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on Labour Economics |
| By: | Johnsen, Julian V. (Department of Economics, University of Bergen); Vaage, Kjell (Department of Economics, University of Bergen) |
| Abstract: | This paper studies the effect of one spouse’s retirement on the Retirement of the other using a Norwegian early reform, which reduced the retirement age for workers in selected firms. The findings indicate that after the reform, the spouses of those who could retire earlier were less likely to remain in the workforce compared to the spouses of those who were not included in the early retirement scheme. This finding is compatible with preferences for shared spousal leisure. Contrary to previous findings, wives respond to husbands’ early retirement decisions. However, the findings are less conclusive with respect to husbands’ response to wives’ early retirement decisions. An investigation of the responding wives’ labor market exit strategy reveals that the reform increased their likelihood of retiring with a disability pension, representing a cost to public finance incurred in addition to the general retirement costs. This study contributes to other recent evidence on the influence of of non-health-related factors on the use of disability benefits among older workers. |
| Keywords: | Joint retirement; disability pension; older workers |
| JEL: | D04 H55 J14 J26 |
| Date: | 2015–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2015_003&r=all |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research) |
| Abstract: | In this paper I examine the rates at which adults in households recently receiving Temporary Assistance to Needy Families (TANF) become jobless, apply for and receive unemployment insurance (UI) benefits, and participate in publicly funded employment services. I also investigate the correlation of UI and employment services receipt with maintenance of self-sufficiency through return to work and independence from TANF. The analysis is based on person-level administrative program records from four of the nine largest states between 1997 and 2003. Evidence suggests that three-quarters of new TANF leavers experience joblessness within three years, and one-quarter of the newly jobless apply for UI benefits. About 87 percent of UI applicants have sufficient prior earnings to qualify for UI benefits; however, only about 44 percent qualify based on their job separation reasons. Among all UI applicants, TANF leavers were found to have much higher rates of voluntary quits and employer dismissals than non-TANF leavers. Nonetheless, 50 percent of TANF leavers who apply for UI ultimately receive benefits. Public employment services are used by one-quarter of newly jobless TANF leavers. Among UI applicants, more than 75 percent use public employment services whether they receive UI benefits or not, while only 14 percent of newly jobless TANF leavers who do not apply for UI choose to use public employment services. Among TANF leavers who become jobless and apply for UI, the rate of return to TANF is lower for those who receive UI benefits. Rates of return to TANF are highest among nonbeneficiary UI applicants and non-UI applicants with low recent earnings. |
| Keywords: | Unemployment insurance, temporary assistance to needy families, employment service, Wagner-Peyser, welfare, public assistance, unemployment, low-income, self-sufficiency, social safety net |
| JEL: | J65 I38 J68 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:15-235&r=all |
| By: | Mason Ameri; Lisa Schur; Meera Adya; Scott Bentley; Patrick McKay; Douglas Kruse |
| Abstract: | People with disabilities have low employment and wage levels, and some studies suggest employer discrimination is a contributing factor. Following the method of Bertrand and Mullainathan (2003), new evidence is presented from a field experiment that sent applications in response to 6,016 advertised accounting positions from well-qualified fictional applicants, with one-third of cover letters disclosing that the applicant has a spinal cord injury, one-third disclosing the presence of Asperger’s Syndrome, and one-third not mentioning disability. These specific disabilities were chosen because they would not be expected to limit productivity in accounting, helping rule out productivity-based explanations for any differences in employer responses. Half of the resumes portrayed a novice accountant, and half portrayed an experienced one. The fictional applicants with disabilities received 26% fewer expressions of employer interest than those without disabilities, with little difference between the two types of disability. The disability gap was concentrated among more experienced applicants, and among private companies with fewer than 15 employees that are not covered by the ADA, although comparable state statutes cover about half of them. Comparisons above and below disability law coverage thresholds point to a possible positive effect of the ADA on employer responses to applicants with disabilities, but no clear effects of state laws. The overall pattern of findings is consistent with the idea that disability discrimination continues to impede employment prospects of people with disabilities, and more attention needs to be paid to employer behavior and the demand side of the labor market for people with disabilities. |
| JEL: | J14 J24 J71 J78 K39 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21560&r=all |
| By: | Brian Nolan (Institute for New Economic Thinking and Department of Social Policy and Intervention, Universtiy of Oxford); Sarah Voitchovsky (Melbourne Institute of Applied Economic and Social Research, University of Melbourne) |
| Abstract: | This paper explores the pattern of job loss in the Great Recession with a particular focus on its incidence by wage level, using data for Ireland. Ireland experienced a particularly pronounced decline in employment with the onset of the recession, by international and historical standards, which makes it a valuable case study. Using EU-SILC data, our analysis identifies which employees were most affected. The results show that the probability of staying in employment, from one year to the next, is positively related to monthly wages both during the boom and in the bust. The gradient with wages, however, is much more marked in the bust, and remains significantly so even after controlling for a range of individual characteristics including part-time status, demographics, education, labour market history, industries or occupations. Classification-E24, J23, J24, J62, J63 |
| Keywords: | Skills, occupations, wages, Great Recession, Ireland, job loss, EU-SILC |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2015n17&r=all |
| By: | Eichhorst, Werner (IZA); Neder, Franziska (IZA); Tobsch, Verena (E-x-AKT WIRTSCHAFTSFORSCHUNG); Wozny, Florian (IZA) |
| Abstract: | In contrast to the recently decreasing unemployment rates in the EU, long-term unemployment remains at alarming levels. An economic recovery will not be sufficient to get all long-term unemployed back to work; rather, there is a need for effective policies addressing the long-term unemployed. To address these issues, this paper starts with an interpretation of standard measures of long-term unemployment and alternative measures of long-term non-employment. Next, we take a closer look at active labor market policies such as training, subsidized employment and public work and investigate which kind is most effective for the reintegration of long-term unemployed persons. Subsequently, the special role of Public Employment Services (PES) and the importance of an individual approach and targeting is stressed to increase the employability of hard-to-place and distant jobseekers from the labor market. Furthermore, we take into account the role of alternative benefit systems for working-age non-employed people. In the final section, we conclude and offer policy advice with a particular focus on the EU. |
| Keywords: | long‐term unemployment, activation, Europe, disability benefits |
| JEL: | J64 J65 J68 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9321&r=all |
| By: | Bauer, Anja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Using high-quality administrative data, I analyze workers' opportunity costs of reallocation across occupations by measuring the additional time spent in unemployment before being hired in a new occupation. Furthermore, I inspect the wage changes after reallocation and find that workers who change occupations through unemployment face wage losses. Interpreted through the lens of islands models in the spirit of Lucas/Prescott (1974), these findings are counterintuitive because workers would only reallocate when they can recoup the costs of reallocation through wage gains. To shed some light on the question of what other factors may drive reallocation, I further investigate whether other economic conditions of an occupation might be more important in the worker's decision to reallocate. I assess whether the workers direct their search across markets with respect to job finding rates and job separation rates and labor market tightness, finding that they play no decisive role." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | E24 J62 J64 |
| Date: | 2015–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201526&r=all |
| By: | Dohmen, Thomas (University of Bonn); Lehmann, Hartmut (University of Bologna); Pignatti, Norberto (ISET, Tbilisi State University) |
| Abstract: | We use the panel data of the German Socio-Economic Panel (SOEP) and of the Ukrainian Longitudinal Monitoring Survey (ULMS) to investigate whether risk attitudes have primary (exogenous) determinants that are valid in different stages of economic development and in a different structural context, comparing a mature capitalist economy and a transition economy. We then analyze the stability of the risk measures over time. Between 2007 and 2012 we have the Great Recession, which had a mild impact in the German labor market while it had a more profound impact on the Ukrainian labor market. This enables us to investigate whether and how the crisis impacted on the risk attitudes in the two countries. By focusing on self-employment we also investigate whether the reduced willingness to take risks as a consequence of the Great Recession affects labor market dynamics and outcomes. |
| Keywords: | risk attitudes, Great Recession, time variation, labor market outcomes, Germany, Ukraine |
| JEL: | J64 J65 P50 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9333&r=all |
| By: | Colussi, Tommaso (IZA) |
| Abstract: | This paper investigates how immigrants' job search outcomes are affected by the labor market outcomes of workers from the same country of origin they are connected to. Connections are identified based on having worked for the same firm in the past. Using matched employer-employee micro data from Italy and an instrumental variables approach, I show that an increase in the employment prospects of socially connected workers improves immigrants’ job search outcomes. The analysis of post-displacement outcomes sheds light on the different mechanisms generating the social effect. |
| Keywords: | migration, job displacements, networks |
| JEL: | J61 J63 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9339&r=all |
| By: | Den Haan, Wouter; Rendahl, Pontus; Riegler, Markus |
| Abstract: | The interaction of incomplete markets and sticky nominal wages is shown to magnify business cycles even though these two features – in isolation – dampen them. During recessions, fears of unemployment stir up precautionary sentiments which induces agents to save more. The additional savings may be used as investments in both a productive asset (equity) and an unproductive asset (money). But even a small rise in money demand has important consequences. The desire to hold money puts deflationary pressure on the economy, which, provided that nominal wages are sticky, increases wage costs and reduces firm profits. Lower profits repress the desire to save in equity, which increases (the fear of) unemployment, and so on. This is a powerful mechanism which causes the model to behave differently from both its complete markets version, and a version with incomplete markets but without aggregate uncertainty. In contrast to previous results in the literature, agents uniformly prefer non-trivial levels of unemployment insurance. |
| Keywords: | business cycles; heterogeneous agents; Keynesian unemployment; magnification; propagation; search friction |
| JEL: | E12 E24 E32 E41 J64 J65 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10814&r=all |
| By: | Steffen Müller; Jens Stegmaier |
| Abstract: | We estimate dynamic effects of works councils on labor productivity using newly available information from West German establishment panel data. Conditioning on plant fixed effects and control variables, we find negative productivity effects during the first five years after council introduction, but a steady and substantial increase in the councils’ productivity effect thereafter. Given the frequently reported positive correlation between council existence and plant productivity, this finding supports causal interpretations. |
| Keywords: | non-union worker representation, works council, labor productivity, dynamic effects |
| JEL: | D24 J53 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:14-15&r=all |
| By: | Eichhorst, Werner (IZA); Hassel, Anke (Hertie School of Governance) |
| Abstract: | This paper assesses the existence and the extent of austerity‐oriented policies in Germany in the aftermath of the 2008‐9 recession. In contrast to the intensive phase of labour market and welfare state reforms in the early 2000s aimed at 'welfare readjustment', we do not see austerity policies in Germany, rather a continuation of the path that was adopted earlier. This can be explained by the economic conditions which were, and still are, much more favourable than in many other EU Member States. Most recently, we can identify a partial reregulation of the labour market, most notably the introduction of a national minimum wage, a potential increase in the regulation of non‐standard contracts and a reintroduction of early retirement for labour market insiders. These policies can be classified as 'welfare protectionism'. |
| Keywords: | labour market reforms, Germany, austerity, welfare state retrenchment |
| JEL: | J21 J26 J68 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9325&r=all |
| By: | Simone Moriconi (Università Cattolica di Milano and CREA, University of Luxembourg); Giovanni Peri (University of California, Davis) |
| Abstract: | European countries exhibit significant differences in employment rates of adult males. Differences in labor-leisure preferences, partly determined by cultural values that vary across countries, can be responsible for part of these differences. However, differences in labor market institutions, productivity, and skills of the labor force are also crucial factors and likely correlated with preferences. In this paper we use variation among first- and second-generation cross-country European migrants to isolate the effect of culturally transmitted labor-leisure preferences on individual employment rates. If migrants maintain some of their country of origin labor-leisure preferences as they move to different labor market conditions, we can separate the impact of preferences from the effect of other factors. We find country-specific labor-leisure preferences explain about 24% of the top-bottom variation in employment rates across European countries. |
| Keywords: | Labor-Leisure Preferences, Cultural Transmission, Employment, Europe, Migrants |
| JEL: | J22 J61 Z10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:15-11&r=all |
| By: | Cardullo, Gabriele |
| Abstract: | In many countries, the government pays almost identical nominal wages to workers living in regions with notable economic disparities. By developing a two-region general equilibrium model with endogenous migration and search frictions in the labour market, I study the differences in terms of unemployment, real wages, and welfare between a regional wage bargaining process and a national one in the public sector. Adopting the latter makes residents in the poorer region better off and residents of the richer region worse off. Private sector employment decreases in the poorer region and it increases in the richer one. Under some conditions, the unemployment rate in the poorer region soars. Simulation results also show that a regional bargaining scheme may increase inequality. |
| Keywords: | public sector wages; centralized pay regulation; unemployment. |
| JEL: | J45 J50 R13 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66879&r=all |
| By: | Boye, Katarina (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | A number of studies have shown that women’s and men’s wages relate to parenthood in general and to parental leave in particular, but we know little about the possible wage impact of leave to care for sick children, which is a part of the Swedish parental leave system. On the one hand, care leave may influence human capital and real or perceived work capacity similarly to parental leave and send the employer the same signals about work commitment and responsibilities outside of work. On the other hand, important differences, including timing, frequency and predictability, between care leave and parental leave influence paid work. This study uses Swedish register data to analyse the association between care leave and wages among mothers and fathers who had their first child in 1994. The results show that care leave is associated with a lower wage, particularly among men, up to 13 years after the birth of the first child. One reason for the gender difference in the association between care leave and wage may be that men’s care leave has a stronger signalling effect compared with women’s care leave. |
| Keywords: | Care leave; parental leave; wages; gender equality; family; labour market |
| JEL: | J13 J16 |
| Date: | 2015–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2015_018&r=all |
| By: | Arellano, Manuel (CEMFI, Madrid); Blundell, Richard (University College London); Bonhomme, Stephane (University of Chicago) |
| Abstract: | We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock. Consumption is modeled as an age-dependent nonlinear function of assets and the two earnings components. We establish the nonparametric identification of the nonlinear earnings process and the consumption policy rule. Exploiting the enhanced consumption and asset data in recent waves of the Panel Study of Income Dynamics, we find nonlinear persistence and conditional skewness to be key features of the earnings process. We show that the impact of earnings shocks varies substantially across earnings histories, and that this nonlinearity drives heterogeneous consumption responses. The transmission of shocks is found to vary systematically with assets. |
| Keywords: | earnings dynamics, consumption, panel data, quantile regression, latent variables |
| JEL: | C23 D31 D91 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9344&r=all |
| By: | Estrada, Ricardo |
| Abstract: | Because of data limitations, there is little empirical research on how firms conduct hiring and the merits of different recruitment strategies. In this paper, I take advantage of a unique setting that allows me to compare the quality (value-added to student achievement) of the teachers hired in a discretionary proce3ss led by the teachers' union in Mexico with those hired on the basis of a screening rule. My results show that the teachers' union selects applicants of a considerably lower quality than those selected using a standardized test, despite the fact that the test has no power to predict teacher quality. I find evidence that the results are not explained by the self-selection of high-quality teachers to follow the test-based process. The combination of these results indicates that the teachers selected through the discretionary process are from the bottom of the distribution of applicant quality. My analysis also reveals that joint committees of state officials and union representatives allocate teachers hired in this way to schools in more "desirable" localities, but with similar pre-treatment trends in outcomes. Findings are consistent with standard models of rent extraction. |
| Keywords: | Hiring methods; Teachers' unions; School quality; Teacher hiring; Rent extraction |
| JEL: | I21 J51 M51 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:mwp2015/14&r=all |
| By: | Black, Dan A. (University of Chicago); Joo, Joonhwi (University of Chicago); LaLonde, Robert J. (Harris School, University of Chicago); Smith, Jeffrey A. (University of Michigan); Taylor, Evan J. (University of Michigan) |
| Abstract: | We provide simple tests for selection on unobserved variables in the Vytlacil-Imbens-Angrist framework for Local Average Treatment Effects. The tests allow researchers not only to test for selection on either or both of the treated and untreated outcomes, but also to assess the magnitude of the selection effect. The tests are quite simple; undergraduates after an introductory econometrics class should be able to implement these tests. We illustrate our tests with two empirical applications: the impact of children on female labor supply from Angrist and Evans (1998) and the training of adult women from the Job Training Partnership Act (JTPA) experiment. |
| Keywords: | local average treatment effects, selection, instrumental variables |
| JEL: | C10 C18 J01 J08 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9346&r=all |
| By: | Esposito, Elena |
| Abstract: | The resistance of Sub-Saharan Africans to diseases that were plaguing the southern United States contributed to the establishment of African slavery in those regions. Specifically, Africans' resistance to malaria increased the profitability of employing African slave labor, especially that of slaves coming from the most malaria-ridden parts of Africa. In this paper, I first document that African slavery was largely concentrated in the malaria-infested areas of the United States. Moreover, I show that the introduction of a virulent strain of malaria into US colonies greatly increased the share of African slaves, but only in states where malaria could thrive. Finally, by looking at the historical prices of African slaves, I show that enslaved individuals born in the most malaria-ridden African regions commanded higher prices. |
| Keywords: | Slavery, Malaria, African Slave Trade, Colonial Institutions |
| JEL: | I12 N31 N37 N57 J15 J47 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:mwp2015/09&r=all |