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on Labour Economics |
| By: | Bart Cockx; Koen Declercq; Muriel Dejemeppe; Leda Inga; Bruno Van der Linden |
| Abstract: | This paper evaluates the impact on the transition to work of a policy reform in Belgium that restricted the access to a specific unemployment insurance scheme for young labor market entrants. This scheme entitles youths with no or little labor market experience to unemployment benefits after a waiting period of one year. As of 2015, the Belgian government unexpectedly scrapped benefit eligibility for youths who start the waiting period at the age of 24 or older. The reform implied a change from an inclining to a flat rate (zero-level) benefit profile. We use a difference-in-differences approach to identify the causal impact of this reform on fresh university graduates. Our main finding is that this reform only increases the transition to very short-lived jobs. |
| Keywords: | youth unemployment, unemployment insurance, policy evaluation, difference-in-differences |
| JEL: | J64 J65 J68 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8136&r=all |
| By: | Will Jianyu Lu (Central Bank of Chile); Kevin Donovan (Yale School of Management); Todd Schoellman (Arizona State University; Ohio State University; Federal Reserve Bank of Minneapolis; National Bureau of Economic Research; Department of Economics; W.P. Carey School of Business) |
| Abstract: | We build a dataset of harmonized rotating panel labor force surveys covering 42 countries across a wide range of development and document three new empirical findings on labor market dynamics. First, labor market flows (job-finding rates, employment-exit rates, and job-to-job transition rates) are two to three times higher in the poorest as compared with the richest countries. Second, employment hazards in poorer countries decline more sharply with tenure; much of their high turnover can be attributed to high separation rates among workers with low tenure. Third, wage-tenure profiles are much steeper in poorer countries, despite the fact that wage-experience profiles are flatter. We show that these facts are consistent with theories with endogenous separation, particularly job ladder and learning models. We disaggregate our results and investigate possible driving forces that may explain why separation operates differently in rich and poor countries. |
| Keywords: | Job flows; Job-finding rate; Separation rate; Selection |
| JEL: | J60 O10 |
| Date: | 2020–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:87618&r=all |
| By: | Céline Piton (National Bank of Belgium & Université libre de Bruxelles); François Rycx (Université libre de Bruxelles) |
| Abstract: | This paper provides a comprehensive quantitative assessment of the employment performance of first- and second-generation immigrants in Belgium compared to that of natives. Using detailed quarterly data for the period 2008-2014, we find not only that first-generation immigrants face a substantial employment penalty (up to -36% points) vis-à-vis their native counterparts, but also that their descendants continue to face serious difficulties in accessing the labour market. The social elevator appears to be broken for descendants of two non-EU-born immigrants. Immigrant women are also found to be particularly affected. Among key drivers of access to employment, we find: i) education for the descendants of non-EU-born immigrants, and ii) proficiency in the host country language, citizenship acquisition, and (to a lesser extent) duration of residence for first-generation immigrants. Finally, estimates suggest that around a decade is needed for the employment gap between refugees and other foreign-born workers to be (largely) suppressed. |
| Keywords: | First- and second-generation immigrants, employment, moderating factors |
| JEL: | J15 J16 J21 J24 J61 |
| Date: | 2020–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2020007&r=all |
| By: | Juan Chaparro (Universidad EAFIT); Aaron Sojourner (University of Minnesota); Matthew Wiswall (University of Wisconsin-Madison) |
| Abstract: | This paper combines multiple sources of information on early childhood development in a unified model for analysis of a wide range of early childhood policy interventions. We develop a model of child care in which households decide both the quantities and qualities of maternal and non-maternal care along with maternal labor supply. The model introduces a novel parenting-effort channel, whereby child care subsidies that permit less parenting may enable better parenting. To estimate the model, we combine observational data with experimental data from the Infant Health and Development Program (IHDP) which randomly assigned free child care when the child was 1 and 2 years old. We estimate a cognitive skill production function and household preferences, giving insight into mechanisms driving the ex post heterogeneous effects of the IHDP intervention, accounting for alternative care substitutes available to the control group and spillovers of the child care offer across the household's decisions. We also estimate ex ante effects of counterfactual policies such as an offer of lower-quality care, requiring a co-pay for subsidized care, raising the maternal wage offer, or a cash transfer. Finally, we use the model to rationalize existing evidence from outside the US on the effects of universal child care programs. |
| Keywords: | human capital, skill formation, child care, maternal labor supply |
| JEL: | J13 D10 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2020-012&r=all |
| By: | Alexandre Ounnas (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | Using Current Population Survey (CPS) data over the period 1976-2010 and the occupation classification of Autor and Dorn (2013) to rank occupations between high, medium and low skill, this paper provides a flow rate analysis of quarterly fluctuations in occupation-specific and aggregate stocks. I apply the variance decomposition developed by Elsby et al. (2015) and find that inflows (the ins) explain a higher share of the variance in the fluctuations of the high skill unemployment rate (around 54%), while outflows (the outs) account for 60% of the variance of the low skill unemployment rate variance. I then show how the variance decomposition for occupation-specific stocks can be used to study fluctuations of aggregate stocks, namely the unemployment and labor force participation rates. This allows to analyze the role of occupation-specific flow rates but also effects of variations in the occupational shares of employment and unemployment. The variance decomposition results indicate that compositional effects do not account for much of the variance in aggregate unemployment rate fluctuations. It is occupation-specific transition rates out and into unemployment that account for most of the variance in these fluctuations. Outflows and inflows explain 60% and 35% of the variance in unemployment fluctuations with flows into and out of middle and low skill unemployment contributing for 80%. I focus on labor force participation fluctuations in the last part of the paper. In addition to the occupation compositional effect, I find that outflows from the labor force are also affected by fluctuations of the unemployment rate: when unemployment increases, the transition rate out of the labor force increases as well given that unemployed have a much higher exit rate compared to employed workers. This compositional effect is also described by Barnichon (2019) and I find that it accounts for 34% of the variance in quarterly fluctuations of labor force participation. The remaining share is explained by inflows to the labor force (65%) with inflows to employment and unemployment contributing for 45% and 20% respectively. |
| Keywords: | Worker flows; unemployment; occupations; labor force participation |
| JEL: | E24 J6 |
| Date: | 2020–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2020009&r=all |
| By: | Hani Mansour; Daniel I. Rees; Bryson M. Rintala; Nathan N. Wozny |
| Abstract: | Although women earn approximately 50 percent of science, technology, engineering and math (STEM) bachelor’s degrees, more than 70 percent of scientists and engineers are men. We explore a potential determinant of this STEM gender gap using newly collected data on the career trajectories of United States Air Force Academy students. Specifically, we examine the effects of being assigned female math and science professors on occupation choice and postgraduate education. We find that, among high-ability female students, being assigned a female professor leads to substantial increases in the probability of working in a STEM occupation and the probability of receiving a STEM master’s degree. |
| JEL: | J16 J24 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26822&r=all |
| By: | Alexandre Ounnas (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This paper provides an analysis of the effects of Job Polarization on the labor market through the study of worker flows and transition rates disaggregated by occupations. I use the Current Population Survey (CPS) for the period 1976-2010 and the occupation classification of Autor and Dorn (2013) to rank occupations between high, middle and low skill. I then use the variance decomposition of Elsby et al. (2015) to measure the percentage point contributions of each hazard rate to labor market stocks fluctuations. This flow rate analysis is used to study 3 phenomena. Firstly, the decrease in middle skill (or routine) employment between 1980 and 2006. The results highlight the role of employment to employment transition rates in the early part of Polarization between 1980 and 1999. After the year 2000, hazard rates between middle skill employment and unemployment/inactivity account for the decrease in employment of these occupations. Secondly, I analyze Jobless recoveries (Jaimovich and Siu (2012)) and the hazard rate contributing to the slow rebound in aggregate employment after the recent recessions. I find that hazard rates from unemployment to employment of all 3 groups of occupations contribute negatively to aggregate employment fluctuations during recoveries. Lastly, I analyze fluctuations of labor force participation as Foote and Ryan (2015) and Cortes et al. (2017) suggest that Polarization lead middle skill workers to exit the labor force. I confirm this observation as the results show that hazard rates between middle skill employment and inactivity contribute negatively to labor fluctuations between 1990 and 2006. |
| Keywords: | Worker flows; occupations; unemployment; labor force participation; Job Polarization |
| JEL: | E0 J0 |
| Date: | 2020–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2020010&r=all |
| By: | Braga, Breno (Urban Institute); Malkova, Olga (University of Kentucky) |
| Abstract: | We examine the effects of college costs on the labor supply of mothers. Exploiting changes in college costs after the roll-out of nine generous state merit aid programs from 1993 to 2004, we analyze the difference in the labor supply of mothers before and after these programs were implemented. Mothers of college-age children decreased their annual hours of work after the start of a generous merit aid program, while fathers did not adjust their labor supply. There is no strong evidence that mothers changed their employment status, as most of the decrease in hours of work happened among employed mothers. Mothers of college-going children are entirely responsible for the decline in hours of work, where mothers of children who did not go to college experienced no change in hours of work. A 10 percent increase in spending on merit aid programs per undergraduate student leads to a 1.3 percent decline in hours of work among mothers of college-going children. The decline in labor supply is mainly due to adjustments among married, highly educated, and white mothers. |
| Keywords: | college costs, maternal labor supply, state merit aid programs |
| JEL: | I22 J22 J13 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12958&r=all |
| By: | Persico, Claudia (American University) |
| Abstract: | Although industrial plants, known as Toxic Release Inventory (TRI) sites, exist in every major city of the United States releasing billions of pounds of toxic substances annually, there is little evidence about how these pollutants might harm child development and children's long run outcomes. Using the detailed geocoded data that follows national representative cohorts of children born to the NLSY respondents over time with detailed information on families, locations, health, disability and labor market outcomes, I compare siblings who were gestating before versus after a TRI site opened or closed within one mile of their home. In other words, I compare siblings in the same family whose family does not move between births where one or more child was exposed to TRI pollution during gestation and other siblings were not exposed because the plant opened or closed in between the conceptions of different children in the same family. I find that children who were exposed prenatally to TRI pollution have lower wages, are more likely to be in poverty as adults, have fewer years of completed education, are less likely to graduate high school, and are more likely to have a disability. |
| Keywords: | air pollution, academic achievement, child health |
| JEL: | Q53 I24 I14 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12965&r=all |
| By: | Viollaz,Mariana; Winkler,Hernan Jorge |
| Abstract: | This article investigates the link between digital technologies and female labor market outcomes in a country with one of the largest gender disparities. It exploits the massive roll-out of mobile broadband technology in Jordan between 2010 and 2016 to identify the effect of internet adoption on labor force participation. Using panel data at the individual level with rich information on labor market outcomes, internet use and gender-biased social norms, the article finds that internet adoption increases female labor force participation but has no effect on male labor force participation. The increase in online job search explains some -- but not all -- of the total increase in female labor force participation. Only older and skilled women experience an increase in employment in response to having internet access. The internet also reduces the prevalence of gender-biased social norms, early marriage and fertility. |
| Keywords: | Labor Markets,Rural Labor Markets,Gender and Development,Educational Sciences,Information Technology |
| Date: | 2020–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9183&r=all |
| By: | Fishback, Price (University of Arizona); Seltzer, Andrew (Royal Holloway, University of London) |
| Abstract: | Minimum wages have been among the most controversial government interventions in labor markets. There have been several waves of minimum wage activity over the past century, beginning with a 1912 Massachusetts law. Since 1938 minimum wages in the United States have been set by a complex array of federal and state laws, with state laws sometimes exceeding the national law and closing important coverage gaps. Between 1938 and 1968, the real value of the federal minimum wage was generally increasing. Coverage gaps continued to be closed by amendments to federal legislation into the 1970s. In the 1980s, the real minimum rate declined sharply, and has since this time never again reached the level of 1955-1980. In this paper we examine the political economy of early minimum wage laws, focussing on the role of interest groups, politicians, courts, economists, and the general public. |
| Keywords: | minimum wages, political economy |
| JEL: | N32 N42 J88 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12973&r=all |
| By: | Maurizio Bussolo (AFFILIATION); Daniele Checchi (University of Milan); Vito Peragine (University of Bari) |
| Abstract: | This paper was started as background paper for the World Bank regional flagship report on “Towards a new social contract: Taking on distributional tensions in Europe and Central Asia†. We thank Jorg Neugschwender (Luxemburg Income project) and Teresa Randazzo (University of Bari) for technical assistance in building the dataset, and Tullio Jappelli (University of Naples, Italy) for extensive discussions. It has been presented at various seminars (Cattaneo Conference on Trends in Inequality, Bologna (2017), Siena (2017), Canazei Winter School (2018), University of Maastricht (2018), Eden final conference, Budapest (2018), UNDP, New York (2019). All remaining errors are our own responsibility. |
| Keywords: | Inequality of Opportunity; Decomposition methods; Education mobility; Returns to Education; Family Networking; Cohort Analysis. |
| JEL: | D31 D63 E24 I24 J62 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-529&r=all |
| By: | Jin, Zhangfeng |
| Abstract: | This study examines the causal effects of welfare benefits on internal migration decisions. Using a quasi-experimental migration reform across 283 Chinese cities from 2002 to 2015, combined with a difference-in-differences setup, I show that improved welfare benefits substantially increase migration. The observed impact is more pronounced for individuals such as the young, women and medium-low-skilled workers. It is relatively smaller in destinations exposed to larger positive demand shocks, suggesting that improved welfare benefits reduce migration costs. And it persists over the long term. All these findings confirm the existence of sizable welfare magnet effects. |
| Keywords: | Welfare Magnets,Internal Migration,China,Difference-in-differences |
| JEL: | H31 J61 O15 F66 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:498&r=all |
| By: | Alexandre Ounnas (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This paper proposes a framework for adjusting issues affecting series of stocks and gross flows by occupations obtained from the Current Population Survey (CPS). Using data over the period 1976-2010 and the occupation classification of Autor and Dorn (2013) to rank occupations between high, medium and low skills, I adjust series for the 1994 redesign of the CPS questionnaire, changes in occupational classification and revisions in the size and composition of the US population. In a second step, I correct flow rates for the Time Aggregation bias. Due to constraints specific to flow rates by occupation, the correction proposed by Shimer (2012) and Elsby et al. (2015) cannot be applied. As a result, I use the bayesian estimation method of Bladt and Sørensen (2005). |
| Keywords: | Current Population Survey; occupations; unobserved component model; time aggregation bias |
| JEL: | C5 C8 J6 |
| Date: | 2020–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2020008&r=all |
| By: | Levati, Lorenzo Maria; Lalanne, Marie |
| Abstract: | Using an original dataset on professional networks of directors sitting on the boards of large US corporations, we examine how personal relationships are used by firms to improve job match quality in the high-skill segment of the labor market. Analyzing explicit social connection data between new hires and recruiters, we are able to test predictions of well established job referral models. We find that referred executive directors have a fifteen percent longer tenure than their non-referred counterparts. Referred executive directors also tend to be similar to their referrers on multiple dimensions, giving support to network homophily hypotheses. |
| Keywords: | Referrals,Job Match Quality,Social Networks,Board of Directors |
| JEL: | L14 J63 M51 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:268&r=all |
| By: | Dessy, Sylvain; Marchetta, Francesca; Pongou, Roland; Tiberti, Luca |
| Abstract: | In communities highly dependent on rainfed agriculture for their livelihoods, the common occurrence of climatic shocks can lower the marginal cost of a child and raise fertility. We test this hypothesis using longitudinal data from Madagascar. Exploiting exogenous within-district year-to-year variation in rainfall deficits in combination with individual fixed effects, we find that drought occurring in the agricultural season increases the fertility of young women living in agricultural households. This effect is long-lasting, as it is not reversed within four years after the drought occurrence. Analyzing mechanisms, we find that drought does not affect common factors of high fertility such as marriage timing. It operates mainly through a reduction of female agricultural income. Indeed, agricultural drought reduces the number of hours worked by women in agriculture but not men. It has no effect on the fertility of young women living in non-agricultural households, or in non-agrarian communities. Moreover, it does not affect fertility if it occurs during the non-agricultural season. These findings validate the marginal cost hypothesis whereby drought, by reducing the value of women's agricultural labor, lowers the marginal cost of a child, thus raising fertility. |
| Keywords: | Climate shocks,Drought,Young Women’s Fertility,Rural areas,Opportunity Cost of Childbearing |
| JEL: | C12 C13 C14 J12 J13 O12 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:490&r=all |
| By: | Siminski, Peter (University of Technology, Sydney); Yetsenga, Rhiannon (University of Technology, Sydney) |
| Abstract: | This paper aims to shed new light on explanations for the sexual division of labour, within a broader examination of within-household specialisation. We propose a set of indices which we believe are the first direct within-couple measures of specialisation. We use these to present a rich descriptive profile of specialisation. Absolute advantage in market work has only a small role in behaviour for heterosexual couples, and no role at all for same-sex couples. In contrast, sex-based specialisation is much greater. We consider whether the patterns in the data are consistent with a formal Beckerian model of comparative advantage. A woman would need to be 109 times more productive in market work than her male partner before reaching expected parity in domestic work, and this is likely biased downwards due to endogeneity of relative wages related to earlier time use decisions. |
| Keywords: | sexual division of labour, family economics, specialisation, gender, time use |
| JEL: | D13 J16 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12977&r=all |
| By: | Weifeng Liu; Phitawat Poonpolkul |
| Abstract: | This paper provides a framework to endogenize rates of return for risk-free bonds and risky capital in an overlapping generation model. The rate of return on capital is endogenized by introducing idiosyncratic production shocks to avoid computation challenges associated with aggregate production shocks in the literature. The framework enables the interaction between financial markets and macroeconomic conditions in a production economy. Based on this framework, the paper first examines life-cycle portfolio choice without demographic change, and illustrates that several factors such as borrowing costs, labor income and production risk play important roles in life-cycle portfolios. The paper then investigates the impacts of population aging on macroeconomic conditions, life-cycle behaviors and financial market structures. The results show that population aging leads to higher capital-labor ratios, and reduces the rates of return on both assets. The bond market shrinks significantly, and capital decreases if the fertility rate declines but increases if the mortality rate declines, leading to structural change in financial markets. The impacts on life-cycle variables are quite different in the fertility and mortality cases particularly at the late stage of life. |
| Keywords: | Demographic change, portfolio choice, financial market structure, risk premium, idiosyncratic production shock, overlapping generation model. |
| JEL: | J11 G11 C63 C68 E21 E23 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-20&r=all |
| By: | Piva, Mariacristina; Tani, Massimiliano; Vivarelli, Marco |
| Abstract: | This paper builds on and considerably extends Piva, Tani and Vivarelli (2018), confirming the key role of Business Visits as a productivity enhancing channel of technology transfer. Our analysis is based on a unique database on business visits sourced from the U.S. National Business Travel Association, merged with OECD and World Bank data and resulting in an unbalanced panel covering 33 sectors and 14 countries over the period 1998-2013 (3,574 longitudinal observations). We find evidence that BVs contribute to fostering labour productivity in a significant way. While this is consistent with what found by the previous (scant) empirical literature on the subject, we also find that short-term mobility exhibits decreasing returns, being more crucial in those sectors characterized by less mobility and by lower productivity performances. |
| Keywords: | Business visits,Labour mobility,Knowledge diffusion,R&D,Productivity |
| JEL: | J61 O33 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:486&r=all |