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on Labour Economics |
| By: | Hornstein, Andreas (Federal Reserve Bank of Richmond); Kudlyak, Marianna (Federal Reserve Bank of San Francisco) |
| Abstract: | In the U.S. labor market unemployed individuals that are actively looking for work are more than three times as likely to become employed as those individuals that are not actively looking for work and are considered to be out of the labor force (OLF). Yet, on average, every month twice as many people make the transition from OLF to employment than do from unemployment. Based on these observations we have argued in Hornstein, Kudlyak, and Lange (2014) for an alternative measure of resource utilization in the labor market, a non-employment index, which is more comprehensive than the standard unemployment rate. In this article we show how the NEI fits into recent extensions of the matching function which is a standard macroeconomic approach to model labor markets with frictions, how it affects estimates of the extent of labor market frictions, and how these frictions have changed in the Great Recession. |
| JEL: | E24 J63 J64 |
| Date: | 2017–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2017-05&r=lab |
| By: | Martin Munk (Aalborg University); Till Nikolka (Ifo Institute); Panu Poutvaara (Ifo Institute) |
| Abstract: | Gender differences in labor force participation are exceptionally small in Nordic countries. We investigate how couples emigrating from Denmark self-select and sort into different destinations and whether couples pursue the dual-earner model, in which both partners work, when abroad. Female labor force participation is slightly lower among couples that later emigrate, and drops considerably after migration outside the Nordic countries. Pre migration differences between couples subsequently migrating to different destinations are small. Our survey reveals that couple migration is usually driven by the male’s job opportunities. The results suggest that increasing international migration may reduce women’s career investments. |
| Keywords: | Household production, Female labor force participation, Child care, International migration, Family migration |
| JEL: | D13 J12 J13 J16 F22 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1703&r=lab |
| By: | Picariello, Luca (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Workers can move across firms and take with them portable skills. This has an impact on how firms are organized and allocate tasks across workers. To reduce mobility, a profit maximizing firm may inefficiently allocate talented workers on tasks that reduce their outside option. In the existing literature, asymmetric information about workers' talents makes this retention strategy profitable, although inefficient. In this paper we let workers' skills be observable across firms, but task allocation to be non-contractible. Inefficient assignment of tasks to workers persists in this environment. We show that by organizing a firm as an equity-partnership, in which the total profit is shared, the efficient task allocation can be implemented and profit increased. This result is attained through shifting control rights to workers that become partners and decide over task allocation. Both partners and workers are retained in equilibrium. This paper provides a new rationale for the widespread presence of partnerships in human-capital intensive industries. |
| Keywords: | Task Allocation; Retention; Compensation Contracts; Partnerships |
| JEL: | D86 J24 J54 M52 |
| Date: | 2017–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2017_002&r=lab |
| By: | Fabio Berton (University of Torino); Sauro Mocetti (Bank of Italy); Andrea F. Presbitero (International Monetary Fund); Matteo Richiardi (University of Oxford) |
| Abstract: | Unemployment is one of the most visible effects of financial crises. We contribute to the empirical literature on the employment effects of a decline in bank credit, investigating individual heterogeneity across firms, workers and jobs in response to a financial shock. We use a rich data set of over 1.5 million individual job contracts in an Italian region, which is matched with the universe of firms and their lending banks. To isolate the effect of the financial shock we construct a firm-specific time-varying measure of credit supply. Our findings indicate that a 10 percent supply-driven credit contraction reduces employment by 2.5 percent. The effect is mostly concentrated among relatively less-educated and less-skilled workers with temporary contracts, and is consistent with the presence of a “dual” labor market and a skill-upgrade strategy adopted by firms in response to the financial shock. |
| Keywords: | bank lending channel, job contracts, employment, financing constraints, skill upgrade |
| JEL: | G01 G21 J23 J63 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1097_17&r=lab |
| By: | Ahlin, Lina (CIRCLE); Andersson, Martin (Department of Industrial Economics); Thulin, Per (KTH Royal Institute of Technology) |
| Abstract: | Sorting of high-ability workers is a main source of urban-rural disparities in economic outcomes. Less is known about when such human capital sorting occurs and who it involves. Using data on 15 cohorts of university graduates in Sweden, we demonstrate significant sorting to urban regions on high school grades and education levels of parents, i.e. two attributes typically associated with latent abilities that are valued in the labor market. A large part of this sorting occurs already in the decision of where to study, because top universities are predominantly located in urban regions. Estimates from a selection model show that even after controlling for sorting prior to labor market entry, the ‘best and brightest’ are still more likely to start working in urban regions, and are also more likely to remain there over long time periods. We conclude that a) urban regions are true magnets for high-ability graduates, and that b) studies of human capital sorting need to account for selection processes to and from universities, because neglecting mobility prior to labor market entry is likely to lead to underestimation of the extent of sorting to urban regions. |
| Keywords: | Human capital; University graduates; Spatial sorting; Migration; Labor mobility; Ability; Geography of talent; Spatial selection |
| JEL: | I23 J24 J61 R12 |
| Date: | 2017–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1155&r=lab |
| By: | Ebru Kongar; Emel Memis |
| Abstract: | Using data from the 2006 Turkish Time-Use Survey, we examine gender differences in time allocation among married heterosexual couples over the life cycle. While we find large discrepancies in the gender division of both paid and unpaid work at each life stage, the gender gap in paid and unpaid work is largest among parents of infants compared to parents of older children and couples without children. The gender gap narrows as children grow up and parents age. Married women's housework time remains relatively unchanged across their life cycle, while older men spend more time doing housework than their younger counterparts. Over the course of the life cycle, women's total work burden increases relative to men's. Placing our findings within the gendered institutional context in Turkey, we argue that gender-inequitable work-family reconciliation policies that are based on gendered assumptions of women's role as caregivers exacerbate gender disparities in time use. |
| Keywords: | Economics of Gender; Time Use; Life Cycle; Turkey |
| JEL: | D13 J16 J22 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_884&r=lab |
| By: | Samuel Bentolila (CEMFI, Centro de Estudios Monetarios y Financieros); J. Ignacio García-Pérez (Universidad Pablo de Olavide and FEDEA); Marcel Jansen (Universidad Autónoma de Madrid and FEDEA) |
| Abstract: | Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-of-the-art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skill and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least one month these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labour market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows. |
| Keywords: | Long-term unemployment, great recession, duration models, survival probability, Spain. |
| JEL: | J63 J64 J65 C41 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2017_1707&r=lab |
| By: | Herz, Benedikt |
| Abstract: | A displaced worker might rationally prefer to wait through a long spell of unemployment instead of seeking employment at a lower wage in a job he is not trained for. I evaluate this trade-off using micro-data on displaced workers. To achieve identification, I exploit that the more a worker invested in occupation-specific human capital the more costly it is for him to switch occupations and the higher is therefore his incentive to wait. I find that between 9% and 18% of total unemployment in the United States can be attributed to wait unemployment. |
| Keywords: | wait unemployment, rest unemployment, specific human capital, worker mobility, mismatch, displaced workers |
| JEL: | E24 J61 J62 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76777&r=lab |
| By: | Edlira Narazani (European Commission - JRC); Francesco Figari (Università degli Studi dell'Insubria) |
| Abstract: | It is widely recognized that childcare has important pedagogical, economic and social effects on both children and parents. This paper is the first attempt to estimate a joint structural model of female labour supply and childcare behavior applied to Italy in order to analyse the effects of relaxing the existing constraints in terms of childcare availability and costs by considering public, private and informal childcare. Results suggest that Italian households might alter their childcare and labour supply behaviors substantially if the coverage rate of formal childcare increases to reach the European targets. Overall, increasing child care coverage is estimated to be more effective in enhancing labor incentives than decreasing existing child care costs, at the same budgetary cost. |
| Keywords: | childcare, female labour supply, Italy |
| JEL: | H53 J13 J22 I38 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:taxref:201702&r=lab |
| By: | Marco de Pinto (Institute for Labour Law and Industrial Relations in the EU, Trier University); Jörg Lingens (University of Muenster) |
| Abstract: | How does an increase in unionization costs, i.e. costs which arise when workers are organized by a union, affect the productivity distribution of active firms, wage inequality and welfare? In this paper, we build a model with costly, endogenous unionization, heterogeneous firms as well as free market entry/exit. If unionization costs are rel- atively low (high), we find that an increase in these costs decreases (increases) average productivity and welfare decreases (increases). Additionally, we find a hump-shaped relationship between unionization costs and wage inequality. These results suggest that policies aiming to reduce unionization could worsen economic performance. |
| Keywords: | unionization costs, endogenous unionization, firm-selection, welfare, wage inequality |
| JEL: | J51 L11 L16 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201701&r=lab |
| By: | albanese, marina; navarra, cecilia; Tortia, Ermanno |
| Abstract: | Extending Shapiro and Stiglitz’s (1984) analysis of unemployment as a worker discipline device, we evidence how an economy populated by worker owned firms (WOFs), by overcoming information asymmetry on the employee side in the presence of employer opportunism (as embodied in moral hazard, hidden action and abuse of authority), can decrease, not increase equilibrium wages, while employment is necessarily higher in the presence of WOFs. Within the Shapiro and Stiglitz framework, our analysis evidences that the non-shirking constraint (NSC) for WOFs is lower for any employment and wage level than in investor owned firms (IOFs). By factoring bi-later asymmetric information and opportunism in the employment relation, our model implies that the Shapiro and Stiglitz (1984) results represent special cases in the wider analysis of equilibrium wages and employment in market economies. Relatedly, the potential for unemployment reduction and efficiency gain of worker ownership (as especially embodied in worker co-operatives, and employee-owned companies) has generally been understudied and empirical evidence coherent with this results need to be more thoroughly analysed. |
| Keywords: | Efficiency wage; contract failure; asymmetric information; moral hazard; worker owned enterprises |
| JEL: | D21 D86 J31 J54 J64 |
| Date: | 2017–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77031&r=lab |
| By: | Maurizio Baussola (DISCE, Università Cattolica); Camilla Ferretti (DISCE, Università Cattolica); Chiara Mussida (DISCE, Università Cattolica) |
| Abstract: | We discuss the relevance of the methodology adopted internationally to compare labor market flexibility, which is based on a two-state labor market model and uses stock data to derive transition rates. This model neglects inactivity, and thus it may crucially affect the results. Therefore, we compare these results with transition rates derived by using a three-state labor market model for France, Italy, Spain and the UK. These countries represent, respectively, the continental Europe and the Anglo-Saxon institutional settings. The implied transition rates are much higher even in continental Europe when inactivity is explicitly considered, thus suggesting that conclusions derived using an incomplete representation of the labor market are flawed. |
| Keywords: | labour market flows, labour market transition matrices, inactivity, comparison across countries |
| JEL: | J60 J62 C14 C15 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1722&r=lab |
| By: | Hensvik, Lena (IFAU - Institute for Evaluation of Labour Market and Education Policy); Müller, Dagmar (IFAU, Uppsala university and UCLS); Nordström Skans, Oskar (Uppsala university, IFAU, UCLS and IZA) |
| Abstract: | Using Swedish economy-wide data spanning across two deep recessions, we examine the relationship between labor market conditions and the role of social contacts in matching labor market entrants to employing firms. We use class-plant fixed-effects models to isolate the role of social contacts from paid work during high-school. One third of post-graduation matches are formed at establishments where youths worked during their studies. Furthermore, graduates are much more likely to match with sites to which adult coworkers from these jobs have relocated. These patterns are strikingly counter-cyclical. Contacts are much more important for job matching in deep recessions than in good times, suggesting that informal contacts and social networks are crucial determinants of matching patterns in bad times. |
| Keywords: | job matching; social Contacts; business cycle; young workers |
| JEL: | J01 |
| Date: | 2017–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2017_002&r=lab |
| By: | Simeth, Markus (Universidad Carlos III de Madrid (UC3M)); Mohammadi, Ali (Royal Institute of Technology (KTH), Centre of Excellence for Science and Innovation Studies (CESIS) & Swedish House of finance) |
| Abstract: | Prior research shows that firms can increase their innovation performance by leveraging external sources of knowledge. However, insights related to potential drawbacks of open collaborative approaches for innovation remain scarce. In this paper, we investigate the relationship between R&D collaboration and the departure of skilled employees. Highly qualified scientists and engineers who interact with external partners in the context of R&D collaborations may increase their outside options, resulting in higher rates of employee mobility to other firms and employee entrepreneurship. We analyze our research question using data from the Swedish edition of the Community Innovation (CIS) survey combined with employer-employee register data. Our econometric analysis suggests that a stronger use of research collaborations by firms leads to an increasing number of employee departures. Moreover, we detect heterogeneity for this relationship with respect to the types of employee exits and different collaboration partners. |
| Keywords: | R&D employees; Open Innovation; R&D Collaboration; Employee mobility; Employee Entrepreneurship |
| JEL: | J62 O32 |
| Date: | 2017–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0449&r=lab |
| By: | Jan Eeckhout (UCL and Barcelona GSE-UPF-ICREA); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | We analyze the role of optimal income taxation across different local labor markets. Should labor in large cities be taxed differently than in small cities? We find that a planner who needs to raise a given level of revenue and is constrained by free mobility of labor across cities does not choose equal taxes for cities of different sizes. The optimal tax schedule is location specific and tax differences between large and small cities depends on the level of government spending, the concentration of housing wealth and the strength of agglomeration economies. Our estimates for the US imply higher optimal marginal rates in big cities than in small cities. Under the current Federal Income tax code with progressive taxes, marginal rates are already higher in big cities which have higher wages, but the optimal difference we estimate is lower than what is currently observed. Simulating the US economy under the optimal tax schedule, there are large effects on population mobility: the fraction of population in the 5 largest cities grows by 7.6% with 3.4% of the country-wide population moving to bigger cities. The welfare gains however are smaller. This is due to the fact that much of the output gains are spent on the increased costs of housing construction in bigger cities. Aggregate goods consumption goes up by 1.51% while aggregate housing consumption goes down by 1.70%. |
| Keywords: | Misallocation, taxation, population mobility, city size, general equilibrium. |
| JEL: | H21 J61 R12 R13 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2017_1705&r=lab |
| By: | Jessica B. Rodell; Jonathan E. Booth; John W. Lynch; Kate P. Zipay |
| Abstract: | As a society, we grapple with a host of national and global social issues — ranging from hunger and poverty to education to financial stability. Today’s corporations are playing an increasing role in efforts to address such concerns, predominantly through corporate volunteering. Yet, because research on corporate volunteering has been primarily focused on the individual volunteer experience, we still know relatively little about how corporate volunteering can help address grand challenges. In this study, we introduce the concept of corporate volunteering climate in order to examine the broader, more system-level functioning of corporate volunteering in workplaces. Drawing on the sensemaking process, we theorize about how a corporate volunteering climate develops — to what extent is it driven by company-level policies versus employee convictions for a cause? We also explore the potential influence of corporate volunteering climate for volunteers and non-volunteers, both in terms of the workplace (through employee affective commitment) and in terms of the broader community (through employee intentions to volunteer, both in corporate opportunities and on personal time). The results of a study conducted with United Way Worldwide suggest that corporate volunteering climate not only arises through either employees’ belief in the cause or corporate policies, but also that these forces act as substitutes for one another. Moreover, by fostering a sense of collective pride among employees, this climate is related to affective commitment, as well as both corporate and personal volunteering intentions. |
| JEL: | R14 J01 L81 F3 G3 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69524&r=lab |