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on Labour Economics |
| By: | Hupkau, Claudia (CUNEF, Madrid); Isphording, Ingo E. (IZA); Machin, Stephen (London School of Economics); Ruiz-Valenzuela, Jenifer (London School of Economics) |
| Abstract: | We study the effect of negative labour market shocks borne by parents during the Covid-19 crisis on resource and time investments in children and the channels through which negative labour market shocks experienced by parents might affect children. Using data collected in the UK before and during the pandemic, we show that fathers and mothers that were already disadvantaged were more likely to have suffered negative earnings and employment shocks. These shocks had an immediate intergenerational impact: Children whose fathers reported an earnings drop to zero are significantly less likely to have received additional paid learning resources compared to similar children whose fathers did not experience a drop in earnings. Potentially offsetting this, they received about 30 more mins of parental help with schoolwork per day. Parental mental health is negatively affected when they experience earnings losses, and fathers who experience a full loss in earnings were less likely to quarrel or talk about things that matter with their kids than fathers who did not suffer earnings drops. The interactions between labour market shocks, parental investments and school closures are likely to have important implications for future inequality. |
| Keywords: | job loss, job insecurity, child outcomes |
| JEL: | J63 J65 I20 I24 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14000&r=all |
| By: | Holmberg, Johan (Department of Economics, Umeå University) |
| Abstract: | In this paper, we present a life-cycle earnings dynamics model including endogenous employment and job change. The model is estimated with the method of indirect inference using Swedish register data. By simulating data from this microeconomic model, we study the macroeconomic consequences of transitory shocks to unemployment risk. The results show that transitory aggregate shocks to unemployment risk have long-lasting negative effects on employment, income, and increases earnings volatility. By studying how unemployment at different ages affects the accumulation and distribution of pension entitlements, we find that becoming unemployed at 40 has the largest effect on pension accumulations. Furthermore, unobserved individual heterogeneity contributes substantially to the observed life-cycle earnings inequality for both men and women in Sweden. |
| Keywords: | Earnings dynamics; unemployment; inequality; social insurance; pensions |
| JEL: | D63 E27 H55 J24 J64 |
| Date: | 2021–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0984&r=all |
| By: | Griffy, Benjamin; Gomis-Porqueras, Pedro |
| Abstract: | We develop a model that allows us to understand the cyclicality of part and full-time employment. In the model, labor market frictions generate a surplus between workers and firms, who jointly decide whether their employment relationship is best suited for part or full-time work based on match quality shocks and the broader economic environment. Lower acyclical costs cause the surplus of part-time matches to vary less with the business cycle than the surplus of full-time matches. As a consequence, the model is able to generate procyclical full-time employment and countercyclical part-time employment as observed in the data. We also show that ignoring part-time employment understates the impact on employment and inequality of a recession and that subsidizing part-time work is far more effective than increasing unemployment insurance at preventing a labor market downturn. |
| Keywords: | part-time employment, search, matching, bargaining |
| JEL: | E24 E30 J31 J6 |
| Date: | 2020–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105095&r=all |
| By: | Roozbeh Hosseini; Karen A. Kopecky; Kai Zhao |
| Abstract: | Using a dynamic panel approach, we provide empirical evidence that negative health shocks reduce earnings. The effect is primarily driven by the participation margin and is concentrated in less educated individuals and those with poor health. We build a dynamic, general equilibrium, life cycle model that is consistent with these findings. In the model, individuals whose health is risky and heterogeneous choose to either work, or not work and apply for social security disability insurance (SSDI). Health affects individuals’ productivity, SSDI access, disutility from work, mortality, and medical expenses. Calibrating the model to the United States, we find that health inequality is an important source of lifetime earnings inequality: nearly 29 percent of the variation in lifetime earnings at age 65 is due to the fact that Americans face risky and heterogeneous life cycle health profiles. A decomposition exercise reveals that the primary reason why individuals in the United States in poor health have low lifetime earnings is because they have a high probability of obtaining SSDI benefits. In other words, the SSDI program is an important contributor to lifetime earnings inequality. Despite this, we show that it is ex ante welfare improving and, if anything, should be expanded. |
| Keywords: | earnings; health; frailty; inequality; disability; dynamic panel estimation; life-cycle models |
| JEL: | D52 D91 E21 H53 I13 I18 |
| Date: | 2021–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:89469&r=all |
| By: | Glaser, Darrell J. (U.S. Naval Academy); Rahman, Ahmed S. (Lehigh University) |
| Abstract: | This paper tackles some issues in personnel economics using the career profiles of British naval officers during the late 19th and early 20th centuries. We ask how promotions, payouts, positions, and peers affect worker retention. Random variation in task assignments and job promotions allows us to explore factors that affect retention of personnel. We develop a number of key insights. Firm-specific human capital accumulation bolsters retention, while technological changes can undo some of this effect. Other challenges to worker retention include lack of promotion opportunities, and "exit contagion" from exits of former peers. Modernizing organizations may need to enhance promotion opportunities and reorganize certain tasks, or else face loss of skilled personnel. |
| Keywords: | personnel economics, human capital, job mobility, promotion tournaments, technological change, military personnel, naval history, peer effects |
| JEL: | J6 J45 J62 N31 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14037&r=all |
| By: | Gay, Victor |
| Abstract: | This paper explores the pathways that underlie the diffusion of women's participation in the labor force across generations. I exploit a severe exogenous shock to the sex ratio, World War I in France, which generated a large inflow of women in the labor force after the war. I show that this shock to female labor transmitted to subsequent generations until today. Three mechanisms of intergenerational transmission account for this result: parental transmission, transmission through marriage, and transmission through local social interactions. Beyond behaviors, the war also permanently altered beliefs toward the role of women in the labor force. |
| Keywords: | Female labor force participation; World War I; Sex ratio; Intergenerational transmission; Gender norms |
| JEL: | J16 J22 N34 Z13 |
| Date: | 2021–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:125087&r=all |
| By: | Asadullah, Niaz (University of Malaya); Mansoor, Nazia (Université Paris-Dauphine); Randazzo, Teresa (University of Kent); Wahhaj, Zaki (University of Kent) |
| Abstract: | Historically, son preference has been widely prevalent in South Asia, manifested in the form of skewed sex ratios, gender differentials in child mortality, and worse educational investments in daughters versus sons. In the present study, we show, using data from a purposefully designed nationally representative survey for Bangladesh, that among women of childbearing age, son bias in stated fertility preferences has weakened and there is an emerging preference for gender balance. We examine a number of different hypotheses for the decline in son preference, including the increasing availability of female employment in the manufacturing sector, increased female education, and the decline of joint family living. Using survival analysis, we show that in contrast to stated fertility preferences, actual fertility decisions are still shaped by son preference. |
| Keywords: | fertility, gender bias, birth spacing, female employment, Bangladesh |
| JEL: | J11 J13 J16 O12 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13996&r=all |
| By: | Gu, Grace (University of California Santa Cruz); Malik, Samreen (New York University AD); Pozzoli, Dario (Department of Economics, Copenhagen Business School); Rocha, Vera (Department of Strategy and Innovation, Copenhagen Business School) |
| Abstract: | This paper examines whether Chinese import competition increases the propensity for firms to offshore production or to cease any involvement in production by switching completely and permanently out of the manufacturing sector (servitization). Using a Danish employer-employee matched dataset covering a large sample of manufacturing firms over the 1995-2012 period, we find that import competition from China significantly increases offshoring but does not induce servitization. These findings are confirmed using various robustness tests as well as an analogous analysis of a Portuguese employer-employee matched dataset. |
| Keywords: | Foreign competition; Offshoring; Servitization |
| JEL: | F12 F14 O31 |
| Date: | 2021–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2021_005&r=all |
| By: | Lassen, Anne Sophie (Department of Economics, Copenhagen Business School) |
| Abstract: | This paper shows that decisions regarding intra-household specializations are determined by gender norms rather than standard economic incentives. To test theoretical predictions of both the standard model of intra-household time allocation and the role of gender identity, social category and prescriptions, I use variation from a Danish parental leave reform. I find large effects among mothers and virtually unchanged behavior among fathers, irrespective of relative earnings in the household. This is consistent with the notion of pay-off from gender identity. Subsequently, I find peer effects among sisters and interpret this as reform-induced prescriptions regarding extensive leave for mothers. |
| Keywords: | Intra-household specialization; Gender norms; Parental leave; Peer effects |
| JEL: | D13 J13 J16 J18 J22 |
| Date: | 2021–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2021_004&r=all |
| By: | Blasco, Sylvie (GAINS, Université du Maine); Fontaine, Francois (Paris School of Economics) |
| Abstract: | A large fraction of the eligible unemployed workers does not claim for unemployment insurance (UI) and, among claimants, many do not register immediately upon layoff. This paper argues that, to understand this intriguing phenomenon, one needs to model jointly job search and take-up efforts and to allow for heterogeneity in both dimensions. Estimating such a model using French administrative data, we find substantial heterogeneity in both search and claiming frictions. If half of the sample faces high claiming frictions, many have good employment prospects and exit unemployment quickly. The burden of the claiming difficulties is concentrated on 10% of the sample that suffers both from claiming and job search difficulties. For that reason, the alleviation of the complexity of the claiming process is likely to have very heterogenous effects but little effect on aggregate unemployment duration. Additionally we show that the link between claiming and job search efforts has important implications when measuring how UI parameters impact unemployment duration. |
| Keywords: | unemployment insurance, take-up, job search |
| JEL: | J64 J65 C41 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14038&r=all |
| By: | Paul Brandily (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Camille Hémet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Clément Malgouyres (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IPP - Institut des politiques publiques) |
| Abstract: | We investigate the cost of job displacement using administrative data from France that covers employer and employee over both employment and unemployment spells. We find that displaced workers experience earnings losses both because of a decline in hours worked (especially in the short run) and because of lower re-employment hourly wages. In line with an active literature, we find that loss in employer-specific wage premium drives most of earnings losses in the long run. However, displaced workers tend to be re-employed by more productive firms. This result contrasts strikingly with the strong positive correlation between firms' productivity and wage premium in the cross-section. We further show that the re-employment firms also display lower labor shares. Overall, our results show that the commonly estimated loss in wage premium following job displacement does not reflect a reallocation toward low productivity firms. Instead they are most consistent with a loss in bargaining power and reallocation towards low-labor share firms. |
| Keywords: | Displaced workers,Wage,Reallocation,Labor share |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-03082302&r=all |
| By: | van den Berg, Gerard J. (University of Bristol); Hofmann, Barbara (FEA Nuremberg); Stephan, Gesine (Institute for Employment Research (IAB), Nuremberg); Uhlendorff, Arne (CREST) |
| Abstract: | In the German unemployment insurance system, Integration Agreements (IA) are mandatory contracts between the employment agency and the unemployed, jointly signed by the latter and the caseworker. IAs stipulate rights and obligations but are generally perceived as instruments to control search behavior. We designed and implemented a Randomized Controlled Trial involving thousands of newly unemployed workers, where we randomize the timing of the IA as well as the extent to which this timing is announced prior to the meeting. Randomization is at the individual level. We use administrative registers to observe outcomes. A theoretical analysis of anticipation of prior announcements provides suggestions to empirically detect this. The results show that IAs early in the spell have on average a small positive effect on entering employment within a year. When classifying individuals using an employability indicator, we find that this result is driven by individuals with adverse prospects. Among them, being assigned to an early IA increases the probability of re-employment within a year from 45% to 53%. |
| Keywords: | unemployment, monitoring, job search, active labor market policy, nudge, anticipation, randomized controlled trial |
| JEL: | J68 J64 C93 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14026&r=all |
| By: | Ori Heffetz; Daniel Reeves |
| Abstract: | From February to April 2020, as COVID-19 hit the U.S. economy, the official unemployment rate (UR) climbed from 3.5 percent—the lowest in more than 50 years—to 14.7—the highest since current measurement began in January 1948. This unprecedented, speedy quadrupling of UR coincided with major disruptions in survey-data-collection procedures and a dramatic, differential drop in response rates. To what extent did measurement issues contribute to this quadrupling? We revisit two recently studied potential biases in the Current Population Survey: rotation group bias (Krueger, Mas and Niu, 2017) and difficulty-of-reaching bias (Heffetz and Reeves, 2019). We extend the original analyses to the years prior to the crisis and focus on the six months of peak UR, from April to September 2020. Our ballpark estimates suggest that the peak official UR figure could be biased by up to ∼1.5 percentage points in either direction. |
| JEL: | C18 C83 I18 J60 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28310&r=all |
| By: | Joan Llull (MOVE, Universitat Autonoma de Barcelona, and Barcelona GSE) |
| Abstract: | This paper analyzes the effect of immigration on gender gaps in the labor market. Using an equilibrium structural model for the U.S. economy, I simulate the importance of two mechanisms: the differential labor market competition induced by immigration on male and female workers, and the availability of cheaper child care services. Consistent with the literature, aggregate effects on gender and participation gaps are negligible. However, female are more negatively affected by labor market competition, even though these effects are compensated from the cheaper-childcare effect. This generates heterogeneity in the effects along the skill distribution: gender gaps are increased at the bottom of the distribution and reduced at the top. Human capital adjustments are also heterogeneous. |
| Keywords: | Gender Gaps, Immigration, Human Capital, Child-care Cost, Competition, Equilibrium |
| JEL: | J16 J2 J31 J61 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2102&r=all |
| By: | Akyol, Pelin (Bilkent University); Kirdar, Murat G. (Bogazici University) |
| Abstract: | Using the 2008 Turkish National Survey of Domestic Violence against Women, Erten and Keskin (2018, henceforth EK), published in AEJ–Applied Economics, find that women's education increases the psychological violence and financial control behavior that they face from their partners. The authors also claim that the incidence of financial control behavior rises because women become more likely to be employed—supporting the instrumental violence hypothesis. They present this evidence only for women who live in what they call "rural areas during childhood". EK's findings are an artifact of the way the authors create two key variables: the variable that classifies women into rural vs. urban childhood location and the variable measuring financial control behavior. EK misclassify the variable on childhood rural status. We find that once this variable is defined properly, the evidence for all their findings vanishes. EK make use of two of the three variables related to financial control behavior in the dataset. We show that using all three variables—or any other combination of two of the three variables—generates no evidence of a policy effect on financial control behavior. Even after ignoring these problems, the evidence EK provide in their paper is highly specification sensitive and the standard checks of the continuity assumption in RDD fail for their key outcomes. Moreover, the results obtained from the analysis of urban areas—not provided in their paper—are inconsistent with the instrumental violence hypothesis. In addition, EK claim—using RDD graphs with high-order polynomials but no estimation results—that the policy has no effect on men's schooling, contrary to the findings of the previous literature. However, we show a clear and substantial policy effect on men's schooling, resulting in the failure of their exclusion restriction assumption. |
| Keywords: | education, domestic violence, regression discontinuity, financial control behavior, women's employment |
| JEL: | J12 J16 I25 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14001&r=all |
| By: | Dale-Olsen, Harald (Institute for Social Research, Oslo); Schone, Pal (Institute for Social Research, Oslo) |
| Abstract: | We analyse the impact of establishment of governmental sector jobs on private sector employment based on Norwegian population-wide administrative-register data. Based on precise geographical information on the location of jobs, differential treatment intensities yield identification of causal effects. The results suggest that governmental employment has positive effects on private sector employment in the close proximity of the stimulus area. In the same area, we also observe positive short-term effects on wage growth and on firms' sales. Over time, only employment effects prevail. Two different types of placebo tests give support to the causal interpretation of the main results. |
| Keywords: | regional labour markets, central government jobs, job creation |
| JEL: | J61 R23 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13993&r=all |
| By: | Gürtzgen, Nicole (Institute for Employment Research (IAB), Nuremberg); Lochner, Benjamin (University of Erlangen-Nuremberg); Pohlan, Laura (ZEW Mannheim and IAB Nuremberg); van den Berg, Gerard J. (University of Bristol) |
| Abstract: | This paper studies the effects of the high-speed internet expansion on the match quality of new hires. We combine data on internet availability at the local level with German individual register and vacancy data. Results show that internet availability has no major impact on the stability of new matches and their wages. We confirm these findings using vacancy data, by explicitly comparing match outcomes of online and non-online recruits. Further results show that online recruiting not only raises the number of applicants and the share of unsuitable candidates per vacancy, but also induces employers to post more vacancies. |
| Keywords: | matching, internet, informational friction, recruiting channel, vacancy, wage, job duration |
| JEL: | J64 H40 L96 C26 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14031&r=all |
| By: | Geraldes, Diogo; Riedl, Arno (RS: GSBE Theme Human Decisions and Policy Design, Microeconomics & Public Economics); Strobel, Martin (RS: GSBE Theme Human Decisions and Policy Design, Microeconomics & Public Economics) |
| Abstract: | The gender gap in income and leadership positions in many domains of our society is an undisputed pervasive phenomenon. One explanation for the disadvantaged position of women put forward in the economic and psychology literature is the weaker response of women to competitive incentives. Despite the large amount of literature trying to explain this fact, the precise mechanisms behind the gender difference in competitive responsiveness are still not fully uncovered. In this paper, we use laboratory experiments to study the potential role of stereotype threat on the response of men and women to competitive incentives in mixed-gender competition. We use a real effort math task to induce an implicit stereotype threat against women in one treatment. In additional treatments we, respectively, reinforce this stereotype threat and induce a stereotype threat against men. In contrast to much of the literature we do not observe that women are less competitive than men, neither when there is an implicit nor when there is an explicit stereotype threat against women. We attribute this to two factors which differentiates our experiment from previous ones. We control, first, for inter-individual performance differences using a within-subject design, and, second, for risk differences between non-competitive and competitive environments by making the former risky. We do find an adverse stereotype threat effect on the performance of men when there is an explicit stereotype threat against them. In that case any positive performance effect of competition is nullified by the stereotype threat. Overall, our results indicate that a stereotype threat has negative competitive performance effects only if there is information contradicting an existing stereotype. This suggests that the appropriate intervention to prevent the adverse effect of stereotype threat in performance is to avoid any information referring to the stereotype. |
| JEL: | C91 D01 J16 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2021002&r=all |
| By: | Francesco Fasani (Queen Mary University of London, CEPR, CReAM and IZA); Jacopo Mazza (European Commission Joint Research Centre) |
| Abstract: | We provide a first timely assessment of the pandemic crisis impact on the labour market prospects of immigrant workers in Europe by proposing a novel measure of their exposure to employment risk. We characterize migrants' occupations along four dimensions related to the role of workers' occupations in the response to the pandemic, the contractual protection they enjoy, the possibility of performing their job from home and the resilience of the industry in which they are employed. We show that our measure of employment risk closely predicts actual employment losses observed in European countries after the first wave of the COVID-19 pandemic. We estimate that, within industries and occupations, Extra-EU migrants and women are exposed to higher risk of unemployment than native men and that women are losing jobs at higher rates than equally exposed men. According to our estimates, more than 9 million immigrants in the EU14+UK area are exposed to a high risk of becoming unemployed due to the pandemic crisis, 1.3 million of which are facing a very high risk. |
| Keywords: | employment risk, COVID-19, key occupations |
| JEL: | F22 J61 J20 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2101&r=all |
| By: | Tumen, Semih (TED University) |
| Abstract: | Existing evidence suggests that low-skilled refugee influx may increase educational attainment among native adolescents due to reduced opportunities and returns in the lower segment of the labor market. In this paper, I test whether refugee influx can also increase the intensity of human capital accumulation among native adolescents who are enrolled in school. Using the PISA micro data and implementing a quasi-experimental empirical strategy designed to exploit (i) the time variation in regional refugee intensity and (ii) institutional setting in the Turkish public education system, I show that the Math, Science, and Reading scores of Turkish adolescents increased following the Syrian refugee influx. The increase in test scores mostly comes from the lower half of the test score distribution and from native adolescents with lower maternal education. The empirical design embeds a framework where the estimated refugee impact can solely be attributed to the labor market mechanism. In particular, I use the observation that refugee adolescents are enrolled more systematically into the Turkish education system after 2016, which gave me the opportunity to use 2015 and 2018 PISA waves in a way to isolate the the effect of the labor market mechanism from the potentially negating force coming from the education experience mechanism. I conclude that the labor market forces that emerged in the aftermath of the refugee crisis have led native adolescents, who would normally perform worse in school, to take their high school education more seriously. |
| Keywords: | Syrian refugees, test scores, PISA, labor markets |
| JEL: | I21 I25 I26 J61 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14039&r=all |
| By: | Philippe Aghion; Antonin Bergeaud; John Van Reenen |
| Abstract: | Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable endogenous growth model with size-contingent regulations. We apply this to population administrative firm panel data from France, where many labor regulations apply to firms with 50 or more employees. Nonparametrically, we find that there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Further, a dynamic analysis shows a sharp reduction in the firm's innovation response to exogenous demand shocks for firms just below the regulatory threshold. We then quantitatively fit the parameters of the model to the data, finding that innovation at the macro level is about 5.4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation intensity per firm rather than just a misallocation towards smaller firms and lower entry. We generalize the theory to allow for changes in the direction of R&D, and find that regulation's negative effects only matter for incremental innovation (as measured by citations and text-based measures of novelty). A more regulated economy may have less innovation, but when firms do innovate they tend to "swing for the fence" with more radical (and labor saving) breakthroughs. |
| Keywords: | innovation, regulation, patents, firm size |
| JEL: | O31 L11 L51 J8 L25 O31 L11 L51 J8 L25 O31 L11 L51 J8 L25 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1744&r=all |
| By: | Daniel Borup (Aarhus University, CREATES and the Danish Finance Institute (DFI)); David E. Rapach (Washington University in St. Louis and Saint Louis University); Erik Christian Montes Schütte (Aarhus University, CREATES and the Danish Finance Institute (DFI)) |
| Abstract: | We generate a sequence of now- and backcasts of weekly unemployment insurance initial claims (UI) based on a rich trove of daily Google Trends (GT) search-volume data for terms related to unemployment. To harness the information in a high-dimensional set of daily GT terms, we estimate predictive models using machine-learning techniques in a mixed-frequency framework. In a simulated out-of-sample exercise, now- and backcasts of weekly UI that incorporate the information in the daily GT terms substantially outperform models that ignore the information. The relevance of GT terms for predicting UI is strongly linked to the COVID-19 crisis. |
| Keywords: | Unemployment insurance, Internet search, Mixed-frequency data, Penalized regression, Neural network, Variable importance |
| JEL: | C45 C53 C55 E24 E27 J65 |
| Date: | 2021–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2021-02&r=all |
| By: | Ayaita, Adam (RWTH Aachen University); Grund, Christian (RWTH Aachen University); Pütz, Lisa (RWTH Aachen University) |
| Abstract: | Employment agencies aim to match individuals to appropriate jobs. There are public and private employment agencies, which co-exist in many countries. Selection effects may be relevant in the sense that private agencies potentially engage in 'cream-skimming' by prioritizing highly qualified workers. The resulting job match quality is also important from an individual, a firm, and a society perspective. We examine the selection into job placement via private and public employment agencies as well as the resulting job match qualities, taking a job-market reform in Germany into account: the introduction of placement vouchers for private job placements. Using representative German panel data, we find that cream-skimming is significantly less pronounced under the voucher policy, as private agencies shift the focus toward unemployed individuals with a voucher. In addition, we find evidence based on propensity score matching estimations that private agencies tend to create better matches than their public counterparts. |
| Keywords: | cream-skimming, job match quality, job placement, job search, private employment agencies, public employment agency, selection, vouchers |
| JEL: | J64 L33 M5 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14024&r=all |