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on Labour Economics |
| By: | Andrea Ichino (Università di Bologna (UNIBO)); Guido Schwerdt (Ifo Institute for Economic Research); Rudolf Winter-Ebmer (University of Linz and Institute for Advances Studies, Vienna); Josef Zweimüller (University of Zurich) |
| Abstract: | We study whether employment prospects of old and young workers differ after a plant closure. Using Austrian administrative data, we show that old and young workers face similar displacement costs in terms of employment in the long-run, but old workers lose considerably more initially and gain later. We interpret these findings using a search model with retirement as an absorbing state, that we calibrate to match the observed patterns. Our finding is that the dynamics of relative employment losses of old versus young workers after a displacement are mainly explained by different opportunities of transition into retirement. In contrast, differences in layoff rates and job offer arrival rates cannot explain these patterns. Our results support the idea that retirement incentives, more than weak labor demand, are responsible for the low employment rates of older workers. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/3tbgp7jdmr8h1qccuk9kiohoki&r=lab |
| By: | Zeynep Elitas; Hakan Ercan; Semih Tumen |
| Abstract: | Among better-educated employed men, the fraction of full-time full-year (FTFY) workers is quite high and stable|around 90 percent|over time in the U.S. Among those with lower education levels, however, this fraction is much lower and considerably more volatile, moving within the range of 62{82 percent for high school dropouts and 75{88 percent for high school graduates. These observations suggest that the composition of unobserved skills may be subject to sharp movements within low-educated employed workers, while the scale of these movements is potentially much smaller within high-educated ones. The standard college-premium framework accounts for the observed shifts between education categories, but it cannot account for unobserved compositional changes within education categories. Our paper uses Heckman's two-step estimator on repeated Current Population Survey cross sections to calculate a relative supply series that corrects for unobserved compositional shifts due to selection into and out of the FTFY status. We find that the well-documented deceleration in the growth rate of relative supply of college- equivalent workers after mid-1980s becomes even more pronounced once we correct for selectivity. This casts further doubt on the relevance of the plain skill-biased technical change (SBTC) hypothesis. We conclude that what happens to the within-group unobserved skill composition for low-educated groups is critical for fully understanding the trends in the relative supply of college workers in the United States. We provide several interpretations to our selection-corrected estimates. |
| Keywords: | Wage inequality; self selection; relative supply index; college premium; SBTC; FTFY |
| JEL: | J23 J24 J31 I24 O33 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1410&r=lab |
| By: | Summerfield, Fraser |
| Abstract: | This paper shows that changes in the skill requirements of jobs are one way by which economic downturns affect job match quality. In doing so this paper makes two contributions to the literature. The first contribution is to document a stylized fact about the cyclicality of skill requirements (tasks) for newly formed jobs. Relating local unemployment rates in Canadian data, to skill requirements generated from the Occupational Information Network (O*NET) database, I show that the demand for manual skill requirements is countercyclical. This stylized fact shown to be consistent with the predictions of a job search models with heterogeneous workers and vacancies. In this framework, firms increase the share manual job vacancies during downturns because they are less costly to post and fill. The second contribution is to show that the cyclicality of skill requirements, rather than economic conditions themselves, contribute to the incidence of overqualification. Estimates using various measures of overqualification confirm that changes in the skill requirements of newly formed jobs can account for much of the relationship between labor market conditions and job match quality. This empirical finding is also consistent with the model, where the share of overqualified workers varies with economic conditions partially because of corresponding changes in the type of job vacancies. |
| Keywords: | Mismatch, Job Search, Overeducation, Skill Demand, Business Cycles |
| JEL: | E24 E32 J24 J63 J64 |
| Date: | 2014–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-19&r=lab |
| By: | Julia Bredtmann (Department of Economics and Business, Aarhus University, Denmark); Sebastian Otten (Ruhr University Bochum); Christian Rulff (RWI Essen) |
| Abstract: | This paper investigates the responsiveness of women’s labor supply to their husband’s loss of employment – the so-called added worker effect. While previous empirical literature on this topic mainly concentrates on a single country, we take an explicit internationally comparative perspective and analyze whether the added worker effect varies across the European countries. In doing so, we use longitudinal data from the European Union Statistics on Income and Living Conditions (EU-SILC) covering the period 2004 to 2011. For our pooled sample of 28 European countries, we find evidence for the existence of an added worker effect, both at the extensive and at the intensive margin of labor supply. Women whose husbands become unemployed have a higher probability of entering the labor market and changing from part-time to full-time employment than women whose husbands remain employed. However, our results further reveal that the added worker effect varies over both the business cycle and the different welfare regimes within Europe. |
| Keywords: | added worker effect, labor supply, unemployment, cross-country analysis |
| JEL: | J22 J64 J82 |
| Date: | 2014–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2014-13&r=lab |
| By: | Green, David A.; Sand, Benjamin |
| Abstract: | We use Census and Labour Force Survey (LFS) data for the period from 1971 to 2012 to investigate whether the Canadian wage and employment structures have polarized, that is, whether wages and employment have grown more in high and low than in middle paying occupations. We find that there has been faster growth in employment in both high and low paying occupations than those in the middle since 1981. However, up to 2005, the wage pattern reflects a simple increase in inequality with greater growth in high paid than middle paid occupations and greater growth in middle than low paid occupations. Since 2005, there has been some polarization but this is present only in some parts of the country and seems to be related more to the resource boom than technological change. We present results for the US to provide a benchmark. The Canadian patterns fit with those in the US and other countries apart from the 1990s when the US undergoes wage polarization not seen elsewhere. We argue that the Canadian data do not fit with the standard technological change model of polarization developed for the U.S. |
| Keywords: | polarization, inequality, wage structure |
| JEL: | J31 J20 |
| Date: | 2014–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2014-18&r=lab |
| By: | Alessia Campolmi; Stefano Gnocchi |
| Abstract: | We incorporate a participation decision in a standard New Keynesian model with matching frictions and show that treating the labor force as constant leads to incorrect evaluation of alternative policies. We also show that the presence of a participation margin mitigates the Shimer critique. |
| Keywords: | Business fluctuations and cycles, Labour markets, Transmission of monetary policy |
| JEL: | E24 E32 E52 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:14-9&r=lab |
| By: | Verena Dill; Uwe Jirjahn |
| Abstract: | Using linked employer-employee data from Germany, we examine the role of foreign owners in employees' perceptions of job insecurity. Our estimates show that there tends to be a positive link between foreign owners and perceived job insecurity. The link is specifically strong for foreign-owned firms with high personnel turnover or poor employment growth. It is also stronger if the foreign-owned firm provides managerial profit sharing. However, the link is negative for foreign-owned firms with product innovations. |
| Keywords: | Foreign ownership, perceived job insecurity, managerial profit sharing, personnel turnover, product innovation |
| JEL: | F23 J23 J28 J63 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:trr:wpaper:201409&r=lab |
| By: | Hetschko, Clemens; Knabe, Andreas; Schöb, Ronnie |
| Abstract: | Previous studies find that past unemployment reduces life satisfaction even after reemployment for non-monetary reasons (unemployment scarring). It is not clear, however, whether this scarring is only caused by employment-related factors, such as worsened working conditions, or increased future uncertainty as regards income and employment. Using German panel data, we identify non-employment-related scarring by examining the transition of unemployed people to retirement as a life event after which employment-related scarring does not matter anymore. We find evidence for non-employment-related non-monetary unemployment scarring for people who were unemployed for the first time in their life directly prior to retirement, but not for people with earlier unemployment experiences. -- |
| Keywords: | unemployment scarring,life satisfaction,retirement |
| JEL: | I31 J26 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201411&r=lab |
| By: | Peter Kuhn; Kailing Shen |
| Abstract: | We study explicit gender discrimination in a population of ads on a Chinese internet job board. Gender-targeted job ads are commonplace, favor women as often as men, and are much less common in jobs requiring higher levels of skill. Employers’ relative preferences for female versus male workers, on the other hand, are more strongly related to the preferred age, height and beauty of the worker than to job skill levels. Almost two thirds of the variation in advertised gender preferences occurs within firms, and one third occurs within firm*occupation cells. Overall, these patterns are not well explained by a firm-level animus model, by a glass-ceiling model, nor by models in which broad occupational categories are consistently gendered across firms. Instead, the patterns suggest a model in which firms have idiosyncratic preferences for particular job-gender matches, which are overridden in skilled positions by factors such as thinner labor markets or a greater incentive to search broadly for the most qualified candidate. |
| Date: | 2013–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:wyi:journl:002164&r=lab |
| By: | Ana Ferrer (Department of Economics, University of Waterloo); Alicia Menendez (Harris School of Public Policy, University of Chicago) |
| Abstract: | We compare the returns to education between graduates of post secondary institutions who delayed their tertiary education for some time and those that proceeded with no delays. Using a unique survey that collects information on a representative cohort of graduates, we are able to estimate the effects of delaying school among successful graduates abstracting from specific macroeconomic conditions at the time of graduation. Our results show that graduates that delayed their education enjoy a premium relative to graduates that did not, even after considering other factors such as experience or labor market connections. These estimates are robust to the possibility of selection in the decision to delay school. |
| JEL: | J24 I2 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:wat:wpaper:1402&r=lab |
| By: | Paul Gaggl (University of North Carolina at Charlotte); Sylvia Kaufmann (Study Center Gerzensee) |
| Abstract: | We analyze quarterly occupation-level data from the US Current Population Survey for 1976-2013. Based on common cyclical employment dynamics, we identify two clusters of occupations that roughly correspond to the widely discussed notion of "routine" and "non-routine" jobs. After decomposing the cyclical dynamics into a cluster-specific ("structural") and an occupationspecific ("idiosyncratic") component, we detect significant structural breaks in the systematic dynamics of both clusters around 1990. We show that, absent these breaks, employment in the three "jobless recoveries" since 1990 would have recovered significantly more strongly than observed in the data, even after controlling for observed idiosyncratic shocks. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:szg:worpap:1403&r=lab |
| By: | Elizabeth Ananat; Shihe Fu; Stephen L. Ross |
| Abstract: | We demonstrate a striking but previously unnoticed relationship between city size and the black-white wage gap, with the gap increasing by 2.5% for every million-person increase in urban population. We then look within cities and document that wages of blacks rise less with agglomeration in the workplace location, measured as employment density per square kilometer, than do white wages. This pattern holds even though our method allows for non-parametric controls for the effects of age, education, and other demographics on wages, for unobserved worker skill as proxied by residential location, and for the return to agglomeration to vary across those demographics, industry, occupation and metropolitan areas. We find that an individual’s wage return to employment density rises with the share of workers in their work location who are of their own race. We observe similar patterns for human capital externalities as measured by share workers with a college education. We also find parallel results for firm productivity by employment density and share college-educated using firm racial composition in a sample of manufacturing firms. These findings are consistent with the possibility that blacks, and black-majority firms, receive lower returns to agglomeration because such returns operate within race, and blacks have fewer same-race peers and fewer highly-educated same-race peers at work from whom to enjoy spillovers than do whites. Data on self-reported social networks in the General Social Survey provide further evidence consistent with this mechanism, showing that blacks feel less close to whites than do whites, even when they work exclusively with whites. We conclude that social distance between blacks and whites preventing shared benefits from agglomeration is a significant contributor to overall black-white wage disparities. |
| JEL: | J15 J24 J31 R23 R32 |
| Date: | 2013–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:wyi:wpaper:002057&r=lab |
| By: | David R. Mann; David C. Wittenburg |
| Keywords: | Employment, Wages, Young Adults, Disabilities, Labor, Working |
| JEL: | I J |
| Date: | 2014–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:8112&r=lab |
| By: | Daniela Hauser |
| Abstract: | We provide evidence regarding the dynamic behaviour of net labour flows across U.S. states in response to a positive technology shock. Technology shocks are identified as disturbances that increase relative state productivity in the long run for 226 state pairs, encompassing 80 per cent of labour flows across U.S. states in the 1976 - 2008 period. The data suggest heterogeneous responses of both employment and net labour flows across states, conditional on a positive technology shock. We build a two-region dynamic stochastic general equilibrium (DSGE) model with endogenous labour mobility and region-specific shocks to account for this evidence. We calibrate the model economy consistently with the observed differences in the degree of nominal rigidities across states, and show that we replicate the different patterns of the responses in employment and net labour flows across states following a technology shock. |
| Keywords: | Business fluctuations and cycles; Labour markets |
| JEL: | E24 E32 J61 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:14-4&r=lab |
| By: | Hutengs, Oliver; Stadtmann, Georg |
| Abstract: | The paper investigates Scandinavian countries and its respective male and female youth unemployment rates. Okun's law is used to estimate age-cohort and gender specific Okun coefficients to make inference on the business-cycle dependence of young people across Scandinavian countries. -- |
| Keywords: | Okun's law,labor market,youth unemployment,Scandinavia |
| JEL: | E24 F50 C23 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:euvwdp:352&r=lab |
| By: | Newhouse, David; Wolff, Claudia |
| Abstract: | This paper utilizes a cross-country panel of 83 developing countries to examine how changes in cohort size are correlated with subsequent employment outcomes for workers at different ages. The results depend on countries'level of development. In low-income countries, young adults that are born into smaller cohorts are less likely to work, but school attendance remains unchanged. In middle-income countries, young adults in smaller cohorts are less likely to be unemployed and more likely to work outside of agriculture. Neither pattern can be discerned among older adults, although the estimates are imprecise. In sum, reductions in cohort size are associated with moderate improvements in employment outcomes for youth in middle-income countries, but there is scant evidence that these improvements persist into adulthood. |
| Keywords: | Labor Markets,Labor Policies,Youth and Governance,Income,Inequality |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6848&r=lab |
| By: | Erling Holmøy (Statistics Norway) |
| Abstract: | This paper analyses the general equilibrium relationship between increases in tax financed public employment and total employment, emphasizing one income effect: Reallocating employment from the private to the public sector reduces non-labour income in the form of profits distributed to workers, since there are no profits in public sectors. This may cause a positive general equilibrium relationship between total employment and tax financed public employment, even if the uncompensated wage elasticity of labour supply is positive. Such a positive relationship is consistent with the stylized facts in generous welfare states such as Norway and Sweden. Precise conditions for a positive general equilibrium relationship are derived within the simplest possible model. It is also shown that if such a positive relationship exists, it will be stronger the higher is public employment. This mechanism turns out to be crucial when explaining the employment effect of an increase in tax financed public employment generated by a realistic CGE model of the Norwegian economy. |
| Keywords: | Taxation; Labour supply; General equilibrium effects |
| JEL: | H20 H31 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:779&r=lab |
| By: | Otterbach, Steffen; Sousa-Poza, Alfonso |
| Abstract: | In this paper, we use 12 waves of the German Socio-Economic Panel to examine the relationship between job insecurity, employability and health-related well-being. Our results indicate that being unemployed has a strong negative effect on life satisfaction and health. They also, however, highlight the fact that this effect is most prominent among individuals over the age of 40. A second observation is that job insecurity is also associated with lower levels of life satisfaction and health, and this association is quite strong. This negative effect of job insecurity is, in many cases, exacerbated by poor employability. -- |
| Keywords: | job insecurity,employment,employability,well-being,health,Germany |
| JEL: | J21 J22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:882014&r=lab |
| By: | Gelain, Paolo; Guerrazzi, Marco |
| Abstract: | In this paper, we implement Bayesian econometric techniques to analyze a theoretical framework built along the lines of Farmer's micro-foundation of the General Theory. Specifically, we test the ability of a demand-driven search model with self-fulfilling expectations to match the behaviour of the US economy over the last thirty years. The main findings of our empirical investigation are the following. First, all over the period, our model fits data very well. Second, demand shocks are the most relevant in explaining the variability of concerned variables. In addition, our estimates reveal that a large negative demand shock caused the Great Recession via a sudden drop of confidence. Overall, those results are consistent with the main features of the New 'Farmerian' Economics as well as to latest demand-side explanations of the finance-induced recession. |
| Keywords: | New Farmerian Economics; Competitive search; Dynamic models; Bayesian estimation. |
| JEL: | E24 E32 J64 |
| Date: | 2014–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55773&r=lab |
| By: | Proto, Eugenio (Department of Economics, University of Warwick); Rustichini, Aldo (Department of Economics, University of Minnesota) |
| Abstract: | Cooperating behavior may be fostered by personality traits reflecting either favorable inclination to others or willingness to comply with norms and rules. We test the relative importance of these two factors in an experiment where subjects provide real mental effort in two treatments with identical task, differing only by whether others' payment is affected. If the first hypothesis is true, subjects reporting high Agreeableness score should put more effort; if the second is true, reporting higher Conscientiousness should predict more effort. We find experimental support for the second hypothesis but not for the first, as subjects reporting high Altruism do not behave consistently with this statement. Key words: Personality Traits ; Cooperation ; Effort Provision JEL classification: C90 ; D03 ; D82 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1045&r=lab |