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on Labour Economics |
| By: | Boneva, T.; Kaufmann, K.; Rauh, C. |
| Abstract: | We design a new survey to elicit quantifiable, interpersonally comparable beliefs about pecuniary and non-pecuniary benefits and costs to maternal labor supply decisions, to study how beliefs vary across and within different groups in the population and to analyze how those beliefs relate to choices. In terms of pecuniary returns, mothers’ (and fathers’) later-life earnings are perceived to increase the more hours the mother works while her child is young. Similarly, respondents perceive higher non-pecuniary returns to children’s cognitive and non-cognitive skills the more hours a mother works and the more time her child spends in childcare. Family outcomes on the other hand, such as the quality of the mother-child relationship and child satisfaction, are perceived to be the highest when the mother works parttime, which is also the option most respondents believe their friends and family would like them to choose. There is a large heterogeneity in the perceived availability of full-time childcare and relaxing constraints could substantially increase maternal labor supply. Importantly, it is perceptions about the non-pecuniary returns to maternal labor supply as well as beliefs about the opinions of friends and family that are found to be strong predictors of maternal labor supply decisions, while beliefs about labor market returns are not. |
| Keywords: | Labor supply, childcare, beliefs, child penalties |
| JEL: | J22 J13 I26 |
| Date: | 2021–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2138&r= |
| By: | Pavel Kapinos |
| Abstract: | This paper uses U.S. county-level data to study the determinants and effects of the Paycheck Protection Program (PPP). The paper first overviews the timeline and institutional aspects of the PPP, implemented in the second quarter of 2020 and worth about $669 billion in forgivable small business loans guaranteed by the Small Business Administration (SBA). It then studies the determinants of the county-level ratios of PPP loans per job lost during the original unemployment surge associated with the onset of the COVID-19 pandemic in late March 2020 and finds that it does not appear to be a major driver of the PPP loan concentration; instead, it was primarily driven by the local banking conditions and demographic factors. The second part of this paper uses the method of local projections to determine whether the participation in the PPP program improved economic conditions following its implementation. Impulse responses in the standard linear framework are positive and statistically significant, albeit economically negligible, suggesting that the PPP was entirely ineffective in stabilizing labor market conditions. Extending the framework to state-dependent local projections reverses this result: PPP lending had a significant effect on reducing unemployment on average and especially in counties with strong banking liquidity and an educated labor force. |
| Keywords: | COVID-19 Pandemic; Paycheck Protection Program; Local Projections; Unemployment Rate |
| JEL: | G21 G28 |
| Date: | 2021–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:91564&r= |
| By: | Enrico Nano (IHEID, Graduate Institute of International and Development Studies, Geneva); Ugo Panizza (IHEID, Graduate Institute of International and Development Studies, Geneva); Martina Viarengo (IHEID, Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | We examine the role of financial aid in shaping the formation of human capital in economics. Specifically, we study the impact of a large merit-based scholarship for graduate studies in affecting individuals' occupational choices, career trajectories, and labor market outcomes of a generation of Italian economists with special focus on gender gaps and the role of social mobility. We construct a unique dataset that combines archival sources and includes microdata for the universe of applicants to the scholarship program and follow these individuals over their professional life. Our unique sample that focuses on the high end of the talent and ability distribution also allows us to analyze the characteristics of top graduates, a group which tends to be under-sampled in most surveys. We discuss five main results. First, women are less likely to be shortlisted for a scholarship as they tend to receive lower scores in the most subjective criteria used in the initial screening of candidates. Second, scholarship winners are much more likely to choose a research career and this effect is larger for women. Third, women who work in Italian universities tend to have less citations than men who work in Italy. However, the citation gender gap is smaller for candidates who received a scholarship. Fourth, women take longer to be promoted to the rank of full professor, even after controlling for academic productivity. Fifth, it is easier to become a high achiever for individuals from households with a lower socio-economic status if they reside in high social mobility provinces. However, high-achievers from lower socio-economic status households face an up-hill battle even in high social mobility provinces. |
| Keywords: | Human capital formation, Financial aid, Career trajectories, Gender gaps |
| JEL: | I22 I24 J16 J24 |
| Date: | 2021–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp08-2021&r= |
| By: | Yusuf Mercan; Benjamin Schoefer; Petr Sedláček |
| Abstract: | In recessions, unemployment increases despite the—perhaps counterintuitive—fact that the number of unemployed workers finding jobs expands. We propose a theory of unemployment fluctuations resting on this countercyclicality of gross flows from unemployment into employment. In recessions, the abundance of new hires “congests” the jobs the unemployed fill—diminishing their marginal product and discouraging further job creation. Countercyclical congestion explains 30-40% of US unemployment fluctuations. Additionally, it explains the excess procyclicality of new hires' wages, the cyclical labor wedge, the large earnings losses from job displacement and from graduating during recessions, and the insensitivity of unemployment to policies such as unemployment insurance. |
| JEL: | D24 E24 E32 J21 J23 J64 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28771&r= |
| By: | Herzog-Stein, Alexander; Nüß, Patrick; Peede, Lennert; Stein, Ulrike |
| Abstract: | We analyse measures of internal flexibility taken to safeguard employment during the Coronavirus Crisis in comparison to the Great Recession. Cyclical working-time reductions are again a major factor in safeguarding employment. Whereas during the Great Recession all working-time instruments contributed to the reduction in working time, short-time work (STW) now accounts for almost all of the working-time reduction. STW was more rapidly extended, more generous, and for the first time a stronger focus was put on securing household income on a broad basis. Still, the current crisis is more severe and affects additional sectors of the economy where low-wage earners are affected more frequently by STW and suffered on average relatively greater earnings losses. A hypothetical average short-time worker had a relative income loss in April 2020 that was more than twice as large as that in May 2009. Furthermore, marginal employment is affected strongly but not protected by STW. |
| Keywords: | Internal Flexibility Short-Time Work,Business Cycles,Great Recession,Coronavirus Crisis |
| JEL: | E24 E32 J08 J20 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:840&r= |
| By: | Yavuz Arslan; Ahmet Degerli; Gazi Kabaş |
| Abstract: | We use disaggregated U.S. data and a border discontinuity design to show that more generous unemployment insurance (UI) policies lower bank deposits. We test several channels that could explain this decline and find evidence consistent with households lowering their precautionary savings. Since deposits are the largest and most stable source of funding for banks, the decrease in deposits affects bank lending. Banks that raise deposits in states with generous UI policies squeeze their small business lending. Furthermore, counties that are served by these banks experience a higher unemployment rate and lower wage growth. |
| Keywords: | Bank funding; Bank lending; Labor; Precautionary saving; Unemployment insurance |
| JEL: | D14 G21 J20 J65 |
| Date: | 2021–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2021-27&r= |
| By: | Natalia Soboleva (National Research University Higher School of Economics) |
| Abstract: | Work forms one of the important spheres of life and is one of the main determinants of subjective well-being in general and life satisfaction in particular (Argyle 2001; Sousa-Poza & Sousa-Poza 2000). The study aims to disclose the impact of work values and socio-demographic characteristics upon the link between life satisfaction and job satisfaction. The European Values Study 2008-2009 is used as dataset. The sample is limited to those who have jobs (28 653 cases). The results confirm findings from the literature that intrinsic motivation increases life satisfaction (Vansteenkiste 2007). It is in line with self-determination theory according to which pursuit of intrinsic motivation facilitates satisfaction of the basic psychological needs for autonomy, competence and relatedness (Deci & Ryan, 2000; Kasser, 2002). Sharing extrinsic values decreases life satisfaction. The association between life satisfaction and job satisfaction is stronger for higher educated individuals and self-employed and weaker for women, married individuals, religious individuals and those of younger age. These results are due to the different of job in life of people with different characteristics. The link between life satisfaction and job satisfaction is the same in countries with low and high GDP per capita |
| Keywords: | life satisfaction, job satisfaction, subjective well-being, work values, European Values Study |
| JEL: | I31 J28 J01 Z13 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:96/soc/2021&r= |
| By: | ; Alexander W. Richter; Nathaniel A. Throckmorton |
| Abstract: | Competing explanations for the sources of nonlinearity in search and matching models indicate that they are not fully understood. This paper derives an analytical solution to a textbook model that highlights the mechanisms that generate nonlinearity and quantifies their contributions. Procyclical variation in the matching elasticity creates nonlinearity in the job finding rate, which interacts with the law of motion for unemployment. These results show the matching function choice is not innocuous. Quantitatively, the Den Haan et al. (2000) matching function more than doubles the skewness of unemployment and welfare cost of business cycles, compared to the Cobb-Douglas specification. |
| Keywords: | Matching Function; Matching Elasticity; Complimentarity; Unemployment |
| JEL: | E24 E32 E37 J63 J64 |
| Date: | 2021–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:91593&r= |
| By: | Julia Hellstrand; Jessica Nisén (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | In the 2010s, fertility has declined in the Nordic countries, most strikingly in Finland, and first births drive the decline. It remains unclear whether this decline results from decreased fertility within unions, changing union dynamics, or both. Thus, we investigated changes in the union–first birth dynamics from 2000 through 2018 in Finland using full-coverage population register data and an incidence-based multistate model. To do so, we calculated the yearly age-specific transition probabilities across states of single, cohabitation, marriage, and first births among 15- to 45-year-old childless men and women. We found lower fertility rates in unions after 2010, increasing dissolution rates amongst cohabiting couples, and long-term declines in the transition to marriage. Counterfactual simulations showed that, for the decline in first births since 2010, fertility within unions matters more (three-quarters) than union dynamics (one-quarter): that is, lower fertility in cohabitating and married individuals explained 42% and 13% of the decline, respectively, and decreasing fertility rates among couples entering cohabitation explained a further 17%. Decreasing marriage (19%) and cohabitation rates (2–4%) as well as higher union dissolution rates (6%) explained a smaller share of the first birth decline. The decline in first births was somewhat sharper among the lower social strata, but across strata the decreasing first birth transitions in unions explained most of the decline. To conclude, while changing union dynamics provide a partial explanation, postponing or foregoing fertility within unions represents the primary reason for the fertility decline. Keywords: first births, union formation, union dissolution, Finland, incidence-based multistate model, counterfactual approach |
| Keywords: | Finland |
| JEL: | J1 Z0 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2021-008&r= |
| By: | Mary Kaltenberg; Adam B. Jaffe; Margie E. Lachman |
| Abstract: | Previous research suggests creative ability peaks in the age decades of the 30s and early 40s, and declines thereafter, with some variation across fields. Building from the cognitive aging literature, we expect differences in the rate of creation and qualitative nature of creative works by age. Cognitive processes show aging-related changes with increases in experience-based knowledge (pragmatics or crystallized abilities) and decreases in the ability to process novel information quickly and efficiently (mechanics or fluid abilities). We describe a new database created by combining the publicly available patent data with information on inventor ages scraped from directory websites on the web for approximately 1.2 million U.S.-resident inventors patenting between 1976 and 2017. Our results suggest that cross-sectional and within-inventor patenting rates are similar, peaking at around the early 40s for both women and men. We find varying results for attributes of patents in relation to age, some of which are consistent with cognitive aging theory. For solo inventors, backward citations and originality, which are connected to experience, were found to increase with age. Forward citations, number of claims, and generality measures, as well as a citation-based measure of disruptiveness decline on average with inventor age. A similar pattern was found for performance in teams based on the average age of inventors in the team. Exploration of age diversity showed that teams with a wider age range had patents that are slightly more important (i.e., with more forward citations). The findings have the potential to advance scholarship on the life course of innovation with implications for workplace policies. |
| JEL: | O31 O34 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28769&r= |
| By: | Boneva, T.; Golin, M.; Rauh, C. |
| Abstract: | To understand students' motives in obtaining postgraduate qualifications, we elicit intentions to pursue postgraduate education and beliefs about its returns in a sample of 1,002 university students. We find large gaps in perceptions about the immediate and later-life benefits of postgraduate education, both between first- and continuing-generation students and within the latter group. Differences in student beliefs about returns can account for 70% of the socioeconomic gaps in intentions to pursue postgraduate studies. We document large differences in students' current undergraduate experiences by socioeconomic background and find these to be predictive of perceived returns to postgraduate education. |
| Keywords: | Higher education, beliefs, socioeconomic inequality, intergenerational mobility, postgraduate education |
| JEL: | I24 I26 J13 J24 J62 |
| Date: | 2021–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2140&r= |
| By: | Preston Mui; Benjamin Schoefer |
| Abstract: | We measure extensive-margin labor supply (employment) preferences in two representative surveys of the U.S. and German populations. We elicit reservation raises: the percent wage change that renders a given individual indifferent between employment and nonemployment. It is equal to her reservation wage divided by her actual, or potential, wage. The reservation raise distribution is the nonparametric aggregate labor supply curve. Locally, the curve exhibits large short-run elasticities above 3, consistent with business cycle evidence. For larger upward shifts, arc elasticities shrink towards 0.5, consistent with quasi-experimental evidence from tax holidays. Existing models fail to match this nonconstant, asymmetric curve. |
| JEL: | E24 E32 J22 J64 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28770&r= |
| By: | Patrick A. Puhani (Leibniz Universität Hannover); Margret K. Sterrenberg (Leibniz Universität Hannover); Margret K. Sterrenberg (Leibniz Universität Hannover) |
| Abstract: | In this paper, we estimate the effects of mandatory military service by exploiting the post-cold war decrease in the need for soldiers causing a substantial number of potential conscripts not to be drafted into the German military. Specifically, using previously unavailable information on degree of fitness in the military’s medical exam as a control variable, we test for the effects of mandatory military service on wages; employment; marriage/partnership status; and satisfaction with work, financial situation, health, family life, friends, and life in general. We find almost no statistically significant effects of this 6 to 9 month career interruption for young German men, with the exception of hourly wage, which shows a negative point estimate of -15 percent with a large confidence interval of between -30 and -0.2 percent. This interval estimate is consistent with previous findings for the United States, Denmark, and the Netherlands. |
| Keywords: | career breaks; conscription; wages; employment; life satisfaction; natural experiment |
| JEL: | J12 J24 J47 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2117&r= |
| By: | Nils Gornemann (Board of Governors of the Federal Reserve System, International Finance Division, Washington, D.C. 20551); Keith Kuester (University of Bonn, Adenauerallee 24-42, 53113 Bonn, Germany); Makoto Nakajima (Federal Reserve Bank of Philadelphia, Ten Independence Mall, Philadelphia, PA 19106-1574) |
| Abstract: | We build a New Keynesian business-cycle model with rich household heterogeneity. In the model, systematic monetary stabilization policy affects the distribution of income, income risks, and the demand for funds and supply of assets: the demand, because matching frictions render idiosyncratic labor-market risk endogenous; the supply, because markups, adjustment costs, and the tax system mean that the average profitability of firms is endogenous. Disagreement about systematic monetary stabilization policy is pronounced. The wealth rich or retired tend to favor inflation targeting. The wealth-poor working class, instead, favors unemployment-centric policy. One- and two-agent alternatives can show unanimous disapproval of inflation-centric policy, instead. We highlight how the political support for inflation-centric policy depends on wage setting, the tax system, and the portfolio that households have. |
| Keywords: | Monetary Policy, Unemployment, Search and Matching, Heterogeneous Agents, General Equilibrium, Dual Mandate |
| JEL: | E12 E21 E24 E32 E52 J64 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:089&r= |
| By: | Kohler, Wilhelm; Müller, Gernot J.; Wellmann, Susanne |
| Abstract: | Country-specific business cycle fluctuations are potentially very costly for member states of currency unions because they lack monetary autonomy. The actual costs depend on the extent to which consumption is shielded from these fluctuations and thus on the extent of risk sharing across member states. The literature to date has focused on financial and credit markets as well as on transfer schemes as channels of risk sharing. In this paper, we show how the standard approach to quantify risk sharing can be extended to account for migration as an additional channel of cross-country risk sharing. In theory, migration should play a key role when it comes to insulating per capita consumption from aggregate fluctuations, and our estimates show that it does so indeed for US states, but not for the members of the Euro area (EA). Consistent with these results, we also present survey evidence which shows that migration rates are about 20 times higher in the US. Lastly, we find, in line with earlier work, that risk sharing is generally much more limited across EA members. |
| Keywords: | Risk sharing,Currency unions,Labour migration,Migration rates,Euro Area |
| JEL: | F41 F22 G15 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:144&r= |
| By: | Natee Amornsiripanitch; Paul A. Gompers; George Hu; Kaushik Vasudevan |
| Abstract: | Immigrant founders of venture capital-backed companies have been critical to the entrepreneurial ecosystem. We document the channels through which immigrant founders find their way to the United States and how those channels have changed over time. Immigrants have been an important source of founders for venture capital-backed startups accounting for roughly 20% of all founders over the past 30 years. Immigrants coming to the United States for their education have been the primary source of founders with those coming after being educated abroad and then arriving for work decreasing in importance over time. The importance of undergraduate education as a channel for immigrant founders has increased over time. Immigrant founders coming for education are likely to start their companies in the state in which they were educated, especially states where they received their graduate education, leading to potentially large local economic benefits. The results of this paper have important policy implications for the supply of entrepreneurial talent and efforts to promote entrepreneurial ecosystems. |
| JEL: | G24 J0 J15 J24 L26 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28773&r= |
| By: | Andrés F. Castro Torres (Max Planck Institute for Demographic Research, Rostock, Germany); Ewa Batyra (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| JEL: | J1 Z0 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2021-009&r= |
| By: | Ganguly, Madhuparna |
| Abstract: | This paper analyzes the effects of a stronger patent regime on innovation incentives, patenting propensity and scientist mobility when an innovating firm can partially recover its damage due to scientist movement from the infringing rival. The strength of the patent system, which is a function of litigation success probability and damage recovery proportion, stipulates expected indemnification. We show that stronger patents fail to reduce the likelihood of infringement and further, decrease the innovation's expected profitability. Higher potential reparation also reduces the scientist's expected return on R&D knowledge, entailing greater R&D investment. Our results suggest important considerations for patent reforms. |
| Keywords: | Damage rules; Infringement; Patent strength; Scientist mobility |
| JEL: | J60 K40 L13 O34 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107635&r= |