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on Labour Economics |
| By: | Koumenta, Maria; Pagliero, Mario; Rostam-Afschar, Davud |
| Abstract: | We study how licensing, certification and unionisation affect the wages of natives and migrants and their representation among licensed, certified, and unionized workers. We provide evidence of a dual role of labor market institutions, which both screen workers based on unobservable characteristics and also provide them with wage setting power. Labor market institutions confer significant wage premia to native workers (3.9, 1.6, and 2.7 log points for licensing, certification, and unionization respectively), due to screening and wage setting power. Wage premia are significantly larger for licensed and certified migrants (10.2 and 6.6 log points), reflecting a more intense screening of migrant than native workers. The representation of migrants among licensed (but not certified or unionized) workers is 14% lower than that of natives. This implies a more intense screening of migrants by licensing institutions than by certification and unionization. |
| Keywords: | Occupational regulation,Licensing,Certification,Unionization,Migration,Wages |
| JEL: | J61 J31 J44 J71 J16 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1052&r= |
| By: | Stanfors, Maria (Department of Economic History, Lund University); Karlsson, Tobias (Department of Economic History, Lund University); Andersson, Lars-Fredrik (Unit of Economic History, Umeå University); Eriksson, Liselotte (Umeå Centre for Gender Studies, Umeå University) |
| Abstract: | Industrialization brought significant economic and social changes. As a response to the risk of income loss due to illness and workplace accidents, mutual health insurance was the main financial vehicle for workers at the turn of the twentieth century across the Western world. We studied individual and firm-level determinants of membership in health insurance societies among male workers in Swedish manufacturing by using matched employer-employee data from the tobacco, printing, and mechanical engineering ndustries. Such data are extremely rare but important for our purpose. They cover all workers (i.e., members and non-members) and firms in a specific year around 1900 (N>12,000). In the years before the first statutory attempts to improve working conditions, we find remarkably high rates of membership, especially in mechanical engineering. We also find an association between membership and age, which is mainly a difference between younger and older adults, but the societies’ egalitarian pricing gave workers no reason to defer enrolment until a higher age related to health problems. Social interaction may explain early membership in the printing and tobacco industries, where we find a positive association between membership among older workers and the enrolment of younger workers. |
| Keywords: | health; health insurance; adverse selection; mutual aid societies; micro data; matched employer-employee data; labour markets; manufacturing industry; industrialization; Sweden; 19th century; 20th century |
| JEL: | I13 N33 N63 |
| Date: | 2022–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0238&r= |
| By: | R. Jason Faberman; Andreas I. Mueller; Ayşegül Şahin |
| Abstract: | We examine the effect of the Covid pandemic on willingness to work along both the extensive and intensive margins of labor supply. Special survey questions in the Job Search Supplement of the Survey of Consumer Expectations (SCE) allow us to elicit information about individuals’ desired work hours for the 2013-2021 period. Using these questions, along with workers’ actual labor market participation, we construct a labor market underutilization measure, the Aggregate Hours Gap (AHG), following Faberman et al. (2020). The AHG captures changes in labor market underutilization for the full population along both the extensive and intensive margins using data on desired work hours as a measure of their potential labor supply. We find that the sharp increase in the AHG during the Covid pandemic essentially disappeared by the end of 2021. We also document a sharp decline in desired work hours during the pandemic that persists through the end of 2021 and is roughly double the drop in the labor force participation rate. Ignoring the decline in desired hours overstates the degree of underutilization by 2.5 percentage points (12.5%). Our findings suggest that, as of 2021Q4, the labor market is tighter than suggested by the unemployment rate and the adverse labor supply effect of the pandemic is more pronounced than implied by the labor force participation rate. These discrepancies underscore the importance of taking into account the intensive margin for both labor market underutilization and potential labor supply. |
| JEL: | E24 J21 J60 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29784&r= |
| By: | Richard K. Crump; Stefano Eusepi; Marc Giannoni; Ayşegül Şahin |
| Abstract: | We estimate the natural rate of unemployment, often referred to as u*, in the United States using data on labor market flows, short-term and long-term inflation expectations and a forward-looking New-Keynesian Phillips curve for the 1960-2021 period. The natural rate of unemployment was at around 4.5% before the onset of the pandemic and increased to 5.9% by the end of 2021. This pronounced rise was primarily informed by strong wage growth rather than changes in inflation expectations. Despite the rise in the natural rate of unemployment, the secular trend of unemployment continued to fall and stands at around 4.2% reflecting ongoing secular developments which have been pushing down the unemployment rate over the last 30 years. Our model forecasts strong wage growth to moderate only sluggishly continuing to put upward pressure on inflation in the medium-run. We project underlying inflation to remain 0.5 percentage points above its long-run trend by the end of 2023 even if long-run inflation expectations remain well anchored. Given the importance of wage growth for the inflation outlook, we examine detailed micro data on job-filling rates, posted wages for vacant positions, and workers' reservation wages. In particular, we construct a composition-bias free measure of wage growth at the employer-job level using Burning Glass Technologies data and document strong wage growth for both teleworkable and non-teleworkable jobs. Moreover, we find that workers' reservation wages increased substantially after the pandemic. Our empirical analysis suggests that the strong wage growth is likely not a one-time adjustment of additional compensation for jobs that pose health risks to workers but rather reflects a tight labor market accompanied with a changing work-leisure trade-off. |
| JEL: | D84 E24 E31 E32 J11 J3 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29785&r= |
| By: | Stefano Cellini (University of Surrey); Livia Menezes (University of Birmingham); Martin Foureaux Koppensteiner (University of Surrey) |
| Abstract: | In this paper, we estimate the effect of maternal displacements during pregnancy on birth outcomes by leveraging population-level administrative data from Brazil on formal employment linked to birth records. We find that involuntary job separation of pregnant single mothers leads to a decrease in birth weight (BW) by around 28 grams (-1% ca.) and an increase in the incidence of low BW by 10.5%. In contrast, we find a significant positive effect on the mean BW and a decrease in the incidence of low BW for mothers in a marriage or stable union. We document more pronounced negative effects for single mothers with lower earnings and no effect for mothers in the highest income quartile, suggesting a mitigating role of self-insurance from savings. Exploiting variation from unemployment benefits eligibility, we also provide evidence on the mitigating role of formal unemployment insurance using a Regression Discontinuity design exploiting the cutoff from the unemployment insurance eligibility rule. |
| Keywords: | Dismissals, birth outcomes, informal insurance, unemployment insurance |
| JEL: | D14 I10 J65 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:22-02&r= |
| By: | Zhesheng Qiu; José-Víctor Ríos-Rull |
| Abstract: | We propose an easy-to-use search friction in the goods markets in medium-sized New Keynesian models. This friction allows increases in measured productivity in response to increases in expenditures via higher search effort from households. As a result markups can become procyclical and labor share countercyclical. Unlike in models that pose variable capital utilization and fixed costs to generate procyclical productivity, firms do not have to spend more to achieve it. We estimate the model matching impulse responses with Bayesian techniques and show superior performance of models with search frictions relative to the state of the art alternative models in the literature. Our estimates also display low fixed costs of production and lower Frisch elasticities. |
| JEL: | E01 E32 E52 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29769&r= |
| By: | Federico Cingano (Bank of Italy); Filippo Palomba (Princeton University); Paolo Pinotti (Bocconi University); Enrico Rettore (University of Padua) |
| Abstract: | We estimate the effects of a large programme of public investment subsidies granted to Italian firms in disadvantaged areas. Projects were given numerical scores according to objective criteria and local politicians' preferences, and funded in rank order until the funds were fully allocated. We estimate that subsidies increased investment by marginal firms near the cutoff by 39 per cent and employment by 17 per cent over a 6-year period. Building on recent advancements in the econometrics of regression discontinuity designs, we characterize heterogeneity of treatment effects and cost-per-new-job across inframarginal firms away from the cutoff. Firms ranking high on objective criteria and firms preferred by local politicians generated larger employment growth on average, but the latter did so at a higher cost per job. Under a policy invariance assumption, we estimate that eliminating political discretion and relying only on objective criteria would reduce the cost per job by 11 per cent, while relying only on political discretion would increase the cost by 47 per cent. The effect of political discretion is larger in southern regions, which received the largest share of funds and exhibited the highest cost-per-job under the actual allocation criteria. |
| Keywords: | public subsidies, investment, employment, political discretion, regression discontinuity |
| JEL: | H25 J08 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1364_22&r= |
| By: | Steven N. Durlauf; Andros Kourtellos; Chih Ming Tan |
| Abstract: | This paper provides a synthesis of theoretical and empirical work on the Great Gatsby Curve, the positive empirical relationship between cross-section income inequality and persistence of income across generations. We present statistical models of income dynamics that mechanically give rise to the relationship between inequality and mobility. Five distinct classes of theories, including models on family investments, skills, social influences, political economy, and aspirations are developed, each providing a behavioral mechanism to explain the relationship. Finally, we review empirical studies that provide evidence of the curve for a range of contexts and socioeconomic outcomes as well as explore evidence on mechanisms. |
| JEL: | D3 H0 J0 R0 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29761&r= |
| By: | Robert W. Fairlie; Frank Fossen |
| Abstract: | Was the $278 billion reboot of the $800 billion Paycheck Protection Program (PPP) in early 2021 disbursed equitably to minority communities? This paper provides the first analysis of how PPP funds were disbursed to minority communities in the third and final round of the program, which was specifically targeted to underserved and disadvantaged communities. Using administrative microdata on the universe of PPP loans, we find a strong positive relationship between PPP flows, as measured by the number of loans per employer business or loan amounts per employee, and the minority share of the population or businesses in the third round. In contrast, the relationship was negative in the first round of 2020 and less positive in the second round of 2020. We find a stronger positive relationship between minority share and loan numbers or amounts to employer businesses for first draw loans than second draw loans in 2021 (capturing some persistence in inequities). The patterns are similar for loan numbers and amounts to nonemployer businesses but with a strong positive relationship with minority share for both first draw and second draw loans. The rebooted PPP that ran from January to May 2021 appears to have been disbursed to minority communities as intended. |
| JEL: | J15 L26 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29732&r= |
| By: | Henrik Kleven (Princeton University); Camille Landais (London School of Economics); Johanna Posch (Analysis Group); Andreas Steinhauer (University of Edinburgh); Josef Zweimüller (University of Zurich) |
| Abstract: | Do family policies reduce gender inequality in the labor market? We contribute to this debate by investigating the joint impact of parental leave and child care, using administrative data covering the labor market and birth histories of Austrian workers over more than half a century. We start by quasi-experimentally identifying the causal effects of all family policy reforms since the 1950s on the full dynamics of male and female earnings. We then map these causal estimates into a decomposition framework building on Kleven, Landais and Søgaard (2019) to compute counterfactual gender inequality series. Our results show that the enormous expansions of parental leave and child care subsidies have had virtually no impact on gender convergence. |
| Keywords: | Family, Gender Inequality, Austria |
| JEL: | J13 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2021-62&r= |
| By: | Aumond, Romain; Di Tommaso, Valerio; Rünstler, Gerhard |
| Abstract: | We present a quarterly narrative database of important labour market reforms in selected euro area economies in between 1995 and 2018 covering 60 events. We provide legal adoption and implementation dates of major reforms to employment protection legislation and unemployment benefits. Estimates based on local projections find negative short-run effects of liberalising reforms on wages, while the employment effects of reforms differ markedly across age groups and partly depend on the state of the economy. JEL Classification: J08, O43 |
| Keywords: | Employment Protection, Quarterly Indicators, Unemployment Benefits |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222657&r= |
| By: | Bernardus Van Doornik (Banco Central do Brasil); Dimas Fazio (National University of Singapore); David Schoenherr (Princeton University); Janis Skrastins (Washington University in St. Louis) |
| Abstract: | We document that a more generous unemployment insurance (UI) system shifts labor supply from safer to riskier firms and reduces compensating wage differentials risky firms need to pay. Consequently, a more generous UI system increases risky firms’ value and fosters entrepreneurship by reducing new firms’ labor costs. Exploiting a UI reform in Brazil that affects only part of the workforce allows us to compare labor supply for workers with different degrees of UI protection within the same firm, sharpening identification of the results. Altogether, our results suggest that UI provides a transfer system from safe to risky firms. |
| Keywords: | unemployment insurance, labor supply, firm risk, entrepreneurship |
| JEL: | J21 J22 J46 J65 K31 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2022-1&r= |
| By: | Jorge M. Agüero (University of Connecticut); Erica Field (Duke University, NBER and BREAD); Ignacio Rodriguez Hurtado (Duke University); Javier Romero (The World Bank and Universidad de Piura) |
| Abstract: | We collect retrospective panel survey data on household socioeconomic status and do-mestic conflict from a large nationwide sample in Peru and find a sizable and sustained increase in intimate partner violence (IPV) during the COVID-19 pandemic. The in-cidence of physical IPV increased by an estimated 56% from 2019 to April/May 2020, and the increase was sustained until July/August 2020, the latest data point collected in our survey. Households most likely to lose a job experienced the largest increases in IPV over the period, measured by variation in the level of job loss across occupations. These patterns suggest that part of the increase in IPV was a causal effect of income shocks created by the COVID-19 pandemic. |
| JEL: | J12 J16 K42 O15 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2022-08&r= |
| By: | Jacob Nielsen Arendt (Jacob Nielsen Arendt); Christian Dustmann (Christian Dustmann); Hyejin Ku (Hyejin Ku) |
| Abstract: | Denmark has accepted refugees from a large variety of countries and for more than four decades. Denmark has also frequently changed policies and regulations concerning integration programs, transfer payments, and conditions for permanent residency. Such policy variation in conjunction with excellent administrative data provides an ideal laboratory to evaluate the effects of different immigration and integration policies on the outcomes of refugee immigrants. In this article, we first describe the Danish experience with refugee immigration over the past four decades. We then review different post-arrival refugee policies and summarize studies that evaluate their effects on the labor market performance of refugees. Lastly, we discuss and contrast these findings in the context of international studies of similar policies and draw conclusions for policy. |
| Keywords: | refugee integration, immigration policies, labor supply, employment, language |
| JEL: | J22 J24 J61 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2209&r= |
| By: | Jane Arnold Lincove; Catherine Mata; Kalena Cortes |
| Abstract: | High school exit exams are meant to standardize the quality of public high schools and to ensure that students graduate with a set of basic skills and knowledge. Evidence suggests that a common perverse effect of exit exams is an increase in dropout for students who have difficulty passing tests, with a larger effect on minority students. To mitigate this, some states offer alternative, non-tested pathways to graduation for students who have failed their exit exams. This study investigates the post-secondary effects of an alternative high school graduation program. Among students who initially fail an exit exam, those who eventually graduate through an alternative project-based pathway have lower college enrollment, but similar employment outcomes to students who graduate by retaking and passing their exit exams. Compared to similar students who fail to complete high school, those students who take the alternative pathway have better post-secondary outcomes in both education and employment. |
| JEL: | I2 I21 I24 I26 J01 J18 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29742&r= |