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on Labour Economics |
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Issue of 2024‒04‒29
seventeen papers chosen by |
| By: | Balleer, Almut; Duernecker, Georg; Forstner, Susanne; Goensch, Johannes |
| Abstract: | Recent research documents mounting evidence for sizable and persistent biases in individual labor market expectations. This paper incorporates subjective expectations into a general equilibrium labor market model and analytically studies the implications of biased expectations for wage bargaining, vacancy creation, worker flows and labor market policies. Importantly, we find that the specific assumption about the frequency of wage bargaining crucially shapes the propagation mechanism through which expectation biases affect bargained wages and equilibrium outcomes. Moreover, we show that the presence of biased beliefs can qualitatively alter the equilibrium effects of labor market policies. Lastly, when allowing for biased firms' beliefs, we establish that only the difference between firms' and workers' biases matters for the bargained wage but not the size of biases. |
| Abstract: | Jüngste Forschungsergebnisse belegen eine deutliche und persistente Verzerrung individueller Arbeitsmarkterwartungen. In diesem Papier werden subjektive Erwartungen in ein allgemeines Gleichgewichtsmodell des Arbeitsmarktes eingebunden und die Auswirkungen von verzerrten Erwartungen auf Lohnverhandlungen, die Schaffung von Arbeitsplätzen, Arbeitnehmerströme und die Arbeitsmarktpolitik analytisch untersuch. Als besonders wichtig für den Propagationsmechanismus von Arbeitsmarkterwartungen auf Löhne stellt sich die Frequenz von Lohnverhandlungen heraus. Darüber hinaus ist der Unterschied in verzerrten Erwartungen zwischen Unternehmen und Arbeitnehmer wichtiger für den ausgehandelten Lohn als der Umfang der Verzerrungen selbst. Darüber hinaus zeigen wir, dass verzerrte Erwartungen die Gleichgewichtseffekte arbeitsmarktpolitischer Maßnahmen qualitativ verändern kann. |
| Keywords: | Subjective expectations, labor markets, search and matching, bargaining, policy |
| JEL: | E24 J64 D84 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:287765&r=lab |
| By: | Rachel Schuh |
| Abstract: | I analyze the value workers ascribe to the gender composition of their workplace and the consequences of these valuations for occupational segregation, tipping, and welfare. To elicit these valuations, I survey 9, 000 U.S. adults using a hypothetical job choice experiment. This reveals that on average women and men value gender diversity, but these average preferences mask substantial heterogeneity. Older female workers are more likely to value gender homophily. This suggests that gender norms and discrimination, which have declined over time, may help explain some women’s desire for homophily. Using these results, I estimate a structural model of occupation choice to assess the influence of gender composition preferences on gender sorting and welfare. I find that workers’ composition valuations are not large enough to create tipping points, but they do reduce female employment in male-dominated occupations substantially. Reducing segregation could improve welfare: making all occupations evenly gender balanced improves utility as much as a 0.4 percent wage increase for women and a 1 percent wage increase for men, on average. |
| Keywords: | gender; labor; occupational choice |
| JEL: | J16 J24 J71 |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:98021&r=lab |
| By: | Makoto WATANABE; Christian Holzner |
| Abstract: | The Public Employment Agency (PEA) helps unemployed to find work and mediates PEA-registered job vacancies to job seekers via vacancy referrals. Using the spatial and temporal variation resulting from the regional roll-out of the Hartz 3 reform we are able to show that Hartz 3, which changed the counseling process of unemployed, decreased the fraction of unemployed that received vacancy referrals, increased the job-finding probability of unemployed without vacancy referrals, left the job-finding probability of unemployed with vacancy referrals unaffected, and increased average wages of newly hired, previously unemployed. Since the existing literature is not able to explain this set of findings, we develop a simple theoretical directed search model, which does. It does so by considering the interaction between the private market and the intermediation provided by the PEA. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cnn:wpaper:24-007e&r=lab |
| By: | Nezih Guner (CEMFI); Ezgi Kaya; Virginia Sanchez-Marcos |
| Abstract: | Among high-income countries, fertility rates differ significantly, with some experiencing total fertility rates as low as 1 to 1.3 children per woman. However, the reasons behind low fertility rates are not well understood. We show that uncertainty created by dual labor markets, the coexistence of temporary and open-ended contracts, and the inflexibility of work schedules are crucial to understanding low fertility. Using rich administrative data from the Spanish Social Security records, we document that temporary contracts are associated with a lower probability of first birth. With Time Use data, we also show that women with children are less likely to work in jobs with split-shift schedules. Such jobs have a long break in the middle of the day, and present a concrete example of inflexible work arrangements and fixed time cost of work. We then build a life-cycle model in which married women decide whether to work, how many children to have, and when to have them. Reforms that eliminate duality or split-shift schedules increase women's labor force participation and reduce the employment gap between mothers and non-mothers. They also increase fertility for women who are employed. Reforming these labor market institutions and providing childcare subsidies would increase the completed fertility of married women to 1.8 children. |
| Keywords: | temporary contracts, split-shift schedules, childcare subsidies |
| JEL: | E24 J13 J21 J22 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2024-006&r=lab |
| By: | Alexander Berry; Elizabeth M. Maloney; David Neumark |
| Abstract: | Stronger enforcement of discrimination laws can help to reduce disparities in economic outcomes with respect to race, ethnicity, and gender in the United States. However, the data necessary to detect possible discrimination and to act to counter it is not publicly available – in particular, data on racial, ethnic, and gender disparities within specific companies. In this paper, we explore and develop methods to use information extracted from publicly available LinkedIn data to measure the racial, ethnic, and gender composition of company workforces. We use predictive tools based on both names and pictures to identify race, ethnicity, and gender. We show that one can use LinkedIn data to obtain reasonably reliable measures of workforce demographic composition by race, ethnicity, and gender, based on validation exercises comparing estimates from scraped LinkedIn data to two sources – ACS data, and company diversity or EEO-1 reports. Next, we apply our methods to study the race, ethnic, and gender composition of workers who were hired and those who experienced mass layoffs at two large companies. Finally, we explore using LinkedIn data to measure race, ethnic, and gender differences in promotion. |
| JEL: | J15 J16 J7 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32294&r=lab |
| By: | Simpson, Julija (Newcastle University); Wildman, John (Newcastle University); Bambra, Clare (Newcastle University); Brown, Heather (Lancaster University) |
| Abstract: | Single mothers have experienced increasing work requirements both in the UK and in other developed countries. Little is known how increasing working hours may have affected their mental health. We investigate the impact of increasing working hours on mental health of single mothers, and compare this relationship to that for partnered mothers. We used 13 waves of the UKHLS (2009-2023) to estimate the relationship between changing working hour categories (1-16 hour per week vs. 17-25; 26-35; 36-40; and 41+) and mental health using fixed-effects models. We also investigated the role of potential mechanisms linking higher working hours and mental health, including role strain and additional income. Our findings suggest that increasing working hours from low (1-16 hours per week) to higher categories has a negative and progressively worsening relationship with the mental health of single mothers. Increasing hours to 17-25, 26-35, 36-40, and 41+ is associated with lower GHQ-12 scores by -0.7, -0.5, -0.8, and -1.1 respectively. For partnered mothers, there is no significant relationship with mental health across any of the higher working hour categories. Further analyses suggest increased role strain for single mothers as a mechanism helping explain these differences. We have found that higher working hours relative to part-time may be contributing to the worsening mental health of single mothers, at least in part due to increased role strain of having to balance work and family responsibilities. Such effects should be considered when developing future welfare policies for single mothers, to ensure that greater work requirements do not undermine the mental health of the already vulnerable population group. |
| Keywords: | mental health, working hours, single mothers, partnered mothers, inequalities |
| JEL: | J13 J16 J22 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16875&r=lab |
| By: | Michael Baker; Yosh Halberstam; Kory Kroft; Alexandre Mas; Derek Messacar |
| Abstract: | We study the effects of the unionization of faculty at Canadian universities from 1970-2022 using an event-study design. Using administrative data which covers the full universe of faculty salaries, we find strong evidence that unionization leads to both average salary gains and compression of the distribution of salaries. Our estimates indicate that salaries increase on average by 2 to over 5 percent over the first 6 years post unionization. These effects are driven largely by gains in the bottom half of the wage distribution with little evidence of any impact at the top end. Our evidence indicates that the wage effects are primarily concentrated in the first half of our sample period. We do not find any evidence of an impact on employment. |
| JEL: | J0 J3 J30 J41 J50 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32277&r=lab |
| By: | Baessler, Laura; Gebhardt, Georg; Gropp, Reint; Güttler, André; Taskin, Ahmet |
| Abstract: | We investigate whether employees in Germany benefit from public bank guarantees in terms of employment probability and wages. To that end, we exploit the removal of public bank guarantees in Germany in 2001 as a quasi-natural experiment. Our results show that bank guarantees lead to higher employment, but lower wage prospects for employees after working in affected establishments. Overall the results suggest that employees do not benefit from bank guarantees. |
| Keywords: | bank guarantees, credit, employment, public banks, wages |
| JEL: | E24 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:287750&r=lab |
| By: | Nicolò Gnocato (Bank of Italy) |
| Abstract: | This paper studies the optimal conduct of monetary policy in the presence of heterogeneous exposure to energy price shocks between the employed and the unemployed, as it is documented by data from the euro-area Consumer Expectations Survey: higher energy prices weigh more on the unemployed, who consume less and devote a higher proportion of their consumption to energy. I account for this evidence into a tractable Heterogeneous-Agent New Keynesian (HANK) model with Search and Matching (S&M) frictions in the labour market, and energy as a complementary input in production and as a non-homothetic consumption good: energy price shocks weigh more on the jobless, who consume less due to imperfect unemployment insurance and, since preferences are non-homothetic, devote a higher share of this lower consumption to energy. Households' heterogeneous exposure to rising energy prices induces an endogenous trade-off for monetary policy, whose optimal response involves partly accommodating core inflation so as to indirectly sustain employment and, therefore, prevent workers from becoming more exposed to the shock through unemployment. |
| Keywords: | heterogeneous agents, New Keynesian, unemployment risk, energy shocks, optimal monetary policy, endogenous trade-off |
| JEL: | E21 E24 E31 E32 E52 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1450_24&r=lab |
| By: | Stark, Oded (University of Bonn); Kosiorowski, Grzegorz (Cracow University of Economics) |
| Abstract: | We formulate a rule for allocating asylum seekers that is based on the social preferences of the native workers of the receiving countries. To derive the rule, we construct for each country a social welfare function, SWF, where the social welfare of a population is determined both by the population's aggregate absolute income and by the population's aggregate relative income. In a utilitarian manner, we combine the social welfare functions of the countries into a global social welfare function, GSWF. We look for the allocation that yields the highest value of the GSWF. We draw on assumptions that pertain to the manner in which the asylum seekers join the income distribution of the native workers: we consider a case in which the arrival of the asylum seekers has only a minor effect on the absolute income of the native population, and in which following their admission and integration, the asylum seekers join the income distribution of the native population "from below, " namely the incomes of the asylum seekers are lower than the incomes of the low-income native workers. The arrival of asylum seekers can, however, measurably affect the relative incomes of the native population. Our rule states that the share of asylum seekers to be optimally assigned to each country depends only on the aggregate of the income excesses experienced by the native populations in the receiving countries. |
| Keywords: | asylum seekers, policy formation, relative deprivation, global social welfare, rule of allocation |
| JEL: | C54 D62 D78 E61 E65 F22 F62 F68 I31 I38 J15 J48 J68 O15 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16873&r=lab |
| By: | Garrett Anstreicher |
| Abstract: | I study how recessions impact the human capital of young adults and how these effects vary over the parent income gradient. Using a novel confidential linked survey dataset from U.S. Census, I document that the negative effects of worse local unemployment shocks on educational attainment are strongly concentrated among middle-class children, with losses in parental home equity being potentially important mechanisms. To probe the aggregate implications of these findings and assess policy implications, I develop a model of selection into college and life-cycle earnings that comprises endogenous parental transfers for education, multiple schooling options, and uncertainty in post-graduation employment outcomes. Simulating a recession in the model produces a “hollowing out the middle” in lifecycle earnings in the aggregate, and educational borrowing constraints play a key role in this result. Counterfactual policies to expand college access in response to the recession can mitigate these effects but struggle to be cost effective. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-15&r=lab |
| By: | Thomas Horvath; Martin Spielauer (WIFO); Philipp Warum (WIFO) |
| Abstract: | Capturing the heterogeneity of life courses improves the accuracy, detail and policy relevance of population and labour force projections. Our study uses the microsimulation model microDEMS for Austria, which simulates individual life courses at a high level of detail and in their family context. The model pays particular attention to educational attainment, health and labour market participation. By maintaining the longitudinal consistency of labour market careers, including the tracking of insurance periods, together with the implementation of detailed retirement rules, our model provides realistic representations of retirement decisions. While we reproduce the demographic outcomes of official (Statistics Austria) population projections, including international migration by region of birth, we integrate several additional dimensions, such as educational differentials in mortality and fertility. MicroDEMS allows to consider a wide range of scenarios when assessing the sensitivity of results, or to focus on the impact of policy changes targeted at specific population subgroups, such as mothers, immigrants, or people with health impairments or lower educational levels. MicroDEMS is a detailed national version of the comparative microWELT model. In this context, microDEMS is used for sensitivity analysis and case studies to assess potential specification bias introduced in microWELT due to the neglect of institutional detail or the less detailed treatment of population heterogeneity, such as in the case of international migration. |
| Keywords: | Dynamic microsimulation, Pension reform, Labour force participation |
| Date: | 2024–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2024:i:674&r=lab |
| By: | Mr. Philip Barrett; Sophia Chen; Ms. Li Lin; Miss Anke Weber |
| Abstract: | We use payroll data on over 1 million workers at 80, 000 small firms to construct county-month measures of employment, hours, and wages that correct for dynamic changes in sample composition in response to business cycle fluctuations. We use this to estimate the response of small firms' employment, hours and wages following tighter local labor market conditions. We find that employment and hours per worker fall and wages rise. This is consistent with the predictions of the response to a demand shock in the well-known “jobs ladder” model of labor markets. To check this interpretation, we show our results hold when instrumenting for local demand using county-level Department of Defense contract spending. Correction for dynamic sample bias is important -- without it, the hours fall by only one third as much and wages increase by double. |
| Keywords: | small firms; wages; hours; firm heterogeneity; privatesector establishment-level data; business cycle |
| Date: | 2024–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/063&r=lab |
| By: | Enzo Brox; Michael Lechner |
| Abstract: | This article shows how coworker performance affects individual performance evaluation in a teamwork setting at the workplace. We use high-quality data on football matches to measure an important component of individual performance, shooting performance, isolated from collaborative effects. Employing causal machine learning methods, we address the assortative matching of workers and estimate both average and heterogeneous effects. There is substantial evidence for spillover effects in performance evaluations. Coworker shooting performance, meaningfully impacts both, manager decisions and third-party expert evaluations of individual performance. Our results underscore the significant role coworkers play in shaping career advancements and highlight a complementary channel, to productivity gains and learning effects, how coworkers impact career advancement. We characterize the groups of workers that are most and least affected by spillover effects and show that spillover effects are reference point dependent. While positive deviations from a reference point create positive spillover effects, negative deviations are not harmful for coworkers. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.15200&r=lab |
| By: | Ricardo Santos; Sam Jones; Gimelgo Xirinda |
| Abstract: | High youth unemployment rates and long school-to-work transition times pose a threat to low-income countries' sustainable growth prospects. Using a randomized control trial experiment conducted in Mozambique, we find strong evidence that providing information on wages and unemployment reduces the time that university graduate job-seekers take to become employed, with different levels of efficacy depending on the type of information provided. |
| Keywords: | School-to-Work, Labour, Information, Randomized controlled trial |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2024-16&r=lab |
| By: | Jinno, Masatoshi; Yasuoka, Masaya |
| Abstract: | This paper analyzes the impact of accepting foreign workers, not just from the perspective of an increase in imperfect substitute labor supply, but also including the indirect aspect of an increased educational burden due to the expansion of residency rights. The results lead to the conclusion that the conditions for improving the welfare of native residents, due to the increase in the supply of labor that cannot be perfectly substituted, may not only be met through this increase but also may be relaxed owing to labor movement between industries, which is facilitated by the increased educational burden resulting from the easing of residency rights. This indicates that the improvement in the utility of native residents could potentially be achieved under more relaxed conditions. |
| Keywords: | Foreign workers, Burden of schooling, Substitutability, Complementarity. |
| JEL: | I28 J6 |
| Date: | 2024–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120568&r=lab |
| By: | Mohamadian, Mehdi (Provincial Health Service Authority of British Columbia); Javdani, Mohsen (Simon Fraser University); Heroux-Legault, Maxime (University of British Columbia, Okanagan) |
| Abstract: | We explore the evolution and determinants of attitudes towards immigration in Canada, utilizing Canadian Election Studies surveys from 1988 to 2019. Our analysis indicates a notable trend: a consistent decrease in anti-immigrant sentiments until the mid-2000s, followed by a shift around 2008 towards gradually more negative attitudes towards immigration. To better understand the factors influencing these attitudes, we examine a comprehensive set of variables. While economic factors seem to have some association with these attitudes, our findings more significantly underscore the role of group-level socio-psychological factors. Additionally, our analysis identifies an emerging polarization along political party lines beginning around 2006. Assessing the relative impact of these factors, our analysis suggests that political party identification has become increasingly significant in influencing attitudes toward immigration. |
| Keywords: | public attitudes towards immigration, socio-psychological factors, social identity, immigration |
| JEL: | J15 D72 Z13 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp211&r=lab |