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on Labour Economics |
| By: | Halla, Martin (University of Innsbruck); Mayr, Harald (University of Zurich); Pruckner, Gerald J. (University of Linz); Garcia-Gomez, Pilar (Erasmus University Rotterdam) |
| Abstract: | The incidence of Cesarean deliveries (CDs) has been on the rise. The procedure's cost and benefits are discussed controversially; in particular, since non-medically indicated cases seem widespread. We study the effect of CDs on subsequent fertility and maternal labor supply. Identification is achieved by exploiting variation in the supply-side's incentives to induce non-medically indicated CDs across weekdays. On weekends and public holidays obstetricians' are less likely to induce CDs (due tighter capacity constraints in hospital). On Fridays and other days preceding a holiday, they face an increased incentive to induce CDs (due to their demand for leisure on non-working days). We use high-quality administrative data from Austria. Women giving birth on different weekdays are pre-treatment observationally identical. Our instrumental variable estimates show that a non-planned CD at parity one decreases life cycle fertility by almost 17 percent. This reduction in fertility translates into a temporary increase in maternal employment. |
| Keywords: | Caesarean delivery, Caesarean section, fertility, female labor supply |
| JEL: | I12 J13 J11 J22 J21 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9905&r=lab |
| By: | Cacciatore, Matteo; Duval, Romain; Fiori, Giuseppe; Ghironi, Fabio |
| Abstract: | We study the consequences of product and labor market reforms in a two-country model with endogenous producer entry and labor market frictions. We focus on the role of business cycle conditions and external constraints at the time of reform implementation (or of a credible commitment to it) in shaping the dynamic effects of such policies. Product market reform is modeled as a reduction in entry costs and takes place in a non-traded sector that produces services used as input in manufacturing production. Labor market reform is modeled as a reduction in firing costs and/or unemployment benefits. We find that business cycle conditions at the time of deregulation significantly affect adjustment. A reduction of firing costs entails larger and more persistent adverse short-run effects on employment and output when implemented in a recession. By contrast, a reduction in unemployment benefits boosts employment and output by more in a recession compared to normal times. The impact of product market reforms is less sensitive to business cycle conditions. Credible announcements about future reforms induce sizable short-run dynamics, regardless of whether the announcement takes place in normal times or during an economic downturn. Whether the immediate effect is expansionary or contractionary varies across reforms. Finally, lack of access to international lending in the wake of reform can amplify the costs of adjustment. |
| Keywords: | Business cycle; External borrowing constraint; Labor market; Product market; Structural reforms |
| JEL: | E24 E32 F41 J64 L51 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11247&r=lab |
| By: | Kitao, Sagiri; Ljungqvist, Lars; Sargent, Thomas J |
| Abstract: | To understand trans-Atlantic employment experiences since World War II, we build an overlapping generations model with two types of workers (high school and college graduates) whose different skill acquisition technologies affect their career decisions. Search frictions affect short-run employment outcomes. The model focuses on labor supply responses near beginnings and ends of lives and on whether unemployment and early retirements are financed by personal savings or public benefit programs. Higher minimum wages in Europe explain why youth unemployment has risen more there than in the U.S. Turbulence, in the form of higher risks of human capital depreciation after involuntary job destructions, causes long-term unemployment in Europe, mostly among older workers, but leaves U.S. unemployment unaffected. The losses of skill interact with workers' subsequent decisions to invest in human capital in ways that generate the age-dependent increases in autocovariances of income shocks observed by Moffitt and Gottschalk (1995). |
| Keywords: | benefits; employment protection; Europe; minimum wage; U.S.; Unemployment |
| JEL: | E24 J21 J64 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11260&r=lab |
| By: | Sophie Cetre; Andrew E. Clark; Claudia Senik |
| 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 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1604&r=lab |
| By: | Chakravarty,Shubha; Lundberg,Mattias K. A.; Danchev,Plamen Nikolov; Zenker,Juliane |
| Abstract: | The youth unemployment rate is exceptionally high in developing countries. Because the quality of education is arguably one of the most important determinants of youth's labor force participation, governments worldwide have responded by creating job training and placement services programs. Despite the rapid expansion of skill-enhancement employment programs across the world and the long history of training program evaluations, debates about the causal impact of training-based labor market policies on employment outcomes still persist. Using a quasi-experimental approach, this report presents the short-run effects of skills training and employment placement services in Nepal. Launched in 2009, the intervention provided skills training and employment placement services for more than 40,000 Nepalese youth over a three-year period, including a specialized adolescent girls'initiative that reached 4,410 women ages 16 to 24. The report finds that after three years of the program, the Employment Fund intervention positively improved employment outcomes. Participation in the Employment Fund training program generated an increase in non-farm employment of 15 to 16 percentage points for an overall gain of about 50 percent. The program also generated an average monthly earnings gain of about 72 percent. The report finds significantly larger employment impacts for women than for men, but younger women ages 16 to 24 experienced the same improvements as older females. These employment estimates are comparable, although somewhat higher, than other recent experimental interventions in developing countries. |
| Keywords: | Financial Literacy,Education For All,Access&Equity in Basic Education,Population Policies,Primary Education |
| Date: | 2016–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7656&r=lab |
| By: | Dongwoo Kim (Department of Economics, at the University of Missouri, Columbia); Cory Koedel (Department of Economics and Truman School of Public Affairs, at the University of Missouri, Columbia); Shawn Ni (Department of Economics, at the University of Missouri, Columbia); Michael Podgursky (Department of Economics, at the University of Missouri, Columbia) |
| Abstract: | Economic theory predicts that incomplete licensing reciprocity and mobility penalties built into teacher pension plans create costly labor frictions for schools operating near state boundaries. We empirically test for boundary effects on production efficiency in public schools by comparing achievement across otherwise similar schools that differ by the extent to which a state line divides the local labor market area. We find highly localized but robust negative effects of state boundaries on student achievement. To the best of our knowledge, our study is the first to link labor-market rigidities to a direct measure of output in any sector. |
| Keywords: | labor mobility, labor frictions, teacher labor market, teacher pensions, teacher licensing |
| JEL: | H7 I2 J6 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1604&r=lab |
| By: | Anmol Bhandari; Jaroslav Borovička; Paul Ho |
| Abstract: | We develop a framework to analyze economies with agents facing time-varying concerns for model misspecification. These concerns lead agents to interpret economic outcomes and make decisions through the lens of a pessimistically biased 'worst-case' model. We combine survey data and implied theoretical restrictions on the relative magnitudes and comovement of forecast biases across macroeconomic variables to identify ambiguity shocks as exogenous fluctuations in the worst-case model. Our solution method delivers tractable linear approximations that preserve the effects of time-varying ambiguity concerns and permit estimation using standard Bayesian techniques. Applying our framework to an estimated New-Keynesian business cycle model with frictional labor markets, we find that ambiguity shocks explain a substantial portion of the variation in labor market quantities. |
| JEL: | C11 C63 D81 D84 E24 E32 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22225&r=lab |
| By: | Jaime Alonso-Carrera; Jordi Caballé; Xavier Raurich |
| Abstract: | In this paper, we build a model that, according to the empirical evidence, gives raise to oscillations in wealth within a dynasty while keeping intergenerational persistence in education attainment. The mechanism that we propose is based on the interaction between effort and wealth suggested by the Carnegie effect, according to which wealthier individuals make less effort than the poorer. The oscillations in wealth arise from changes in the effort exerted by different generations as a response to both inherited wealth and college premium. Our mechanism generates a rich social stratification with several classes in the long run as a consequence of the combination of different levels of education and effort. Furthermore, we generate a large mobility in wealth among classes even in the long run. Our model highlights the role played by the minimum cost on education investment, the borrowing constraints, and the complementarity between effort and education. |
| Keywords: | intergenerational mobility, education, effort |
| JEL: | I24 J62 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:905&r=lab |
| By: | Clément Gorin (Université de Lyon, Lyon F- 69007, France; CNRS, GATE L-SE, Ecully, F- 69130, France; Université J. Monnet, Saint-Etienne, F- 42000, France) |
| Abstract: | Highly skilled professionals are regarded as one of the main driver for the economic development of cities through their effect on innovative capabilities. Skilled individuals are mobile in space and tend to cluster within a limited number of urban areas, therefore a crucial question is what factors shape this flows and influence the divergent levels of economic development across urban areas. Building on these considerations, this paper takes advantage of a large-scale dataset to shed light on the patterns and determinants of inventors’ mobility across European urban areas. First, a descriptive analysis is carried out to document the dynamics of inventors’ mobility and their spatial dimension. Second, a gravity model is used to analyse how job opportunities and socio-professional networks influence the flows of inventors between urban areas. From a methodological perspective, this paper uses a spatial filtering variant of the Poisson gravity model, which accommodate the nature of the data, while controlling for multilateral resistance and spatial autocorrelation in mobility flows. The descriptive analysis suggest that inventors’ mobility occurs primarily between relatively large and collocated urban areas, partly because of the high level of circular and intra-firm mobility. The econometric analysis shows that employment opportunities, social networks, as well as various forms of proximity are important determinants of inventors’ mobility. |
| Keywords: | Inventors’ mobility, urban areas, job opportunities, socio-professional network, Poisson gravity model, spatial filtering |
| JEL: | J61 O18 O31 O33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1615&r=lab |
| By: | Petra Persson; Maya Rossin-Slater |
| Abstract: | This paper studies how in utero exposure to maternal stress from family ruptures affects later mental health. We find that prenatal exposure to the death of a maternal relative increases take-up of ADHD medications during childhood and anti-anxiety and depression medications in adulthood. Further, family ruptures during pregnancy depress birth outcomes and raise the risk of perinatal complications necessitating hospitalization. Our results suggest large welfare gains from preventing fetal stress from family ruptures and possibly from economically induced stressors such as unemployment. They further suggest that greater stress exposure among the poor may partially explain the intergenerational persistence of poverty. |
| JEL: | I10 I31 J13 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22229&r=lab |
| By: | O'Hare, Colin; Li, Youwei |
| Abstract: | Predicting life expectancy has become of upmost importance in society. Pension providers, insurance companies, government bodies and individuals in the developed world have a vested interest in understanding how long people will live for. This desire to better understand life expectancy has resulted in an explosion of stochastic mortality models many of which identify linear trends in mortality rates by time. In making use of such models for forecasting purposes we rely on the assumption that the direction of the linear trend (determined from the data used for fitting purposes) will not change in the future, recent literature has started to question this assumption. In this paper we carry out a comprehensive investigation of these types of models using male and female data from 30 countries and using the theory of structural breaks to identify changes in the extracted trends by time. We find that structural breaks are present in a substantial number of cases, that they are more prevalent in male data than in female data, that the introduction of additional period factors into the model reduces their presence, and that allowing for changes in the trend improves the fit and forecast substantially. |
| Keywords: | Mortality; stochastic models; structural breaks; forecasting |
| JEL: | C51 C52 C53 G22 G23 J11 |
| Date: | 2016–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71392&r=lab |
| By: | Vaona, Andrea |
| Abstract: | Money long-run super-neutrality and the vertical long-run Phillips curve are two widely shared beliefs in the economics profession and among economic policy-makers. The present survey is devoted to anomalous empirical evidence which challenges this view. We consider a variety of studies, differing in terms of models, estimation strategies, and countries analyzed. We conclude with a brief discussion of some future possible developments of the literature. |
| Keywords: | long-run,money non-super-neutrality,non-vertical Phillips curve,empirical evidence |
| JEL: | E31 E40 E50 J64 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2038&r=lab |
| By: | Denni Tommasi |
| Abstract: | This paper estimates a collective model of the household and investigates how parents reach decisions to allocate household resources. Using data from PROGRESA, we test the restrictions of collective rationality on a large variety of specifications and show that, contrary to previous results, this modeling approach cannot rationalize the household decision process. We provide some evidence that the observed inefficiency is driven by the group receiving the cash transfers. These results are consistent with the idea that a possible indirect effect of CCT programs may be to enhance disagreements between the spouses which trigger an inefficient allocation of their resources. |
| Keywords: | collective model; bargaining power; efficiency; PROGRESA; conditional cash transfers |
| JEL: | D13 I38 J12 J16 O15 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/229749&r=lab |
| By: | Thibault Darcillon (Centre d'Economie de la Sorbonne) |
| Abstract: | This article aims at analyzing the role of the interactions between financial deregulation policies and changes in top tax marginal rates to explain the evolution in top income shares since the 1980s in most OECD countries. I argue that higher financial integration should have an increasing-effect on top income shares by resulting in lower marginal top tax rates. First, international financial integration has gradually contributed to increased tax competition by raising capital mobility. Second, financial integration also reflects higher bargaining power for top earners, pushing for a reduction in marginal top tax rates. Based on instrumental variables and simultaneous equations system regressions, I find strong evidence of my hypothesis: first, financial integration is negatively correlated with higher top marginal tax rates; second, this result seems to explain the negative relationship between marginal top tax rates and top income shares |
| Keywords: | Financial integration, top income shares; tax policy |
| JEL: | G1 I39 J63 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:16032&r=lab |
| By: | Mendolia, Silvia (University of Wollongong); Siminski, Peter (University of Wollongong) |
| Abstract: | We seek to quantify the role of education as a mechanism through which family background affects earnings. To this end, we propose a generalisation of statistical 'mediation analysis'. In our approach, the treatment and mediator can be multidimensional. This allows us to directly and flexibly account for a range of background characteristics which affect child earnings through the pathway of education and through other mechanisms. The results suggest that educational attainment explains 24%-39% of the overall family background effect on earnings in Australia. The mediating role of education seems to be larger for Australia than for the UK. |
| Keywords: | mediation analysis, intergenerational mobility, equality of opportunity |
| JEL: | I24 C49 J62 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9917&r=lab |
| By: | Climent Quintana-Domeque; Damian Clarke; Sonia Oreffice |
| Abstract: | Abstract: We study the determinants of season of birth of the first child, for White non-Hispanic married women aged 25-45 in the US, using birth certificate and Census data. The prevalence of good season (quarters 2 and 3) is significantly related to mother's age, education, and smoking status during pregnancy, as well as to receiving WIC food during pregnancy and to pre-pregnancy body mass index. Moreover, those who did not use assisted reproductive technology (ART) present a higher prevalence of good season births. The frequency of good season is also higher and more strongly related to mother's age in states where cold weather is more severe, and varies with mother's occupation, exhibiting a particularly strong positive association with working in "education, training, and library". Remarkably, this relationship between good season and weather disappears for mothers in "education, training, and library" occupations, revealing that season of birth is a matter of choice and preferences, not simply a biological mechanism. We estimate the compensating wage differential for mothers who work in jobs other than "education, training, and library", which allows us to provide an upper-bound to the life-time value of good season of birth of about USD 1,000,000. Finally, we present evidence that good season of birth is positively related to health at birth conditional on several maternal characteristics. |
| Keywords: | Quarter of birth, Fertility timing, Compensating wage differentials, Birth out-comes. |
| JEL: | I10 J01 J13 |
| Date: | 2016–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:792&r=lab |
| By: | Rune V. Lesner (Department of Economics and Business Economics, Aarhus University, Denmark) |
| Abstract: | This paper uses variation among siblings to identify the effect of childhood poverty on long-term outcomes such as income, earnings, job type, employment, and having children. Childhood poverty is found to have large negative effects on labour market outcome and small effects on non-labour market outcomes. The marginal effect of one additional year of childhood poverty from the age of 13 to 15 is found to decrease the disposable income of the individual by 6.4% around the age of 30. The effect size is found to have an inverse u-shape in the age of the child, peaking in the early teens, but with a notable spike at the year of birth. The effect is not found to be accentuated by other shocks to the household, such as divorce, parental job loss, or relocation. Yet, a social gradient is detected, where children from low educated parents are harmed more than others. |
| Keywords: | Poverty, Child development, Family background, Siblings, Intergenerational mobility |
| JEL: | D31 I32 J13 |
| Date: | 2016–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2016-08&r=lab |
| By: | Fetzer, Thiemo (University of Warwick); Pardo, Oliver (Universidad Icesi); Shanghavi, Amar (London School of Economics) |
| Abstract: | This paper exploits a nearly year-long period of power rationing that took place in Colombia in 1992, to shed light on three interrelated questions. First, we show that power shortages can lead to higher fertility, causing mini baby booms. Second, we show that the increase in fertility had not been offset by having fewer children over the following 12 years. Third, we show that the fertility shock caused mothers worse socioeconomic outcomes 12 years later. Taken together, the results suggest that there are significant indirect social costs to poor public infrastructure. |
| Keywords: | fertility, infrastructure, blackouts, unplanned parenthood. JEL Classification: J13, J16, O18, H41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:284&r=lab |
| By: | J. Vernon Henderson; Tim Squires; Adam Storeygard; David Weil |
| Abstract: | We study the distribution of economic activity, as proxied by lights at night, across 250,000 grid cells of average area 560 square kilometres. We first document that nearly half of the variation can be explained by a parsimonious set of physical geography attributes. A full set of country indicators only explains a further 10%. When we divide geographic characteristics into two groups, those primarily important for agriculture and those primarily important for trade, we find that the agriculture variables have relatively more explanatory power in countries that developed early and the trade variables have relatively more in countries that developed late, despite the fact that the latter group of countries are far more dependent on agriculture today. We explain this apparent puzzle in a model in which two technological shocks occur, one increasing agricultural productivity and the other decreasing transportation costs, and in which agglomeration economies lead to persistence in urban locations. In countries that developed early, structural transformation due to rising agricultural productivity began at a time when transport costs were still relatively high, so urban agglomerations were localized in agricultural regions. When transport costs fell, these local agglomerations persisted. In late developing countries, transport costs fell well before structural transformation. To exploit urban scale economies, manufacturing agglomerated in relatively few, often coastal, locations. With structural transformation, these initial coastal locations grew, without formation of more cities in the agricultural interior. |
| Keywords: | agriculture; physical geography; development |
| JEL: | J1 N0 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66538&r=lab |