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on Labour Economics |
| By: | Gustafsson, Björn Anders (University of Gothenburg); Katz, Katarina (Karlstad University); Österberg, Torun (University of Gothenburg) |
| Abstract: | In high-income countries, not completing secondary school often entails a high risk of social exclusion. Using data on young adults born in 1985 that grew up in metropolitan Sweden, we study factors associated with not graduating from upper secondary school at age 21. Our hypothesis is that if a young person sees examples of people who are not able to earn a living despite having a long education, such negative examples are influential. Results from estimated logistic models are consistent with the hypothesis. |
| Keywords: | secondary schooling, Sweden, social exclusion, neighbourhoods |
| JEL: | D64 I24 R23 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9886&r=lab |
| By: | BHARADWAJ, Prachant; LAKDAWALA, Leah K.; LI, Nicholas |
| Abstract: | While bans against child labor are a ubiquitous policy tool, there is very little empirical evidence on their effectiveness. In this paper, we examine the consequences of India's landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined whom the ban applied to, we show that the relative probability of child employment increases and child wages (relative to adult wages) decrease after the ban. Our main specification relies on comparing changes in work probabilities over time for children of the same age but with siblings who are rendered either eligible or ineligible for legal work when the ban is implemented. The increases in the probability of economic activity are largest for children in areas where (i) the industries targeted by the ban play a larger role in local labor markets and (ii) the probability of employer inspections are higher. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor. We also examine the effects of the ban at the household level. Using linked consumption and expenditure data, we find that along the margins of assets and share of staple goods in calorie consumption, households are worse off after the ban. |
| JEL: | I38 J22 J82 O12 |
| Date: | 2016–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-25&r=lab |
| By: | White, Michael (Policy Studies Institute); Bryson, Alex (University College London) |
| Abstract: | Unions make differences to employee satisfaction that correspond to their effects on individual economic advantage. Panel data reveal how changes in economic circumstance and changes in job satisfaction are linked to changes in union coverage. When individuals move into a union covered job they receive a wage mark-up and express enhanced pay satisfaction. Conversely, those moving from a union covered job on average lose any mark-up and have significantly reduced satisfaction. Similar findings emerge for working hours. On average individuals prefer shorter hours, something they tend to (not to) achieve on moving into (out of) a unionized job, resulting in higher (lower) satisfaction. Switching into union coverage lowers satisfaction with job security, even though coverage has no effect on the risk of unemployment. This is because covered employees suffer greater costs of re-employment for a given level of unemployment risk, partly due to loss of the union mark-up. |
| Keywords: | trade unions, job satisfaction, pay, job security, hours |
| JEL: | J28 J51 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9876&r=lab |
| By: | Ilpo Kauppinen; Borjas; J. George; Poutvaara; Panu |
| Abstract: | We show that the Roy model has more precise predictions about the self-selection of migrants than previously realized. The same conditions that have been shown to result in positive or negative selection in terms of expected earnings also imply a stochastic dominance relationship between the earnings distributions of migrants and non-migrants. We use the Danish full population administrative data to test the predictions. We find strong evidence of positive self-selection of emigrants in terms of pre-emigration earnings: the income distribution for the migrants almost stochastically dominates the distribution for the non-migrants. This result is not driven by immigration policies in destination countries. Decomposing the self-selection in total earnings into self-selection in observable characteristics and self-selection in unobservable characteristics reveals that unobserved abilities play the dominant role. |
| Keywords: | international migration, Roy model, self-selection |
| JEL: | J61 F22 |
| Date: | 2016–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:67&r=lab |
| By: | Schmieder, Johannes F. (Boston University); Trenkle, Simon (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | A large literature has documented that the unemployment duration of unemployed individuals increases with the generosity of the unemployment insurance (UI) system, which has been interpreted as the disincentive effect of UI benefits. However, unemployed workers typically also have caseworkers assigned who are monitoring and assisting the job search efforts. These caseworkers may respond to differences in UI eligibility by shifting resources (financial or time) between unemployed individuals in order to counteract the moral hazard effect of UI benefits or to focus resources to where they have the largest effect. Depending on the motivations of the caseworker, the effectiveness of caseworker resources and the complementarity between these resources and UI benefits, the typical estimates of the disincentive effects of UI may be biased upwards or downwards in studies that compare workers within the same UI agency. We estimate whether caseworkers respond to the generosity of UI eligibility using a sharp regression discontinuity (RD) design in Germany, where potential UI durations vary with age. We show that across a wide variety of measures, including training programs, wage subsidies, personal meetings and sanctions, UI caseworkers do not treat unemployed with different eligibility differently. At best we find a very small effect that workers with shorter eligibility close to the exhaustion point are more likely to be assigned to training programs that prolong their UI eligibility. The typical RD estimates of the UI disincentive effects thus seem to be valid estimates. |
| Keywords: | unemployment benefits, unemployment insurance, caseworkers, active labor market programs |
| JEL: | J65 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9868&r=lab |
| By: | Wisarut Suwanprasert |
| Abstract: | Abstract Why do politicians advocate trade protections to save domestic jobs when neoclassical trade models suggest that small open economies should implement free trade? The novel insight of this paper is that trade protections can be rationalized as a second-best policy that improves the domestic welfare when the equilibrium unemployment is different from the constrain-efficient unemployment. To understand the puzzle, I incorporate a Diamond-Mortensen-Pissarides frictional labor market into the standard Heckscher-Ohlin model of international trade. The model offers four main findings. First, when the relative price of the labor (capital)-intensive good increases, equilibrium unemployment decreases (increases). Second, a labor market in a competitive equilibrium is constrained-efficient when the Hosios condition is satisfied. Third, a capital-abundant country with inefficiently high unemployment may experience welfare losses from trade. Conditional on having the same observed trade share, a labor-abundant country with inefficiently high unemployment have extra welfare gains from international trade. Finally and importantly, when the labor market in a small open economy generates inefficiently high equilibrium unemployment, the optimal trade policy is to raise the domestic price of its labor-intensive goods (an import tariff in a capital-abundant country and an export subsidy in a labor-abundant country). Free trade is optimal only when a labor market is initially efficient. The model predictions are supported by patterns of tariffs in WTO member countries. |
| JEL: | F11 F13 F16 F66 |
| Date: | 2016–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:jmp:jm2016:psu467&r=lab |
| By: | Guglielmo Barone (Bank of Italy); Sauro Mocetti (Bank of Italy) |
| Abstract: | We examine intergenerational mobility in the very long run, across generations that are six centuries apart. We exploit a unique dataset containing detailed information at the individual level for all people living in the Italian city of Florence in 1427. These individuals have been associated, using their surnames, with their pseudo-descendants living in Florence in 2011. We find that earnings elasticity is about 0.04, much higher than predicted by traditional models of intergenerational mobility. We also find an even stronger role for real wealth inheritance and evidence of persistence in belonging to certain elite professions. Our results are confirmed when we account for the quality of the pseudo-links and when we address the potential selectivity bias due to the differential survival rates across surnames. We argue that the quasi-immobility of pre-industrial society and the positional advantages in the access to certain professions might explain (in part) the long-lasting effects of ancestors’ socioeconomic status. |
| Keywords: | intergenerational mobility, earnings, wealth, professions, informational content of surnames, Florence |
| JEL: | J62 N33 D31 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1060_16&r=lab |
| By: | Enrique López-Bazo (AQR Research Group-IREA. University of Barcelona); Elisabet Motellón (AQR Research Group-IREA. Universitat Oberta de Catalunya) |
| Abstract: | This paper investigates the role of regional determinants on innovation performance controlling by the firm’s absorptive capacity and other sources of firm heterogeneity. The findings for a sample of firms in Spain support the hypothesis that regional determinants matter, though their role is subtler than the one frequently assumed. Rather than a direct influence on firm’s innovation, the regional context moderates the effect of internal determinants. In the case of product innovation the most important mechanism of interaction seems to be operating through cooperation in innovation, whereas for process innovation it seems to be through highly skilled labour. |
| Keywords: | product innovation; process innovation; firm; multilevel modelling; Spanish regions. JEL classification: D21; O31; R10; R15 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201607&r=lab |
| By: | Alberto González Pandiella |
| Abstract: | The Irish labour market is exceptionally open to international migration flows, thus making labour supply highly responsive to changes in cyclical conditions. Immigration provides the skills that the Irish economy needs. The crisis triggered a sharp reversal in migration flows, with immigration suddenly halting and emigration increasing. A large proportion of emigration is highly qualified, as is a high proportion of immigration. This pattern of “brain exchange” can contribute to reducing skills mismatches, but also raises the challenge of remaining attractive for skilled workers. This paper examines how the crisis has affected migration, how related policies have evolved and proposes avenues to spread the benefits of migration beyond the scope of multinational enterprises, in particular to Irish SMEs. The proportion of Irish-born population living abroad is very large and the paper also analyses what role return migration could play, what policies are in place to maintain links with emigrant’s communities abroad and how they can be strengthened. Ireland has recently experienced, for the first time in its history, large-scale immigration. As a result, it currently hosts a large and very heterogeneous immigrant community, with diverging challenges and needs. Getting integration policies right is therefore a complex, but crucial task. The paper identifies what are the key challenges in this area and proposes some avenues to foster the labour market integration of immigrants. Ireland is also starting to experience challenges associated with the integration of second generation immigrants. To respond to those challenges, the paper recommends early action in education and social domains. Migration en Irlande : Défis, opportunités et politiques Le marché du travail irlandais est exceptionnellement ouvert au flux migratoires internationaux, rendant ainsi l'offre de main-d'oeuvre hautement sensible aux changements de conditions cycliques. Immigration fournit les compétences que l'économie irlandaise a besoin. La crise a déclenché une forte inversion des flux migratoires. L'immigration a soudainement arrêté et l'émigration a augmentée. Une grande partie de l'émigration est hautement qualifié. Une forte proportion de l'immigration est aussi hautement qualifiée. Ce modèle de «l'échange des cerveaux» peut contribuer à réduire l'inadéquation des compétences, mais soulève aussi le défi de rester attractif pour les travailleurs qualifiés. Ce document examine comment la crise a affecté la migration, comment les politiques connexes ont évolué et propose des pistes d'étendre les avantages de la migration au-delà de la portée des entreprises multinationales, en particulier aux PME irlandaises. La proportion de la population d'origine irlandaise vivant à l'étranger est très grande et le document analyse aussi le rôle que la migration de retour pourrait jouer, que politiques sont en place pour maintenir des liens avec les communautés à l'étranger et comment ils peuvent être renforcés. L'Irlande a connu récemment, pour la première fois de son histoire, l'immigration à grande échelle. En conséquence, il accueille actuellement une communauté d'immigrants vaste et très hétérogène, avec des défis et des besoins divergents. Obtenir les politiques d'intégration est donc juste une tâche complexe, mais crucial. Le document identifie quels sont les principaux défis dans ce domaine et propose quelques pistes pour favoriser l'intégration des immigrants au marché du travail. L'Irlande est également commence à éprouver des difficultés liées à l'intégration des immigrants de deuxième génération. Pour répondre à ces défis, le document recommande une action précoce dans l'éducation et les domaines sociaux. |
| Keywords: | migration, immigration, labour market, integration, return migration, migration de retour, marché du travail, migration, immigration, intégration |
| JEL: | E24 F22 J21 J24 J61 |
| Date: | 2016–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1292-en&r=lab |
| By: | Kris Inwood (University of Guelph); Les Oxley (University of Waikato); Evan Roberts (University of Minnesota) |
| Abstract: | We examine physical well-being among New Zealand Maori from the 1700s to the mid-twentieth century. After colonization Maori stature declined slowly. Late nineteenth century Maori and Pakeha (European settlers) stood equally tall, but Maori stature lagged between 1900 and World War II. Stature increased after the 1920s for Pakeha and 1950s for Maori. Convergence has re-established comparable stature. Fertility decline, improvements in socio-economic status and health policy may explain convergence of stature and infant mortality. We hypothesize that the early twentieth century divergence reflects cumulative land loss, disease incidence, rural-urban migration and labour market segregation. |
| JEL: | I14 J15 N30 O57 |
| Date: | 2016–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:16/02&r=lab |
| By: | Zheng, Yannu (CIRCLE, Lund University) |
| Abstract: | Children of immigrants inherit human capital attainment from their parents that impact on their innovative performance. Some of this stem from their migrant parents’ positive and negative selection traits, part from their physical or cognitive proximity of country of origin to the host society. In this paper, I examine how second-generation immigrants (with at least one foreign-born parent), taking into consideration their parents’ region of origin, perform in inventive activity compared with native Swedes (with two native-born parents) and how this is related to their parents’ background. The study is based on a new Swedish database of inventors, which matched with the entire population between 1985 and 2007. The results show that, in terms of probability of becoming an inventor and number of forward citations to their patents, second-generation immigrants with non-Nordic European backgrounds perform better than native Swedes. Their better performance is related to the positive selection of their foreign-born parents and a certain distance of proximity to Sweden. The study indicates that there is a trade-off effect between the selection and proximity of foreign-born parents on second-generation immigrants’ patenting performance, but that differs between groups. For second-generation immigrants with other Nordic backgrounds, their less well performance is mainly attributed to their lower education level, which is further related to their less positively selected parents. However, for second-generation immigrants with one native-born parent and one parent from another non-European country, their large distance of proximity to Sweden seems to impede their performance. |
| Keywords: | Native Swedes; Foreign-born; Innovation; Human capital; Selection |
| JEL: | J15 J24 N30 O31 |
| Date: | 2016–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_011&r=lab |
| By: | Matthias Doepke (Northwestern University); Michele Tertilt (Universität Mannheim) |
| Abstract: | Much of macroeconomics is concerned with the allocation of physical capital, human capital, and labor over time and across people. The decisions on savings, education, and labor supply that generate these variables are made within families. Yet the family (and decision-making in families) is typically ignored in macroeconomic models. In this chapter, we argue that family economics should be an integral part of macroeconomics, and that accounting for the family leads to new answers to classic macro questions. Our discussion is organized around three themes. We start by focusing on short and medium run fluctuations, and argue that changes in family structure in recent decades have important repercussions for the determination of aggregate labor supply and savings. Next, we turn to economic growth, and describe how accounting for families is central for understanding differences between rich and poor countries and for the determinants of long-run development. We conclude with an analysis of the role of the family as a driver of political and institutional change. |
| Keywords: | families, Households, bargaining, fertility, Labor Supply, human capital, gender |
| JEL: | D13 J16 O10 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-010&r=lab |
| By: | Cetre, Sophie (Paris School of Economics); Clark, Andrew E. (Paris School of Economics); Senik, Claudia (Paris School of Economics) |
| Abstract: | There is mixed evidence in the existing literature on whether children are associated with greater subjective well-being, with the correlation depending on which countries and populations are considered. We here provide a systematic analysis of this question based on three different datasets: two cross-national and one national panel. We show that the association between children and subjective well-being is positive only in developed countries, and for those who become parents after the age of 30 and who have higher income. We also provide evidence of a positive selection into parenthood, whereby happier individuals are more likely to have children. |
| Keywords: | happiness, fertility, children, income, selection |
| JEL: | D1 J13 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9880&r=lab |
| By: | Roskruge, Matthew (University of Waikato); Poot, Jacques (University of Waikato); King, Laura (University of Waikato) |
| Abstract: | Both migrant entrepreneurship and social capital are topics which have attracted a great deal of attention. However, relatively little econometric analysis has been done on their interrelationship. In this paper we first consider the relationship between social capital and the prevalence of entrepreneurship. We also investigate the relationship between social capital and the living standards of entrepreneurs. In both cases we ask whether these interrelationships differ between migrants and comparable native‐born people. We utilize unit record data from the pooled 2008, 2010 and 2012 New Zealand General Social Surveys (NZGSS). The combined sample consists of 15,541 individuals who are in the labour force. Entrepreneurs are defined as those in the sample who obtained income from self‐employment or from owning a business. Social capital is proxied by responses to questions on social networks, volunteering and sense of community. The economic standard of living is measured by either personal income or by an Economic Living Standards Index (ELSI) score developed by the New Zealand Ministry of Social Development. We find significant differences between migrants and the native born in terms of the attributes of social capital that are correlated with entrepreneurship, but volunteering matters equally for both groups. The positive association between social capital attributes and ELSI scores is similar between migrant and natives. Social capital contributes little to explaining incomes of either group. |
| Keywords: | migration, social capital, entrepreneurship, income, standard of living |
| JEL: | F22 J15 L26 Z13 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9874&r=lab |