interactions (social space). In equilibrium, we show under which condition some individuals reside close to the job center while others live far away from it. Even though the two populations have the same characteristics and no group experiences any discrimination, we show that the majority group always has a lower unemployment rate than the minority group both when ethnic minorities reside close and far away from the city-center where jobs are located. This is because they have a larger and better-quality social network. This result is quite unique as it can explain the high unemployment rates of ethnic minorities both in European and American cities. |
| Keywords: | social interactions, segregation, labor market, spatial mismatch, network size |
| JEL: | A14 J15 R14 Z13 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9166&r=lab |
| By: | Adascalitei, Dragos; Khatiwada, Sameer; Malo, Miguel A.; Pignatti Morano, Clemente |
| Abstract: | In this article, we present information from a unique database of labour market reforms implemented in 111 developed and developing countries between 2008 and 2014. We show that the number of reforms implemented each year has gradually increased and that the majority of reforms were passed in advanced economies – with EU member states being particularly active reformers. Moreover, the results show that permanent contracts and collective bargaining were the most popular areas of policy intervention in the labour market domain and that the majority of reforms decreased the strictness of employment protection legislation – although large disparities emerge across world regions in this respect. Finally, the paper compares our database to different indicators of employment regulation in order to check the consistency of our results. |
| Keywords: | Labour market reforms; great recession; crisis; developed countries; developing countries; collective agreements; EPL |
| JEL: | J0 J08 J8 J88 K31 |
| Date: | 2015–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65509&r=lab |
| By: | Jung , Seeun (ESSEC Business School and THEMA); Vranceanu, Radu (ESSEC Business School and THEMA) |
| Abstract: | This paper reports results from a real-eort experiment in which men and women are paired to form a two-member team and asked to execute a real-effort task. Each participant receives an equal share of the team's output. Workers who perform better than their partner can punish him/her by imposing a fi ne. We manipulate the teams' gender composition (man-man, man-woman, and woman-woman) to analyze whether an individual's performance and sanctioning behavior depends on his/her gender and the gender interaction within the team. The data show that, on average, men perform slightly better than women. A man's performance will deteriorate when paired with a woman, while a woman's performance will improve when paired with a woman. When underperforming, women are sanctioned more often and more heavily than men; if sanctioned, men tend to improve their performance, while women's performance does not change. |
| Keywords: | Gender studies; Real-effort task; Team production; Performance; Punishment; Discrimination |
| JEL: | C91 J16 M52 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-15013&r=lab |
| By: | Bennett, Patrick (Department of Economics, Copenhagen Business School); La Cour, Lisbeth (Department of Economics, Copenhagen Business School); Larsen, Birthe (Department of Economics, Copenhagen Business School); Waisman, Gisela (Regeringskansliet, Stockholm) |
| Abstract: | This paper explores potential explanations behind the educational gap between young natives and immigrants using two measures, negative attitudes towards immigrants and networking, which may influence natives and immigrants differently. The paper considers, both theoretically and empirically, the impact of negative attitudes and networking taking into account that these parameters may influence high and uneducated workers as well as immigrants and natives differently, creating different incentives to acquire education for the two ethnic groups. Using rich Danish administrative data, this paper finds evidence that greater negative attitudes increase incentives for males to acquire education and that networking also increases immigrant education. |
| Keywords: | incentives; immigrants; education; attitudes |
| JEL: | I20 I24 J15 |
| Date: | 2015–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2015_001&r=lab |
| By: | Tony Champion; Ian Shuttleworth |
| Abstract: | This paper is prompted by the widespread acceptance that the rates of inter-county and inter-state migration have been falling in the USA and sets itself the task of examining whether this decline in migration intensities is also the case in the UK. It uses the inter-area migration matrices available for England and Wales from the National Health Service Central Register (NHSCR) which provides continuous monitoring since the 1970s by broad age group. The main methodological challenge, arising from changes in the geography of health areas for which the inter-area flows are given, is addressed by adopting the lowest common denominator of 80 areas. Care is also taken to allow for the effect of business cycles in producing short-term fluctuations on migration rates and to isolate the effect of a sharp rise in rates for 16-24 year olds in the 1990s, which is presumed to be related to the expansion of the university sector. The findings suggest that, unlike for the USA, there has not been a substantial decline in the intensity of internal migration between the first two decades of the study period and the second two. While there was a 3 per cent reduction in the overall rate of migration between the regions of England and Wales between 1975-1990 and 1996-2011 (omitting the 16-24s), the rate for within-region moves between areas was some 10 per cent higher in the latter period. The main evidence for decline relates to particular age groups of between-region migration, where the rate for those aged 65 and over shrank by a quarter and that for 0-15 year olds was down by a tenth. In general, however, if there has been any major decline in the intensity of address changing in England and Wales, it can only be for the shortest-distance (within area) moves that the NHSCR does not record. |
| Keywords: | Internal migration, Migration intensity, Between-area moves, Long-term trend, England and Wales |
| JEL: | J11 J61 O15 R23 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0176&r=lab |
| By: | Stephen Popick; Anthony M. Yezer |
| Abstract: | Some sources of heterogeneity among cities, i.e. age, gender, race, income, and education, have been the object of substantial inquiry. The reasons are obvious. These differences are easily observed and may have important implications for economic activity. This study considers another potentially important population characteristic, obesity. Descriptive statistics reveal that the intercity variance in obesity rates is substantial. Empirical results demonstrate that demographic and regional amenity variables all have a relation to intercity differences in obesity. Because obesity is important for preferences, performance, and productivity, its omission from previous studies and its correlation with amenity and demographic characteristics, could create problems for empirical research. |
| JEL: | I12 J10 R23 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2015-12&r=lab |