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on Labour Economics |
| By: | Bohn, Sarah (Public Policy Institute of California); Lofstrom, Magnus (Public Policy Institute of California); Raphael, Steven (University of California, Berkeley) |
| Abstract: | We examine the impact of state level legislation against the hiring of unauthorized immigrants on employment opportunities among competing low-skilled workers. Our focus is on the role of E-Verify mandates and specifically, we test for effects of the 2007 Legal Arizona Workers Act (LAWA) on employment outcomes of low-skilled native-born and legal immigrant workers in Arizona. We use the synthetic control method developed by Abadie, Diamond and Hainmueller (2010) to select a group of states against which the labor market trends of Arizona can be compared. Our results suggest that contrary to its intent, the Legal Arizona Workers Act does not appear to have improved labor market outcomes of competing legal low-skilled workers. In fact, we find some evidence of diminished employment and increased unemployment among legal low-skilled workers in Arizona. These findings are concentrated on the largest demographic group of workers – non-Hispanic white men. While they are less likely to find employment, those who do have on average higher earnings as a result of LAWA. The pattern of results points to both labor supply and labor demand contractions due to LAWA, with labor supply dominating in terms of magnitude. |
| Keywords: | illegal, unauthorized, undocumented, immigration, E-Verify, Arizona |
| JEL: | J8 J15 J18 J21 J31 J61 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9420&r=all |
| By: | Anthony Edo; Farid Toubal |
| Abstract: | This paper analyzes the effects of immigration on the gender wage gap. Using a detailed individual French dataset, we shed lights on the strong feminization of the immigration workforce from 1990 to 2010. Our theoretical model predicts that a shift in the supply of female workers increases gender wage inequality when men and women are imperfect substitute in production. Our structural estimate shows an imperfect substituability between men and women workers of similar education and experience. Our econometric analysis shows that a 10% increase in immigrant female labor supply relative to immigrant male labor supply in a given education-experience group lowers the relative earnings of female native workers of that group by 4%. We finally use a structural model to account for the cross-group effects induced by immigration and show that the rise in the relative number of female immigrants has decreased the relative wage of female native workers, thereby contributing to a widening native gender wage gap. |
| Keywords: | Migration;labor supply;gender wage gap |
| JEL: | F22 J16 J21 J31 J61 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2015-17&r=all |
| By: | Hugo Jales (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244) |
| Abstract: | This paper proposes a new framework to identify the effects of the minimum wage on the joint distribution of sector and wages in a developing country. I show that under reasonable assumptions, cross-sectional data on the worker's wage and sector can identify the joint distribution of the latent counterparts of these variables; that is, the sector status and wage that would prevail in the absence of the minimum wage. I apply the method in the “PNAD”, a nationwide representative Brazilian cross-sectional dataset for the years 2001 to 2009. The results indicate that the size of the informal sector is increased by around 39% compared to what would prevail in the absence of the minimum wage, an effect attributable to (i) unemployment effects of the minimum wage on the formal sector, (ii) movements of workers from the formal to the informal sector as a response to the policy. |
| Keywords: | Minimum Wage; Informality; Unemployment; Density Discontinuity Design; Wage Inequality; Labor Tax Revenues; Formal Sector |
| JEL: | J60 J30 J31 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:184&r=all |
| By: | Bartolucci, Cristian (Collegio Carlo Alberto); Devicienti, Francesco (University of Turin); Monzón, Ignacio (Collegio Carlo Alberto) |
| Abstract: | We propose a novel methodology to uncover the sorting pattern in the labor market. Our methodology exploits the additional information contained in profits, which complements the information from wages and transitions typically used in previous work. We identify the strength of sorting solely from a ranking of firms by profits. To discern the sign of sorting, we build a noisy ranking of workers from wage data. We provide a test for the sign of sorting that is consistent even with noise in worker rankings. We apply our approach to a panel data set that combines social security earnings records for workers in the Veneto region of Italy with detailed financial data for firms. We find robust evidence of positive sorting. The correlation between worker and firm types is about 52%. |
| Keywords: | assortative matching, worker mobility, profits, matched employer-employee data |
| JEL: | J6 J31 L2 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9411&r=all |
| By: | Driouchi, Ahmed |
| Abstract: | Abstract This paper focuses on skill loss from the unemployment of qualified labor in Arab economies. It aims at analyzing the prospects of unemployment of skilled labor in relation to the increasing gap between the supply of labor and the low levels of job creation. The obsolescence of the skills gained prior to job search, is discussed in relation to the length of unemployment. Descriptive statistical analysis of unemployment in addition to a discussion of skill obsolescence is pursued. Among the results, skill losses appear to be crucial under limited prospective policies. Some directions of economic and social policies that need strengthening are introduced. |
| Keywords: | Keywords: Risks; Loss; Skills; Obsolescence; Unemployment; Skilled Labor. |
| JEL: | J24 J64 |
| Date: | 2015–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67361&r=all |
| By: | Chad Sparber (Colgate University) |
| Abstract: | The H-1B program allows highly-educated foreign-born labor to temporarily work in the United States. Quotas restrict the number of labor force entrants, however. In many years, all available work permits were allocated by random lottery. This paper argues that an alternative distribution method based upon ability would increase output, output per worker, and wages paid to less-educated workers. Baseline estimates suggest that a change in allocation policy could result in a $26.5 billion gain for the economy over a six year period. This estimate grows when H-1B demand rises. |
| Keywords: | Skilled Workers, H-1B Work Permit, Immigration |
| JEL: | J61 F22 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1513&r=all |
| By: | Manuel Arellano (CEMFI, Centro de Estudios Monetarios y Financieros); Richard Blundell (University College London); Stéphane Bonhomme (University of Chicago) |
| Abstract: | We develop a new quantile-based panel data framework to study the nature of income persistence and the transmission of income shocks to consumption. Log-earnings are the sum of a general Markovian persistent component and a transitory innovation. The persistence of past shocks to earnings is allowed to vary according to the size and sign of the current shock. Consumption is modeled as an age-dependent nonlinear function of assets and the two earnings components. We establish the nonparametric identification of the nonlinear earnings process and the consumption policy rule. Exploiting the enhanced consumption and asset data in recent waves of the Panel Study of Income Dynamics, we find nonlinear persistence and conditional skewness to be key features of the earnings process. We show that the impact of earnings shocks varies substantially across earnings histories, and that this nonlinearity drives heterogeneous consumption responses. The transmission of shocks is found to vary systematically with assets. |
| Keywords: | Earnings dynamics, consumption, panel data, quantile regression, latent variables. |
| JEL: | C23 D31 D91 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2015_1506&r=all |
| By: | Cai, Lixin |
| Abstract: | Using the Household, Income and Labour Dynamics in Australia (HILDA) survey, this study shows that workers who have entered low pay from higher pay also have a higher hazard rate of transitioning to higher pay; and those who have entered low pay from non-employment are more likely to return to non-employment. Union members, public sector jobs and working in medium to large size firms tend to increase the hazard rate of transitioning to higher pay, while immigrants from non-English speaking countries and workers with health problems have a lower hazard rate of moving into higher pay. There is some evidence that the longer a worker is on low pay, the less likely he or she is to transition to higher pay. |
| Keywords: | Earnings; low pay; data analysis; modelling |
| JEL: | J01 J08 J31 |
| Date: | 2015–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67261&r=all |
| By: | Amy Guisinger (George Washington University); Ruben Hernandez-Murillo; Michael Owyang; Tara Sinclair (Institute for International Economic Policy, George Washington University) |
| Abstract: | Okun’s law is an empirical relationship that measures the correlation between the deviation of the unemployment rate from its natural rate and the deviation of output growth from its potential. In this paper, we estimate Okun’s coefficients for each U.S. state and examine the potential factors that explain the heterogeneity of the estimated Okun relationships. We find that indicators of more flexible labor markets (higher levels of education achievement in the population, lower rate of unionization, and a higher share of non-manufacturing employment) are important determinants of the differences in Okun’s coefficient across states. Finally, we show that Okun’s relationship is not stable across specifications, which can lead to inaccurate estimates of the potential determinants of Okun’s coefficient. |
| JEL: | C32 E32 R11 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2015-17&r=all |
| By: | Simone Moriconi (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Giovanni Peri |
| Abstract: | European countries exhibit significant differences in employment rates of adult males. Differences in labor-leisure preferences, partly determined by cultural values that vary across countries, can be responsible for part of these differences. However, differences in labor market institutions, productivity, and skills of the labor force are also crucial factors and likely correlated with preferences. In this paper we use variation among first- and second-generation cross-country European migrants to isolate the effect of culturally transmitted labor-leisure preferences on individual employment rates. If migrants maintain some of their country of origin labor-leisure preferences as they move to different labor market conditions, we can separate the impact of preferences from the effect of other factors. We find country-specific labor-leisure preferences explain about 24% of the top-bottom variation in employment rates across European countries. |
| Keywords: | Labor-Leisure Preferences, Cultural Transmission, Employment, Europe, Migrants. |
| JEL: | J22 J61 Z10 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie1:def029&r=all |
| By: | Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza) |
| Abstract: | In this paper, we propose a new spatial framework to model excess commuting of workers and we show empirical differences between the self-employed and employees in the US. In a theoretical framework where self-employed workers minimize their commuting time, employees do not minimize their commuting time because they lack full information, and thus the difference between the time devoted to commuting by self-employed workers and employees is modeled as wasteful commuting (i.e., excess commuting). We first formulate a microeconomic framework for commuting by modeling the location of individuals in urban cores surrounded by rings. Using the American Time Use Survey for the years 2003-2013, our empirical results show that employees spend twelve more minutes per day, or forty percent of the average commuting time, compared to their self-employed counterparts. This is consistent with our "diana" model, in that location is an important factor. |
| Keywords: | excess commuting, urban cores, American Time Use Survey, self-employed workers, employees |
| JEL: | R20 R41 J64 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9425&r=all |
| By: | George J. Borjas (Harvard Kennedy School); Ilpo Kauppinen (VATT Institute for Economic Research); Panu Poutvaara (University of Munich and Ifo Institute) |
| Abstract: | We show that the Roy model has more precise predictions about the self-selection of migrants than previously realized. The same conditions that have been shown to result in positive or negative selection in terms of expected earnings also imply a stochastic dominance relationship between the earnings distributions of migrants and non-migrants. We use the Danish full population administrative data to test the predictions. We find strong evidence of positive self-selection of emigrants in terms of pre-emigration earnings: the income distribution for the migrants almost stochastically dominates the distribution for the non-migrants. This result is not driven by immigration policies in destination countries. Decomposing the self-selection in total earnings into self-selection in observable characteristics and self-selection in unobservable characteristics reveals that unobserved abilities play the dominant role. |
| Keywords: | International Migration, Roy model, Self selection |
| JEL: | F22 J61 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1515&r=all |
| By: | Fricke, Hans (University of St. Gallen); Frölich, Markus (University of Mannheim); Huber, Martin (University of Fribourg); Lechner, Michael (University of St. Gallen) |
| Abstract: | This paper proposes a nonparametric method for evaluating treatment effects in the presence of both treatment endogeneity and attrition/non-response bias, using two instrumental variables. Making use of a discrete instrument for the treatment and a continuous instrument for non-response/attrition, we identify the average treatment effect on compliers as well as the total population and suggest non- and semiparametric estimators. We apply the latter to a randomized experiment at a Swiss University in order to estimate the effect of gym training on students' self-assessed health. The treatment (gym training) and attrition are instrumented by randomized cash incentives paid out conditional on gym visits and by a cash lottery for participating in the follow-up survey, respectively. |
| Keywords: | endogeneity, attrition, local average treatment effect, weighting, instrument, experiment |
| JEL: | C14 C21 C23 C24 C26 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9428&r=all |
| By: | Chia-Huei Wu; Jun Liu; Ho Kwong Kwan; Cynthia Lee |
| Abstract: | Why and when do employees respond to workplace ostracism by withholding their engagement in citizenship behavior? Beyond perspectives proposed in past studies, we offer a new account based on a social identity perspective and propose that workplace ostracism decreases citizenship behavior by undermining employees’ identification with the organization. We also theorize that perceived job mobility influences the extent to which employees identify with the organization when being ostracized. These hypotheses were examined in two time-lagged studies conducted in China. The proposed hypotheses were supported by results in Study 1, and findings were generally replicated in Study 2, where effects of other known mediators (i.e., organization-based self-esteem, job engagement, and felt obligation towards the organization) and moderators (i.e., collectivism, power distance, and future orientation) suggested by previous perspectives were controlled. Results of Study 2 provided further support of the hypothesized directional effect of workplace ostracism on citizenship behavior via organizational identification. Our studies support the identification perspective in understanding workplace ostracism and also strengthen the application of this perspective in understanding workplace aggression broadly. |
| Keywords: | workplace ostracism; organizational identification; citizenship behavior; job mobility |
| JEL: | J50 |
| Date: | 2015–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64006&r=all |
| By: | Favero, Carlo A.; Galasso, Vincenzo |
| Abstract: | Demographic trends in Europe do not support empirically the secular stagnation hypothesis. Our evidence shows that the age structure of population generates less long-term growth but positive real rates. Policies for growth become very important. We assess the relevance of the demographic structure for the choice between macro adjustements and structural reforms. We show that middle aged and elderly individuals have a more negative view of reforms, competitiveness and globalization than young. Our results suggest that older countries -- in terms of share of elderly people -- should lean more towards macroeconomic adjustments, whereas younger nations will be more supportive of structural reforms. |
| Keywords: | Europe; growth; real interest rates; stochastic mortality |
| JEL: | J11 J14 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10887&r=all |