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on Labour Economics |
| By: | Timothy J. Moore (Department of Economics, The George Washington University; and National Bureau of Economic Research ) |
| Abstract: | Few Social Security Disability Insurance (DI) beneficiaries return to the labor force, making it hard to assess their likely employment in the absence of benefits. Using administrative data, I examine the employment of individuals who lost DI eligibility after the 1996 removal of drug and alcohol addictions as qualifying conditions. Approximately 22 percent started working at levels that would have disqualified them for DI, an employment response that is large relative to their work histories. Those who received DI for 2-3 years had the largest response, suggesting that a period of public assistance may maximize the employment of some disabled individuals. |
| Keywords: | Disability insurance, social security, health capital, labor force participation |
| JEL: | H53 H55 J14 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2015n02&r=lab |
| By: | John S. Heywood ; Uwe Jirjahn |
| Abstract: | This paper focuses on the German labor market for older workers. It does so in comparison with other countries and with a unique focus on the role of employer incentives for retaining and hiring older workers. It argues that while employment of older German workers has improved due to changes in government policy, the labor market for older workers remains characterized by far less mobility and opportunity. While we recognize the potential explanations of reduced productivity and age discrimination, we review evidence pointing to the importance of life-cycle contracts (Hutchens 1986, Lazear 1979). These contracts can be efficient but typically imply that older workers will have difficulty being re-hired into career jobs after separation. We suggest that attempts to reduce or eliminate such life-cycle contracts are likely to be counter-productive but suggest how other countries, particularly Japan, have dealt with this issue. |
| Keywords: | Older workers, deferred compensation, productivity, discrimination, labor market institutions |
| JEL: | J14 J33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:trr:wpaper:201502&r=lab |
| By: | Moczall, Andreas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] ) |
| Abstract: | "What happens to the wages of regular workers in establishments subsidized with hiring subsidies? Does hiring programme participants result in windfalls that are distributed among regular workers? Do these reduce their wage demands to avoid being substituted by subsidized workers? Using linked employer-employee data from Germany, I estimate the effects of subsidizing an establishment on regular workers' wages using spell fixed effects regression. I find that hiring subsidy schemes do increase the daily wages of regular workers by up to almost one per cent in the manufacturing sector. These effects are limited to large establishments and abovemedian local unemployment rates. They occur within the establishment itself and are not merely the result of varying regional exposure to ALMP programmes. I conclude that hiring subsidies have a notable impact on regular workers beyond mere substitution." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Linked-Employer-Employee-Datensatz, Eingliederungszuschuss, Beschäftigerverhalten, Lohnstruktur, Betrieb, arbeitsmarktpolitische Maßnahme - Auswirkungen |
| JEL: | J38 J68 H25 C23 |
| Date: | 2015–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201501&r=lab |
| By: | Luis Diéz-Catalán (University of Minnesota ); Ernesto Villanueva (Banco de España ) |
| Abstract: | We study the impact of (widespread) downward wage rigidity on the fl ows from employment to non-employment at the onset of the Great Recession. Downward wage (growth) rigidity is due to the fact that sector-level collective agreements in Spain are automatically extended to all fi rms, setting wage minima for workers in the same province-industry-skill cell. We identify the impact of wage rigidity on employment because, unlike settled ones, newly bargained contracts can adjust to aggregate shocks. Using the exact dates of bargaining periods of all sector-level contracts in Spain, we fi nd that agreements reached after the fall of Lehman Brothers were for an average wage growth of 1.8%, while agreements signed before 15 September 2008 were for mean wage increases of 3.1%. Matching information on collective agreements with longitudinal Social Security records on workers, we document two fi ndings. Firstly, the probability of job loss between 2009 and 2010 was 1 percent higher among workers covered by agreements signed before the fall of Lehman Brothers than among workers covered by contracts signed afterwards. Secondly, the analysis of a subsample of contracts with information about the exact province-industry-skill level minimum wage suggests that the impact of date of contract signature on wage changes and employment losses is confi ned to workers whose pre-recession earnings were below 1.2 times the contract-specifi c minimum wage. Those fi ndings are consistent with the hypothesis that the staggering of contracts and the inability to renegotiate contracts amplify aggregate shocks. We end with a discussion of whether those results can be extrapolated to other sample periods. |
| Keywords: | collective bargaining, labor demand, aggregate shock, wage rigidity |
| JEL: | J23 J50 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1431&r=lab |
| By: | Mandelman, Federico S. (Federal Reserve Bank of Atlanta ); Zlate, Andrei (Federal Reserve Bank of Boston ) |
| Abstract: | During the last three decades, jobs in the middle of the skill distribution disappeared, and employment expanded for high- and low-skill occupations. Real wages did not follow the same pattern. Although earnings for the high-skill occupations increased robustly, wages for both low- and middle-skill workers remained subdued. We attribute this outcome to the rise in offshoring and low-skilled immigration, and we develop a three-country stochastic growth model to rationalize this outcome. In the model, the increase in offshoring negatively affects the middle-skill occupations but benefits the high-skill ones, which in turn boosts aggregate productivity. As the income of high-skill occupations rises, so does the demand for services provided by low-skill workers. However, low-skill wages remain depressed as a result of the surge in unskilled immigration. Native workers react to immigration by upgrading the skill content of their labor tasks as they invest in training. |
| Keywords: | labor market polarization; task upgrading; offshoring; labor migration; heterogeneous agents; international business cycles |
| JEL: | F16 F41 |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2014-28&r=lab |
| By: | Pieter Gautier ; Jose L Moraga-Gonzalez ; Ronald Wolthoff |
| Abstract: | Many labor market policies affect the marginal benefits and costs of job search. The impact and desirability of such policies depend on the distribution of search costs. In this paper, we provide an equilibrium framework for identifying the distribution of search costs and we apply it to the Dutch labor market. In our model, the wage distribution, job search intensities, and firm entry are simultaneously determined in market equilibrium. Given the distribution of search intensities (which we directly observe), we calibrate the search cost distribution and the flow value of non-market time; these values are then used to derive the socially optimal firm entry rates and distribution of job search intensities. From a social point of view, some unemployed workers search too little due to a hold-up problem, while other unemployed workers search too much due to coordination frictions and rentseeking behavior. Our results indicate that jointly increasing unemployment benefits and the sanctions for unemployed workers who do not search at all can be welfare-improving. |
| Keywords: | job search; search cost heterogeneity; labor market frictions; wage dispersion; welfare |
| JEL: | J64 J31 J21 E24 C14 |
| Date: | 2015–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-527&r=lab |
| By: | Nele E. Franz |
| Abstract: | This paper analyzes the wage development of mothers interrupting their careers, in comparison to the wages of men who do not face a parental interruption. We estimate OLS regression models for different subcategories defined by age and point in time. We use data from the German Socioeconomic Panel from 1984 to 2011, to show that wages and the financial penalty for maternity differ according to the duration of interruption. We find a lower wage penalty in the short run for women interrupting their careers who are legally protected, but merely delayed penalties for the same group in the long run. |
| Keywords: | Human capital, parental leave, wages, OLS |
| JEL: | C21 J13 J24 J31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp722&r=lab |
| By: | Chung, Hess (Board of Governors of the Federal Reserve System (U.S.) ); Fallick, Bruce C. (Federal Reserve Bank of Cleveland ); Nekarda, Christopher J. (Board of Governors of the Federal Reserve System (U.S.) ); Ratner, David (Board of Governors of the Federal Reserve System (U.S.) ) |
| Abstract: | This paper describes a dynamic factor model of 19 U.S. labor market indicators, covering the broad categories of unemployment and underemployment, employment, workweeks, wages, vacancies, hiring, layoffs, quits, and surveys of consumers' and businesses' perceptions. The resulting labor market conditions index (LMCI) is a useful tool for gauging the change in labor market conditions. In addition, the model provides a way to organize discussions of the signal value of different labor market indicators in situations when they might be sending diverse signals. The model takes the greatest signal from private payroll employment and the unemployment rate. Other influential indicators include the insured unemployment rate, consumers' perceptions of job availability, and help-wanted advertising. Through the lens of the LMCI, labor market conditions have improved at a moderate pace over the past several years, albeit with some notable variation along the way. In addition, from t he perspective of the model, the unemployment rate declined a bit faster over the past two years than was consistent with the other indicators. |
| Keywords: | LMCI; U.S. labor market; dynamic factor model; employment; unemployment rate |
| JEL: | E24 E66 J20 J60 |
| Date: | 2014–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2014-109&r=lab |
| By: | Damiaan Persyn (European Commission – JRC - IPTS ); d'Artis Kancs (European Commission – JRC - IPTS ); Wouter Torfs (European Commission – JRC - IPTS ) |
| Abstract: | This paper outlines how regional labour market adjustments to macro-economic and policy shocks are modelled in RHOMOLO through participation, employment and migration decisions of workers. RHOMOLO, being a multi-sectoral, inter-regional general equilibrium model, is complex both in terms of its dimensionality and the modelling of spatial interactions through trade flows and factor mobility. The modelling of the labour market is therefore constrained by the tractability and computational solvability of the model. The labour market module consists of individual labour participation decisions, including the extensive margin (to participate or not) and the intensive margin (hours of work). Unemployment is determined through a wage curve and inter-regional labour migration decisions are modelled in a discrete-choice framework, with backward-looking expectations. |
| Keywords: | Participation, unemployment, labour migration, wage curve, CGE, new economic geography |
| JEL: | C68 D58 F22 J20 J61 J64 O15 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc89537&r=lab |
| By: | Beata Wozniak-Jechorek (Poznañ University of Economics ) |
| Abstract: | The article will focus on regional diversity of the Polish Labor Market from institutional perspective. The Polish Labor Market is geographically diverse in terms of unemployment and employment rates, and also in terms of economic development. At the end of 2013 the difference between the lowest and the highest unemployment rate in the Polish regions was 12.1% (Wielkopolska located in the West Poland has unemployment rate of 9.6% and Warmia - Mazury in the East has unemployment of 21.7%). The question arises whether this difference comes from the structural or institutional sources? The paper will describe the character of Polish Labor Market whereas in the second part, it will trace the impact of institutional variables such as real wage, Kaitz index and Gender gap on the regional unemployment rate in 2002-2012 in Poland. |
| Keywords: | institutional economics, labor market, institutional unemployment, labor market’s institutions |
| JEL: | B15 B25 B52 J08 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2014:no54&r=lab |
| By: | Yanan Li (Cornell University ); Victoria Prowse (Cornell University ) |
| Abstract: | In this paper, we explore and compare how older and younger couple house- holds use adjustments in the wife’s labor supply to mitigate the e?ects of negative shocks to the husband’s employment status. Using di?erence-in-di?erences match- ing methods, we document a substantial added worker e?ect for younger house- holds. However, the wives of older men do not increase employment in response to their husbands’ negative employment shocks. Instead, in older households, fe- male unemployment increases. These results are consistent with older women being constrained by the labor market in the extent to which they can adjust their labor supply to mitigate the e?ects of spousal employment shocks. Our ?ndings suggest that spousal labor supply is not an e?ective intra-household insurance device for older households. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp309&r=lab |
| By: | Chletsos, Michael ; Giotis, Georgios P. |
| Abstract: | Until the early 90’s a strong consensus existed among economists that minimum wage has negative employment effects. However, in 1992, the studies by Card (1992a) and Katz and Krueger (1992), who found insignificant and slightly positive effects, respectively, came to create a schism. Since then a divergence of views expressed by conflicting empirical studies exists in the literature. In our paper, we use a meta-sample of 77 international studies from 18 countries to investigate this relationship. Our analysis suggests that there is evidence of publication selection, but no effect of minimum wages on employment measures. Additionally, using 27 moderators as potential explanatory variables in order to explain the variation among studies, we find that study characteristics related to the data, the model specifications and the group concerned, diversify the degree of the effect. |
| Keywords: | Minimum wage, Employment, Meta-analysis. |
| JEL: | C12 J21 J38 |
| Date: | 2015–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61321&r=lab |
| By: | David H. Autor ; Nicole Maestas ; Kathleen J. Mullen ; Alexander Strand |
| Abstract: | This paper measures the causal effect of time out of the labor force on subsequent employment of Social Security Disability Insurance (SSDI) applicants and distinguishes it from the discouragement effect of receiving disability benefits. Using a unique Social Security Administration workload database to identify exogenous variation in decision times induced by differences in processing speed among disability examiners to whom applicants are randomly assigned, we find that longer processing times reduce the employment and earnings of SSDI applicants for multiple years following application, with the effects concentrated among applicants awarded benefits during their initial application. A one standard deviation (2.1 month) increase in initial processing time reduces long-run “substantial gainful activity” rates by 0.36 percentage points (3.5%) and long-run annual earnings by $178 (5.1%). Because applicants initially denied benefits spend on average more than 15 additional months appealing their denials, previous estimates of the benefit receipt effect are confounded with the effect of delays on subsequent employment. Accounting separately for these channels, we find that the receipt effect is at least 50% larger than previously estimated. Combining the delay and benefits receipt channels reveals that the SSDI application process reduces subsequent employment of applicants on the margin of award by twice as much as prior literature suggests. |
| JEL: | H53 I13 J22 J38 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20840&r=lab |
| By: | Arntz, Melanie ; Dlugosz, Stephan ; Wilke, Ralf A. |
| Abstract: | A number of contributions have found evidence for motherhood being a critical life event for women's employment careers. This study presents a detailed model for the du- ration of maternity leave in which young mothers can make a transition into a number of states related to employment and unemployment among others. The model incorporates a large number of factors including the legal framework, individual and firm character- istics. We provide a comprehensive picture of the sorting mechanisms that lead to the differentiation of women's employment careers after birth. Our empirical evidence is de- rived from large linked administrative individual labour market data from Germany for a period of three decades. We obtain unprecedented insights how women's skills, the quality of the previous job match, firm level characteristics, labour market conditions and leave legislation are related to the length of maternity duration. |
| Keywords: | work interruptions,cumulative incidence,leave legislation |
| JEL: | J13 J18 C41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14125&r=lab |
| By: | Patrick Kline ; Melissa Tartari |
| Abstract: | We study the short-term impact of Connecticut's Jobs First welfare reform experiment on women’s labor supply and program participation decisions. A non-parametric optimizing model is shown to restrict the set of counterfactual choices compatible with each woman's actual choice. These revealed preference restrictions yield informative bounds on the frequency of several intensive and extensive margin responses to the experiment. We find that welfare reform induced many women to work but led some others to reduce their earnings in order to receive assistance. The bounds on this latter “opt-in” effect imply that intensive margin labor supply responses are non-trivial. |
| JEL: | C14 H20 J22 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20838&r=lab |
| By: | Hotchkiss, Julie L. (Federal Reserve Bank of Atlanta ); Pitts, M. Melinda (Federal Reserve Bank of Atlanta ); Walker, Mary Beth (Georgia State University ) |
| Abstract: | This paper uses unique administrative data to expand the understanding of the role women's intermittency decisions play in the determination of their wages. We demonstrate that treating intermittency as exogenous significantly overstates its impact. The intermittency penalty also increases in the education level of the woman. The penalty for a woman with a high school degree with an average amount of intermittency during six years after giving birth to her first child is roughly half the penalty for a college graduate. We also demonstrate the value of using an index to capture multiple dimensions of the intermittency experience, and we illustrate the importance of firm dynamics in the determination of a woman's wage. |
| Keywords: | intermittency; administrative data; career interruptions; fertility; labor supply; wage differentials |
| JEL: | J13 J22 J31 |
| Date: | 2014–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2014-23&r=lab |
| By: | David Card ; Andrew Johnston ; Pauline Leung ; Alexandre Mas ; Zhuan Pei |
| Abstract: | We provide new evidence on the effect of the unemployment insurance (UI) weekly benefit amount on unemployment insurance spells based on administrative data from the state of Missouri covering the period 2003-2013. Identification comes from a regression kink design that exploits the quasi-experimental variation around the kink in the UI benefit schedule. We find that UI durations are more responsive to benefit levels during the recession and its aftermath, with an elasticity between 0.65 and 0.9 as compared to about 0.35 pre-recession. |
| JEL: | J64 J65 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20869&r=lab |
| By: | Torsvik, Gaute (University of Oslo ); Vaage, Kjell (University of Bergen ) |
| Abstract: | We examine the impact of a policy reform that gave employees in a municipality extended rights to self-declare sickness absence. To identify the effect of bypassing the physician as an absence certifier we contrast the development of absence in the reform municipality with absence in similar municipalities. We use a standard difference–in–difference comparison and the synthetic control method to quantify the effect of the reform. Using these methods we find that the reform reduced sickness absence by more than 20%. It is the incidence of absence spells that declines, not their length. To explain this result, we emphasize that the reform not only removed the physician from the picture, it also put the employer more firmly into it by prescribing a detailed follow up scheme (phone calls, meetings, flowers) for the employer (the first line–leader) and the employee calling in sick. The combination of extended self–certification and employer involvement can be taken as a sign of trust and concern for the employees’ well-being or as enhanced monitoring. Both interpretations can explain the drop in absence we observe. |
| Keywords: | Sickness absence; Public reform; Gatekeeping; Trust; Monitoring |
| JEL: | C21 H55 J21 |
| Date: | 2014–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2014_008&r=lab |
| By: | Michele Battisti (University of Palermo, CeLEG LUISS Guido Carli and RCEA ); Massimo Del Gatto (G.d'Annunzio University and CRENoS ); Christopher F. Parmeter (Department of Economics, University of Miami ) |
| Abstract: | We adopt a counterfactual approach to decompose labor productivity growth into growth of Technological Productivity (TEP), growth of the capital-labor ratio and growth of Total Factor Productivity (TFP). We bring the decomposition to the data using international countrysectoral information spanning from the 1960s to the 2000s and a nonparametric generalized kernel method, which enables us to estimate the production function allowing for heterogeneity across all relevant dimensions: countries, sectors and time. As well as documenting substantial heterogeneity across countries and sectors, we nd average TEP to account for about 44% of labor productivity growth and TEP gaps with respect to the US to remain almost unchanged, on average, despite an average 1% yearly decrease in the labor productivity gap. The US displays the highest TEP growth rate. We then perform standard convergence regressions nding strong evidence of technological convergence and showing that the eect of a few variables only, among those found significant to explain labor productivity convergence, occurs through the technology channel. |
| Keywords: | TFP, Aggregate Productivity, Technology, Nonparametric Estimation, Convergence Publication Status: Under Review |
| JEL: | C14 D24 O41 O47 |
| Date: | 2014–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:mia:wpaper:2014-02&r=lab |
| By: | van Klaveren, Maarten ; Tijdens, Kea |
| Abstract: | After the Second World War in the Netherlands, one of the most open economies in the world, wage moderation has be a leading theme in macroeconomic policy and industrial rela-tions. When wage restraint met with an overheated labour market and strike movements, social partners accepted the re-placement of a voluntary "social minimum wage" by a statutory minimum wage, introduced in 1969. Due to governmental freezes in the 1990s and 2000s the statutory minimum wage fell relative to the average wage, which left room for the in-crease of low-wage employment. In the 2000s the Dutch econ-omy generated large trade surpluses. However, in 2008-13 domestic private consumption fell substantially and this has, in combination with a housing bubble, seriously frustrated the recovery of the Dutch economy from the crisis. Continuing the Dutch wage moderation tradition in current conditions would cause negative effects, not only on domestic demand but also on the country´s labour productivity and growth potential. Thus, there are good reasons to defend a wage-led strategy as a recovery option in the case of the Netherlands. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wsidps:194&r=lab |