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on Labour Economics |
| By: | Hippolyte d'Albis (Paris School of Economics - Centre d'Economie de la Sorbonne); Paula Gobbi (Université Catholique de Louvain); Angela Greulich (Centre d'Economie de la Sorbonne) |
| Abstract: | This paper shows that differences in fertility across European countries mainly emerge due to fewer women having two children in low fertility countries. It further suggests that childcare services are an important determinant for the transition to a second child to occur. The theoretical framework we propose suggests that: (i) in countries where childcare coverage is low, there is a U-shaped relationship between a couple's probability to have a second child and female's wage, while (ii) in countries with easy access to childcare, this probability is positively related with the woman's potential wage. Data from the European Survey of Income and Living Conditions (EU-SILC) confirm these implications when estimating a woman's probability of having a second child as a function of education. This implies that middle income women are the most affected ones by the lack of childcare coverage |
| Keywords: | Childcare; Education; Fertility; Female Employment |
| JEL: | J11 J13 J16 O11 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:16017&r=lab |
| By: | Pilar García-Gómez; Sergi Jimenez-Martin; Judit Vall Castelló |
| Abstract: | In a world with limited PAYGO financing possibilities this paper explores whether older Spanish individuals have the health capacity to work longer. For that purpose we use Milligan-Wise and Cutler-Meara Cutler-Meara- Richards-Shubik simulation methods. Our results suggest that Spanish workers have significant additional capacities to extend their working careers. |
| JEL: | I1 J11 J14 J82 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21973&r=lab |
| By: | Ralf Werner Koßmann |
| Abstract: | The empirical literature has provided ample yet contradictory evidence on the effectiveness of social ties in the job search process in terms of post-hire outcomes, such as wages or job satisfaction. Whereas early research, mainly focussing on the U.S. labour market, found positive correlations between finding a job via social ties and post-hire outcomes, most recent studies reported inconclusive or even negative correlations. Country differences in the effectiveness of social ties could be explained by differences in the effectiveness of other search channels, e.g. public institutions. Therefore, this study contributes to the existing literature by investigating the effectiveness of social ties in the German labour market which is commonly regarded as rather strict and monitored by strong labour market institutions. Based on data from the German Socio-Economic Panel (SOEP), it is analysed whether wages, job satisfaction, and fluctuation are affected by the job finding channel. Furthermore, this is the first study which investigates whether job changes affect wage and job satisfaction differentials between the current and the previous job. Results show that finding a job via social ties is not related to higher income; yet, weak evidence can be found for higher job satisfaction and a reduction in turnover. |
| Keywords: | Job search, unemployment, social ties, social capital |
| JEL: | J24 J28 J31 J63 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp823&r=lab |
| By: | Barbara Broadway (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; and ARC Centre of Excellence for Children and Families over the Life Course); Guyonne Kalb (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; ARC Centre of Excellence for Children and Families over the Life Course; and Institute for the Study of Labor (IZA)); Duncan McVicar (Queen’s Management School, Queen’s University Belfast); Bill Martin (Institute for Social Science Research, The University of Queensland) |
| Abstract: | The introduction of the Australian Paid Parental Leave scheme in 2011 provides a rare opportunity to estimate the labour supply and employment impacts of publicly-funded paid leave on mothers in the first year post-partum. The almost universal coverage of the scheme coupled with detailed survey data collected specifically for this purpose means that eligibility for paid leave under the scheme can be plausibly taken as exogenous following a standard propensity score matching exercise. In line with much of the existing literature, we find a positive impact on leave taking in the first half year and on the probability of eventually returning to work in the first year. The paper provides new evidence of a positive impact on continuing in the same job and under the same conditions. Further new evidence shows that disadvantaged mothers – low income, less educated, without access to employer-funded leave – respond most to the scheme. Classification- J13, J18, J22 |
| Keywords: | Labour supply, parental leave, mothers, duration analysis, propensity score matching |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2016n09&r=lab |
| By: | Jonathan Lain |
| Abstract: | In this paper, we build a search-match model to help explain differences in the outcomes of women and men in urban African labour markets. First, we use longitudinal data from a panel collected in four of Ghana's largest cities to establish a set of stylised facts relating to the size of different sectors in the economy, the earnings gaps that persist within those sectors, and transitions between different jobs. We then construct a model, which allows for individual heterogeneity and participation in both self- and wage-employment, as well as discrimination against female workers in the wage sector. By numerically solving and simulating this model, we show that wage sector discrimination leads to average earnings gaps in all sectors of the economy, even if the underlying ability distribution is the same for both sexes. This result arises because discrimination creates extra frictions for women, making it harder for them to select jobs according to comparative advantage. We also conduct a series of experiments to examine how women and men may be affected differently by government policy, and consider the robustness of our results to alternative assumptions about individual heterogeneity. |
| Keywords: | Search Models; Discrimination; Comparative Advantage; Self-Employment; Informal Sectors |
| JEL: | J60 J71 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2016-02&r=lab |
| By: | Mevlude Akbulut-Yuksel; Adriana D. Kugler |
| Abstract: | It is well known that a substantial part of income and education is passed on from parents to children, generating substantial persistence in socio-economic status across generations. In this paper, we examine whether another form of human capital, health, is also largely transmitted from generation to generation, contributing to limited socio-economic mobility. Using data from the NLSY, we first present new evidence on intergenerational transmission of health outcomes in the U.S., including weight, height, the body mass index (BMI), asthma and depression for both natives and immigrants. We show that both native and immigrant children inherit a prominent fraction of their health status from their parents, and that, on average, immigrants experience higher persistence than natives in weight and BMI. We also find that mothers’ education decreases children’s weight and BMI for natives, while single motherhood increases weight and BMI for both native and immigrant children. Finally, we find that the longer immigrants remain in the U.S., the less intergenerational persistence there is and the more immigrants look like native children. Unfortunately, the more generations immigrant families remain in the U.S., the more children of immigrants resemble natives’ higher weights, higher BMI and increased propensity to suffer from asthma. |
| JEL: | I12 I14 J61 J62 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21987&r=lab |
| By: | Marianne Bertrand; Patricia Cortés; Claudia Olivetti; Jessica Pan |
| Abstract: | In most of the developed world, skilled women marry at a lower rate than unskilled women. We document heterogeneity across countries in how the marriage gap for skilled women has evolved over time. As labor market opportunities for women have improved, the marriage gap has been growing in some countries but shrinking in others. We discuss a theoretical model in which the (negative) social attitudes towards working women might contribute towards the lower marriage rate of skilled women, and might also induce a non-linear relationship between their labor market prospects and their marriage outcomes. The model is suited to understand the dynamics of the marriage gap for skilled women over time within a country with set social attitudes towards working women. The model also delivers predictions about how the marriage gap for skilled women should react to changes in their labor market opportunities across countries with more or less conservative attitudes towards working women. We test the key predictions of this model in a panel of 23 developed countries, as well as in a panel of US states. |
| JEL: | J0 J01 J11 J12 J16 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22015&r=lab |
| By: | Emiko Usui; Satoshi Shimizutani; Takashi Oshio |
| Abstract: | This paper explores the extent to which older Japanese can potentially expand the labor supply, based on two analytic approaches: the Milligan-Wise and Cutler et al. methods. First, we examine how much older individuals could work if they worked as much as those with the same mortality rate in the past (the Milligan-Wise method). Second, we estimate how much older individuals could work if they worked as much as younger ones in similar health (the Cutler et al. method). Results from both of these methods underscore a large work capacity in old age in Japan. We further investigate differences in health capacity across education groups and find that highly educated individuals tend to have more capacity to work after they are 65 years of age. |
| JEL: | H55 I12 J26 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21971&r=lab |
| By: | Andrea Roventini (Laboratory of Economics and Management (Pisa) (LEM)); Maria Enrica Virgillito; Manoela Carrera Pereira (Universidade Estadua del Campinas); Giovanni Dosi (Laboratory of Economics and Management) |
| Abstract: | Wages are an element of cost crucially affecting the competitiveness of individual rms. But the wage bill is also a crucial element of aggregate demand. Hence it could be that more “flexible"and fluid labour markets, while allowing for faster inter-firm reallocation of labour, may also render the whole economic system more fragile, more prone to recession, more volatile. In this work we investigate some conditions under which such a conjecture applies. The paper presents an agent-based model that investigates the effects of two “archetypes of capitalism", in terms of regimes of labour governance - defined by the mechanisms of wage determination, firing, labour protection and productivity gains sharing - upon (i) labour market regularities and (ii) macroeconomic dynamics (long-term rates of growth, GDP fluctuations, unemployment rates, inequality, etc..). The model is built upon the \Keynes meets Schumpeter" family of models (Dosi et al.,2010), explicitly incorporating different microfounded labour market regimes. Our results show that seemingly more rigid labour markets and labour relations are conducive to coordination successes with higher and smoother growth. |
| Keywords: | Involuntary unemployment; Aggregate demand; Wage determination; Labour market regimes; Keynesian coordination failures; Agent based models |
| JEL: | C63 E2 E12 E24 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/9d007rc2q9huruni0kde2vr73&r=lab |
| By: | Joao Paulo Pessoa |
| Abstract: | How does welfare change in the short- and long-run in high wage countries when integrating with low wage economies like China? Even if consumers benefit from lower prices, there can be significant welfare losses from increases in unemployment and lower wages. I construct a dynamic multi-sector-country Ricardian trade model that incorporates both search frictions and labor mobility frictions. I then structurally estimate this model using cross-country sector-level data and quantify both the potential losses to workers and benefits to consumers arising from China's integration into the global economy. I find that overall welfare increases in northern economies, both in the transition period and in the new steady state equilibrium. In import competing sectors, however, workers bear a costly transition, experiencing lower wages and a rise in unemployment. I validate the micro implications of the model using employer-employee panel data. |
| Keywords: | trade, unemployment, earnings, China |
| JEL: | F16 J62 J64 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1411&r=lab |
| By: | Per Johansson; Lisa Laun; Mårten Palme |
| Abstract: | Following an era of a development towards earlier retirement, there has been a reversed trend to later exit from the labor market in Sweden since the late 1990s. We investigate whether or not there are potentials, with respect to health and work capacity of the population, for extending this trend further. We use two different methods. First, the Milligan and Wise (2012) method, which calculates how much people would participate in the labor force at a constant mortality rate. Second, the Cutler et al. (2012) method, which asks how much people would participate in the labor force if they would work as much as the age group 50-54 at a particular level of health. We also provide evidence on the development of self-assessed health and health inequality in the Swedish population. |
| JEL: | I10 I14 J14 J26 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21969&r=lab |
| By: | Bolhaar, Jonneke (Netherlands Bureau for Economic Policy Analysis (CPB), VU University Amsterdam); Ketel, Nadine (Department of Economics, School of Business, Economics and Law, Göteborg University); van der Klaauw, Bas (VU University Amsterdam; Tinbergen Institute; CEPR; IZA) |
| 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: | job search; welfare-to-work; active labor-market policies; randomized experiment |
| JEL: | C21 C93 I38 J08 J64 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0648&r=lab |
| By: | Mark Egan; Gregor Matvos; Amit Seru |
| Abstract: | We construct a novel database containing the universe of financial advisers in the United States from 2005 to 2015, representing approximately 10% of employment of the finance and insurance sector. Roughly 7% of advisers have misconduct records. Prior offenders are five times as likely to engage in new misconduct as the average financial adviser. Firms discipline misconduct: approximately half of financial advisers lose their job after misconduct. The labor market partially undoes firm-level discipline: of these advisers, 44% are reemployed in the financial services industry within a year. Reemployment is not costless. Following misconduct, advisers face longer unemployment spells, and move to less reputable firms, with a 10% reduction in compensation. Additionally, firms that hire these advisers also have higher rates of prior misconduct themselves. We find similar results for advisers of dissolved firms, in which all advisers are forced to find new employment independent of past misconduct or performance. Firms that persistently engage in misconduct coexist with firms that have clean records. We show that differences in consumer sophistication may be partially responsible for this phenomenon: misconduct is concentrated in firms with retail customers and in counties with low education, elderly populations, and high incomes. Our findings suggest that some firms “specialize” in misconduct and cater to unsophisticated consumers, while others use their reputation to attract sophisticated consumers. |
| JEL: | D14 D18 G24 G28 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22050&r=lab |
| By: | Imbert , Clément (Department of Economics, University of Warwick) |
| Abstract: | This paper provides some of the first evidence that rural development policies can have fundamental effects on the reallocation of labor between rural and urban areas. It studies the spillover effects of the world's largest rural workfare program, India's rural employment guarantee. We find that the workfare program has substantial con¬sequences: it reduces short-term (or seasonal) migration to urban areas by 9% and increases wages for manual, short-term work in urban areas by 6%. The implied elas¬ticity of unskilled wages with respect to short-term migration is high (-0.7). |
| Keywords: | internal migration, workfare programs, spillover effects, india |
| JEL: | O15 J61 R23 H53 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1116&r=lab |
| By: | Karlsson, Tobias (Department of Economic History, Lund University); Stanfors, Maria (Department of Economic History, Lund University) |
| Abstract: | Attracting membership while stifling freeriding and heterogeneous preferences among potential members is critical for trade union success. Women are generally seen as less inclined to join trade unions, particularly at the onset of the labor movement. We highlight a previously neglected explanation for this: the importance of risk and gender differences in assessment hereof. We study matched employer-employee data from two industries around the year 1900 where union membership was associated with different levels of risk: the Swedish cigar and printing industries. We find that the gender gap in membership was larger in the high-risk environment (cigar) and smaller in the low-risk environment (printing). Women were not hard to organize but avoided risks and uncertain returns. |
| Keywords: | trade unions; risk aversion; gender; 19th Century; 20th Century; Sweden |
| JEL: | J51 N33 N63 |
| Date: | 2016–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0144&r=lab |
| By: | Emanuele Bracco; Luisanna Onnis |
| Abstract: | This paper investigates the effects of immigration and immigration amnesties on the shadow economy. We find a robust and positive relationship between the presence of immigrants and the unobserved economic activity at the local level, but the implementation of a large immigration amnesty substantially weakens this link. Our analysis exploits newly compiled datasets of Italian immigration and shadow economy estimates for the years 1995-2006, comprising a panel of local-level aggregate statistical information, and a micro-level survey of representative households. We exploit the discontinuity created by the 2002 immigration amnesty, which increased the stock of migrants by almost 50%. |
| Keywords: | Shadow Economy, immigration, Immigration policies, Amnesties |
| JEL: | H26 J61 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:108263550&r=lab |
| By: | Deborah A. Cobb-Clark (School of Economics, The University of Sydney; ARC Centre of Excellence for Children and Families over the Life Course; Institute for the Study of Labor (IZA)); Nicolas Salamanca (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; ARC Centre of Excellence for Children and Families over the Life Course); Anna Zhu (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; ARC Centre of Excellence for Children and Families over the Life Course) |
| Abstract: | We propose a household production function approach to human development that explicitly considers the role of parenting style in child rearing. Specifically, we model parenting style as an investment in human development that depends not only on inputs of time and market goods, but also on attention, i.e. cognitive effort. The model links socioeconomic disadvantage to parenting style and human development through the constraints that disadvantage places on cognitive capacity. We find empirical support for our model. We demonstrate that parenting style is a construct that is distinct from standard goods- and timeintensive parental investments and that effective parenting styles are negatively correlated with socioeconomic disadvantage. Moreover, parenting style is an important determinant of young adults’ human capital net of other parental investments. Classification-D13, I31, J13 |
| Keywords: | Parenting style, cognitive load, locus of control, socioeconomic disadvantage, parental investments, human development |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2016n03&r=lab |
| By: | Scott E. Carrell; Mark Hoekstra; Elira Kuka |
| Abstract: | A large and growing literature has documented the importance of peer effects in education. However, there is relatively little evidence on the long-run educational and labor market consequences of childhood peers. We examine this question by linking administrative data on elementary school students to subsequent test scores, college attendance and completion, and earnings. To distinguish the effect of peers from confounding factors, we exploit the population variation in the proportion of children from families linked to domestic violence, who were shown by Carrell and Hoekstra (2010, 2012) to disrupt contemporaneous behavior and learning. Results show that exposure to a disruptive peer in classes of 25 during elementary school reduces earnings at age 26 by 3 to 4 percent. We estimate that differential exposure to children linked to domestic violence explains 5 to 6 percent of the rich-poor earnings gap in our data, and that removing one disruptive peer from a classroom for one year would raise the present discounted value of classmates' future earnings by $100,000. |
| JEL: | I21 I24 J12 J24 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22042&r=lab |
| By: | Briggs Depew; Ozkan Eren; Naci Mocan |
| Abstract: | We investigate the existence of in-group bias (preferential treatment of one’s own group) in court decisions. Using the universe of juvenile court cases in a U.S. state between 1996 and 2012 and exploiting random assignment of juvenile defendants to judges, we find evidence for negative racial in-group bias in judicial decisions. All else the same, black (white) juveniles who are randomly assigned to black (white) judges are more likely to get incarcerated (as opposed to being placed on probation), and they receive longer sentences. Although observed in experimental settings, this is the first empirical evidence of negative in-group bias, based on a randomization design outside of the lab. Explanations for this finding are provided. |
| JEL: | D03 J15 K4 K41 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22003&r=lab |
| By: | Christine Ho; Nicola Pavoni |
| Abstract: | We study the design of child care subsidies in an optimal welfare and tax problem. The optimal subsidy schedule is qualitatively similar to the existing US scheme. Efficiency mandates a subsidy on formal child care costs for working mothers, with higher subsidies paid to lower income earners. The optimal subsidy is also kinked as a function of child care expenditure.To counterbalance the sliding scale pattern of the optimal subsidy rates, marginal labor income tax rates are set lower than the labor wedges, with the potential to generate negative marginal tax rates. We calibrate our model to features of the US labor market and focus on single mothers with children aged below 6. The optimal program provides stronger participation incentives compared to the US scheme. The intensive margin incentives provided by the efficient program are milder, with subsidy rates decreasing with income more steeply than those in the US. JEL: D82, H21, H24, J13 Keywords: optimal taxation, asymmetric information, child care subsidies. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:572&r=lab |
| By: | Heller Sahlgren, Gabriel (London School of Economics) |
| Abstract: | This paper analyses the short- and long-term effects of retirement on mental health in ten European countries. It exploits thresholds created by regular state pension ages in a fuzzy regression-discontinuity design combined with individual-fixed effects to deal with endogeneity in retirement behaviour. The results display no short-term effects of retirement on mental health, but a large negative longer-term impact. This impact survives a battery of robustness tests, and applies to women and men as well as to people of different educational backgrounds equally. Differences compared to previous research are attributed to the study’s differentiation of short- and longer-term effects as well as its utilisation of a cleaner research design. Overall, the paper’s findings suggest that reforms inducing people to postpone retirement are not only important for making pension systems solvent, but with time could also pay a mental health dividend among the elderly and reduce public health care costs. |
| Keywords: | Mental Health; Retirement; SHARE; Regression-Discontinuity Design |
| JEL: | I10 J14 J26 |
| Date: | 2016–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1114&r=lab |
| By: | Doepke, Matthias; Kindermann, Fabian |
| Abstract: | It takes a woman and a man to make a baby. This fact suggests that for a birth to take place, the parents should first agree on wanting a child. Using newly available data on fertility preferences and outcomes, we show that indeed, babies are likely to arrive only if both parents desire one, and there are many couples who disagree on having babies. We then build a bargaining model of fertility choice and match the model to data from a set of European countries with very low fertility rates. The distribution of the burden of child care between mothers and fathers turns out to be a key determinant of fertility. A policy that lowers the child care burden specifically on mothers can be more than twice as effective at increasing the fertility rate compared to a general child subsidy. |
| Keywords: | Bargaining; Child Care; Fertility |
| JEL: | J13 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11158&r=lab |