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on Labour Economics |
| By: | Pauline Leung (Cornell University); Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research) |
| Abstract: | Recent efforts to expand unemployment insurance (UI) eligibility are expected to increase low-earning workers' access to UI. Although the expansion's aim is to smooth the income and consumption of previously ineligible workers, it is possible that UI benefits simply displace other sources of income. Standard economic models predict that UI delays reemployment, thereby reducing wage income. Additionally, low-earning workers are often eligible for benefits from means-tested programs, which may decrease with UI benefits. In this paper, we estimate the impact of UI eligibility on employment, means-tested program participation, and income after job loss using a unique individual-level administrative data set from the state of Michigan. To identify a causal effect, we implement a fuzzy regression discontinuity design around the minimum earnings threshold for UI eligibility. Our main finding is that while UI eligibility increases jobless durations by up to 25 percent and temporarily lowers receipt of cash assistance (TANF) by 63 percent, the net impact on total income is still positive and large. In the quarter immediately following job loss, UI-eligible workers have 46-61 percent higher incomes than ineligibles. |
| Keywords: | Unemployment insurance, Temporary Assistance to Needy Families, TANF, Supplemental Nutrition Assistance Program, SNAP, Medicaid, welfare, public assistance, unemployment, social safety net |
| JEL: | J65 I38 J68 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:15-236&r=all |
| By: | Jeanne Tschopp (Department of Economics, Ryerson University, Toronto, Canada) |
| Abstract: | This paper estimates the importance of workers’ outside options in wage determination. In models of search and bargaining, a worker’s wage is determined by the marginal product of labour and by a weighted average of wages in alternate jobs. Thus, the nature of the wage equation makes it difficult to isolate changes in workers’ outside options that are independent from changes in the marginal product of labour. This paper builds on the predictions of a search and bargaining model with multiple cities, industries and occupations to propose novel identification strategies. Using a unique administrative panel database for Germany, the study exploits differences in both the employment composition across cities and in job-specific skill transferability as sources of variation for identification. The main finding of the paper is that a 10% increase in the outside options of a worker generates a 7% wage increase. |
| Keywords: | WWages, search and bargaining, marginal product, sectoral and occupational mobility, cities. |
| JEL: | J30 J31 J60 J62 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:rye:wpaper:wp055&r=all |
| By: | Brian Nolan (Institute for New Economic Thinking and Department of Social Policy and Intervention, University of Oxford); Sarah Voitchovsky (Melbourne Institute of Applied Economic and Social Research, University of Melbourne) |
| Abstract: | This paper explores the pattern of job loss in the Great Recession with a particular focus on its incidence by wage level, using data for Ireland. Ireland experienced a particularly pronounced decline in employment with the onset of the recession by international and historical standards, which makes it a valuable case study. Using EU-SILC data, our analysis identifies which employees were most affected. The results show that the probability of staying in employment, from one year to the next, is positively related to monthly wages both during the boom and in the bust. The gradient with wages, however, is much more marked in the bust, and remains significantly so even after controlling for a range of individual characteristics including part-time status, demographics, education, labour market history, industries or occupations. |
| Keywords: | skills, occupations, wages, Great Recession, Ireland, job loss, EU-SILC |
| JEL: | E24 J23 J24 J62 J63 |
| Date: | 2015–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201519&r=all |
| By: | Corrado Giulietti; Mirco Tonin; Michael Vlassopoulos |
| Abstract: | Discrimination in access to public services can act as a major obstacle towards addressing racial inequality. We examine whether racial discrimination exists in access to a wide spectrum of public services in the US. We carry out an email correspondence study in which we pose simple queries to more than 19,000 local public service providers. We find that emails are less likely to receive a response if signed by a black-sounding name compared to a white-sounding name. Given a response rate of 72% for white senders, emails from putatively black senders are almost 4 percentage points less likely to receive an answer. We also find that responses to queries coming from black names are less likely to have a cordial tone. Further tests suggest that the differential in the likelihood of answering is due to animus towards blacks rather than inferring socioeconomic status from race. |
| Keywords: | discrimination, public services provision, school districts, libraries, sheriffs, field experiment, correspondence study |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:don:donwpa:080&r=all |
| By: | Deborah A. Cobb-Clark (Melbourne Institute of Applied Economic and Social Research, University of Melbourne); Anna Zhu (Melbourne Institute of Applied Economic and Social Research, University of Melbourne) |
| Abstract: | This paper analyzes children’s long-term consequences of experiencing homelessness. Our primary goal is to assess the importance of the potential pathways linking childhood homelessness to adult employment. We use novel panel data that link survey and administrative data for a sample of disadvantaged adults who are homeless or at risk of homelessness. We find that those experiencing homelessness for the first time as children are less likely to be employed than those who were never homeless as a child. For women, this relationship is largely explained by the lower educational attainment and higher welfare receipt (both in general and in the form of mental illness-related disability payments) of those experiencing childhood homelessness. Higher rates of high-school incompletion and incarceration explain some of the link between childhood homelessness and men’s employment, however, childhood homelessness continues to have a substantial direct effect on male employment rates. Classification-J1, J2, I2 |
| Keywords: | Employment, homelessness, welfare receipt, education, incarceration |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2015n18&r=all |
| By: | Matthew S. Rutledge; Qi Guan |
| Abstract: | Numerous studies have found that even as employment growth in high- and low-skill occupations has been robust, employment in middle-skill occupations such as office administration and manufacturing is in long-term decline. The timing of this decline could not be worse for the older workers looking to prolong their careers to compensate for decreasing Social Security and pension income. But few existing studies have examined the consequences of job polarization on older workers, who may be less likely than prime-aged workers to find work in high- or low-skill occupations. This paper uses the Survey of Income and Program Participation to investigate employment outcomes specifically for older workers first observed in middle-skill jobs. If they leave a middle-skill job, are they able to find jobs in another skill level, or are they forced out of employment prematurely? What are the circumstances surrounding these transitions, and how are the workers’ earnings affected? |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2015-23&r=all |
| By: | Stadin, Karolina (Department of Economics, Uppsala University) |
| Abstract: | According to search and matching theory, a greater availability of unemployed workers should make it easier for a firm to fill a vacancy but more vacancies at other firms should make recruitment more difficult. But what can we say about the expected magnitudes of these effects on firms’ employment dynamics? In this paper, I simulate a theoretical model featuring search frictions in the labor market, imperfect competition in the product market and quadratic adjustment costs. The simulations show quite small employment effects of typical shocks to the number of vacancies in the local labor market and very small effects of typical shocks to the number of unemployed. The employment effects are smaller in recessions than in booms. Estimation of an employment equation using panel data for Swedish firms suggests that neither the number of unemployed nor the number of vacancies in the local labor market are important for firms’ employment dynamics. Thus, the empirical results are in line with the predictions from the theoretical simulations. |
| Keywords: | Employment dynamics; search and matching frictions |
| JEL: | E24 J23 J63 J64 |
| Date: | 2015–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2015_020&r=all |
| By: | Neeraj Kaushal; Yao Lu; Nicole Denier; Julia Shu-Huah Wang; Stephen J. Trejo |
| Abstract: | We study the short-term trajectories of employment, hours worked, and real wages of immigrants in Canada and the U.S. using nationally representative longitudinal datasets covering 1996-2008. Models with person fixed effects show that on average immigrant men in Canada do not experience any relative growth in these three outcomes compared to men born in Canada. Immigrant men in the U.S., on the other hand, experience positive annual growth in all three domains relative to U.S. born men. This difference is largely on account of low-educated immigrant men, who experience faster or longer periods of relative growth in employment and wages in the U.S. than in Canada. We further compare longitudinal and cross-sectional trajectories and find that the latter over-estimate wage growth of earlier arrivals, presumably reflecting selective return migration. |
| JEL: | J15 J18 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21591&r=all |
| By: | Anja Bauer (Friedrich-Alexander University of Erlangen-Nuremberg); Ian King (School of Economics, The University of Queensland) |
| Abstract: | We examine the proposition that the Hartz reforms offset the GFC’s effect on unemployment (leading to the â€German miracleâ€) and the GFC offset the Hartz reform’s effects on reallocation, in Germany (leading to the reallocation puzzle) over the period 2005-2010. To do so, we use a labor reallocation model based on Lucas and Prescott (1974), but with the additional features of unemployment benefits and rest unemployment. The model generates two simple conditions that must hold for two events to simultaneously offset each other in this way. We estimate the key parameters of the model to assess the extent to whether these conditions were satisfied in Germany at that time. We find that the observed drop in productivity due to the GFC (6.6%) fell somewhat short of the drop required to explain the reallocation puzzle (10.1%). Conditional on this offset taking place, the observed percentage drop in unemployment benefits (26.7%) was approximately four times that required (6.6%) for the German miracle. |
| Keywords: | Labor market reallocation, unemployment, policy, Hartz reforms |
| JEL: | E24 E43 E65 J24 J62 J65 |
| Date: | 2015–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:550&r=all |
| By: | Martha H. Stinson; Peter Gottschalk |
| Abstract: | We investigate the question of whether investing in a child’s development by having a parent stay at home when the child is young is correlated with the child’s adult outcomes. Specifically, do children with stay-at-home mothers have higher adult earnings than children raised in households with a working mother? The major contribution of our study is that, unlike previous studies, we have access to rich longitudinal data that allows us to measure both the parental earnings when the child is very young and the adult earnings of the child. Our findings are consistent with previous studies that show insignificant differences between children raised by stay-at-home mothers during their early years and children with mothers working in the market. We find no impact of maternal employment during the first 5 years of a child’s life on earnings, employment, or mobility measures of either sons or daughters. We do find, however, that maternal employment during children’s high school years is correlated with a higher probability of employment as adults for daughters and a higher correlation between parent and daughter earnings ranks. |
| Keywords: | human capital, child development, female labor supply |
| JEL: | J13 J22 J24 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:15-27&r=all |
| By: | Alicia H. Munnell; Geoffrey T. Sanzenbacher; Matthew S. Rutledge |
| Abstract: | This paper explores the extent to which health, employment, family, or finances are associated with earlier-than-planned retirement using the Health and Retirement Study (HRS). The importance of any shock that drives early retirement depends both on its effect on those experiencing it and its prevalence in the population; therefore, the analysis proceeds in two steps. First, a probit regression is used to determine the strength of the relationship between the shocks and earlier-than-planned retirement, controlling for individual characteristics. Second, to incorporate the prevalence of the shock, counterfactual experiments are run to determine how much early retirement would be reduced in the population if these shocks did not occur. |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2015-22&r=all |