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on Labour Economics |
| By: | Rebollo-Sanz, Yolanda Fatima (Universidad Pablo de Olavide); Rodríguez-Planas, Núria (Queens College, CUNY) |
| Abstract: | In the aftermath of the Great Recession, the Spanish government reduced the replacement rate (RR) from 60% to 50% after 180 days of unemployment for all spells beginning on July 15, 2012. Using Social Security data and a Differences-in-Differences approach, we find that reducing the RR by 10 percentage points (or 17%) increases workers' odds of finding a job by at least 41% relative to similar workers not affected by the reform. To put it differently, the reform reduced the mean expected unemployment duration by 5.7 weeks (or 14%), implying an elasticity of 0.86. We find strong behavioral effects as the reform reduced the expected unemployment duration right from the beginning of the unemployment spell. While the reform had no effect on wages, it did not decrease other measures of post-displacement job-match quality. After 15 months, the reform decreased unemployment insurance expenditures by 16%, about half of which are explained by job seekers' behavioral changes. |
| Keywords: | labor supply, financial incentives, unemployment insurance replacement rate, hazard function models, wages and job-match quality, forward-looking non-employed workers, longitudinal social security data |
| JEL: | C41 J64 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10044&r=lab |
| By: | Ayuso, Mercedes (University of Barcelona); Bravo, Jorge Miguel (Universidade Nova de Lisboa); Holzmann, Robert (University of New South Wales) |
| Abstract: | Heterogeneity in longevity between socioeconomic groups is increasingly documented for developed economies and is reviewed in the paper. Heterogeneity in life expectancy disaggregated by main socioeconomic characteristics – such as age, gender, race, health, education, profession, income, and wealth – is sizable and has not declined in recent decades. The prospects for future decline are not strong, either; perhaps even to the contrary. As heterogeneity is closely linked to income or earnings (i.e., the contribution base of earnings‐related social programs such as pensions) and as heterogeneity is empirically sizable, the result is major implicit taxes for some groups – particularly the less educated and low earners –and major subsidies for other groups – particularly highly educated individuals and high‐income earners. The implications for pension reform and scheme design are substantial as taxes/subsidies counteract the envisaged effects of (i) a closer contribution‐benefit link, (ii) a later formal retirement age to address population aging, and (iii) more individual funding and private annuities to compensate for reduced public generosity. |
| Keywords: | implicit tax, lifetime income, gender, life expectancy, implicit subsidy |
| JEL: | D9 G22 H55 J13 J14 J16 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10060&r=lab |
| By: | Jon Kristian Pareliussen; Christophe André; Thomas Chalaux; Vincent Koen |
| Abstract: | Employment fosters equity and economic inclusiveness because those out of work face the highest risk of poverty, and it generates the tax receipts on which the social safety net depends. Further enhancing education and life-long learning would lower hurdles to employment, which are high for the low-skilled. Policies to speed up tertiary graduation, improve work incentives and activation of the unemployed and postpone labour market exit are necessary to bring the employment rate closer to the level of other Nordics. Easing employment regulations and allowing more flexible wage setting would increase both employment and productivity. This working paper relates to the 2016 OECD Economic Survey of Finland (www.oecd.org/eco/surveys/economic-survey-finland.htm). Emploi et Compétences en Finlande L’emploi est facteur d’équité et d’inclusion économique car ceux qui en sont exclus sont les plus exposés au risque de pauvreté ; il est également générateur de recettes dont dépend le financement du filet de protection sociale. De nouvelles mesures en faveur de l’éducation et de la formation tout au long de la vie permettraient d’abaisser les obstacles à l’emploi, plus difficiles à surmonter pour les moins qualifiés. Il faut mettre en place des mesures pour accélérer les délais d’obtention des diplômes dans l’enseignement supérieur, améliorer les incitations à travailler et l’activation des chômeurs et retarder la sortie du marché du travail pour rapprocher les taux d’emploi avec ceux des autres pays nordiques. Enfin, l’assouplissement de la législation sur l’emploi et la mise en place de procédures plus souples de fixation des salaires devraient permettre des gains en termes à la fois d’emplois et de productivité. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Finlande 2016 (www.oecd.org/fr/eco/etudes/etude-econom ique-finlande.htm). |
| Keywords: | education, employment, skills, inequality, wage bargaining, négociation salariale, compétences, emploi, inégalité, éducation |
| JEL: | I21 I28 J08 J11 J21 J24 J31 J52 |
| Date: | 2016–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1320-en&r=lab |
| By: | Hémet, Camille; Malgouyres, Clément |
| Abstract: | This paper aims at determining whether and how the level of origins' diversity of a community affects its members' employment prospects. Relying on detailed data from the French Labor Force Survey, we measure diversity at two geographic levels: the neighborhood and the local labor market. The correlation between diversity and employment varies accordingly: it is negative at the former level but positive at the latter level. We then tackle the endogenous location selection issue in two ways. First, we rely on a standard instrumental variable approach to deal with diversity at the local labor market level, and propose a new instrument: diversity in the public housing sector. After correcting for endogeneity, the positive effect of diversity at this level is driven down to zero, revealing that it was mostly due to self-selection. Second, regarding neighborhood diversity, we adopt the strategy developed by Bayer, Ross and Topa (2008) which takes advantage of the very precise localization of the data. The negative effect of diversity on employment at the neighborhood level is reinforced. We also show that diversity in terms of nationalities (a proxy for cultural diversity) matters more than diversity based on parents' origins (a proxy for ethnic diversity). These results reveal that local diversity may act as a barrier to communication, preventing job information transmission, and hence reducing employment prospects. |
| Keywords: | diversity; employment; neighborhood effects |
| JEL: | J15 J60 R23 Z13 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11396&r=lab |
| By: | Donal O'Neill (Department of Economics, Finance and Accounting, Maynooth University.); Aedin Doris (Department of Economics, Finance and Accounting, Maynooth University.); Olive Sweetman (Department of Economics, Finance and Accounting, Maynooth University.) |
| Abstract: | During the Great Recession many Irish workers experienced nominal earnings cuts The proportion of all job stayers suffering earnings cuts trebled in the peak crisis years, with over 55% of workers receiving earnings cuts at the height of the crisis. However, while earnings cuts were common the evidence suggests substantial heterogeneity in earnings dynamics; at the same time as many workers were experiencing cuts, a substantial minority of workers continuing to receive earnings rises throughout the crisis. In this paper we use a unique dataset containing earnings data on every worker in every firm in Ireland from 2005-2013 to examine the relative role of worker and firm characteristics in explaining the observed heterogeneity in earnings dynamics. Our results show that firm effects play a smaller role in determining pay changes in Ireland. Although firm effects become more important in the peak year of the economic crisis, even then the vast majority of earnings changes continue to be driven by within firm rather than between firm forces. These finding raise a number of important questions about the role of morale and fairness in the wage setting process. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n272-16.pdf&r=lab |
| By: | Francesca Carta; Lucia Rizzica |
| Abstract: | We theoretically show that when mothers need to buy childcare services not only if they work but also if they want to search actively for a job, a reduction in the price of childcare will increase their likelihood of searching but may decrease their willingness to accept a job offer and therefore lower employment. We test these predictions empirically by means of a Regression Discontinuity design and find that the introduction in Italy of pre-kindergarten, a much cheaper alternative to day care for 2-year-old children, increased both participation in the labour market and employment of mothers of eligible children. This effect was driven largely by a significant decrease in the stated reservation wage. For a full evaluation of the policy we finally provide evidence that pre-kindergarten did not affect childrenÕs cognitive development as measured at second grade. Length: 56 pages |
| Keywords: | child care, female labour supply, public services |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:don:donwpa:091&r=lab |
| By: | Enoch Hill (Wheaton College); Kai Ding (University of Minnesota) |
| Abstract: | There have been significant changes in the cyclicality of US labor productivity since the early 1990s. Previously, labor productivity was largely procyclical but beginning with the recession of the early 1990s labor productivity rises immediately following a recession before returning to prerecession levels. In this paper we develop a dynamic general equilibrium model in which a change in the importance of firm specificc human capital can explain the new pattern in labor productivity as well as partially account for the decrease in the rate of employment recovery (jobless recoveries) observed in the most recent three recessions. Additionally, we present empirical support that the importance of rm specificc human capital has in fact increased for recent recessions. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed016:291&r=lab |
| By: | Lilas Demmou |
| Abstract: | Although Lithuania’s growth has been impressive, inequality is high, the risk of poverty is one of the highest of European countries, and life expectancy is comparatively low and strongly dependent on socio-economic background. The low job satisfaction reduces well-being and feeds high emigration. Labour market, social and health policies can all contribute to improve both well-being and growth. Priorities include providing more and better jobs for all, especially for the low-skilled, by making work pay while keeping the labour costs under control. More accessible and adequate income support combined with more ambitious job-search support and training programmes would better-integrate out-of-work individuals into the labour market. Strengthening equity, effectiveness and sustainability of health policies is also instrumental to inclusiveness. This Working Paper relates to the 2016 OECD Economic Survey of Lithuania (www.oecd.org/eco/surveys/economic-survey-lithuania.htm) Partager les fruits de la croissance : rendre le processus de convergence plus inclusif en Lituanie Bien que la Lituanie ait connu une croissance impressionnante, elle se caractérise par de fortes inégalités, un risque de pauvreté figurant parmi les plus élevés des pays européens, ainsi qu'une espérance de vie relativement faible et fortement tributaire du milieu socioéconomique. La faible satisfaction professionnelle des individus réduit le bien-être et alimente une forte émigration. La politique du marché du travail, la politique sociale et la politique de santé peuvent toutes contribuer à améliorer le bien-être et la croissance. Les pouvoirs publics doivent notamment s'employer en priorité à fournir à tous des emplois de meilleure qualité, en particulier aux personnes peu qualifiées, en valorisant le travail tout en gardant la maîtrise des coûts de main-d'oeuvre. Des aides au revenu plus accessibles et adaptées, conjuguées à des programmes plus ambitieux d'aide à la recherche d'emploi et de formation, permettraient de mieux intégrer les individus sans emploi sur le marché du travail. L'inclusivité passe également par un renforcement de l'équité, de l'efficacité et de la viabilité des politiques de santé. Ce Document de travail se rapporte à l’Étude économique de l’OCDE 2016 de Lituanie (www.oecd.org/fr/eco/etudes/etude-economique-lituanie.htm) Mots clés: inclusivité, inégalit |
| Keywords: | employment protection legislation, active labour market policies, in-work benefits, life expectancy, health care system, public employment services, unemployment benefits, tax wedge |
| JEL: | H2 I1 I3 J08 J28 J31 J6 |
| Date: | 2016–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1308-en&r=lab |
| By: | d'Artis Kancs; Pavel Ciaian |
| Abstract: | In June 2016, the European Commission issued a new EU Blue Card proposal. This proposal is meant to make the EU more attractive for highly qualified workers from third countries. While strengthening the knowledge economy of the EU, the potential impacts of the EU Blue Card on developing countries are less known. The present study attempts to shed light on the potential challenges and opportunities for developing countries by analysing conceptually the potential socio-economic impacts of the new EU Blue Card proposal. Our results suggest that the EU Blue Card may reduce the human capital, the knowledge capital, and hence growth and development prospects in developing countries, if not accompanied by appropriate policy measures. The present study identifies and examines a number of policy measures, which could help turning the sending country challenges into opportunities. Our results suggest that policies implemented on the demand side of the labour market are more efficient than policies that address the supply side of the labour market, though they are less costly to implement. Developing countries can also benefit from the knowledge diffusion from the EU, if sufficient human resources are available to use this knowledge. |
| Keywords: | High-skill migration, EU Blue Card, innovative capital, economic growth, developing countries. |
| JEL: | C68 D58 F22 J20 J61 J64 O15 |
| Date: | 2016–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2016_09&r=lab |
| By: | Moyen, Stephane; Stähler, Nikolai; Winkler, Fabian |
| Abstract: | We discuss how cross-country unemployment insurance can be used to improve international risk sharing. We use a two-country business cycle model with incomplete financial markets and frictional labor markets where the unemployment insurance scheme operates across both countries. Cross-country insurance through the unemployment insurance system can be achieved without affecting unemployment outcomes. The Ramsey-optimal policy however prescribes a more countercyclical replacement rate when international risk sharing concerns enter the unemployment insurance trade-off. We calibrate our model to Eurozone data and find that optimal stabilizing transfers through the unemployment insurance system are sizable and mainly stabilize consumption in the periphery countries, while optimal replacement rates are countercyclical overall. Moreover, we find that debt-financed national policies are a poor substitute for fiscal transfers. |
| Keywords: | Fiscal Union ; International Business Cycles ; International Risk Sharing ; Unemployment Insurance |
| JEL: | E32 E62 H21 J64 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2016-54&r=lab |
| By: | Ramaele Moshoeshoe |
| Abstract: | This paper examines the effect of birth order on educational attainment and child labour in Lesotho. Using family fixed effects models, I find robust negative birth order effects on educational attainment and child labour. The birth order effects on educational attainment are in sharp contrast with the evidence from many other developing countries such as Ecuador and Kenya, but are consistent with the evidence from developed countries. I further find that these birth order effects are pronounced in large families, and families with first-born girls, which suggests presence of girls' education bias. Turning to potential pathways of these effects, I find that they are not propagated through family wealth, but mainly through birth-spacing. These results are robust to different sample restrictions. |
| Keywords: | Educational attainment, Child labour, Birth Order |
| JEL: | D13 I21 J1 O12 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:621&r=lab |
| By: | Christoph Eder; Martin Halla |
| Abstract: | As a consequence of World War II, Austria was divided into four different occupation zones for 10 years. Before tight travel restrictions came into place, about 11 percent of the population residing in the Soviet zone moved across the demarcation line. We exploit this large internal migration shock to further our understanding of why economic activity is distributed unevenly across space. Our analysis shows that the distorted population distribution across locations has fully persisted until today (60 years after the demarcation line become obsolete). An analysis of more direct measures of economic activity shows an even higher concentration in the former non-Soviet zone. This gap in economic activity is growing over time, mainly due to commuting streams out of the former Soviet zone. This shows that a transitory shock is capable of shifting an economy to a new spatial equilibrium, which provides strong evidence for the importance of increasing returns to scale in explaining the spatial distribution of economic activity. |
| Keywords: | spatial equilibrium, agglomeration effects, population shock, World War II, Austria |
| JEL: | R11 R12 R23 J61 N44 N94 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2016-23&r=lab |
| By: | Malo, Miguel Ángel; Martín-Román, Ángel L.; Moral, Alfonso |
| Abstract: | The current work seeks to ascertain whether rulings on dismissal cases issued by labour courts in Spain are influenced by whether incumbent judges are acting alone in their own court or sharing duties with other judges such as replacement judges, support judges or incumbent judges from other courts. In the approach used, more than one judge acting in a court is considered to be a treatment, and an analysis is conducted into the effect said treatment has had on the percentage of cases in which the judge has found in favour of the dismissed worker. The data used in the research are taken from the information recorded at court level provided by the statistics kept by the General Council of the Spanish Judiciary. A total of 2,888 observations were available, corresponding to the period spanning 2004 to 2012, and the information is the result of constructing a data panel from all the labour courts in Spain. As regards the findings, the percentage of cases ruled in favour of workers increases in line with the unemployment rate. More cases are also ruled in favour of workers during the crisis and in areas where the construction and industrial sector play a greater role. With regard to treatment as the central analysis variable, it may be concluded that there is a significant positive impact on the number of dismissal cases ruled in favour of workers when incumbent judges are not acting alone in their court. |
| Keywords: | Dismissal; Legal ruling; Labour court; Peer effects |
| JEL: | J65 K31 K41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:72669&r=lab |
| By: | Stepanok, Ignat (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | In this paper I build a North-South model of international trade, economic growth and search-frictional unemployment in the North. Growth is driven by a process of creative destruction in the North followed by imitation in the South. I study the effects of intellectual property rights protection and trade liberalization on unemployment and welfare in the North. Intellectual property rights protection decreases unemployment and increases welfare. Trade liberalization increases welfare but has an ambiguous effect on unemployment. It decreases unemployment if workers in the North have a high outside option and increases it if their outside option is low. I provide empirical evidence in support of the last result using data for 20 OECD countries. |
| JEL: | F12 F16 F43 J63 O31 O34 O41 |
| Date: | 2016–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201623&r=lab |