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on Labour Economics |
| By: | Andrew C. Johnston; Alexandre Mas |
| Abstract: | We examine how a 16-week cut in potential unemployment insurance (UI) duration in Missouri affected search behavior of UI recipients and the aggregate labor market. Using a regression discontinuity design (RDD), we estimate a marginal effect of maximum duration on UI and nonemployment spells of approximately 0.5 and 0.3 respectively. We use RDD estimates to simulate the unemployment rate assuming no market-level externalities. The simulated response closely approximates the estimated change in the unemployment rate following the benefit cut, suggesting that even in a period of high unemployment the labor market absorbed this influx of workers without crowding-out other jobseekers. |
| JEL: | E24 H0 J6 J64 J65 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22411&r=lab |
| By: | Erling Barth; James Davis; Richard B. Freeman; Sari Pekkala Kerr |
| Abstract: | This paper finds that US employment changed differently relative to output in the Great Recession and recovery than in most other advanced countries or in the US in earlier recessions. Instead of hoarding labor, US firms reduced employment proportionately more than output in the Great Recession, with establishments that survived the downturn contracting jobs massively. Diverging from the aggregate pattern, US manufacturers reduced employment less than output while the elasticity of employment to gross output varied widely among establishments. In the recovery, growth of employment was dominated by job creation in new establishments. The variegated responses of employment to output challenges extant models of how enterprises adjust employment over the business cycle. |
| JEL: | J0 J00 J01 J08 J10 J24 J60 J64 J70 J80 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22432&r=lab |
| By: | Cuiping Long |
| Abstract: | I use the non-public decennial censuses in 1970 to investigate the effect of the Head Start program on maternal labor supply and schooling in its early years. I exploit a discontinuity in county-level Head Start funding beginning in the late 1960s to explore differences in countylevel maternal employment and maternal schooling. The results provide suggestive evidence that the more availability of Head Start led to an increase the nursery school enrollment of children and a decrease in maternal labor supply. In addition, the ITT estimates imply a relatively large, negative effect of enrollment on maternal labor supply. However, the estimates are somewhat sensitive to addition of covariates and the standard errors are also large to draw firm inferences. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:16-35&r=lab |
| By: | Kathleen Mullen; Stefan Staubli |
| Abstract: | A key component for estimating the optimal size and structure of disability insurance (DI) programs is the elasticity of DI claiming with respect to benefit generosity. Yet, in many countries, including the United States, all workers face identical benefit schedules, which are a function of one’s labor market history, making it difficult to separate the effect of the benefit level from the effect of unobserved preferences for work on individuals’ claiming decisions. To circumvent this problem, we exploit exogenous variation in DI benefits in Austria arising from several reforms to its DI and old age pension system in the 1990s and 2000s. We use comprehensive administrative social security records data on the universe of Austrian workers to compute benefit levels under six different regimes, allowing us to identify and precisely estimate the elasticity of DI claiming with respect to benefit generosity. We find that, over this time period, a one percent increase in potential DI benefits was associated with a 1.2 percent increase in DI claiming. |
| JEL: | H53 H55 J14 J22 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22419&r=lab |
| By: | Ioana Marinescu |
| Abstract: | During the Great Recession, U.S. unemployment benefits were extended by up to 73 weeks. Theory predicts that extensions increase unemployment by discouraging job search, a partial equilibrium effect. Using data from the large job board CareerBuilder.com, I find that a 10% increase in benefit duration decreased state-level job applications by 1%, but had no robust effect on job vacancies. Job seekers thus faced reduced competition for jobs, a general equilibrium effect. Calibration implies that the general equilibrium effect reduces the impact of unemployment insurance on unemployment by 40%: increasing benefit duration by 10% increases unemployment by only 0.6% in equilibrium. |
| JEL: | J63 J64 J65 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22447&r=lab |
| By: | Grace Lordan; Jörn-Steffen Pischke |
| Abstract: | Occupational segregation and pay gaps by gender remain large while many of the constraints traditionally believed to be responsible for these gaps have weakened over time. Here, we explore the possibility that women and men have different tastes for the content of the work they do. We run regressions of job satisfaction on the share of males in an occupation. Overall, there is a strong negative relationship between female satisfaction and the share of males. This relationship is fairly stable across different specifications and contexts, and the magnitude of the association is not attenuated by personal characteristics or other occupation averages. Notably, the effect is muted for women but largely unchanged for men when we include three measures that proxy the content and context of the work in an occupation, which we label 'people,' 'brains,' and 'brawn.' These results suggest that women may care more about job content, and this is a possible factor preventing them from entering some male dominated professions. We continue to find a strong negative relationship between female satisfaction and the occupation level share of males in a separate analysis that includes share of males in the firm. This suggests that we are not just picking up differences in the work environment, although these seem to play an independent and important role as well. |
| Keywords: | occupational choice, job content, gender, preferences |
| JEL: | J16 J4 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1446&r=lab |
| By: | Gary Burtless |
| Abstract: | Unlike prime-age Americans, who have experienced declines in employment and labor force participation since the onset of the Great Recession, Americans past 60 have seen their employment and labor force participation rates increase. In order to understand the contrasting labor force developments among the old, on the one hand, and the prime-aged, on the other, this paper develops and analyzes a new data file containing information on monthly labor force changes of adults interviewed in the Current Population Survey (CPS). The paper documents notable differences among age groups with respect to the changes in labor force transition rates that have occurred over the past two decades. What is crucial for understanding the surprising strength of old-age labor force participation and employment are changes in labor force transition probabilities within and across age groups. |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2016-1&r=lab |
| By: | Joshua D. Gottlieb; Richard R. Townsend; Ting Xu |
| Abstract: | Do potential entrepreneurs remain in wage employment because of the danger that they will face worse job opportunities should their entrepreneurial ventures fail? Using a Canadian reform that extended job-protected leave to one year for women giving birth after a cutoff date, we study whether the option to return to a previous job increases entrepreneurship. A regression discontinuity design reveals that longer job-protected leave increases entrepreneurship by 1.8 percentage points. The results are driven by more educated entrepreneurs, starting firms that survive at least five years and hire paid employees, in industries where experimentation is more valuable. |
| JEL: | H50 J13 J16 J65 J88 L26 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22446&r=lab |
| By: | Girum Abebe; Stefano Caria; Marcel Fafchamps; Paolo Falco; Simon Franklin; Simon Quinn |
| Abstract: | We conduct a randomized evaluation of two job-search support programs for urban youth in Ethiopia. One group of treated respondents receives a subsidy to cover the transport costs of job search. Another group participates in a job application workshop where their skills are certified and they are given orientation on how to make effective job applications. The two interventions are designed to lower spatial and informational barriers to employment. We find that both treatments significantly improve the quality of jobs that young jobseekers obtain. Impacts are concentrated among women and the least educated. Using rich high-frequency data from a phone survey, we are able to explore the mechanisms underlying the results; we show that while the transport subsidy increases both the intensity and the efficacy of job search, the job application workshop mainly operates through an increase in search efficacy. Both interventions mitigate the adverse effects of spatial constraints on employment outcomes, and the job application workshop alleviates informational asymmetries by helping workers to signal their ability. |
| JEL: | J64 O15 O18 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22409&r=lab |
| By: | Claudia Goldin |
| Abstract: | The Japanese are becoming older. Americans are also becoming older. Demographic stress in Japan, measured by the dependency ratio (DR), is currently about 0.64. In the immediate pre-WWII era it was even higher because Japan’s total fertility rate (TFR) was in the 4 to 5 range. As the TFR began to decline in the post-WWII era, the DR fell and hit a nadir of 0.44 in 1990. But further declining fertility and rising life expectancy caused the DR to shoot up after 1995. In this short note I simulate the DR under various conditions and make comparisons with the US. Japan has experienced a large increase in its DR because its fertility rate is low, its people are long lived and it has little immigration. Fertility is the largest of the contributors in Japan. If there are no demographic changes in Japan, the DR will be 0.88 by 2050. I also assess the role of the “baby boom” of the late 1940s and show that it was compensatory, unlike that in the US. The good news is that healthier older longer-lived people will continue to be employed for many more years than previously and that is one way to reduce demographic stress. |
| JEL: | I10 J11 J14 J26 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22445&r=lab |
| By: | Julia Debski; Michael Jetter; Saskia Mösle; David Stadelmann |
| Abstract: | Empirical findings of a negative association between female participation in politics and the labor market, and levels of corruption have received great attention. We reproduce this correlation for 177 countries from 1998 to 2014. Once taking account of country-specific heterogeneity by fixed effects, the negative association disappears entirely in terms of statistical significance and magnitude. This suggests that female participation in politics and the labor market is not directly linked to lower corruption. Exploiting different dimensions of culture as country-specific characteristics, our analysis shows that power distance and masculinity systematically affect corruption. These two cultural characteristics are sufficient to fully mitigate any association between gender and corruption. Our findings point out the importance of culture and suggest that its omission causes a spurious correlation, leading to the erroneous claim that increased female participation in public life alone reduces corruption. |
| Keywords: | Gender; corruption; female participation; power distance; culture; development |
| JEL: | J16 D73 Z10 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2016-05&r=lab |
| By: | Masatoshi Kato (School of Economics, Kwansei Gakuin University); Haibo Zhou (Faculty of Economics and Business, University of Groningen) |
| Abstract: | Using a panel data set based on repeated questionnaire surveys in Japan, this study examines the effects of numerical labor flexibility on innovation outcomes of start-up firms, a topic that has not been well examined in the literature. Using a random-effects probit model, the estimation results indicate that the use of temporary employees significantly increases the probability of product innovation. In addition, numerical flexibility, measured as external labor turnover of regular employees, initially increases and then decreases the probability of patent application. The implications of our findings are discussed. |
| Keywords: | start-up firm, numerical flexibility, regular employee flexibility, nonregular employee flexibility, innovation outcome, panel data |
| JEL: | M13 M50 J63 O32 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:146&r=lab |
| By: | Pleijt, Alexandra M. de (London School of Economics and Utrecht University); Nuvolari, Alessandro (Sant’ Anna School of Advanced Studies); Weisdorf, Jacob (University of Southern Denmark, CEPR and CAGE) |
| Abstract: | This paper explores the effect of technological change on human capital formation during the early phases of England’s Industrial Revolution. Following the methodology used in Franck and Galor (2016), we consider the adoption of steam engines as an indicator of technical change, examining the correlation between industrialisation and human capital by performing cross-sectional regression analyses using county-level variation in the number of steam engines installed in England by 1800. Using exogenous variation in carboniferous rock strata as an instrument for the regional distribution of steam engines, we find that technological change as captured by steam technology significantly improved the average working skills of the labour force. In particular, places with more steam engines had lower shares of unskilled workers and higher shares of highly-skilled mechanical workmen deemed important by Mokyr (2005) in the Industrial Revolution. Technological change was, however, not conducive to elementary education. Literacy rates and school enrollment rates were not systematically different in places with more steam engines. This diverse response to new technology highlights the ambiguous effects of early industrialisation on the formation of human capital. |
| Keywords: | Economic Growth, Education, Human Capital, Industrialisation, Technological Progress, Steam Engines JEL Classification: J82, N33, O14, O33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:294&r=lab |
| By: | Christian Dustman (University College London); Francesco Fasani Fasani (Queen Mary); Tommaso Frattini (Università degli Studi di Milano); Luigi Minale (Universidad Carlos III de Madrid); Uta Schӧnberg (University College London) |
| Abstract: | This paper provides a comprehensive review and analysis of refugee migration, with emphasis on the current refugee crisis. After first reviewing the institutional framework laid out by the Geneva Convention for Refugees, we demonstrate that, despite numerous attempts at developing a common European asylum policy, EU countries continue to differ widely in interpretation and implementation. We then describe key features of the current refugee crisis and document the overall magnitudes and types of refugee movements, illegal border crossings, and asylum applications to EU member states. We next turn to the economics of refugee migrations, contrasting economic and refugee migrants, discussing the trade-offs between long-term asylum and temporary protection, and highlighting the economic advantages of increasingly coordinating the different national asylum policies. Finally, we illustrate the economic integration of past refugee migrants to EU countries and conclude with several policy recommendations. |
| Keywords: | asylum policy, asylum seekers, refugee crisis |
| JEL: | F22 J15 J61 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1616&r=lab |
| By: | Donna B. Gilleskie; Euna Han; Edward C. Norton |
| Abstract: | In this study we quantify the life-cycle effects of human and health capital on the wage distribution of females, with a focus on health measured by body mass. We use NLSY79 data on women followed annually up to twenty years during the time of their lives when average annual weight gain is greatest. We allow body mass to explain variation in wages contemporaneously conditional on observed measures of human capital and productivity histories (namely, education, employment experience, marital status, and family size) and dynamically over the life cycle through its impact on the endogenous histories of behaviors that determine wages. We find significant differences in the contemporaneous effect and the dynamic effect of body mass on wages, both across females of different races and over the distribution of wages. |
| JEL: | I12 J12 J13 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22430&r=lab |
| By: | Alan Gustman; Thomas Steinmeier; Nahid Tabatabai |
| Abstract: | This paper compares Social Security means tests that would reduce benefits for recipients who fall in the top quarter of the income distribution with means tests aimed at those in the top quarter of the wealth distribution. Both means tests would reduce the average benefits for the affected groups by about $5,000. The analysis is based on data from the Health and Retirement Study and covers individuals aged 69 to 79 in 2010. About 14.5 percent of retirees in this age group are both in the top quarter of income recipients and in the top quarter of wealth holders. Another 10.5 percent are top quarter income recipients, but not top quarter wealth holders; with an additional 10.5 percent top quarter wealth holders, but not top quarter income recipients. We find that a means test of Social Security based on income has substantially different distributional effects from a means test based on wealth. Moreover, there are substantial differences when a Social Security means test based on income is evaluated in terms of its effects on individuals arrayed by their wealth rather than their income. Similarly, a means test based on wealth will be evaluated quite differently by policy makers who believe that income is the appropriate basis for a means test than by those who believe that means tests should be based on wealth. |
| JEL: | D04 D31 D63 H55 I3 J14 J18 J32 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22424&r=lab |
| By: | Francesco Agostinelli; Matthew Wiswall |
| Abstract: | We develop a new estimator for the process of children's skill formation in which children's skills endogenously develop according to a dynamic latent factor structure. Rather than assuming skills are measured perfectly by a particular measure, we accommodate the variety of skills measures used in practice and allow latent skills to be measured with error using a system of arbitrarily located and scaled measures. For commonly estimated production technologies, which already have a known location and scale, we prove non-parametric identification of the primitive production function parameters. We treat the parameters of the measurement model as "nuisance" parameters and use transformations of moments of the measurement data to eliminate them, analogous to the data transformations used to eliminate fixed effects with panel data. We develop additional, empirically grounded, restrictions on the measurement process that allow identification of more general production technologies, including those exhibiting Hicks neutral total factor productivity (TFP) dynamics and non-constant returns to scale. We use our identification results to develop a sequential estimation algorithm for the joint dynamic process of investment and skill development, correcting for the biases due to measurement error in skills and investment. Using data for the United States, we estimate the technology of skill formation, the process of parental investments in children, and the adult distribution of completed schooling and earnings, allowing the production technology and investment process to freely vary as the child ages. Our estimates of high TFP and increasing returns to scale at early ages indicate that investments are particularly productive at these ages. We find that the marginal productivity of early investments is substantially higher for children with lower existing skills, suggesting the optimal targeting of interventions to disadvantaged children. Our estimates of the dynamic process of investment and skill development allow us to estimate heterogeneous treatment effects of policy interventions. We show that even a modest transfer of family income to families at ages 5-6 would substantially increase children's skills, completed schooling, and adult earnings, with the effects largest for low income families. |
| JEL: | C38 J13 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22442&r=lab |
| By: | Stefano Gagliarducci; M. Daniele Paserman |
| Abstract: | This paper uses data on bill sponsorship and cosponsorship in the U.S. House of Representatives to estimate gender differences in cooperative behavior. We employ a number of econometric methodologies to address the potential selection of female representatives into electoral districts with distinct preferences for cooperativeness, including regression discontinuity and matching. After accounting for selection, we find that among Democrats there is no significant gender gap in the number of cosponsors recruited, but women-sponsored bills tend to have fewer cosponsors from the opposite party. On the other hand, we find robust evidence that Republican women recruit more cosponsors and attract more bipartisan support on the bills that they sponsor. This is particularly true on bills that address issues more relevant for women, over which female Republicans have possibly preferences that are closer to those of Democrats. We interpret these results as evidence that cooperation is mostly driven by a commonality of interest, rather than gender per se. |
| JEL: | D70 D72 H50 J16 M50 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22488&r=lab |
| By: | Klemp, Marc (Brown University); Weisdorf, Jacob (University of Southern Denmark) |
| Abstract: | This research explores a fundamental cause of variation in human capital formation across families in the pre-modern period, as well as the mitigating effects of family-level economic prosperity. Exploiting a vast genealogy of English individuals in the 17th to the 19th centuries, the study proposes and tests the hypothesis that lower parental reproductive capacity positively affected the socioeconomic achievements of offspring. In particular, the research establishes an e↵ect of reproductive capacity on offspring human capital in the pre-modern era. Using the time interval between the date of marriage and the first birth as a measure of reproductive capacity, the research establishes that children of parents with lower fecundity were more likely to become literate and employed in skilled and high-wealth professions. The analysis finds that parental fecundity significantly affected the number of siblings, indicating that a trade-off between child quantity and quality was present in England during the industrial revolution and supporting leading theories of the origins of modern economic growth. Furthermore, it finds that the effect was weaker for the socioeconomic elite, who could offset the cost of additional children by raising total investment in offspring human capital. |
| Keywords: | Human Capital Formation, Child Quantity-Quality Trade-Off, Reproductive Capacity, Fecundity, Demographic Transition, Long-Run Economic Growth JEL Classification: J13, N30, O10 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:296&r=lab |