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on Labour Economics |
| By: | Carlos Carrillo-Tudela; Bart Hobijn; Powen She; Ludo Visschers |
| Abstract: | Using quarterly data for the U.K. from 1993 through 2012, we document that the extent of worker reallocation across occupations or industries (a career change, in the parlance of this paper) is high and procyclical. This holds true after controlling for workers' previous labour market status and for changes in the composition of who gets hired over the business cycle. Our evidence suggests that a large part of this reallocation reflect excess churning in the labour market. We also find that the majority of career changes come with wage increases. During the economic expansion wage increases were typically larger for those who change careers than for those who do not. During the recession this is not true for career changers who were hired from unemployment. Our evidence suggests that understanding career changes over the business cycle is important for explaining labour market ows and the cyclicality of wage growth. |
| Keywords: | labour market turnover, occupational and industry mobility, wage growth |
| JEL: | J63 J64 G10 |
| Date: | 2015–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:258&r=lab |
| By: | Larsen, Birthe (Department of Economics, Copenhagen Business School); Waisman, Gisela (Regeringskansliet, Stockholm) |
| Abstract: | We examine the impact of discrimination on labour market performance when workers are subject to a risk of losing skills during an unemployment experience. Within a search and matching framework, we show that both natives and immigrants are affected by discrimination. Discrimination in one sector has positive spill-overs, inducing employment to increase in the other sector and the effect on labour market performance therefore depends on whether discrimination is present in only one sector or in both sectors. Discrimination may induce workers to train more or less than natives after having lost their skills, dependent upon which sector there is discrimination. Net output tends to the be most negatively affected by discrimination among high-skilled workers |
| Keywords: | discrimination; unemployment; search and matching; wages |
| JEL: | J15 J31 J61 J64 J71 |
| Date: | 2015–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2015_002&r=lab |
| By: | Ellul, Andrew; Pagano, Marco; Schivardi, Fabiano |
| Abstract: | We investigate the determinants of firms’ implicit employment and wage insurance to employees, using a difference-in-difference approach: we rely on differences between family and non-family firms to identify the supply of insurance, and exploit variation in unemployment insurance programs across and within countries to gauge workers’ demand for insurance. Using a firm-level panel from 41 countries, we find that family firms provide more stable employment than non-family ones, and in exchange they obtain both greater wage flexibility and lower labor cost: on average, their real wages are 5 percent lower, controlling for country, industry and time effects. The additional employment security provided by family firms is greater, and the wage discount larger, the less generous is public unemployment insurance: private and public provision of employment insurance appear to be substitutes. |
| Keywords: | family firms; insurance; risk-sharing; social security; unemployment; wages |
| JEL: | G31 G32 G38 H25 H26 M40 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10711&r=lab |
| By: | Rendon, Sílvio (Federal Reserve Bank of Philadelphia); Quella-Isla, Núria (Barnard College, Columbia University) |
| Abstract: | In this paper, we investigate to what extent shocks in housing and financial markets account for wage and employment variations in a frictional labor market. To explain these interactions, we use a model of job search with accumulation of wealth as liquid funds and residential real estate, in which house prices are randomly persistent. First, we show that reservation wages and unemployment are increasing in total wealth. And, second, we show that reservation wages and unemployment are also responsive to the composition of wealth. Specifically, when house prices are expected to rise, holding a larger share of wealth as residential real estate tends to increase reservation wages, which deteriorates employment transitions and increases unemployment. We estimate our model structurally using National Longitudinal Survey of Youth data from 1978 to 2005, and we find that more relaxed house financing conditions, in particular lower down payment requirements, decrease employment rates by 5 percentage points in the short run and by 2 percentage points in the long run. We also find that worse labor market conditions immediately increase homeownership rates by up to 5 percent points, whereas in the long run homeownership decreases by 8 percentage points. |
| Keywords: | Job search; Housing; Savings; Structural estimation |
| JEL: | E21 E24 J64 R21 |
| Date: | 2015–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:15-27&r=lab |
| By: | Kolsrud, Jonas; Landais, Camille; Nilsson, Peter; Spinnewijn, Johannes |
| Abstract: | This paper provides a simple, yet general framework to analyze the optimal time profile of benefits during the unemployment spell. We derive simple sufficient-statistics formulae capturing the insurance value and incentive costs of unemployment benefits paid at different times during the unemployment spell. Our general approach allows to revisit and evaluate in a transparent way the separate arguments for inclining or declining profiles put forward in the theoretical literature. We then estimate our sufficient statistics using administrative data on unemployment, income and wealth in Sweden. First, we exploit duration-dependent kinks in the replacement rate and find that the moral hazard cost of benefits is larger when paid earlier in the spell. Second, we find that the drop in consumption determining the insurance value of benefits is large from the start of the spell, but further increases throughout the spell. On average, savings and credit play a limited role in smoothing consumption. Our evidence therefore indicate that the recent change from a flat to a declining benefit profile in Sweden has decreased welfare. In fact, the local welfare gains push towards an increasing rather than decreasing benefit profile over the spell. |
| Keywords: | consumption smoothing; dynamic policy; sufficient statistics; unemployment |
| JEL: | H20 J64 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10701&r=lab |
| By: | Peter Mueser (University of Missouri); Marios Michaelides (University of Cyprus) |
| Abstract: | We report the results of a random assignment study of a reemployment program implemented in the United States during the Great Recession. The program expedited participant exit from Unemployment Insurance (UI), produced significant UI savings, and improved participant employment rates and earnings. These effects are associated with: (1) increased participant UI exit prior to services receipt, indicating an effect due to participant efforts to avoid program requirements; and (2) greater exit subsequent to services, implying that the services themselves helped participants conduct an effective job search. Our findings provide compelling evidence that reemployment programs can be effective during recessions. |
| Keywords: | Great Recession, job search services, unemployment, unemployment compensation, program evaluation. |
| JEL: | J6 H4 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1509&r=lab |
| By: | William J. Collins; Marianne H. Wanamaker |
| Abstract: | We construct datasets of linked census records to study internal migrants’ selection and destination choices during the first decades of the “Great Migration” (1910-1930). We study both whites and blacks and intra- and inter-regional migration. While there is some evidence of positive selection, the degree of selection was small and participation in migration was widespread. Differences in background, including initial location, cannot account for racial differences in destination choices. Blacks and whites were similarly responsive to pre-existing migrant stocks from their home state, but black men were more deterred by distance, attracted to manufacturing, and responsive to labor demand. |
| JEL: | J10 J61 N32 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21384&r=lab |
| By: | Merle Kreibaum (Georg-August-University Göttingen); Stephan Klasen (Georg-August-University Göttingen) |
| Abstract: | We investigate the effect of the Vietnam War and the socialist regime in the Northern part of the country on female labour force participation. We differentiate the effect across birth cohorts, thus comparing immediate and long-term impacts. After presenting a theoretical model implying effects due to the role played by the ‘added workers’ and cultural change, we use data from three national household censuses in 1989, 1999, and 2009 to estimate probit models of determinants of women’s choice to enter the labour market. Proxying war intensity with the provincial share of female population after the war, the effect of ‘missing men’ on the work status of women is found to be positive and significant for those cohorts directly affected by the war. For those cohorts entering working age after the end of the conflict, the effect is still positive but smaller and in some specifications insignificant. Living in the Northern part of the country increases the likelihood of a woman working by around eleven percentage points, suggesting a larger and more persistent effect of socialism on female labour force participation. |
| Keywords: | Female labour force participation; conflict, Socialism; Vietnam |
| JEL: | F51 J16 J20 O15 P2 |
| Date: | 2015–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:181&r=lab |
| By: | Peter Walkenhorst; Urban Sila |
| Abstract: | Slovenia’s population is set to age rapidly in the coming decades. This demographic trend will increasingly put pressure on already fragile public finances as age related expenditure is projected to rise by 3 percentage points of GDP by the year 2030. Ensuring debt sustainability and generational equity requires reforms of social support systems and necessitates adjustments in labour markets. Policy makers will thus need to act more strongly than in the past to rein in ageing related outlays, pursue efficiency-enhancing restructurings of health and long-term care systems, and adopt measures to strengthen labour force participation. In particular, further increases in the relatively low pension age in line with the rise in life expectancy would reduce pension costs and the burden on the active population. Better utilisation of medical resources and coordinated purchasing of medical supplies would curb health care expenditure, while a dedicated funding mechanism for long-term care would enhance the sustainability of the system. Moreover, removing incentives for early retirement in combination with active labour market policies would increase the labour force participation rates of older workers from its currently very low levels. This Working Paper relates to the 2015 OECD Economic Survey of Slovenia (www.oecd.org/eco/surveys/economic-survey-slovenia.htm).<P>Les conséquences économiques d'une population vieillissante en Slovénie<BR>La population de la Slovénie vieillira rapidement dans les prochaines décennies. Cette tendance démographique mettra la pression de plus en plus sur les finances publiques déjà fragiles, car les dépenses liées au vieillissement devraient augmenter de 3 points de pourcentage du PIB d'ici l'an 2030. Assurer la viabilité de la dette et l'équité intergénérationnelle exige des réformes des systèmes de soutien social et nécessite des ajustements du marché du travail. Les décideurs devront donc agir plus fortement que par le passé à freiner les dépenses liées au vieillissement, de poursuivre les restructurations améliorant l'efficacité des systèmes de santé et de soins de longue durée, et d'adopter des mesures visant à renforcer la participation au marché du travail. En particulier, de nouvelles augmentations du relativement faible âge de la retraite en ligne avec la hausse de l'espérance de vie réduiraient les coûts de pension et le fardeau sur la population active. Une meilleure utilisation des ressources médicales et l'achat coordonné de fournitures médicales freinerait les dépenses de soins de santé, tandis qu’un mécanisme de financement spécifique pour les soins à long terme renforcerait la viabilité du système. En outre, la suppression des incitations à la retraite anticipée en combinaison avec les politiques du marché du travail active entraîneraient une augmentation des taux d'activité des travailleurs âgés au marché du travail de ses actuellement très faibles niveaux. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Slovénie, 2015 (www.oecd.org/fr/eco/etudes/etude-econom ique-slovenie.htm). |
| Keywords: | ageing populations, long-term care, health care systems, pension system, vieillissement de la population, système de retraite, système de santé |
| JEL: | H55 I1 J1 |
| Date: | 2015–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1242-en&r=lab |
| By: | Blumberg, Boris; Pfann, Gerard Antonie |
| Abstract: | This paper studies the event history of business foundation and distinguishes between transgenerational entrepreneurship and self-made start-ups. Three theoretical concepts of human, financial and social capital are linked to investigate variations over time in the decision process to become self-employed. Data from a cohort of Dutch inhabitants born in 1939/1940 who have been interviewed three times during their lives in 1952, 1983, and 1993 allows testing theoretical hypotheses that state clear differences between these two paths towards business ownership. Empirical results show that the base-line hazard of individuals without self-employed parents increases with time, while people with entrepreneurial parents become self-employed at an early age. Moreover, social capital is a better predictor of enterprise than human capital. |
| Keywords: | entrepreneurship; occupational choice; self-employment; transgenerational mobility |
| JEL: | J24 J62 L26 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10699&r=lab |
| By: | Filipe Campante; David Yanagizawa-Drott |
| Abstract: | We study whether war service by one generation affects service by the next generation in later wars, in the context of the major US theaters of the 20th century. To identify a causal effect, we exploit the fact that general suitability for service implies that how close to age 21 an individual’s father happened to be at a time of war is a key determinant of the father’s likelihood of participation. We find that a father’s war service experience has a positive and significant effect on his son’s likelihood of service. We estimate an intergenerational transmission parameter of approximately 0.1, across all wars, and that each individual war had a substantial impact on service in those that followed. We find evidence consistent with cultural transmission of war service from fathers to sons, and with the presence of substitutability between this direct transmission and oblique transmission (from society at large). In contrast, father’s war service increases sons’ educational achievement and actually reduces the likelihood of military service outside of wartime, suggesting that the results cannot be explained by material incentives or broader occupational choice. Taken together, our results indicate that a history of wars helps countries overcome the collective action problem of getting citizens to volunteer for war service. |
| JEL: | D74 D90 J12 J13 Z10 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21371&r=lab |