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on Labour Economics |
| By: | Bergemann, Annette (University of Bristol); Pohlan, Laura (University of Mannheim); Uhlendorff, Arne (CREST) |
| Abstract: | This paper analyzes the impact of job creation schemes (JCS) on job search outcomes in the context of the turbulent East German labor market in the aftermath of the German reunification. High job destruction characterized the economic environment. JCS were heavily used in order to cushion this development. Using data from 1990-1999 and building upon the timing-of-events approach, we estimate multivariate discrete time duration models taking selection based on both observed and unobserved heterogeneity into account. Our results indicate that participation in JCS increases the unemployment duration mainly due to profound locking-in effects. However, twelve months after the program start the significantly negative impact on the job finding probability vanishes. We find evidence for effect heterogeneity. Our results suggest that female and highly skilled participants leave unemployment quicker than other groups, which results in highly skilled women benefiting from participation. However, we find no significant impact on post-unemployment employment stability. Our results are robust to allowing for random treatment effects. Also taking into account endogenous participation in training programs or multiple treatment effects do not change the results. |
| Keywords: | active labor market policy, unemployment duration, employment stability, timing-of-events model, East Germany, transition economy |
| JEL: | J64 C41 C33 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10369&r=lab |
| By: | Mussche, Ninke (University of Antwerp); Corluy, Vincent (University of Antwerp); Marx, Ive (University of Antwerp) |
| Abstract: | Intra‐EU mobility has been the subject of debate from its very inception. Some scholars argue that intra‐EU labour migration improves the allocation of human capital in the EU and contend that the level of permanent‐type labour mobility is still too low to talk of a single European labour market. Others point to the social downside of both free labour mobility and free service mobility, such as the increased precariousness of industrial relations, and problems of wage dumping. Since the downsides are acute and demand attention, less attention has been given to the origins, destinations and nature of the posting flows more generally. One of the reasons for this is the fact that data on posting are still scarce. This article aims to fill this gap by exploring unique posting data for Belgium. Based on these data we argue that while the free movement of labour and a single European labour market has been a policy goal for decades, it is the free movement of services that is well on its way to shape a hybrid single European labour market. Permanent type mobility is greatly complemented with high levels of short term service mobility. Service mobility/posting is as much a phenomenon of intra‐EU15 mobility, than it is of EU12 mobility. Moreover, posting is set to remain more popular than classical free movement of labour among EU12 citizens. Service workers circumvent the most important linguistic, cultural, institutional and social hurdles that classical mobile workers face in a diverse EU. The free movement of services is developing to such an extent that it complements permanent type free labour mobility in shaping a single but typically European labour market that is driven by diversity and circular mobility. |
| Keywords: | posting, migration, labor mobility |
| JEL: | J61 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10365&r=lab |
| By: | Nyström, Kristina (The Ratio Institute The Royal Institute of Technology) |
| Abstract: | This paper contributes to knowledge about regional resilience to displacement and examines the extent to which the characteristics of the i) regional closures, ii) individuals in a region, iii) regional industry, iv) regional economy and v) regional attractiveness influence the re-employment of displaced employees. The results indicate that regions where the average size of establishment closures is large or the regional displacement rate is high exhibit increased resilience in terms of re-employing displaced employees in the same region. Unrelated and related industrial variety are positively related to resilience to displacement in regions with low re-employment capacities, whereas there is some evidence that regional attractiveness is positively related to resilience in regions with a good ability to re-employ displaced employees. |
| Keywords: | Displacements; regional resilience; exit. Labor mobility; regional development; regional attractiveness |
| JEL: | J60 R10 |
| Date: | 2016–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0276&r=lab |
| By: | Sajons, Christoph |
| Abstract: | Do migrant parents change their labor market behavior when their children are born with the citizenship of the host country? In this study, I implement a difference-in-discontinuities approach to examine possible adjustments in employment and working hours following the introduction of birthright citizenship for immigrant children in Germany in 2000. In particular, I compare the changes in labor market outcomes between the parents of migrant children born before and after the enactment date with those of children of mixed couples (migrants and Germans) who were unaffected by the law change. The analysis of data from the Microcensus from 2001 to 2008 suggests that mothers and fathers react differently to having a German-citizen child: While fathers' labor force participation is unaffected, I find mothers to be more likely to stay at home. By contrast, there seems to be no effect on the number of hours in the job. |
| Keywords: | Birthright citizenship,Integration,Naturalization,Labor force participation |
| JEL: | J15 J22 J61 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:1607&r=lab |
| By: | Francesco Furlanetto (Norges Bank (Central Bank of Norway)); Ørjan Robstad (Norges Bank (Central Bank of Norway)) |
| Abstract: | We propose a new VAR identification scheme that enables us to disentangle immigration shocks from other macroeconomic shocks. Identification is achieved by imposing sign restrictions on Norwegian data over the period 1990Q1 - 2014Q2. The availability of a quarterly series for net immigration is crucial to achieving identification. Notably, immigration is an endogenous variable in the model and can respond to the state of the economy. We find that domestic labor supply shocks and immigration shocks are well identified and are the dominant drivers of immigration dynamics. An exogenous immigration shock lowers unemployment (even among native workers), has a positive effect on prices and on public finances in the medium run, no impact on house prices and household credit, and a negative effect on productivity. |
| Keywords: | Labor supply shocks, immigration shocks, job-related immigration, identification, VAR |
| JEL: | C11 C32 E32 |
| Date: | 2016–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2016_18&r=lab |
| By: | Kadija Charni (Aix-Marseille University (Aix-Marseille School of Economics), CNRS, & EHESS) |
| Abstract: | Classical literature uses the cross-sectional age-earnings profile to describe how the earnings evolve over the life cycle. Using a cohort analysis, I argue that this interpretation of age-earnings profile is not correct. I show that the cohort effects largely explain the decline observed at older ages. I illustrate this point by using a rotating panel data from France and a British longitudinal panel dataset for the period 1991 to 2007. I find no clear evidence that the earnings decline at older age, although the profiles are different between countries. Earnings for French workers rise linearly with age, with a further increase at the end of career, while it becomes flat for older workers in Great Britain. Overlapping cohorts provide an explanation of the observed decline of earnings for older workers in cross-sectional data. This suggests that cross-section age-earnings profile fails to represent the individual age-earnings profile. |
| Keywords: | age-earnings profile, older workers, cohort analysis |
| JEL: | J3 J14 J24 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1640&r=lab |
| By: | Pasquale Tridico; Riccardo Pariboni |
| Abstract: | The objective of this paper is to argue that the labour productivity decline experienced in recent years by several advanced countries can be explained, following a Kaldorian-Classical approach, by a weak GDP performance and by a decline in the wage share. Moreover, drawing inspiration from recent Post- Keynesian literature, we identify the ongoing worsening in income equality and the increase in the degree of financialisation as other major explanatory factors of sluggish productivity. The paper will provide a brief literature review concerning non-mainstream attempts to endogenise labour productivity. We will then discuss how labour flexibility and shareholder value orientation, one of the main aspects of financialisation, can negatively affect equality and labour productivity. Finally, we will propose and test an extended version of Sylos Labini’s productivity equation, where productivity is claimed to depend positively on GDP rate of growth and the wage share, and negatively on income inequality and financialisation. |
| Keywords: | Labour productivity, Inequality, Financialisation. |
| JEL: | E02 E12 E24 E44 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0211&r=lab |
| By: | Görg, Holger (Kiel Institute for the World Economy); Henze, Philipp (University of Kiel); Jienwatcharamongkhol, Viroj (University of Nottingham); Kopasker, Daniel (University of Aberdeen); Molana, Hassan (University of Dundee); Montagna, Catia (University of Aberdeen); Sjöholm, Fredrik (Lund University) |
| Abstract: | This paper studies the effect of the firm-size distribution on the relationship between employment and output. We construct a theoretical model, which predicts that changes in demand for industry output have larger effects on employment in industries characterised by a distribution that is more skewed towards smaller firms. Industry-specific shape parameters of the firm size distributions are estimated using firm-level data from Germany, Sweden and the UK, and used to augment a relationship between industry-level employment and output. Our empirical results align with the predictions of the theory and confirm that the size distribution of firms is an important determinant of the relationship between changes in output and employment. |
| Keywords: | firm distribution, firm size, employment, fluctuations |
| JEL: | E20 E23 L20 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10371&r=lab |
| By: | Ludovica Gambaro; Jan Marcus; Frauke H. Peter |
| Abstract: | Most literature on the relationship between childcare availability and maternal labour force participation examines childcare for preschool aged children. Yet families must continue to arrange childcare once their children enter primary school, particularly in countries where the school day ends at lunchtime. In this paper we examine the case of Germany, a country that has moved from an exclusively half-day school system to one where formal afternoon care is increasingly available. We estimate the effect of afternoon care on maternal labour supply. To do so, we use a novel matching technique, entropy balancing, and draw on the rich and longitudinal data of the German Socio-Economic Panel (SOEP). We show that children’s afternoon care increases mothers’ employment rate and their working hours. To confirm the robustness of our results we conduct a series of sensitivity analysis and apply a newly proposed method to assess possible bias from omitted variables. Our findings highlight how childcare availability shapes maternal employment patterns well after school entry. |
| Keywords: | Afternoon care, Maternal labour supply, All-day schools, Entropy balancing |
| JEL: | J13 J63 J65 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1622&r=lab |
| By: | Caruana Galizia, Paul; Wolf, Nikolaus |
| Abstract: | What shapes an economy's ability to absorb shocks? We test the hypothesis that high homeownership impairs the labour market's ability to absorb shocks through restricting labour mobility. Our results are relevant to the debate on Europe's high and unevenly distributed level of unemployment. We find that high homeownership hinders the convergence of unemployment rates across a panel of 85 German regions over 1998 to 2011. To deal with endogeneity, we use variation in the timing and intensity of WWII Allied bombing of Germany, which destroyed the country's housing stock and led to the wide-scale public provision of rental accommodation. We show how bombing during the war created substantial variation in post-WWII housing subsidies and contributed to persistent differences in homeownership across Germany. We find that moving from the first to second quartile in homeownership rates almost doubles the unemployment growth rate. Moreover, we provide evidence that homeownership restricts gross emigration rates, supporting the idea that labour mobility is the key mechanism behind our finding. Housing policies matter for labour markets. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11649&r=lab |
| By: | Silvia Avram (ISER, University of Essex, U.K.); Olga Canto (Universidad de Alcalá and EQUALITAS, Spain) |
| Abstract: | A large body of literature in economics aims to understand the transmission mechanisms through which intergenerational economic and social advantage persists. Evidence shows that individuals born into low socioeconomic status families tend to experience worse labour outcomes when adults than otherwise similar peers. Recessions, however, may have a significant impact on how certain elements of this transmission process operate in some countries but not in others (e.g. due to diverse changes in returns to education or occupation and the role of family networks). Using EU-SILC data for 2005 and 2011 we compare the different role of family background on labour outcomes in five EU countries before and after the Great Recession using a multidimensional family background indicator, that avoids undesirable cohort effects. Our results suggest that family background affects employment prospects and job quality (wages and being on a temporary contract) beyond its effect on education but we do not find significant evidence that this effect is substantially moderated by the economic cycle. |
| Keywords: | family background, labour outcomes, returns to education, European Union, recession. |
| JEL: | I24 I26 J31 J62 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2016-414&r=lab |
| By: | Ryan Edwards; Francesc Ortega |
| Abstract: | This paper provides a quantitative assessment of the economic contribution of unauthorized workers to the U.S. economy, and the potential gains from legalization. We employ a theoretical framework that allows for multiple industries and a heterogeneous workforce in terms of skills and productivity. Capital and labor are the inputs in production and the different types of labor are combined in a multi-nest CES framework that builds on Borjas (2003) and Ottaviano and Peri (2012). The model is calibrated using data on the characteristics of the workforce, including an indicator for imputed unauthorized status (Center for Migration Studies, 2014), and industry output from the Bureau of Economic Analysis. Our results show that the economic contribution of unauthorized workers to the U.S. economy is substantial, at approximately 3% of private-sector GDP annually, which amounts to close to $5 trillion over a 10-year period. These effects on production are smaller than the share of unauthorized workers in employment, which is close to 5%. The reason is that unauthorized workers are less skilled and appear to be less productive, on average, than natives and legal immigrants with the same observable skills. We also find that legalization of unauthorized workers would increase their contribution to 3.6% of private-sector GDP. The source of these gains stems from the productivity increase arising from the expanded labor market opportunities for these workers which, in turn, would lead to an increase in capital investment by employers. |
| JEL: | F22 J15 J31 J61 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22834&r=lab |
| By: | Carlos Farinha Rodrigues; Isabel Andrade |
| Abstract: | The elderly poverty rate has decreased significantly in Portugal in recent years with rising elderly incomes and inequality and material deprivation levels converging to national levels. There is also growing evidence of heterogeneity amongst the elderly poor, with marked differences between the higher average incomes of the younger elderly generations versus the older ones. For example, the poverty rate of the elderly aged 75+ and living alone was equal to 27% in 2014, identifying this group as one of great economic and social vulnerability. These results are even more significant when the ageing of the population is taken into account: the ageing index rose from 45% in 1980 to over 90% in late 1990s and 141.3% in 2014, implying that the decreasing elderly poverty has an increasing effect on the national poverty levels. The aim of this paper in to investigate whether the austerity policies implemented in the post-2010 period had a strong impact on the monetary resources and what was their effect on the elderly using the most recent available EU-SILC data. It concludes that the decrease in the ‘official’ elderly poverty indicators in 2009-14 is connected with the drop in the poverty threshold caused by the decrease in the average median income of the whole population, and that if its effect is removed from the analysis through the usage of the anchored poverty line, the elderly poverty indicators actually increased, rather than decreased, during the economic crisis. Key Words : Social Policy, Income Distribution, Inequality, Poverty Alleviation, Demographic Economics, Portugal |
| JEL: | D63 I32 I38 J1 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp242016&r=lab |
| By: | Klor, Esteban F; Saiegh, Sebastian; Satyanath, Shanker |
| Abstract: | Well-known dictatorships have justified massive human rights violations on the grounds that they were aimed at attacking crony capitalism (governance based on favoring firms that are connected to the regime). So far, however, there is no systematic study examining whether this justification should be believed. We address this gap in the literature in the context of one of the best-known episodes of human rights violations in modern history, the repression following the coup in Argentina on March 24, 1976. Specifically, we examine the logic driving the choice of firm level union representatives who were subjected to violence following the coup. Using an original dataset assembled and digitized by us, we find that political, business and social connections to the regime are associated with an increase of 2 to 3 times in the number of firm level union representatives arrested and/or disappeared. This is the case even after controlling for a battery of firms' characteristics that capture alternative explanations for the targeting of violence. The effect is particularly pronounced in privately owned (as opposed to state-owned) firms, suggesting that the correlation is driven by cronyism for financial gain rather than ideology or information transmission. We also show that connected firms benefited from violence against union representatives by subsequently having less strikes and a higher market valuation. Our findings highlight the pervasiveness of ties to the government, even in cases where one of the main stated goals of the regime is to curb cronyism. |
| Keywords: | Argentina; Human Rights Violations; Labor Repression; Political Connections |
| JEL: | D73 D74 J52 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11650&r=lab |
| By: | David Albouy; Kristian Behrens; Frédéric Robert-Nicoud; Nathan Seegert |
| Abstract: | The received economic wisdom is that cities are too big and that public policy should limit their sizes. This wisdom assumes, unrealistically, that city sites are homogeneous, migration is unfettered, land is given freely to incoming migrants, and federal taxes are neutral. Should those assumptions not hold, large cities may be inefficiently small. We prove this claim in a system of cities with heterogeneous sites and either free mobility or local governments, where agglomeration economies, congestion, federal taxation, and land ownership create wedges. A quantitative version of our model suggests that cities may well be too numerous and underpopulated for a wide range of plausible parameter values. The welfare costs of free migration equilibria appear small, whereas they seem substantial when local governments control city size. |
| JEL: | H73 J61 R12 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22823&r=lab |
| By: | Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater |
| Abstract: | We analyse the efficiency in a labour market matching process. We understand efficiency as a share of the mean number of matches (conditional on given covariates) in the number of matches that would occur if search and matching was optimal, bearing in mind that, contrary to the production function, being unemployed or vacant is not freely chosen or changed. We apply a stochastic matching frontier for random, job queuing and stock-flow models. We use data for Poland, a country with a highly regionally diversified unemployment rate. We contribute to the literature by comparing different spatial aggregation levels – NUTS-1 to NUTS-4 in monthly and annual perspectives. We analyse whether and how the efficiency changes over time. We find spatial and temporal heterogeneity in the labour market. Thus, various policy measures should be designed to improve labour market matching efficiency at certain regional levels. |
| Keywords: | matching function; matching efficiency; spatial aggregation; stochastic frontier; |
| JEL: | C23 J64 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp575&r=lab |
| By: | van Landeghem, Bert; Cörvers, Frank (ROA / Human capital in the region); de Grip, Andries (Research Centre for Educ and Labour Mark) |
| Abstract: | Active Labour Market Policies (ALMPs) often exclusively target towards the long-term unemployed. Although it might be more efficient to intervene earlier in order to prevent long-term unemployment rather than to cure it, the climate of austerity in Eurozone countries is spreading a tendency to further reduce the basic counselling for those who become unemployed. This study investigates the impact on employment chances of a relatively light and inexpensive intervention. In a field experiment in a public employment office in Flanders, a random selection of clients were invited for a mandatory information session in the first month of the unemployment spell, while the control group were invited after four months of unemployment. Although the average intention-to-treat effect we find is not significant, the early intervention appears to be very beneficial for those with low education. |
| Keywords: | active labour market policies, unemployment, natural field experiment |
| JEL: | D04 D61 J64 J68 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2016011&r=lab |
| By: | Angelini, Viola (University of Groningen); Bertoni, Marco (University of Padova); Stella, Luca (University of Wuppertal); Weiss, Christoph T. (European Investment Bank) |
| Abstract: | By allowing people to obtain divorce without the consent of their spouse, Unilateral Divorce Laws (UDLs) increase the risk of divorce. Using the staggered introduction of UDLs across European countries, we show that households exposed to UDLs for longer time accumulate more savings. This effect holds for both financial and total wealth and is stronger at higher quantiles of the wealth distribution. Longer exposure to UDLs also increases female labour market participation and financial literacy, contributing to uncover the mechanisms through which the risk of divorce may affect savings. Our results are consistent with a precautionary motive for saving. |
| Keywords: | household savings, financial literacy, divorce |
| JEL: | G11 J12 J22 J32 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10363&r=lab |
| By: | Jonathan V. Hall; Alan B. Krueger |
| Abstract: | Uber, the ride-sharing company launched in 2010, has grown at an exponential rate. This paper provides the first comprehensive analysis of the labor market for Uber’s driver-partners, based on both survey and administrative data. Drivers who partner with Uber appear to be attracted to the platform largely because of the flexibility it offers, the level of compensation, and the fact that earnings per hour do not vary much with the number of hours worked. Uber’s driver-partners are more similar in terms of their age and education to the general workforce than to taxi drivers and chauffeurs. Most of Uber’s driver-partners had full- or part-time employment prior to joining Uber, and many continued in those positions after starting to drive with the Uber platform, which makes the flexibility to set their own hours all the more valuable. Uber’s driver-partners also often cited the desire to smooth fluctuations in their income as a reason for partnering with Uber. |
| JEL: | J01 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22843&r=lab |
| By: | Jørgen Modalsli (Statistics Norway) |
| Abstract: | There is increasing evidence that intergenerational transmission of economic characteristics goes beyond what can be measured by parent-child associations. However, existing studies are based on samples from small geographic areas or particular time periods, making it hard to know to what extent these multigenerational processes can be generalized across space and time, and how they depend on the measurement of economic outcomes. This paper uses Norwegian census data on occupational associations among grandfathers, fathers and sons from 1865 to 2011 and finds significant grandparental influence throughout the period. In particular, the additional grandparental influence is strong for white-collar occupations. The findings are robust to alternative ways of measuring the characteristics of the parent generation, and to the use of income rather than occupation as a measure of economic status. Multigenerational persistence is found to have been stronger early in the period, before the establishment of a modern welfare state, suggesting that institutions play a part in how economic characteristics are transmitted across generations. Persistence is strong also in subpopulations where generations grew up in different parts of the country. This shows that the grandparental effect is not exclusively driven by direct interpersonal interaction between individuals across generations. |
| Keywords: | Multigenerational mobility; human capital transmission; occupational mobility; income mobility; grandfathers |
| JEL: | J62 D31 N33 N34 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:850&r=lab |
| By: | Jeremy Greenwood (University of Pennsylvania); Nezih Guner (Universitat Autònoma de Barcelona); Guillaume Vandenbroucke (Federal Reserve Bank of St. Louis) |
| Abstract: | Powerful currents have reshaped the structure of families over the last century. There has been (i) a dramatic drop in fertility and greater parental investment in children; (ii) a rise in married female labor-force participation; (iii) a decline in marriage and a rise in divorce; (iv) a higher degree of assortative mating; (v) more children living with a single mother; (vi) shifts in social norms governing premarital sex and married women's roles in the labor market. Macroeconomic models explaining these aggregate trends are surveyed. The relentless flow of technological progress and its role in shaping family life are stressed. |
| Keywords: | assortative mating, baby boom, baby bust, family economics, female labor supply, fertility, household income inequality, Household Production, human capital, macroeconomics, marriage and divorce, Quantity-quality tradeoff, premarital sex, quantitative theory, single mothers, social change, survey paper, technological progress, women's rights |
| JEL: | D10 E20 J10 O10 O40 Z10 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-021&r=lab |
| By: | Rafael Doménech; Juan Ramón García; Camilo Ulloa |
| Abstract: | In this paper we estimate the macroeconomic effects of the greater wage and firms’ internal flexibility promoted by various changes in Spanish labour regulations approved since 2012. To do so, we propose a structural VAR that allows us to break down the changes in the main macroeconomic variables into different structural shocks. |
| Keywords: | Economic Analysis , Spain , Working Paper |
| JEL: | C32 E24 J08 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:16/17&r=lab |