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on Labour Economics |
| By: | Pastore, Francesco (University of Naples II); Sattar, Sarosh (World Bank); Sinha, Nistha (World Bank); Tiongson, Erwin R. (Georgetown University) |
| Abstract: | Building on recent analyses that find a sizeable, overall gender wage gap in Azerbaijan's workforce, this paper uses data on young workers in their early years in the labor market to understand how gender wage gaps evolve over time, if at all. Using a unique database from a survey of young people age 15-29 years old, we provide evidence that new labor market entrants begin with little or no gender differences in earnings, but a wage gap gradually emerges over time closer to the childbearing years. The gender wage gap grows from virtually zero, or even a small, positive gap in favor of women, until the age of 20 years to about 20% two years later and even more than 30% at the age of 29 years. The gap in labor supply rises from almost zero to about 20% during the years from 19 to 22, while the gap in hours worked falls from positive (up to 6 hours per week more than their male counterparts) to negative (up to -5 hours per week) over the same period in the life cycle. When decomposing the gap at different deciles of the wage distribution, it appears that most of it is at the lower and upper end of the distribution, among young adults and the prime-age workers. Selection of women into employment is strong and strongly skill-based: when controlling for sample selection bias, the gender gap becomes positive. |
| Keywords: | gender wage gap and dynamics, early labor market outcomes, school-to-work transitions, earnings equations, decomposition analysis |
| JEL: | I21 J13 J15 J16 J24 J31 J7 P30 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9660&r=lab |
| By: | van den Berg, Gerard J. (University of Mannheim); Hofmann, Barbara (University of Mannheim); Uhlendorff, Arne (CREST) |
| Abstract: | Unemployment insurance agencies may combat moral hazard by punishing refusals to apply to assigned vacancies. However, the possibility to report sick creates an additional moral hazard, since during sickness spells, minimum requirements on search behavior do not apply. This reduces the ex ante threat of sanctions. We analyze the effects of vacancy referrals and sanctions on the unemployment duration and the quality of job matches, in conjunction with the possibility to report sick. We estimate multi-spell duration models with selection on unobserved characteristics. We find that a vacancy referral increases the transition rate into work and that such accepted jobs go along with lower wages. We also find a positive effect of a vacancy referral on the probability of reporting sick. This effect is smaller at high durations, which suggests that the relative attractiveness of vacancy referrals increases over the time spent in unemployment. Overall, around 9% of sickness absence during unemployment is induced by vacancy referrals. |
| Keywords: | unemployment insurance, wage, physician, vacancy referrals, unemployment, monitoring, moral hazard |
| JEL: | J64 J65 C41 C21 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9626&r=lab |
| By: | Arni, Patrick (IZA) |
| Abstract: | Empirically, not much is known about the mechanisms how labor market programs like job search assistance and training operate to support finding a job. This paper provides novel evidence to open the "blackbox": it causally links the program interventions to the dynamics of search behavior, beliefs and non-cognitive skills. The study is based on a unique combination of a randomized field experiment with detailed register data and a panel of repeated surveys. The tested coaching program, focused on older job seekers, turns out to increase the job finding of participants by 9 percentage points (72% vs. 63% in the control group). The treatment effect is driven by a reduction of reservation wages and an increase in search efficiency. Moreover, I find short-run effects on motivation, self-confidence and beliefs. The job seekers overestimate their chances slightly less with respect to job interviews and salaries. Overall, the focus on realistic expectations and on search strategy appears to be important for program success. The experiment shows that evaluation designs which directly assess behavior can provide a fruitful base for targeted policy design. |
| Keywords: | field experiment, labor market policy, older workers, reservation wages, job search behavior, non-cognitive skills, biased beliefs, dynamic treatment effects, unemployment insurance |
| JEL: | J64 J65 J68 J14 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9617&r=lab |
| By: | Böckerman, Petri (Turku School of Economics, Labour Institute for Economic Research, Helsinki a); Skedinger, Per (Research Institute of Industrial Economics (IFN)); Uusitalo, Roope (Jyväskylä University School of Business and Economics) |
| Abstract: | We construct a multi-country employer-employee data to examine the consequences of employment protection. We identify the effects by comparing worker exit rates between units of the same firm that operate in two countries that have different seniority rules. The results show that last-in-first-out rules reduce dismissals of older, more senior workers, especially in shrinking multinational firms, and increase their bargaining power, resulting in a steeper seniority-wage profile. |
| Keywords: | Multi-country linked employer-employee data; Employment protection legislation; Seniority rules |
| JEL: | J08 J32 J63 K31 L51 |
| Date: | 2016–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1105&r=lab |
| By: | Caliendo, Marco (University of Potsdam); Cobb-Clark, Deborah A. (University of Sydney); Hennecke, Juliane (Free University of Berlin); Uhlendorff, Arne (CREST) |
| Abstract: | Internal migration can substantially improve labor market efficiency. Consequently, policy is often targeted towards reducing the barriers workers face in moving to new labor markets. In this paper we explicitly model internal migration as the result of a job search process and demonstrate that assumptions about the timing of job search have fundamental implications for the pattern of internal migration that results. Unlike standard search models, we assume that job seekers do not know the true job offer arrival rate, but instead form subjective beliefs - related to their locus of control - about the impact of their search effort on the probability of receiving a job offer. Those with an internal locus of control are predicted to search more intensively (i.e. across larger geographic areas) because they expect higher returns to their search effort. However, they are predicted to migrate more frequently only if job search occurs before migration. We then test the empirical implications of this model. We find that individuals with an internal locus of control not only express a greater willingness to move, but also undertake internal migration more frequently. |
| Keywords: | locus of control, internal migration, mobility, job search |
| JEL: | J61 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9600&r=lab |
| By: | Olivetti, Claudia (Boston College); Petrongolo, Barbara (Queen Mary, University of London) |
| Abstract: | Women in developed economies have made major inroads in labor markets throughout the past century, but remaining gender differences in pay and employment seem remarkably persistent. This paper documents long-run trends in female employment, working hours and relative wages for a wide cross-section of developed economies. It reviews existing work on the factors driving gender convergence, and novel perspectives on remaining gender gaps. The paper finally emphasizes the interplay between gender trends and the evolution of the industry structure. Based on a shift-share decomposition, it shows that the growth in the service share can explain at least half of the overall variation in female hours, both over time and across countries. |
| Keywords: | female employment, gender gaps, demand and supply, industry structure |
| JEL: | E24 J16 J31 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9659&r=lab |
| By: | Patterson, Christina (Massachusetts Institute of Technology); Sahin, Aysegül (Federal Reserve Bank of New York); Topa, Giorgio (Federal Reserve Bank of New York); Violante, Giovanni L. (New York University) |
| Abstract: | The UK experienced an unusually prolonged stagnation in labor productivity in the aftermath of the Great Recession. This paper analyzes the role of sectoral labor misallocation in accounting for this "productivity puzzle." If jobseekers disproportionately search for jobs in sectors where productivity is relatively low, hires are concentrated in the wrong sectors, and the post-recession recovery in aggregate productivity can be slow. Our calculations suggest that, quantified at the level of three-digit occupations, this mechanism can explain up to two thirds of the deviations from trend-growth in UK labor productivity since 2007. |
| Keywords: | misallocation, productivity |
| JEL: | E24 E32 J24 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9629&r=lab |
| By: | Albanese, Andrea (Ghent University); Cockx, Bart (Ghent University); Thuy, Yannick (Ghent University) |
| Abstract: | In this paper we study the effects on the survival rate in employment of a scheme that facilitates gradual retirement through working time reductions. We use information on the entire labour market career and other observables to control for selection and take dynamic treatment assignment into account. We also estimate a competing risks model considering different (possibly selective) pathways to early retirement. We find that participation in the scheme initially prolongs employment, as participants keep accumulating full pension rights. However, as participants become eligible for early retirement subsequently, these larger financial incentives induce them to leave the labour force prematurely. These adverse incentives are stronger for individuals who reduce their working time most. After two (four) years for men (women), the positive effects reverse. The more favourable effect for women is likely a consequence of their lower opportunities to enter early retirement. The gradual retirement scheme fails the cost-benefit test. |
| Keywords: | part-time work, older workers, Inverse Probability Weighting, dynamic selection into treatment, endogenous sampling |
| JEL: | J14 C22 J18 J22 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9619&r=lab |
| By: | Clément Bosquet; Henry G. Overman |
| Abstract: | We consider the link between birthplace and wages. Using a unique panel dataset we estimate a raw elasticity of wage with respect to birthplace size of 4.6%, two thirds of the 6.8% raw elasticity with respect to city size. We consider a number of mechanisms through which this birthplace effect could arise. Our results suggest that inter-generational transmission (sorting) and the effect of birthplace on current location (geography) both play a role in explaining the effect of birthplace. We find no role for human capital formation at least in terms of educational outcomes (learning). Our results highlight the importance of intergenerational sorting in helping explain the persistence of spatial disparities. |
| Keywords: | place of birth, spatial sorting, lifetime mobility |
| JEL: | J61 J62 R23 J31 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0190&r=lab |
| By: | Fakih, Ali (Lebanese American University); Ibrahim, May (World Bank) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9667&r=lab |
| By: | Sojourner, Aaron J. (University of Minnesota); Yang, Jooyoung (University of Minnesota) |
| Abstract: | We study how union certification affects the enforcement of workplace-safety laws. To generate credible causal estimates, a regression discontinuity design compares outcomes in establishments where unions barely won representation elections to outcomes in establishments where union barely lost such elections. The study combines two main datasets: the census of National Labor Relations Board (NLRB) representation elections and the Occupational Safety and Health Administration's (OSHA) enforcement database since 1985. There is evidence of positive effects of union certification on establishment's rate of OSHA inspection, the share of inspections carried out in the presence of a labor representative, violations cited, and penalties assessed. |
| Keywords: | union(s), OSHA inspections, workplace accidents, effects, labor market institutions |
| JEL: | J51 J28 I18 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9610&r=lab |
| By: | Burkhauser, Richard V. (Cornell University); Hahn, Markus (Melbourne Institute of Applied Economic and Social Research); Hall, Matthew (Cornell University); Watson, Nicole (University of Melbourne) |
| Abstract: | The factors leading individuals to immigrate to developed nations are widely studied, but comparatively less is known about those who emigrate from them. In this paper, we use data from a nationally representative cohort of Australian adults to develop longitudinal measures of emigration and to assess how social ties and individual economic position predict emigration. Cox proportional hazards models indicate that the propensity to emigrate is particularly pronounced for those with relatively little social connectedness in Australia. Specifically, our results show that first-generation Australians, especially those with relatively short durations in the country, have substantially higher emigration rates than later-generation Australians. Similarly, having a partner with deeper generational roots in Australia strongly reduces the likelihood to emigrate. At the same time, our analysis also shows that economic position matters, with the not employed having higher risks of emigration. Perhaps most interestingly, estimates from our models reveal that those with university degrees are much more likely to emigrate than individuals with lower levels of education; a finding that is true for both first- and later-generation Australians. |
| Keywords: | Australian demography, immigration, emigration, HILDA data, Cox proportional model |
| JEL: | J1 J6 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9665&r=lab |
| By: | Tani, Massimiliano (University of New South Wales) |
| Abstract: | This paper exploits a quasi-experiment to shed light on whether the wage penalty experienced by migrants reflects poor schooling quality in the country of education or employers' discrimination in the host country. The quasi-experiment is the possibility for migrants to undertake an official assessment of their foreign qualifications, and remove the uncertainty surrounding the educational curriculum completed abroad. Data about the assessment can be used together with indicators of where education was completed to test empirically which determinant most affects the returns to foreign education. Since the assessment is a choice it is instrumented with a measure of relative distance between awareness of degrees awarded in the country of education and the host country. The analysis is based on the Longitudinal Survey of Immigrants to Australia. The results suggest that undertaking the assessment raises the returns of foreign education, offsetting the penalty for being educated abroad. The assessment's effect weakens over time, as employers observe migrants' productivity. The effect of where schooling is completed also trends upwards over time. These findings are consistent with the hypothesis of statistical discrimination due to the imperfect information about migrants' educational credentials. Adding a local signal appears to be effective in easing immigrants' economic assimilation and improve the international transferability of their human capital. |
| Keywords: | immigration, foreign education, statistical discrimination |
| JEL: | J24 J61 J70 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9597&r=lab |
| By: | Okumura, Tsunao (Yokohama National University); Usui, Emiko (Hitotsubashi University) |
| Abstract: | This paper investigates, theoretically and empirically, differences between blacks and whites in the U.S. concerning the intergenerational transmission of occupational skills and the effects on sons' earnings. The father-son skill correlation is measured by the correlation coefficient (or cosine of the angle) between the father's skill vector and the son's skill vector. The skill vector comprises an individual's occupational characteristics from the Dictionary of Occupational Titles (DOT). According to data from the U.S. National Longitudinal Survey of Youth (NLSY79), white sons earn higher wages in occupations that require skills similar to those of their fathers, whereas black sons in such circumstances incur a wage loss. A large portion of the racial wage gap is explained by the father-son skill correlation. However, a significant unexplained racial wage gap remains at the lower tail of the wage distribution. |
| Keywords: | multidimensional skills, intergenerational transmission, occupational characteristics, black-white differences |
| JEL: | J62 J24 J15 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9662&r=lab |
| By: | Caliendo, Marco (University of Potsdam); Künn, Steffen (Maastricht University); Weißenberger, Martin (University of Potsdam) |
| Abstract: | Many countries support business start-ups to spur economic growth and reduce unemployment with different programmes. Evaluation studies of such programmes commonly rely on the conditional independence assumption (CIA), allowing a causal interpretation of the results only if all relevant variables affecting participation and success are accounted for. While the entrepreneurship literature has emphasised the important role of personality traits as predictors for start-up decisions and business success, these variables were neglected in evaluation studies so far due to data limitations. In this paper, we evaluate a new start-up subsidy for unemployed individuals in Germany using propensity score matching under the CIA. Having access to rich administrative-survey data allows us to incorporate usually unobserved personality measures in the evaluation and investigate their impact on the estimated effects. We find strong positive effects on labour market reintegration and earned income for the new programme. Most importantly, results including and excluding individuals' personalities do not differ significantly, implying that concerns about potential overestimation of programme effects in absence of personality measures might be less justified if the set of other control variables is rich enough. |
| Keywords: | start-up subsidies, evaluation, self-employment, personality, treatment effects |
| JEL: | C14 L26 H43 J68 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9628&r=lab |
| By: | Borgschulte, Mark (University of Illinois at Urbana-Champaign); Martorell, Paco (University of California, Davis) |
| Abstract: | This paper provides revealed-preference estimates of the monetary value of avoiding job search in a high-unemployment labor market by examining the behavior of military servicemembers deciding between reenlisting and exiting the military. We find that servicemembers would sacrifice 1.5-2% in earnings in exchange for avoiding a one percentage point increase in the home-state unemployment rate. Comparing these estimates to realized losses in post-service civilian earnings resulting from exiting the military during times of high unemployment suggests that mitigating factors (e.g., leisure, private and public transfers) offset less than one-third of the earnings losses caused by entering a weak labor market. |
| Keywords: | welfare cost of business cycles, labor market entry, military reenlistment |
| JEL: | J30 J60 J65 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9680&r=lab |