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on Labour Economics |
| By: | Gabriella Conti; Rita Ginja, Renata Narita |
| Abstract: | Do households value access to free health insurance when making labor supply decisions? We answer this question using the introduction of universal health insurance in Mexico, the Seguro Popular (SP), in 2002. The SP targeted individuals not covered by Social Security and broke the link between access to health care and job contract. We start by using the rollout of SP across municipalities in a differences-indifferences approach, and find an increase in informality of 4% among low-educated families with children. We then develop and estimate a household search model that incorporates the pre-reform valuation of formal sector amenities relative to the alternatives (informal sector and non-employment) and the value of SP. The estimated value of the health insurance coverage provided by SP is below the government’s cost of the program, and the corresponding utility gain is, at most, 0.56 per each peso spent. |
| Keywords: | Search; Household behavior; Health insurance; Informality; Unemployment |
| JEL: | J64 D10 I13 |
| Date: | 2018–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2018wpecon18&r=lab |
| By: | Francisco Gallego; Cristian Larroulet; Andrea Repetto |
| Abstract: | We explore how improving dental health affects economic, social, and psychological outcomes. Using a randomized intervention whereby an impoverished group in Chile received free dental care, including access to prostheses, we find that the treatment in the short-run: (i) significantly improved dental health of both men and women, (ii) had a significant and positive effect on women's selfesteem, and (iii) positively impacted both employment rates and earnings among women. In the medium run, the effects on dental health and self-esteem persist but the treatment effects on labor market outcomes become statistically non-significant, although still economically relevant among women with low levels of self-esteem and among women missing at least one front tooth at baseline. We also find treatment effects on spending on appearance-related items, and improvements in the quality of relationships with partners including a reduction in verbal violence. The employment effects come mostly from the informal sector. Using several pieces of evidence, we document that the employment effects are consistent with a combination of increases in productivity and labor supply jointly with a possibly much smaller response of labor demand in the formal sector. |
| Keywords: | Dental Health, Labor Markets, Self-Esteem, Women. |
| JEL: | I10 J16 J20 O15 |
| Date: | 2018–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:col:000518:016949&r=lab |
| By: | Michael Amior |
| Abstract: | The US suffers from large regional disparities in employment rates which have persisted for many decades. It has been argued that foreign migration offers a remedy: it "greases the wheels" of the labor market by accelerating the adjustment of local population. Remarkably, I find that new migrants account for 30 to 60 percent of the average population response to local demand shocks since 1960. However, population growth is not significantly more responsive in locations better supplied by new migrants: the larger foreign contribution is almost entirely offset by a reduced contribution from internal mobility. This is fundamentally a story of "crowding out": I estimate that new foreign migrants to a commuting zone crowd out existing US residents one-for-one. The magnitude of this effect is puzzling, and it may be somewhat overstated by undercoverage of migrants in the census. Nevertheless, it appears to conflict with much of the existing literature, and I attempt to explain why. Methodologically, I offer tools to identify the local impact of immigration in the context of local dynamics. |
| Keywords: | migration, geographical mobility, local labor markets, employment |
| JEL: | J61 J64 R23 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1582&r=lab |
| By: | Anelí Bongers (Department of Economics, University of Málaga); Carmen Díaz-Roldán (Department of Economics, University of Castilla-La Mancha); José L. Torres (Department of Economics, University of Málaga) |
| Abstract: | This paper studies the implications of highly skilled labor international migration in a two-country Dynamic Stochastic General Equilibrium model. The model considers three types of workers: STEM workers, non-STEM college educated workers, and non-college educated workers. Only high skilled workers can move internationally from the relative low productivity (sending) country to the high productivity (host) country. Aggregate productivity in each economy is a function of innovations, which can be produced only by STEM workers. The model predicts i) the existence of a wage premium of STEM workers relative to non-STEM college educated workers, ii) this wage premium is higher in the destination country and increases with positive technological shocks, iii) a reduction in migration costs increases output, wages and total labor in the destination country, with opposite e¤ects in the country of origin, and iv) high skilled immigrants reduce skilled native labor and do not a¤ect unskilled labor. |
| Keywords: | STEM workers; Migration; Dynamic Stochastic General Equilibrium models; Innovation |
| JEL: | F43 J61 O31 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:mal:wpaper:2018-8&r=lab |
| By: | Bhalotra, Sonia R. (University of Essex); Clarke, Damian (Universidad de Santiago de Chile) |
| Abstract: | Twin births are often used to instrument fertility to address (negative) selection of women into fertility. However recent work shows positive selection of women into twin birth. Thus, while OLS estimates will tend to be downward biased, twin-IV estimates will tend to be upward biased. This is pertinent given the emerging consensus that fertility has limited impacts on women's labour supply, or on investments in children. Using data for developing countries and the United States, we demonstrate the nature and size of the bias in the twin-IV estimator of the quantity-quality trade-off and estimate bounds on the true parameter. |
| Keywords: | twins, fertility, maternal health, quantity-quality trade-off, parental investment, bounds, IV |
| JEL: | J12 J13 C13 D13 I12 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11878&r=lab |
| By: | Akcigit, Ufuk; Grigsby, John; Nicholas, Tom; Stantcheva, Stefanie |
| Abstract: | This paper studies the effect of corporate and personal taxes on innovation in the United States over the twentieth century. We use three new datasets: a panel of the universe of inventors who patent since 1920; a dataset of the employment, location and patents of firms active in R&D since 1921; and a historical state-level corporate tax database since 1900, which we link to an existing database on state-level personal income taxes. Our analysis focuses on the impact of taxes on individual inventors and firms (the micro level) and on states over time (the macro level). We propose several identification strategies, all of which yield consistent results: i) OLS with fixed effects, including inventor and state-times-year fixed effects, which make use of differences between tax brackets within a state-year cell and which absorb heterogeneity and contemporaneous changes in economic conditions; ii) an instrumental variable approach, which predicts changes in an individual or firm's total tax rate with changes in the federal tax rate only; iii) event studies, synthetic cohort case studies, and a border county strategy, which exploits tax variation across neighboring counties in different states. We find that taxes matter for innovation: higher personal and corporate income taxes negatively affect the quantity and quality of inventive activity and shift its location at the macro and micro levels. At the macro level, cross-state spillovers or business-stealing from one state to another are important, but do not account for all of the effect. Agglomeration effects from local innovation clusters tend to weaken responsiveness to taxation. Corporate inventors respond more strongly to taxes than their non-corporate counterparts. |
| Keywords: | business taxation; Corporate taxation; firms; Income taxes; Innovation; inventors; R&D tax credits; state taxation |
| JEL: | H24 H25 H31 J61 O31 O32 O33 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13167&r=lab |
| By: | Hergovich, Philipp; Merz, Monika |
| Abstract: | The capital-to-labor ratio has steadily risen in the U.S. and elsewhere during the post-WWII period. Since the 1970s this rise has been accompanied by a rise in the level and variability of corporate profits whereas the labor share of income has declined. In this paper we ask whether these trends are related in that they can be explained by a common determinant such as the observed decline in the relative price of new capital goods, or the change in production technology towards increased substitutability between capital and labor. We use a dynamic stochastic equilibrium model of competitive search in the labor market augmented by a CES production function that allows firms to substitute between capital and labor at varying degrees. By assumption, firms can adjust capital more easily than labor. Profits arise from rents paid to quasi-fixed factors of production. We find that the declining relative price of capital and the increase in factor substitutability each causes the capital-to-labor ratio and corporate profits to rise, but only increased factor substitutability generates the observed decrease in the labor share of income and increases the relative variability of profits. |
| Keywords: | competitive search; factor substitutability; profits; quasi-fixed production factor |
| JEL: | E24 G32 J64 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13168&r=lab |
| By: | Jang, Youngook |
| Abstract: | This paper argues the importance of ethnic affinity in determining migration patterns using a newly constructed late- and post-Soviet dataset. The members of various indigenous ethnic groups, who had been spread across the Soviet territories, had to decide whether or not to leave the land in which they suddenly became diaspora after the dissolution of the USSR. The migration literature conventionally claims that potential migrants respond to the economic differentials between source and destination, but the post-Soviet case reveals that ethnicity also played a crucial and independent role in migration decision and destination choice. The trend of ethnic un-mixing is evidently seen in the novel dataset regarding the regional migration patterns of major ethnic groups in the post-Soviet space. Econometric analyses using this dataset also confirm that ethnic composition of a region, along with labour market conditions, has significant effects on the regional migration patterns. |
| Keywords: | Soviet/post-Soviet migration; determinants of migration; ethnic mixing and un-mixing |
| JEL: | F22 J15 P25 |
| Date: | 2018–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:90574&r=lab |
| By: | Lekfuangfu, Warn N. (Chulalongkorn University); Lordan, Grace (London School of Economics) |
| Abstract: | We consider the extent to which societal shifts have been responsible for an increased tendency for females to sort into traditional male roles over time, versus childhood factors. Drawing on three cohort studies, which follow individuals born in the UK in 1958, 1970 and 2000, we compare the magnitude of the shift in the tendency of females in these cohorts to sort into traditionally male roles as compared to males, to the combined effect of a set of childhood variables. For all three cohorts we find strong evidence of sorting along gendered lines which has decreased substantively over time. We also find that there has been no erosion of the gender gap in the tendency to sort into occupations with the highest share of males. Within cohort, we find little evidence that childhood variables change the tendency for either the average or highest ability female to sort substantively differently. Our work underlines the importance of societal shifts, over and above childhood variables, in determining the sorting patterns we have seen over the last number of decades, and also those that remain today. |
| Keywords: | occupational choice, gender, societal change, childhood influences |
| JEL: | J16 J4 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11872&r=lab |
| By: | Dale-Olsen, Harald (Institute for Social Research, Oslo) |
| Abstract: | Do unions promote creative destruction? In this paper we apply a shift-share approach and historical unionisation data from 1918 to study the impact of changes in regional unionisation on regional wage and productivity growth and job creation and destruction during the period 2003-2012. As local regional-industrial unionisation increases, wages grow. Lay-offs through plant closure and shrinking workplaces increase, but entry and new hires are unaffected. Overall, the increased unionisation yields a positive impact on regional productivity, exceeding the wage growth, partly due to the closure of less productive firms, but also enhanced productivity of the survivors and new entrants. |
| Keywords: | trade unions, entry/exit, creative destruction, wages, productivity, historical data |
| JEL: | J01 J08 J50 J51 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11894&r=lab |
| By: | Baghai, Ramin P.; Silva, Rui C; Ye, Luofu |
| Abstract: | We study the impact of corporate bankruptcies on teams and inventor productivity in the United States. We show that bankruptcy reduces team stability. After a bankruptcy, team inventors produce fewer and less impactful patents, and they are more likely to cease patenting. This points to the loss of team-specific human capital as a cost of resource reallocation through bankruptcy. Our findings also suggest that the labor market values teams and their stability. Past collaboration increases the probability of inventors jointly moving to a new firm after bankruptcy, and the productivity of inventors that relocate together with their team increases. |
| Keywords: | bankruptcy; creative destruction; Innovation; labor productivity; Team-specific human capital; Teams; Teamwork |
| JEL: | G33 J24 J63 O31 O32 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13198&r=lab |
| By: | Komura, Mizuki (Musashi Unniversity); Ogawa, Hikaru (University of Tokyo) |
| Abstract: | This study explores the effects of globalization on gender inequality. Specifically, we depict that, in terms of capital market integration, globalization alters the gender gap in wage rates through changes in labor demand for capital-intensive sectors. Consequently, globalization leads to opposite effects on the couple's labor supply and fertility decisions in capital-importing and capital-exporting countries, via changes in the bargaining positions of men and women. Moreover, by considering the properties of the industrial structures of capital-importing and capital-exporting countries, our result shows that globalization induces empirically observed declines in fertility rates throughout the world. |
| Keywords: | globalization, capital market integration, gender inequality, domestic production |
| JEL: | F15 F21 J12 J13 J16 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11885&r=lab |
| By: | Elliott Isaac (Tulane University) |
| Abstract: | I use variation from the 1990s in the Earned Income Tax Credit and welfare reform to estimate the effects on marrying and divorcing. I examine flows into and out of marriage, use test scores to predict who is most likely to be affected by the policy changes, and employ a flexible functional form to estimate heterogeneous effects. I find that low-earning single parents are more likely to marry due to the EITC expansion and lower welfare generosity, while mid-earning married parents are less likely to divorce and high-earning married parents are more likely to divorce due to the EITC expansion. |
| Keywords: | taxation, marriage, divorce, EITC, TANF, AFDC |
| JEL: | J12 H24 H53 D10 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:1810&r=lab |
| By: | Webber, Douglas A. (Temple University) |
| Abstract: | Using linked employer-employee data which covers the majority of U.S. employment, I examine how frictions in the labor market have evolved over time. I estimate that the labor supply elasticity to the firm declined by approximately 0.19 log points (1.20 to 1.01) since the late 1990's, with the steepest declines occurring during the financial crisis. I find that this decline in labor market competition cost workers about 4 percent in lost earnings. I also find evidence that relatively monopsonistic firms smooth their employment behavior, growing at a rate lower than relatively competitive firms in good economic climates and slightly higher during poor economic climates. This conforms with the predictions of recent macroeconomic search models which suggest that frictions in the economy may actually reduce employment fluctuations. |
| Keywords: | monopsony, Great Recession, adjustment costs |
| JEL: | J21 J42 J64 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11887&r=lab |
| By: | Barham, Tania; Macours, Karen; Maluccio, John |
| Abstract: | Conditional cash transfer (CCT) programs are one of most popular policy instruments for increasing investment in nutrition, health, and education in developing countries. For teenage girls, CCTs not only provide incentives and means to remain in school longer, but also may affect fertility outcomes through improved nutrition (with implications for the onset of puberty) or provision of reproductive healthcare information. Therefore, examining the fertility mechanism is crucial for understanding long-term impacts, in particular labor market outcomes, as young women's decisions regarding economic, education, and reproductive activities are closely linked. This paper exploits an experimental design and a survey implemented 10 years after the start of a CCT program in Nicaragua that introduced random variation in program exposure during the early teenage years, ages critical for sexual maturity. Differential exposure to the CCT does not lead to long-term differences in grades attained or learning, but does lead to differential impacts on the age of menarche, young adult BMI, fertility, and subsequent labor market outcomes and income. |
| Keywords: | CCT; education; Fertility; labor markets; long-term effects |
| JEL: | I18 I25 I38 J13 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13165&r=lab |
| By: | Fougère, Denis; Gautier, Erwan; ROUX, Sebastien |
| Abstract: | This paper examines empirically the dynamics of wage floors defined in industry-level wage agreements in France. It also investigates how industry-level wage floor adjustment interacts with changes in the national minimum wage (NMW hereafter). For this, we have collected a unique dataset of approximately 3,200 industry-level wage agreements containing about 70,000 occupation-specific wage floors in 367 industries over the period 2006Q1-2017Q4. Our main results are the following. Wage floors are quite rigid, adjusting only once a year on average. They mostly adjust in the first quarter of the year and the NMW shapes the timing of industry-level wage bargaining. Inflation but also changes in past aggregate wage increases and in the real NMW are the main drivers of wage floor adjustments. Elasticities of wage floors with respect to these macro variables are 0.6, 0.4 and 0.3 respectively. Inflation and the NMW have both decreasing but positive effects all along the wage floor distribution. |
| Keywords: | collective bargaining; inflation; minimum wage; wages |
| JEL: | E24 J31 J51 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13179&r=lab |
| By: | Siddique, Zahra (University of Bristol) |
| Abstract: | This paper explores whether fear and safety concerns have an impact on behavior such as female labor supply in a developing country context. The effect of media reported physical and sexual assaults on urban women's labor force participation in India is investigated by combining nationally representative cross-sectional microeconomic surveys carried out between 2009 and 2012 with a novel geographically referenced data source on media reports of assaults. I find that a σ increase in lagged sexual assault reports within one's own district reduces the probability that a woman is employed outside her home by 0.44 percentage points (or 3.6% of the sample average). I find this effect despite ruling out several sources of unobserved heterogeneity. This effect is also robust to a number of sensitivity checks. Consistent with a model in which women make investments to overcome fear in the presence of economic incentives, I find that the effect of local violence on labor supply is weaker among women from poorer households. I also find this effect to be weaker among high caste Hindu women, but strong among Muslim women. |
| Keywords: | economics of gender, labor supply |
| JEL: | J16 J22 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11874&r=lab |
| By: | Nolan, Brian; Richiardi, Matteo; Valenzuela, Luis |
| Abstract: | Rising income inequality has recently come centre-stage as a core societal concern for rich countries. The diagnosis of the forces driving inequality upwards and their relative importance remains hotly contested, notably with respect to the roles of globalization versus technology and of market forces versus institutions and policy choices. This survey provides a critical review and synthesis of recent research. The focus is on income inequality across the entire distribution, rather than only on what has been happening at the very top. We pay particular attention to including what has been learned from the analysis of micro-data, to ensuring that the coverage is not unduly US-centric, and to analyses of the interrelations between the different drivers of inequality. We conclude by highlighting key gaps in knowledge and clarifying what stands in the way of a consensus emerging about the contribution of the various forces affecting how income inequality has evolved in recent decades. |
| Keywords: | inequality, wage dispersion, technology, globalization, market power |
| JEL: | D30 D40 F16 H20 J0 J00 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89806&r=lab |
| By: | Shuchen, Liu; Deng, Kent; Shengmin, Sun |
| Abstract: | This study uses data of “Chinese Household Income Project Survey 2002” to investigate long-term impact of Mao’s persistent policy of “forced/involuntary ruralisation of urban youth” (shangshan xiaxiang, literally “re-settlement in mountains and villages”) during the 1950s and 70s on women’s labour market participation and contribution to family incomes. Our results indicate that the impact of Mao’s forced ruralisation on female labour market participation can be positive (despite diminishing in size due to ageing). In addition, a change from positive to negative impact is largely determined by personal hardship under Maoism and its aftermath. Moreover, regarding female contribution to family incomes, our findings suggest that forcefully ruralised urban women have more bargaining power later in family finance. Our conclusion is that against all the odds Mao’s “forced ruralisation of urban youth” has improved family and societal positions of female victims in the post-Mao era as an unintended consequence of Maoism. |
| JEL: | I28 J08 P25 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:90615&r=lab |