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on Labour Economics |
| By: | Mária Balgová; Hannah Illing |
| Abstract: | This paper sheds new light on the barriers to migrants’ labor market assimilation. Using administrative data for Germany from 1997-2016, we estimate dynamic difference-in-differences regressions to investigate the relative trajectory of earnings, wages, and employment following mass layoff separately for migrants and natives. We show that job displacement affects the two groups differently even when we systematically control for pre-layoff differences in their characteristics: migrants have on average higher earnings losses, and they find it much more difficult to find employment. However, those who do find a new job experience faster wage growth compared to displaced natives. We examine several potential mechanisms and find that these gaps are driven by labor market conditions, such as local migrant networks and labor market tightness, rather than migrants’ behavior. |
| Keywords: | immigration, job displacement, job search |
| JEL: | J62 J63 J64 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_457&r=lab |
| By: | Davis, Steven J. (University of Chicago); Krolikowski, Pawel M. (Federal Reserve Bank of Cleveland) |
| Abstract: | We design and field an innovative survey of unemployment insurance (UI) recipients that yields new insights about wage stickiness on the layoff margin. Most UI recipients express a willingness to accept wage cuts of 5-10 percent to save their jobs, and one third would accept a 25 percent cut. Yet worker-employer discussions about cuts in pay, benefits or hours in lieu of layoffs are exceedingly rare. When asked why employers don't propose job-saving pay cuts, four-in-ten UI recipients don't know. Sixteen percent say cuts would undermine morale or lead the best workers to quit, and 39 percent don't think wage cuts would save their jobs. For lost union jobs, 45 percent say contractual restrictions prevent wage cuts. Among those on permanent layoff who reject our hypothetical pay cuts, half say they have better outside options, and 38 percent regard the proposed pay cut as insulting. An estimated one-quarter of the layoffs violate the condition for bilaterally efficient separations that holds in leading theories of job separations, frictional unemployment, and job ladders. We draw on our findings and other evidence to assess theories of wage stickiness and its role in layoffs. |
| Keywords: | wage rigidity, sticky wages, layoffs, unemployment insurance, survey of job losers, worker perceptions |
| JEL: | E24 J63 J65 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16351&r=lab |
| By: | Alan, Sule (European University Institute); Corekcioglu, Gozde (Kadir Has University); Kaba, Mustafa (Max Planck Institute for Research on Collective Goods); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Using data from over 2, 000 professionals in 24 large corporations, we show that female leaders shape the relational culture in the workplace dierently than male leaders. Males form homophilic professional ties under male leadership, but female leadership disrupts this pattern, creating a less segregated workplace. Female leaders are more likely to establish professional support links with their subordinates. Under female leadership, female employees are less likely to quit their jobs but no more likely to get promoted. Our results suggest that increasing female presence in leadership positions may be an effective way to mitigate toxic relational culture in the workplace. |
| Keywords: | female leadership, workplace climate, social networks |
| JEL: | C93 J16 M14 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16383&r=lab |
| By: | Kalee Burns; Julie L. Hotchkiss |
| Abstract: | Using the American Community Survey between 2005 and 2019, this paper investigates the role constraints to migration might play in explaining racial/ethnic disparities in the labor market. We find that Black workers are typically less responsive than White workers to changes in job opportunities, but responsiveness increases when those opportunities present themselves in locations with a higher share own-minority population. We construct an education/race specific Bartik shift-share instrument to control for potential endogeneity of growth in job opportunities. |
| Keywords: | racial labor market disparities; migration costs; Delta index; social costs; place-based; people-based; mismatch |
| JEL: | J61 J15 J18 |
| Date: | 2023–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:96612&r=lab |
| By: | Roupakias, Stelios |
| Abstract: | This paper evaluates the economic integration of immigrants in Greece, employing microdata from the 2001 and 2011 decennial Censuses combined with aggregate data from the 2006 Structure of Earnings Survey. By means of probit and multinomial logit regressions, we document that migrants are, upon arrival, less likely to be employed relative to similar natives. On the contrary, their odds of being overeducated or holding a low-paying job are higher. There is, however, substantial heterogeneity between the different origin groups considered. Residence in Greece helps migrants to narrow the initial employment gap, whilst its impact on occupational mobility appears to be limited. The assimilation process of female migrants is much slower than that of their male counterparts. |
| Keywords: | Immigrant assimilation |
| JEL: | J60 J62 |
| Date: | 2023–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118351&r=lab |
| By: | Javier López Segovia |
| Abstract: | Households allocate around 40% of their budget to goods and services that are difficult to adjust, such as rents, mortgages, or mobile plans, which are called “commitments”. Only about 11% of households adjust the consumption of these goods every quarter. Commitments imply monthly payments that are hard to avoid and make employment and income fluctuations more costly. This paper analyzes the role of unemployment insurance in the presence of commitments using a heterogeneous agents search model with incomplete markets and unemployment shocks. The model is calibrated to the US data and matches key features of the US labor market. Using this framework, we show that the existence of commitment goods amplifies the effects of unemployment insurance on search effort and unemployment duration. Commitments also induce households to build larger precautionary savings. Morover, we show that welfare gains from elimating UI increase from 3.4% to 4.2% when commitments are considered. The optimal replacement rate is 57% in the benchmark economy, higher than the current US policy (50%). |
| Keywords: | unemployment, consumption commitments, precautionary savings, optimal unemployment insurance |
| JEL: | E2 H2 I38 J64 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_458&r=lab |
| By: | Dustmann, Christian (University College London); Ku, Hyejin (University College London); Surovtseva, Tetyana (New York University, Abu Dhabi) |
| Abstract: | We relate origin-destination real price differences to immigrants' reservation wages and their career trajectories, exploiting administrative data from Germany and the 2004 enlargement of the European Union. We find that immigrants who enter Germany when a unit of earnings from Germany allows for larger consumption at home settle for lower entry wages, but subsequently catch up to those arriving with less favourable exchange rates, through transition to better-paying occupations and firms. Similar patterns hold in the US data. Our analysis offers one explanation for the widespread phenomenon of immigrants' downgrading, with new implications for immigrant cohort effects and assimilation profiles. |
| Keywords: | real exchange rate, reservation wage, immigrant downgrading, earnings assimilation |
| JEL: | J24 J31 J61 O15 O24 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16390&r=lab |
| By: | Rich Ryan |
| Abstract: | Unemployment insurance provides temporary cash benefits to eligible unemployed workers. Benefits are sometimes extended by discretion during economic slumps. In a model that features temporary benefits and sequential job opportunities, a worker's reservation wages are studied when policymakers can make discretionary extensions to benefits. A worker's optimal labor-supply choice is characterized by a sequence of reservation wages that increases with weeks of remaining benefits. The possibility of an extension raises the entire sequence of reservation wages, meaning a worker is more selective when accepting job offers throughout their spell of unemployment. The welfare consequences of misperceiving the probability and length of an extension are investigated. In a numerical example, the costs of misperception are small, which has implications for policymakers considering economic slumps, virus pandemics, extreme heat, and natural disasters. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2308.09783&r=lab |
| By: | Zubanov, Nick (University of Konstanz); Shakina, Elena (University of Vigo) |
| Abstract: | Building on job matching theory, we model the effect of collective turnover on workplace performance as the total of its costs from operational disruptions and benefits from better job-worker match quality, each component varying with turnover level. The resulting theoretical turnover-performance relationship is generally curvilinear, nesting all the hitherto known patterns – linear, "U-shape" and "inverted U-shape" – as special cases, and lends itself to an empirically estimable regression model from which one can derive the implied costs and benefits of turnover. Applications to data from two retail firms reveal some benefits from turnover in one firm, and none in the other. Turnover costs exceed benefits in both firms. |
| Keywords: | employee turnover, performance |
| JEL: | J63 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16413&r=lab |
| By: | Dhamija, Gaurav; Roychowdhury, Punarjit; Shankar, Binay |
| Abstract: | The paper examines the short-term implications of urbanization on women empowerment in India. In theory, urbanization can affect women either positively or negatively. Women in urban areas, compared to their rural counterparts, are thought to enjoy greater social, economic, and political opportunities and freedoms. At the same time, research shows barriers to women's empowerment remain widespread in urban environments. We measure urbanization using satellite-based nighttime light intensity data. Fixed effects estimation results show that urbanization positively affects women's labor market participation, agency within households, mobility, access to information, and attitudes toward domestic violence (thereby making them more likely to report incidences of violence). However, the effect of urbanization on women's financial autonomy is negative, and on health is mixed. These results, we show, are robust to unmeasured confounders to a large extent. In light of the rapid urbanization that India is currently experiencing, the importance of these findings cannot be overemphasized. They suggest that while urbanization could go a long way toward economically empowering women in India, the government also needs to devise complementary policies and interventions that could tackle the adverse consequences of urban expansion. |
| Keywords: | Gender, India, Nighttime Lights, Urbanization, Women Empowerment |
| JEL: | J16 O12 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1323&r=lab |
| By: | Koh, Yumi (University of Seoul); Li, Jing (Singapore Management University); Wu, Yifan (Shanghai University); Yi, Junjian (Peking University); Zhang, Hanzhe (Michigan State University) |
| Abstract: | Young women outnumber young men in cities in many countries during periods of economic growth and urbanization. This gender imbalance among young urbanites is more pronounced in larger cities. We use the gradual rollout of special economic zones across China as a quasi-experiment to establish the causes of this gender imbalance. Our analysis suggests that a key contributor is gender-differential incentives to migrate due to rural women's higher likelihood of marrying and marrying up in cities when urbanization creates more economic opportunities and an abundance of high-income marriage-age men. |
| Keywords: | urbanization, migration, gender imbalance, labor market, marriage market |
| JEL: | O15 J12 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16353&r=lab |
| By: | Sebastian Galiani; Luis F. Jaramillo; Mateo Uribe-Castro |
| Abstract: | This paper examines the influence of transportation infrastructure on migration decisions in the context of the Great Migration in the United States. Focusing on the opening of the Panama Canal in 1920, we isolate the effect of improved economic opportunities from reduced migration costs. Using full-count Census data, we find that Southern African American migrants preferred areas with enhanced market access, leading to higher inflows after 1920. The study highlights the inter- play between migrant networks and labor markets in shaping migration patterns. Our findings underscore the significance of local market conditions induced by improvements in local market access in influencing migration decisions during the Great Migration. |
| JEL: | J16 N32 N72 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31551&r=lab |
| By: | Anna Belianska |
| Abstract: | I examine the impact of macroeconomic uncertainty on labor market outcomes for skilled and unskilled workers and propose a new channel to improve our understanding of the underlying propagation mechanisms. I find that uncertainty shocks are recessionary with the unskilled experiencing a steeper fall in employment. To rationalize these findings, I build a New Keynesian DSGE model with skill heterogeneity and wage rigidities, which, coupled with precautionary labor supply, significantly amplify contractionary effects of uncertainty on the real economy. |
| Keywords: | Stochastic volatility; Capital-skill complementarity; Relative wages; Skill premium. |
| Date: | 2023–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2023/155&r=lab |
| By: | De Brouwer, Octave (Free University of Brussels); Tojerow, Ilan (Free University of Brussels) |
| Abstract: | Between 2005 and 2020, Belgium experienced a significant rise in the recipiency rate of long-term disability insurance (DI), rising from 3.5% to 6.8%. In this paper, we examine the potential factors driving this increase by exploiting administrative micro-level data covering the Belgian population from 2005 to 2015. Our analysis reveals that changes in observable characteristics, such as age, labor market participation among some groups of workers, and several job characteristics, can only marginally account for the increase in the long-term DI entry rate between 2005 and 2015. We also find evidence suggesting that reforms in unemployment insurance over the past two decades have contributed to the rise in the DI entry rate from unemployment. Finally, drawing on the literature on optimal DI policy, we discuss potential reforms aimed at decreasing the Belgian DI recipiency rate. |
| Keywords: | social insurance, disability insurance, unemployment insurance |
| JEL: | H53 H55 J65 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16376&r=lab |
| By: | Papps, Kerry L. (University of Bradford); Bryson, Alex (University College London); Reade, J. James (University of Reading) |
| Abstract: | Drawing on 28 million observations on people's running times in a free weekly 5 kilometre running event, Parkrun, we examine whether labour market conditions affect fitness. Running times improve during recessions for men and women aged 50 and above but worsen for men aged 20-49 and women aged 20-29, suggesting that the fall in the opportunity costs of fitness during recessions is the dominant factor for elderly runners, whereas the income effect induced by unemployment dominates for prime age workers. Participation in Parkrun is not sensitive to the business cycle so our results are not driven by compositional changes. |
| Keywords: | business cycle, health, fitness, Parkrun |
| JEL: | I12 I30 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16410&r=lab |
| By: | Duncan, Brian (University of Colorado Denver); Trejo, Stephen (University of Texas at Austin) |
| Abstract: | The authors explore unique complete-count data from the 1930 Census in which a respondent's race was assigned by enumerators and "Mexican" was one of the possible responses. Census enumerators frequently and selectively assigned a non-Mexican race— predominantly "white"—to U.S.-born individuals of Mexican ancestry. As a result, using enumerator-assigned race to identify Mexican Americans misses a sizeable fraction of the relevant population and significantly understates this group's socioeconomic attainment. The propensity for Census enumerators to identify Mexican Americans as white varied enormously across U.S. counties, and this variation is strongly associated with both the educational attainment of U.S.-born Mexican Americans observed in the 1940 Census and the amount of return migration by Mexican immigrants during the 1930s. As such, this variation may help to identify local environments that were more favorable for the integration of Mexican Americans. |
| Keywords: | race, ethnicity, Mexican Americans, immigrant assimilation, intergenerational progress |
| JEL: | J15 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16402&r=lab |
| By: | Shanfei Zhang (University of East Anglia) |
| Abstract: | I analyze the influence of Chinese internal migration on the local labor market outcomes. In this presentation, both linear and quadratic equations are estimated to explore a comprehensive relationship between migrant share and native workers' wages in a city. My findings are twofold. In the ordinary least-squares regression model, every 10% increase in immigrants would lead to a 5.67% decrease in local labor wages. However, in the nonlinear model a turning point is observed. The average wage level decreases when the migrant share is lower than 27.82%, while increases with the migrant share larger than 27.82% are complementary, by IV regression. |
| Date: | 2023–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:boc:fsug23:11&r=lab |
| By: | Ylenia Brilli (Department of Economics, University Of Venice CÃ Foscari); Simone Moriconi (IESEG School of Management, Univ. Lille, CNRS, UMR 9221 - LEM - Lille Economie Management, F-59000 Lille, France; CESIfo Munich; Institut Convergences Migrations) |
| Abstract: | This paper analyzes how a cultural trait that values “engagement†in child-rearing activities affects the choice of parents concerning parental investments and labor supply. We use data from the World Value Survey to construct a country-specific measure of parental engagement, which we associate with the time investments in children of first- and second-generation migrants in Australia. We show that migrant parents from more engaged cultures increase their time investment during weekends, in particular in play activities, while spending less time with their children during working days. We also show that these parents are more affectionate and are more likely to discipline the children and to reason about their children’s misbehavior than individuals from less engaged cultures. Finally, we provide evidence that culture specific parental engagement features a more egalitarian allocation of parenting vs. labor supply tasks by the couple. We interpret this as indirect evidence that fathers may have a greater marginal utility from parenting time than mothers, on average. |
| Keywords: | culture, parental investments, parenting, labor supply |
| JEL: | D10 J13 J15 J22 Z13 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2023:17&r=lab |
| By: | Meccheri, Nicola |
| Abstract: | In an international duopoly with two markets and two ports, this paper investigates the role of dockworkers unionisation in affecting welfare outcomes under public and private ports, as well as in determining the endogenous choice by governments of port ownership structure. While private ports maximise profits, public ports maximise domestic welfare and face a budget constraint, which is binding when unions are suf- ficiently wage-oriented and shipping costs are not too high. Consumer surplus, total wage bill and domestic welfare are generally higher under public ownership, especially when unions are wage-oriented. The opposite holds true for firm profits, whilst privati- sation always increases port profits. Moreover, relative to endogenous port ownership structures, state-owned ports appear as the most likely equilibrium result although all possible configurations may arise in equilibrium, including an asymmetric structure with a state-owned port and a private port. |
| Keywords: | unionised dockworkers, port ownership structure, international duopoly, welfare outcomes |
| JEL: | F16 J51 L33 R48 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1326&r=lab |
| By: | Rainer Kotschy; David E. Bloom |
| Abstract: | This paper examines the extent to which changes in working-age shares associated with population aging might slow economic growth in upcoming years. We first analyze the economic effects of changing working-age shares in a standard empirical growth model using country panel data from 1950–2015. We then juxtapose the estimates with predicted shifts in population age structure to project economic growth in 2020–2050. Our results indicate that population aging will slow economic growth throughout much of the world. Expansions of labor supply due to improvements in functional capacity among older people can cushion much of this demographic drag. |
| JEL: | I15 J11 O11 O47 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31585&r=lab |
| By: | Ellis Scharfenaker; Markus P. A. Schneider |
| Abstract: | In this paper, we present new findings that validate earlier literature on the apparent segmentation of the US earnings distribution. Previous contributions posited that the observed distribution of earnings combined two or three distinct signals and was thus appropriately modeled as a finite mixture of distributions. Furthermore, each component in the mixture appeared to have distinct distributional features hinting at qualitatively distinct generating mechanisms behind each component, providing strong evidence for some form of labor market segmentation. This paper presents new findings that support these earlier conclusions using internal CPS ASEC data spanning a much longer study period from 1974 to 2016. The restricted-access internal data is not subject to the same level of top-coding as the public-use data that earlier contributions to the literature were based on. The evolution of the mixture components provides new insights about changes in the earnings distribution including earnings inequality. In addition, we correlate component membership with worker type to provide a tacit link to various theoretical explanations for labor market segmentation, while solving the problem of assigning observations to labor market segments a priori. |
| Keywords: | Inequality, Income Distribution, Mixture Model |
| JEL: | C16 J01 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:23-41&r=lab |
| By: | Fairlie, Robert W. (University of California, Los Angeles) |
| Abstract: | Many small businesses closed in the pandemic, but were economic losses disproportionately felt by businesses owned by people of color? This paper provides the first study of the impacts of COVID-19 on racial inequality in business earnings. Pandemic-induced losses to business earnings in 2020 were 16-19 percent for all business owners. Racial inequality increased in the pandemic: Black business owners experienced larger negative impacts on business earnings of 12-14 percent relative to white business owners. Regression estimates for Latinx and Asian business owners reveal negative point estimates but the estimates are not statistically significant. Using Blinder-Oaxaca decompositions and a new pandemic-focused decomposition technique, I find that the industry concentrations of Black, Latinx, and Asian business owners placed each of these groups at a higher risk of experiencing disproportionate business earnings losses in the pandemic. Higher education levels among Asian business owners helped insulate them from larger losses from COVID-19. In the following year of economic recovery, 2021, business earnings rebounded strongly for all groups except for Asian business owners who experienced large relative losses (which were partly due to industry concentrations). State-level variation in policies and disease spread does not explain racial differences in business earnings losses or rebounds. |
| Keywords: | entrepreneurship, COVID-19, racial inequality, business earnings, pandemic |
| JEL: | L26 J15 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16412&r=lab |
| By: | Allen N. Berger; Maryann P. Feldman; W. Scott Langford; Raluca Roman |
| Abstract: | Minority-owned banks have a mission to promote economic well-being in their communities. In particular, specialization in lending based on a central mechanism of shared-minority identity can yield an advantage in serving community needs through times of financial and economic crises. To test this proposition, we analyze individual banks in their local market context from 2006 to 2020. Results suggest minority-owned banks improve economic resilience in their communities during the global financial crisis (GFC) and the COVID-19 crisis through increased small business and household lending, but fewer benefits are found during other phases of the business cycle. Our results are robust and stand up to treatments of identification concerns, including propensity score matching (PSM) and instrumental variables (IV). Our results imply that if all U.S. banks behaved in a manner consistent with minority-owned banks through the GFC, at least 1.9 million more minority jobs would have been maintained and at least $50 billion more in credit would have been available to small businesses on an annual basis. These findings are consistent with predictions of the economic resilience literature but not those of the finance-growth nexus literature. |
| Keywords: | minority-owned banks; minority employment; community banking; crises; economic resilience; small business credit; household credit; shared-minority identity |
| JEL: | G01 G21 J15 J21 O12 |
| Date: | 2023–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:96382&r=lab |