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on Labour Economics |
| By: | López-Martín Bernabé; Takayama Naoki |
| Abstract: | We construct a theoretical model of labor markets with human capital accumulation to understand and quantify the earnings losses for young workers generated by unemployment: unemployment represents time forgone in terms of human capital accumulation, which adversely affects long-term income prospects of individuals. We show that lifetime earnings losses generated by job-displacement are larger for individuals with lower capacity to accumulate human capital and during an economic downturn, as documented in the empirical literature. At the aggregate level, the framework delivers youth unemployment rates that are higher and more sensitive to fluctuations in aggregate productivity than total unemployment rates. Additionally, in economies with a higher tax-wedge, unemployment rates are more sensitive to aggregate productivity shocks. A higher tax-wedge and minimum wage increase the long-term earnings losses produced by job-displacement, especially for low-skill individuals. |
| Keywords: | aggregate fluctuations; directed search; unemployment; worker heterogeneity; life cycle; human capital. |
| JEL: | E24 E32 J63 J64 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2015-22&r=lab |
| By: | Anna Matysiak; Letizia Mencarini; Daniele Vignoli |
| Abstract: | Many empirical studies find parents to be less happy than non-parents and parenthood to exert a negative effect on subjective well-being (SWB). We add to these findings by arguing that there is a key moderating factor that has been overlooked in previous research, the work-family conflict. In this paper we assesses the effect of parenthood on individuals’ SWB, taking into account that the birth of a child means an increase in work-family tensions, which may be substantial for some parents and relatively weak for others. To this end, we estimate fixed-effects models using panel data from the Household, Income and Labor Dynamics in Australia (HILDA) survey. We find that childbearing negatively affects SWB only when parents, and mothers, in particular, have to face a heavy work-family conflict. |
| Keywords: | work-family conflict, reconciliation of work and family, subjective well-being, life-satisfaction, Australia. |
| JEL: | I31 J13 J22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:435&r=lab |
| By: | Gayle, George-Levi (Federal Reserve Bank of St. Louis); Golan, Limor (Federal Reserve Bank of St. Louis); Miller, Robert A. (Carnegie Mellon University) |
| Abstract: | This paper asked the question of whether the behavior and compensation of interlocked executives and non-independent board of directors are consistent with the hypothesis of governance problem or whether this problem is mitigated by implicit and market incentives. It then analyzes the role of independent board of directors. Empirically, we cannot reject the hypothesis that executives in companies with a large number of non-independent directors on the board receive the same expected compensation as other executives. In our model, every executive has an incentive to work. Placing more of non-independent directors on the board mitigates gross losses to the firm should any one of them shirk because they monitor each other. It also reduces the net benefits from shirking and increases the gross value of the firm from greater coordination (reflected in the firm’s equity value and thus impounded into its financial returns). Therefore having a greater non-independent director representation on the board create a more challenging signaling problem to solve thereby raising the risk premium. However, giving more votes on the board to non-independent executives fosters better executive working conditions, which in turn offsets the higher risk premium in pay by a lower certainty-equivalent wage in equilibrium. Thus, our estimates undergird a plausible explanation of how large shareholders determine the number of insiders on the board to maximize the expected value of their equity. We then conduct counterfactual policy experiment imposing 50% upper bound on the fraction of insiders on the board and another counterfactual imposing 40% quotas for women on the boards. |
| JEL: | G34 J24 J33 J41 J44 J63 L22 M12 |
| Date: | 2015–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2015-040&r=lab |
| By: | Tito Boeri (INPS AND UNIVERSITÀ BOCCONI); Juan F. Jimeno (Banco de España) |
| Abstract: | Unemployment in Europe is not only “too high”, it is also too different across countries that belong to a monetary union. In this paper we i) document this increasing heterogeneity, ii) try to explain it and iii) draw from our diagnosis indications as to the appropriate set of policies to reduce unemployment and labour market disparities. Our analysis suggests that the divergence in labour market outcomes across Europe is the by-product of interactions between, on the one hand, shocks of varying size and nature, and, on the other hand, country-specific labour market institutions. We argue that EU policy coordination and conditionality during the Great Recession and the euro area debt crisis did not properly take into account these interactions. We also propose a change in the European policy approach for fighting unemployment. |
| Keywords: | unemployment, conditionality, employment policies |
| JEL: | E60 J65 J68 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1534&r=lab |
| By: | Effrosyni Adamopoulou (Bank of Italy); Ezgi Kaya (Cardiff Business School) |
| Abstract: | This paper focuses on young adults in the US living with their parents and studies the role of peers. Using data from the National Longitudinal Study of Adolescent Health we analyse the influence of high school friends on the nest-leaving decision of young adults. We achieve identification by exploiting the differences in the timing of leaving the parental home among peers, the individual-specific nature of the peer groups, and by including school and grade fixed effects. Our results indicate that there are statistically significant peer effects on the decision of young adults to leave parental home. This is true even after we control for labour and housing market conditions and for a comprehensive list of individual and family-of-origin characteristics that are not usually observed by the econometrician. We discuss various mechanisms and we confirm the robustness of our results through a placebo exercise. Our findings correspond with the increasing trend of young adults living with their parents that has been observed in the US during the last 50 years. |
| Keywords: | peer effects, friends, living arrangements, leaving parental home |
| JEL: | D10 J12 J60 Z13 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1038_15&r=lab |
| By: | Michael Beckmann; Elena Shvartsman (University of Basel) |
| Abstract: | Work-related stress can lead to substantial health problems and thereby resultin immense costs for establishments. Therefore, the question as to what extentestablishments contribute to their employees’ stress levels is of great importance for firm performance. We investigate the relationship between personnel policies and work-related stress by considering a series of personnel policies that refer to a worker’s job reward, job demand, or job control situation. Using data from the German Socio-Economic Panel (SOEP) we find statistically significant associations of several policies and work-related stress. Most importantly, bad promotion opportunities and low working time control turn out to be associated with higher stress levels, while the opposite is true for an adequate salary. |
| Keywords: | job stress, personnel policy, working conditions |
| JEL: | I10 J81 M54 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2015/15&r=lab |
| By: | Mario Izquierdo (Banco de España); Juan Francisco Jimeno (Banco de España) |
| Abstract: | This paper describes the main results from the third wave of the Wage Dynamics Network (WDN) survey. Its main goal is to provide information on demand, finance conditions and other factors determining economic activity, on wage, price and employment adjustments over the period 2010-2013, and on firms’ perceptions of institutional changes in the labour market. In Spain, the survey was conducted at the end of 2014, collecting information from a representative sample of 1,975 Spanish firms covering manufacturing, energy and market services sectors. The main results show that Spanish firms’ adjustment to falling demand and other negative conditions since 2010 relied heavily on the dismissal of employees under temporary contracts, although those firms most affected by the crisis also significantly reduced permanent employment. On the contrary, wage and hours adjustments remained limited even in those firms most severely affected by the negative shocks. Regarding institutional changes, Spanish firms perceive some easing in the conditions for economic layoffs, attributing the main source of this higher flexibility to legal changes since 2010. As to other labour conditions, including wages and hours, the share of firms perceiving higher flexibility is somewhat lower. |
| Keywords: | survey, wages, employment, shocks |
| JEL: | J23 J30 J50 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:bde:opaper:1503&r=lab |
| By: | Mikhed, Vyacheslav (Federal Reserve Bank of Philadelphia); Scholnick, Barry (University of Alberta School of Business) |
| Abstract: | Entry barriers into social insurance programs will be effective screening devices if they cause only those individuals receiving higher benefits from a program to participate in that program. We find evidence for this by using plausibly exogenous variations in travel-related entry costs into the Canadian consumer bankruptcy system. Using detailed balance sheet and travel data, we find that higher travel-related entry costs reduce bankruptcies from individuals with lower financial benefits of bankruptcy (unsecured debt discharged, minus secured assets forgone). When compared across filers, each extra kilometer traveled to access the bankruptcy system requires approximately $11 more in financial benefits from bankruptcy. {{p}}Supersedes Working Paper 14-18 |
| Keywords: | Social insurance; Consumer bankruptcy; Filing costs; Entry barriers |
| JEL: | D14 G23 G33 K35 |
| Date: | 2015–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:15-40&r=lab |
| By: | Berg, Gerard J. van den; Uhlendorff, Arne (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolff, Joachim (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "With the introduction of a new welfare benefit system in 2005, Germany implemented quite strict benefit sanctions for welfare recipients aged younger than 25 years. For all types of non-compliance except for missing appointments, their basic cash benefit is withdrawn for three months. A second sanction of the same type within one year implies a complete benefit cut for three months. We analyze the impact of these sanctions on job search outcomes and on transitions out of the labor force. Our analysis is based on administrative data on a large inflow sample of young male jobseekers into welfare in West Germany. We estimate separate models for people living alone and people living with their family, as sanctioned welfare recipients living with other household members can partly rely on their support and might react less by increasing search intensity and lowering reservation wages. We estimate the parameters of multivariate duration models taking selection based on unobservables into account. Our results suggest that both the first and the second sanction increase the probability of finding a job, but that these jobs go along with lower earnings due to first but not the second sanction. Moreover, first sanctions significantly increase the transition rate out of the labor force of both groups of young men, while second sanctions amplify this effect only for young men living in single households." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | J64 J65 C41 C21 |
| Date: | 2015–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201534&r=lab |
| By: | Ding, Lei (Federal Reserve Bank of Philadelphia); Hwang, Jackelyn (Princeton University); Divringi, Eileen (Federal Reserve Bank of Philadelphia) |
| Abstract: | Gentrification has provoked considerable debate and controversy about its effects on neighborhoods and the people residing in them. This paper draws on a unique large-scale consumer credit database to examine the mobility patterns of residents in gentrifying neighborhoods in the city of Philadelphia from 2002 to 2014. We find significant heterogeneity in the effects of gentrification across neighborhoods and subpopulations. Residents in gentrifying neighborhoods have slightly higher mobility rates than those in nongentrifying neighborhoods, but they do not have a higher risk of moving to a lower-income neighborhood. Moreover, gentrification is associated with some positive changes in residents’ financial health as measured by individuals’ credit scores. However, when more vulnerable residents (low-score, longer-term residents, or residents without mortgages) move from gentrifying neighborhoods, they are more likely to move to lower-income neighborhoods and neighborhoods with lower values on quality-of-life indicators. The results reveal the nuances of mobility in gentrifying neighborhoods and demonstrate how the positive and negative consequences of gentrification are unevenly distributed. |
| Keywords: | Gentrification; Residential mobility; Credit scores; Displacement |
| JEL: | D14 J11 J6 R23 |
| Date: | 2015–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:15-36&r=lab |
| By: | Sahoo, Bimal; Neog, Bhaskar Jyoti |
| Abstract: | Labour informality is one of the most serious challenges for the world and more so for developing economy like India with large scale poverty and little unemployment protection. The provision of decent working conditions becomes prerogative bringing the issue of labour informality into the forefront. This study scrutinized possible heterogeneity within informal employment among the non-cultivator workers in India. It has studied the trend, pattern, and determinants of the various components of the informal employment. It found significant heterogeneity within the informal employment with respect to poverty, age, gender, socio-religious communities, educational attainment, and industrial classification. . Complexity of heterogeneity in informal employment has been rising over time, hence posing serious policy challenges. Cluster analysis carried out to demonstrate the relationship between informality in employment and quality of works. The evidence suggests significant diversity within the informal employment. Multinominal logit was applied to determine the determinants of participation in informal employment. The result further reinforces the complexity in informal employment. The convolution is more with respect to rural and urban area, dependency ratio, marital status, social groups, and poverty. With respect to education the dual market hypothesis was supported. Co-existence of voluntary and involuntary informal employment was also observed. Given the diversity of employment, the paper suggests specific policy deign for different segment of employment to achieve eatable and inclusive growth. |
| Keywords: | Labour Market Informality, Quality of Work, Cluster Analysis, Heterogeneity, Multinomial Logit |
| JEL: | C35 C38 J80 |
| Date: | 2015–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68136&r=lab |
| By: | Bertoli, Simone (CERDI, University of Auvergne); Dequiedt, Vianney (CERDI, University of Auvergne); Zenou, Yves (Stockholm University) |
| Abstract: | Destination countries can adopt selective immigration policies to improve migrants' quality. Screening potential migrants on the basis of observable characteristics also influences their self-selection on unobservables. We propose a model that analyzes the effects of selective immigration policies on migrants' quality, measured by their wages at destination. We show that the prevailing pattern of selection on unobservables influences the effect of an increase in selectivity, which can reduce migrants' quality when migrants are positively self-selected on unobservables. We also demonstrate that, in this case, the quality-maximizing share of educated migrants declines with the scale of migration. |
| Keywords: | migrants' quality, self-selection, selective policies |
| JEL: | F22 J61 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9538&r=lab |
| By: | Michela Braga (Università Bocconi, Milano); Francesco Scervini (Università di Pavia) |
| Abstract: | This paper investigates whether the gender of elected politicians af- fects the political municipal outcomes. Relying on Italian administra- tive data from 1991 to 2009, we are able to instrument the gender of elected politician using an institutional exogenous change: a gender quota in the candidacy list enforced only in a subsample of municipali- ties and for a short period of time. While the gender of politicians does not affect the general `quality of life', proxied by the internal migration rate, it does affect significantly both the efficacy of policies targeted to women and households, proxied by the fertility rate, and the efficiency of municipal administration, proxied by the size of administrative bod- ies. These results are robust to several specifications and robustness checks. Affirmative actions enhancing gender equality in political rep- resentation may be then beneficial not only in terms of social justice, but also from a political outcome perspective. |
| Keywords: | Gender, Municipal government, Political outcomes, Fertility |
| JEL: | D72 J13 J16 R23 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipu:wpaper:35&r=lab |
| By: | Leslie P. Willcocks; Mary Lacity; Andrew Craig |
| JEL: | J50 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64519&r=lab |
| By: | Laetitia Lebihan (Department of Economics, University of Quebec in Montreal); Catherine Haeck (Department of Economics, University of Quebec in Montreal); Pierre Lefebvre (Department of Economics, University of Quebec in Montreal); Philip Merrigan (Department of Economics, University of Quebec in Montreal) |
| Abstract: | In this paper, we study the long-run impact of a universal child care policy in Quebec on parental health and parenting practices. Using data from the National Longitudinal Survey of Child and Youth, we follow treated families for more than 9 years and investigate the impact well beyond the first few years of the policy. A non-experimental evaluation framework based on multiple pre- and post-treatment periods is used to estimate the policy effects. We show that the policy increased mothers' depression scores with preschool children as well as scores of inappropriate parenting behavior. The policy increased hostile and aversive parenting and reduced positive interaction and consistent parenting. However, negative effects of the program on parental behaviors vanish when the child is in school. Moreover, we find that this pattern persists even ten years after the implementation of the reform. |
| Keywords: | universal child care, parental health and behaviors, longer-run effects, child care policy, natural experiment |
| JEL: | I31 J18 J20 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:grc:wpaper:15-04&r=lab |