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on Labor Markets - Supply, Demand, and Wages |
| By: | Thorben Korfhage |
| Abstract: | In this paper, I estimate a dynamic structural model of labor supply, retirement, and informal care supply, incorporating labor market frictions and the German tax and benefit system. I find that informal elderly care has adverse and persistent effects on labor market outcomes and therefore negatively affects lifetime earnings, future pension benefits, and individuals’ well-being. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that, even though fiscally costly, public long-term care insurance can offset the personal costs of caregiving to a large extent – in particular for low-income individuals. |
| Keywords: | long-term care; informal care; long-term care insurance; labor supply; retirement; pension benefits; structural model |
| JEL: | I18 I38 J14 J22 J26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1051&r=all |
| By: | Erica M. Field; Leigh L. Linden; Ofer Malamud; Daniel Rubenson; Shing-Yi Wang |
| Abstract: | This paper estimates the impact of admission to formal vocational secondary programs on labor market outcomes in Mongolia. We conducted public lotteries to allocate scarce slots for approximately 8,000 students who applied to oversubscribed trades in 10 vocational schools during 2010, 2011, and 2012. We find that admission to oversubscribed vocational schools in Mongolia led to significantly higher employment, and increased earnings for women. These positive impacts appear to be due to the acquisition of more skills in specific trades, greater work intensity, and increased employment opportunities in high-paying sectors. |
| JEL: | I25 J24 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26092&r=all |
| By: | Di Meglio, Gisela; Barge-Gil, Andrés; Camiña, Ester; Moreno, Lourdes |
| Abstract: | Undergraduate internships have gained popularity among students, universities, government and firms since the creation of the European Higher Education Area. However, empirical research on the relationship between internships and labour market performance of graduates is still scarce, particularly in Spain. This paper examines whether internships improve the job attainment in the short run (first employment after graduation) and in the medium /long term (employment four years later). We use the first Spanish University Graduate Job Placement Survey (2014) to estimate linear probability models and probit models. A novel econometric technique is also implemented to evaluate the sensitivity of our findings to omitted variable bias. We disentangle the internship effect on: (i) the speed to find the first job; (ii) the vertical, horizontal and skill/competence matching with the first job; (iii) being employed in the medium/ long term; (iv) the vertical and horizontal matching with the current employment; and (v) wage quintiles of the current job. Our results show that the internship experience smooths the university-to-work transition for Spanish graduates. Although internships effects on employment do not vanish in the medium/long term, there is weak evidence of positive effects on matching or wages four years after graduation. |
| Keywords: | Internships, employment, job attainment, Spain |
| JEL: | C21 J21 J22 J40 |
| Date: | 2019–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95712&r=all |
| By: | Araya, Federico; Le Barbanchon, Thomas; Ubfal, Diego |
| Abstract: | We provide the first estimates of the effects of working while in school that use controlled random variation in job offers. We leverage a Uruguayan program offering 9-to-12-month part-time employment in state-owned companies by lottery to enrolled students. Using social security data matched to the universe of over 120,000 applicants, we estimate a 9% increase in earnings over the four post-program years for youth completing a program job. We find large positive effects on school enrollment during the program year, consistent with the conditionality of the program and smaller effects in the post-program years. Our time-use survey indicates that students substitute leisure and household chores with work, without significant reductions in studying time. Finally, a decomposition of the earnings effect shows that accumulation of work experience can explain the majority of the increase in earnings. |
| Keywords: | randomized lottery; student employment |
| JEL: | I21 I28 J08 J22 J24 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13826&r=all |
| By: | Cornwell, Christopher; Schmutte, Ian M.; Scur, Daniela |
| Abstract: | Firms' hiring and firing decisions affect the entire labor market. Managers often make these decisions, yet the effects of management on labor allocation remains largely unexplored. To study the relationship between a firm's management practices and how it recruits, retains and dismisses its employees, we link a survey of firm-level management practices to production and employee records from Brazil. We find that firms using structured management practices consistently hire and retain better workers, and fire more selectively. Good production workers match with firms using structured personnel management practices. By contrast, better managers match with firms using structured operations management practices. |
| Keywords: | labor allocation; Management Practices; Managers; productivity |
| JEL: | D22 J31 M11 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13908&r=all |
| By: | Blanas, Sotiris; Gancia, Gino; Lee, Sang Yoon (Tim) |
| Abstract: | We study how various types of machines, namely, information and communication technologies, software, and especially industrial robots, affect the demand for workers of different education, age, and gender. We do so by exploiting differences in the composition of workers across countries, industries and time. Our dataset comprises 10 high-income countries and 30 industries, which span roughly their entire economies, with annual observations over the period 1982-2005. The results suggest that software and robots reduced the demand for low and medium-skill workers, the young, and women - especially in manufacturing industries; but raised the demand for high-skill workers, older workers and men - especially in service industries. These findings are consistent with the hypothesis that automation technologies, contrary to other types of capital, replace humans performing routine tasks. We also find evidence for some types of workers, especially women, having shifted away from such tasks. |
| Keywords: | automation; employment; labor demand; Labor Income Share; robots |
| JEL: | J21 J23 O33 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13802&r=all |
| By: | Yusuf Emre Akgunduz; Altan Aldan; Yusuf Kenan Bagir; Huzeyfe Torun |
| Abstract: | The minimum wages in Turkey rose by nearly 30% in January 2016. We investigate the impact of the increase in minimum wages on export value and prices of firms. We use administrative employee-employer matched firm and transaction level customs data for the analysis. We calculate the potential exposure of each firm to the minimum wage increase according to their 2015 employment records and estimate the effects using a difference-in-differences approach. The results show that there is no significant effect on export prices suggesting that Turkish exporters are price-takers in international trade and producer costs have little effect on export prices in the short run. The impact on export amount is varying across firms depending on the firm size. |
| Keywords: | Minimum wages, Labor costs, Exports |
| JEL: | J23 J38 F14 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1920&r=all |
| By: | Stephany, Fabian; Lorenz, Hanno |
| Abstract: | The uniqueness of human labour is at question in times of smart technologies. The 250 years-old discussion on technological unemployment reawakens. Frey and Osborne (2013) estimate that half of US employment will be automated by algorithms within the next 20 years. Other follow-up studies conclude that only a small fraction of workers will be replaced by digital technologies. The main contribution of our work is to show that the diversity of previous findings regarding the degree of job automation is, to a large extent, driven by model selection and not by controlling for personal characteristics or tasks. For our case study, we consult Austrian experts in machine learning and industry professionals on the susceptibility to digital technologies in the Austrian labour market. Our results indicate that, while clerical computer-based routine jobs are likely to change in the next decade, professional activities, such as the processing of complex information, are less prone to digital change. |
| Keywords: | Classification,Employment,GLM,Technological Change |
| JEL: | E24 J24 J31 J62 O33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:202035&r=all |
| By: | Bradley Setzler; Felix Tintelnot |
| Abstract: | Governments go to great lengths to attract foreign multinational enterprises because these enterprises are thought to raise the wages paid to their employees (direct effects) and to improve outcomes at incumbent local firms (indirect effects). We construct the first U.S. employer-employee dataset with foreign ownership information from tax records to measure these direct and indirect effects. We find the average direct effect of a foreign multinational firm on its U.S. workers is a 7 percent increase in wages. This premium is larger for higher skilled workers and for the employees of firms from high GDP per capita countries. We leverage the past spatial clustering of foreign-owned firms by country of ownership to identify the indirect effects. An expansion in the foreign multinational share of commuting zone employment substantially increases the employment, value added, and—for higher earning workers—wages at local domestic-owned firms. Per job created by a foreign multinational, our estimates suggest annual gains of 16,000 USD to the aggregate wages of local incumbents, of which about two-thirds is due to indirect effects. We compare our findings to the value of subsidy deals received by foreign multinationals. |
| JEL: | F23 J3 R1 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26149&r=all |
| By: | Gisela Di Meglio (Complutense University of Madrid, Department of Economic Analysis, ICAE and GRIPICO.); Andrés Barge-Gil (Complutense University of Madrid, Department of Economic Analysis, ICAE and GRIPICO.); Ester Camiña (Complutense University of Madrid, Department of Economic Analysis and ICAE.); Lourdes Moreno (Complutense University of Madrid, Department of Economic Analysis and GRIPICO.) |
| Abstract: | Las prácticas académicas externas (PAEs) han ganado mucha popularidad entre los estudiantes, universidades, gobiernos y empresas desde la creación del Espacio Europeo de Educación Superior. Sin embargo, la evidencia empírica acerca de la relación entre las PAEs y la inserción laboral de los graduados es todavía muy escasa, particularmente en España. Este trabajo analiza si las PAEs mejoran los resultados en el mercado laboral tanto en el corto plazo (primer empleo después de graduarse) como en el medio/largo plazo (empleo 4 años después de la graduación). Para ello, se estiman modelos de probabilidad lineal y modelos probit a partir de los datos de la Encuesta de Inserción Laboral de los Titulados Universitarios 2014 del INE. Adicionalmente se implementa una técnica econométrica novedosa para evaluar la sensibilidad de los resultados al sesgo de variables omitidas en las estimaciones. En concreto, se analiza el efecto de las PAEs en: (i) la velocidad de encontrar el primer empleo; (ii) la adecuación horizontal, vertical y de habilidades técnicas con el primer empleo; (iii) la probabilidad de estar empleado en el medio y largo plazo; (iv) la adecuación horizontal y vertical con el empleo actual; y (v) los quintiles de salario del empleo actual. Los resultados muestran que las prácticas académicas en empresas suavizan y favorecen la transición de la universidad al mercado laboral de los graduados españoles. Aunque los efectos de las PAEs no desaparecen totalmente en el medio y largo plazo, existe una débil evidencia de efectos positivos en la adecuación al trabajo actual y en los salarios de los graduados tras 4 años de graduación. |
| Abstract: | Undergraduate internships have gained popularity among students, universities, government and firms since the creation of the European Higher Education Area. However, empirical research on the relationship between internships and labour market performance of graduates is still carce, particularly in Spain. This paper examines whether internships improve the job attainment in the short run (first employment after graduation) and in the medium /long term (employment four years later). We use the first Spanish University Graduate Job Placement Survey (2014) to estimate linear probability models and probit models. A novel econometric technique is also implemented to evaluate the sensitivity of our findings to omitted variable bias. We disentangle the internship effect on: (i) the speed to find the first job; (ii) the vertical, horizontal and skill/competence matching with the first job; (iii) being employed in the medium/ long term; (iv) the vertical and horizontal matching with the current employment; and (v) wage quintiles of the current job. Our results show that the internship experience smooths the university-to-work transition for Spanish graduates. Although internships effects on employment do not vanish in the medium/long term, there is weak evidence of positive effects on matching or wages four years after graduation. |
| Keywords: | Prácticas académicas externas en empresa; Empleo; Inserción laboral; España.; Internships; Employment; Job attainment; Spain. |
| JEL: | J21 J22 J40 C21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doctra:19-02&r=all |
| By: | Kenta Kojima (Assistant Professor, Faculty of Economics, Kansai University); Katsuya Takii (Professor, Osaka School of International Public Policy (OSIPP), Osaka University) |
| Abstract: | This paper develops a novel method that assigns a job a value to capture both the likelihood and speed of promotion from each job to a top executive and applies it to investigate the career paths of bureaucrats in Japan. We find that outwardly similar jobs within the same hierarchical rank, estimated using the standard method in Baker, Gibbs, and Holmstrom (1994), have very different opportunities to be promoted to a top executive. We can also detect frequent real demotions and the presence of early selection (read fast track) of elite bureaucrats unable to be detected through use of hierarchical rank. |
| Keywords: | Human Internal labor market; Career paths; Promotion; Fast track; Bureaucracy |
| JEL: | M51 J41 H83 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:19e008&r=all |
| By: | Shing-Yi Wang |
| Abstract: | Combining eight years of panel data with an event study approach, we show that rural Chinese women's labor supply falls for one year following the birth of a daughter before returning to their pre-birth levels. The negative impact of the birth of a son on women's labor supply is much larger in magnitude and persists for four years. We also find that households reduce their cigarette consumption more following the arrival of a boy than a girl. Furthermore, there is an increase in the mother's probability of being in school, her leisure time, and her participation in household decision-making following the birth of boys relative to daughters. There is no evidence of increases in investments in boys that would be complementary to mothers' time, such as breastfeeding, immunizations or consumption of milk or meat. Together, these results are consistent with the idea that mothers are rewarded for giving birth to boys, leading them to have more leisure and work less. |
| JEL: | J13 J16 J22 O12 O53 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26185&r=all |
| By: | Lemos, Renata; Scur, Daniela |
| Abstract: | This paper investigates the impact of family CEOs on firm organizational choices and the causes and consequences of these decisions. We focus on second-generation (dynastic) family firms, collect new data on CEO successions for over 900 firms in Latin America and Europe and merge it with unique data on organizational choices, specifically, structured management practices. We use variation in the gender composition of the outgoing CEOs' children for identification. There is clear preference for male heirs: conditional on number of children, having at least one son is correlated with a 30pp higher likelihood of dynastic family succession. As the gender composition of the outgoing CEO's children is unlikely to affect decisions on mid-level managerial practices, we use it as an instrumental variable for family succession. Dynastic CEO successions lead to almost one standard deviation lower adoption of structured management practices, with an implied productivity decrease of about 10%. We rationalize this finding with a new conceptual framework that accounts for the importance of implicit employment commitments to employees of dynastic firms in determining the adoption of monitoring technologies. We find empirical evidence that, controlling for lower levels of knowledge and skills of family CEOs, concerns for reputation and ''family name'' can play a role in constraining investment in structured management practices. Overall, our empirical results shed new light on dynastic firms' persistent performance deficit and apparent lag in the adoption of structured management practices. |
| JEL: | D22 M11 M12 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13794&r=all |
| By: | Jessen, Jonas; Kluve, Jochen |
| Abstract: | Labor markets in low- and middle income countries are characterized by high levels of informality. A multitude of interventions have therefore been implemented in many countries with the objective to increase the formalization of firms and workers, including information campaigns, simplification of registration procedures, reductions of payroll taxes and social security contributions, and interventions that enforce labor or business formalization. In this paper, we compile a database of 157 impact estimates from 32 academic studies that evaluate empirically one or more of these formalization interventions. The empirical analysis correlates the impact estimates of the primary studies - given as either (i) a measure of sign and statistical significance or (ii) the effect size - with explanatory factors such as the intervention type, the outcome variable, the scope of the intervention (program or policy), and other covariates. Several key findings emerge: first, the intervention type is not a strong determinant for the effectiveness of formalization interventions, though tax incentives and labor inspection are most likely to display significant positive effects. Second, the outcome "worker registration" shows significantly better results than other outcomes. Third, interventions at scale - i.e. formalization "policies" - are more effective on average than singular "programs". |
| Keywords: | formalization,labor registration,business registration,impact evaluation |
| JEL: | C40 J08 J48 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:814&r=all |
| By: | Congressional Budget Office |
| Abstract: | CBO estimates that the federal budget deficit for 2019 will be $960 billion. Under current law, budget deficits are projected to average $1.2 trillion a year between 2020 and 2029, boosting debt held by the public to 95 percent of GDP in that year—its highest level since just after World War II. Economic output is projected to grow by 2.3 percent in 2019, supporting strong labor market conditions that feature low unemployment and rising wages. After 2019, in CBO’s projections, economic growth averages 1.8 percent per year, which is less than the historical average. |
| JEL: | E20 E60 E62 E66 H20 H50 H60 H61 H62 H63 H68 |
| Date: | 2019–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:55551&r=all |
| By: | Margherita Calderone (University of Turin, Department of Economics and Statistics); Romain Houssa (CRED, University of Namur); Paul Reding (CRED, University of Namur); Marius Olodo; Marc-Olivier Zohoungbogbo |
| Abstract: | In 2016, the Belgian Technical Cooperation in Benin (BTC-Benin) launched a call for applications to a new program, denominated PROgramme d’appui au développement des FIlières agricoles (PROFI), to support agri-businesses involved in the value chains of rice, cashews, and vegetables in selected regions of the South (Mono-Couffo) and the North (Atacora-Donga). The program consists in providing agricultural entrepreneurs with equipment and materials, as well as in offering targeted technical assistance. Applications could only be submitted by organizations, i.e. groups of entrepreneurs organized into agri-business cooperatives, which could then decide how to allocate the support received among their members. At the demand of DGD, we have designed a randomized impact evaluation of this program and report in this paper about the different stages of implementation, which followed step by step the different phases of program development from the call for applications to the final selection of beneficiaries... |
| Keywords: | randomized impact evaluation, agri-businesses, agricultural productivity |
| JEL: | O1 O2 |
| URL: | http://d.repec.org/n?u=RePEc:nam:befdwp:0125&r=all |
| By: | Orhun Sevinc |
| Abstract: | This paper documents that employment and wage growth of occupations increase monotonically with measures of occupational skill intensity since 1980 in the US, contrary to the popular interpretation of labor market polarization. Skill-biased occupation growth is not driven by a specific gender, age group, decade, or occupation classification. A simple extension of routinization framework which allows for skill heterogeneities within occupations is capable of jointly explaining skill-biased occupation growth and polarization as well as their evolution over time. |
| Keywords: | Occupations, Skills, Inequality, Technological change |
| JEL: | J20 J24 J31 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1921&r=all |
| By: | Pamela Giustinelli; Matthew D. Shapiro |
| Abstract: | The Subjective ex ante Treatment Effect is the difference between the probabilities of an outcome conditional on a treatment. The SeaTE yields ex ante causal effects at the individual level. The paper gives an interpretation in two workhorse econometric frameworks: potential outcomes and dynamic programming. It finds large effect heterogeneity of health on work in two surveys of older workers, the VRI and the HRS. It shows how reduced-form estimates of health on work are biased when there is unobserved heterogeneity in taste for work. Using the VRI’s panel structure, it validates the elicited conditional probabilities of work given health. |
| JEL: | C21 C83 D84 J26 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26087&r=all |
| By: | Tina Hinz (Friedrich-Alexander University Erlangen-Nürnberg); Jens Mohrenweiser (Bournemouth University) |
| Abstract: | The new training literature argues that imperfect labour markets (i.e. less competition) lead to an increasing productivity-wage wedge. We show that this relation does not hold for all institutional and market environments. We use representative establishment panel data for Germany and apply a control function approach for estimating the production function to correct for endogeneity in input factors. We show that the skill-productivity gradient responds stronger to increases in product market competition and labour market density than the skill-wage gradient. This leads to an increasing productivity-wage wedge in more competitive environments. Similarly, works councils have a stronger effect on the skill-productivity than on the skill-wage gradient while both gradients are similar in the presence of union wage bargaining. Our results call for a more nuanced interpretation of the exposition of the new training literature to understand company-sponsored training across institutional and market environments. |
| Keywords: | training, productivity, wages, wage compression |
| JEL: | J24 M53 R23 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0162&r=all |
| By: | Bohren, Aislinn; Haggag, Kareem; Imas, Alex; Pope, Devin G. |
| Abstract: | Discrimination has been widely studied in economics and other disciplines. In addition to identifying evidence of discrimination, economists often categorize the source of discrimination as either taste-based or statistical. Categorizing discrimination in this way can be valuable for policy design and welfare analysis. We argue that a further categorization is important and needed. Specifically, in many situations economic agents may have inaccurate beliefs about the expected productivity or performance of a social group. This motivates our proposed distinction between accurate (based on correct beliefs) and inaccurate (based on incorrect beliefs) statistical discrimination. We do a thorough review of the discrimination literature and argue that this distinction is rarely discussed. Using an online experiment, we illustrate how to identify accurate versus inaccurate statistical discrimination. We show that ignoring this distinction -- as is often the case in the discrimination literature -- can lead to erroneous interpretations of the motives and implications of discriminatory behavior. In particular, when not explicitly accounted for, inaccurate statistical discrimination can be mistaken for taste-based discrimination, accurate statistical discrimination, or a combination of the two. |
| Keywords: | discrimination; Inaccurate Beliefs |
| JEL: | D90 J71 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13790&r=all |
| By: | Espinoza, Raphael; Ostry, Jonathan D.; Papageorgiou, Chris |
| Abstract: | Macroeconomic models have largely ignored the importance of gender diversity by assuming that male and female workers are perfectly substitutable in the aggregate production function. Whether this assumption is valid is an empirical question that this paper aims to answer by estimating the elasticity of substitution (ES) between the two types of labor. We apply linear and non-linear techniques to cross-country data at the aggregate level, to cross-country data at the sectoral level, and to firm-level data for the manufacturing sector in China. We find that women and men are far from being perfect substitutes: the ES is below 1 for the aggregate sample, between 1-2 for the sectoral sample, and between 2-3 at firm-level. We discuss why the ES may vary at different levels of aggregation and conclude on the implications of these results for growth accounting and for the gains from gender equality. |
| Keywords: | aggregate production function; elasticity of substitution; Female Labor Force Participation; growth |
| JEL: | J24 O47 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13792&r=all |
| By: | Bar-Isaac, Heski; Levy, Raphaël |
| Abstract: | Firms have discretion over task allocations, which may dampen employees' career prospects, and, hence, motivation. Task assignments and worker motivation interact through the extent of labor market competition; that is, the possibility of moving to another firm. More competition enhances motivation but decreases firms' incentives to assign workers to informative tasks. One consequence is that competitive firms sometimes choose strategies that lead to intermediate competition. When the employee pool is heterogeneous, firms might choose different human resources practices that attract different kinds of workers, and differentiate themselves through the career opportunities within and beyond the firms that they offer. |
| Keywords: | career concerns; Labour market competition; professional service firms; task assignments |
| JEL: | J32 J33 M12 M5 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13828&r=all |