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on Labour Economics |
| By: | Vincent Sterk (Department of Economics University College London (UCL); Centre for Macroeconomics (CFM)) |
| Abstract: | Standard models predict that episodes of high unemployment are followed by recoveries. This paper shows, by contrast, that a large shock may set the economy on a path towards very high unemployment, with no recovery in sight. First, I estimate a reduced-form model of flows in the U.S. labor market, allowing for the possibility of multiple steady states. Next, I estimate a non-linear search and matching model, in which multiplicity of steady states may arise due to skill losses upon unemployment, following Pissarides (1992). In both cases, estimates imply a stable steady state with around 5 percent unemployment and an unstable one with around 10 percent unemployment. The search and matching model can explain observed job finding rates remarkably well, due to its strong endogenous persistence mechanism. |
| Keywords: | Unemployment, multiple steady states, non-linear estimation |
| JEL: | E24 E32 J23 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1603&r=lab |
| By: | Kambayashi, Ryo; Ueno, Yuko |
| Abstract: | This study aims to empirically examine how establishments employ various tools, including promotion, threat of dismissal, progressive base wages, and bonuses, to motivate workers. Starting with the standard tournament model, we incorporate the link between the tournament structure and the worker separation that affects the degree of internal competition for managerial positions. By using an establishment-level panel data set, we find that the average policy of human resource management in Japan, particularly since the global financial crisis, is consistent with tournament theory. Further, there is evidence that establishments use a positive selection scheme for determining the set of candidates. The progressive base wage schedule and the smaller portion of bonus payments for employees who remain are also consistent with the selection scheme. |
| Keywords: | Promotion tournament, internal competition, worker separation, wage progression |
| JEL: | M51 M52 J31 J63 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rcesrs:dp15-11&r=lab |
| By: | Özlem Onaran (University of Greenwich); Thomas Obst |
| Abstract: | This paper estimates a multi-country demand-led growth model for EU15 countries. A decrease in the share of wages in national income in isolation leads to lower growth in Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom, whereas it stimulates growth in Austria, Belgium, Denmark and Ireland. However, a simultaneous decline in the wage share leads to an overall decline in EU15 GDP; hence EU15 as a whole is a wage-led economy. Furthermore, Austria and Ireland also experience negative effects on growth when they decrease their wage share along with their trading partners. The results indicate that a decline in the wage share has had significant negative effects on growth in the EU15 countries and supports the case of wage coordination. We present different wage-led recovery scenarios taking into account further effects of a change in the wage share on prices, nominal unit labour costs, investment, and net exports. |
| Keywords: | Wage share, Growth, European Multiplier, Demand Regime |
| JEL: | E12 E22 E25 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1602&r=lab |
| By: | Abigail Cooke; Thomas Kemeny |
| Abstract: | Recent evidence suggests that rising immigrant diversity in cities offers economic benefits, including improved innovation, entrepreneurship and productivity. One potentially important but underexplored dimension of this relationship is how local institutional context shapes the benefits firms and workers receive from the diversity in their midst. Theory suggests that institutions can make it less costly for diverse workers to transact, thereby catalyzing the latent bene ts of heterogeneity. This paper tests the hypothesis that the effects of immigrant diversity on productivity will be stronger in locations featuring more “inclusive" institutions. It leverages comprehensive longitudinal linked employer-employee data for the U.S. and two distinct measures of inclusive institutions at the metropolitan area level: social capital and pro- or anti-immigrant ordinances. Findings confirm the importance of institutional context: in cities with low levels of inclusive institutions, the benefits of diversity are modest and in some cases statistically insignificant; in cities with high levels of inclusive institutions, the benefits of immigrant diversity are positive, significant, and substantial. Moreover, natives residing in cities that have enacted laws restricting immigrants enjoy no diversity spillovers whatsoever, while immigrants in these cities continue to receive a diversity bonus. These results confirm the economic significance of urban immigrant diversity, while suggesting the importance of local social and economic institutions. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:16-07&r=lab |
| By: | Baron,Juan; Popova,Anna; Sanchez Diaz,Angelica Maria |
| Abstract: | This paper exploits data from a rotating panel that follows individuals for four quarters to shed light on the factors driving the time use decisions and restrictions faced by Mexican youth. The results of the analysis imply that: (i) once youth aged 15 to 18 years old leave school, it is very unlikely that they will return; (ii) being"neither in work nor in school"(Nini) is a highly persistent condition; and (iii) marriage (perhaps motivated by teen pregnancy) increases the probability of girls leaving school and raising children by themselves, which may in turn increase their future likelihood of being Ninis, as well as the probability of their children growing up to become Ninis, potentially creating an intergenerational transmission of Nininess. Similar results are found for other countries in the region (Brazil and Argentina). |
| Keywords: | Gender and Health,Youth and Government,Adolescent Health,Population Policies,Primary Education |
| Date: | 2016–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7534&r=lab |
| By: | Erik Brynjolfsson; Kristina McElheran |
| Abstract: | Manufacturing in America has become significantly more data-intensive. We investigate the adoption, performance effects and organizational complementarities of data-driven decision making (DDD) in the U.S. Using data collected by the Census Bureau for 2005 and 2010, we observe the extent to which manufacturing firms track and use data to guide decision making, as well as their investments in information technology (IT) and the use of other structured management practices. Examining a representative sample of over 18,000 plans, we find that adoption of DDD is earlier and more prevalent among larger, older plants belonging to multi-unit firms. Smaller single-establishment firms adopt later but have a higher correlation with performance than similar non-adopters. Using a fixed-effects estimator, we find the average value-added for later DDD adopters to be 3% greater than non-adopters, controlling for other inputs to production. This effect is distinct from that associated with IT and other structured management practices and is concentrated among single-unit firms. Performance improves after plants adopt DDD, but not before – consistent with a causal relationship. However, DDD-related performance differentials decrease over time for early and late adopters, consistent with firm learning and development of organizational complementarities. Formal complementarity tests suggest that DDD and high levels of IT capital reinforce each other, as do DDD and skilled workers. For some industries, the benefits of DDD adoption appear to be greater for plants that delegate some decision making to frontline workers. |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:16-06&r=lab |
| By: | Ali Fakih; May Ibrahim (Sans nom) |
| Abstract: | This paper analyzes time-sensitive data on a humanitarian crisis in the Middle East. It aims to assess the impact of the steep influx of Syrian refugees into Jordan on the country’s labor market since the onset of the conflict in Syria (March 2011). As of August 2014, nearly 3 million registered Syrians have sought refuge in neighboring countries (Lebanon, Jordan, Iraq, and Turkey), according to the United Nations High Commissioner for Refugees (UNHCR). Jordan and Lebanon are hosting the majority of them. This paper utilizes data regarding unemployment rates, employment rates, labor force participation, the number of refugees, and economic activity at the level of governorates. The Vector Autoregressive (VAR) methodology is used to examine time series data from the most affected governorates in Jordan. The empirical results of Granger causality tests and impulse response functions show that there is no relationship between the influx of Syrian refugees and the Jordanian labor market. Our results are verified through a set of robustness checks. |
| Keywords: | Forced refugees; Host country; Labor market; VAR model, |
| JEL: | J61 H56 N45 |
| Date: | 2016–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2016s-05&r=lab |