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on Labour Economics |
| By: | Brown, Alessio (UNU‐MERIT, Maastricht University); Kohlbrecher, Britta (Friedrich-Alexander-Universität Erlangen-Nürnberg); Merkl, Christian (Friedrich-Alexander-Universität Erlangen-Nürnberg, and IZA); Snower, Dennis J. (Kiel Institute for the World Economy, IZA, CEPR, and Christian -Albrechts-Universität Kiel) |
| Abstract: | In the standard macroeconomic search and matching model of the labour market, there is a tight link between the effects of (i) productivity on unemployment and (ii) unemployment benefits on unemployment. This tight link is at odds with the empirical literature. We present a two-sided model of labour market search where the household and firm decisions are decomposed into job offers, job acceptances, firing, and quits. In such a model, unemploy-ment benefits affect households’ behaviour directly, without having to run via the bargained wage. In line with the evidence, productivity shocks may have quantitatively large effects on unemployment, while benefits only have moderate effects. Our analysis shows the importance of investigating the effects of policies on the households’ work incentives and the firms’ employment incentives within the search process. |
| Keywords: | Unemployment benefits, search and matching, aggregate shocks, macro model, labour market |
| JEL: | E24 E32 J63 J64 |
| Date: | 2016–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2016032&r=lab |
| By: | Balkan, Binnur (Central Bank of Turkey); Baskaya, Yusuf Soner (Central Bank of Turkey); Tumen, Semih (Central Bank of Turkey) |
| Abstract: | This paper investigates the employment effects of a targeted subsidy scheme implemented in Turkey following the 2008 crisis. The Turkish government started a subsidy program in 2008 to generate new employment for younger men and all women, which are the relatively disadvantaged groups in the Turkish labor markets. The program puts men of age 18-29 and all women into the treatment group, while men of age 30 and above are placed into the control group. We use a nationally representative micro-level dataset and a difference-in-differences approach to estimate the causal effect of this program. On aggregate, the subsidy program seems to be ineffective in increasing the employment probabilities of those individuals in the target group. However, when heterogeneity is accounted for by dividing the treatment group into several sub-groups, we observe that the program has been notably effective on some of those sub-groups. In particular, the increase in employment probability is high for older women, while a weaker positive effect is observed for younger women and almost no effect is detected for younger men. The effect on older women is subject to further heterogeneity: the program has increased the employment probabilities of low-educated and/or low-skill older women rather than the high-educated and/or high-skill ones. |
| Keywords: | employment subsidies, treatment effects, difference-in-differences, Turkish micro data |
| JEL: | C21 H24 J21 J68 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9993&r=lab |
| By: | Jakobsen, Kristian Thor; Kaarsen, Nicolai; Vasiljeva, Kristine |
| Abstract: | In 2002 the Danish government reduced the size of cash transfers to new refugees. We exploit the reform to study the effect of lower transfers on educational outomces of refugee children. Surprisingly, the reduction in parental benefits has no negative effect on educational outcomes of the children, such as test scores, probability of completion of the 9th grade or probability of enrollment in upper-secondary education. Likewise, children of parents affected by the reform are not forced to earn more in youth. Refugee parents increase their labour supply and earn more to compensate for the loss in income, but on average the increase in earnings does not compensate for the decline in benefits. |
| Keywords: | refugees, refugee children, benefits, educational outcomes, employment |
| JEL: | H31 I29 J15 J29 J64 |
| Date: | 2016–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72008&r=lab |
| By: | Michel Dumont; Chantal Kegels |
| Abstract: | Recent studies reveal the importance of entrants and young firms for job creation, productivity and economic growth. Some scholars argue that the falling rate at which new firms are established, can explain, to a certain extent, the productivity slowdown witnessed in most OECD countries. Belgium appears to stand out unfavourably from other countries in its very low start-up rate. This paper reviews the empirical cross-country evidence, provides some additional analysis of the role of young firms in industry-level employment and productivity dynamics in Belgium and concludes with a discussion of the implications for economic policy. |
| JEL: | D22 D24 E23 E24 H32 L25 L26 L53 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:1606&r=lab |
| By: | Leduc, Sylvain (Bank of Canada); Liu, Zheng (Federal Reserve Bank of San Francisco) |
| Abstract: | Despite steady declines in the unemployment rate and increases in the job openings rate after the Great Recession, the hiring rate in the United States has lagged behind. Significant gaps remain between the actual job filling and finding rates and those predicted from the standard labor search model. To examine the forces behind the slow job recovery, we generalize the standard model to incorporate endogenous variations in search intensity and recruiting intensity. Our model features a vacancy creation cost, which implies that firms rely on variations in both the number of vacancies and recruiting intensity to respond to aggregate shocks, in contrast to the textbook model with costless vacancy creation and thus constant recruiting intensity. Cyclical variations in search and recruiting intensity drive a wedge into the matching function even absent exogenous changes in match efficiency. Our estimated model suggests that fluctuations in search and recruiting intensity help substantially bridge the gap between the actual and model-predicted job filling and finding rates in the aftermath of the Great Recession. |
| JEL: | E32 J63 J64 |
| Date: | 2016–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2016-09&r=lab |
| By: | Noritaka Kudoh (Nagoya University); Hiroaki Miyamoto (University of Tokyo); Masaru Sasaki (Osaka University) |
| Abstract: | This paper studies a labor market search-matching model with multi-worker firms to investigate how firms utilize employment and hours of work over the business cycle. The earnings function derived from intra-firm bargaining determines the costs of utilizing the two margins of labor adjustment. We calibrate the model for the Japanese labor market, in which fluctuations in hours of work account for 79 percent of the variations in total labor input. The model replicates much of the fluctuations in total labor input, employment, and hours per employee without wage rigidity even though the source of fluctuations is total factor productivity (TFP) alone. If hours of work are determined by bargaining, then the intensive margin makes the unemployment volatility puzzle much harder to resolve. |
| Keywords: | search, hours of work, employment, business cycles, multi-worker firms |
| JEL: | E32 J20 J64 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2016-9&r=lab |
| By: | Emily Farchy |
| Abstract: | This paper is part of the joint project between the Directorate General for Migration and Home Affairs of the European Commission and the OECD’s Directorate for Employment, Labour and Social Affairs on “Review of Labour Migration Policy in Europe”. This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. Grant: HOME/2013/EIFX/CA/002 / 30-CE-0615920/00-38 (DI130895) A previous version of this paper (DELSA/ELSA/MI(2015)10) was presented and discussed at the OECD working party on migration in June 2015 This paper examines the impact of the free flow of migrants within the EU on the prospects of labour migrants from third countries - the extent to which free movement migrants and third country migrants are substitutes or complements on the labour market. The first section of this paper looks at the recent trends in migration to the European Union, with a particular focus on trends in the ‘big five’ recipient countries. The analysis is supplemented by the use of micro data from the EU Labour Force Survey, to examine the extent to which the socio-economic and job characteristics suggest that EU migrants and third country migrants provide a similar labour input. Aggregate migrant flows, however, are driven by both supply and demand factors; a comparison of aggregate trends is therefore insufficient to disentangle the disparate drivers of these trends. A booming economy, for example, will attract labour migrants from both EU and third countries, yet the positive relation between these flows cannot be attributed to a complementarity between these labour inputs but rather to the demand side factors that drive them both. To overcome this endogeneity the second section of this paper utilizes the natural experiment of EU enlargement to isolate the impact of the increased supply of free movement migrants on third country migrant populations. Abstracting in this manner from the economic factors that have played such an important role in determining labour demand in recent years the empirical analysis of this paper identifies a negative impact on the arrivals of third country migrants when labour supply from new EU migrants increases. Furthermore, the lack of identifiable impact on the employment rate of third country migrants is dependent on assumptions regarding the counterfactual employment outcomes of these displaced third country migrants. |
| JEL: | F22 J61 R23 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:179-en&r=lab |
| By: | Robertson, Raymond (Texas A&M University); Brown, Drusilla (Tufts University); Dehejia, Rajeev (New York University) |
| Abstract: | A large and growing literature has identified several conditions, including exporting, that contribute to plant survival. A prevailing sentiment suggests that anti-sweatshop activity against plants in developing countries adds the risk of making survival more difficult by imposing external constraints that may interfere with optimizing behavior. Using a relatively new plant-level panel dataset from Cambodia, this paper applies survival analysis to estimate the relationship between changes in working conditions and plant closure. The results find little, if any, evidence that improving working conditions increases the probability of closure. In fact, some evidence suggests that improvements in standards relating to compensation are positively correlated with the probability of plant survival. |
| Keywords: | working conditions, apparel, sweatshops, plant survival, closure |
| JEL: | J8 J5 J3 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10026&r=lab |
| By: | Chen, Xi (Yale University) |
| Abstract: | This paper makes use of the most recent social pension reform in rural China to examine whether receipt of the pension payment equips adult children of pensioners to migrate. Employing a regression discontinuity (hereafter RD) design to a primary longitudinal survey, this paper overcomes challenges in the literature that households eligible for pension payment might be systematically different from ineligible households and that it is difficult to separate the effect of pension from that of age or cohort heterogeneity. Around the pension eligibility age cut-off, results reveal large and significant increase among adult sons (but not daughters) to migrate out of their home county. Meanwhile, adult children are more likely to migrate out if their parents are healthy. Our Fuzzy RD estimations survive a standard set of key placebo tests and robustness checks. |
| Keywords: | rural pension, RD Design, adult children, migration |
| JEL: | H55 I38 J14 J22 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10016&r=lab |
| By: | Pieters, Janneke (Wageningen University); Rawlings, Samantha (University of Reading) |
| Abstract: | This paper studies the causal effect of maternal and paternal unemployment on child health in China, analyzing panel data for the period 1997-2004, when the country underwent economic reforms leading to massive layoffs. We find that paternal unemployment reduces child health, while maternal unemployment has beneficial child health impacts. Analysis of channels shows that paternal and maternal unemployment have different effects on income, time use, mothers' blood pressure, and certain health investments, including children's diets. Our results support the notion that traditional gender roles can explain why mothers and fathers' unemployment affect child health so differently. |
| Keywords: | child health, unemployment, nutrition, China |
| JEL: | I12 J13 J69 O15 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10021&r=lab |
| By: | Brown, Drusilla (Tufts University); Dehejia, Rajeev (New York University); Robertson, Raymond (Texas A&M University) |
| Abstract: | Working conditions in developing countries, such as those associated with the 2013 Rana Plaza collapse in Bangladesh, remain stubbornly low despite strict laws regulating hours, pay practices and occupational safety and health. Recent theoretic and empirical work suggests that norms and learning may play a significant role in determining conditions. We exploit the natural experiment of Cambodia's 15-year experience with the Better Factories Cambodia program to identify variation that reveals the relative contributions of laws, costs, norms, and learning in improving working conditions in Cambodia. The results suggest that policies that follow from the learning hypothesis may be the most effective at improving working conditions in the long run. |
| Keywords: | working conditions, norms, personnel economics |
| JEL: | F53 F66 J8 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10025&r=lab |
| By: | Tommaso Colussi |
| Abstract: | This paper is part of the joint project between the Directorate General for Migration and Home Affairs of the European Commission and the OECD’s Directorate for Employment, Labour and Social Affairs on “Review of Labour Migration Policy in Europe”. This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. Grant: HOME/2013/EIFX/CA/002 / 30-CE-0615920/00-38 (DI130895) A previous version of this paper (DELSA/ELSA/MI(2015)4) was presented and discussed at the OECD Working Party on Migration in June 2015. The paper assesses the impact of three European Directives – Student Directive, Researcher Directive and the Blue Card Directive – on migration flows from third countries to the EU. Using a difference-in-difference empirical strategy and data from the EU-LFS and Eurostat database on work permits to non-EU workers, it estimates the effect of each Directive on the inflow of targeted third country nationals. Overall, the econometric analysis does not provide evidence of a direct impact of the implementation of either of the Directives on the inflow of targeted groups. Most member states did experience an increase in the inflow of non-EU high skilled workers after the adoption of the Blue Card Directive; however, this increase can be almost entirely explained by positive pre-existing trends in the inflow of this type of immigrants. Similarly, despite the increase in the number of permits issued to students and researchers from third countries in Europe, difference-in-differences estimates do not provide evidence of a direct effect of the implementation of the Student and Researcher Directive on changes in this type of inflows. The absence of a measurable impact of the three Directives analysed may be due to delayed effects of policy changes, which take time to filter into perception and thus affect immigrant inflows to Europe. |
| JEL: | F22 J61 K37 R23 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:181-en&r=lab |
| By: | Kevin Denny; Cormac Ó Gráda |
| Abstract: | The paper employs recent data from the European Social Survey and Eurobarometer to place evolving Irish attitudes to immigration in comparative context. Particular attention is given to determinants of differences in attitudes by gender, xenophobia, and exaggerated impressions of the immigrant presence. |
| Keywords: | Immigration; Gender; Xenophobia |
| JEL: | J61 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201604&r=lab |
| By: | Gimenez-Nadal, J. Ignacio (University of Zaragoza); Sevilla, Almudena (Queen Mary, University of London) |
| Abstract: | The ideology of intensive mothering, whereby mother's time is thought of as crucial for child development, continues to be the dominant cultural framework in the United States. Yet there is little evidence about how mothers differ in their child care experiences from large representative surveys. We use data from the Well-being Module of the American Time Use Survey to understand emotions in mothering experiences, and how these vary by maternal educational attainment and the type of child care activity mothers engage in. We document that, compared to less-educated mothers, higher educated mothers report lower happiness and meaning, and higher levels of fatigue when engaging in mothering activities. The gap in momentary wellbeing among mothers across the educational distribution does not depend on the type of child care activity and suggests that intensive mothering practices are more likely to pressurize the most-educated women, who may subscribe to more time-intensive forms of mothering. |
| Keywords: | mothering, emotional well-being, education gradient, child care, ideology of intensive mothering, time use |
| JEL: | J10 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10023&r=lab |
| By: | Anda David; Jean-Noël Senne |
| Abstract: | This paper is part of the joint project between the Directorate General for Migration and Home Affairs of the European Commission and the OECD’s Directorate for Employment, Labour and Social Affairs on “Review of Labour Migration Policy in Europe”. This document has been produced with the financial assistance of the European Union. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. Grant: HOME/2013/EIFX/CA/002 / 30-CE-0615920/00-38 (DI130895) A previous version of this paper was presented and discussed at the OECD Working Party on Migration in June 2015. The paper examines immigration to, and emigration from, the European Union, and compares them with migrant inflows and outflows to other OECD destinations. It investigates how the migrants are distributed in terms of gender, age, education and labour force status, depending on their country of origin as well as of destination. Drawing upon the Database on Immigrants in the OECD countries (DIOC), changes in migration rates and stock are analysed over time, focusing on whether the EU is facing a net gain or loss of skills. |
| JEL: | F22 J11 N34 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:184-en&r=lab |
| By: | Eyal Apatov (Motu Economic and Public Policy Research); Arthur Grimes (Motu Economic and Public Policy Research) |
| Abstract: | We examine the relationship between the presence of Higher Education Institutions (HEIs) and local growth, using a sample of 57 New Zealand Territorial Local Authorities (TLAs) between 1986 and 2013. Our models include a large set of controls, including past growth. An innovation of our approach is that we include official population projections as a control to account for growth-related factors that were perceived at the time by policy makers, but are otherwise unobservable to the econometrician. Holding all else equal, we find that a greater university share of Equivalent Full Time Students (EFTS) to working-age population raises population and employment growth. At the means, a one percentage point increase in university EFTS share is associated with a 0.19 (0.14) percentage point increase in the annual average population (employment) growth rate. This relationship holds under all alternative specifications, including different HEI activity definitions, samples, and specifications. On the other hand, growth related to polytechnic activity was estimated less precisely, and is much smaller. While our results suggest a positive association between university activity and growth, we find no evidence for complementarities between HEI activity and several indicators of urbanisation and innovation, nor do we find evidence that HEI presence affected the industrial (sectoral) structure of the local economy. |
| Keywords: | Universities; Polytechnics; Regional Growth, Patent Activity; Skilled Workforce |
| JEL: | I25 J11 R11 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:16_11&r=lab |
| By: | Sandra Brée (UNIVERSITE CATHOLIQUE DE LOUVAIN, Centre de Recherche en Démographie et Sociétés); David de la Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE) |
| Abstract: | To better understand the forces underlying fertility decisions, we look at the forerunners of fertility decline. In Rouen, France, completed fertility dropped between 1640 and 1792 from 7.4 to 4.2 children. We review the list of possible explanations and keep only three: increase in materialism, women's empowerment and increase in returning to education. We propose a theory that shows that we can discriminate between these explanations by looking at childlessness and its social gradient. An increase in materialism or, under certain conditions, an increase in women's empowerment, leads to an increase in childlessness, while an increase in returning to education leads to a decrease in childlessness. Looking at the Rouen data, childlessness is clearly on the rise, from 4% in 1640 to 10% at the end of the 18th century, which appears to discredit the explanation based on increasing returns to education, at least for this period. |
| Keywords: | Demographic transition, Childlessness, Quality-quantity tradeoff, Forerunners, Women's empowerment |
| JEL: | J13 N33 O11 |
| Date: | 2016–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2016014&r=lab |
| By: | Jetter, Michael (University of Western Australia); Laudage, Sabine (University of Bayreuth); Stadelmann, David (University of Bayreuth) |
| Abstract: | Contrary to previous findings, we find a systematic and economically sizeable relationship between income levels and life expectancy in a panel dataset of 197 countries over 213 years. By itself, GDP/capita explains more than 64 percent of the variation in life expectancy. The Preston curve prevails, even when accounting for country- and time-fixed effects, country-specific time trends, and alternative control variables. Quantile regressions and instrumental variable estimations suggest this link to be persistent across different levels of life expectancy and unaffected by reverse causality. If policymakers want to prolong people's lives, economic growth appears to be the predominant medicine. |
| Keywords: | historical panel data, income levels, life expectancy, quantile regression analysis |
| JEL: | I15 I31 J11 H51 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10015&r=lab |