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on Labour Economics |
| By: | Kyyrä, Tomi (VATT, Helsinki); Pesola, Hanna (VATT, Helsinki) |
| Abstract: | This paper analyzes the effects of unemployment insurance (UI) benefits on unemployment exits and subsequent labor market outcomes. We exploit a piecewise linear relationship between the previous wage and UI benefits in Finland to identify the causal effects of the benefit level by using a regression kink design. According to our findings, higher benefits lengthen nonemployment spells and decrease time spent in part-time unemployment, and thus result in more full-time unemployment. Also the re-employment probability and post-unemployment wage are negatively affected. The results for the duration of the first post-unemployment job are not conclusive, but in total both employment and earnings in the two years following the beginning of the unemployment spell decrease with higher benefits. |
| Keywords: | unemployment duration, job match quality, regression kink design, unemployment insurance |
| JEL: | J64 J65 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10484&r=lab |
| By: | Jansen, Marcel; García-Pérez, J. Ignacio; Bentolila, Samuel |
| Abstract: | Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-ofthe- art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skills and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least one month these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labour market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows. |
| Keywords: | Spain; survival probability; duration model; great recession; Long-term unemployment |
| JEL: | C41 J65 J64 J63 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:24122&r=lab |
| By: | Hippolyte d'Albis (Paris School of Economics); Paula E. Gobbi (Université Catholique de Louvain); Angela Greulich (Centre d'Economie de la Sorbonne and INED) |
| Abstract: | This paper shows that differences in fertility across European countries mainly emerge due to fewer women having two children in low fertility countries. It further suggests that childcare services are an important determinant for the transition to a second child to occur. The theoretical framework we propose suggests that: (i) in countries where childcare coverage is low, there is a U-shaped relationship between a couple's probability of having a second child and the woman's potential wage while (ii) in countries with easy access to childcare, this probability is positively related with the woman's potential wage. Data from the European Union Statistics on Income and Living Conditions (EU-SILC) confirm these implications when estimating a woman's probability of having a second child as a function of education. This implies that middle income women are the most affected ones by the lack of access to formal and subsidized childcare |
| Keywords: | Childcare; Education; Fertility; Female Employment |
| JEL: | J11 J13 J16 O11 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:17009&r=lab |
| By: | Inmaculada García-Mainar (University of Zaragoza); Víctor M. Montuenga-Gómez (University of Zaragoza) |
| Abstract: | Over-education may arise from the voluntary decisions of individuals to acquire more qualifications than those required in the workplace. In these cases, the mismatch may have a signalling role that allows workers to compensate for the lack of certain other skills, or to gain access to the labour market. The aim of this paper is to analyse the signalling role of over-education in Spain, a country characterised by a strongly-segmented labour market with high unemployment levels, and a large number of over-educated individuals. Using micro data for a representative sample of Spanish workers, we use three different methods to test the signalling value of over-education. The results obtained provide evidence that educational mismatch plays a clear signalling role. |
| Keywords: | human capital, educational mismatch, rate of return, signalling |
| JEL: | D82 I26 J24 J28 J62 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:zar:wpaper:dt2017-03&r=lab |
| By: | Brewer, Mike; Cribb, Jonathan |
| Abstract: | Time-limited in-work credits are cheaper, and more targeted, than conventional in-work credits, but are thought to have small to zero long-term impacts. We study two time-limited in-work credits in- troduced in the mid-2000s in the UK and find they reduced welfare participation and increased employment. Both policies increased job retention once recipients were in work and boosted employment even after the payments were stopped. Conditioning on hours of work was important. Paying a credit to those working 16+ hours a week only increased part-time work, while conditioning on full-time work reduced part-time work and increased full-time work. |
| Date: | 2017–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2017-01&r=lab |
| By: | Arpaia, Alfonso (European Commission); Cardoso, Pedro (European Commission, Directorate Employment, Social Affairs and Inclusion); Kiss, Aron (European Commission); Van Herck, Kristine (European Commission, Directorate Employment, Social Affairs and Inclusion); Vandeplas, Anneleen (European Commission, Directorate Employment, Social Affairs and Inclusion) |
| Abstract: | This paper analyses some macroeconomic implications of the statutory minimum wage in the member states of the European Union and assesses how its institutional design influences these outcomes. First, the paper looks at the institutional dimensions of statutory minimum wage setting. On the basis of this information, an indicator of institutional stringency is built to characterise the degree of predictability of minimum wage setting. Second, it explores the impact of minimum wage changes on employment, prices, consumption, and poverty. |
| Keywords: | minimum wage, statutory minimum wage, composite indicator, poverty, in-work poverty, European Union |
| JEL: | J38 J52 E24 I32 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp124&r=lab |
| By: | Joanne Lee; Karen Needels; Walter Nicholson |
| Abstract: | This study used longitudinal survey data to investigate how unemployment insurance recipients in California changed their job search strategies and ways of coping with financial hardships during a six- to nine-month period after they started receiving benefits. |
| Keywords: | unemployment, insurance, California, benefits, longitudinal, survey |
| JEL: | J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:982c8e2b780e479ea249e7b059bb1853&r=lab |
| By: | Jahn, Elke J. (University of Bayreuth); Neugart, Michael (Darmstadt University of Technology) |
| Abstract: | Social networks may affect workers' labor market outcomes. Using rich spatial data from administrative records, we analyze whether the employment status of neighbors influences the employment probability of a worker who lost his job due to a plant closure and the channels through which this occurs. Our findings suggest that a ten percentage point higher neighborhood employment rate increases the probability of having a job six months after displacement by 0.9 percentage points. The neighborhood effect seems to be driven not by social norms but by information transmission at the neighborhood level, and additionally by networks of former co-workers who also lost their jobs due to plant closure. |
| Keywords: | social networks, job search, neighborhood, employment, wages, plant closures |
| JEL: | J63 J64 R23 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10480&r=lab |
| By: | Olivetti, Claudia (Boston College); Petrongolo, Barbara (Queen Mary, University of London) |
| Abstract: | We draw lessons from existing work and our own analysis on the effects of parental leave and other interventions aimed at aiding families. The outcomes of interest are female employment, gender gaps in earnings and fertility. We begin with a discussion of the historical introduction of family policies ever since the end of the nineteenth century and then turn to the details regarding family policies currently in effect across high-income nations. We sketch a framework concerning the effects of family policy to motivate our country- and micro-level evidence on the impact of family policies on gender outcomes. Most estimates of the impact of parental leave entitlement on female labor market outcomes range from negligible to weakly positive. The verdict is far more positive for the beneficial impact of spending on early education and childcare. |
| Keywords: | parental leave, childcare, family policies, gender gaps |
| JEL: | J13 J16 J18 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10505&r=lab |
| By: | Palokangas, Tapio K. (University of Helsinki) |
| Abstract: | I examine the effects of globalization in countries where the employed workers support the unemployed and the governments control wages by regulating the workers' relative bargaining power. I use a general oligopolistic equilibrium model of two integrated countries with two inputs: labor and potentially footloose capital. National competition for jobs by labor market deregulation creates a distortion with suboptimal wages. The mobility of capital aggravates that distortion by increasing the wage elasticity of labor demand, which decreases wages and welfare even further. The delegation of labor market regulation to an international agent eliminates that distortion, increasing wages and aggregate welfare. |
| Keywords: | international trade, footloose capital, labor market regulation, capital market liberalization |
| JEL: | C78 F16 F68 J52 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10468&r=lab |
| By: | Muller, Paul (Department of Economics, School of Business, Economics and Law, Göteborg University); van der Klaauw, Bas (VU University Amsterdam and Tinbergen Institute); Heyma, Arjan (SEO Economic Research) |
| Abstract: | We test whether different empirical methods give different results when evaluating job-search assistance programs. Budgetary problems at the Dutch unemployment insurance (UI) administration in March 2010, caused a sharp drop in the availability of these programs. Using administrative data provided by the UI administration, we evaluate the effect of the program using (1) the policy discontinuity as a quasiexperiment, (2) conventional matching methods, and (3) the timing-of-events model. All three methods use the same data to consider the same program in the same setting, and also yield similar results. The program reduces job finding during the first six months after enrollment. At longer durations, the quasi-experimental estimates are not significantly different from zero, while the non-experimental methods show a small negative effect. |
| Keywords: | empirical policy evaluation; job-search assistance; unemployment duration |
| JEL: | C14 C31 J64 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0691&r=lab |
| By: | Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | In the late 1940s, Ragnar Frisch published two articles in Norwegian that constitute a pioneering attempt to apply welfare economics to a problem of economic policy. The main contention of the articles is that there exists a fundamental externality in the labour market because the marginal productivity of labour depends both on input in the individual unit and on total labour use in the economy. While inspired by the problems of postwar reconstruction, Frisch came to regard it as a general problem in a decentralized economy, and he explores its consequences for wage and tax policy. While Frisch attached great importance to the analysis, it has received little attention in the subsequent literature. |
| Keywords: | Economic policy; wage; tax policy |
| JEL: | E20 |
| Date: | 2017–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2017_001&r=lab |
| By: | Albrecht, James (Georgetown University); Robayo-Abril, Monica (World Bank); Vroman, Susan (Georgetown University) |
| Abstract: | We extend the Diamond-Mortensen-Pissarides model of equilibrium unemployment to incorporate public-sector employment. We calibrate our model to Colombian data and analyze the effects of public-sector wage and employment policy on the unemployment rate, on the division of employment between the private and public sectors, and on the distributions of wages in the two sectors. |
| Keywords: | public sector, search and matching, wages, unemployment |
| JEL: | J45 J64 D83 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10467&r=lab |
| By: | Cuéllar-Martín, Jaime; Martín-Román, Ángel L.; Moral, Alfonso |
| Abstract: | The main goal of the present work is to split effective unemployment into two components, one dealing with the natural rate of unemployment, and another with cyclical unemployment. With this purpose in mind, an estimation of stochastic cost frontiers is performed where natural unemployment is identified as a lower limit and cyclical unemployment as the deviation of effective unemployment with regard to that limit. To achieve this purpose, information is used from the 17 autonomous communities in Spain over the period spanning 1982 to 2013. Results evidence a greater importance of the natural component as the principal determinant of effective unemployment at a regional scale. The latter part of the work compares stochastic frontier estimations to those obtained when applying univariate filters, which are in widespread use in economic literature. The main conclusion to emerge is that the proposed decomposition modifies the weight distribution amongst the various types of unemployment, increasing the importance of cyclical unemployment. This finding has significant implications for economic policy, such as the existence of a greater margin for aggregate demand policies in order to reduce cyclical unemployment, particularly during growth periods. |
| Keywords: | Natural Unemployment, Cyclical Unemployment, Labor Market, Stochastic Frontiers, Policy Modeling |
| JEL: | E24 J08 J64 R23 |
| Date: | 2017–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76503&r=lab |
| By: | Keith McLeod; Sylvia Dixon; Sarah Crichton (The Treasury) |
| Abstract: | The Youth Service is a programme administered by the Ministry of Social Development, designed to encourage and assist disadvantaged youth to stay in education and achieve qualifications. There are three main strands of the programme. The Youth Service (YS) is provided to recipients of the Youth Payment (YP) and Young Parent Payment (YPP) benefits, while the YS:NEET service is aimed at disadvantaged young people at risk of becoming detached from employment, education and training. This report focusses on the YP and YPP strands. Community organisations are contracted to provide mentoring and support for youth participating in the service. This is complemented by other changes to youth benefits intended to encourage continued study, including; obligations to participate in the service and in formal study, financial incentives, sanctions for failing to meet obligations, and access to childcare payments. |
| Keywords: | Youth transitions; youth mentoring; social welfare programmes; unemployment; employment programmes |
| JEL: | I38 J65 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nzt:nztwps:16/07&r=lab |