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on Labour Economics |
| By: | Bratsberg, Bernt; Moxnes, Andreas; Raaum, Oddbjørn; Ulltveit-Moe, Karen-Helene |
| Abstract: | This paper investigates the impact of a large shock to labor supply from immigration on occupational wages, labor costs and industry growth. We develop a simple factor-proportions theory where individuals sort into occupations, and industries use occupations with different factor intensities. The model delivers an empirical framework and testable hypotheses that we confront with a rich data set on industry performance, occupational characteristics and immigration. We apply the methodology to one of the largest labor immigration shocks of the 21th century: The immigration wave to Norway after the Eastern enlargement of the European Union. We introduce a novel instrument that exploits the fact that the language requirements are significant barriers for foreign workers and these requirements vary across occupations. The results point to labor migration leading to large adjustments in relative industry employment, labor costs and wages, and these effects are particularly strong in industries that are initially intensive in the use of immigrant occupations. Finally, a quantification of the general equilibrium of our model shows that the welfare effect of immigration was close to zero for natives, but negative for the existing population of immigrants. |
| Keywords: | Eastern enlargement; Immigration; Industry Adjustments |
| JEL: | F22 J61 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13670&r=all |
| By: | Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar |
| Abstract: | The literature on social networks often presumes that job search through (strong) social ties leads to increased inequality by providing privileged individuals with access to more attractive labor market opportunities. We assess this presumption in the context of sorting between AKM-style person and establishment fixed effects. Our rich Swedish register data allow us to measure connections between agents - workers to workers and workers to firms - through parents, children, siblings, spouses, former co-workers and classmates from high school/college, and current neighbors. In clear contrast with the above presumption, there is less sorting inequality among the workers hired through social networks. This outcome results from opposing factors. On the one hand, reinforcing positive sorting, high wage job seekers are shown to have social connections to high-wage workers, and therefore to high-wage firms (because of sorting of workers over firms). Furthermore, connections have a causal impact on the allocation of workers across workplaces â?? employers are much more likely to hire displaced workers to whom they are connected through their employees, in particular if their social ties are strong. On the other hand, attenuating positive sorting, the (causal) impact is much stronger for low-wage firms than it is for high-wage firms, irrespective of the type of worker involved, even conditional on worker fixed effects. The lower degree of sorting among connected hires thus arises because low-wage firms use their (relatively few) connections to high-wage workers to hire workers of a type that they are unable to attract through market channels. |
| Keywords: | Hiring; Job Displacement; job search; networks |
| JEL: | J23 J30 J60 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13672&r=all |
| By: | Matteo Gomellini; Cormac Ó Gráda |
| Abstract: | Emigrants from Italy and Ireland contributed disproportionately to the Age of Mass Migration. That their departure improved the living standards of those they left behind is hardly in doubt. Nevertheless, a voluminous literature on the selectivity of migrant flows— both from sending and receiving country perspectives—has given rise to claims that migration generates both ‘brain drains’ and ‘brain gains’. On the one hand, positive or negative selection among emigrants may affect the level of human capital in sending countries. On the other hand, the prospect of emigration and return migration may both spur investment in schooling in source countries. This essay describes the history of emigration from Italy and Ireland during the Age of Mass Migration from these perspectives. |
| Keywords: | Migration; Brain Drain; Brain Gain; Human Capital; Italy; Ireland |
| JEL: | F22 J61 N33 O15 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201907&r=all |
| By: | Mathä, Thomas Y.; Millard, Stephen; Rõõm, Tairi; Wintr, Ladislav; Wyszyńsk, Robert |
| Abstract: | We use firm-level survey data from 25 EU countries to analyse how firms adjust their labour costs (employment, wages and hours) in response to shocks. We develop a theoretical model to understand how firms choose between different ways to adjust their labour costs. The basic intuition is that firms choose the cheapest way to adjust labour costs. Our empirical findings are in line with the theoretical model and show that the pattern of adjustment is not much affected by the type of the shock (demand shock, access-to-finance shock, ‘availability of supplies’ shock), but differs according to the direction of the shock (positive or negative), its size and persistence. In 2010-13, firms responding to negative shocks were most likely to reduce employment, then hourly wages and then hours worked, regardless of the source of the shock. Results for the 2008-09 period indicate that the ranking might change during deep recession as the likelihood of wage cuts increases. In response to positive shocks in 2010-13, firms were more likely to increase wages, followed by increases in employment and then hours worked suggesting an asymmetric reaction to positive and negative shocks. Finally, we show that strict employment protection legislation and high centralisation or coordination of wage bargaining make it less likely that firms reduce wages when facing negative shocks. JEL Classification: D21, D22, D24 |
| Keywords: | employment, firms, hours, labour cost adjustment, Shocks, survey, wages |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192269&r=all |
| By: | Hospido, Laura; Laeven, Luc; Lamo, Ana |
| Abstract: | We examine gender differences in career progression and promotions in central banking, a stereotypical male-dominated occupation, using confidential anonymized personnel data from the European Central Bank (ECB) during the period 2003-2017. A wage gap emerges between men and women within a few years of hiring, despite broadly similar entry conditions in terms of salary levels and other observables. We also find that women are less likely to be promoted to a higher salary band up until 2010 when the ECB issued a public statement supporting diversity and took several measures to support gender balance. Following this change, the promotion gap disappears. The gender promotion gap prior to this policy change is partly driven by the presence of children. Using 2012-2017 data on promotion applications and decisions, we explore the promotion process in depth, and confirm that during this most recent period women are as likely to be promoted as men. This results from a lower probability of women to apply for promotion, combined with a higher probability of women to be selected conditional on having applied. Following promotion, women perform better in terms of salary progression, suggesting that the higher probability to be selected is based on merit, not positive discrimination. JEL Classification: J16, J31, J41, J63 |
| Keywords: | central banking, gender gaps, promotions, working histories |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192265&r=all |
| By: | Kessler, Anke; Milligan, Kevin |
| Abstract: | This paper studies the influence of cultural norms on economic outcomes. We combine detailed information on second-generation female immigrants with historical data from their an- cestral source countries to see how the cultural endowment affects current decisions on work and fertility. We show that results using the standard approach are sensitive to context and specification. We then extend to reveal an education gradient for cultural assimilation: lower-educated women exhibit a strong influence of cultural variables while higher educated women show no in- fluence at all. We gather and present evidence on several potential mechanisms for the education gradient. |
| Keywords: | Assimilation; Culture; Fertility; Human Capital; Immigration; Labor Supply |
| JEL: | J16 J22 J61 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13658&r=all |
| By: | André Gröger |
| Abstract: | This article investigates the impact of negative income shocks in migrant destination countries around the world on the domestic and international labor migration decisions of their family members left behind at origin. Exploiting differences in labor market shocks across and within destinations during the Great Recession, I find large and heterogeneous effects on both types of migration decisions. High remittance-dependent households reduced domestic and increased international labor migration in response to the shock. Low dependence ones remained largely unaffected. I provide a theoretical framework, which rationalizes this heterogeneity by the relative magnitudes of income and substitution effects caused by the shock. The results imply a deterioration in the skill selection of aggregate international migrant flows as high dependence households had below average skill levels. New international migrants targeted the same destinations as established ones from the same household, providing evidence of strong kinship migration networks. The results show that domestic and foreign migration decisions are interrelated and jointly determine aggregate migration flows. |
| Keywords: | international migration, domestic migration, migration selection, unemployment, Vietnam |
| JEL: | F22 J61 O15 R23 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1086&r=all |
| By: | Becker, Sascha O. (University of Warwick); Fernandes, Ana (Bern University of Applied Sciences); Weichselbaumer, Doris (Johannes Kepler University Linz) |
| Abstract: | Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer’s perspective, in their fertile age they are also at “risk” of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a largescale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate’s personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-àvis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare. |
| Keywords: | Fertility; Discrimination; Experimental economics. JEL Classification: C93; J16; J71. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:412&r=all |
| By: | Ager, Philipp; Boustan, Leah; Eriksson, Katherine |
| Abstract: | The nullification of slave-based wealth after the US Civil War (1861-65) was one of the largest episodes of wealth compression in history. We document that white southern households with more slave assets lost substantially more wealth by 1870 relative to households with otherwise similar pre-War wealth levels. Yet, the sons of these slaveholders recovered in income and wealth proxies by 1880, in part by shifting into white collar positions and marrying into higher status families. Their pattern of recovery is most consistent with the importance of social networks in facilitating employment opportunities and access to credit. |
| JEL: | J62 N31 N91 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13660&r=all |
| By: | François Gerard; Joana Naritomi |
| Abstract: | The most common forms of government-mandated job displacement insurance are Severance Pay (SP; lump-sum payments at layoff) and Unemployment Insurance (UI; periodic payments contingent on nonemployment). While there is a vast literature on UI, SP programs have received much less attention, even though they are prevalent across countries and predominant in developing countries. In particular, little is known about their insurance value, which critically relies on workers’ ability to dissave the lump-sum progressively to smooth consumption after layoff. Using de-identified high-frequency expenditure data and matched employee-employer data from Brazil, we find that displaced workers eligible for both UI and SP increase consumption at layoff by 35% despite experiencing a 17% consumption loss after they stop receiving any benefits. Moreover, this sensitivity of consumer spending to cash-on-hand is present across spending categories and sources of variation in UI benefits and SP amounts. We show that a simple structural model with present-biased workers can rationalize our findings, and we use it to illustrate their implications for the incentive-insurance trade-off between SP and UI. Specifically, the insurance value of SP programs – or of other policies that provide liquidity to workers at layoff – can be severely reduced when consumption is over-sensitive to the timing of benefit disbursement, undermining their advantage in terms of job-search incentives. Our findings highlight the importance of the difference between SP and UI in their disbursement policy, and shed new light on the need for job displacement insurance in a developing country context. |
| JEL: | G22 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25749&r=all |
| By: | Enrique Alberola-Ila; Carlos Urrutia |
| Abstract: | Informality is an entrenched structural trait in emerging market economies, despite of the progress achieved in macroeconomic management. Informality determines the behavior of labour markets, financial access and the productivity of the overall economy. Therefore it influences the transmission of shocks and also of monetary policy. This paper develops a simple general equilibrium closed economy model with nominal rigidities, labor and financial frictions. Informality is captured by a dual labour market where the share of informal workers is endogenous. Only formal sector firms have access to financing, which is instrumental in their production process. Informality has a buffering effect on the propagation of demand and supply shocks to prices; the financial feature of the model exacerbates the impact of financial shocks in the formal sector while the informal sector is in principle unaffected. As a result informality dampens the impact of demand and financial shocks on wages and inflation but heighten the impact of technology shocks. Informality also increases the sacrifice ratio of monetary policy actions. From a Central Bank perspective, the results imply that the presence of an informal sector mitigates inflation volatility for some type of shocks but makes monetary policy less effective. |
| Keywords: | informality, inflation, monetary policy |
| JEL: | E26 E31 E52 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:778&r=all |
| By: | Yosh Halberstam |
| Abstract: | In the first large-scale study on voice, audio data on lawyers at the top U.S. law firms–a male dominated work environment–show that female lawyers alternate between two voice frequency modes: a primary female mode at about 200 Hz as well as a secondary female mode at about 100 Hz that is coextensive with the primary (and only) male voice frequency mode. This tendency is stronger among female associates than among female partners, and does not replicate for male lawyers or female assistants. Evidence of differences driven by firm heterogeneity is comparatively insignificant, indicating market-wide trends in workplace behavior. |
| Keywords: | labor markets; gender identity; social norms; codeswitching; voice frequency |
| JEL: | D91 J16 J44 M14 Z10 |
| Date: | 2019–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-636&r=all |
| By: | Marie Connolly (Department of Economics, University of Quebec in Montreal); Miles Corak (The Graduate Center, City University of New York); Catherine Haeck (Department of Economics, University of Quebec in Montreal) |
| Abstract: | Intergenerational income mobility is lower in the United States than in Canada, but varies significantly within each country. Our sub-national analysis finds that the national border only partially distinguishes the close to one thousand regions we analyze within these two countries. The Canada-US border divides Central and Eastern Canada from the Great Lakes regions and the Northeast of the United States. At the same time some Canadian regions have more in common with the low mobility southern parts of the United States than with the rest of Canada, and the fact that these areas represent a much larger fraction of the American population also explains why mobility is lower in the United States. |
| Keywords: | intergenerational mobility, equality of opportunity, geography |
| JEL: | D63 J61 J62 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:grc:wpaper:19-02&r=all |
| By: | Maximilian Sprengholz; Anna Wieber; Elke Holst |
| Abstract: | We exploit the natural experiment of German reunification in 1990 to investigate if the institutional regimes of the formerly socialist (rather gender-equal) East Germany and the capitalist (rather gender-traditional) West Germany shaped different gender identity prescriptions of family breadwinning. We use data for three periods between 1984 and 2016 from the representative German Socio-Economic Panel (SOEP). Density discontinuity tests and fixed-effects regressions suggest that married couples in West (but not East) Germany diminished the wife’s labor market outcomes in order to avoid situations where she would earn more than him. However, the significance of the male breadwinner prescription seems to decline in West Germany since reunification, converging to the more gender-egalitarian East Germany. Our work emphasizes the view that political and institutional frameworks can shape fairly persistent gender identity prescriptions that influence household economic decisions for some time, even when these frameworks change. |
| Keywords: | Gender identity, Male breadwinner norm, Institutions, Female labor market outcomes, SOEP |
| JEL: | J16 J12 D10 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1030&r=all |
| By: | Drelichman, Mauricio; Gonzalez Agudo, David |
| Abstract: | We exploit the records of a large Toledan hospital to study the compensation of female labor and the gender wage gap in early modern Castile in the context of nursing, a non-gendered low-skill occupation in which men and women performed the same clearly defined tasks. We employ a robust methodology to valuate in-kind compensation, and show it to constitute a central part of the labor contract, far exceeding subsistence requirements. Patient admissions records are used to measure nurse productivity, which did not differ across genders. Female compensation varied between 70% and 100% of male levels, with fluctuations clearly linked to relative labor scarcity. Contrary to common assumptions in the literature, we show that female compensation in early modern Castile was set through a competitive market, and not according to custom. The sources of the gender disparity are therefore likely to be found in the broader social and cultural context. |
| Keywords: | gender gap; discrimination; compensation; early modern; Spain |
| JEL: | N33 N93 J16 |
| Date: | 2019–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:bricol:mauricio_drelichman-2019-7&r=all |
| By: | Lüger, Tim |
| Abstract: | This work seeks to answer the "population question," i.e. the effect of population growth on production per capita. This question has lingered in economic thought for centuries and to this day two general lines of thought can be identified, which might be marked as the "optimist" and the "pessimist" view. While the optimists claim that an increase in population will - chiefly owed to concomitant specialization and technological progress - raise average production per capita, the pessimists maintain that the latter would decline as a result of resources becoming relatively more scarce. Integrating both approaches and using a neoclassical framework, this work intends to show that sustainably increasing productivity is predominantly the result of reducing too high fertility toward a lower level such that diminishing returns are outweighed by the benefits from labor division. The paper argues that the historical reduction of fertility can almost completely explain long-run development. |
| Keywords: | Population Question,Division of Labor,Diminishing Returns,Demographic Transition,Economic Development,Classical Growth Theory,Neoclassical Growth Theory,Unified Growth Theory,History of Economic Thought |
| JEL: | B12 B22 J1 O47 N01 N3 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:darddp:235&r=all |
| By: | Anna Aizer; Paul J. Devereux; Kjell G. Salvanes |
| Abstract: | Women who give birth as teens have worse subsequent educational and labor market outcomes than women who have first births at older ages. However, previous research has attributed much of these effects to selection rather than a causal effect of teen childbearing. Despite this, there are still reasons to believe that children of teen mothers may do worse as their mothers may be less mature, have fewer financial resources when the child is young, and may partner with fathers of lower quality. Using Norwegian register data, we compare outcomes of children of sisters who have first births at different ages. Our evidence suggests that the causal effect of being a child of a teen mother is much smaller than that implied by the cross-sectional differences but that there are still significant long-term, adverse consequences, especially for children born to the youngest teen mothers. Unlike previous research, we have information on fathers and find that negative selection of fathers of children born to teen mothers plays an important role in producing inferior child outcomes. These effects are particularly large for mothers from higher socio-economic groups. |
| Keywords: | Teen pregnancy; Intergenerational mobility; Family fixed effects |
| JEL: | J12 J13 I31 I32 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201908&r=all |
| By: | Pettinicchi, Yuri; Vellekoop, Nathanael |
| Abstract: | Job security is important for durable consumption and household savings. Using surveys, workers express a probability that they will lose their job in the next 12 months. In order to assess the empirical content of these probabilities, we link survey data to administrative data with labor market outcomes. Workers predict job loss quite well, in particular those whose job loss is followed by unemployment. Workers with higher job loss expectations acquire cheaper cars, and are less likely to buy new cars. In line with models of precautionary saving, higher job loss expectations are associated with more savings and less exposure to risky assets. |
| Keywords: | Subjective expectations,Durable consumption,Household saving |
| JEL: | C81 C83 D14 J63 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:249&r=all |
| By: | Julien Albertini (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Arthur Poirier (Ministerio de Trabajo, Empleo y Seguridad Social, Argentina); Thepthida Sopraseuth (thepthida.sopraseuth@u-cergy.fr) |
| Abstract: | We shed light on the driving forces behind unemployment fluctuations and short-run changes in the informality rate on the Argentine labor market. Using Argentine survey data, we measure worker flows between formal employment, informal employment, unemployment and non-participation. We propose a methodology to correct for the discontinuity of Argentine survey data and that is able to compute consistent time series of quarterly ins and outs of informal work. Using variance decompositions and counterfactual exercises, we show that the ins and outs of informal employment are key drivers of labor market fluctuations. In particular, outflows from unemployment to informal employment account for 37% of fluctuations in the unemployment rate. In addition, our analysis suggests that informality is: (i) a flexible sector that is used in recessionary periods as a buffer against income losses and (ii) a stepping stone towards formal employment. The observed large changes in the informality rate are well explained by the change in job mobility between the formal and informal sectors as well as variations in hirings from unemployment and non-participation in the informal sector. |
| Keywords: | worker flows, informality, unemployment, business cycle, emerging market |
| JEL: | E24 E26 J6 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1916&r=all |
| By: | Barigozzi, Francesca; Cremer, Helmuth; Roeder, Kerstin |
| Abstract: | This paper studies the design of child-care policies when redistribution matters. Traditional mothers provide some informal child care, whereas career mothers purchase full time formal care in the market. The sorting of women across career paths is endogenous and shaped by a social norm about gender roles in the family. Via this social norm traditional mothers' informal child care imposes an externality on career mothers, so that the market outcome is inefficient. Informal care is too large and the group of career mothers is too small so that inefficiency and gender inequality go hand in hand. In a first-best, full information word redistribution across couples and efficiency are separable. Redistribution is performed via lump-sum transfers and taxes which are designed to equalize utilities across all couples. The efficient allocation of child care is obtained by subsidizing formal care at a Pigouvian rate. However, in a second-best settings, we show that a trade-off between the reduction of gender inequality and redistributive considerations emerge. The optimal uniform subsidy is lower than the "Pigouvian" level. Under a nonlinear policy the first-best "Pigouvian" rule for the (marginal) subsidy on informal care is reestablished. While the share of high career mothers continues to be distorted downward for incentive reasons, this policy is effective in reconciling the objectives of reducing the child care related gender inequalities and achieving a more equal income distribution across couples. |
| Keywords: | Child Care; child care subsidies; redistribution; Social norms; women's career choices |
| JEL: | D13 H23 J16 J22 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13675&r=all |