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on Labour Economics |
| By: | Dodini, Samuel (Norwegian School of Economics); Salvanes, Kjell G. (Norwegian School of Economics); Willén, Alexander (Norwegian School of Economics); Zhu, Li (Norwegian School of Economics) |
| Abstract: | We combine exogenous variation in union membership with detailed administrative data and a novel field survey to estimate the career effects of labor union membership. In the survey, we show how workers perceive the role of unions in setting wages and determining work amenities. In the administrative data, we causally examine through which channels unions influence worker outcomes, whether unions influence workers differently across their careers, and what the overall long-run effects of individual union membership are. Our results highlight that the career effect of union membership differs greatly depending on the age at which workers enroll. In addition, we show that focusing on a restricted set of outcomes, such as wages and employment, generates a fractionalized understanding of the multidimensional career effect that union membership has on workers. |
| Keywords: | unions, wage premiums, job protection, work environment |
| JEL: | J51 J31 J32 J16 J63 J65 J81 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16185&r=lab |
| By: | Albanese, Andrea (LISER); Cockx, Bart (Ghent University); Dejemeppe, Muriel (Université catholique de Louvain) |
| Abstract: | We use a regression discontinuity design and difference-in-differences estimators to estimate the impact of a one-shot hiring subsidy for low-educated unemployed youths during the Great Recession recovery in Belgium. The subsidy increases job-finding in the private sector by 10 percentage points within one year of unemployment. Six years later, high school graduates accumulated 2.8 quarters more private employment. However, they substitute private for public and self-employment; thus, overall employment does not increase but is still better paid. For high school dropouts, no persistent gains emerge. Moreover, the neighboring employment hub of Luxembourg induces a complete deadweight loss near the border. |
| Keywords: | hiring subsidies, youth unemployment, low-educated, regression discontinuity design, difference-in-differences, spillover effects |
| JEL: | C21 J08 J23 J24 J64 J68 J61 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16153&r=lab |
| By: | Mohammed Ait Lahcen; Garth Baughman; Hugo van Buggenum |
| Abstract: | We study the nonlinearities present in a standard monetary labor search model modified to have two groups of workers facing exogenous differences in the job finding and separation rates. We use our setting to study the racial unemployment gap between Black and white workers in the United States. A calibrated version of the model is able to replicate the difference between the two groups both in the level and volatility of unemployment. We show that the racial unemployment gap rises during downturns, and that its reaction to shocks is state-dependent. In particular, following a negative productivity shock, when aggregate unemployment is above average the gap increases by 0.6pp more than when aggregate unemployment is below average. In terms of policy, we study the implications of different inflation regimes on the racial unemployment gap. Higher trend inflation increases both the level of the racial unemployment gap and the magnitude of its response to shocks. |
| Keywords: | Racial inequality; Monetary policy; Unemployment; Inflation; Discrimination |
| JEL: | E32 E52 J64 E31 |
| Date: | 2023–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:96260&r=lab |
| By: | Juergen Jung (Department of Economics, Towson University); Vinish Shrestha (Department of Economics, Towson University) |
| Abstract: | Abstract We study the effects of work limiting health issues in combination with adverse local economic conditions on career advancement using a US panel data set that follows a cohort of people from 1987 (ages 22–30) to 2014 (ages 49–57). We find that work limiting health issues decrease the probability of promotions at the current job only if the individual lives in an area with high levels of unemployment. This effect is driven by individuals who do not or cannot move out of these areas. The combination of bad health and poor economic conditions significantly lowers the on-the-job promotion probabilities of workers between age 30–40 and is weaker and not significant for younger workers or workers past age 50. Gender and race play a minor role but the negative effect of work limiting health issues on promotions—conditional on living in areas with high unemployment—are enduring and can still be measured 6 years later. The low frequency of our data (biennial) does not allow us to establish a direct relationship between poor health during economic recessions on the probability of career advancement. |
| Keywords: | Job promotions, health shocks, lifecycle labor market effects, local area unemployment. |
| JEL: | M51 J71 J62 J63 J16 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:tow:wpaper:2023-03&r=lab |
| By: | Achyuta Adhvaryu; N. Meltem Daysal; Snaebjorn Gunnsteinsson; Teresa Molina; Herdis Steingrimsdottir |
| Abstract: | How do parents contend with threats to the health and survival of their children? Can the social safety net mitigate negative economic effects through transfers to affected families? We study these questions by combining the universe of cancer diagnoses among Danish children with register data for affected and matched unaffected families. Parental income declines substantially for 3-4 years following a child's cancer diagnosis. Fathers’ incomes recover fully, but mothers' incomes remain 3% lower 12 years after diagnosis. Using a policy reform that introduced variation in the generosity of targeted safety net transfers to affected families, we show that such transfers play a crucial role in smoothing income for these households and, importantly, do not generate work disincentive effects. The pattern of results is most consistent with the idea that parents’ preferences to personally provide care for their children during the critical years following a severe health shock drive changes in labor supply and income. Mental health and fertility effects are also observed but are likely not mediators for impacts on economic outcomes. |
| JEL: | I10 J13 J22 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31277&r=lab |
| By: | Brandén, Gunnar (Center for Epidemiology and Community Medicine); Nybom, Martin (Institute for Evaluation of Labour Market and Education Policy (IFAU)); Vosters, Kelly (University of North Carolina at Charlotte) |
| Abstract: | We show how intergenerational mobility has evolved over time in Sweden and the United States since 1985, focusing on prime-age labor incomes of both men and women. Income persistence involving women (daughters and/or mothers) has risen substantially over recent decades in both Sweden and the US, while the more predominantly studied father-son measures remained roughly stable. Interestingly, mother-son and mother-daughter persistence levels are very similar as they rise through the sample period, also to nearly the same levels in both countries, contrary to well-established elevated levels of persistence in the US relative to Sweden. We develop a model to quantify the relative roles of parent human capital, employment, and (residual) income, as well as assortative mating. Despite very similar trends and levels for mothers in the US and Sweden, we find substantial differences in the roles of employment and assortative mating over time, consistent with the staggered timing in women's spike in labor force attachment. Parental assortative mating is also an important factor in both countries, though negative sorting on (residual) income in the US negates the upward influence of positive human capital sorting, lending to the similar cross-country levels of mother-child persistence. |
| Keywords: | intergenerational mobility, gender, inequality |
| JEL: | J62 J12 J16 J24 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16152&r=lab |
| By: | Bensnes, Simon (Statistics Norway); Huitfeldt, Ingrid (Norwegian Business School (BI)); Leuven, Edwin (University of Oslo) |
| Abstract: | This paper presents novel methodological and empirical contributions to the child penalty literature. We propose a new estimator that combines elements from standard event study and instrumental variable estimators and demonstrate their relatedness. Our analysis shows that all three approaches yield substantial estimates of the long-term impact of children on the earnings gap between mothers and their partners, commonly known as the child penalty, ranging from 11 to 18 percent. However, the models not only estimate different magnitudes of the child penalty, they also lead to very different conclusions as to whether it is mothers or partners who drive this penalty – the key policy concern. While the event study attributes the entire impact to mothers, our results suggest that maternal responses account for only around one fourth of the penalty. Our paper also has broader implications for event-study designs. In particular, we assess the validity of the event-study assumptions using external information and characterize biases arising from selection in treatment timing. We find that women time fertility as their earnings profile flattens. The implication of this is that the event-study overestimates women's earnings penalty as it relies on estimates of counterfactual wage profiles that are too high. These new insights in the nature of selection into fertility show that common intuitions regarding parallel trend assumptions may be misleading, and that pre-trends may be uninformative about the sign of the selection bias in the treatment period. |
| Keywords: | child penalty, female labor supply, event study, instrumental variable |
| JEL: | C36 J13 J16 J21 J22 J31 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16174&r=lab |
| By: | Zhu, Mengbing (Beijing Normal University); Li, Yi (Beijing Normal University); Xing, Chunbing (Renmin University of China) |
| Abstract: | This study examines the impact of husbands' wages on their wives' labor force participation rates and hours worked in urban China from 1995 to 2018. We find that an increase in husbands' wages reduces the labor force participation rate of married women with similar education levels. Controlling for gender identity—in particular, an aversion to the wife earning more than her husband—strengthens the income effect of husbands' wages. The labor supply effect of husbands' wages is more significant for younger and less-educated women and those with more children. The employed women's hours worked are negatively correlated with their husbands' wages, which is more significant for married women of older cohorts and with more children. This study helps us better understand the trend of the female labor supply in urban China. It sheds light on the impact of gender identity, welfare inequalities across families, and the well-being of households facing economic shocks. |
| Keywords: | husbands' wages, female labor force participation, hours worked, gender identity |
| JEL: | D13 D31 J16 J21 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16148&r=lab |
| By: | Adamecz-Völgyi, Anna (KRTK KTI; Centre for Economic and Regional Studies, Institute of Economics); Jerrim, John (University College London); Pingault, Jean-Baptiste (University College London); Shure, Nikki (University College London) |
| Abstract: | It is well established that boys perceive themselves to be better in mathematics than girls, even when their ability is the same. We examine the drivers of this male overconfidence in self-assessed mathematics ability using a longitudinal study of twins. This allows us to control for family fixed effects, i.e. shared genetic and environmental factors, and exploit the random assignment of the sex of one's co-twin. Using measures of individual self-assessment in mathematics from childhood and adolescence, along with mathematics levels and test scores, cognitive skills, parent and teacher mathematics assessments, and characteristics of their families and siblings, we examine potential channels of the gender gap. Our results confirm that objective mathematics abilities only explain a small share of the gender gap in self-assessed mathematics abilities, and the gap is even larger within opposite-sex twin pairs. We find that having a confident male co-twin increases the confidence of boys but decreases the confidence of girls, not just in mathematics, but also in their self-assessment of other abilities. Male overconfidence might explain why men self-select into top jobs or STEM courses, making entry more difficult for women. We also find that parents are more likely to overestimate boys' and underestimate girls' mathematics abilities. Gender-biased parental assessments explain a large part of the gender gap in mathematics self-assessment, highlighting the importance of the intergenerational transmission of gender stereotypes. |
| Keywords: | gender gaps, self-assessed mathematics ability, twins, overconfidence, peer effects |
| JEL: | I24 J16 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16180&r=lab |
| By: | Theodoropoulos, Nikolaos; Voucharas, Georgios |
| Abstract: | We examine the impact of active and passive labor market policies expenditures on the probability of re-employment, re-employment duration, unemployment duration, and re-employment wages in the case of job displacements due to firm closures. We use retrospective homogeneous longitudinal data from the Survey of Health, Ageing and Retirement in Europe and OECD data for 24 countries over the period 1985-2017 and we operate within alternative econometric frameworks. Our findings suggest that, in contrast to passive labor market policies, investing in active labor market policies increases the re-employment probability and the re-employment duration, reduces the risk of staying unemployed, and leads to higher wages at the lower end of the conditional wage distribution. Passive labor market policies estimates offset active labor market estimates and their interaction effect is always negative, but complementarities effects are found for Northern countries. By breaking down active and passive labor market policies into eight subcomponents, our results indicate that they have significant heterogeneous effects within and across labor market outcomes. Further, expenditures on labor market policies vary substantially across regions. For instance, active labor market policies have a stronger impact for Eastern countries, whereas passive labor market policies such as out-of-work income has a positive impact for Southern countries. Further, females are found to benefit more from active labor market policies in terms of re-employment probability, duration of re-employment, and risk of unemployment, but not in terms of wages, compared to males. Policymakers may consider the importance of implementing diverse reforms tailored to different countries and groups to enhance the effectiveness of labor market policies. |
| Keywords: | labor market policies, plant closures, job loss, re-employment probability, unemployment duration, re-employment wages |
| JEL: | C21 E24 J08 J65 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1288&r=lab |
| By: | De Benedetto, Marco Alberto (University of Calabria); De Paola, Maria (University of Calabria); Scoppa, Vincenzo (University of Calabria); Smirnova, Janna (University of Calabria) |
| Abstract: | We study the impact that participation in the Erasmus program produces on a number of labor market outcomes. By implementing a Fuzzy Regression Discontinuity Design, we show that participating in the international mobility program positively affects the probability of being employed three years after graduation and reduces the time spent to find a job, whereas no significant effect is found on the likelihood of getting a job in line with the qualification acquired. These results are mainly driven by male and STEM graduates. We further investigate potential mechanisms underlying our results and find that spending a period of time studying abroad improves both the proficiency in spoken English and graduates' academic performance, and tends to increase the willingness to move to find a job. |
| Keywords: | international mobility, Erasmus, academic outcomes, employment, Fuzzy Regression Discontinuity Design |
| JEL: | C26 D04 I23 I26 J00 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16181&r=lab |
| By: | Subhayu Bandyopadhyay; Khusrav Gaibulloev; Todd Sandler |
| Abstract: | The paper presents a two-country model in which a destination country chooses its immigration quota and proactive counterterrorism actions in response to immigration from a terror-plagued source country. After the destination country fixes its two policies, immigrants decide between supplying labor or conducting terrorist attacks, which helps determine equilibrium labor supply and wages. The analysis accounts for the marginal disutility of lost rights/freedoms stemming from stricter counterterror measures as well the inherent radicalization of migrants. Comparative statics involve changes to those two parameters. For example, an enhanced importance attached to lost rights is shown to limit immigration quotas and counterterrorism actions. In contrast, increased source-country radicalization reduces immigration quotas but has an ambiguous effect on optimal proactive measures. Extensions involving defensive policies and destination-country citizens radicalization are considered. |
| Keywords: | immigration; terrorism; counterterrorism; rights; freedoms; radicalization; labor market equilibrium |
| JEL: | H56 F22 H87 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:96348&r=lab |
| By: | Kristina Czura; Florian Englmaier; Hoa Ho; Lisa Spantig |
| Abstract: | The positive role of transformational leadership on productivity and mental well-being has long been established. Transformational leadership behavior may be particularly suited to navigate times of crisis which are characterized by high levels of complexity and uncertainty. We exploit quasi-random assignment of employees to managers and study the role of frontline managers’ leadership styles on employees’ performance, work style, and mental well-being in times of crisis. Using longitudinal administrative data and panel survey data from before and during the Covid-19 pandemic, we find that frontline managers who were perceived as having a more transformational leadership style before the onset of the pandemic, led employees to better performance and mental well-being during the pandemic. |
| Keywords: | leadership, frontline managers, labor-management relations, organizational behavior, crisis |
| JEL: | M54 M12 J53 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10433&r=lab |
| By: | Diego A. Martin (Growth Lab) |
| Abstract: | Can households' beliefs about future income shocks affect child labor? This paper examines whether the three-year gap between the announcement (in 2014) and the start (in 2017) of the Illicit Crop Substitution Program (ICSP) increased child labor in Colombia. The ICSP provides farmers with financial support for not planting and harvesting coca leaves – the key input of cocaine. My results from a difference-in-differences model using differences in historical coca production show that due to the ICSP announcement, children became four percentage points more likely to work in municipalities with historical coca production than in non–coca-growing areas. Although the likelihood of working increased in coca–growing areas, the hours worked per child declined modestly after the ICSP announcement. The expansion of the children working in coca fields but the decline in working hours per child produce null effects of the announcement on education outcomes. The rise in the expected income affects the time allocation decision within households in rural areas. |
| Keywords: | Child labor, Coca cultivation, Anticipated effects, Policy announcements |
| JEL: | J13 J22 K42 O13 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:150a&r=lab |
| By: | Moriconi, Simone (IÉSEG School of Management); Peri, Giovanni (University of California, Davis); Turati, Riccardo (Universitat Autònoma de Barcelona) |
| Abstract: | We analyze whether second-generation immigrants have different political preferences relative to children of citizens. Using data on individual voting behavior in 22 European countries between 2001 and 2017, we characterize each vote on a left-right scale based on the ideological and policy positions of the party. First, we describe and characterize the size of the "left-wing bias" in the vote of second-generation immigrants after controlling for a large set of individual characteristics and origin and destination country fixed effects. We find a significant left-wing bias of second-generation immigrants, similar in magnitude to the left-wing bias of those with a secondary, relative to a primary, education. We then show that this left-wing bias is associated with stronger preferences for inequality-reducing government intervention, internationalism and multiculturalism. We find only weak evidence that second-generation immigrants are biased away from populist political agendas and no evidence that they have stronger preferences for pro-immigrant policies. Finally, we show that growing up with a father who is struggling to integrate into the labor market is a strong predictor of this left-wing bias. |
| Keywords: | immigration, elections, Europe |
| JEL: | D72 J61 P16 Z1 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16164&r=lab |
| By: | Zhang, Junsen (Zhejiang University); Fei, Shulan (Zhejiang University of Finance and Economics); Wen, Yanbing (Jiaxing University) |
| Abstract: | Research on the economics of beauty has persistently emphasized beauty premiums in the labor market but ignored its influence within existing marriages. We examine the physical appearance of the wives and its influence on several post-marriage family outcomes using a conceptual framework that is widely applicable. Based on two data sets from China, we find beautiful women have at least 0.43 fewer children than average- or plain-looking women when controlling for other factors. The negative effect remains robust controlling for wages and the possible endogeneity of beauty. In terms of mechanisms, the negative impact seems to operate by altering bargaining power within the family and the opportunity cost of having children, but not through the quantity-quality interaction of children. For other outcomes, wives' good looks reduce the probability of their taking care of or tutoring their children and increase the probability of parents or in-laws caring for children or performing household chores in urban areas. |
| Keywords: | beauty, household bargaining power, number of children, intergenerational care, opportunity cost |
| JEL: | J10 J13 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16157&r=lab |
| By: | Nancy Qian (Northwestern University,); Marco Tabellini (Harvard Business School,) |
| Abstract: | This paper documents several new facts about the relationship between discrimination and political exclusion and the motivation to fight in wartime. The Pearl Harbor attack triggered a sharp increase in volunteer enlistment rates of American men, the magnitude of the increase was smaller for Black men than for white men and the Black-white gap was larger in counties with higher levels of racial discrimination. Discrimination reduced the quantity and the quality of Black volunteers. The discouraging effects of discrimination were more pronounced in places that were geographically distant from Pearl Harbor and in states that had joined the Union relatively recently. For Japanese-American men, enlistment rates were higher where the Japanese-American community was not interred than where it was interred. These and other results provide empirical support for the theory that discrimination and political exclusion reduce support for the government when it is under threat. |
| Keywords: | Political and Economic Exclusion, Social Contract, Nation Building |
| JEL: | D72 J15 N92 P16 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2310&r=lab |