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on Labour Economics |
| By: | Michael A. Clemens (Center for Global Development; IZA) |
| Abstract: | ‘Guest workers’ earn higher wages overseas on temporary low-skill employment visas. This wage effect can quantify global inefficiencies in the pure spatial allocation of labor between poorer and richer countries. But rigorous estimates are rare, complicated by migrant self-selection. This paper tests the effects of guest work on Indian applicants to a construction job in the United Arab Emirates, where a crisis exogenously influenced job placement. Guest work raised the return to labor by a factor of four, implying large spatial inefficiency. Short-term effects on households were modest. Effects on information, debt, and later migration were incompatible with systematic fraud. |
| Keywords: | income, human capital, migration, labor, mobility, guest work, india, gulf, construction, worker, selection, migrant, temporary, visa, wage, education, crisis, low-skill, unskilled, credit, exploited, naive, regret, slavery, trafficking, debt, coerced, cheated |
| JEL: | F22 J6 O12 O16 O19 |
| Date: | 2019–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:501&r=all |
| By: | Robert E. Hall; Marianna Kudlyak |
| Abstract: | We track the path that a worker follows after losing a job. Initially, the typical job-loser spends some time out of the labor force and in job search. Only a month or two later, in normal times, the worker lands a job. But the job is frequently brief. Over the next few months, the worker finds a good match that becomes a long-term job. Short-term jobs tend to precede long-term ones. Short-term employment shares some of the characteristics of unemployment and some of the characteristics of employment. We show that this pattern of moving among working, searching for a job, and being out of the labor force is concentrated in a segment of the working-age population. In other segments, individuals are insulated from disturbances to their activities in the labor market. Some work continuously while others are always out of the labor market. We develop a model that incorporates heterogeneity across and within these segments. |
| JEL: | E24 J63 J64 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25625&r=all |
| By: | Carlo Pizzinelli (University of Oxford); Konstantinos Theodoridis (Cardiff Business School); Francesco Zanetti (University of Oxford (E-mail: Francesco.Zanetti@ economics.ox.ac.uk)) |
| Abstract: | This paper documents state dependence in labor market fluctuations. Using a Threshold Vector-Autoregression model, we establish that the unemployment rate, the job separation rate and the job finding rate exhibit a larger response to productivity shocks during periods with low aggregate productivity. A Diamond-Mortensen-Pissarides model with endogenous job separation and on-the-job search replicates these empirical regularities well. The transition rates into and out of employment embed state dependence through the interaction of reservation productivity levels and the distribution of match-specific idiosyncratic productivity. State dependence implies that the effect of labor market reforms is different across phases of the business cycle. A permanent removal of layoff taxes is welfare enhancing in the long run, but it involves distinct short-run costs depending on the initial state of the economy. The welfare gain of a tax removal implemented in a low- productivity state is 4.9 percent larger than the same reform enacted in a state with high aggregate productivity. |
| Keywords: | Search and Matching Models, State Dependence in Business Cycles, Threshold Vector Autoregression |
| JEL: | E24 E32 J64 C11 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:19-e-03&r=all |
| By: | Cantore, Cristiano; Ferroni, Filippo; León-Ledesma, Miguel |
| Abstract: | The textbook New-Keynesian (NK) model implies that the labor share is pro-cyclical conditional on a monetary policy shock. We present evidence that a monetary policy tightening robustly increased the labor share and decreased real wages and labor productivity during the Great Moderation period in the US, the Euro Area, the UK, Australia, and Canada. We show that this is inconsistent not only with the basic NK model, but with a wide variety of NK models commonly used for monetary policy analysis and where the direct link between the labor share and the markup can be broken. |
| Keywords: | Labor Share; monetary policy shocks |
| JEL: | C52 E23 E32 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13551&r=all |
| By: | Andrea Coveri (Department of Economics, Society & Politics, Università di Urbino Carlo Bo); Mario Pianta (Scuola Normale Superiore, Florence) |
| Abstract: | In the last four decades, an increasingly skewed income distribution has favored capital at the expense of labour and has been coupled with ever growing inequalities. Merging a Neo-Schumpeterian approach to innovation with a Post-Keynesian theoretical framework, this work contributes to the analysis of the structural determinants of functional income distribution. Building on Pianta and Tancioni (2008), we propose a simultaneous model on wage and profit dynamics identifying technological change, offshoring strategies and role of trade unions as key factors which shape the power relations between capital and labour. On the empirical ground, we perform an industry-level analysis extending and improving the Sectoral Innovation Database (SID), which accounts for 38 manufacturing and service sectors for six major European countries (France, Germany, Italy,Netherlands, Spain and United Kindgom) from 1994 to 2014. We find that, despite the structural asymmetries between industries’ patterns of evolution, labour productivity growth and product innovation have a positive impact on both distributive components, while a rather negative effect of process innovation on wages is detected. Offshoring processes generally emerge as profit-enhancing while represent a reliable firms’ weapon to reduce labour costs, although a remarkable heterogeneity arises when the technological nature of offshoring strategies is accounted for; finally, union density tends to be positively associated with wage dynamics, suggesting the relevance of labour market institutions in conditioning the patterns of income distribution. |
| Keywords: | Distribution, innovation, offshoring, union density, Europe, industries. |
| JEL: | F12 F15 J31 J51 L16 L6 L8 O33 O52 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:19_01&r=all |
| By: | Teresa Molina (University of Hawaii at Manoa); Ivan Rivadeneyra (University of Hawaii at MÄ noa) |
| Abstract: | It is both theoretically and empirically unclear whether a drastic nationwide reduction in the cost of education should significantly improve individual labor market outcomes. This paper estimates the labor market effects of a 2008 policy that eliminated tuition fees at public universities in Ecuador. We use a difference-in-difference strategy that exploits variation across cohorts differentially exposed to the policy, as well as geographic variation in access to public universities. We find that the tuition fee elimination significantly increased college participation, but did not improve income. The policy had modest effects on job type, shifting people out of more physical jobs. However, the bulk of the benefits of this fee elimination were enjoyed by individuals of higher socioeconomic status. |
| Keywords: | higher education, tuition reduction, Ecuador |
| JEL: | I23 I24 I28 O15 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201901&r=all |
| By: | Karin Mayr-Dorn |
| Abstract: | This paper analyses the effect of firm learning on labor market efficiency in a frictional labor market with asymmetric information. I consider a model with random matching and wage bargaining a la Pissarides (1985, 2000) where worker ability is unknown to firms at the hiring stage. Firm learning increases relative expected earnings in high-ability jobs and, thereby, enhances imitation incentives of low-ability workers. The net effect on aggregate expected match surplus and unemployment is indeterminate a priori. Numerical results show that firm learning does not increase labor market efficiency. |
| Keywords: | job search; on-the-job effort; asymmetric information; learning. |
| JEL: | D82 D83 J64 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2019_06&r=all |
| By: | Robert J. Shiller (Cowles Foundation, Yale University) |
| Abstract: | Concerns that technological progress degrades job opportunities have been expressed over much of the last two centuries by both professional economists and the general public. These concerns can be seen in narratives both in scholarly publications and in the news media. Part of the expressed concern about jobs has been about the potential for increased economic inequality. But another part of the concern has been about a perceived decline in job quality in terms of its effects on monotony vs creativity of work, individual sense of identity, power to act independently, and meaning of life. Public policy should take account of both of these concerns, inequality and job quality. |
| Keywords: | Labor-saving machines, Artificial intelligence, History of thought, Division of labor, Unemployment, Automation, Robotics |
| JEL: | N3 J0 B0 E2 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2168&r=all |
| By: | Michalis Nikiforos |
| Abstract: | The paper builds on the concept of (shifting) involvements, originally proposed by Albert Hirschman (2002 [1982]). However, unlike Hirschman, the concept is framed in class terms. A model is presented where income distribution is determined by the involvement of the two classes, capitalists and workers. Higher involvement by capitalists and lower involvement by workers tends to increase the profit share and vice versa. In turn, shifts in involvements are induced by the potential effect of a change in distribution on economic activity and past levels of distribution. On the other hand, as the profit share increases, the economy tends to become more wage led. The dynamics of the resulting model are interesting. The more the two classes prioritize the increase of their income share over economic activity, the more possible it is that the economy is unstable. Under the stable configuration, the most likely outcome is Polanyian predator-prey cycles, which can explain some interesting historical episodes during the 20th century. Finally, the paper discusses the possibility of conflict and cooperation within each of the distribution-led regimes. |
| Keywords: | Shifting Involvements; Hirschman; Wage Led; Profit Led; Predator-Prey |
| JEL: | E11 E12 E21 E22 E32 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_924&r=all |
| By: | Banfi, Stefano; Choi, Sekyu; Villena-Roldán, Benjamin |
| Abstract: | We use an unusually rich data from a Chilean job board to document novel facts regarding job search for unemployed and employed seekers. We show how application behavior is influenced by (1) demographics such as gender, age, and marital status, (2) alignment between applicant wage expectations and wage offers, (3) applicant fit into ad requirements such as education, experience, job location and occupation (4) timing variables, including unemployment duration, job tenure (for on-the-job searchers) and business cycle conditions. This empirical evidence can discipline current and future search-theoretical frameworks. |
| Keywords: | Online job search, Applications, Search frictions, Unemployment, On-the-job search, Networks. |
| JEL: | E24 J4 J64 |
| Date: | 2019–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92482&r=all |
| By: | Daniel Horn (Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Hungary and Eötvös Loránd University); Hubert Janos Kiss (Centre for Economic and Regional Studies, Hungarian Academy of Sciences, Hungary and Eötvös Loránd University) |
| Abstract: | We collect data on time preferences of a representative sample of the Hungarian population in a non-incentivized way and investigate how patience and present bias associate with important life outcomes in five domains: i) educational attainment, ii) unemployment, iii) income and wealth, iv) financial decisions and difficulties, and v) health. Based on the literature, we formulate the broad hypotheses that patience fosters, while present bias hinders positive outcomes in the domains under study. We document a consistent and often significant positive effect of patience in almost all areas (except unemployment), with the strongest effects in escaping low educational attainment, wealth and financial decisions. We find that present bias associates significantly with saving decisions and financial troubles. |
| Keywords: | educational attainment, financial decisions and difficulties, income and wealth, patience, present bias, risk preferences. |
| JEL: | D12 D14 D31 D90 I12 I21 J6 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:has:bworkp:1901&r=all |
| By: | Hammermann, Andrea; Niendorf, Matthias; Schmidt, Jörg |
| Abstract: | "In Germany, the labour force is ageing rapidly. At the same time, age heterogeneity within companies is rising. The literature on diversity argues that heterogeneity can have a positive as well as a detrimental effect on team outputs. Our paper sheds light on the impact of age diversity on the likelihood of a company to create product or process innovations. Based on our analysis of the Linked Employer-Employee-Data from the Institute for Employment Research (IAB) over the 2009-2013 period, we focus on different indicators of age diversity within a company's workforce (variety, separation and disparity). We find that a rise in the average age of a company's workforce has a negative impact on innovation, but age diversity measured by the standard deviation of age or the average age gap increases the probability of a company to create innovations. In addition, the uniformity of the age distribution does not affect innovativeness. Different results for age and tenure diversity suggest a higher importance of generalised human capital for creativity processes compared to company-specific knowledge gained during employment within a company." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | J14 J24 M14 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201904&r=all |
| By: | Borowiecki, Karol Jan (Department of Business and Economics); Graddy, Kathryn (Brandeis University) |
| Abstract: | In order to investigate the role of immigrant artists on the development of artistic clusters in U.S. cities, we use the U.S. Census and American Community Survey, collected every 10 years since 1850. We identify artists and art teachers, authors, musicians and music teachers, actors and actresses, architects, and journalists, their geographical location and their status as a native or an immigrant. We look at the relative growth rate of the immigrant population in these occupations over a ten year period and how it affects the relative growth rate of native-born individuals in these artistic occupations. We find that cities that experienced immigrant artist inflows, also see a greater inflow of native artists by about 40%. |
| Keywords: | Migration; agglomeration economies; cities; artists |
| JEL: | J61 N30 Z11 |
| Date: | 2019–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2019_004&r=all |