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on Labour Economics |
| By: | Foged, Mette (University of Copenhagen); Peri, Giovanni (University of California, Davis) |
| Abstract: | Using longitudinal data on the universe of workers in Denmark during the period 1991-2008 we track the labor market outcomes of low skilled natives in response to an exogenous inflow of low skilled immigrants. We innovate on previous identification strategies by considering immigrants distributed across municipalities by a refugee dispersal policy in place between 1986 and 1998. We find that an increase in the supply of refugee-country immigrants pushed less educated native workers (especially the young and low-tenured ones) to pursue less manual-intensive occupations. As a result immigration had positive effects on native unskilled wages, employment and occupational mobility. |
| Keywords: | refugees, dispersal policy, manual skills, employment, wages |
| JEL: | F22 J24 J61 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8961&r=lab |
| By: | Kudoh, Noritaka (Hokkaido University); Miyamoto, Hiroaki (University of Tokyo); Sasaki, Masaru (Osaka University) |
| Abstract: | This paper studies a labor market search-matching model with multi-worker firms to investigate how firms utilize the extensive and intensive margins over the business cycle. The earnings function derived from the Stole-Zwiebel bargaining acts as an adjustment cost function for employment and hours. We calibrate the model to match the Japanese labor market, in which the intensive margin accounts for 79% of the variations in total working hours. The model replicates the observed cyclical behavior of hours of work, but fails to generate employment volatility of realistic magnitude. Additional penalties for longer hours of work do not resolve this issue. Wage rigidity and persistent shocks are promising lines of further investigations. |
| Keywords: | business cycles, hours of work, search, multi-worker firms |
| JEL: | E32 J20 J64 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8946&r=lab |
| By: | Addison, John T. (University of South Carolina); Portugal, Pedro (Banco de Portugal); Vilares, Hugo (Banco de Portugal) |
| Abstract: | This paper provides the first definitive estimates of union density in Portugal, 2010-2012, using a unique dataset. The determinants of union density at firm level are first modeled. Next, we draw upon a very recent study of the union wage premium to provide summary estimates of the union wage gap for different ranges of union density. Since these estimates fully reflect the reality of an industrial relations system in which collective agreements are extended to nonunion workers and firms, the final issue examined is contract coverage. Although there has occurred a pronounced fall in the number of new extension agreements in recent years, this decline has been uncritically linked with a fall in coverage. We show that the number of workers covered by new and existing agreements has been largely unaffected by economic crisis. The reduced frequency of new agreements and extensions is viewed as an aspect of downward nominal wage rigidity in deflationary times (the counterpart of "upward nominal wage rigidity" in more normal times) rather than the immediate expression of a crisis in collective bargaining per se. |
| Keywords: | collective bargaining, union density, collective agreement coverage, union wage premium, nominal wage rigidity, Portugal |
| JEL: | J31 J52 J53 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8943&r=lab |
| By: | Carlos Madeira |
| Abstract: | Due to the absence of longitudinal data, empirical studies ignore labor income dynamics in developing economies, where earnings inequality is highest and social insurance is weakest. This work proposes a dynamic earnings process with two distinct shocks: unemployment spells and the wage of workers who stay employed. I then show this income process can be estimated from employment surveys with a rotating sample design, which are available for several countries. Applying this procedure to Chilean data I show wage volatility and unemployment rates are highly heterogeneous across workers. Unemployment spells are the most important source of earnings risk for workers. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:754&r=lab |
| By: | Abigail McKnight |
| Abstract: | The evaluation of the Coalition's employment policy shows that although the labour market was remarkably resilient over the recession in terms of employment rates, this was largely driven by falling real wages and increases in self-employment. For many, employment became more precarious through the growth in zero hours contracts and insecure self-employment on very low incomes. The young were hit hardest with the recession having differential generational consequences, as unlike in previous recessions older workers did not suffer from skill redundancies as the recession was not accompanied by large scale industrial restructuring. In fact there was a redistribution of employment from younger workers to older workers including those working beyond the state pension age. The Government introduced a range of new active labour market programmes and reformed existing programmes but these reforms are best described as an evolution rather than a revolution as they built on a strong policy platform put in place by the previous Labour Government. Despite employment reaching new record levels, the performance of the Government's active labour market programmes did not meet expectations and for some time, and particularly for some groups, the new programmes delivered results below those achieved by the programmes they replaced. A greater emphasis on private providers delivering services and being paid according to the results they achieve with higher financial incentives available for groups requiring additional help (in particular groups whose work capability is affected by illness or disability) has not improved relative outcomes for the most disadvantaged groups. The fiasco around work capability assessments and the fact that active labour market programmes are still failing to meet the needs of those deemed capable of work in a limited capacity suggests that a major review is now required for this group of claimants. |
| Keywords: | Employment policy, evaluation of labour policies, unemployment, wages |
| JEL: | J21 J68 J08 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:/187&r=lab |
| By: | Arni, Patrick (IZA); Schiprowski, Amelie (IZA) |
| Abstract: | Job search requirements constrain the effort choice of unemployment insurance recipients by enforcing a minimum number of monthly applications. This paper is the first to assess how individual search effort, job finding and job stability react to this constraint. Standard job search theory predicts that requirements affect each job seeker relative to her unconstrained effort choice. Therefore, the behavioral treatment intensity of interest is the incremental effort necessary to comply with the requirement. Using novel Swiss register data, we measure this intensity as the difference between the individual requirement threshold and the search effort provided just before requirement imposition. Our econometric approach exploits that – conditional on a broad set of choice fixed effects – the match between the job seeker's unconstrained effort choice and the caseworker's requirement setting behavior is arbitrary. Therefore, it provides exogenous variation in the treatment assignment. We find that binding search requirements that exceed the job seeker's unconstrained effort choice, increase job finding in a substantial way. These effects are highly heterogeneous with respect to the job seeker's characteristics. They come at the cost of increased non-compliance and sanction imposition rates. Moreover, binding requirements have striking negative effects on job stability. Finally, we find that non-binding requirements can also affect search outcomes. This suggests that requirements can operate as signals, thereby generating behavioral effects that are not predicted by standard job search theory. |
| Keywords: | job search behavior, unemployment insurance, incentive effects |
| JEL: | J64 J65 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8951&r=lab |
| By: | Esther Ann BØLER (University of Oslo and ESOP); Beata Smarzynska JAVORCIK (University of Oxford, ESOP and CEPR); Karen Helene ULLTVEI-MOE (University of Oslo, ESOP and CEPR) |
| Abstract: | While the impact of globalization on income inequality has received a lot of attention, little is known about its effect on the gender wage gap (GWG). This study argues that there is a systematic differece in GWG between exporting firms and non-exporters. By the virtue of being exposed to higher competition, exporters require greater commitment and flexibility from their employees. If commitment is not easily observable and women are precieved as less committed workers than men, exporters will statistically discriminate against female employees and will exhibit a higher GWG than non-exporters. We test this hyphesis using matched employer-employee data from the Norwegian manufacturing sector from 1996 to 2010. Our identification strategy relies on an exogeneous shock, namely, the legislative changes that increased the lenght of the parental leave that is available only to fathers. We argue that these changes have narrowed the perceived commitment gap between the genders and show that the initially higher GWG observved in exporting firms relative to non-exporters has gone down after the changes took place. |
| Keywords: | Exporters, Globalizations, Gender Wage Gap |
| JEL: | F10 F14 F16 J16 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-25&r=lab |
| By: | Ayhan, Sinem H. (IZA) |
| Abstract: | This paper contributes to the research on interdependencies in spousal labor supply by analyzing labor supply response of married women to their husbands' job losses ("added worker effect"). It empirically tests the hypothesis of added worker effect relying on a case study on Turkey during the global economic crisis of 2008. Identification is achieved by exploiting the exogenous variation in the output of male-dominated sectors that were hit hard by the crisis and the high degree of gender segmentation that characterizes the Turkish labor market. Findings based on the instrumental variable approach suggest that the probability of entering the labor force for a woman increases by up to 29% in response to her husband's unemployment. However the effect is not contemporaneous; it appears with a quarter of lag and remains existent only for two quarters. |
| Keywords: | spousal labor supply, added worker effect, discouraged worker effect, global economic crisis |
| JEL: | C26 D10 J16 J22 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8937&r=lab |
| By: | Boman, Anders (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | In this paper we study retirement decisions and more specifically, the influence of a partner’s labour market status on this decision. We use information from three waves of the Survey of Health Ageing and Retirement in Europe (SHARE), providing information on a wide range of variables, including economic, social, as well as health variables not only of the respondent but also of the partner of the respondent, if any. Most importantly, we are able analyse the transition into retirement rather than the state of being retired and also to distinguish between different degrees of labour market attachment of the partner. Initially, we find that having a partner who is retired or a homemaker increases the likelihood of retirement, whereas an unemployed partner or a partner who is not working due to permanent sickness or disability has no statistically significant effect. However, dividing the sample into men and women, we find that the effects differ substantially between these two groups. The probability of retirement among men is not influenced by their partner’s labour market status, and among women we only find a statistically significant effect of having a partner who is retired. Our findings are robust to variations in the definition of retirement and subsamples. |
| Keywords: | retirement; labour market; family; joint leisure; SHARE |
| JEL: | J14 J26 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0618&r=lab |
| By: | Davoine, Thomas (Institute for Advanced Studies) |
| Abstract: | The paper provides a theoretical rationale for flexicurity policies, which consist of low employment protection, generous unemployment insurance and active labor market programmes. It analyzes in which conditions flexicurity can be optimal. Low employment protection encourages costly education efforts to access high productivity and high innovation sectors, with firms more likely to survive and thus not exposing much their workers to unemployment risk. Activation programmes support the reallocation flow from unproductive to productive firms, helping to reduce unemployment. Low employment protection thus provides incentives for costly self-insurance against unemployment risk through education, mitigating the moral hazard cost of unemployment insurance and activation programmes. The paper provides realistic numerical illustrations where flexicurity is optimal, and where it is not optimal. |
| Keywords: | flexicurity, unemployment insurance, job protection, active labor market policy, education |
| JEL: | J64 J65 J68 J32 H30 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:311&r=lab |
| By: | Campaña, Juan Carlos (University of Zaragoza); Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza) |
| Abstract: | We analyze differences by gender in the time dedicated to total work (paid and unpaid) by families in Latin America, with particular attention to the effect of social norms. To this end, we use survey data on time use in Mexico (2009), Peru (2010), Ecuador (2012) and Colombia (2012), to estimate differential equations through OLS. Our results reveal differences between countries in terms of the gender distribution of total work (paid work plus unpaid work), with Colombia and Peru being more equitable. These two countries could be approaching a situation of "iso-work", or equality of work, in the sense that men and women spend similar amounts of time in total work. When considering the social norms that explain gender differences in the time spent in total work, we use data from the last wave (2010-2014) of the World Values Survey (WVS). Our results indicate that the more egalitarian countries exhibit the highest levels of equality in the distribution of work. It is important to know how men and women from these four countries distribute their time in total work, in order to understand why there are clear differences by gender. |
| Keywords: | total work, Latin America, differences by gender, social norms |
| JEL: | D13 J22 J13 J16 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8933&r=lab |
| By: | Isao Kamata |
| Abstract: | his paper attempts to perform an empirical analysis of the effects of “labor clauses” provided in bilateral or plurilateral trade agreements (or regional trade agreements: RTAs) on working conditions that laborers in the RTA signatory countries actually face, using macro-level data for a wide variety of countries. The paper first reexamines the labor-provision classification of 223 RTAs in force proposed in the author’s other study (Kamata, 2014) by reviewing the texts of a selected set of those RTAs, and re-defines “RTAs with labor clauses” according to two criteria: (i) the agreement urges or expects the signatory countries to harmonize their domestic labor standards with internationally recognized standards, and (ii) the agreement stipulates the procedures for consultations and/or dispute settlement on labor-condition issues between the signatory countries. Based on this RTA labor-clause (re-)classification, this paper then estimates the impacts of a country’s trade intensities with partners of RTAs with labor clauses and of those without on four measured working conditions in the country: average earnings, average work hours, fatal occupational injury rate, and the number of the ILO’s fundamental conventions ratified. The empirical result indicates that RTAs with labor clauses do not differ from RTAs without labor clauses in the direction of their impacts (improving or worsening) on actual working conditions, and trade intensity with RTA partners should not have a statistically significant impact on the country’s working conditions regardless of whether or not those RTAs include labor clauses. It, however, may be premature to conclude that RTA labor clauses are not effective, since there should be some technical issues inherent in the method and data employed in the current study. |
| Keywords: | wage gap; International trade, Regional trade agreements, Labor standards, Labor clauses |
| JEL: | F13 F14 F16 J81 J88 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:kue:dpaper:e-14-019&r=lab |
| By: | Celeste K. Carruthers (Department of Economics, University of Tennessee); Thomas Sanford (Minnesota Office of Higher Education) |
| Abstract: | We estimate near-term returns to postsecondary diplomas, certificates, and associate's degrees awarded to adult students by Tennessee community colleges and public technology centers. We find that sub-baccalaureate credentials increase access to new industries, particularly health, and that changing industries explains 20 percent of the returns to postsecondary diplomas, 58 percent of the returns to associate's degrees, and at least 72 percent of the return to certificates. Benefits do not appear to be limited to the signal value of completion: students who leave without a credential realize wage gains over matched non-students with a similar history of earnings. |
| JEL: | I21 I28 J62 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ten:wpaper:2015-02&r=lab |
| By: | Jacob Funk Kirkegaard (Peterson Institute for International Economics) |
| Abstract: | This paper empirically investigates US-India labor migration and finds that it dominates permanent and temporary employment-based migration to the United States. The true economic value of temporary high-skilled Indian workers in the United States, based on a new visa data based methodology, is estimated to exceed $45 billion in recent years, surpassing the value of US cross-border imports of goods or services from India. The paper analyzes the impact of a potential US immigration reform on US-India bilateral labor migration relations and finds the 2013 Senate Bill S-744 to ease access for Indian individuals to the US labor market, while making it harder for some Indian high-tech firms to operate in the US markets. |
| Keywords: | Temporary Labor Migration, High-Skilled Workers, US-India Relations, Immigration Reform |
| JEL: | F16 F24 J61 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp15-1&r=lab |
| By: | Gabriel P. Mathy |
| Abstract: | Long-term unemployment was a problem both during the Great Depression and today. As employers view the long-term unemployed as lower-quality employees, this reduces their prospects for reemployment long after the end of a recession, a phenomenon which has been previously described as "hysteresis in unemployment." I find that hysteresis was a significant problem during the Great Depression as the number of long-term unemployed rose, but that the essentially unlimited labor demand during the Second World War provided jobs even to the long-term unemployed. As a result, the hysteresis effect was reversed and labor market conditions in the 1950s resembled those of the 1920s prior to the Great Depression. The Beveridge Curve has also shifted out during the Great Recession as long-term unemployment has risen. Both of these shifts are also evident during the Great Depression. I provide some rough estimates of the costs of this hysteresis effect through a counterfactual simulation where the unemployed are matched to new jobs during the Great Recession and its aftermath just as easily as they were before the Great Recession. Without the pernicious effect of hysteresis, there could be over 12 million more employed Americans today. |
| JEL: | N12 J60 E32 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2015-02&r=lab |
| By: | Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Valentina Tocchioni (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Silvana Salvini (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze) |
| Abstract: | The diffusion of temporary job contracts in contemporary European societies has raised concern that these jobs, even while deemed useful for combating unemployment, may also constitute a source of insecurity and precariousness for young workers. Little is known about their possible social and demographic consequences, especially as regards family formation. We focused on this knowledge-gap by examining how job precariousness affects union formation practices in Italy. We studied both genders and combined the empirical evidence from both qualitative and quantitative research. Based on the qualitative evidence, we advanced the hypothesis that cohabitation can be linked to the growing labor market uncertainty while marriage can be linked to stability. The subsequent quantitative analysis provided strong support for this hypothesis in the general population. |
| Keywords: | job precariousness, temporary contracts, family formation, cohabitation, marriage, Italy |
| JEL: | J13 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2015_02&r=lab |
| By: | Philippe Aghion; Ufuk Akcigit; Angus Deaton; Alexandra Roulet |
| Abstract: | In this paper we analyze the relationship between turnover-driven growth and subjective wellbeing, using cross-sectional MSA level US data. We find that the effect of creative destruction on wellbeing is (i) unambiguously positive if we control for MSA-level unemployment, less so if we do not; (ii) more positive on future wellbeing than on current well-being; (iii) more positive in MSAs with faster growing industries or with industries that are less prone to outsourcing; (iv) more positive in MSAs within states with more generous unemployment insurance policies. |
| JEL: | I31 J63 J65 O33 O38 Z19 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21069&r=lab |