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on Labour Economics |
| By: | Salvador Barrios (European Commission - JRC); Mathias Dolls (ZEW); Anamaria Maftei (European Commission - JRC); Andreas Peichl (ZEW); Sara Riscado (European Commission - JRC); Janos Varga (European Commission – DG ECFIN); Christian Wittneben (ZEW) |
| Abstract: | In this paper, we present a dynamic scoring analysis of tax reforms for European countries. In this analysis we account for the feedback effects resulting from the adjustment in the labour market and for the economy-wide reaction to tax policy changes. We combine the microsimulation model EUROMOD, extended to incorporate an estimated labour supply model, with the new Keynesian DSGE model QUEST, used by the European Commission for analysing fiscal and structural reform in EU member states. These two models are connected in two ways: by introducing tax policy shocks in QUEST, derived from computing changes in implicit tax rates using EUROMOD; and by calibrating the elasticity of labour supply and the non-participation rates, by skill categories, in QUEST from values calculated using EUROMOD and the estimated labour supply function. Moreover, we discuss aggregation issues and the consistency between the micro and macro modelling of labour supply and interpret the model interaction in terms of tax incidence analysis. We illustrate the methodological approach with the results obtained when scoring specific reforms in three EU Member States, namely, Italy, Belgium and Poland. We compare two different scenarios – one in which the behavioural response to tax changes over the medium term is ignored and another scenario where this behavioural/micro-dimension is embedded into the microsimulation model. In this particular set-up, we do not find evidence of strong second-round effects, and the fiscal and distributional effects of the reforms tend to overlap in both scenarios. We attribute these results to existing rigidities in labour and product markets, which have shrunk further the small tax policy shocks introduced into the macroeconomic model. |
| Keywords: | Dynamic scoring, tax reforms, first and second round effects, labour market behaviour |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:taxref:201603&r=lab |
| By: | Huang, Wei (National Bureau of Economic Research); Zhang, Chuanchuan (Central University of Finance and Economics) |
| Abstract: | This paper examines the impacts of social pension provision among people of different ages. Utilizing the county-by-county rollout of the New Rural Pension Scheme in rural China, we find that, among the age-eligible people, the scheme provision leads to higher household income (18 percent) and food expenditure (10 percent), lower labor supply (6 percent), and better health (11-14 percent). In addition, among the age-ineligible adults, the pension scheme shifts them from farming to non-farming work, lowers insurance participation rate, but does not change income, expenditure or health significantly. Finally, among the children aged below 15, the pension scheme leads to more pocket money received, more caring from grandparents, improved health, and higher schooling rate. |
| Keywords: | pension, health, elderly |
| JEL: | E21 H55 I38 O22 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10425&r=lab |
| By: | Bhalotra, Sonia R. (University of Essex); Clarke, Damian (Universidad de Santiago de Chile) |
| Abstract: | Twin births are often construed as a natural experiment in the social and natural sciences on the premise that the occurrence of twins is quasi-random. We present new population-level evidence that challenges this premise. Using individual data for more than 18 million births (more than 500,000 of which are twins) in 72 countries, we demonstrate that indicators of the mother's health and health-related behaviours and exposures are systematically positively associated with the probability of a twin birth. The estimated associations are sizeable, evident in richer and poorer countries, and evident even in a sample of women who do not use IVF. The positive selection of women into twinning implies that estimates of impacts of fertility on parental investments and on women's labour supply that use twin births to instrument fertility will tend to be downward biased. This is pertinent given the emerging consensus that these relationships are weak. Using two large samples, one for developing countries and one for the United States, and focusing upon twin-instrumented estimates of the quantity–quality trade-off, we demonstrate the nature of the bias and estimate bounds on the true parameter. |
| Keywords: | twins, fertility, maternal health, miscarriage, bounds, quantity-quality trade-off, parental investment |
| JEL: | J12 J13 C13 D13 I12 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10405&r=lab |
| By: | Coral del Río; Olga Alonso-Villar |
| Abstract: | This paper shows that the occupational sorting of racial-gender groups varies by sexual orientation. Except for Asians, women in same-sex couples are more evenly distributed across occupations than women in different-sex couples. Black and Hispanic men in same-sex couples are also less concentrated in occupations than their straight counterparts, while the pattern for Asian and white men is less conclusive. In addition, the analysis reveals that, except for black women (whose monetary losses associated with their sorting do not seem to be affected by sexual orientation), for the remaining female groups, the occupational achievements of lesbians are higher than those of their straight counterparts. The occupational attainments of gay men are also higher than those of straight men of the same race/ethnicity. However, when comparing workers having bachelor’s degrees with their peers in education, the gains of Asian lesbian and straight women associated with their occupational sorting almost disappear and white lesbian women no longer have gains. Asian and white gay men still have gains associated with their sorting, although lower than those of their straight counterparts. Black and Hispanic gay men do remain better off than their straight counterparts, although they have losses associated with their sorting. When comparing workers with a low educational level with their peers in education, the only groups with gains associated with their sorting are white straight and gay men, especially the former. Gay men are worse off than straight men of the same race/ethnicity, while lesbian women tend to have lower losses than their straight counterparts. |
| Keywords: | Sexual orientation; gender; race; occupational segregation; wages; wellbeing |
| JEL: | D63 I31 J15 J16 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:vig:wpaper:1604&r=lab |
| By: | Gustafsson, Björn Anders (University of Gothenburg); Mac Innes, Hanna (University of Gothenburg); Österberg, Torun (University of Gothenburg) |
| Abstract: | This paper analyses how age at immigration to Sweden and getting a first foothold in the labor market is related. We estimate hazard rate models using registry data on all persons who arrived in each of the years 1990, 1994, 1998, and 2002. The results show that the number of years taken to get a foothold in the Swedish labor market increases rapidly by age among immigrants from middle- and low-income countries aged 40 +. Most individuals who are born in middle- or low-income countries who immigrate after age 50 never get a foothold in the Swedish labor market. |
| Keywords: | immigrants, Sweden, age, labor market |
| JEL: | C41 J15 J61 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10423&r=lab |
| By: | Matthew S. Rutledge; Caroline V. Crawford |
| Abstract: | Delaying retirement improves retirement preparedness, but older workers cannot work longer if employers do not hire or retain them. This study examines one way in which public policy potentially makes older workers more attractive to employers: state regulatory restrictions on how much employer premiums are permitted to increase at small firms with older, unhealthier workforces. The study uses data from the Current Population Survey from 1989-2013 to compare older individuals’ overall employment, small-firm employment, and earnings in states with varying degrees of premium regulation, and among workers of different educational backgrounds. The analysis shows mixed results. Stronger premium regulations were not effective in increasing employment: employment at small firms, which are most sensitive to premium increases, saw no statistically significant increase, and overall employment for older workers at both large and small firms increased only slightly. The earnings gap between large and small firms is also smaller in states with tighter restrictions, but older workers were not helped appreciably more than younger workers. These results suggest that indirect efforts to lower the price of hiring an older worker are not likely to be effective in improving their job prospects. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2016-17&r=lab |
| By: | Qu, Zhaopeng (Frank) (Nanjing University); Zhao, Zhong (Renmin University of China) |
| Abstract: | The paper studies the levels and changes in wage inequality among Chinese rural-urban migrants during 2002-2007. Using data from two waves of national household surveys, we find that wage inequality among migrants decreased significantly between 2002 and 2007. Our analysis on the wage distribution further shows that the high-wage migrants experienced slower wage growth than middle-and low-wage migrants – a primary cause of declining inequality of migrants. By using distributional decomposition methods based on quantile regression, we find that overall between-group effect dominates in the whole wage distribution, which means that the change in returns to the characteristics (education, experience and other employment characteristics) plays a key role, but on the upper tails of the wage distribution, the within group effect (residual effect) dominates, implying that the unobservable factors or institutional barriers do not favor the migrants at the top tail of the wage distribution. We also study wage differential between migrants and urban natives, and find that though the wage gap is narrowed, gap at upper wage distribution is becoming bigger. Overall, the results suggest that there exists strong "glass ceiling" for migrants in urban labor market. |
| Keywords: | rural to urban migrants, wage inequality, quantile decomposition, China |
| JEL: | J30 J45 J61 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10424&r=lab |
| By: | Brewer, Mike (ISER, University of Essex); Cribb, Jonathan (Institute for Fiscal Studies, London) |
| Abstract: | Time-limited in-work credits are cheaper, and more targeted, than conventional in-work credits, but are thought to have small to zero long-term impacts. We study two time-limited in-work credits introduced in the mid-2000s in the UK and find they reduced welfare participation and increased employment. Both policies increased job retention once recipients were in work and boosted employment even after the payments were stopped. Conditioning on hours of work was important. Paying a credit to those working 16+ hours a week only increased part-time work, while conditioning on full-time work reduced part-time work and increased full-time work. |
| Keywords: | in-work credits, time-limits, duration model, lone parents |
| JEL: | H21 I38 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10414&r=lab |
| By: | Chletsos, Michael; Roupakias, Stelios |
| Abstract: | This study applies the skill-cell approach introduced by Borjas (2003) in order to identify the causal impact of immigration on the employment opportunities of resident workers, using data from two different samples, namely two waves of the Census of Population (1991 and 2001) and the Greek Labour Force Survey (1998-2015). Grouping workers in three education and eight experience classes at the national level, we find small adverse effects on the employment outcomes of natives, that are generally not sensitive to alternative education and experience classifications and when accounting for the effective experience of immigrants. However, as for the period between 1998 and 2015, our findings appear to be driven by the negative influence of immigration ascertained in the sub-period during the Great Recession. Remarkably, there is some evidence of complementarity when the pre-recession period (1998- 2007) is considered. The less-skilled natives, appear to be the group of workers which is more vulnerable to immigration. Our results also indicate that the Greek economy has the capacity to accommodate large immigration flows in the long-run, without significant effects. Finally, contrary to earlier studies, we do not find evidence consistent with the idea that migrants push natives towards complex, language-intensive tasks. |
| Keywords: | Immigration employment, earnings |
| JEL: | F22 J15 J31 |
| Date: | 2016–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75659&r=lab |
| By: | Peter A. Diamond; Ayşegül Şahin |
| Abstract: | The aggregate matching (hiring) function relates gross hires to labor market tightness. Decompositions of aggregate hires show how the hiring process differs across different groups of workers and of firms. Decompositions include employment status in the previous month, age, gender and education. Another separates hiring between part-time and full-time jobs, which show different patterns in the current recovery. Shift-share analyses are done based on industry, firm size and occupation to show what part of the residual of the aggregate hiring function can be explained by the composition of vacancies. The hiring process appears to shift as a recovery starts, coinciding with shifts in the Beveridge curve. The paper also discusses some issues in the modeling of the labor market. |
| JEL: | E24 J60 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22965&r=lab |
| By: | Nikolova, Milena (IZA); Ayhan, Sinem H. (IZA) |
| Abstract: | This study is the first to provide a causal estimate of the subjective well-being effects of spousal unemployment at the couple level. Using German panel data on married and cohabiting partners for 1991-2013 and information on exogenous job termination induced by workplace closure, we show that spousal unemployment reduces the life satisfaction of indirectly-affected spouses. The impact is equally pronounced among female and male partners. Importantly, the results are not driven by an income effect, but likely reflect the psychological costs of unemployment. Our findings are robust to a battery of sensitivity checks and imply that public policy programs aimed at mitigating the negative consequences of unemployment need to consider within-couple spillovers. |
| Keywords: | unemployment, involuntary job loss, plant closure, spouses, well-being |
| JEL: | I31 J01 J65 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10411&r=lab |
| By: | Christine L. Exley; Muriel Niederle; Lise Vesterlund |
| Abstract: | Gender differences in the propensity to negotiate are often used to explain the gender wage gap, popularizing the push for women to “lean-in.” We use a laboratory experiment to examine the effect of leaning-in. Despite men and women achieving similar and positive returns when they must negotiate, we find that women avoid negotiations more often than men. While this suggests that women would benefit from leaning-in, a direct test of the counterfactual proves otherwise. Women appear to positively select into negotiations and to know when to ask. By contrast, we find no significant evidence of a positive selection for men. |
| JEL: | C9 J01 J16 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22961&r=lab |
| By: | Raj Chetty; Nathaniel Hendren |
| Abstract: | We show that the neighborhoods in which children grow up play a significant role in determining their earnings, college attendance rates, and fertility and marriage rates by studying more than 7 million families who move across commuting zones in the U.S. By exploiting variation in the age of children when families move, we find that neighborhoods have significant childhood exposure effects: the outcomes of children whose families move to a better neighborhood – as measured by the outcomes of children already living there – improve linearly in proportion to the time they spend growing up in that area, at a rate of approximately 4% per year of exposure. We distinguish the causal effects of neighborhoods from confounding factors by comparing the outcomes of siblings within families, studying moves triggered by displacement shocks, and exploiting sharp variation in predicted place effects across birth cohorts, genders, and quantiles to implement overidentification tests. The findings show that place affects intergenerational mobility primarily through childhood exposure, helping reconcile conflicting results in the prior literature. |
| JEL: | H0 J0 R0 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23001&r=lab |
| By: | Gehrsitz, Markus; Ungerer, Martin |
| Abstract: | Millions of refugees made their way to Europe between 2014 and 2015, with over one million arriving in Germany alone. Yet, little is known about the impact of this inflow on labor markets, crime, and voting behavior. This article uses administrative data on refugee allocation and provides an evaluation of the short-run consequences of the refugee inflow. Our identification strategy exploits that a scramble for accommodation determined the assignment of refugees to German counties resulting in exogeneous variations in the number of refugees per county even within states. Our estimates suggest that migrants have not displaced native workers but have themselves struggled to find gainful employment. We find very small increases in crime in particular with respect to drug offenses and fare-dodging. Our analysis further suggests that counties which experience a larger influx see neither more nor less support for the main anti-immigrant party than counties which experience small migrant inflows. |
| Keywords: | Immigration,Refugees,Unemployment,Crime,Voting |
| JEL: | J6 J15 K4 D72 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16086&r=lab |
| By: | Raj Chetty; Nathaniel Hendren |
| Abstract: | We estimate the causal effect of each county in the U.S. on children's earnings and other outcomes in adulthood using a fixed effects model that is identified by analyzing families who move across counties with children of different ages. Using these estimates, we (a) quantify how much places matter for upward mobility, (b) construct predictions of the causal effect of growing up in each county that can be used to guide families seeking to move to opportunity, and (c) characterize which types of areas produce better outcomes. For children growing up in low-income families, each year of childhood exposure to a one standard deviation (SD) better county increases income in adulthood by 0.5%. Hence, growing up in a one SD better county from birth increases a child's income by approximately 10%. There is substantial local area variation in children's outcomes: for example, growing up in the western suburbs of Chicago (DuPage county) would increase a given child's earnings by 30% relative to growing up in Cook county. Counties with less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates tend to produce greater upward mobility. Boys' outcomes vary more across areas than girls, and boys have especially poor outcomes in highly segregated areas. One-fifth of the black-white earnings gap can be explained by differences in the counties in which black and white children grow up. Areas that generate better outcomes tend to have higher house prices, but our approach uncovers many “opportunity bargains” – places that generate good outcomes but are not very expensive. |
| JEL: | H0 J0 R0 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23002&r=lab |
| By: | Folke, Olle (Uppsala University); Rickne, Johanna (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This paper addresses women's under-representation in top jobs in organizational hierarchies. We show that promotions to top jobs dramatically increase women's probability of divorce, but do not affect men's marriages. This effect is causally estimated for top jobs in the political sector, where close electoral results deliver exogenous variation in promotions across job candidates. Descriptive evidence from job promotions to the position of CEO shows that private sector promotions result in the same gender inequality in the risk of divorce. A description of male and female job candidates' household formations sheds some light on the mechanism behind this result. For most male candidates for top jobs, their promotion aligns with the gender-specialized division of paid and unpaid labor in their households. Many female candidates for top jobs live in dual-earner households and are married to older husbands who take a small share of parental leave. Divorce among women in top jobs occurs more often in couples with a larger age gap and a less equal division of leave, and in households in which her promotion shifts the division of earnings (further) away from the norm of male dominance. No divorce effect is found in couples that are more gender-equal in terms of having a smaller age gap and a more equal division of parental leave. We argue that norms and behavior in the marriage market hinder the closure of the gender gap in the labor market. |
| Keywords: | Promotions; Marriage; Social norms; Divorce; Career |
| JEL: | H00 J12 J16 |
| Date: | 2016–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1146&r=lab |