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on Labour Economics |
| By: | Erling Barth; James Davis; Richard B. Freeman |
| Abstract: | We augment standard ln earnings equations with variables reflecting unmeasured attributes of workers and measured and unmeasured attributes of their employer. Using panel employee-establishment data for US manufacturing we find that the observable employer characteristics that most impact earnings are: number of workers, education of co-workers, capital equipment per worker, industry in which the establishment produces, and R&D intensity of the firm. Employer fixed effects also contribute to the variance of ln earnings, though substantially less than individual fixed effects. In addition to accounting for some of the variance in earnings, the observed and unobserved measures of employers mediate the estimated effects of individual characteristics on earnings and increasing earnings inequality through the sorting of workers among establishments. |
| JEL: | J0 J01 J24 J3 J40 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22512&r=lab |
| By: | Amuedo-Dorantes, Catalina (San Diego State University); Antman, Francisca M. (University of Colorado, Boulder) |
| Abstract: | This paper explores the labor market and schooling effects of the Deferred Action for Childhood Arrivals (DACA) initiative, which provides work authorization to eligible immigrants along with a temporary reprieve from deportation. The analysis relies on a difference-in-differences approach that exploits the discontinuity in program rules to compare eligible individuals to ineligible, likely undocumented immigrants before and after the program went into effect. To address potential endogeneity concerns, we focus on youths that likely met DACA's schooling requirement when the program was announced. We find that DACA reduced the probability of school enrollment of eligible higher-educated individuals, as well as some evidence that it increased the employment likelihood of men, in particular. Together, these findings suggest that a lack of authorization may lead individuals to enroll in school when working is not a viable option. Thus, once employment restrictions are relaxed and the opportunity costs of higher-education rise, eligible individuals may reduce investments in schooling. |
| Keywords: | undocumented immigrants, work authorization |
| JEL: | J15 J61 J2 J3 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10144&r=lab |
| By: | Rzepka, Sylvi |
| Abstract: | In a context of demographic change, European governments seek ways to keep the skill set of the labor force flexible. One option to achieve this goal is widening access to college education to non-traditional students, such as those vocationally trained. Assessing whether this is a promising approach, I investigate what kind of labor market returns German non-traditional students can expect after enrolling in college rather than continuing with a vocational training-based career. Relying on the Adult Cohort of the National Educational Panel Study I use propensity score-adjusted regressions to estimate the average treatment eff ect on those that enroll in college based on vocational qualifications. The findings suggest high opportunity costs because treated individuals have an up to 67 percent lower employment probability while being enrolled. After this initial phase individuals exhibit a similar employment level and job stability as those that continue with a vocational training-based career. All treated individuals take up more prestigious jobs. Enrolling in college is on average associated with at most 43 percent higher life-time earnings compared to earnings when continuing with a vocational training-based career. However, recouping the opportunity costs of enrolling in college is a lengthy and risky process. |
| Abstract: | Aufgrund des aktuellen demographischen Wandels, der mit einem Fachkräftemangel einhergeht, sucht die Politik nach Strategien, das Qualifikationsniveau der Erwerbsbevölkerung den neuen Herausforderungen anzupassen. Die Öffnung des tertiären Bildungsbereichs für Personen ohne Abitur stellt eine mögliche Maßnahme dar. Dieser Artikel untersucht, ob es sich für Individuen in Deutschland auszahlt, mit einer beruflichen Qualifikation ein Studium aufzunehmen im Vergleich zu Personen, die ihre ausbildungsbasierte Laufbahn fortsetzen. Ich schätze hierfür die Auswirkungen einer Immatrikulation an einer Hochschule auf die berufliche Laufbahn mit Hilfe der Erwachsenenstichprobe des Nationale Bildungspanel sowie Propensity Score und Regressionsmethoden. Die Ergebnisse deuten kurzfristig auf hohe Opportunitätskosten der beruflich qualifizierten Studierenden hin, da sie zu Beginn eine bis zu 67 Prozent niedrigere Wahrscheinlichkeit haben, erwerbstätig zu sein, als jene, die eine ausbildungsbasierte Karriere verfolgen. Langfristig erreichen sie jedoch dasselbe Niveau an Erwerbstätigkeit und Arbeitsplatzstabilität wie jene, die eine ausbildungsbasierte Laufbahn einschlagen. Zudem arbeiten beruflich Qualifizierte nach dem Studium in prestigeträchtigeren Berufen und erzielen maximal 43 Prozent höhere Lebenseinkommen. Die anfänglichen Opportunitätskosten auszugleichen dauert allerdings sehr lange und ist risikobehaftet. |
| Keywords: | Educational choice,vocational training,tertiary education,occupational mobility |
| JEL: | I21 J24 J62 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:633&r=lab |
| By: | Carlsson, Mikael (Uppsala University); Westermark, Andreas (Research Department, Central Bank of Sweden) |
| Abstract: | We show that in micro data, as well as in a search and matching model with endogenous separations and rigid wages, separations and hence employment volatility are non-neutral to wage rigidities of incumbent workers. In contrast to when all wages are flexible, the standard deviation of unemployment in a model with rigid wages for incumbent workers (only) matches the standard deviation in the data. Thus, the degree of wage rigidity for newly hired workers is not a sufficient statistic for determining the effect of wage rigidities on macroeconomic outcomes in this class of models. |
| Keywords: | Search and matching; Unemployment volatility puzzle; Wage rigidities; Job Destruction |
| JEL: | E30 J63 J64 |
| Date: | 2016–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:rbnkwp:0326&r=lab |
| By: | Vahé Nafilyan |
| Abstract: | Combining the longitudinal dimension and the retrospective calendar of the French Labour Force Survey (2003-2011), we analyse the labour market transitions and outcomes of workers who were dismissed for economic reasons. This study analyses the re-employment patterns of displaced workers and their earnings losses, as is common in the literature, as well as the consequences of displacement for other aspects of job quality. Results suggest that the cost of involuntary job loss is important and goes beyond the fall in earnings. Workers who are made redundant face relatively long spells of non-employment before getting back to work and their new jobs tend to be of lower quality than their pre-displacement jobs along a number dimensions. Re-employed displaced workers suffer a monthly wage penalty of 15-20% and are, on average, nine times as likely to lose their job again as are workers who have not been made redundant. In addition, displaced workers are more likely to work part-time once re-employed, and to have fewer paid holidays and lower job authority than had they not been dismissed, though these differences tend to fall over time. Dans cette étude, nous analysons les transitions et les performances sur le marché du travail des salariés qui ont été licenciés pour motif économique. Pour ce faire, nous utilisons la dimension longitudinale de l’Enquête Emploi en continu (2003-2011) combinée avec le calendrier rétrospectif. Nous examinons les perspectives de réemploi des employés licenciés pour motif économique ainsi que les conséquences de la perte d'emploi sur le salaire et d'autres indicateurs de la qualité de l'emploi. L'analyse montre que les conséquences de la perte involontaire d'emploi sont importantes et ne se limitent pas à une perte de revenus. Les employés licenciés pour motif économique non seulement les subissent une longue période de non-emploi, mais lorsqu’ils sont réemployés, la qualité de leur emploi généralement moindre. Une fois réemployés, ils subissent une perte de salaire d'environ 15-20% et ont neuf fois plus de chance de perdre à nouveau leur emploi que s'ils n'avaient pas été licencies. De plus, ils ont une plus forte probabilité de travailler à temps partiel, ont moins de vacances et de responsabilités, bien que la différence s'amenuise au cours du temps. |
| Keywords: | Unemployment duration, job search, displaced, dismissed, layoffs |
| JEL: | J63 J64 J65 J68 |
| Date: | 2016–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:194-en&r=lab |
| By: | Fackler, Daniel; Hank, Eva |
| Abstract: | Using survey data from the German Socio-Economic Panel (SOEP), this paper analyses to what extent alternative income sources, reactions within the household context, and redistribution by the state attenuate earnings losses after job displacement. Applying propensity score matching and fixed effects estimations, we find high individual earnings losses after job displacement and only limited convergence. Income from selfemployment slightly reduces the earnings gap and severance payments buffer losses in the short run. On the household level, we find substantial and rather persistent losses in per capita labour income. We do not find that increased labour supply by other household members contributes to the compensation of the income losses. Most importantly, our results show that redistribution within the tax and transfer system substantially mitigates income losses of displaced workers both in the short and the long run whereas other channels contribute only little. |
| Keywords: | job displacement,plant closure,household income,SOEP |
| JEL: | D10 I38 J63 J65 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:282016&r=lab |
| By: | Lordan, Grace; Pischke, Jörn-Steffen |
| 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: | Gender; job content; Occupational choice; preferences |
| JEL: | J16 J4 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11434&r=lab |
| By: | Marcelo Arbex (Department of Economics, University of Windsor); Dennis O'Dea (Department of Economics, University of Washington); David Wiczer (Research Division, Federal Reserve Bank of St. Louis) |
| Abstract: | We introduce a complex network into a search model in which workers find jobs through their network or directly from firms. This framework links heterogeneity in network position to heterogeneity in wage-employment dynamics: better-connected workers climb the job ladder faster, drawing more frequently from the network offer distribution which stochastically dominates the direct-search distribution. The mean- field approach allows a tractable, recursive formulation and our calibrated version is consistent with several empirical findings. Further, we present new evidence consistent with our model: Job-to-job switches use networks more frequently at higher rungs of the ladder. |
| Keywords: | Labor Markets; Social networks; Job search; Unemployment; Wages dispersion. |
| JEL: | D83 D85 E24 J31 J64 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:wis:wpaper:1606&r=lab |
| By: | Christian Dudel (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | A key concern about population aging is the decline in the size of the economically active population. Working longer is a potential remedy. However, little is known about the length of working lives. We use the US Health and Retirement Study for 1992-2011 and multistate life tables to analyze working life expectancy at age 50 by gender, race/ethnicity, and education. Despite declines of 1-2 years following the Great Recession, in 2008-2011 American men aged 50 still spent 13 years, or two-fifths of their remaining life, working; while American women of the same age spent 11 years, or one-third of their remaining life, in employment. At age 50, the working life expectancy of college-educated individuals is twice as long as that of individuals with no high school education, and the working life expectancy of whites is one-third longer than that of blacks or Hispanics. These differentials are driven by labor force attachment, not mortality. Although educational differences have been stable over the past 20 years, racial differences started changing after the onset of the Great Recession. Our results show that while Americans generally work longer than people in other countries, there is considerable sub-population heterogeneity. We also find that the time trends are fluctuating, which may prove troublesome as the population ages. Policies targeting the weakest performing groups may be needed to increase the total population trends. |
| JEL: | J1 Z0 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2016-006&r=lab |
| By: | Pauline Leung; Alexandre Mas |
| Abstract: | We examine whether the recent expansions in Medicaid from the Affordable Care Act reduced “employment lock” among childless adults who were previously ineligible for public coverage. We compare employment in states that chose to expand Medicaid versus those that chose not to expand, before and after implementation. We find that although the expansion increased Medicaid coverage by 3.0 percentage points among childless adults, there was no significant impact on employment. |
| JEL: | H0 J0 J18 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22540&r=lab |
| By: | Teresa C. Fort |
| Abstract: | This paper provides direct empirical evidence on the relationship between technology and firms’ global sourcing strategies. Using new data on U.S. firms’ decisions to contract for manufacturing services from domestic or foreign suppliers, I show that changes in firm use of communication technology between 2002 to 2007 can explain almost one quarter of the increase in fragmentation over the period. The effect of firm technology also differs significantly across industries; in 2007, it is 20 percent higher, relative to the mean, in industries with production specifications that are easier to codify in an electronic format. These patterns suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing. The larger impact on domestic fragmentation highlights its importance as an alternative to offshoring, and can be explained by complementarities between technology and worker skill. High technology firms and industries are more likely to source from high human capital countries, and the differential impact of technology across industries is strongly increasing in country human capital. |
| JEL: | F14 F23 L23 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22550&r=lab |
| By: | Bicakova, Alena (CERGE-EI); Kaliskova, Klara (CERGE-EI) |
| Abstract: | The Czech Republic is a country with a strong attachment of women to the labor market, but with one of the longest paid family leaves, which is often followed by a spell of unemployment. Using a difference-in-differences methodology, we study the impact of two reforms of the duration of the parental allowance on the labor market status of mothers 2 to 7 years after childbirth. While the 1995 reform prolonged the allowance from 3 to 4 years, the 2008 reform allowed some parents to shorten the duration of the allowance to only 2 or 3 years with an equivalent total monetary amount. The impact of the reforms on the length of women's career breaks following childbirth is substantial. |
| Keywords: | family leave, female labor supply, unemployment, policy evaluation |
| JEL: | J13 J18 J22 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10149&r=lab |
| By: | Dyballa, Katharina (TU Dortmund); Kraft, Kornelius (TU Dortmund) |
| Abstract: | Contrary to previous literature we hypothesize that labor's interest may well – like that of shareholders – aim at securing the long-run survival of the firm. Consequently, employee representatives on the supervisory board could well have an interest in increasing incentive-based compensation to avoid management's excessive risk taking and short-run oriented decisions. We compile unique panel data on executive compensation over the periods 2006 to 2011 for 405 listed companies and use a Hausman-Taylor approach to estimate the effect of codetermination on the compensation design. Finally, codetermination has a significantly positive effect on performance-based components of compensation, which supports our hypothesis. |
| Keywords: | executive compensation, board representation, principal-agent theory, corporate finance, Hausman-Taylor |
| JEL: | J52 L20 G32 M12 C33 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10153&r=lab |
| By: | Müller, Steffen; Fackler, Daniel; Stegmaier, Jens |
| Abstract: | To assess to what extent collective job displacements can be regarded as unanticipated exogenous shocks for affected employees, we analyze plant-level employment patterns before bankruptcy, plant closure without bankruptcy, and mass layoff. Utilizing administrative data covering all West German private sector plants, we find no systematic employment reductions prior to mass layoffs, a strong and long-lasting reduction prior to closures, and a much shorter shadow of death preceding bankruptcy. Our analysis of worker flows underlines that bankruptcies seem to struggle for survival while closures follow a shrinking strategy. We conclude that the scope of worker anticipation of upcoming job loss is smallest for mass layoffs and largest for closures without bankruptcy. |
| Keywords: | job displacement,shadow of death,plant closure,bankruptcy,mass layoff |
| JEL: | D22 J65 L2 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:272016&r=lab |
| By: | Lafourcade, Pierre; Gerali, Andrea; Brůha, Jan; Bursian, Dirk; Buss, Ginters; Corbo, Vesna; Haavio, Markus; Håkanson, Christina; Hlédik, Tibor; Kátay, Gábor; Kulikov, Dmitry; Lozej, Matija; Micallef, Brian; Papageorgiou, Dimitris; Vanhala, Juuso; Zeleznik, Marin |
| Abstract: | This paper revisits the empirical relationship between unemployment and output, and its evolution following the financial crisis of 2008, with the aim of drawing potential consequences for labour market modelling strategies in place within the European System of Central Banks (ESCB). First, the negative correlation between output and unemployment (Okun’s law) at cyclical frequencies is found to be a robust feature of macro data across time, countries and identification schemes. Focusing on the euro area, the financial distress seems to have altered the dynamics of output and unemployment mainly at lower frequencies, interpreted as trend developments by the statistical filters used in the analysis. Looking at the implications for modelling strategies, we propose an extension of the standard labour search and matching model in which financial frictions impinge directly on the labour market rather than on the capital market, opening the way to protracted and lagged response of employment after a “financial” crisis. In terms of policy implications, the importance of the interplay between financial and labour market frictions in trend developments should be read as strong support for an ambitious structural reform agenda in Europe, so as to make our labour (and goods) markets more flexible and resilient. JEL Classification: E1, E32, J64 |
| Keywords: | financial crisis, labour market, macroeconomic models of the labour market, output, unemployment |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:2016175&r=lab |
| By: | Nyström, Kristina (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm) |
| Abstract: | This paper studies which grading systems students choose for their degree projects if they are to choose, and what the motivational factors behind making this choice are. Furthermore, students’ perception the importance of grades and the quality of their degree project for their competitiveness in the labor market are studied. Student record data and a survey dataset to students conducting their degree project at the Department of Industrial Economics and Management at KTH Royal Institute of Technology in Stockholm, Sweden during 2016 are used to study students grading scale choices. During spring semester 2016 students were able to choose between the Pass/fFail or A-F grading scale for their degree project which implies that the data reflect students revealed preferences for grading scale. Data from study record transcripts show that 55 percent selected the two-step (Pass/Fail) grading scale, while 45 percent of the students selected the seven-step grading scale (A-F). The GPA score among students choosing the Pass/Fail scale is somewhat higher compared to students choosing A-F grading scale. Among the empirical findings it could be mentioned that perceptions of how a Pass/Fail grading scale promotes good learning and to what extent it motivates students to do a good job on the degree project are rather dispersed among students. What they do agree on is that the Pass/Fail grading system reduces stress. |
| Keywords: | grading system; degree project; labor market entry |
| JEL: | A20 J60 |
| Date: | 2016–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthind:2016_015&r=lab |