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on Labour Economics |
| By: | McGee, Andrew (University of Alberta, Department of Economics); McGee, Peter (University of Arkansas) |
| Abstract: | Women report setting lower reservation wages than men in survey data. We show that women set reservation wages that are 14 to 18 percent lower than men’s in laboratory search experiments that control for factors not fully observed in surveys such as offer distributions and outside options. This gender gap — which exists even controlling for overconfidence, preferences, personality, and intelligence — leads women to spend less time searching than men while accepting lower wages. Women — but not men — set reservation wages that are too low relative to theoretically optimal values given their risk preferences early in search, reducing their earnings. |
| Keywords: | reservation wages; gender wage gaps; search experiments |
| JEL: | C91 J16 J64 |
| Date: | 2023–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2023_011&r=lab |
| By: | Paul Bingley; Lorenzo Cappellari; Marco Ovidi |
| Abstract: | We investigate the stages of childhood at which parental job loss is most consequential for their child’s education. Using Danish administrative data linking parents experiencing plant closures to their children, we compare end-of-school outcomes to matched peers and to closures hitting after school completion age. Parental job loss disproportionally reduces test taking, scores, and high school enrolment among children exposed during infancy (age 0-1). Effects are largest for low-income families and low-achieving children. The causal chain from job loss to education likely works through reduced family income. Maternal time investment partially offsets the effect of reduced income |
| Keywords: | Parental labor market shocks; Intergenerational mobility; Child development |
| JEL: | D10 J13 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2023-12&r=lab |
| By: | Claudia Macaluso |
| Abstract: | This paper quantifies how the local skill remoteness of a laid-off worker’s last job affects subsequent wages, employment, and mobility rates. Local skill remoteness captures the degree of dissimilarity between the skill profiles of the worker’s last job and all other jobs in a local labor market. I implement a measure of local skill remoteness at the occupation-city level and find that higher skill remoteness at layoff is associated with persistently lower earnings after layoff. Earnings differences between workers whose last job was above or below median skill remoteness amount to a loss of more than $10, 000 over 4 years, and are mainly accounted for by lower wages upon re-employment (not lower hours worked). Workers who lost a skill-remote job also have a higher probability of changing occupation, a lower probability of being re-employed at jobs with similar skill profiles, and a higher propensity to migrate to another city after layoff. Finally, I show that jobs destroyed in recessions are more skill-remote than those lost in booms. Taking all these facts together, I conclude that the local skill remoteness of jobs is an empirically relevant factor to understand the severity and cyclicality of displaced workers’ earnings losses and reallocation patterns. |
| Keywords: | mismatch, job loss, worker reallocation, occupational change, migration |
| JEL: | E24 J24 J63 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10845&r=lab |
| By: | Chrostek, Paweł (Ministry of Finance; Institute of Economics); Karbownik, Krzystof (Department of Economics, Emory University); Myck, Michał (Centre for Economic Analysis) |
| Abstract: | Using population-level administrative data, we document effects of changes in age-specific employment protection legislation (EPL) on labor market outcomes of those approaching eligibility. Our results show no economically meaningful overall effects of the legislation on employment or earnings of either men or women. Considering separately incumbent workers and non-employees we find small positive and small negative employment effects for the former and the latter groups, respectively. The positive employment effects are likely to reflect additional effort exerted to remain employed up to the coverage threshold. |
| Keywords: | employment protection; retirement |
| JEL: | J00 |
| Date: | 2024–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:mfplwp:0041&r=lab |
| By: | Vojtech Bartos (University of Milan); Silvia Castro (LMU Munich); Kristina Czura (University of Groningen); Timm Opitz (Max Planck Institute for Innovation and Competition) |
| Abstract: | We analyze gender discrimination in entrepreneurship finance. Access to finance is crucial for entrepreneurial success, yet constraints for women are particularly pronounced. We structurally unpack whether loan officers evaluate business ideas and implementation constraints differently for male and female entrepreneurs, both as individual entrepreneurs or in entrepreneurial teams. In a lab-in-the-field experiment with Ugandan loan officers, we document gender discrimination of individual female entrepreneurs, but no gender bias in the evaluation of entrepreneurial teams. Our results suggest that the observed bias is not driven by animus against female entrepreneurs but rather by differential beliefs about women’s entrepreneurial ability or implementation constraints in running a business. Policies aimed at team creation for start-up enterprises may have an additional benefit of equalizing access to finance and ultimately stimulating growth. |
| Keywords: | access to finance; gender bias; entrepreneurship; lab-in-the-field; |
| JEL: | C93 G21 J16 L25 L26 O16 |
| Date: | 2023–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:473&r=lab |
| By: | Dodini, Samuel (Dept. of Economics, Norwegian School of Economics and Business Administration); Willén, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration); Zhu, Julia Li (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | We examine if unions narrow or widen labor market gaps between natives and immigrants. We do so by combining rich Norwegian employer-employee matched register data with exogenous variation in union membership obtained through national government policies that differentially shifted the cost to workers to join a union. While union membership significantly improves the wages of natives, its positive effects diminish substantially for Western immigrants and disappear almost entirely for non-Western immigrants. The effect of unions on native wages, and the role of unions in augmenting the native-immigrant wage gap, is nonexistent in competitive labor markets while it is substantial in markets characterized by a high degree of labor concentration. This implies that unions act as a countervailing force to employer power in imperfect markets and can ameliorate the negative labor market effects of labor market concentration, but only for natives. Using unions as a means to empower workers and solve market failures caused by imperfect competition in the labor market, therefore, is likely to lead to a significant increase in societal inequality. |
| Keywords: | Unions; Migration; Inequality |
| JEL: | J10 J50 J60 |
| Date: | 2023–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2023_024&r=lab |
| By: | Marguerite Obolensky; Marco Tabellini; Charles Taylor |
| Abstract: | This paper introduces the concept of “climate matching” as a driver of migration and establishes several new results. First, we show that climate strongly predicts the spatial distribution of immigrants in the US, both historically (1880) and more recently (2015), whereby movers select destinations with climates similar to their place of origin. Second, we analyze historical flows of German, Norwegian, and domestic migrants in the US and document that climate sorting also holds within countries. Third, we exploit variation in the long-run change in average US climate from 1900 to 2019 and find that migration increased more between locations whose climate converged. Fourth, we verify that results are not driven by the persistence of ethnic networks or other confounders, and provide evidence for two complementary mechanisms: climate-specific human capital and climate as amenity. Fifth, we back out the value of climate similarity by: i) exploiting the Homestead Act, a historical policy that changed relative land prices; and, ii) examining the relationship between climate mismatch and mortality. Finally, we project how climate change shapes the geography of US population growth by altering migration patterns, both historically and into the 21st century. |
| JEL: | J15 J61 N31 N32 Q54 R11 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32035&r=lab |
| By: | Philipp, Marie-Fleur (University of Tübingen); Büchau, Silke (University of Tübingen); Schober, Pia S. (University of Tübingen); Werner, Viktoria (University of Tübingen); Spieß, C. Katharina (Bundesinstitut für Bevölkerungsforschung (BiB)) |
| Abstract: | Not only the quantity of formal daycare provision for young children, but also its quality has become an issue of political concern. This experimental study investigates how a hypothetical improvement in the quality of daycare facilities shapes normative judgements regarding daycare use and working hours norms for parents with young children in Germany. The analysis is framed using capability-based explanations combined with theoretical concepts of ideals of care and normative policy feedback theories. We draw on a factorial survey experiment implemented in 2019/2020 in the German Family Panel (pairfam) measuring underlying work-care norms for a couple with a 15-month-old child under different contextual conditions. Ordered logistic and linear multilevel regressions were conducted with 5, 324 respondents. On average, high hypothetical daycare quality for young children leads respondents to recommend greater daycare use and longer working hours for mothers and fathers by about 1 hour per week. Respondents who hold more egalitarian gender beliefs, those with tertiary education, native Germans and parents tend to respond more strongly to higher daycare quality by increasing their support for full-daycare use. The results consistently point to the relevance of high quality for increasing the acceptance and subsequently take-up of formal daycare. |
| Keywords: | work-care norms, gender beliefs, care ideals, early childhood education and care, daycare, childcare, factorial survey, pairfam, Germany |
| JEL: | I2 J13 J16 J22 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16729&r=lab |
| By: | Garstenauer, Viola; Siassi, Nawid |
| Abstract: | In this paper, we examine reforms that alleviate large employment disincentives induced by child-related transfers for married mothers. We develop a life-cycle model where married couples face labor market, child care and fertility risk, and make joint labor supply and consumption-saving decisions. The evolution of female human capital is endogenous and shaped by mothers’ employment decisions. We calibrate the model to the U.S. using data from the Current Population Survey. We show that participation tax rates exceed 25 percent for most mothers in our sample, and can be as high as 60 percent when including child care expenses. We then evaluate reforms to existing tax credits for working couples. We find that (i) expanding child care tax credits and (ii) introducing a secondary earner EITC deduction lead to substantially higher employment rates among married mothers. Both reforms are easily implementable, self-financing, and welfare-improving. A combination of both reforms closes the maternal employment gap altogether. |
| Keywords: | Family labor supply, Child-related transfers, Income taxation |
| JEL: | H24 H31 J12 J22 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuweco:281162&r=lab |
| By: | Patricia Cortés; Ying Feng; Nicolás Guida-Johnson; Jessica Pan |
| Abstract: | We examine the differential effects of automation on the labor market and educational outcomes of women relative to men over the past four decades. Although women were disproportionately employed in occupations with a high risk of automation in 1980, they were more likely to shift to high-skill, high-wage occupations than men in over time. We provide a causal link by exploiting variation in local labor market exposure to automation attributable to historical differences in local industry structure. For a given change in the exposure to automation across commuting zones, women were more likely than men to shift out of routine task-intensive occupations to high-skill, high wage occupations over the subsequent decade. The net effect is that initially routine-intensive local labor markets experienced greater occupational gender integration. College attainment among younger workers, particularly women, also rose significantly more in areas more exposed to automation. We propose a model of occupational choice with endogenous skill investments, where social skills and routine tasks are q-complements, and women have a comparative advantage in social skills, to explain the observed patterns. Supporting the model mechanisms, areas with greater exposure to automation experienced a greater movement of women into occupations with high social skill (and high cognitive) requirements than men. |
| JEL: | J16 J24 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32030&r=lab |
| By: | Anna Maria Mayda; Mine Z. Senses; Walter Steingress |
| Abstract: | Using U.S. county-level data from 1990 to 2010, we study the causal impact of immigration on the provision of local public goods. We uncover substantial heterogeneity across immigrants with different skills, mainly due to the asymmetric impact immigrants have on the per capita tax base and local revenues. In the absence of full insurance through intergovernmental transfers, the changes in per capita revenues are reflected in changes in the provision of local public services: per capita public expenditures decrease with the arrival of low-skilled immigrants and increase with the arrival of high-skilled immigrants. While the two types of immigrants offset each other on average, spatial differences in the population shares of low- and high-skilled immigrants lead to unequal fiscal effects across U.S. counties. We find the estimated impact to differ across various public services and for second-generation immigrants. |
| Keywords: | Fiscal policy; International topics; Regional economic developments |
| JEL: | F22 H41 H7 J61 J68 R5 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:23-57&r=lab |
| By: | BAI Yu; TANAKA Ryuichi |
| Abstract: | This paper investigates whether a relaxation-oriented educational approach can lead to either improved or worsened labor market outcomes. By examining individuals born in the same year but with varying durations of exposure to the relaxation-oriented curriculum of the 1980s in Japan, we analyze the impact of this curriculum on their performance in the labor market. Our findings reveal that individuals exposed to more years of a relaxed education tended to achieve less favorable outcomes, including lower earnings, a higher likelihood of unemployment, and reduced chances of securing full-time employment. This study also explores the potential mechanisms contributing to their suboptimal performance, highlighting lower educational attainment and relatively low probability to work as skilled workers. Importantly, our results remain robust even after controlling for other potential explanations and withstand various sensitivity tests. |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:24003&r=lab |
| By: | Atencio-De-Leon, Andrea (International Monetary Fund); Lee, Munseob (University of California, San Diego); Macaluso, Claudia (Federal Reserve Bank of Richmond) |
| Abstract: | We design, pilot, and field a new survey of occupational skills in Peru, to investigate human capital differences between poor and rich countries. Though the average skill level is comparable, Peruvian jobs have markedly more uniform skill profiles than jobs in the US. However, matching frictions are no more severe than in the US, and recruiting technology is largely equivalent as well. A model with complementarities in production offers a plausible explanation. Uncertainty about labor availability, more pronounced in poor countries' turbulent labor markets, destabilizes production. This generates an endogenous labor demand preference for unspecialized workers. |
| Keywords: | cross-country productivity differences, human capital, labor reallocation |
| JEL: | E24 O11 O47 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16671&r=lab |
| By: | Beetsma, Roel (University of Amsterdam); Jensen, Svend E. Hougaard (Department of Economics, Copenhagen Business School); Pinkus, David (Department of Economics, Copenhagen Business School); Pozzoli, Dario (Department of Economics, Copenhagen Business School) |
| Abstract: | We have constructed a comprehensive dataset that integrates ownership information with Danish registers, enabling us to empirically document a significant relationship between pension fund equity investment and firm productivity. Following such an investment, we observe a substantial increase in firm productivity, averaging between 3% and 5%. This finding is robust and persists across various methodological considerations, including selection issues and a broad array of refinements, such as controlling for the firm’s status as an exporter and the types of co-investors. The productivity effect increases with the equity stake. Additionally, we find that pension funds tend to invest for longer periods than other institutional investors, such as private equity. Consistent with this fact, the estimated productivity increase is positively correlated with the duration of the equity investment by pension funds. Furthermore, the productivity increase is particularly pronounced for unlisted and small firms. These combined findings are consistent with pension funds engaging in long-term financing commitments and alleviating financial constraints on firms, enabling them to make productivity-enhancing investments. Our results suggest that public policies aimed at stimulating pension funding and encouraging pension fund equity holdings could enhance the productivity of the economy. |
| Keywords: | pension funds; productivity; equity; structural estimation |
| JEL: | D22 D24 G32 |
| Date: | 2024–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2024_002&r=lab |
| By: | J. Carter Braxton; Nisha Chikhale; Kyle F. Herkenhoff; Gordon M. Phillips |
| Abstract: | We combine the Decennial Census, credit reports, and administrative earnings to create the first panel dataset linking parent’s credit access to the labor market outcomes of children in the U.S. We find that a 10% increase in parent’s unused revolving credit during their children’s adolescence (13 to 18 years old) is associated with 0.28% to 0.37% greater labor earnings of their children during early adulthood (25 to 30 years old). Using these empirical elasticities, we estimate a dynastic, defaultable debt model to examine how the democratization of credit since the 1970s – modeled as both greater credit limits and more lenient bankruptcy – affected intergenerational mobility. Surprisingly, we find that the democratization of credit led to less intergenerational mobility and greater inequality. Two offsetting forces underlie this result: (1) greater credit limits raise mobility by facilitating borrowing and investment among low-income households; (2) however, more lenient bankruptcy policy lowers mobility since low-income households dissave, hit their constraints more often, and reduce investments in their children. Quantitatively, the democratization of credit is dominated by more lenient bankruptcy policy and so mobility declines between the 1970s and 2000s. |
| JEL: | D14 E21 J13 J24 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32031&r=lab |