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on Labour Economics |
| By: | Choi, Eleanor J. (Hanyang University); Choi, Jaewoo (Korea Development Institute (KDI)); Son, Hyelim (University of Seoul) |
| Abstract: | This study investigates the long-term effects of initial labor market conditions by comparing cohorts who graduated from college before, during, and after the 1997–1998 Asian financial crisis in South Korea. We measure the overall welfare effect by examining their labor market activities, family formation, and household finances. Using data from 20 waves of the Korean Labor and Income Panel Study, we find a substantial and persistent reduction in employment, earnings, marriage, fertility, and asset building among men who graduated during a recession. For women, limited job opportunities at graduation result in an increase in childbearing. Our results suggest that labor market entry in a large-scale recession has prolonged effects on a young worker's life course even after the penalties in the labor market have disappeared. |
| Keywords: | recession, financial crisis, long-term effects, college graduates |
| JEL: | E32 J10 E21 J20 J31 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13009&r=all |
| By: | Grübl, Dominik (University of Linz); Lackner, Mario (University of Linz); Winter-Ebmer, Rudolf (University of Linz) |
| Abstract: | We estimate the causal effect of parents' unemployment on unemployment among their children in their own adulthood. We use administrative data for Austrian children born between 1974 and 1984 and apply an instrumental variables (IV) identification strategy using parents' job loss during a mass layoff as the instrument. We find evidence of unemployment inheritance in the next generation. An additional day of unemployment during childhood causally raises the average unemployment days of the adult child by 1 to 2%. The greatest effects are observed for unmarried parents, young children, children of low-education parents, and in families living in capital cities. We also explore various channels of intergenerational unemployment, such as education, income, and job matching by parents. |
| Keywords: | intergenerational transmission, mass layoff, unemployment duration, instrumental variable |
| JEL: | J62 J64 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13068&r=all |
| By: | Andreas Lichter; Amelie Schiprowski |
| Abstract: | This paper studies how the potential duration of unemployment benefits affects individuals' job search behavior and re-employment outcomes. We exploit an unexpected reform of the German unemployment insurance scheme in 2008, which increased the potential benefit duration from 12 to 15 months for recipients of age 50 to 54. Based on detailed survey data and difference-in-differences techniques, we estimate that one additional month of benefits reduces the number of filed applications by around 10% on average over the first two months of unemployment. Treatment effects on the reservation wage are positive but statistically insignificant. In a complementary analysis, we use social security data to investigate how the reform affected re-employment outcomes. The difference-in-differences estimates yield an elasticity of 0.24 (0.1) additional months in unemployment (nonemployment) per additional month of potential benefits. A cautious back-of-the-envelope calculation reveals substantial returns to early search effort. |
| Keywords: | Unemployment Insurance, Job Search, Re-Employment Outcomes, Natural Experiment |
| JEL: | D83 I38 J64 J68 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_164&r=all |
| By: | Orrenius, Pia M. (Federal Reserve Bank of Dallas); Zavodny, Madeline (University of North Florida); Abraham, Alexander (Federal Reserve Bank of Dallas) |
| Abstract: | Immigration, like any positive labor supply shock, should increase the return to capital and spur business investment. These changes should have a positive impact on business creation and expansion, particularly in areas that receive large immigrant inflows. Despite this clear prediction, there is sparse empirical evidence on the effect of immigration on business dynamics. One reason may be data unavailability since public-access firm-level data are rare. This study examines the impact of immigration on business dynamics and employment by combining U.S. data on immigrant inflows from the Current Population Survey with data on business formation and survival and job creation and destruction from the National Establishment Time Series (NETS) database for the period 1997 to 2013. The results indicate that immigration increases the business growth rate by boosting business survival and raises employment by reducing job destruction. The effects are largely driven by less-educated immigrants. |
| Keywords: | immigration, business dynamics, firm entry, firm exit, job creation, job destruction |
| JEL: | J15 J61 L25 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13014&r=all |
| By: | Francine D. Blau; Lawrence M. Kahn; Matthew Comey; Amanda Eng; Pamela Meyerhofer; Alexander Willén |
| Abstract: | There is a well-known gender difference in time allocation within the household, which has important implications for gender differences in labor market outcomes. We ask how malleable this gender difference in time allocation is to culture. In particular, we ask if US immigrants allocate tasks differently depending upon the characteristics of the source countries from which they emigrated. Using data from the 2003-2017 waves of the American Time Use Survey (ATUS), we find that first-generation immigrants, both women and men, from source countries with more gender equality (as measured by the World Economic Forum’s Global Gender Gap Index) allocate tasks more equally, while those from less gender equal source countries allocate tasks more traditionally. These results are robust to controls for immigration cohort, years since migration, and other own and spouse characteristics. There is also some indication of an effect of parent source country gender equality for second-generation immigrants, particularly for second-generation men with children. Our findings suggest that broader cultural factors do influence the gender division of labor in the household. |
| Keywords: | Housework, childcare, gender, immigration, time allocation |
| JEL: | J13 J15 J16 J22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1858&r=all |
| By: | Per Krusell; Toshihiko Mukoyama; Richard Rogerson; Ayşegül Şahin |
| Abstract: | We build a three-state general equilibrium model of the aggregate labor market that features both standard labor supply forces and labor market frictions. Our model matches key features of the cyclical properties of employment, unemployment, and nonparticipation as well as those of gross worker flows across these three labor market states. Our key finding is that shocks to labor market frictions play a dominant role in accounting for labor market fluctuations. This is in contrast to the focus of the traditional RBC literature, which emphasized how employment fluctuations arise as a consequence of labor supply responses to price changes induced by TFP shocks. |
| JEL: | E24 E32 J22 J64 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26878&r=all |
| By: | Bryson, Alex (University College London); Dale-Olsen, Harald (Institute for Social Research, Oslo) |
| Abstract: | We present theoretical and empirical evidence challenging results from early studies that found unions were detrimental to workplace innovation. Under our theoretical model, which extends the Cournot duopoly innovation model, local union wage bargaining is more conducive to innovation - particularly product innovation - than competitive pay setting. We test the theory with workplace data for Britain and Norway. Results are consistent with the theory: local union bargaining is positively associated with product innovations in both countries. In Norway, local union bargaining is also positively associated with process innovation. |
| Keywords: | product innovation, process innovation, trade unions, collective bargaining |
| JEL: | J28 J51 J81 L23 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13015&r=all |
| By: | Peri, Giovanni (University of California, Davis); Rury, Derek (University of California, Davis); Wiltshire, Justin C. (University of California, Davis) |
| Abstract: | Using a synthetic control estimation strategy we examine the economic impact of a large inflow of people from Puerto Rico into Orlando in the aftermath of Hurricane Maria, which devastated Puerto Rico in September 2017. We find that aggregate employment in Orlando increased as a result of the inflow, as did employment in the construction and retail sectors. We also find positive overall employment effects on non-Hispanic and less-educated workers, as well as positive effects on compensation for those same subgroups in the retail sector. In the construction sector – which absorbed the preponderance of this migrant labor supply shock – we find that earnings for non-Hispanic and less-educated (workers likely to be natives) decreased by a modest amount. These results together suggest that, while migrant inflows may have small negative impacts on the earnings of likely-native workers in sectors directly exposed to the labor supply shock, employment and earnings of likely-native workers in other sectors are positively impacted, possibly by increased local demand. |
| Keywords: | migration, natural disasters, local economies |
| JEL: | F22 J15 J21 J61 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13049&r=all |
| By: | Chaparro, Juan (Universidad EAFIT); Sojourner, Aaron J. (University of Minnesota); Wiswall, Matthew (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 D1 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13047&r=all |
| By: | Piton, Céline (National Bank of Belgium); Rycx, Francois (Free University of Brussels) |
| 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 the 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 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13004&r=all |
| By: | Amelie Schiprowski |
| Abstract: | Caseworkers are the main human resources used to provide social services. This paper asks if, and how much, caseworkers matter for the outcomes of unemployed individuals. Using large-scale administrative data, I exploit exogenous variation in unplanned absences among Swiss UI caseworkers. I find that individuals who lose a meeting with their caseworker stay unemployed 5% longer. Results show large heterogeneity in the personal impact of caseworkers: the effect of a foregone meeting is zero for caseworkers in the lower half of the productivity distribution, while it amounts to more than twice the average effect for caseworkers in the upper half. |
| Keywords: | Public Human Resources, Caseworkers, Unemployment Insurance |
| JEL: | J64 J65 M50 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_165&r=all |
| By: | Drenik, Andres (Columbia University); Jäger, Simon (Massachusetts Institute of Technology); Plotkin, Pascuel (University of British Columbia); Schoefer, Benjamin (University of California, Berkeley) |
| Abstract: | We estimate how much firms differentiate pay premia between regular and outsourced workers. We study temp agency work arrangements where pay setting has previously escaped measurement because existing datasets do not report links between user firms (the workplaces where temp workers perform their labor) and temp agencies (their formal employers). We overcome this measurement challenge by leveraging unique administrative data from Argentina with such links. We estimate that temp agency workers receive 49% of theworkplace-specific pay premia earned by regularworkers in user firms: the midpoint between the benchmark for insiders (one) and the competitive spot-labor market benchmark (zero). |
| Keywords: | outsourcing, temp agencies, non-standard work arrangements, rent sharing |
| JEL: | J31 J53 L24 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13076&r=all |
| By: | Ansala, Laura (City of Helsinki); Aslund, Olof (IFAU); Sarvimäki, Matti (Aalto University) |
| Abstract: | This paper studies the relationship between past immigration experiences of the host country and the way new immigrants enter the labor market. We focus on two countries—Finland and Sweden—that have similar formal institutions but starkly different immigration histories. In both countries, immigrants tend to find their first jobs in low-paying establishments, where the manager and colleagues share their ethnic background. The associations between background characteristics, time to first job, other entry job characteristics, earnings dynamics and job stability are also remarkably similar. These results are consistent with the hypothesis that the host country's immigration history plays a limited role in shaping the integration process. |
| Keywords: | immigration, labor market integration, ethnic segregation, entry jobs |
| JEL: | J61 J62 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13089&r=all |
| By: | Jetter, Michael (University of Western Australia); Magnusson, Leandro (Tulane University); Roth, Sebastian (University of Western Australia) |
| Abstract: | This paper presents evidence suggesting men's (but not women's) risk and time preferences have systematically become sensitive to local economic conditions since the 2008 financial crisis. Studying longitudinal, nationally representative data for 22,579 Australian-based respondents in up to 11 surveys from 2002-2015, men respond with increased risk aversion and impatience to a rise in their region's unemployment rate – but only since 2008. We find no such relationship for women or before the crisis. This conclusion persists when accounting for individual-level fixed effects, demographics, national economic conditions, the individual's employment situation, income, wealth, as well as region- and time-specific unobservables. Exploring a potential mechanism, higher regional unemployment rates are also linked to men (but not women) being more unhappy since 2008. This 'happiness channel' only partially explains the link between the local unemployment rate and risk preferences. |
| Keywords: | risk preferences, time preferences, gender differences, financial crisis |
| JEL: | D81 G11 G14 J16 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13054&r=all |
| By: | Liu, Ding (Southern Methodist University); Millimet, Daniel L. (Southern Methodist University) |
| Abstract: | Understanding the relationship between disability and employment is critical and has long been the subject of study. However, estimating this relationship is difficult, particularly with survey data, since both disability and employment status are known to be misreported. Here, we use a partial identification approach to bound the joint distribution of disability and employment status in the presence of contaminated data. Allowing for a modest amount of contamination leads to bounds on the labor market status of the disabled that are not overly informative given the relative size of the disabled population. Thus, absent further assumptions, even a modest amount of contamination creates much uncertainty about the employment gap between the non-disabled and disabled. However, additional assumptions considered are shown to have some identifying power. For example, under our most stringent assumptions, we find that the employment gap is at least 15.2% before the Great Recession and 22.0% afterwards. |
| Keywords: | employment, disability, measurement error, partial identification |
| JEL: | C14 C18 J14 J64 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13020&r=all |
| By: | Jia, Ning (Central University of Finance and Economics); Fleisher, Belton M. (Ohio State University) |
| Abstract: | We study the effect of the Thousand Young Talents Program (TYTP) on the academic quality of return migrant scientists to China. Using a unique dataset of the top Chinese mathematics departments' new hires, we find that the program leads to considerable increases in measures of their educational background and research productivity. The effects are concentrated in the elite C9 league, where the proportion of hires who received PhD degrees from top-50 overseas mathematics departments increased nearly four times after the initiation of the program. The data also reveal large and statistically significant increases in weighted pre-hire publications and weighted citations to pre-hire publications under the program. However, it appears that research output of previously hired faculty members declined after the introduction of TYTP hires, suggesting minimal or even negative impact of TYTP on faculty colleagues' academic achievements. |
| Keywords: | migration, scientific research, R&D policy |
| JEL: | J61 O31 O38 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13073&r=all |
| By: | Fernández-Val, Iván (Boston University); Peracchi, Franco (University of Rome Tor Vergata); van Vuuren, Aico (University of Gothenburg); Vella, Francis (Georgetown University) |
| Abstract: | We examine the impact of annual hours worked on annual earnings by decomposing changes in the real annual earnings distribution into composition, structural and hours effects. We do so via a nonseparable simultaneous model of hours, wages and earnings. We provide identification results and estimators of the objects required for the decompositions. Using the Current Population Survey for the survey years 1976–2016, we find that changes in the level of annual hours of work are important in explaining movements in inequality in female annual earnings. This captures the substantial changes in their employment behavior over this period. The impact of hours on males' earnings inequality operates only through the lower part of the earnings distribution and reflects the sensitivity of these workers' annual hours of work to cyclical factors. |
| Keywords: | earnings inequality, sample selection, decompositions, nonseparable model |
| JEL: | C14 I24 J00 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13016&r=all |
| By: | Casoria, Fortuna (GATE, University of Lyon); Riedl, Arno (Maastricht University); Werner, Peter (Maastricht University) |
| Abstract: | This paper reviews experimental studies that investigate the effects of communication on behavior in organizational settings. Two main classes of studies are identified: (a) studies on coordination and competition, which include experimental research that tests whether communication can help to overcome coordination failure within organizations, and (b) studies that analyze the role of communication in alleviating problems arising from information asymmetries at the workplace. The evidence from these studies indicates that communication is suited to improve efficient coordination within firms and to mitigate information problems in employer-employee relationships. In addition, studies are presented that focus on the interaction between communication and monetary incentive schemes in companies. |
| Keywords: | communication, organization, experiment, behavior |
| JEL: | C90 D82 D83 J53 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13005&r=all |
| By: | Piva, Mariacristina (Università Cattolica del Sacro Cuore); Tani, Massimiliano (University of New South Wales); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| 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 J61 O33 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13034&r=all |
| By: | Titan Alon; Matthias Doepke; Jane Olmstead-Rumsey; Michèle Tertilt |
| Abstract: | The economic downturn caused by the current COVID-19 outbreak has substantial implications for gender equality, both during the downturn and the subsequent recovery. Compared to ``regular'' recessions, which affect men's employment more severely than women's employment, the employment drop related to social distancing measures has a large impact on sectors with high female employment shares. In addition, closures of schools and daycare centers have massively increased child care needs, which has a particularly large impact on working mothers. The effects of the crisis on working mothers are likely to be persistent, due to high returns to experience in the labor market. Beyond the immediate crisis, there are opposing forces which may ultimately promote gender equality in the labor market. First, businesses are rapidly adopting flexible work arrangements, which are likely to persist. Second, there are also many fathers who now have to take primary responsibility for child care, which may erode social norms that currently lead to a lopsided distribution of the division of labor in house work and child care. |
| Keywords: | Covid-19, Division of Labor, Business Cycle, Gender Equality |
| JEL: | D13 J16 O10 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_163&r=all |