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on Labour Economics |
| By: | Adrian Chadi; Clemens Hetschko |
| Abstract: | For representative German panel data, we document that voluntary job switching is associated with higher levels of life satisfaction, though only for some time, whereas forced job changes do not affect life satisfaction clearly. Using plant closures as an exogenous trigger of switching to a new employer, we find that job mobility turns out to be harmful for satisfaction with family life. By investigating people’s lives beyond their workplaces, our study complements research on the well-being impact of labour mobility, suggesting some positive welfare effects of flexible labour markets, but also a previously undocumented potential for negative implications. |
| Keywords: | Life satisfaction; satisfaction with family life; job changes; honeymoon-hangover effect; employment protection legislation |
| JEL: | I32 J28 J61 J63 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp747&r=lab |
| By: | Altmann, Steffen (University of Copenhagen); Falk, Armin (University of Bonn); Jäger, Simon (Harvard University); Zimmermann, Florian (University of Zurich) |
| Abstract: | We conduct a large-scale field experiment in the German labor market to investigate how information provision affects job seekers' employment prospects and labor market outcomes. Individuals assigned to the treatment group of our experiment received a brochure that informed them about job search strategies and the consequences of unemployment, and motivated them to actively look for new employment. We study the causal impact of the brochure by comparing labor market outcomes of treated and untreated job seekers in administrative data containing comprehensive information on individuals' employment status and earnings. While our treatment yields overall positive effects, these tend to be concentrated among job seekers who are at risk of being unemployed for an extended period of time. Specifically, the treatment effects in our overall sample are moderately positive but mostly insignificant. At the same time, we do observe pronounced and statistically significant effects for individuals who exhibit an increased risk of long-term unemployment. For this group, the brochure increases employment and earnings in the year after the intervention by roughly 4%. Given the low cost of the intervention, our findings indicate that targeted information provision can be a highly effective policy tool in the labor market. |
| Keywords: | job search, information provision, unemployment, field experiment |
| JEL: | C93 D04 D83 J64 J68 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9040&r=lab |
| By: | Cigagna, Claudia (University of Cagliari); Sulis, Giovanni (University of Cagliari) |
| Abstract: | Using data on migration flows for a sample of 15 OECD countries over the period 1980-2006, we analyse the effect of unemployment and labour institutions such as employment protection legislation, coverage of unemployment benefits, minimum wages, union power and tax wedge on migration flows. We allow for interactions of these institutions with migration entry laws, as both affect equilibrium wages and employment in destination countries, influencing mobility decisions of immigrants. We find strong and negative effects of unemployment, employment protection and migration policy on flows. The negative effect of migration policy on flows is larger in countries with high than in countries with low employment protection. We find positive effects for minimum wages, unemployment benefits and union power. We deal with potential endogeneity of the variables of interest and report heterogeneous effects depending on the group of countries of origin and destination. |
| Keywords: | international migration flows, labour market institutions, migration policies |
| JEL: | J61 J50 F22 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9016&r=lab |
| By: | Patricia Gallego-Granados; Johannes Geyer |
| Abstract: | The gender wage gap is a persistent labor market phenomenon. Most research focuses on the determinants of these wage differences. We contribute to this literature by exploring a different research question: if wages of women are systematically lower than male wages, what are the distributional consequences (disposable income) and what are the labor market effects (labor supply) of the wage gap? We demonstrate how the gender gap in gross hourly wages shows up in the distribution of disposable income of households. This requires taking into account the distribution of working hours as well as the tax-benefit system and other sources of household income. We present a methodological framework for deriving the gender wage gap in terms of disposable income which combines quantile decomposition, simulation techniques and structural labor supply estimation. This allows us to examine the implications of the gender wage gap for income inequality and working incentives. We illustrate our approach with an application to German data. |
| Keywords: | Gender wage gap, quantile regression, wage decomposition, labor supply, microsimulation, income distribution, tax-benefit system |
| JEL: | D31 J31 J16 H23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp753&r=lab |
| By: | Nitika Bagaria; Barbara Petrongolo; John Van Reenen |
| Abstract: | Disability rolls have escalated in developed nations over the last 40 years. The UK, however, stands out because the numbers on these benefits stopped rising when a welfare reform was introduced that integrated disability benefits with unemployment insurance (UI). This policy reform improved job information and sharpened bureaucratic incentives to find jobs for the disabled (relative to those on UI). We exploit the fact that policy was rolled-out quasi-randomly across geographical areas. In the long-run the policy improved the outflows from disability benefits by 6% and had an (insignificant) 1% increase in unemployment outflows. This is consistent with a model where information helps both groups, but bureaucrats were given incentives to shift effort towards helping the disabled find jobs and away from helping the unemployed. Interestingly, in the short-run the policy had a negative impact for both groups, suggesting important disruption effects. We estimate that it takes about six years for the estimated benefits of the reform to exceed its costs, which is beyond the time horizon of most policy-makers. |
| JEL: | H53 I13 I38 J14 J18 J64 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21163&r=lab |
| By: | Giovanni Peri; Kevin Shih; Chad Sparber |
| Abstract: | In April of 2007 and 2008, the U.S. randomly allocated 65,000 H-1B temporary work permits to foreign-born skilled workers. About 88,000 requests for computer-related H-1B permits were declined in each of those two years. This paper exploits random H-1B variation across U.S. cities to analyze how these supply shocks affected labor market outcomes for computer-related workers. We find that negative H-1B supply shocks are robustly associated with declines in foreign-born computer-related employment, while native-born computer employment either falls or remains constant. Most of the correlation between H-1B supply shocks and foreign employment is due to rationing that varies with a city's initial dependence upon H-1B workers. Variation in random, lottery-driven, unexpected shocks is too small to identify significant effects on foreign employment in the full sample of cities. However, we do find that random rationing affects foreign employment in cities that are highly dependent upon the H-1B program. Altogether, the results support the existence of complementarities between native and foreign-born H-1B computer workers. |
| JEL: | F22 J61 O33 R10 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21175&r=lab |
| By: | Pascal Michaillat; Emmanuel Saez |
| Abstract: | This article develops a model of unemployment fluctuations. The model keeps the architecture of the general-disequilibrium model of Barro and Grossman (1971) but takes a matching approach to the labor and product markets instead of a disequilibrium approach. On the product and labor markets, both price and tightness adjust to equalize supply and demand. Since there are two equilibrium variables but only one equilibrium condition on each market, a price mechanism is needed to select an equilibrium. We focus on two polar mechanisms: fixed prices and competitive prices. When prices are fixed, aggregate demand affects unemployment as follows. An increase in aggregate demand leads firms to find more customers. This reduces the idle time of their employees and thus increases their labor demand. This in turn reduces unemployment. We combine the predictions of the model and empirical measures of product market tightness, labor market tightness, output, and employment to assess the sources of labor market fluctuations in the United States. First, we find that product market tightness and labor market tightness fluctuate a lot, which implies that the fixed-price equilibrium describes the data better than the competitive-price equilibrium. Next, we find that labor market tightness and employment are positively correlated, which suggests that the labor market fluctuations are mostly due to labor demand shocks and not to labor supply or mismatch shocks. Last, we find that product market tightness and output are positively correlated, which suggests that the labor demand shocks mostly reflect aggregate demand shocks and not technology shocks. |
| JEL: | E10 E24 E30 J2 J64 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61832&r=lab |
| By: | Chen, Yiu Por (Vincent) (City University of Hong Kong) |
| Abstract: | This paper explores the relationship between fiscal decentralization, which gave greater rural industrialization and fiscal authority to local governments, and the emergence of rural-rural undocumented inter-provincial labor migration during China's initial reform period. A Heckman model is employed to correct for the zero observation problems and to consistently estimate the labor mobility with a modified gravity equation. Given the institutional barriers, the fiscal decentralization has two contending effects on labor market integration: Local economic development promotes labor mobility, but local public goods crowding restrains the inflow of labor at the destination. The crowding effect is stronger at lower levels of government. |
| Keywords: | fiscal decentralization, local economic development, local public goods, rural labor mobility |
| JEL: | H30 J61 J68 D72 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9024&r=lab |
| By: | Lorenzo Caliendo; Maximiliano Dvorkin; Fernando Parro |
| Abstract: | We develop a dynamic labor search model where production and consumption take place in spatially distinct labor markets with varying exposure to domestic and international trade. The model recognizes the role of labor mobility frictions, goods mobility frictions, geographic factors, and input-output linkages in determining equilibrium allocations. We show how to solve the equilibrium of the model without estimating productivities, reallocation frictions, or trade frictions, which are usually difficult to identify. We use the model to study the dynamic labor market outcomes of aggregate trade shocks. We calibrate the model to 38 countries, 50 U.S. states and 22 sectors and use the rise in China's import competition to quantify the aggregate and disaggregate employment and welfare effects on the U.S. economy. We find that China's import competition growth resulted in 0.6 percentage point reduction in the share of manufacturing employment, approximately 1 million jobs lost, or about 60% of the change in the manufacturing employment share not explained by a secular trend. Overall, China's shock increases U.S. welfare by 6.7% in the long-run and by 0.2% in the short-run with very heterogeneous effects across labor markets. |
| JEL: | E24 F16 J62 R13 R23 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21149&r=lab |
| By: | Eckstein, Zvi; Setty, Ofer; Weiss, David |
| Abstract: | There is a strong correlation between the corporate interest rate (BAA rated), and its spread relative to Treasuries, and the unemployment rate. We model how interest rates and potential default rates impact equilibrium unemployment in a Diamond-Mortesen-Pissarides model. We calibrate the model using US data without targeting business cycle statistics. Volatility in the corporate interest rate can explain about 80% of the volatility of unemployment, vacancies, and market tightness. Simulating the Great Recession shows the model can account for much of the rise in unemployment. Without Fed action, unemployment would have been 6% higher. |
| Keywords: | business cycles; corporate interest rates; equilibrium unemployment; Great Recession; interest rate spread; search and matching models |
| JEL: | E22 E24 E32 E44 J41 J63 J64 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10596&r=lab |
| By: | Riphahn, Regina T. (University of Erlangen-Nuremberg); Wunder, Christoph (Martin-Luther University, Halle-Wittenberg) |
| Abstract: | We study state dependence in welfare receipt and investigate whether welfare transitions changed after a welfare reform. Using data from the German Socio-Economic Panel, we apply dynamic multinomial logit estimators and find that state dependence in welfare receipt is not a central feature of the German welfare system. We find that welfare transitions changed after the reform: transitions from welfare to employment became more likely and persistence in welfare and inactivity declined. We observe a large relative increase in transitions from employment to welfare. Immigrants' responsiveness to the labor market situation increased after the reform. |
| Keywords: | social assistance, state dependence, unemployment benefit II, immigration, dynamic multinomial logit |
| JEL: | I38 J61 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9035&r=lab |
| By: | Zetterdahl, Emma (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | This thesis consists of an introductory part and four self-contained papers related to individual financial behavior and risk-taking in financial markets. <p> In Paper [I] we estimate within-family and community social interaction effects upon an individual’s stock market entry, participation, and exit decision. Interestingly, community sentiment towards the stock market (based on portfolio outcomes in the community) does not influence individuals’ likelihood to enter, while a positive sentiment increases (decreases) the likelihood of participation (exit). Overall, the results stress the importance of accounting for family social influence and highlight potentially important differences between family and community effects in individuals’ stock market participation. <p> In Paper [II] novel evidence is provided indicating that the influence from family (parents and partners) and peer social interaction on individuals’ stock market participation vary over different types of individuals. Results imply that individuals’ exposure to, and valuation of, stock market related social signals are of importance and thus, contribute to the understanding of the heterogeneous influence of social interaction. Overall, the results are interesting and enhance the understanding of the underlying mechanisms of social interaction on individuals’ financial decision making. <p> In Paper [III] the impact of divorce on individual financial behavior is empirically examined in a dynamic setting. Evidence that divorcing individuals increase their saving rates before the divorce is presented. This may be seen as a response to the increase in background risk that divorce produces. After the divorce, a negative divorce effect on individual saving rates and risky asset shares are established, which may lead to disparities in wealth accumulation possibilities between married and divorced. Women are, on average, shown to not adjust their precautionary savings to the same extent as men before the divorce. I also provide tentative evidence that women reduce their financial risk-taking more than men after a divorce, which could be a result of inequalities in financial positions or an adjustment towards individual preferences. <p> Paper [IV] provides novel empirical evidence that gender identity is of importance for individuals’ financial risk-taking. Specifically, by use of matching and by dividing male and females into those with “traditional” versus “nontraditional” gender identities, comparison of average risk-taking between groupings indicate that over a third (about 35-40%) of the identified total gender risk differential is explained by differences in gender identities. Results further indicate that risky financial market participation is 19 percentage points higher in groups of women with nontraditional, compared with traditional, gender identities. The results, obtained while conditioning upon a vast number of controls, are robust towards a large number of alternative explanations and indicate that some individuals (mainly women) partly are fostered by society, through identity formation and socially constructed norms, to a relatively lower financial risk-taking. |
| Keywords: | Asset allocation; Behavioral finance; Divorce; Financial literacy; Financial risk-taking; Gender identity; Household finance; Panel data; Asset allocation; Behavioral finance; Divorce; Financial literacy; Financial risk-taking; Gender identity; Household finance; Panel data; Propensity score matching; Risky asset share; Risk aversion; Saving behavior; Stock market participation; Social interaction; Trust |
| JEL: | D01 D03 D14 D14 D83 G02 G11 J12 J16 |
| Date: | 2015–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0908&r=lab |
| By: | Peter Bönisch; Walter Hyll |
| Abstract: | In this paper we study the effect of television exposure on fertility. We exploit a natural experiment that took place in Germany after WWII. For topographical reasons, Western TV programs, which promoted one/no child families, could not be received in certain parts of East Germany. Using an IV approach, we find robust evidence that watching West German TV results in lower fertility. This conclusion is robust to alternative model specifications and data sets. Our results imply that individual fertility decisions are affected by role models or information about other ways of life promoted by media. |
| Keywords: | Natural experiment; TV consumption; Fertility |
| JEL: | C26 D12 J13 L82 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp752&r=lab |
| By: | Hippolyte d’Albis (UNIVERSITY PARIS 1, Paris Schoof of Economics); Paula Gobbi (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Angela Greulich (UNIVERSITE PARIS 1 Panthéon-Sorbonne) |
| Abstract: | This paper shows that differences in fertility across European countries mainly emerge in the transition from the first to the second child and that childcare services enabling women to work are an important determinant for this transition to occur. The theoretical framework proposed accounts for these two findings: in countries where childcare coverage is low, there is a U-shaped relationship between a couple's probability to have a second child and female potential wage, while in countries with easy access to childcare, this probability is positively related with the woman's potential wage. Both of these implications are confirmed empirically when utilizing the European Survey of Income and Living Conditions (EU-SILC) for estimating a woman's probability of having a second child as a function of education. |
| Keywords: | Childcare, Education, Fertility, Female Employment |
| JEL: | J11 J13 J16 |
| Date: | 2015–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2015010&r=lab |
| By: | Steingress, Walter (Banque de France) |
| Abstract: | Immigrants can increase international trade by shifting preferences towards the goods of their country of origin and by reducing bilateral transaction costs. Using geographical variations across US states for the period 1970 to 2005, we quantify the impact of immigrants on intermediate goods imports. We address endogeneity and reverse causality – which arises if migration from a country of origin to a US state is driven by trade opportunities between the two locations – by exploiting the exogenous allocation of refugees within the US refugee resettlement program. Our results are robust to an alternative identification strategy, based on the large influx of Central American immigrants to the United States after hurricane Mitch. We find that a 10 percent increase in recent immigrants to a given US state raises intermediate imports from those immigrants' country of origin by 1.5 percent. |
| Keywords: | international trade, international migration, political refugees, hurricane Mitch |
| JEL: | F14 F22 J61 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9058&r=lab |
| By: | Noland, Marcus; Stahler, Kevin |
| Abstract: | This paper examines Asian exceptionalism at the Olympics. Northeast Asian countries conform to the statistical norm while the rest of Asia lags, but this result obscures underlying distinctions. Asian women do better than men. Non-Northeast Asia’s relative underperformance is due to the men. Asian performance is uneven across events, finding more success in weight-stratified contests, perhaps due to the fact that competition is more “fair” physiologically. The models imply that China, Japan, and South Korea will place among the top ten medaling countries at the 2016 Games, while China will continue to close the medal gap with the United States. |
| Keywords: | Asia, gender, sports, Olympics |
| JEL: | J16 L83 Z13 |
| Date: | 2015–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64380&r=lab |
| By: | Moretti, Enrico; Wilson, Daniel J |
| Abstract: | Using data on the universe of U.S. patents filed between 1976 and 2010, we quantify how sensitive is migration by star scientist to changes in personal and business tax differentials across states. We uncover large, stable, and precisely estimated effects of personal and corporate taxes on star scientists’ migration patterns. The long run elasticity of mobility relative to taxes is 1.6 for personal income taxes, 2.3 for state corporate income tax and -2.6 for the investment tax credit. The effect on mobility is small in the short run, and tends to grow over time. We find no evidence of pre-trends: Changes in mobility follow changes in taxes and do not to precede them. Consistent with their high income, star scientists migratory flows are sensitive to changes in the 99th percentile marginal tax rate, but are insensitive to changes in taxes for the median income. As expected, the effect of corporate income taxes is concentrated among private sector inventors: no effect is found on academic and government researchers. Moreover, corporate taxes only matter in states where the wage bill enters the state’s formula for apportioning multi-state income. No effect is found in states that apportion income based only on sales (in which case labor’s location has little or no effect on the tax bill). We also find no evidence that changes in state taxes are correlated with changes in the fortunes of local firms in the innovation sector in the years leading up to the tax change. Overall, we conclude that state taxes have significant effect of the geographical location of star scientists and possibly other highly skilled workers. While there are many other factors that drive when innovative individual and innovative companies decide to locate, there are enough firms and workers on the margin that relative taxes matter. |
| Keywords: | economic geography; innovation; taxes |
| JEL: | H2 J01 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10600&r=lab |
| By: | Marcus Noland (Peterson Institute for International Economics); Kevin Stahler (Peterson Institute for International Economics) |
| Abstract: | This paper examines the growing diversity of participation and achievement in the Olympics. A wide set of socioeconomic variables is correlated with medaling, particularly with respect to the Summer Games and women's events. Host advantage is particularly acute in judged contests such as gymnastics. However, there is evidence that the influence of correlates such as country size, per capita income, and membership in the communist bloc is declining over time as competition becomes increasingly diverse. These effects are less evident in the Winter Games, events that require significant capital investments, and judged contests. |
| Keywords: | women, globalization, sports, Olympics, doping |
| JEL: | J16 L83 Z13 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp15-9&r=lab |