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on Labour Economics |
| By: | Adermon, Adrian (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Mikael (Department of Economics, University of Gothenburg; IFAU; IZA; UCLS; CESifo); Palme, Mårten (Department of economics, Stockholm University; IZA) |
| Abstract: | We study the importance of the extended family – or the dynasty – for the persistence in human capital inequality across generations. We use data including the entire Swedish population, linking four generations. This data structure enables us to – in addition to parents, grandparents and great grandparents – identify parents’ siblings and cousins, as well as their spouses, and the spouses’ siblings. We introduce and estimate a new parameter, which we call the intergenerational transmission of dynastic inequality. This parameter measures the between-dynasty variation in intergenerational transmission of human capital. We use three different measures of human capital: years of schooling, family income and an index of occupational status. Our results show that traditional parent-child estimates miss about half of the persistence across generations estimated by the extended model. |
| Keywords: | intergenerational mobility; extended family; dynasty; human capital |
| JEL: | I24 J62 |
| Date: | 2016–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2016_019&r=lab |
| By: | Evangelia Papapetrou (Bank of Greece); Pinelopi Tsalaporta (Bank of Greece) |
| Abstract: | This paper examines the structure and determinants of inter-industry wage differentials in Greece, along with the role of the rent-sharing and unobserved heterogeneity hypotheses, employing restricted least squares and quantile regression techniques with cluster robust standard errors at the firm level. To this end, a unique dataset, the European Union Structure of Earnings Survey (SES), is utilized. Data refer to 2010 when the first elements of the economic adjustment programme to deal with the chronic deficiencies of the Greek economy and restore sustainable public finances, competitiveness and set the foundation for long-term growth were beginning to be implemented. Results point to high wage dispersion across industries at the mean of the conditional wage distribution, even after controlling for personal and workplace characteristics. However, evidence for the unobserved heterogeneity hypothesis is rather scant. Therefore, there is room for efficiency wage or rent-sharing theories in accounting for a large part of inter-industry wage differentials tentatively implying that firm heterogeneity in the ability-to-pay matters more than employee unobservable attributes in the wage determination process. |
| Keywords: | Inter-industry wage differentials; Rent-sharing; Unobserved heterogeneity hypotheses; Greece |
| JEL: | J31 J16 J24 C21 M52 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:213&r=lab |
| By: | Gottfries, Nils (Department of Economics); Stadin, Karolina (Ratio) |
| Abstract: | We examine the matching process using monthly panel data for local labour markets in Sweden. We find that an increase in the number of vacancies has a very weak effect on the number of unemployed workers being hired: unemployed workers appear to be unable to compete for many available jobs. Vacancies are filled quickly and there is no (or only weak) evidence that high unemployment makes it easier to fill vacancies; hiring appears to be determined by labour demand while frictions and labour supply play small roles. These results indicate persistent mismatch in the Swedish labour market. |
| Keywords: | structural unemployment; frictional unemployment; matching function; labour demand; labour supply |
| JEL: | J23 J62 J63 J64 |
| Date: | 2016–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2016_014&r=lab |
| By: | Malte Sandner (University College London) |
| Abstract: | This paper presents the results of a randomized study of a home visiting programme implemented in Germany for low-income, first-time mothers. A major goal of the programme is to improve the participants’ economic self-sufficiency and family planning. I use administrative data from the German social security system and detailed telephone surveys to examine the effects of the intervention on maternal employment, welfare benefits, and household composition. The study reveals that the intervention decreased maternal employment and increased subsequent births. These results contradict those of previous studies from the United States, where home visiting programmes successfully increased employment and decreased fertility. Low employment incentives and generous welfare state arrangements for disadvantaged mothers with young children in Germany may explain the different results. |
| Keywords: | Early Childhood Intervention, Randomized Experiment, Fertility |
| JEL: | J13 J12 I21 H52 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:duh:wpaper:1606&r=lab |
| By: | Crépon, Bruno (Center for Research in Economics and Statistics (CREST); IZA; CEPR; Abdul Latif Jameel Poverty Action Lab); van den Berg, Gerard J. (Department of Economics, University of Bristol; IFAU; IZA; ZEW; CEPR; Abdul Latif Jameel Poverty Action Lab) |
| Abstract: | Active labor market policies are massively used with the objective being to improve labor market outcomes of individuals out of work. Many observational evaluation studies have been published. In this review, we critically assess policy effectiveness. We emphasize insights from recent randomized controlled trials. In addition, we examine policy effects that have not been the primary object of most of the past evaluations, such as anticipatory effects of advance knowledge of future treatments and equilibrium effects, and we discuss the actual implementation of policies. We discuss the importance of heterogeneity of programs and effects and examine the extent to which potential participants are interested in enrollment. We also discuss the assessment of costs and benefits of programs. |
| Keywords: | Active labor market program; evaluation; job search assistance; matching; subsidized jobs; training; unemployment; wages |
| JEL: | J08 J64 |
| Date: | 2016–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2016_017&r=lab |
| By: | Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri |
| Abstract: | In this paper we analyze the impact of an increase in the local supply of immigrants on firms’ outcomes, allowing for heterogeneous effects across firms according to their initial productivity. Using micro-level data on French manufacturing firms spanning the period 1995-2005, we show that a supply-driven increase in the share of foreign-born workers in a French department (a small geographic area) increased the total factor productivity of firms in that department. Immigrants were prevalently highly educated and this effect is consistent with a positive complementarity and spillover effects from their skills. We also find this effect to be significantly stronger for firms with low initial productivity and small size. The positive productivity effect of immigrants was also associated with faster growth of capital, larger exports and higher wages for natives. Highly skilled natives were pushed towards firms that did not hire too many immigrants spreading positive productivity effects to those firms too. Because of stronger effects on smaller and initially less productive firms, the aggregate effects of immigrants at the department level on average productivity and employment was small. |
| JEL: | E25 F22 J15 J61 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22852&r=lab |
| By: | Orsetta Causa; Mikkel Hermansen; Nicolas Ruiz; Caroline Klein; Zuzana Smidova |
| Abstract: | This paper delivers a broad assessment of income inequality in Denmark. As a necessary preamble to provide a basis for discussion, we start by contrasting Danish official inequality measures with those gathered by the OECD in an international context. We show that differences between these two sources are fully explained by differences in methodological choices. We then go beyond synthetic measures of inequality to deliver a granular assessment of income distribution and of the distributional impact of taxes and transfers; and on this basis we compare Denmark to other OECD countries. This approach is then used to quantify the distributional impact of some growth-enhancing reforms undertaken or recommended for Denmark, based on empirical evidence across OECD countries. Finally, we take a forward looking stance by discussing global forces shaping the rise in inequality, in particular skill-biased technological change and deliver a tentative scenario for Denmark in the wider OECD context. Les inégalités au Danemark : mesures, évolutions et impacts de réformes récentes Ce document de travail fournit une évaluation générale de l'inégalité de revenu au Danemark. En préambule afin de fournir une base aux discussions, ce papier commence par une comparaison entre les mesures d'inégalité officielles danoises et celles recueillies par l'OCDE dans un contexte international. Il est montré que les différences entre ces deux sources sont expliquées principalement par des différences de choix méthodologiques. Ensuite, au-delà des mesures synthétiques de l'inégalité, le document fournit une évaluation granulaire des inégalités et de l'impact redistributif des impôts et des transferts au Danemark, dans une perspective internationale. Cette approche est ensuite utilisée pour quantifier l'impact redistributif de certaines réformes pro-croissance. Enfin, les potentielles évolutions futures des inégalités au Danemark sont discutées, au regard des récentes tendances mondiales, en particulier le changement technologique et son influence sur la demande de compétences. |
| Keywords: | income distribution, inequality, structural policies |
| JEL: | D31 E61 I23 O15 |
| Date: | 2016–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1341-en&r=lab |
| By: | Marco Di Cataldo |
| Abstract: | Leaving the European Union will entail for UK regions losing access to the EU Cohesion Policy. Have EU funds been effective in the country, and what may be the consequences of an interruption of EU financial support to the UK’s poorer regions? This paper studies the impact of ‘Objective 1’ funding – the highest form of EU aid – in Cornwall and South Yorkshire, two of the UK’s most subsidised regions. We employ synthetic control, matching and difference-in-differences methodologies in order to assess the labour market and economic performance of the two regions. The results indicate that Cornwall and South Yorkshire performed better than counterfactual comparisons throughout the period in which they were classified as Objective 1. Unlike Cornwall, South Yorkshire lost Objective 1 eligibility in 2006 and this massively reduced its share of EU funds. Our findings indicate that, after 2006, South Yorkshire was unable to sustain the gains obtained in previous years. This suggests that while Structural Funds may be effectively improving socio-economic conditions of poorer regions, the performance of subsidised areas could be deeply affected by a reduction (or worse, an interruption) of EU aid. |
| Keywords: | EU Cohesion Policy, Objective 1, Brexit, synthetic control method, UK |
| JEL: | R11 O18 J60 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:120&r=lab |
| By: | Hyun Lee (University of Connecticut) |
| Abstract: | In this paper, I develop a novel two-country general equilibrium model of immigration and return migration with incomplete markets and heterogeneous agents. I use the model to quan-tify the short-run and the long-run macroeconomic impacts of permanently doubling the US H-1B visa quota. In the short-run, I find huge endogenous increase in visa application by less talented skilled foreigners, which increases the probability of obtaining the H-1B visa by only 11 percentage points. In the long-run, US experiences a modest gain in output per capita. Most importantly, I find that there exists a sizable mass of US native skilled workers who—despite the decrease in their equilibrium wage—gain in welfare because of their accumulated capital holdings. Furthermore, I highlight the importance of including return migration in a quantita-tive model of international labor mobility by showing that shutting down return migration in my model results in overestimating the magnitude of the welfare changes by more than sixfold for certain cohorts. JEL Classification: E13, E24, F22, O11, J61 Key words: Immigration, heterogeneous agent model, H-1B visa quota, welfare, transition path, human capital, return migration |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2016-35&r=lab |
| By: | Barbara J. Robles; Marysol McGee |
| Abstract: | The growing prevalence of alternative work arrangements has accelerated with the rapidly evolving digital platform transformations in local and global markets (Kenny and Zysman, 2015 and 2016). Although traditional (offline) informal paid work has always been a part of the labor sector (BLS-Contingent Worker Survey, 2005; GAO, 2015 and Katz and Krueger, 2016), the rise of online enabled paid work activities requires new approaches to measure this growing trend (Farrell and Greig, 2016; Gray et al, 2016; Sundararajan, 2016 and Schor, 2015). In the fourth quarter of 2015, the Federal Reserve Board conducted a nationally representative survey of adults 18 and older to track online and offline income-generating activities as well as their employment status during the six months prior to the surveys. Survey results indicate that 36 percent of respondents undertook informal paid work activities either as a complement to or as a substitute for more traditional and formal work arrangements. We explore the rationale behind respondents' participation in alternative work arrangements by setting questions that capture participant motives and attitudes towards informal offline and online paid work activities. Sixty five percent of qualified survey respondents indicate that a main reason for participating in informal work is to earn extra income. |
| Keywords: | Digital economy ; On-demand economy ; Platform economy ; Gig economy ; The collaborative economy ; Sharing economy ; Informal paid work ; Online and offline paid work ; Online fee for tasks ; Fee-for-tasks ; Supplemental income generation ; Income-patching |
| JEL: | J00 L8 O0 R00 H8 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2016-89&r=lab |
| By: | Caroline Klein; Louise Aggerstrøm Hansen |
| Abstract: | The generous Danish welfare state relies on a high degree of labour force participation both for financing and in order to ensure social cohesion. This underlines the need for getting work incentives right and improve the employability of vulnerable groups of workers, in particular migrants. Many benefit recipients also face high marginal tax rates for returning to work, creating a barrier for inclusion. Likewise, as the population ages, the need for longer working lives becomes a central aim. In Denmark, much has been done to keep older workers in the labour market, but there is further scope for reducing barriers to work for this group, including through the design of the pension system. Cost pressures at social institutions could be addressed by better reaping the effects on municipal reform, more coordination between different service providers, and open the market for social services, for instance old age care, for private suppliers under a strict quality monitoring framework. Concilier inclusion, incitations au travail et soutenabilité au Danemark Le système danois de protection sociale, généreux, repose sur des taux d’activité élevés, que ce soit pour son financement ou pour garantir la cohésion sociale. Aussi est-il d’autant plus nécessaire de trouver le bon système d’incitations au travail et d’améliorer l’employabilité des actifs les plus vulnérables, en particulier les migrants. Par ailleurs, de nombreux bénéficiaires de prestations sont imposés à des taux marginaux élevés lorsqu’ils retournent au travail, ce qui crée un obstacle à l’insertion. Dans le même ordre d’idée, avec le vieillissement de la population, la nécessité de prolonger la vie active constitue un objectif central. Beaucoup a été fait au Danemark pour maintenir les travailleurs seniors au travail, mais les barrières à l’emploi de ce groupe peuvent être encore réduites, notamment dans la conception même du système de retraite. Les contraintes financières des institutions de protection sociale pourraient être allégées en tirant un meilleur parti des effets de la réforme budgétaire sur les municipalités, en assurant une meilleure coordination entre les différents prestataires de services et en ouvrant le marché des services sociaux, notamment les soins aux personnes âgées, à des prestataires privés, moyennent un strict contrôle de la qualité des soins dispensés. |
| Keywords: | social assistance, labour markets, immigration, disability benefit reforms, pensions |
| JEL: | H53 H68 H75 J08 J23 J26 J32 J61 J65 |
| Date: | 2016–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1338-en&r=lab |
| By: | Ngai, Liwa Rachel; Pissarides, Christopher; Wang, Jin |
| Abstract: | China's hukou system imposes two main barriers to population movements. Agricultural workers get land to cultivate but run the risk of losing it if they migrate. Social transfers (education, health, etc.) are conditional on holding a local hukou. We show that the land policy is a more important barrier on industrialization. This distortion can be corrected by giving property rights to farmers. Social transfers dampen mainly urbanization. We calculate that the two policies together lead to overemployment in agriculture of 6.7 points, underemployment in the urban sector of 6.3 points and have practically no impact on the rural non-agricultural sector. |
| Keywords: | China hukou; employment allocations; land policy; mobility barriers; social subsidies |
| JEL: | J61 O18 R23 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11657&r=lab |
| By: | Gerard, Francois; Rokkanen, Miikka; Rothe, Christoph |
| Abstract: | A key assumption in regression discontinuity analysis is that units cannot affect the value of their running variable through strategic behavior, or manipulation, in a way that leads to sorting on unobservable characteristics around the cutoff. Standard identification arguments break down if this condition is violated. This paper shows that treatment effects remain partially identified under weak assumptions on individuals' behavior in this case. We derive sharp bounds on causal parameters for both sharp and fuzzy designs, and show how additional structure can be used to further narrow the bounds. We use our methods to study the disincentive effect of unemployment insurance on (formal) reemployment in Brazil, where we find evidence of manipulation at an eligibility cutoff. Our bounds remain informative, despite the fact that manipulation has a sizable effect on our estimates of causal parameters. |
| Keywords: | manipulation; Regression Discontinuity; Unemployment insurance |
| JEL: | C14 C21 C31 J65 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11668&r=lab |
| By: | Black, Sandra E. (Department of economics, University of Texas; IZA; NEBR); Grönqvist, Erik (IFAU - Institute for Evaluation of Labour Market and Education Policy); Öckert, Björn (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | We study the effect of birth order on personality traits among men using population data on enlistment records and occupations for Sweden. We find that earlier born men are more persistent, socially outgoing, willing to assume responsibility, and able to take initiative than later-borns. In addition, we find that birth order affects occupational sorting; first-born children are more likely to be managers, while later-born children are more likely to be self-employed. We also find that earlier born children are more likely to be in occupations that require leadership ability, social ability and the Big Five personality traits. Finally, we find a significant role of sex composition within the family. Later-born boys suffer an additional penalty the larger the share of boys among the older siblings. When we investigate possible mechanisms, we find that the negative effects of birth order are driven by post-natal environmental factors. We also find evidence of lower parental human capital investments in later-born children. |
| Keywords: | birth order; non-cognitive abilities; managerial skills |
| JEL: | I00 J10 |
| Date: | 2016–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2016_018&r=lab |
| By: | Fukunari Kimura (Graduate School of Economics, Keio University); Mateus Silva Chang (Graduate School of Economics, Keio University) |
| Abstract: | A number of developing East Asian countries have achieved both rapid economic growth and poverty reduction by effectively utilizing global value chains. An essential, but often neglected, condition for their economic development is smooth labor movements from the rural to urban sectors. This paper demonstrates that such labor movements have played an important role in the process of industrialization with global value chains. After conducting some international comparisons, we examine the case of Thailand for its massive labor movements until the mid-2000s as well as discussing stagnant moves in recent years. |
| Keywords: | Global Value Chains, Agglomeration, Lewis model, Informal Sector, Thailand |
| JEL: | F66 J0 O1 |
| Date: | 2016–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2016-022&r=lab |
| By: | Casey, Gregory; Galor, Oded |
| Abstract: | We provide evidence that lower fertility can simultaneously increase income per capita and lower carbon emissions, eliminating a trade-off central to most policies aimed at slowing global climate change. We estimate the effect of lower fertility on carbon emissions accounting for the fact that changes in fertility patterns affect carbon emissions through three channels: total population, the age structure of the population, and economic output. Our analysis proceeds in two steps. First, we estimate a version of the STIRPAT equation on an unbalanced yearly panel of cross-country data from 1950-2010. We demonstrate that the coefficient on population is nearly seven times larger than the coefficient on income per capita and that this difference is statistically significant. Thus, regression results imply that 1% slower population growth could be accompanied by an increase in income per capita of nearly 7% while still lowering carbon emissions. In the second part of our analysis, we use a recently constructed economic-demographic model of Nigeria to estimate the effect of lower fertility on carbon emissions accounting for the impacts of fertility on population growth, population age structure, and income per capita. The model was constructed to estimate the effect of lower fertility on economic growth, making it well-suited for this application. We find that by 2100 C.E., moving from the medium to the low variant of the UN fertility projection leads to 35% lower yearly emissions and 15% higher income per capita. These results strongly suggest that population policies should be a part of the approach to combating global climate change. |
| JEL: | J11 O40 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11659&r=lab |