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on Labour Economics |
| By: | Lafférs, Lukáš (Matej Bel University); Schmidpeter, Bernhard (University of Linz) |
| Abstract: | We explore the impact of successful job search after childbirth on mothers' labor market careers. Using a bounding approach and administrative data, we find strong heterogeneity in the returns to leaving the pre-birth employer. Moving to a new employer after childbirth leads to an increase in re-employment earnings only for mothers at the upper part of the earnings distribution. For these mothers, initial job search also increases long-term earnings. We provide evidence that earnings gains are the result of higher geographical mobility and longer commutes to work. Successful mothers are also more likely to move to faster growing firms and firms offering better opportunities to women. Our results do not suggest that husbands play an important role in supporting successful job search of mothers. |
| Keywords: | parental leave, return-to-work, job search, earnings, earnings gaps |
| JEL: | C21 J13 J31 J62 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14593&r= |
| By: | Gyetvai, Attila (Banco de Portugal); Zhu, Maria (Syracuse University) |
| Abstract: | Which former coworkers help displaced workers find jobs? We answer this question by studying occupational similarity in job finding networks. Using matched employer-employee data from Hungary, this paper relates the unemployment duration of displaced workers to the employment rate of their former coworker networks. We find that while coworkers from all occupations are helpful in job finding, there is significant heterogeneity in effects by occupation skill-level. For workers in low-skill jobs, coworkers who worked in the same narrow occupation as the displaced worker are the most useful network contacts. For workers in high-skill jobs, coworkers from different occupations are the most useful network contacts. |
| Keywords: | networks, job search, former coworkers, unemployment duration, skill heterogeneity |
| JEL: | J64 D85 J24 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14615&r= |
| By: | Christoph Albert; Albrecht Glitz; Joan Llull |
| Abstract: | In this paper, we show that the wage assimilation of immigrants is the result of the intricate interplay between individual skill accumulation and dynamic equilibrium effects in the labor market. When immigrants and natives are imperfect substitutes, increasing immigrant inflows widen the wage gap between them. Using a simple production function framework, we show that this labor market competition channel can explain about one quarter of the large increase in the average immigrant-native wage gap in the United States between the 1960s and 1990s arrival cohorts. Once competition effects and compositional changes in education and region of origin are accounted for, we find that the unobservable skills of newly arriving immigrants increased over time rather than decreased as traditionally argued in the literature. We corroborate this finding by documenting closely matching patterns for immigrants’ English language profficiency. |
| Keywords: | immigrant assimilation, labor market competition, cohort sizes, imperfect substitution, general and specific skills |
| JEL: | J21 J22 J31 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9231&r= |
| By: | Kuhn, Peter J. (University of California, Santa Barbara); Shen, Kailing (Australian National University) |
| Abstract: | When employers' explicit gender requests were unexpectedly removed from a Chinese job board overnight, pools of successful applicants became more integrated: women's (men's) share of call-backs to jobs that had requested men (women) rose by 63 (146) percent. The removal 'worked' in this sense because it generated a large increase in gender-mismatched applications, and because those applications were treated surprisingly well by employers. The removal had little or no effect on aggregate matching frictions. The job titles that were integrated however, were not the most gendered ones, and were disproportionately lower-wage jobs. |
| Keywords: | gender, recruiting, job search, gender segregation, discrimination |
| JEL: | J16 J63 J71 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14618&r= |
| By: | Faber, Marius (University of Basel); Sarto, Andrés (NYU Stern); Tabellini, Marco (Harvard Business School) |
| Abstract: | Migration has long been considered one of the key mechanisms through which labor markets adjust to economic shocks. In this paper, we analyze the migration response of American workers to two of the most important shocks that hit US manufacturing since the late 1990s – Chinese import competition and the introduction of industrial robots. Exploiting plausibly exogenous variation in exposure across US local labor markets over time, we show that robots caused a sizable reduction in population size, while Chinese imports did not. We rationalize these results in two steps. First, we provide evidence that negative employment spillovers outside manufacturing, caused by robots but not by Chinese imports, are an important mechanism for the different migration responses triggered by the two shocks. Next, we present a model where workers are geographically mobile and compete with either machines or foreign labor in the completion of tasks. The model highlights that two key dimensions along which the shocks differ – the cost savings they provide and the degree of complementarity between directly and indirectly exposed industries – can explain their disparate employment effects outside manufacturing and, in turn, the differential migration response. |
| Keywords: | migration, employment, technology, trade |
| JEL: | J21 J23 J61 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14623&r= |
| By: | Liepmann, Hannah (ILO International Labour Organization); Pignatti, Clemente (ILO International Labour Organization) |
| Abstract: | We analyze for the first time the welfare effects of unemployment benefits (UBs) in a context of high informality, exploiting matched administrative and survey data with individual-level information on UB receipt, formal and informal employment, wages and consumption. Using a difference-in-differences approach, we find that dismissal from a formal job causes a large drop in consumption, which is between three to six times larger than estimates for developed economies. This is generated by a permanent shift of UB recipients towards informal employment, where they earn substantially lower wages. We then exploit a kink in benefits and show that more generous UBs delay program exit through a substitution of formal with informal employment. However, the disincentive effects are small and short-lived. Because of the high insurance value and the low efficiency costs, welfare effects from increasing UBs are positive for a range of values of the coefficient of relative risk aversion. |
| Keywords: | unemployment benefits, welfare effects, informal employment |
| JEL: | J46 J65 J68 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14601&r= |
| By: | Kraft, Kornelius (TU Dortmund); Lammers, Alexander (TU Dortmund) |
| Abstract: | In this paper we report the results of an empirical study on the employment growth effects of a policy intervention, explicitly aimed at increasing placement efficiency of the Federal Employment Agency in Germany. We use the Hartz III reform in the year 2004 as an exogenous intervention that improves the matching process and compare establishments that use the services of the Federal Employment Agency with establishments that do not use the placement services. Using detailed German establishment level data, our difference-in-differences estimates reveal an increase in employment growth among those firms that use the agency for their recruitment activities compared to non-user firms. After the Hartz III reform was in place, establishments using the agency grew roughly two percentage points faster in terms of employment relative to non-users and those establishments achieve an increase in the proportion of hires. We provide several robustness tests using, for example, inverse-probability weighting to additionally account for differences in observable characteristics. Our paper highlights the importance of the placement service on the labor demand side, in particular on the so far overlooked establishment level. |
| Keywords: | Hartz III reform, Federal Employment Agency, matching efficiency, employment growth, difference-in-differences |
| JEL: | J23 J64 J68 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14629&r= |
| By: | Parsons, Sam (University College London); Bryson, Alex (University College London); Sullivan, Alice (University College London) |
| Abstract: | Using data from two British birth cohorts born in 1958 and 1970 we investigate the impact of teenage conduct problems on subsequent employment prospects through to age 42. We find teenagers with conduct problems went on to spend fewer months both in paid employment, and in employment, education and training (EET) between age 17 and 42 than comparable teenagers who did not experience conduct problems. Employment and EET disadvantages were greatest among those with severe behavioural problems. The 'gap' in time spent in employment or EET by conduct problem status was similar for men and women across cohorts, with only a small part of the gap being attenuated by differences in social background, individual characteristics and educational attainment in public examination at age 16. We discuss the implications of our findings. |
| Keywords: | education, training, disadvantage, educational attainment, labour market, employment, behavioural problems, Rutter |
| JEL: | I12 J20 J64 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14616&r= |
| By: | Svraka, András (Tax Policy and Research Unit, Ministry of Finance) |
| Abstract: | We analyse regional wage inequalities in the 2010s using administrative data sources at highly disaggregated regional levels, including commuting zones. The decline in national wage inequalities during this period is reflected at regional levels and we find convergence between regions in income levels and in the decreasing weight of between region inequalities as well. There are still large differences, and high income employees are concentrated in prosperous regions. Interregional mobility was also a driving force behind changes in income inequalities even in a country with low overall mobility rates. High income employees are much more likely to move, typically from less central, less developed regions to more central, larger labour markets. We find some evidence for a transitory mobility premium, although we cannot establish the causality of this relationship. |
| JEL: | D31 J61 R12 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:auo:moftwp:9&r= |
| By: | Jorge Luis García; James J. Heckman; Victor Ronda |
| Abstract: | This paper demonstrates multiple beneficial impacts of a program promoting intergenerational mobility for disadvantaged African-American children and their children. The program improves outcomes of the first-generation treatment group across the life cycle, which translates into better family environments for the second generation leading to positive intergenerational gains. There are long-lasting beneficial program effects on cognition through age 54, contradicting claims of fadeout that have dominated popular discussions of early childhood programs. Children of the first-generation treatment group have higher levels of education and employment, lower levels of criminal activity, and better health than children of the first-generation control group. |
| JEL: | C93 H43 I28 J13 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29057&r= |
| By: | Marianne Bertrand; Chang-Tai Hsieh; Nick Tsivanidis |
| Abstract: | India's Industrial Disputes Act (IDA) of 1947 requires firm with more than 100 workers to pay large costs if they shrink their employment. Since the early 2000s, large Indian manufacturing firms have increasingly relied on contract workers who are not subject to the IDA. By 2015, contract workers accounted for 38% of total employment at firms with more than 100 workers compared to 20% in 2000. Over the same time period, the thickness of the right tail of the firm size distribution in formal Indian manufacturing plants increased, the average product of labor for large firms declined, the job creation rate for large firms increased, and the probability that large firms introduce new products rose. We provide evidence that these outcomes were caused by an increased reliance on contract labor among large establishments. A model of firm growth subject to firing costs suggests the rise of contract labor increased TFP in Indian manufacturing by 7.6%, occurring all through a one-time reduction in misallocation between large and small firms with negligible change in the long-run growth rate. |
| JEL: | J23 J4 J5 O0 O4 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29151&r= |
| By: | Kurmann, André (Drexel University); Lalé, Etienne (Université du Québec à Montréal); Ta, Lien (Drexel University) |
| Abstract: | The COVID-19 pandemic has led to an explosion of research using real-time establishment-level data. One key challenge when working with this data is how to take into account the effects of business openings and closings. In this paper, we address this challenge by matching small business establishment records from Homebase with information on business activity from Google, Facebook,and Safegraph to distinguish business closings and openings from other sample exits and entry. Weshow that this distinction is critical to benchmark the data to pre-pandemic administrative records and estimate the effects of the pandemic on small business activity. We find four key results: (1)employment of small businesses in four of the hardest hit service sectors contracted more severely in the beginning of the pandemic than employment of larger businesses, but small businesses also rebounded more strongly and have on average recovered a higher share of job losses than larger businesses; (2)closings account for 70% of the initial decline in small business employment, but two thirds of closed businesses have reopened and the annual rate of closings is just slightly higher than prior to the pandemic; (3) new openings of small businesses constitute an important driver of the recovery but the annual rate of new openings is only about half the rate one year earlier (4) small business employment was affected less negatively in counties with early access to loans from the Paycheck Protection Program(PPP) and in counties where Federal Pandemic Unemployment Compensation (FPUC) was more generous relative to pre-pandemic earnings of likely recipients, with business closings accounting for a large part of these two effects. The results dispel the popular notion that small businesses continue to suffer more from the pandemic than larger businesses. At the same time, our analysis suggests that PPP and FPUC helped to significantly mitigate the negative effects of the pandemic for small businesses by, respectively, alleviating financial constraints and stimulating demand for local services. |
| Keywords: | Small business activity; Sample turnover versus business openings/closings; Matchingrecords; COVID-19; Paycheck Protection Program; Federal Pandemic Unemployment Compensation |
| JEL: | E01 E24 E32 E60 |
| Date: | 2021–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2021_015&r= |
| By: | Billur Aksoy (Rensselaer Polytechnic Institute); Ian Chadd (Rensselaer Polytechnic Institute); Boon Han Koh (University of East Anglia) |
| Abstract: | We study discrimination in prosocial domains against sexual minorities using a sharing (dictator) game in an online experiment, where these individuals have the opportunity to signal their identity. We find that political affiliations matter: Republican heterosexual individuals are less generous to others who are perceived to be sexual minorities, while their Democratic counterparts are slightly more generous. This is robust to alternative specifications and cannot be explained by perceptions about the recipient’s political leaning. Moreover, women, but not men, are less likely to signal their sexual minority status when they are aware of the potential payoff implications of their decisions. |
| Keywords: | taste-based discrimination, identity, LGBTQ+, political preferences, gender. |
| JEL: | C90 D90 J16 |
| Date: | 2021–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaeco:2021-08&r= |
| By: | Kelly Jones |
| Abstract: | An unintended birth at an early age has the potential to interrupt a woman’s education, with implications for her future career and earnings. This paper investigates the impact of abortion access on women’s economic outcomes later in life. I corroborate earlier findings that abortion access during adolescence and early adulthood reduces early births. I then offer updated evidence that, controlling for contraception access, abortion access increases educa¬tional attainment, career outcomes and earnings of black women and reduces their poverty and reliance on public assistance. Findings suggest that fertility is a significant pathway by which abortion access affects work status and family income, but that other pathways such as expectations and investment in human capital are more relevant for occupational choice and personal earnings. |
| Keywords: | fertility, family planning, abortion, economics of gender |
| JEL: | J13 I2 J24 J16 N32 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:202102&r= |
| By: | Svraka, András (Tax Policy and Research Unit, Ministry of Finance) |
| Abstract: | This paper uses 2009--19 income tax data to investigate trends in Hungarian market income inequalities. Wage inequality decreased, total inequality increased but these changes differ across the income distribution. Income share of the bottom 40% decreased slightly due an inflow of marginally attached workers. Wages above this threshold -- corresponding to full time employment -- significantly flattened, including in the top 1%, while total income's share remained mostly unchanged. Similar patterns hold within groups for gender, age, and regions but between group inequality rose for age and decreased for regions due to changes in taxpayer population. Growth was broadly shared for non marginally attached, although in the top 0.1% all growth came from capital income. Persistence of income during this period was low in the bottom half of the income distribution, suggesting an increased inequality in this segment might not lead to higher inequality in the long run. |
| JEL: | D31 J11 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:auo:moftwp:8&r= |
| By: | Conti, Gabriella (University College London); Pizzo, Elena (University College London); Morris, Stephen (University of Cambridge); Melnychuk, Mariya (University College London) |
| Abstract: | Child maltreatment is a major public health problem with significant consequences for individual victims and for society. In this paper we quantify for the first time the economic costs of fatal and non-fatal child maltreatment in the UK in relation to several short-, medium- and long-term outcomes ranging from physical and mental health problems, to labour market outcomes and welfare use. We combine novel regression analysis of rich data from the National Child Development Study and the English Longitudinal Study of Ageing with secondary evidence to produce an incidence-based estimate of the lifetime costs of child maltreatment from a societal perspective. The discounted average lifetime incidence cost of non-fatal child maltreatment by a primary caregiver is estimated at £89,390 (95% uncertainty interval £44,896 to £145,508); the largest contributors to this are costs from social care, short-term health and long-term labour market outcomes. The discounted lifetime cost per death from child maltreatment is estimated at £940,758, comprising health care and lost productivity costs. Our estimates provide the first comprehensive benchmark to quantify the costs of child maltreatment in the UK and the benefits of interventions aimed at reducing or preventing it. |
| Keywords: | child maltreatment, incidence-based approach, lifetime costs, health care costs, productivity losses, sensitivity analysis |
| JEL: | I18 J17 D61 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14612&r= |
| By: | Michal Bauer; Jana Cahlíková; Julie Chytilová; Gérard Roland; Tomas Zelinsky |
| Abstract: | This paper provides experimental evidence showing that members of a majority group systematically shift punishment on innocent members of an ethnic minority. We develop a new incentivized task, the Punishing the Scapegoat Game, to measure how injustice affecting a member of one’s own group shapes punishment of an unrelated bystander (“a scapegoat”). We manipulate the ethnic identity of the scapegoats and study interactions between the majority group and the Roma minority in Slovakia. We find that when no harm is done, there is no evidence of discrimination against the ethnic minority. In contrast, when a member of one’s own group is harmed, the punishment ”passed” on innocent individuals more than doubles when they are from the minority, as compared to when they are from the dominant group. These results illuminate how individualized tensions can be transformed into a group conflict, dragging minorities into conflicts in a way that is completely unrelated to their behavior. |
| JEL: | C93 D74 D91 J15 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29157&r= |
| By: | Pahontu, Raluca L. |
| Abstract: | A central challenge in understanding public opinion shifts is identifying whose opinions change. Political economists try to uncover this by exploring voters' economic vulnerability, particularly the relationship between labor-market risk and redistribution preferences. Predominantly, however, such work imputes risk from occupational or sectoral characteristics. Due to within-occupational inequality in exposure to risk, considerable variation remains unexplored. I propose an individual-level, dynamic account of risk inferred from job tenure, contract type, and expectations of job security. These aspects, importantly, account for individual variation in risk and the possibility that one's experience of risk may change across time. The results indicate the usefulness of this approach to risk in understanding changes in social spending preferences. |
| Keywords: | comparative political economy; quantitative methods |
| JEL: | R14 J01 |
| Date: | 2021–07–28 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:111593&r= |