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on Labour Economics |
| By: | Fernandez, Rodrigo (OECD); Immervoll, Herwig (OECD); Pacifico, Daniele (OECD); Thévenot, Céline (OECD) |
| Abstract: | This paper proposes a novel method for identifying and visualising key employment obstacles that may prevent individuals from participating fully in the labour market. The approach is intended to complement existing sources of information that governments use when designing and implementing activation and employment-support policies. In particular, it aims to provide individual and household perspectives on employment problems, which may be missed when relying on common labour-force statistics or on administrative data, but which are relevant for targeting and tailoring support programmes and related policy interventions. A first step describes a series of employment-barrier indicators at the micro level, comprising three domains: work-related capabilities, financial incentives and employment opportunities. For each domain, a selected set of concrete employment barriers are quantified using the EU-SILC multi-purpose household survey. In a second step, a statistical clustering method (latent class analysis), is used to establish profiles and patterns of employment barriers among individuals with no or weak labour-market attachment. A detailed illustration for two countries (Estonia and Spain) shows that "short-hand" groupings that are often highlighted in the policy debate, such as "youth" or "older workers", are in fact composed of multiple distinct sub-groups that face very different combinations of employment barriers and likely require different policy approaches. Results also indicate that individuals typically face two or more simultaneous employment obstacles suggesting that addressing one barrier at a time may not have the intended effect on employment levels. From a policy perspective, the results support calls for carefully sequencing activation and employment support measures, and for coordinating them across policy domains and institutions. |
| Keywords: | unemployment, employment barrier, activation, targeting, latent class, active labour market programmes |
| JEL: | C38 J08 H31 J21 J22 J68 J82 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9954&r=lab |
| By: | Simon Franklin |
| Abstract: | Do high search costs affect the labour market outcomes of job seekers living far away from jobs? I randomly assign transport subsidies to unemployed youth in urban Ethiopia. Treated respondents increase job search intensity, and are more likely to find good employment. Subsidies also reduce participation in temporary work during job search. I explain these results with a dynamic model of job search, in which cash constraints cause workers to give up search too early. The predictions of the model closely match the trajectory of treatment effects over time, which I estimate using a weekly phone call survey. |
| Keywords: | job search, spatial mismatch, unemployment, cash constraints, urban, transpor |
| JEL: | J64 C93 J61 O18 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0199&r=lab |
| By: | Kambayashi, Ryo; Ueno, Yuko |
| Abstract: | This study aims to empirically examine how establishments employ various tools, including promotion, threat of dismissal, progressive base wages, and bonuses, to motivate workers. Starting with the standard tournament model, we incorporate the link between the tournament structure and the worker separation that affects the degree of internal competition for managerial positions. By using an establishment-level panel data set, we find that the average policy of human resource management in Japan, particularly since the global financial crisis, is consistent with tournament theory. Further, there is evidence that establishments use a positive selection scheme for determining the set of candidates. The progressive base wage schedule and the smaller portion of bonus payments for employees who remain are also consistent with the selection scheme. |
| Keywords: | Promotion tournament, internal competition, worker separation, wage progression |
| JEL: | M51 M52 J31 J63 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rcesrs:dp16-2&r=lab |
| By: | David Autor; David Figlio; Krzysztof Karbownik; Jeffrey Roth; Melanie Wasserman |
| Abstract: | Using birth certificates matched to schooling records for Florida children born 1992 - 2002, we assess whether family disadvantage disproportionately impedes the pre-market development of boys. We find that, relative to their sisters, boys born to disadvantaged families have higher rates of disciplinary problems, lower achievement scores, and fewer high-school completions. Evidence supports that this is a causal effect of the post-natal environment; family disadvantage is unrelated to the gender gap in neonatal health. We conclude that the gender gap among black children is larger than among white children in substantial part because black children are raised in more disadvantaged families. |
| JEL: | I24 J12 J13 J16 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22267&r=lab |
| By: | Susanto Basu; Christopher L. House |
| Abstract: | Modern monetary business-cycle models rely heavily on price and wage rigidity. While there is substantial evidence that prices do not adjust frequently, there is much less evidence on whether wage rigidity is an important feature of real world labor markets. While real average hourly earnings are not particularly cyclical, and do not react significantly to monetary policy shocks, systematic changes in the composition of employed workers and implicit contracts within employment arrangements make it difficult to draw strong conclusions about the importance of wage rigidity. We augment a workhorse monetary DSGE model by allowing for endogenous changes in the composition of workers and also by explicitly allowing for a difference between allocative wages and remitted wages. Using both individual-level and aggregate data, we study and extend the available evidence on the cyclicality of wages and we pay particular attention to the response of wages to identified monetary policy shocks. Our analysis suggests several broad conclusions: (i) in the data, composition bias plays a modest but noticeable role in cyclical compensation patterns; (ii) empirically, both the wages for newly hired workers and the "user cost of labor" respond strongly to identified monetary policy innovations; (iii) a model with implicit contracts between workers and firms and a flexible allocative wage replicates these patterns well. We conclude that price rigidity likely plays a substantially more important role than wage rigidity in governing economic fluctuations. |
| JEL: | E24 E3 E31 E32 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22279&r=lab |
| By: | Maya Rossin-Slater; Miriam Wüst |
| Abstract: | We leverage non-linearities in Danish child support guidelines and rich administrative data to provide causal estimates of parental behavioral responses to child support obligations. We estimate that a 1,000 DKK ($149) increase in a father's obligation is associated with a 506 DKK ($75) increase in his payment. A higher obligation also reduces father-child co-residence, pointing to substitution between financial and non-pecuniary investments. Further, obligations increase parental post-separation fertility, and reduce labor supply among high-income fathers. Our findings suggest that government efforts to increase child investments through mandates on parents can be complicated by their behavioral responses to them. |
| JEL: | H40 I30 J12 J13 J16 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22227&r=lab |
| By: | Tommaso Ferraresi; Andrea Roventini; Willi Semmler |
| Abstract: | In this work, we investigate the interrelations among technology, output and employment in the different states of the U.S. economy (recessions vs. expansions). More precisely, we estimate different threshold vector autoregression (TVAR) models with TFP, hours, and GDP, employing the latter as threshold variable, and we assess the ensuing generalized impulse responses of GDP and hours as to TFP shocks. We find that positive productivity shocks, while spurring GDP growth, display a negative effect on hours worked at least on impact, independently of the state of the economy. In the 1957-2011 period, the effects of productivity shocks on employment are abundantly negative in downturns, but they are not significantly different from zero in good times. However, the impact of TFP shocks in different business cycle regimes depends on the chosen sample: after the mid eighties (1984-2011), productivity shocks increase hours during recessions. Finally, we express and test some conjectures that might have caused the changes in the responses in different time periods. |
| Keywords: | technology shocks, employment, threshold vector autoregression, generalized impulse response functions |
| Date: | 2016–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2016/23&r=lab |
| By: | Jasmin Thomas; James Uguccioni |
| Abstract: | This report presents new estimates of the Index of Economic Well-Being and its four domains (consumption flows, stocks of wealth, economic equality, and economic security) for fourteen OECD countries for the 1980-2014 period. It finds that in 2014 Norway had the highest level of economic well-being and Spain the lowest. Canada ranked eleventh among the fourteen countries. Over the 1980-2014 period, Australia enjoyed the most rapid increase in economic well-being in absolute terms, and Italy the slowest. In all fourteen countries, over the 1980-2014 period, there was growth in the consumption flows index and the stocks of wealth index. Over this same period, the economic security index and the economic equality index were largely stagnant in most countries. Most importantly, in all fourteen countries except France, the IEWB grew slower than GDP per capita, a measure that is often used to provide indications into the state of well-being in a given country. According to our estimates, economic well-being, therefore, has not advanced as rapidly as GDP per capita. Furthermore, since 2008, growth in economic well-being has been slower than growth over the 1980-2008 period for nine of the fourteen countries considered, with two countries showing negative growth (Italy and Spain). |
| Keywords: | OECD, Well-Being, Wealth, Consumption, Equality, Economic Security |
| JEL: | I31 I32 C43 D63 N34 N32 N37 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1606&r=lab |
| By: | Heidrich, Stefanie (Department of Economics, Umeå University) |
| Abstract: | In Paper [I] we analyze the implications of social identity and self-categorization for optimal redistributive income taxation. A two-type model is supplemented by an assumption that individuals select themselves into social categories, in which norms are formed and education effort choices partly depend on these norms. The results show, among other things, that externality correction by a welfarist government leads to an element of tax progression that serves to reduce the discrepancy between the effort norm and the actual effort chosen by low-productivity individuals in the high-effort group. Furthermore, if the preference for social identity is sufficiently strong, increased wageinequality leads to higher social welfare through a relaxation of the selection constraint. It may thus be desirable to use publicly provided education to induce more wageinequality, even if higher wage-inequality increases the intrinsic utility of a potential mimicker. In Paper [II] I employ high quality register data to present new facts about income mobility in Sweden. The focus of the paper is regional differences in mobility, using a novel approach based on a multilevel model. This method is well-suited when regions differ greatly in population size as is the case in Sweden. The maximum likelihood estimates are substantially more precise than those obtained by running separate OLS regressions. I find small regional differences in income mobility when measured in relative terms. Regional differences are large when adopting an absolute measure and focusing on children with below-median parent income. On the national level I find that the association between parent and child income ranks has decreased over time, implying increased mobility. In Paper [III] I study the long term effects of inter-municipal moving during childhood on income using Swedish register data. Due to the richness of the data I am able to control for important sources of selection into moving, such as parent separation, parents' unemployment, education, long run income, and immigration background. I find that children's long run incomes are significantly negatively affected by moving during childhood, and the effect is larger for those who move more often. For children who move once, I also estimate the effect of the timing and the quality of the move. I measure the quality of each neighborhood based on the adult outcomes for individuals who never move. The quality of a move is defined as the difference in quality between the origin and the destination. Given that a family moves, I find that the negative effect of childhood moving on adult income is increasing in age at move. Children benefit economically from the quality of the region they move to only if they move before age 12 (sons) and age 16 (daughters). Applied research on the association between parent and child lifetime income is relying on income data that covers only part of the life cycle which may lead to misleading estimates of the intergenerational elasticity (IGE). In Paper [IV] I study the bias of IGE estimates for different missing-data scenarios based on simulated income processes. Using an income process from the income dynamics and risks literature to generate two linked generations' complete income histories, I use Monte Carlo methods to study the relationship between available data patterns and the bias of the IGE. I find that the traditional approach using the average of the typically available log income observations leads to IGE estimates that are around 40 percent too small. Moreover, I show that the attenuation bias is not reduced by averaging over many father income observations. Using just one income observation for each generation at the optimal age (as discussed in the paper) or using weighted instead of unweighted averages can reduce the bias. In addition, the rank-rank slope is found to be clearly less sensitive to missing data. |
| Keywords: | optimal income taxation; education; social identity; self-categorization; intergenerational income mobility; regional analysis; multilevel model; long-term effects of moving; disruption costs; neighborhood effects; human capital; child development; intergenerational mobility; IGE; income process; lifetime income; simulations; Monte Carlo methods |
| JEL: | D03 D31 E24 E27 H21 I21 J17 J24 J62 R00 R23 Z13 |
| Date: | 2016–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0932&r=lab |
| By: | Ekaterina Selezneva (IOS Regensburg) |
| Abstract: | During the 20th century, Russian women were assigned the triple role of social and political activists, workers, caregivers and mothers. This paper makes an overview of the main steps undertaken first by the Soviet and later by the modern Russian governments to influence family formation models and fertility levels, in order to improve the demographic situation over the period from 1917 until 2015. The overview pays close attention to such measures of demographic policy as marriage and divorce regulation, support of families through family benefits and the tax system, reconciliation of family and work spheres (maternity/paternity leaves, workplace flexibility measures), fertility promotion, childbearing and childcare support, as well as rare reproductive health protection initiatives. |
| Keywords: | fertility, Russia, family policy |
| JEL: | J12 J13 J18 P30 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:355&r=lab |
| By: | Marco Gonzalez-Navarro; Matthew A. Turner |
| Abstract: | We investigate the relationship between the extent of a city’s subway network, its population and its spatial configuration. To accomplish this investigation, for the 632 largest cities in the world, we construct panel data describing the extent of each of the 138 subway systems in these cities, their population, and measures of centralization calculated from lights at night data. These data indicate that large cities are more likely to have subways, but that subways have an economically insignificant effect on urban population growth. Consistent with economic theory and with other studies of the effects of transportation improvements on cities, our data also indicate that subways cause cities to be more decentralized. For a subset of subway cities we also observe panel data describing subway and bus ridership. We find that a 10% increase in subway extent causes about a 6% increase in subway ridership and has no effect on bus ridership. Consistent with the available literature describing the effect of roads on cities, our results are consistent with subways having a larger effect on the configuration of cities than on their sizes, and with subways having a larger effect on discretionary than commute travel. |
| Keywords: | subways; public transit; urban growth; urban decentralization |
| JEL: | R14 J01 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66535&r=lab |
| By: | Tabuchi, Takatoshi; Thisse, Jacques François; Zhu, Xiwei |
| Abstract: | We study how technological progress in manufacturing and transportation to-gether with migration costs interact to shape the space-economy. Rising labor productivity in the manufacturing sector fosters the agglomeration of activities, whereas falling transport costs associated with technological and organizational in-novations fosters their dispersion. Since these two forces have been at work for a long time, the final outcome must depend on how drops in the costs of producing and trading goods interact with the various costs borne by migrants. Finally, when labor is heterogeneous, the most efficient workers of the less productive region are the first to move to the more productive region. |
| Keywords: | Economic geography, Labor productivity, Manufacturing industries, Transportation, New economic geography, Technological progress, Migration costs, Labor heterogeneity |
| JEL: | J61 R12 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper599&r=lab |
| By: | Charles Yuji Horioka; Emin Gahramanov; Aziz Hayat; Xueli Tang |
| Abstract: | In this paper, we conduct a theoretical analysis of why individuals provide care and attention to their elderly parents using a two-period overlapping generations model with endogenous saving and a “contest success function” and test this model using micro data from a Japanese household survey, the Osaka University Preference Parameter Study. To summarize our main findings, we find that the Japanese are more likely to live with (or near) their elderly parents and/or to provide care and attention to them if they expect to receive a bequest from them, which constitutes strong support for the selfish bequest motive or the exchange motive (much stronger than in the United States), but we find that their caregiving behavior is also heavily influenced by the strength of their altruism toward their parents and social norms. |
| JEL: | D12 D64 D91 E21 J14 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22245&r=lab |
| By: | Daudin, Guillaume (Université Paris-Dauphine); Franck, Raphaël (Bar-Ilan University); Rapoport, Hillel (Paris School of Economics) |
| Abstract: | France experienced the demographic transition before richer and more educated countries. This paper offers a novel explanation for this puzzle that emphasizes the diffusion of culture and information through internal migration. It tests how migration affected fertility by building a decennial bilateral migration matrix between French regions for 1861-1911. The identification strategy uses exogenous variation in transportation costs resulting from the construction of railways. The results suggest the convergence towards low birth rates can be explained by the diffusion of low-fertility norms by migrants, especially by migrants to and from Paris. |
| Keywords: | fertility, France, demographic transition, migration |
| JEL: | J13 N33 O15 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9945&r=lab |
| By: | Daniela Vuri (DEF & CEIS,University of Rome Tor Vergata, IZA, CESifo) |
| Abstract: | Recent research has focused on the consequences on the unilateral divorce laws on several aspects of individual behavior but the issue of children custody after divorce has been almost neglected. This paper studies the implications on mothers of the changes in child custody law from maternal preference to joint custody using the 1960-2000 Census Public Use Micro Sample (IPUMS). Variation in the timing of joint custody reforms across states provides a natural experimental framework to study the causal effect of shared custody on mothers' economic outcomes. We also study the heterogeneity of the effect according to the years of exposure and to the age of the child at the time of the reform. The results show that divorced/separated mothers are negatively affected by the adoption of the joint custody laws in terms of a decrease in total income and earnings, exposing them to a higher risk of poverty. The paper discusses a possible rationale for these fidings in terms of higher child support payments the mother gets from the non custodial father in case of joint custody which might discourage them from looking for high paid jobs or investing in their careers. |
| Keywords: | joint custody laws, bargaining, difference in difference |
| JEL: | J12 J13 |
| Date: | 2016–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:380&r=lab |
| By: | Spahn, Peter |
| Abstract: | Post Keynesian stagnation theory argues that slower population growth dampens consumption and investment. A New Keynesian OLG model derives an unemployment equilibrium due to a negative natural rate in a three-generations credit contract framework. Besides deleveraging or rising inequality, also a shrinking population is a triggering factor. In all cases, a saving surplus drives real interest rates down. In other OLG settings however, with bonds as stores of value, slower population growth, on the contrary, causes a lack of saving and thus rising rates. Moreover, the recent fall in market interest rates was brought about by monetary factors. |
| Keywords: | overlapping generations,zero lower bound,deflation equilibrium,natural versus market interest rates |
| JEL: | E12 E21 E43 J11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:042016&r=lab |