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on Labour Economics |
| By: | Daly, Mary C. (Federal Reserve Bank of San Francisco); Hobijn, Bart (Arizona State University) |
| Abstract: | Using 35 years of data from the Current Population Survey we decompose fluctuations in real median weekly earnings growth into the part driven by movements in the intensive margin-wage growth of individuals continuously full-time employed-and movements in the extensive margin-wage differences of those moving into and out of full-time employment. The relative importance of these two margins varies significantly over the business cycle. When labor markets are tight, continuously full-time employed workers drive wage growth. During labor market downturns, the procyclicality of the intensive margin is largely offset by net exits out of full-time employment among workers with lower earnings. This leads aggregate real wages to be largely acyclical. Most of the extensive margin effect works through the part-time employment margin. Notably, the unemployment margin accounts for little of the variation or cyclicality of median weekly earnings growth. |
| Date: | 2016–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2016-04&r=lab |
| By: | Gustafsson, Björn Anders (University of Gothenburg); Katz, Katarina (Karlstad University); Österberg, Torun (University of Gothenburg) |
| Abstract: | In this paper, we investigate to what degree young adults live in neighbourhoods that are similar, in terms of relative average household income, to the neighbourhoods in which they grew up. We use regression analysis on register data for all individuals who were born in 1974 and lived in metropolitan Sweden in both 1990 and 2006. During this period, the distribution of income in Sweden became far more unequal, unemployment rose dramatically, earlier housing policies were dismantled, the share of "visible minorities" increased dramatically and residential segregation increased very considerably. We find a correlation between average neighbourhood incomes at these two points in the sample's life cycle of 0.44, which is more than three times as high as the household income correlation. We find that half of the children of "visible minorities" grew up in the poorer quartile of neighbourhoods, and of these almost two-thirds remained in the poorest quartile of neighbourhoods as adults. Several measures indicate that intergenerational persistency in context is lower in metropolitan Sweden than was found in a similar study in the United States. However, it appears, that if visible minority individuals lived in a neighbourhood in the lowest part of the distribution in Sweden as a child, the probability that they will do so also as adults is as high as the corresponding probability for a African-American person in the US. |
| Keywords: | Sweden, residential segregation, immigrants, intergenerational persistence |
| JEL: | J15 J62 R23 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9837&r=lab |
| By: | Suresh Naidu; Noam Yuchtman |
| Abstract: | Although 19th century American labor markets were unencumbered by regulatory legislation, labor market institutions played an active role determining labor market outcomes and the distribution of income. We provide evidence of firm-specific rents in 19th century labor markets: employees in firms experiencing positive output price shocks earned significant wage premia, relative to very similar workers. Employees and employers bargained over rents in the labor contract, with workers striking to raise wages. We present data on strikes' frequency in the 19th century, and suggestive correlations between strikes and wages. The U.S. government supported employers in limiting strikes' efficacy. Strike-breaking actions included intervention by police and militia; employers often relied on less drastic, but still effective, judicial labor injunctions suppressing strikes. We document the rise of these injunctions, pointing to the important role played by the judicial branch in structuring (Northern) American labor market institutions prior to the rise of legislative regulation. |
| JEL: | N3 O10 P16 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22117&r=lab |
| By: | Bolhaar, Jonneke (Vrije Universiteit Amsterdam); Ketel, Nadine (University of Gothenburg); van der Klaauw, Bas (Vrije Universiteit Amsterdam) |
| 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 J64 J08 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9786&r=lab |
| By: | Grant Miller and Christine Valente |
| Abstract: | There is longstanding debate in population policy about the relationship between modern contraception and abortion. Although theory predicts that they should be substitutes, the existing body of empirical evidence is difficult to interpret. What is required is a large-scale intervention that alters the supply (or full price) of one or the other – and importantly, does so in isolation (reproductive health programs often bundle primary health care and family planning – and in some instances, abortion services). In this paper, we study Nepal’s 2004 legalization of abortion provision and subsequent expansion of abortion services, an unusual and rapidly-implemented policy meeting these requirements. Using four waves of rich individual-level data representative of fertile-age Nepalese women, we find robust evidence of substitution between modern contraception and abortion. This finding has important implications for public policy and foreign aid, suggesting that an effective strategy for reducing expensive and potentially unsafe abortions may be to expand the supply of modern contraceptives. |
| Keywords: | Abortion, Contraception, Nepal. |
| JEL: | J13 N35 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:426&r=lab |
| By: | Ahlin, Lina (CIRCLE & Department of Economics, Lund University); Andersson, Martin (Department of Industrial Economics, Blekinge Institute of Technology (BTH), Karlskrona & CIRCLE, Lund University); Thulin, Per (Department of Industrial Economics and Management, KTH Royal Institute of Technology, Stockholm & Swedish Entrepreneurship Forum, Stockholm) |
| Abstract: | Sorting of high-ability workers is a main source of urban-rural disparities in economic outcomes. Less is known about when such human capital sorting occurs and who it involves. Using data on 15 cohorts of university graduates in Sweden, we demonstrate significant sorting to urban regions on high school grades and education levels of parents, i.e. two attributes typically associated with latent abilities that are valued in the labor market. A large part of this sorting occurs already in the decision of where to study, because top universities are predominantly located in urban regions. Estimates from a selection model show that even after controlling for sorting prior to labor market entry, the ‘best and brightest’ are still more likely to start working in urban regions, and are also more likely to remain there over long time periods. We conclude that a) urban regions are true magnets for high-ability graduates, and that b) studies of human capital sorting need to account for selection processes to and from universities, because neglecting mobility prior to labor market entry is likely to lead to underestimation of the extent of sorting to urban regions. |
| Keywords: | human capital; university graduates; spatial sorting; migration; labor mobility; ability; geography of talent; spatial selection |
| JEL: | I23 J24 J61 R12 |
| Date: | 2016–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_010&r=lab |
| By: | Climent Quintana-Domeque; Nicola Barban; Elisabetta De Cao; Sonia Oreffice |
| Abstract: | Abstract: Social scientists have overwhelmingly documented a strong and increasing educational homogamy between spouses. When estimating sorting by education, the presence of measurement error in the education variables or random factors in the matching process may underestimate the actual degree of assortative mating, simultaneity bias may overestimate it, while omitting other individual characteristics relevant in the marriage market may under- or overestimate it. We address these issues using an instrumental variables approach based on exploiting genetic variation in polygenic scores and controlling for population stratification. Specifically, we instrument spousal education with his/her educational polygenic score while controlling for own educational polygenic score. If the exclusion restriction is satisfied, our findings indicate that (1) assortative mating is underestimated when using OLS, and that (2) male education is correlated with other matching-relevant socioeconomic characteristics, while female education is productive per se in the matching. If the exclusion restriction is not satisfied, our evidence is consistent with (2). This suggests that individual socioeconomic attractiveness in the marriage market is multidimensional for men, but can be summarized with education for women. |
| Keywords: | Matching, Years of Education, College, Polygenic Scores, HRS |
| JEL: | D1 J1 J12 |
| Date: | 2016–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:791&r=lab |
| By: | Fredrik Andersson; John C. Haltiwanger; Mark J. Kutzbach; Giordano Palloni; Henry O. Pollakowski; Daniel H. Weinberg |
| Abstract: | To date, research on the long-term effects of childhood participation in voucher-assisted and public housing has been limited by the lack of appropriate data and suitable identification strategies. We create a new, national-level longitudinal data set on housing assistance and labor market earnings to explore how children’s housing affects their later earnings. While naïve estimates suggest there are substantial negative long-term consequences to childhood participation in voucher-assisted and public housing, these relationships appear to be driven largely by negative selection into housing assistance programs. To mitigate this source of bias, we employ household fixed-effects specifications that use only within-household (across-sibling) variation for identification. Compared to naïve specifications, household fixed-effects estimates are more positive for all demographic groups and, for some groups, positive and statistically significant. Black non-Hispanic females, in particular, benefit from time spent in both voucher-assisted and public housing. Exploiting the between sibling variation accounts for unobserved time-invariant family attributes that may influence outcomes but does not address time varying within household factors that may be at work. We use a number of strategies to address these issues and find our results are results are largely robust to these concerns. |
| JEL: | H43 I31 I38 J38 J62 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:13-48r&r=lab |
| By: | Ammar Farooq; Adriana Kugler |
| Abstract: | We examine whether greater Medicaid generosity encourages mobility towards riskier but better jobs in higher paid occupations and industries. We use Current Population Survey Data and exploit variation in Medicaid thresholds across states and over time through the 1990s and 2000s. We find that moving from a state in the 10th to the 90th percentile in terms of Medicaid income thresholds increases occupational and industrial mobility by 7.6% and 7.8%. We also find that higher income Medicaid thresholds increase mobility towards occupations and industries with greater wage spreads and higher separation probabilities, but with higher wages and higher educational requirements. |
| JEL: | I13 J6 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22118&r=lab |
| By: | Ofer Malamud; Cristian Pop-Eleches; Miguel Urquiola |
| Abstract: | This paper explores whether conditions during early childhood affect the productivity of later human capital investments. We use Romanian administrative data to ask if the benefit of access to better schools is larger for children who experienced better family environments because their parents had access to abortion. We combine regression discontinuity and differences-in-differences designs to estimate impacts on a high-stakes school-leaving exam. Although we find that access to abortion and access to better schools each have positive impacts, we do not find evidence of significant interactions between these shocks. While these results suggest the absence of dynamic complementarities in human capital formation, survey data suggest that they may also reflect behavioral responses by students and parents. |
| JEL: | I00 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22112&r=lab |
| By: | Lommerud, Kjell Erik; Straume, Odd Rune; Vagstad, Steinar |
| Abstract: | We analyse the effects of different labour market policies - employment protection, unemployment benefts and payroll taxes - on job creation and technology choices in a model where firms are randomly matched with workers of different productivity and wages are determined by ex-post bargaining. The model is characterised by two intertwined sources of inefficiency, namely a matching externality and a hold-up externality associated with workers' bargaining strength. Results depend on the relative importance of the two externalities and on worker risk aversion. "Flexicurity", meaning low employment protection and generous unemployment insurance, can be optimal if the hold-up problem is relatively important and workers greatly value income security. |
| Keywords: | Technology adoption; job creation; employment protection; unemployment in- |
| JEL: | H21 J38 J65 O31 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11192&r=lab |
| By: | MARTIN Ludivine |
| Abstract: | Nowadays, employers face the mobility of the most productive employees and large costs induced by labour turnover. This paper examines the impact of two management policies on employees’ motivation on one hand and their quitting behaviour on the other hand. These two policies are i) the participation in High Involvement Management (HIM) practices and ii) the use of Information and Communication Technologies (ICT). Employees’ motivation, which is at the heart of this question, has different facets. Some employees exert effort because their job is in line with their values, gives opportunities for personal growth and pleasure in performing tasks. Alternatively, employees may simply be driven by rewards or compulsion. Using recent survey-based data of employees, the results show that the HIM and ICT strategies are positively related to the two types of work motivation (personal growth and rewards/compulsion). However, these strategies affect differently the likelihood of staff to remain or leave their current employer by type of motivation. While the HIM strategy reduces the risk that employees motivated by personal growth search for another job, it encourages on the contrary those who are motivated by rewards or compulsion to leave. ICT appear to play no role in employee retention. |
| Keywords: | on-the-job search; work motivation; high involvement management practices; information and communication technologies |
| JEL: | J28 J81 M54 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2016-03&r=lab |
| By: | Sachiko Kazekami (Chukyo University) |
| Abstract: | First, this paper empirically evaluates the incidence of the Japanese place-based job creation program, which has been rarely studied in Japan. The program increases employment, especially in the agricultural, retail trade and service sectors that most treated cities promote. Second, this paper explores the cities that the program most affects. Those with large aging populations and those with small working age population decrease the effects of the program. Third, this paper assesses the rationale of this program and does not observe a strong reduction in sales, workers or establishments in the neighboring cities of the treated city. |
| Keywords: | Place-based policy, job creation, unemployment, rationale, externality effect |
| JEL: | J23 J68 R23 H22 H23 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:bai:series:series_wp_02-2016&r=lab |
| By: | Hagen, Tobias |
| Abstract: | This paper evaluates a placement coaching program implemented in Zurich during 2009-2013 that focused on the reemployment of persons drawing disability insurance (DI) benefits. A private company was commissioned to implement the program. Kernel-based matching and radius matching with bias adjustment estimators combined with difference-in-differences are applied to administrative panel data. The estimates point to a successful project in terms of a reduction in DI benefits and an increase in income even in the medium-run. A simple cost-benefit analysis suggests that the project was a profitable investment for the social security system. Sensitivity analyses indicate that the results are robust to confounders and further specification issues. An interesting policy implication is that it seems possible to enhance the employment prospects of disabled persons with a relatively inexpensive intervention which does not include any explicit investments in human capital. |
| Keywords: | rehabilitation,placement coaching,disability,evaluation,matching |
| JEL: | I38 J08 J14 J64 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fhfwps:10&r=lab |
| By: | Cohen-Zada, Danny (Ben Gurion University); Krumer, Alex (University of St. Gallen); Shtudiner, Ze'ev (Ariel University) |
| Abstract: | We exploit a natural experiment in which two professionals compete in a one-stage contest without strategic motives and where one contestant has a clear exogenous psychological momentum advantage over the other in order to estimate the causal effect of psychological momentum on performance. We find that men's performance is significantly affected by psychological momentum, while women's is not. This result is robust to different specifications and estimation strategies. Our results are in line with evidence in the biological literature that testosterone, which is known to enhance performance of both men and women, commonly increases following victory and decreases following loss only among men. Implications of our findings for contest design are also discussed. |
| Keywords: | psychological momentum, contest, gender differences, performance |
| JEL: | J16 J24 L83 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9845&r=lab |
| By: | Jason Long; Henry E. Siu |
| Abstract: | We construct longitudinal data from the U.S. Census records to study migration patterns of those affected by the Dust Bowl of the 1930s. Our focus is on the famous "Okie" migration of the Southern Great Plains. We find that migration rates were much higher in the Dust Bowl than elsewhere in the U.S. This difference is due to the fact that individuals who were typically unlikely to move (e.g., those with young children, those living in their birth state) were equally likely to move in the Dust Bowl. While this result of elevated mobility conforms to long-standing perceptions of the Dust Bowl, our other principal findings contradict conventional wisdom. First, relative to other occupations, farmers in the Dust Bowl were the least likely to move; this relationship between mobility and occupation was unique to that region. Second, out-migration rates from the Dust Bowl region were only slightly higher than they were in the 1920s. Hence, the depopulation of the Dust Bowl was due largely to a sharp drop in migration inflows. Dust Bowl migrants were no more likely to move to California than migrants from other parts of the U.S., or those from the same region ten years prior. In this sense, the westward push from the Dust Bowl to California was unexceptional. Finally, migration from the Dust Bowl was not associated with long-lasting negative labor market effects, and for farmers, the effects were positive. |
| JEL: | J61 J62 N12 N32 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22108&r=lab |
| By: | Carneiro, Pedro (University College London); Lee, Sokbae (Seoul National University); Reis, Hugo (Banco de Portugal) |
| Abstract: | The vast majority of immigrants to the United States at the beginning of the 20th century adopted first names that were common among natives. The rate of adoption of an American name increases with time in the US, although most immigrants adopt an American name within the first year of arrival. Choice of an American first name was associated with a more successful assimilation, as measured by job occupation scores, marriage to a US native and take-up of US citizenship. We examine economic determinants of name choice, by studying the relationship between changes in the proportion of immigrants with an American first name and changes in the concentration of immigrants as well as changes in local labor market conditions, across different census years. We find that high concentrations of immigrants of a given nationality in a particular location discouraged members of that nationality from taking American names. Poor local labor market conditions for immigrants (and good local labor market conditions for natives) led to more frequent name changes among immigrants. |
| Keywords: | Americanization, culture, first name, identity, immigration |
| JEL: | J15 N32 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9792&r=lab |
| By: | Fernanda Estevan; Thomas Gall, Louis-Philippe Morin |
| Abstract: | In this paper, we examine an innovative affirmative action policy designed to increase the representation of underprivileged students at UNICAMP, a large and highly ranked Brazilian university. The university awarded bonus points to targeted applicants (i.e., public high school applicants) on their admission exam, as opposed to imposing a typical quota system. Using a rich set of administrative data from UNICAMP, we assess the effect of this policy on the composition of admitted students, and investigate for possible behavioral responses at the extensive (participation) and intensive (preparation effort) margins. We find that the admission probability of public high school applicants, the targeted applicants, significantly increased following the adoption of the affirmative action program. The policy was also associated with sizable redistribution in the composition of admitted students, with a shift towards students from families with lower socio-economic status. Surprisingly, we find little evidence of behavioral reactions to the affirmative action policy, in terms of test performance or application decision. |
| Keywords: | post-secondary education; affirmative action; university admission; inequality. |
| JEL: | I23 I24 I28 J15 J18 |
| Date: | 2016–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2016wpecon07&r=lab |
| By: | Parsons, Donald O. (George Washington University) |
| Abstract: | Unemployment insurance replacement rates world-wide are well below 100 percent, a fact often attributed to search moral hazard concerns. As Blanchard and Tirole (2008) have illustrated, however, neither search nor layoff moral hazard (firing cost) distortions need arise in first-best insurance plans. Their counterexample depends on the functional form of the state utility function--utility with a single argument, consumption plus monetized leisure. The monetized leisure model is unattractive if leisure is a choice variable, however, and a review of the optimal UI literature reveals a surprising variety of alternative utility function assumptions. A standard neoclassical utility function is used to characterize the utility function conditions required to generate moral-hazard-free (MHF) first-best contracts. Two conditions emerge: (i) the necessary condition that leisure and consumption be substitutes (the cross-derivative of consumption and leisure be negative) and (ii) the sufficient condition that leisure be an inferior good, Rosen (1985). Leisure appears to be a normal good, which rules out the possibility of first-best moral-hazard-free (FB MHF) utility structures, but the first-best UI replacement rate remains very much an open question. The rich empirical literature on the "retirement consumption paradox" suggests that the rate is below 100 percent, easing moral hazard concerns, if not eliminating them. |
| Keywords: | unemployment insurance, utility functions, moral hazard, firing costs, consumption, retirement |
| JEL: | J65 J41 J33 J08 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9824&r=lab |
| By: | Michael J. Kottelenberg; Steven F. Lehrer |
| Abstract: | We extend earlier research evaluating the Quebec Family Policy by providing the first evidence on the distributional effects of universal child care on two specific developmental outcomes. Our analysis uncovers substantial policy relevant heterogeneity in the estimated effect of access to subsidized child care across two developmental score distributions for children from two-parent families. Whereas past research reported findings of negative effects on mothers and children from these families, igniting controversy, our estimates reveal a more nuanced image that formal child care can indeed boost developmental outcomes for children from some households: particularly disadvantaged single-parent households. In addition, we document significant heterogeneity that differs by child gender. We present suggestive evidence that the heterogeneity in policy effects that emerges across child gender and family type is consistent with differences in the home learning environments generated by parents behaviors that are previously present and are shaped by responses to the policy. |
| JEL: | C23 I28 J13 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22126&r=lab |