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on Labour Economics |
| By: | Ager, Philipp (Department of Business and Economics); Hansen, Casper Worm (Department of Economics) |
| Abstract: | The introduction of immigration quotas in the 1920s fundamentally changed U.S. immigration policy. We exploit this policy change to estimate the economic consequences of immigration restrictions for the U.S. economy. The implementation of the quota system led to a long-lasting relative decline in population growth in areas with larger pre-existing immigrant communities of affected nationalities. This effect was largely driven by the policy-restricted supply of immigrants from quota-affected nationalities and lower fertility of first- and second-generation immigrant women. In the more affected areas labor productivity growth in manufacturing declined substantially and native workers were pushed into lower-wage occupations. While native white workers faced sizable earnings losses, black workers benefited from the quota system and improved their relative economic status within the more affected areas. |
| Keywords: | Immigration restrictions; productivity growth; local labor markets; racial wage gap |
| JEL: | J31 J61 N31 O15 |
| Date: | 2017–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2017_011&r=lab |
| By: | Christoph Albert |
| Abstract: | This paper explores the labor market impact of both documented and undocumented immigration in a model featuring search frictions and non-random hiring that generates predictions consistent with novel patterns documented in data. Due to their lower earnings, a rise in the share of immigrant workers in the economy leads to the creation of additional jobs, but also more job competition for natives. As undocumented immigrants earn the lowest wages of all workers, their job creation effect is large, whereas it is small and potentially negative for documented immigrants. Model simulations show that the job creation effect of undocumented immigration dominates the competition effect, leading to gains in terms of both employment and wages for natives, which does not hold in case of documented immigration. Stricter immigration enforcement in form of a higher deportation risk for undocumented immigrants mutes job creation and raises the unemployment rate of all workers, having an even larger detrimental effect if it targets employed immigrants because this leads to a risk premium in their wages. I present empirical evidence that gives support to the qualitative predictions of the model. |
| Keywords: | wage gap, migrant workers, hiring, employment |
| JEL: | J31 J61 J63 J64 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6575&r=lab |
| By: | Anna Christina Raute |
| Abstract: | To assess whether earnings-dependent maternity leave positively impacts fertility and narrows the baby gap between high educated (high earning) and low educated (low earning) women, I exploit a major maternity leave benefit reform in Germany that considerably increases the financial incentives for higher educated and higher earning women to have a child. In particular, I use the large differential changes in maternity leave benefits across education and income groups to estimate the effects on fertility up to 5 years post reform. In addition to demonstrating an up to 22% increase in the fertility of tertiary educated versus low educated women, I find a positive, statistically significant effect of increased benefits on fertility, driven mainly by women at the middle and upper end of the education and income distributions. Overall, the results suggest that earnings-dependent maternity leave benefits, which compensate women commensurate with their opportunity cost of childbearing, could successfully reduce the fertility rate disparity related to mothers’ education and earnings. |
| Keywords: | fertility, fertility gaps, paid maternity leave |
| JEL: | J13 J16 J18 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6652&r=lab |
| By: | Thomas K. Bauer (RWI, Ruhr-University Bochum and IZA); Matthias Giesecke (RWI and IZA); Laura M. Janisch (RWI, RGSEcon and Ruhr-University Bochum) |
| Abstract: | We examine the long-run effects of forced migration from Eastern Europe into post-war Germany. Existing evidence suggests that displaced individuals are worse off economically, facing a considerably lower income and a higher unemployment risk than comparable natives even twenty years after being expelled. We extend this literature by investigating the relative performance of forced migrants across the entire life cycle. Using social security records that document the exact date of death and a proxy for pre-retirement lifetime earnings, we estimate a signifi cantly and considerably higher mortality risk among forced migrants compared to native West-Germans. The adverse displacement effect persists throughout the earnings distribution except for the top quintile. Although forced migrants are generally worse off regarding mortality outcomes, those with successful labor market histories seem to overcome the long-lasting negative consequences of flight and expulsion. |
| Keywords: | Forced Migration, Di erential Mortality, Lifetime Earnings, Economic History |
| JEL: | I12 J61 O15 R23 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1709&r=lab |
| By: | Enrica Di Stefano (Bank of Italy) |
| Abstract: | In Italy, young adults tend to postpone their transition to adulthood and live with their parents until very late compared with other countries. A dynamic discrete choice model is proposed in which agents choose residential arrangements, together with labor supply and marital status, conditional on the economic and institutional framework and on other agents' choices. The model is structurally estimated with the Simulated Method of Moments for non-student high-school graduate males and then used to assess, through a variety of counterfactual experiments, the relative importance of factors that are claimed to influence the choice to leave home in the existing literature: labor market conditions, parental resources, housing market conditions and social interaction. Results suggest that Italians choose to remain with their parents due to a combination of poor labor market conditions and high housing costs. The relatively high income of parents could contribute to the patterns observed by acting as an insurance against unemployment. Finally, estimates indicate that individuals tend to conform to a social norm that is influenced by external conditions. |
| Keywords: | transition to adulthood, co-residence, structural estimation |
| JEL: | J11 J12 H31 D10 D31 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1144_17&r=lab |
| By: | Brian J. Asquith; Judith K. Hellerstein; Mark J. Kutzbach; David Neumark |
| Abstract: | We explore the links between social capital and labor market networks at the neighborhood level. We harness rich data taken from multiple sources, including matched employer-employee data with which we measure the strength of labor market networks, data on behavior such as voting patterns that have previously been tied to social capital, and new data – not previously used in the study of social capital – on the number and location of non-profits at the neighborhood level. We use a machine learning algorithm to identify potential social capital measures that best predict neighborhood-level variation in labor market networks. We find evidence suggesting that smaller and less centralized schools, and schools with fewer poor students, foster social capital that builds labor market networks, as does a larger Republican vote share. The presence of establishments in a number of non-profit oriented industries are identified as predictive of strong labor market networks, likely because they either provide public goods or facilitate social contacts. These industries include, for example, churches and other religious institutions, schools, country clubs, and amateur or recreational sports teams or clubs. |
| JEL: | J01 J64 R23 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23959&r=lab |
| By: | Leone, Tharcisio |
| Abstract: | This paper employs mobility matrices, univariate regressions and multivariate econometric techniques based on the recently published nationally representative household survey (PNAD-2014) from Brazil to investigate the relevance of the gendered patterns in the intergenerational transmission of educational attainment between parents and their descendants. The empirical evidence from these three different approaches is absolutely unanimous: In Brazil there is a significant variation in degree of mobility across genders, with a higher mobility level for daughters than for sons. The reason for this gender gap in mobility lies in the chances of attaining the educational levels: regardless of the educational background of the parents, females have a lower chance of remaining without school certificate and a greater probability to achieve a tertiary education. The results of this paper point out also that the educational attainment of children is strongly associated with the education of their most educated parent, regardless of their gender and this correlation is higher for female than for male. Concerning the evolution of the persistence in education over time, the findings indicate for both sexes a significant increase in intergeneration mobility over the last decades. However this positive evolution is much more modest when the relative deviation in education across generations is excluded from the investigation. Finally, this study has demonstrated that parental occupation levels and individual characteristics (race, locality of residence and year of birth) also have a statistically significant effect on the prospects for mobility. |
| Keywords: | Intergenerational Mobility,Educational Persistence,Gender Gap,Brazil |
| JEL: | J62 I21 J16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201727&r=lab |
| By: | Antonio Rodriguez-Lopez; Miaojie Yu |
| Abstract: | Chinese firms faced an all-around trade liberalization process during the early 2000s: lower barriers from other countries on Chinese goods, and lower Chinese barriers on other countries’ goods and inputs. Using novel firm-level tariff data for trading Chinese manufacturing firms, this paper disentangles the effects of each type of trade liberalization on Chinese firm-level em-ployment. For each firm type, reductions in Chinese and foreign final-good tariffs are associated with job destruction in low-productivity firms and job creation in high-productivity firms. In contrast, the net effect of reductions in Chinese input tariffs is limited to job destruction in low-productivity ordinary exporters. |
| Keywords: | firm-level employment, firm-level tariffs, heterogeneous firms |
| JEL: | F12 F14 F16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6710&r=lab |
| By: | Lazaryan, Nika (Federal Reserve Bank of Richmond); Lubik, Thomas A. (Federal Reserve Bank of Richmond) |
| Abstract: | We study global and local dynamics of a simple search and matching model of the labor market. We show that the model can be locally indeterminate or have no equilibrium at all, but only for parameterizations that are empirically implausible. In contrast to the local results, we show that the model exhibits chaotic and periodic dynamics for reasonable parameter values both in backward and forward time. In contrast to earlier work, we establish these results analytically without placing numerical restrictions on the parameters. |
| Keywords: | Indeterminacy; Bifurcation; Chaos; Backward Map; Forward Map |
| JEL: | C62 C65 E24 J64 |
| Date: | 2017–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:17-12&r=lab |
| By: | Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); YingDeng (University of International Business and Economics); Xiangjun Ma (University of International Business and Economics) |
| Abstract: | This paper studies the fact that 37 percent of the internal migrants in China do not sign a labor contract with their employers, as revealed in a nationwide survey. These contract-free jobs pay lower hourly wages, require longer weekly work hours, and provide less insurance or on-the-job training than regular jobs with contracts. We find that the co-villager networks play an important role in a migrant’s decision on whether to accept such insecure and irregular jobs. By employing a comprehensive nationwide survey in 2011 in the spatial autoregressive logit model, we show that the common behavior of not signing contracts in the co-villager network increases the probability that a migrant accepts a contract-free job. We provide three possible explanations on how networks influence migrants’ contract decisions: job referral mechanism, limited information on contract benefits, and the "mini labor union" formed among co-villagers, which substitutes for a formal contract. In the sub-sample analysis, we also find that the effects are larger for migrants whose jobs were introduced by their covillagers, male migrants, migrants with rural Hukou, short-term migrants, and less educated migrants. The heterogeneous effects for migrants of different employer types, industries, and home provinces provide policy implications. |
| Keywords: | Contract, Co-Villager Network, Spatial Autoregressive Logit Model, Internal Migrants |
| JEL: | O15 R12 J14 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:207&r=lab |
| By: | Alberto Batinti; Joan Costa-i-Font |
| Abstract: | Economic downturns give rise to unexpected employment shocks that can reshape the distribution of population income, and hence produce a “middle-class squeeze”. However, there is limited empirical evidence testing the latter. This paper aims at testing the ‘middle-class squeeze’ hypothesis drawing from unique data from the Luxembourg Income Study (LIS) for several years, including the period of the Great Recession, and the Integrated Values Study (IVS) obtained by merging data from the World Value Survey (WVS) and the European Values Study (EVS). We examine the association between changes in unemployment in a recession drawing upon a heterogeneous set of both income and middle-class definitions as well as an extensive list of controls and different recession periods. Our findings suggest no robust evidence that recessions produce a middle-class squeeze, though they increase the share of the population regarding itself as ‘middle class’. The effect is heterogeneous to the baseline unemployment at the time of a recession, country spending on social protection and middle-class measurements and definitions. However, when we restrict our analysis to the recent Great Recession, we do find some evidence of a ‘middle-class squeeze’. |
| Keywords: | middle-class size, economic recessions, employment shocks, income distribution |
| JEL: | F22 I30 J64 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6673&r=lab |
| By: | Peter Haan; Daniel Kemptner; Holger Lüthen |
| Abstract: | This study uses German social security records to provide novel evidence about the heterogeneity in life expectancy by lifetime earnings and, additionally, documents the distributional implications of this earnings-related heterogeneity. We find a strong association between lifetime earnings and life expectancy at age 65 and show that the longevity gap is increasing across cohorts. For West German men born 1926-28, the longevity gap between top and bottom decile amounts to about 4 years (about 30%). This gap increases to 7 years (almost 50%) for cohorts 1947-49. We extend our analysis to the household context and show that lifetime earnings are also related to the life expectancy of the spouse. The heterogeneity in life expectancy has sizable and relevant distributional consequences for the pension system: when accounting for heterogeneous life expectancy, we find that the German pension system is regressive despite a strong contributory link. We show that the internal rate of return of the pension system increases with lifetime earnings. Finally, we document an increase of the regressive structure across cohorts, which is consistent with the increasing longevity gap. |
| Keywords: | mortality, lifetime inequality, pensions, redistribution |
| JEL: | H55 I14 J11 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1698&r=lab |
| By: | Janine Dixon |
| Abstract: | Over the next eight years, employment in Australia will grow to almost 14 million jobs, a net increase of some 1.6 million jobs. In which industries and regions will these jobs be? What occupations will the workers perform? The labour market in Australia is constantly changing. It is unlikely that these questions will have the same answers in 2025 that they have today. The Victoria University Employment Forecasting (VUEF) project attempts to address these questions, in the context of a macroeconomic model that has the capacity to incorporate detailed structural and demographic change. As a generation of baby-boomers retires and a new generation – many with degree-level qualifications in management and commerce, society and culture, health and other fields – enters the workforce, the service industries will continue to dominate. The modelling finds that just three industry divisions – health care and social assistance, professional services, and education and training – will account for more than half of employment growth over the next eight years. Accordingly, employment in the professional occupations will continue to grow strongly, adding almost 600,000 jobs to employ 3.4 million people, or a quarter of the workforce, by 2025. A gradual reversal of some of the adverse conditions affecting employment in the manufacturing and agricultural sectors will see a return to positive, albeit modest, growth rates in these sectors. High urban population growth forecasts and the dominance of growth in the service industries mean that more than 75 per cent of employment growth, or a net increase of 1.2 million jobs, will be in the capital cities. Melbourne and Sydney will account for just over half of the forecast growth in national employment. Full or partial subscriptions to the 2017 edition of the detailed VUEF database are now available from the Centre of Policy Studies at Victoria University. |
| JEL: | J21 J23 J24 J11 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-277&r=lab |