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on Labour Economics |
| By: | Marios Michaelides; Peter Mueser |
| Abstract: | This paper examines four experimental design U.S. reemployment programs targeting Unemployment Insurance (UI) recipients during the Great Recession. Results show that, regardless of their specific requirements, reemployment programs led to shorter UI spells, UI savings that exceeded program costs, and improved employment rates and earnings. Program success was partly attributable to threat effects, occurring because some participants exited UI early in their claims to avoid program participation. Also, programs that conducted eligibility reviews were effective in reducing UI fraud, pushing job-ready or ineligible participants to exit UI and return to employment sooner. In addition to these initial effects, our results suggest that program services may have substantial direct value. The program that combined the eligibility review with mandatory job-counselling services produced greater effects than the other programs, and our analyses suggest that this is because services helped participants improve their job search. These findings provide important policy guidance on the kinds of programs that are effective and evidence that program benefits occur even during an economic downturn. |
| Keywords: | Great Recession, job search services, eligibility review, unemployment, Unemployment Insurance, program evaluation. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:08-2015&r=lab |
| By: | Thomas Dohmen; Hartmut Lehmann; Norberto Pignatti |
| Abstract: | We use the panel data of the German Socio-Economic Panel (SOEP) and of the Ukrainian Longitudinal Monitoring Survey (ULMS) to investigate whether risk attitudes have primary (exogenous) determinants that are valid in different stages of economic development and in a different structural context, comparing a mature capitalist economy and a transition economy. We then analyze the stability of the risk measures over time. Between 2007 and 2012 we have the Great Recession, which had a mild impact in the German labor market while it had a more profound impact on the Ukrainian labor market. This enables us to investigate whether and how the crisis impacted on the risk attitudes in the two countries. By focusing on self-employment we also investigate whether the reduced willingness to take risks as a consequence of the Great Recession affects labor market dynamics and outcomes. |
| Keywords: | risk attitudes, Great Recession, time variation, labor market outcomes, Germany, Ukraine |
| JEL: | J64 J65 P50 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp793&r=lab |
| By: | Pesliakaite, Jurgita; Šiaudvytis, Tomas |
| Abstract: | This paper gives a broad descriptive overview on wage and price setting behaviour of Lithuanian firms during the last episode of the economic crisis in 2008–2009 and in the post¬-crisis period of 2010–2013. The evidence provided in this paper is based on the firm¬¬-level data from the third wave of the Wage Dynamic Network (WDN3) survey ¬— the joint research project of the European Union (EU) countries launched within the European System of Central Banks (ESCB). Wage and price setting strategies of Lithuanian firms were evaluated by relating firms’ decision-making to the macroeconomic, financial and institutional environment under which the firms are operating. The preliminary conclusion drawn in this paper is that both wages and prices show rather high degree of flexibility in Lithuania. Low wage rigidity should primarily be attributable to labour market institutions — low collective wage bargaining coverage and completely decentralised wage setting process. Easing of employment protection laws during the last episode of economic downturn might also have contributed to the increased wage flexibility in the after-crisis period. |
| Keywords: | WDN survey; labour market; wage setting behaviour; price setting behaviour; Lithuania |
| JEL: | J0 J00 J3 J30 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67466&r=lab |
| By: | Amini, Makan (Advent International); Ekström, Mathias (NHH Norwegian School of Economics); Ellingsen, Tore (Stockholm School of Economics); Johannesson, Magnus (Stockholm School of Economics); Strömsten, Fredrik (McKinsey & Company) |
| Abstract: | Failure to express minority views may distort the behavior of company boards, committees, juries, and other decision-making bodies. Devising a new experimental procedure to measure such conformity in a judgment task, we compare the degree of conformity in groups with varying gender composition. Overall, our experiments offer little evidence that gender composition affects expression of minority views. A robust finding is that a subject’s lack of ability predicts both a true propensity to accept others judgment (informational social influence) and a propensity to agree despite private doubt (normative social influence). Thus, as an antidote to conformity in our experiments, high individual ability seems more effective than group diversity. |
| Keywords: | Conformity; Gender Differences; Group Composition; Skill |
| JEL: | C90 D02 D71 D83 J16 |
| Date: | 2015–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1091&r=lab |
| By: | Viola Angelini; Marco Bertoni; Luca Corazzini |
| Abstract: | Using longitudinal data from the German Socio-Economic Panel (SOEP), we show that paternal unemployment has a surprisingly positive causal effect on the "Big 5" personality traits of children aged 17 to 25. In particular, our results from longitudinal value-added models for personality suggest that paternal unemployment makes children significantly more conscientious and less neurotic. Our results are robust to different estimation methods and to selection on unobservables. Furthermore, these effects are stronger for girls and for children whose mothers are employed. |
| Keywords: | personality traits, unemployment, household behavior, SOEP |
| JEL: | J24 J13 J64 C33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp795&r=lab |
| By: | Guisinger, Amy Y. (George Washington University); Hernandez-Murillo, Ruben (Federal Reserve Bank of Cleveland); Owyang, Michael T. (Federal Reserve Bank of St. Louis); Sinclair, Tara M. (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 nonmanufacturing 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. |
| Keywords: | correlated unobserved components; potential output; natural rate of unemployment |
| JEL: | C32 E32 R11 |
| Date: | 2015–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1523&r=lab |
| By: | Marco Di Cataldo |
| Abstract: | In the past years, a large number of evaluations have assessed the impact of European Union?s Cohesion Policy, the largest transnational programme for regional development promotion worldwide. In particular, great attention has been devoted to determine the effectiveness of EU funds in improving economic and labour market conditions in Objective 1 regions, the most economically disadvantaged areas receiving the large majority of the funds. However, there is no consensus yet in the literature on whether Structural Funds have successfully contributed to promote convergence by improving the economic performance of the poorest regions in the EU. In addition, a lot of attention has been devoted to determine the effect of Cohesion Policy interventions on inequality across regions and countries, but little research has been carried out to analyse the impact of the policy in reducing disparities within the targeted regions. In order to provide more conclusive answers on the effectiveness of Cohesion Policy, a new strand of evaluations has emerged in the literature. This research is based on the adoption of quasi-experimental methods to capture the causal effects of the policy. In this paper we follow this example and use a differences-in-differences strategy to estimate the impact of Cohesion Policy. By exploiting an exogenous change in eligibility for Objective 1 support occurred in the UK region of Cornwall in 2000, we are able to compare Cornwall?s unemployment trend before and after the introduction of Objective 1 support. The study is performed at three different geographical levels. First, we construct a synthetic control region that equals the treated region in all relevant characteristics except for not having received Objective 1 funding. Second, we use Local Authority Districts and compare the unemployment change of Cornwall with similar English areas. Third, we adopt propensity score matching techniques and estimate the average treatment effect at the level of electoral wards. All different methodologies provide clear evidence of a reduction in unemployment in Cornwall as compared to regions that did not benefit from Objective 1 support. In the second part of the study we identify the areas that experienced the highest unemployment change. We estimate the difference in quantile functions between Cornwall wards and control wards, constraining treatment and control to have the same unemployment distribution before the treatment. We find that the main variations occurred towards the higher end of the unemployment distribution, that is, for wards starting from a higher unemployment level. This suggests that labour market disparities have consistently reduced during the intervention period. We put forth some hypotheses to explain Cornwall?s successful management of EU funds. |
| Keywords: | EU Cohesion Policy; Objective 1; unemployment; labour market disparities; UK. |
| JEL: | R11 O18 J60 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p104&r=lab |
| By: | Kuchler, Theresa (New York University, Stern School of Business); Zafar, Basit (Federal Reserve Bank of New York) |
| Abstract: | We use novel survey data to estimate how personal experiences affect household expectations about aggregate economic outcomes in housing and labor markets. We exploit variation in locally experienced house prices to show that individuals systematically extrapolate from recent locally experienced home prices when asked for their expectations about U.S. house price changes over the next year. In addition, higher volatility of locally experienced house prices causes respondents to report a wider distribution over expected future national house price movements. We find similar results for labor market expectations, where we exploit within-individual variation in labor market status to estimate the effect of own experience on national labor market expectations. Personally experiencing unemployment leads respondents to be significantly more pessimistic about future nationwide unemployment. The extent of extrapolation is unrelated to proxies for how informative personal experiences are, and is more pronounced for less sophisticated individuals. |
| Keywords: | expectation formation; extrapolation |
| JEL: | C81 D80 |
| Date: | 2015–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:748&r=lab |
| By: | Colin Green; Swarnodeep Homroy |
| Abstract: | There is pressure to increase female representation on corporate boards. A number of studies have found no, or in some cases a negative, effect of female representation on boards and firm performance. We demonstrate robust positive and economically meaningful effects on firm performance of female representation on European boards.<br/>Moreover, while previous work has considered female representation broadly, we focus on membership of committees involved explicitly in firm governance. We demonstrate marked, larger, e¤ects on performance of having female representation on these committees. Finally, we reconcile this evidence with prior US and UK evidence and demonstrate a positive performance impact of female committee memberships. Our evidence is supportive of the expansion of female involvement in corporate governance from a financial performance perspective. |
| Keywords: | Board of directors, Female director, Diversity, Performance |
| JEL: | G30 G34 J16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:95922258&r=lab |
| By: | Ece Yagman (SALDRU, the School of Economics, University of Cape Town); Malcolm Keswell (SALDRU, School of Economics, University of Cape Town) |
| Abstract: | We investigate discrimination according to accent and race on trust behaviour. Proposers were randomly paired with responders of the same/different race, and asked to play the trust game after looking at a photograph and hearing a 10 second audio clip of the responders reading a standardised script in English. This allows us to check for within and across-group favouritism in both race and accentedness. We find that accentedness is a statistically significant predictor of trust and is strongly non-linear in the race of the paired subjects for males but not for females. In the case of males, offers decrease by 11.3% if the responder has a mother-tongue English accent and does not share the same race as the proposer, but increases by about 6.6% if there is racial similarity. This effect is especially pronounced for Black males who are paired with other Black males: offers are 19.5% higher if responders have a mother-tongue English accent. By contrast, females in general seem less sensitive to the signal package. These large gender differences are not because men behave any more strategically than women. |
| Keywords: | Experiments, Trust, Accents, Discrimination, Race |
| JEL: | C91 D03 J15 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:158&r=lab |