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on Labour Economics |
| By: | Hendrik Jürges; Lars Thiel; Axel Börsch-Supan |
| Abstract: | After two decades of reforms that have tightened eligibility for early retirement and the generosity of social security payments, the German government has begun to turn back time and re-introduce more generous disability and early retirement benefits. Often, poor health is cited as the main reason why workers cannot work until the regular retirement age. In this chapter, we try to answer a seemingly simple question: what is the proportion of older individuals who could work in the labor market if they wanted to and if they were not limited by poor health? To answer this question, we follow two different empirical approaches with a similar logic: we estimate the link between health and labor force participation in a population whose employment patterns are or were hardly affected by the current (early) retirement incentives. Using these “pure health effects” on labor force participation to extrapolate to a population that is currently strongly affected by legislation informs us how many could not work for health reasons and how many could work. We find substantial capacity to work among the older population. We estimate that two thirds of the population would be capable of working in the labor market until they turn 70 if they wanted to. |
| JEL: | H31 H55 I19 J14 J26 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21972&r=lab |
| By: | Rudanko, Leena (Federal Reserve Bank of Philadelphia); Krusell, Per (Stockholm University, CEPR, and NBER) |
| Abstract: | We analyze a labor market with search and matching frictions in which wage setting is controlled by a monopoly union. Frictions render existing matches a form of firm-specific capital that is subject to a hold-up problem in a unionized labor market. We study how this hold-up problem manifests itself in a dynamic infinite horizon model with fully rational agents. We find that wage solidarity, seemingly an important norm governing union operations, leaves the unionized labor market vulnerable to potentially substantial distortions because of hold-up. Introducing a tenure premium in wages may allow the union to avoid the problem entirely, however, potentially allowing efficient hiring. Under an egalitarian wage policy, the degree of commitment to future wages is important for outcomes: With full commitment to future wages, the union achieves efficient hiring in the long run but hikes up wages in the short run to appropriate rents from firms. Without commitment, and in a Markov perfect equilibrium, hiring is well below its efficient level both in the short and the long run. We demonstrate the quantitative impact of the union in an extended model with partial union coverage and multiperiod union contracting. |
| Keywords: | Labor unions; Frictional labor markets; Time inconsistency; Limited commitment |
| JEL: | E02 E24 J51 J64 |
| Date: | 2016–02–29 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:16-7&r=lab |
| By: | Emanuele Ciani (Bank of Italy) |
| Abstract: | I estimate the effect of retirement on housework by exploiting the discontinuity in pension eligibility generated by the Italian social security rules. Using microdata from the 2007 wave of the Survey on Income and Living Conditions (SILC), I show that women increase their time spent on home production by more than 400 minutes per week. For men, there is on average no evidence of a significant change, which differs from the results of studies in other countries. However, estimates are heterogeneous by marital status, suggesting that married men do not increase time spent on household production because they can rely on their spouses. I also discuss other possible explanations, in particular men dedicating their time to ‘semi-leisure chores’ that do not fall under the definition of housework used in SILC. Overall, results suggest that retirement does not lead to a more equal distribution of ‘core’ household chores between genders. |
| Keywords: | retirement, house work, regression discontinuity |
| JEL: | J22 J26 D1 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1056_16&r=lab |
| By: | Stefano DellaVigna; John A. List; Ulrike Malmendier; Gautam Rao |
| Abstract: | We design a model-based field experiment to estimate the nature and magnitude of workers’ social preferences towards their employers. We hire 446 workers for a one-time task. Within worker, we vary (i) piece rates; (ii) whether the work has payoffs only for the worker, or also for the employer; and (iii) the return to the employer. We then introduce a surprise increase or decrease in pay (‘gifts’) from the employer. We find that workers have substantial baseline social preferences towards their employers, even in the absence of repeated-game incentives. Consistent with models of warm glow or social norms, but not of pure altruism, workers exert substantially more effort when their work is consequential to their employer, but are insensitive to the precise return to the employer. Turning to reciprocity, we find little evidence of a response to unexpected positive (or negative) gifts from the employer. Our structural estimates of the social preferences suggest that, if anything, positive reciprocity in response to monetary ‘gifts’ may be larger than negative reciprocity. We revisit the results of previous field experiments on gift exchange using our model and derive a one-parameter expression for the implied reciprocity in these experiments. |
| JEL: | C93 D64 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22043&r=lab |
| By: | Wolters, Maik H. |
| Abstract: | Hours per capita measures based on the private sector as usually included in the set of observables for estimating macroeconomic models are affected by low-frequent demographic trends and sectoral shifts that cannot be explained by standard models. Further, model-based output gap estimates are closely linked to the observable hours per capita series. Hence, hours per capita that are not measured in concordance with the model assumptions can distort output gap estimates. This paper shows that sectoral shifts in hours and the changing share of prime age individuals in the working-age population lead indeed to erroneous output gap dynamics. Regarding the aftermath of the global financial crisis model-based output gaps estimated using standard hours per capita series are persistently negative for the US economy. This is not caused by a permanently depressed economy, but by the retirement wave of baby boomers which lowers aggregate hours per capita. After adjusting hours for changes in the age composition to bring them in line with the model assumptions, the estimated output gap gradually closes in the years following the global financial crisis. |
| Keywords: | output gap estimates,DSGE models,hours per capita measurement,demographic trends,Bayesian estimation |
| JEL: | C11 C54 E32 J11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2031&r=lab |
| By: | Bolhaar, Jonneke; Ketel, Nadine; van der Klaauw, Bas |
| Abstract: | This paper studies mandatory job-search periods for welfare applicants. During this period the benefits application is put on hold and the applicant is obliged to make job applications. We combine a randomized experiment with detailed administrative data to investigate the effects of imposing a job-search period. We find strong and persistent effects on the probability to collect welfare benefits. The reduced benefits are fully compensated by increased earnings from work. Furthermore, we do not find evidence of adverse consequences for the most vulnerable applicants. Our results therefore suggest that a job-search period is an effective instrument for targeting welfare-benefits applicants. |
| Keywords: | active labor-market policies; job search; randomized experiment; welfare-to-work |
| JEL: | C21 C93 I38 J08 J64 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11165&r=lab |
| By: | Braun, Sebastian; Weber, Henning |
| Abstract: | We draw on two decades of historical data to analyze how regional labor markets in West Germany adjusted to one of the largest forced population movements in history, the mass inflow of eight million German expellees after World War II. The expellee inflow was distributed very asymmetrically across two West German regions. A dynamic two-region search and matching model of unemployment, which is exposed to the asymmetric expellee inflow, closely fits historical data on the regional unemployment differential and the regional migration rate. Both variables increase dramatically after the inflow and decline only gradually over the next decade. We show that despite the large and long-lasting dynamics following the expellee inflow, native workers experience only a modest loss in expected discounted lifetime labor income of 1.38%. Per-period losses in native labor income, however, are up to four times as large. The magnitude of income losses also depends on the initial location and labor market status of native workers. In counterfactual analyses, we furthermore show that economic policy interventions that affect the nature of the immigration inflow can effectively reduce native income losses and dampen adjustment dynamics in regional labor markets. One such intervention is to distribute the inflow more evenly over time. Smaller immigration inflows, similar in magnitude to the refugee inflow that Germany is experiencing today, also reduce native income losses markedly but decrease the duration of labor market adjustment only modestly. |
| Keywords: | Immigration,labor market adjustments,dynamic search and matching model of unemployment,asymmetric labor supply shock,post-war Germany |
| JEL: | J61 F22 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2025&r=lab |
| By: | Schmillen,Achim Daniel; Packard,Truman G. |
| Abstract: | Over the past 30 years, Vietnam has experienced significant shifts of employment away from agriculture toward manufacturing and services, away from household enterprises toward registered and regulated businesses, and away from state-owned enterprises toward private firms. This paper argues that for these processes to continue in the future, appropriately designed and implemented labor market policies need to be in place, including labor market regulations that protect workers but do not inhibit creative destruction and creation of formal sector jobs; labor market interventions that improve workers'human capital, eliminate information asymmetries, and are fiscally sustainable; and labor market institutions that give voice to workers and employers. As a part of all of these measures, Vietnam will also have to renew its efforts to integrate vulnerable groups into the labor market. |
| Keywords: | Banks&Banking Reform,Labor Policies,Markets and Market Access,Labor Markets,Labor Standards |
| Date: | 2016–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7587&r=lab |
| By: | Heinrich Hock; Walter Nicholson; Karen Needels; Joanne Lee; Priyanka Anand |
| JEL: | J |
| Date: | 2016–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:881bfec473cb45498e8392657dc6a316&r=lab |
| By: | Deckers, Thomas; Falk, Armin; Kosse, Fabian; Szech, Nora |
| Abstract: | This paper studies how individual characteristics, institutions, and their interaction influence moral decisions. We validate a moral paradigm focusing on the willingness to accept harming third parties. Consequences of moral decisions are real. We explore how moral behavior varies with individual characteristics and how these characteristics interact with market institutions compared to situations of individual decision-making. Intelligence, female gender, and the existence of siblings positively influence moral decisions, in individual and in market environments. Yet in markets, most personalities tend to follow overall much lower moral standards. Only fluid intelligence specifically counteracts moraleroding effects of markets. |
| Keywords: | homo moralis,moral personality,real moral task,markets and personality,trade and morals |
| JEL: | D02 D03 J10 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2016302&r=lab |
| By: | Anna Zhu (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) |
| Abstract: | Mothers caring for an infant or toddler continue to face barriers in returning to work after child birth. Mothers caring for an infant or toddler with a disability, however, may face even greater barriers. This paper contributes to the literature by exploring the employment costs for this group of mothers using a novel Australian administrative data set. The employment patterns of mothers with and without a disabled infant or toddler are compared both before and after child birth. The data follow 7,600 mothers on a bi-weekly basis for the entire period 12 months before and the 24 months after child birth and contain information on the disability status of the child, measures of employment and the intensity of employment. I find that mothers of disabled toddlers and infants suffer employment disadvantages relative to mothers of non-disabled children. The employment gaps grow from approximately six percentage points shortly after their children are born to 14-17 percentage points when their children are 12 to 24 months old. The employment gaps exist for full-time employment as well as for short part-time employment. Classification- I12, J13, J22 |
| Keywords: | Disability, infants or toddlers, mothers’ employment |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2016n06&r=lab |
| By: | Didier Blanchet; Eve Caroli; Corinne Prost; Muriel Roger |
| Abstract: | France stands out as a country with a low labor force attachment of older workers. A reversal in the trend of French labor participation rates over 50 is under way, partly due to the pension reforms that took place since 1993. The French ageing process is driven by large gains in life expectancy and Pension reforms allocate part of these gains to work rather than to retirement. The implicit assumptions guiding the reforms have been that additional years of life are years with a health status that can be considered reasonably compatible with work. If this is not the case, the idea of sharing these additional years of life between work and retirement is questionable. Considering mortality and health status, we question the fact that the reforms may have gone too far in increasing the retirement age. To tackle these issues, we rely on two different methodological approaches developed in the economic literature: one based on the gap in employment rates across time for given mortality rates; the other using the work/health relationship measured at certain ages to predict the health-related work capacity of older age groups at the same period of time. Both methods aim at providing measures of additional work capacity. This capacity may be defined as a measure of the distance between current retirement ages and what we call the “health barrier”, i.e. the age at which health prevents people from working longer. Both methods predict high average levels of additional work capacity. However, the picture becomes somewhat different when disaggregating the results by social groups or education. Our results emphasize the idea that policies aiming at activating any estimated additional work capacity should take into account, when possible, the heterogeneity of health conditions in the population. Moreover, additional work capacity cannot be a general indicator of how much seniors should work. The methods used here indeed leave aside many factors that determine the employment rate of older workers. |
| JEL: | I10 J14 J21 J26 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22024&r=lab |
| By: | Brian Duncan; Stephen J. Trejo |
| Abstract: | Because of data limitations, virtually all studies of the later-generation descendants of immigrants rely on subjective measures of ethnic self-identification rather than arguably more objective measures based on the countries of birth of the respondent and his ancestors. In this context, biases can arise from “ethnic attrition” (e.g., U.S.-born individuals who do not self-identify as Hispanic despite having ancestors who were immigrants from a Spanish-speaking country). Analyzing 2003-2013 data from the Current Population Survey (CPS), this study shows that such ethnic attrition is sizeable and selective for the second- and third-generation populations of key Hispanic and Asian national origin groups. In addition, the results indicate that ethnic attrition generates measurement biases that vary across groups in direction as well as magnitude, and that correcting for these biases is likely to raise the socioeconomic standing of the U.S.-born descendants of most Hispanic immigrants relative to their Asian counterparts. |
| JEL: | J15 J61 J62 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21982&r=lab |
| By: | Christopher S. Carpenter; Chandler B. McClellan; Daniel I. Rees |
| Abstract: | We provide the first analysis of the relationship between economic conditions and the use of illicit drugs other than marijuana. Drawing on US data from 2002-2013, we find mixed evidence with regard to the cyclicality of illicit drug use. However, there is strong evidence that economic downturns lead to increases in substance use disorders involving hallucinogens and prescription pain relievers. These effects are robust to a variety of specification choices and are concentrated among prime-age white males with low educational attainment. We conclude that the returns to spending on the treatment of substance use disorders are particularly high during economic downturns. |
| JEL: | E32 I12 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22051&r=lab |
| By: | Stephen B. Billings (University of North Carolina-Charlotte); David J. Deming (Harvard University); Stephen L. Ross (University of Connecticut) |
| Abstract: | Why do crime rates differ greatly across neighborhoods and schools? Comparing youth who were assigned to opposite sides of newly drawn school boundaries, we show that concentrating disadvantaged youth together in the same schools and neighborhoods increases total crime. We then show that these youth are more likely to be arrested for committing crimes together – to be “partners in crime”. Our results suggest that direct peer interaction is a key mechanism for social multipliers in criminal behavior. As a result, policies that increase residential and school segregation will – all else equal – increase crime through the formation of denser criminal networks. |
| Keywords: | Youth Crime, Schools, Criminal Partnerships, Neighborhood Effects, Social Interactions |
| JEL: | I2 J1 K4 R2 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2016-03&r=lab |
| By: | James Banks; Carl Emmerson; Gemma Tetlow |
| Abstract: | This paper estimates how much additional work capacity there might be among men and women aged between 55 and 74 in the United Kingdom, given their health, and how this has evolved over the last decade. The objective is not to suggest how much older people should work but rather to shed light on how much ill-health (as opposed to other constraints and preferences) constrains older individuals’ ability to work. We present two alternative methods, both of which rely on constructing a ‘counterfactual’ employment rate for older people based on the behaviour of other similarly healthy individuals. Both methods suggest that there is significant additional capacity to work among older men and women, but that this has been declining over recent years for women (and possibly also for men). This latter finding suggests that the increase in employment rates among older people seen over the last decade are more rapid than would have been expected based on the improvements seen in health alone. |
| JEL: | I14 J21 J22 J26 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21980&r=lab |
| By: | Ken Clark (University of Manchester); Stephen Drinkwater (University of Roehampton); Catherine Robinson (University of Kent) |
| Abstract: | Self-employment constitutes a vital part of the economy since entrepreneurs can provide not only employment for themselves but also for others. The link between self-employment and immigration is, however, complex since self-employment can be viewed as both a haven from the paid labour market or as a source of economic growth. Moreover, the nature of self-employment has changed considerably in recent decades, especially with regards to providing a flexible form of employment for many demographic groups. We investigate the evolving relationship between self-employment and immigration in the UK using recently released microdata from the 2011 Census for England and Wales. Our findings indicate large variations, with high self-employment rates observed for some groups with a long established history of migration to the UK (especially men born in Pakistan) and also for some groups who have arrived more recently (such as from the EU’s new member states). We further explore the differences, analyse variations by gender and identify key determining factors. In addition to certain socio-economic characteristics, it is found that migration-related influences, such as English language proficiency and period of arrival in the UK, play an important role for some groups. |
| Keywords: | Self-Employment; Immigrants; United Kingdom |
| JEL: | J61 F22 J21 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1605&r=lab |
| By: | Kieron Barclay; Katherine Keenan; Emily Grundy; Martin Kolk; Mikko Myrskylä |
| Abstract: | A growing body of evidence suggests that reproductive history influences post-reproductive mortality. A potential explanation for this association is confounding by socioeconomic status in the family of origin, as socioeconomic status is related to both fertility behaviours and to long-term health. We examine the relationship between age at first birth, completed parity, and post-reproductive mortality and address the potential confounding role of family of origin. We use Swedish population register data for men and women born 1932-1960, and examine both all-cause and cause-specific mortality. The contributions of our study are the use of a sibling comparison design that minimizes residual confounding from shared family background characteristics and assessment of cause-specific mortality that can shed light on the mechanisms linking reproductive history to mortality. Our results were entirely consistent with previous research on this topic, with teenage first time parents having higher mortality, and the relationship between parity and mortality following a U-shaped pattern where childless men and women and those with five or more children had the highest mortality. These results indicate that selection into specific fertility behaviours based upon socioeconomic status and experiences within the family of origin does not explain the relationship between reproductive history and post-reproductive mortality. Additional analyses where we adjust for other lifecourse factors such as educational attainment, attained socioeconomic status, and post-reproductive marital history do not change the results. Our results add an important new level of robustness to the findings on reproductive history and mortality by showing that the association is robust to confounding by factors shared by siblings. However it is still uncertain whether reproductive history causally influences health, or whether other confounding factors such as childhood health or risk-taking propensity could explain the association. |
| Keywords: | Age at first birth; parity; reproductive history; mortality; sibling fixed effects; Sweden |
| JEL: | C1 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:65602&r=lab |
| By: | Gaëlle Ferrant; Alexandre Kolev |
| Abstract: | This paper estimates the potential income gains associated with greater gender parity in social institutions and the cost of the current level of discrimination. Using cross-country analysis, it investigates how gender-based discrimination in social institutions, measured by the OECD Development Centre’s Social Institutions and Gender Index (SIGI), affects income per capita. First, the empirical results indicate that such discrimination impedes a country’s level of income beyond its effect on gender inequality in outcomes. Second, the effect is stronger for lowincome countries. Third, the channel decomposition analysis indicates that gender-based discrimination in social institutions tends to reduce income per capita by lowering both women’s human capital acquisition and labour force participation, as well as total factor productivity. Fourth, the income loss associated with gender discrimination in social institutions is estimated at up to USD 12 trillion, or 16% of world income. By contrast, a gradual dismantling of genderbased discriminatory social institutions by 2030 could increase the annual income global growth rate by 0.03 to 0.6 percentage points over the next 15 years, depending on the scenario. Such results are robust to changes in specifications and controls for potential endogeneity. Cet article évalue le gain de revenu potentiel associé à une plus grande parité entre les sexes dans les institutions sociales et le coût du niveau actuel de discrimination. À partir d’une analyse transversale, il examine comment les discriminations de genre dans les institutions sociales, mesurées par l’indicateur institutions sociales et égalité femme-homme de l’OCDE (SIGI), influencent la croissance économique de long terme. Les résultats indiquent tout d’abord que les institutions sociales discriminatoires entravent la croissance économique de long terme d’un pays au-delà de leurs effets sur les inégalités de genre en matière de résultats. Deuxièmement, cet effet est d’autant plus fort que les pays sont pauvres. Troisièmement, l’analyse des canaux de transmission suggère que les discriminations de genre dans les institutions sociales influencent la croissance de long-terme en restreignant l’accès des femmes à l’éducation et au marché du travail, ainsi qu’en réduisant la productivité totale des facteurs. Quatrièmement, le coût de la discrimination de genre dans les institutions sociales est estimé à une perte de revenu atteignant jusqu’à 12 milliards de dollars, soit 16 % du revenu mondial. Une diminution progressive des discriminations de genre dans les institutions sociales d’ici à 2030 pourrait augmenter les taux de croissance annuels mondiaux de 0.03 à 0.6 points de pourcentage pendant les 15 prochaines années, selon le scenario envisagé. Ces résultats sont robustes à des changements de spécifications et à l’utilisation de procédures d’estimations traitant des potentiels problèmes d’endogéneité. |
| Keywords: | social institutions, gender inequality, income, sustainable development, growth, croissance, institutions sociales, revenu |
| JEL: | J16 O11 O43 |
| Date: | 2016–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:devaaa:330-en&r=lab |
| By: | Michael F. Lovenheim; Randall Reback; Leigh Wedenoja |
| Abstract: | Children from low-income families face persistent barriers to accessing high-quality health care services. Previous research studies have examined the importance of expanding children's health insurance coverage, but there is little prior evidence concerning the impacts of directly expanding primary health care access to this population. We address this gap in the literature by exploring whether teenagers' access to primary health care influences their fertility and educational attainment. We study how the significant expansion of school-based health centers (SBHCs) in the United States since the early 1990's has affected teen fertility and high school dropout rates. Our results indicate that school-based health centers have a negative effect on teen birth rates: adding services equivalent to the average SBHC reduces the 15-18 year old birth rate by 5%. The effects are largest among younger teens and among African Americans and Hispanics. However, primary care health services do not reduce high school dropout rates by very much despite the sizable reductions in teen birth rates |
| JEL: | H75 I14 I21 J13 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22030&r=lab |