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on Labour Economics |
| By: | van den Berg, Gerard J. (University of Bristol, IFAU Uppsala, IZA, ZEW, CEPR); Hofmann, Barbara (University of Mannheim, IAB Nuremberg); Uhlendorff, Arne (CNRS, CREST, IAB Nuremberg, DIW, IZA) |
| Abstract: | Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex ante threat of sanctions. Based on a large inflow sample into unemployment of male job seekers in West Germany in the year 2000, we analyze the effects of vacancy referrals and sanctions on the unemployment duration and the quality of job matches, in conjunction with the possibility to report sick. We estimate multispell duration models with selection on unobserved characteristics. We find that a vacancy referral increases the transition rate into work and that such accepted jobs go along with lower wages. We also find a positive effect of a vacancy referral on the probability of reporting sick. This effect is smaller at high durations, which suggests that the relative attractiveness of vacancy referrals increases over the time spent in unemployment. In our setting, with relatively severe sanctions, around 9 percent of sickness absence during unemployment is induced by vacancy referrals. |
| Keywords: | unemployment; vacancy referrals; physician; wage; unemployment Insurance; monitoring; moral hazard |
| JEL: | C21 C41 J64 J65 |
| Date: | 2017–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2017_001&r=lab |
| By: | Ryan Finnigan; Jo Mhairi Hale (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Millions of workers in the United States experience irregular and unpredictable weekly working hours, particularly following the Great Recession. This work variability brings greater economic insecurity and work-life conflict, particularly for low-wage workers. In the absence of strong and widespread policies regulating ‘precarious work,’ labor unions may significantly limit work variability. However, any benefits with union membership could depend crucially on union density, which varies widely between states. This paper analyzes the relationship between unionization and two measures of work variability among hourly workers using data from the 2004 and 2008 panels of the Survey of Income and Program Participation. The results show union members were significantly less likely to report a varying number of hours from week to week, but only in states with relatively high unionization rates. In contrast, union members were more likely to report irregular schedules, but not in states with the highest unionization rates. Finally, we find the monthly earnings penalty for work variability is significantly weaker among union members than non-members. Altogether, the paper’s results demonstrate some of the continued benefits of unionization for workers, and some of its limitations. Keywords: unionization, precarious employment, work scheduling, earnings |
| JEL: | J1 Z0 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2017-002&r=lab |
| By: | Helge Braun (Ruhr Graduate School in Economics, Germany); Björn Brügemann (VU Amsterdam, The Netherlands) |
| Abstract: | We study welfare effects of public short-time compensation (STC) in a model in which firms respond to idiosyncratic profitability shocks by adjusting employment and hours per worker. Introducing STC substantially improves welfare by mitigating distortions caused by public unemployment insurance (UI), but only if firms have access to private insurance. Otherwise firms respond to low profitability by combining layoffs with long hours for remaining workers, rather than by taking up STC. Optimal STC is substantially less generous than UI even when firms have access to private insurance, and equally generous STC is worse than not offering STC at all. |
| Keywords: | Short-Time Compensation; Unemployment Insurance; Welfare |
| JEL: | J65 |
| Date: | 2017–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170010&r=lab |
| By: | Merkl, Christian; Stüber, Heiko |
| Abstract: | This paper analyzes the effects of different wage cyclicalities on labor market flow dynamics at the establishment level. We derive a model that allows for heterogeneous wage cyclicalities across firms over the business cycle and confront the theoretical results with the new AWFP dataset, which comprises the entire universe of German establishments. In line with theory, establishments with more procyclical wage movements over the business cycle have a more countercyclical hires rate and employment behavior. This result is robust when we look at certain sectors and states. Wage cyclicalities do not only have the expected qualitative impact on stocks and flows, but the quantitative responses are also in line with the proposed model. More generally, our empirical results provide support for theories that lead to an effect of wage rigidities on labor market flow dynamics. |
| Keywords: | Labor Market Flows,Wages,Administrative Data,Establishment,Matches |
| JEL: | E24 E32 J64 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:122016&r=lab |
| By: | Nezih Guner (Universitat Autònoma de Barcelona); Remzi Kaygusuz; Gustavo Ventura (Arizona State University) |
| Abstract: | What are the macroeconomic and welfare effects of expanding transfers to households with children in the United States? How do childcare subsidies compare to alternative policies? We answer these questions in a life-cycle equilibrium model with household labor-supply decisions, skill losses of females associated to non participation, and heterogeneity in terms of fertility, childcare expenditures and access to informal care. We consider the expansion of transfers that are contingent on market work - childcare subsidies and Child and Dependent Care Tax Credits (CDCTC) - versus those that are not - Child Tax Credits (CTC). We find that expansions of transfers of the first group have substantial positive effects on female labor supply, that are largest at the bottom of the skill distribution. Universal childcare subsidies at a 75% rate lead to long-run increases in the participation of married females of 8.8%, while an equivalent expansion of the CTC program leads to the opposite - a reduction of about 2.4%. We find that welfare gains of newborn households are substantial and up to 2.3% under the CDCTC expansion. The expansion of none of the existing programs, however, receives majority support at the time of its implementation. Our findings show substantial heterogeneity in welfare effects, with a small fraction of households - young and poorer households with children - who gain significantly while many others lose. |
| Keywords: | household labor supply, child-related transfers, childcare |
| JEL: | E62 H24 H31 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-001&r=lab |
| By: | Jenny Williams (University of Melbourne, Australia); Jan C. van Ours (Erasmus School of Economics, The Netherlands) |
| Abstract: | We study the impact of early cannabis use on the school to work transition of young men. Our empirical approach accounts for common unobserved confounders that jointly affect selection into cannabis use and the transition from school to work using a multivariate mixed proportional hazard framework in which unobserved heterogeneities are drawn from a discrete mixing distribution. Extended models account for school leavers' option of returning to school rather than starting work as a competing risk. We find that early cannabis use leads young men to accept job offers more quickly and at a lower wage rate compared to otherwise similar males who did not use cannabis. These effects are present only for those who use cannabis for longer than a year before leaving school. Overall, our findings are consistent with a mechanism whereby early non-experimental cannabis use leads to greater impatience in initial labor market decision-making. |
| Keywords: | multivariate duration models, discrete factors, cannabis use, job search, wages |
| JEL: | C41 I12 J01 |
| Date: | 2017–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170004&r=lab |
| By: | F. Barigozzi; H. Cremer; K. Roeder |
| Abstract: | Our model explains the observed gender-specific patterns of career and child care choices through endogenous social norms. We study how these norms interact with the gender wage gap. We show that via the social norm a couple’s child care and career choices impose an externality on other couples, so that the laissez-faire is inefficient. We use our model to study the design and effectiveness of three commonly used policies. We find that child care subsidies and women quotas can be effective tools to mitigate or eliminate the externality. Parental leave, however, may even intensify the externality and decrease welfare. |
| JEL: | D13 H23 J16 J22 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1094&r=lab |
| By: | Ghassan Dibeh; Ali Fakih; Walid Marrouch |
| Abstract: | This paper studies the determinants of youth emigration decisions, which is considered to be one of the main causes of ‘Brain Drain’ in Arab Mediterranean Countries (AMCs). We focus on the case of Lebanon using a unique dataset covering young people aged 15 to 29 from the year 2016. The aim of the paper is to identify the profile of youth’s propensity to emigrate from Lebanon. The empirical results indicate that youth from non-wealthy backgrounds living in smaller dwellings have a higher propensity to emigrate. It is also found that being male and unemployed has a positive incidence on migration. Moreover, university education promotes the willingness to emigrate; while residents of poor regions are more likely to express such willingness. Finally, the paper provides some insights for policymakers. |
| Keywords: | Emigration; youth; Lebanon; probit model, |
| JEL: | C25 J60 O15 |
| Date: | 2017–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2017s-04&r=lab |
| By: | Steven Bradley; Giuseppe Migali |
| Keywords: | Tuition fee reform, Recession, University Dropouts |
| JEL: | I22 I28 J6 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:149346773&r=lab |
| By: | Christian Schoder (Department of Economics, New School for Social Research) |
| Abstract: | A Dynamic Stochastic Disequilibrium (DSDE) model is proposed for business cycle analysis. Unemployment arises from job rationing due to insucient aggregate spending. The nominal wage is taken as a policy variable subject to a collective Nash bargaining process between workers and rms with the state of the labor market a ecting the relative bargaining power. A precautionary saving motive arising from an uninsurable risk of permanent income loss implies an equilibrium relation between consumption, income and wealth. The DSDE model di ers from the corresponding Dynamic Stochastic General Equilibrium (DSGE) model with labor market clearing in important respects: (i) Output is determined from the demand side and not from the supply side; (ii) The steady-state interest rate cannot be interpreted as a natural rate; (iii) It has to be smaller than the rate of economic growth in order for a steady state to exist; (iv) Determinacy of the solution requires the monetary policy response to in ation to be high (low) at low (high) steady-state interest rates; (v) Fighting in ation is stabilizing in the active monetary policy regime but destabilizing in the passive monetary policy regime; (vi) Macroeconomic responses to monetary policy and productivity shocks are similar to those of the DSGE model but give more weight to quantity adjustment and predict the real wage to increase with productivity. |
| Keywords: | Dynamic stochastic disequilibrium, labor market disequilibrium, labor rationing, collective wage bargaining, monetary policy |
| JEL: | B41 E12 J52 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1701&r=lab |