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on Labour Economics |
| By: | Joan Monras (CEMFI and CEPR); Javier Vázquez-Grenno (Universitat de Barcelona and IEB); Ferran Elias (University of Copenhagen) |
| Abstract: | This paper investigates the consequences of the legalization of around 600,000 immigrants by the unexpectedly elected Spanish government of Zapatero following the terrorist attacks of March 2004 (Garcia-Montalvo, 2011). Using detailed data from payroll-tax revenues, we estimate that each newly legalized immigrant increased local social-security revenues by 3,504 Euros on average. This estimate is only 49 percent of what we would have expected from the size of the newly documented immigrants, which suggests that newly legalized immigrants probably earned lower wages than, and maybe affected the labor-market outcomes of, other workers. We estimate that the policy change deteriorated the labor-market outcomes of some low-skilled natives and immigrants and improved the outcomes of highskilled natives and immigrants. This led some low-skilled immigrants to move away from high-immigrant locations. Correcting for internal migration and selection, we obtain that each newly legalized immigrant increased payroll-tax re nues by 4,368 Euros or 25 percent more than the raw payroll-tax revenue data estimates. This shows the importance of looking both at public revenue data and the labor market to understand the consequences of amnesty programs fully. |
| Keywords: | Immigration, undocumented immigrants, public policy evaluation |
| JEL: | F22 J31 J61 R11 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1708&r=lab |
| By: | CAMILLI, Andrea; LAGERBORG, Andresa |
| Abstract: | Using annual data for 20 OECD countries over the period 1961-2014, we study whether labor market institutions (LMIs) not targeted to maternity impact the total fertility rate (TFR). We distinguish between employment rigidities (ER) and real wage rigidities (RWR), since the former reduces and the latter amplifies the response of the business cycle to shocks. Panel regressions and principal component analysis reveal that ER, such as employment protection and union strength, increase TFR. On the other hand, RWR, proxied by the centralization of wage bargaining and unemployment benefits, reduce TFR. We also find evidence that unemployment volatility reduces fertility whereas wage volatility raises fertility. Thus, to the extent that labor market institutions affect unemployment and wage volatility, they may also affect fertility. We complement our analysis with a DSGE model that incorporates households' fertility decision as well as unemployment and wage rigidities. We find that downward wage rigidities amplify real contractions in response to negative demand shocks and lead to large drops in employment and fertility. |
| Keywords: | fertility, labor market institutions, female labor force participation, income volatility, DSGE |
| JEL: | J01 J08 J13 J41 J51 D1 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2017/07&r=lab |
| By: | Schiprowski, Amelie (IZA) |
| Abstract: | Caseworkers are the main human resource used to provide social services. This paper asks if, and how much, caseworkers matter for the outcomes of unemployed individuals. Using large-scale administrative data, I exploit exogenous variation in unplanned absences among Swiss UI caseworkers. I find that individuals who lose an early meeting with their caseworker stay on average 10 days longer in unemployment (5% relative to the mean). Results show large heterogeneity in the economic value of caseworkers: the effect of a foregone meeting doubles for caseworkers in the highest productivity tercile, while it is zero for caseworkers in the lowest tercile. Finally, absences induce negative spillover effects on the performance of present colleagues, who have to cover additional workload. |
| Keywords: | unemployment insurance, public human resources, caseworkers |
| JEL: | J64 J65 M50 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11040&r=lab |
| By: | Girum Abebe; Stefano Caria; Marcel Fafchamps; Paolo Falco; Simon Franklin; Simon Quinn; Forhad Shilpi |
| Abstract: | Do matching frictions affect youth employment in developing countries? We organise job fairs in Addis Ababa, to match firms with a representative sample of young, educated job-seekers. We create very few jobs: one for approximately 10 firms that attended. We explore reasons for this, and find significant evidence for mismatched expectations: about wages, about firms requirements and about the average quality of job-seekers. We find evidence of learning and updating of beliefs in the aftermath of the fair. This changes behaviour: both workers and firms invest more in formal job search after the fairs. |
| Keywords: | matching, labour, job-search, firms, recruitment, experiment |
| JEL: | O18 J22 J24 J61 J64 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0225&r=lab |
| By: | Bar, Michael; Hazan, Moshe; Leukhina, Oksana; Weiss, David; Zoabi, Hosny |
| Abstract: | Recent public discussion has focused on inequality and social justice, while economists have looked at inequality's adverse effects on economic growth. One economic theory builds on the empirically negative relationship between income and fertility observed in the post demographic transition era. It argues that rising inequality leads to greater differential fertility -- the fertility gap between rich and poor. In turn, greater differential fertility lowers the average education level, as the poor invest less in the education of their children. We show that the relationship between income and fertility has flattened between 1980 and 2010 in the US, a time of increasing inequality, as the rich increased their fertility. These facts challenge the standard theory. We propose that marketization of parental time costs can explain the changing relationship between income and fertility. We show this result both theoretically and quantitatively, after disciplining the model on US data. Without marketization, the impact of inequality on education through differential fertility is reversed. Policies, such as the minimum wage, that affect the cost of marketization, have a large effect on the fertility and labor supply of high income women. We apply the insights of this theory to the literatures of the economics of childlessness and marital sorting. |
| Keywords: | Differential Fertility; economic growth.; Human Capital; Income inequality; Marketization |
| JEL: | E24 J13 J24 O40 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12376&r=lab |
| By: | Alonso-Soto, Daniel (OECD); Nopo, Hugo R. (GRADE) |
| Abstract: | Indicators for quality of schooling are not only relatively new in the world but also unavailable for a sizable share of the world's population. In their absence, some proxy measures have been devised. One simple but powerful idea has been to use the schooling premium for migrant workers in the U.S. (Bratsberg and Terrell, 2002). In this paper we extend this idea and compute measures for the schooling premium of immigrant workers in the U.S. over a span of five decades. Focusing on those who graduated from either secondary or tertiary education in Latin American countries, we present comparative estimates of the evolution of such premia for both schooling levels. The results show that the schooling premia in Latin America have been steadily low throughout the whole period of analysis. The results stand after controlling for selective migration in different ways. This contradicts the popular belief in policy circles that the education quality of the region has deteriorated in recent years. In contrast, schooling premium in India shows an impressive improvement in recent decades, especially at the tertiary level. |
| Keywords: | schooling premium, returns to education, wage differentials, immigrant workers |
| JEL: | J31 J61 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11030&r=lab |
| By: | Gaetano Basso; Giovanni Peri; Ahmed Rahman |
| Abstract: | The changes in technology that took place in the US during the last three decades, mainly due to the introduction of computerization and automation, have been characterized as “routine-substituting.” They have reduced the demand for routine tasks, but have increased the demand for analytical tasks. Indirectly they have also increased the demand for manual tasks and service oriented occupations. Little is known about how these changes have impacted immigration, or task specialization between immigrants and natives. In this paper we show that such technological progress has attracted skilled and unskilled immigrants, with the latter group increasingly specialized in manual-service occupations. We also show that the immigration response has helped to reduce the polarization of employment for natives. We explain these facts with a model of technological progress and endogenous immigration. Simulations show that immigration in the presence of technological change attenuates the drop in routine employment and the increase in service employment for natives. |
| JEL: | J15 J24 O15 O33 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23935&r=lab |
| By: | Camille Landais; Arash Nekoei; Peter Nilsson; David Seim; Johannes Spinnewijn |
| Abstract: | This paper studies whether adverse selection can rationalize a universal mandate for unemployment insurance (UI). Building on a unique feature of the unemployment policy in Sweden, where workers can opt for supplemental UI coverage above a minimum mandate, we provide the first direct evidence for adverse selection in UI and derive its implications for UI design. We find that the unemployment risk is more than twice as high for workers who buy supplemental coverage, even when controlling for a rich set of observables. Exploiting variation in risk and prices to control for moral hazard, we show how this correlation is driven by substantial risk-based selection. Despite the severe adverse selection, we find that mandating the supplemental coverage is dominated by a design leaving the choice to workers. In this design, a large subsidy for supplemental coverage is optimal and complementary to the use of a minimum mandate. Our findings raise questions about the desirability of the universal mandate of generous UI in other countries, which has not been tested before. |
| Keywords: | adverse selection, unemployment insurance, mandate, subsidy |
| JEL: | H40 J65 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1503&r=lab |
| By: | Robin Cowan; Giulia Rossello |
| Abstract: | This paper is about the South African job market for PhDs. PhD to first job mobility involves the preferences of both the hiring institution and the candidate. Both want to make the best choice and here institutional prestige plays a crucial role. A university’s prestige is an emergent property of the hiring interactions, so we use a network perspective to measure it. Using this emergent ordering, we compare the subsequent scientific performance of scholars with different changes in the prestige hierarchy. We ask how movements between universities of different prestige from PhD to first job correlates with academic performance. We use data of South African scholars from 1970 to 2004 and we find that those who make large movements in terms of prestige have lower research ratings than those wo do not. Further, those with higher prestige PhD or first job have high research ratings throughout their careers. |
| Keywords: | Academia, South Africa, faculty hiring network, institutional prestige, institutional stratification, scholars research performance, university system, matched pair analysis. |
| JEL: | D7 I2 J15 O3 Z13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2017-27&r=lab |
| By: | Girsberger, Esther Mirjam (University of Lausanne) |
| Abstract: | I study individual location, education and work decisions in a dynamic life-cycle model in a developing country. I estimate the model exploiting panel data on migrants and stayers in Burkina Faso, and cross-sectional data on permanent emigrants. Individuals self-select into migration and locations based on education. Migration to urban centres increases with education, while migrants at the extremes of the education distribution tend to move abroad. Local unemployment rates, skilled work opportunities and returns to education result in differential expected income gains across locations and hereby explain the complex migration pattern observed. Large income gains from migration are partially offset by direct and indirect migration costs, as well as by higher investment in education (for rural migrants). Migration prospects to urban centres drive education choices of rural individuals. Hence, migration policies can be used to stimulate educational attainment in rural regions. |
| Keywords: | migration, education, life-cycle model, simulated method of moments, Burkina Faso |
| JEL: | J61 O15 R58 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11028&r=lab |
| By: | Serafinelli, Michel; Tabellini, Guido |
| Abstract: | Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? In this paper we match data on thousands of notable individuals born in Europe between the XIth and the XIXth century with historical data on city institutions and population. After documenting several stylized facts, we show that the formation of creative clusters is not preceded by increases in city size. Instead, the emergence of city institutions protecting economic and political freedoms facilitates the attraction and production of creative talent |
| Keywords: | agglomeration; Gravity; Immigration; Innovation; Political Institutions |
| JEL: | J61 N13 O10 R10 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12365&r=lab |