|
on Labour Economics |
| By: | Brown, Alessio J. G.; Kohlbrecher, Britta; Merkl, Christian; Snower, Dennis J. |
| Abstract: | In the standard macroeconomic search and matching model of the labor market, there is a tight link between the quantitative effects of (i) aggregate productivity shocks on unemployment and (ii) unemployment benefits on unemployment. This tight link is at odds with the empirical literature. We show that a two-sided model of labor market search where the household and firm decisions are decomposed into job offers, job acceptances, firing, and quits can break this link. In such a model, unemployment benefits affect households' behavior directly, without having to run via the bargained wage. A calibration of the model based on U.S. JOLTS data generates both a solid amplification of productivity shocks and a moderate effect of benefits on unemployment. Our analysis shows the importance of investigating the effects of policies on the households' work incentives and the firms' employment incentives within the search process. |
| Keywords: | unemployment benefits,search and matching,aggregate shocks,macro models of the labor market |
| JEL: | E24 E32 J63 J64 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:082017&r=lab |
| By: | Jason M. Fletcher (Yale University); Stefanie Schurer (The University of Sydney) |
| Abstract: | We test whether adverse childhood experiences – exposure to parental maltreatment and its indirect effect on health – are associated with age 30 personality traits. We use rich longitudinal data from a large, representative cohort of young US Americans and exploit differences across siblings to control for the confounding influences of shared environmental and genetic factors. We find that maltreatment experiences are significantly and robustly associated with neuroticism, conscientiousness, and openness to experience, but not with agreeableness and extraversion. High levels of neuroticism are linked to sexual abuse and neglect; low levels of conscientiousness and openness to experience are linked to parental neglect. The estimated associations are significantly reduced in magnitude when controlling for physical or mental health, suggesting that adolescent health could be one important pathway via which maltreatment affects adulthood personality. Maltreatment experiences, in combination with their health effects, explain a significant fraction of the relationship between adulthood conscientiousness and earnings or human capital. Our findings provide a possible explanation for why personality traits are important predictors of adulthood labor market outcomes. |
| Keywords: | human capital, non-cognitive skills, Big Five personality traits, adverse childhood experiences, maltreatment, siblings-fixed effects, add health |
| JEL: | J24 J13 I00 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-021&r=lab |
| By: | Tadashi Morita (Faculty of Economics, Kindai University); Yukiko Sawada (Faculty of Economics, University of Tokyo); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University) |
| Abstract: | This paper constructs a model of subsidy competition for manufactur- ing firms under labor market imperfections. Because subsidies affect the distribution of firms, they influence unemployment rates, the number of firms, and welfare. In our model, governments always provide inefficiently high subsidy rates to manufacturing firms. When labor market frictions are high, subsidy competition is beneficial, although subsidies under sub- sidy competition are inefficiently high. We show that an increase in labor market frictions always lowers welfare, whereas trade liberalization always improves welfare. Finally, we find that a rise in labor market friction in a country raises the equilibrium subsidy rate, affects unemployment rates, and lowers welfare. |
| Keywords: | elastic Labor market friction, Unemployment, Subsidy competition |
| JEL: | F10 J64 R10 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1707&r=lab |
| By: | Ritzen, Jo (IZA and Maastricht University); Kahanec, Martin (Central European University) |
| Abstract: | A sustainable EU Immigration Policy aims to contribute to a vibrant European society through more effectively and selectively managed immigration from outside the EU, more attention to integration of immigrants, more rooting out of discrimination, more asylum centres close to areas of conflict, and more attention to education and training in areas where refugees have settled. Immigration from outside the EU is often opposed, mainly because of sluggish integration combined with tensions in actual and perceived values between immigrants and native populations. These divisions affect not only the first generation of immigrants, but also those that follow. We propose a sustainable, win-win policy fostering the benefits of immigration and in line with the preferences of EU citizens holding not only positive but also more sceptical views on immigration while relying on adherence to human rights. The proposed policy is directed towards more effectively and selectively managed immigration based on the employability potential of the immigrant, combined with more attention to integration and stricter measures to fight discrimination. We also acknowledge the need for a robust policy framework to cope with asylum and abrupt large-scale waves of refugees wanting to enter the EU, resulting from conflicts, natural catastrophes, and other sudden or violent events. We propose screening of asylum-seekers close to for refugee camps surrounding countries they have fled to determine migrants' refugee status, channelling them either as economic migrants, selected on their employability, or through a humanitarian scheme that respects the EU's multilateral and bilateral commitments. Such a humanitarian scheme would be embedded into education-cooperation policies, to provide better opportunities to qualify for admission and substantially greater support for refugees. |
| Keywords: | migration, EU, migration policy, humanitarian migration, refugees, economic migrants, immigrant integration, asylum policy |
| JEL: | F22 J15 J61 J68 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp126&r=lab |
| By: | Gottfries, Axel; Teulings, Coen N |
| Abstract: | A wide class of models with On-the-Job Search (OJS) predicts that workers gradually select into better-paying jobs. We develop a simple methodology to test predictions implied by OJS using two sources of identification: (i) time-variation in job-finding rates and (ii) the time since the last lay-off. Conditional on the termination date of the job, job duration should be distributed uniformly. This methodology is applied to the NLSY 79. We find remarkably strong support for all implications. The standard deviation of the wage offer distribution is about 15%. OJS accounts for 30% of the experience profile, 9% of total wage dispersion and an average wage loss of 11% following a lay-off. |
| Keywords: | job duration; on-the-job search; wage dispersion |
| JEL: | J31 J63 J64 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11921&r=lab |
| By: | Takanori Ago (ySchool of Commerce, Senshu University); Tadashi Morita (Faculty of Economics, Kindai University); Takatoshi Tabuchi (Faculty of Economics, University of Tokyo); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University) |
| Abstract: | This study analyzes the interplay between the agglomeration of economic activities and interregional diverences in working hours, which are typically longer in large cities, as they are normally more developed than small cities. For this purpose, we develop a two-region model with endogenous labor supply. Although we assume a symmetric distribution of immobile workers, the symmetric equilibrium breaks in the sense that firms may agglomerate when trade costs are intermediate and labor supply is elastic. We also show that the price index is always lower, while labor supply, per capita income, real wages, and welfare are always higher in the more agglomerated region. |
| Keywords: | elastic labor supply; agglomeration; symmetry break |
| JEL: | R23 F16 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1706&r=lab |
| By: | Nan L. Maxwell; Nathan Wozny |
| Abstract: | This research assesses the extent to which norms related to behaviors at home and work and to parenting might affect gender differences in time allocation, earnings, and employment. |
| Keywords: | norms, earnings, employment, time use, gender differentials |
| JEL: | J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:38f127bf7f494794807db7a3ac395da3&r=lab |
| By: | André Almeida (Centre for Research in Higher Education Policies (CIPES)); Hugo Figueiredo (Centre for Research in Higher Education Policies (CIPES); Department of Economics, Management, Industrial Engineering and Tourism,University of Aveiro; GOVCOPP, University of Aveiro); João Cerejeira (Centre for Research in Higher Education Policies (CIPES); Economic Policies Research Unit (NIPE); School of Economics and Management, University of Minho); Miguel Portela (Centre for Research in Higher Education Policies (CIPES); Economic Policies Research Unit (NIPE); School of Economics and Management, University of Minho; Institute for the Study of Labor (IZA); Banco de Portugal); Carla Sá (Centre for Research in Higher Education Policies (CIPES); Economic Policies Research Unit (NIPE); School of Economics and Management, University of Minho); Pedro Teixeira (Centre for Research in Higher Education Policies (CIPES); Institute for the Study of Labor (IZA); University of Porto, Faculty of Economics) |
| Abstract: | In this paper we use a large official employer-employee dataset, which includes almost the whole universe of business firms, to document and decompose the rising graduates postgraduates’ wage differentials in Portugal. Using a non-parametric matching exercise, we pay particular attention to differences in the assignment of these two groups of workers across occupations and tasks. This allows us to disentangle different sources of postgraduates’ relative earnings and look at the creation of postgraduate jobs. We further look, however, at displacement and deskilling effects due to relative demand inertia as possible sources of such evolution of the relative earnings. Our results show that both displacement and deskilling effects, particularly of graduates with only a first-degree, appear to be at least as important as direct productivity effects in explaining postgraduates premiums. We also conclude that the relative importance of the former has been steadily increasing overtime and that, on the contrary, the net creation of high-paying, postgraduate-only jobs has been relatively modest. This suggests that postgraduate degrees have largely worked as a way of holding on to a higher ground in the labour market. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:08/2017&r=lab |
| By: | Angana Banerji; Valerio Crispolti; Era Dabla-Norris; Romain A Duval; Christian H Ebeke; Davide Furceri; Takuji Komatsuzaki; Tigran Poghosyan |
| Abstract: | Product and labor market reforms are needed to lift persistently sluggish growth in advanced economies. But reforms have progressed slowly because of concerns about their distributive and short-term economic effects. Our analysis, based on new empirical and numerical analysis and country case-studies shows that most labor and product market reforms can improve public debt dynamics over the medium-term. This because reforms raise output by boosting employment and/or labor productivity. But the effect of some labor market reforms on budgetary outcomes and fiscal sustainability depends critically on business cycle conditions. Our evidence also suggests that some temporary and well-designed up-front fiscal stimulus can help enhance the economic impact of reforms. In the past, countries have used fiscal incentives in the past to facilitate reforms by alleviating transition and social costs. But strong ownership of reforms was crucial for their successful implementation. |
| Keywords: | Labor market reforms;Fiscal policy;Fiscal reforms;Employment;Legislation;Business cycles;Developed countries;Fiscal Policy; Structural Reforms; Public Debt; Labor Market; Product Market; Deregulation; Employment Protection; Unemployment Benefits; Labor Tax; Active Labor Market Policy |
| Date: | 2017–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfsdn:17/03&r=lab |
| By: | Sanchez-Romero, Miguel; Fürnkranz-Prskawetz, Alexia |
| Abstract: | We investigate the differential impact that pension systems have on the labor supply and the accumulation of physical and human capital for individuals that differ by their learning ability and levels of life expectancy. Our analysis is calibrated to the US economy using a general equilibrium model populated by overlapping generations, in which all population groups interact through the pension system, the labor market, and the capital market. Within our framework we analyze the redistributive and macroeconomic effects of a progressive versus a flat replacement rate of the pension system. |
| Keywords: | Human capital,Longevity,Inequality,Life cycle,Social Security |
| JEL: | E24 J10 J18 H55 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuweco:032017&r=lab |
| By: | Neto, António; Furukawa, Yuichi; Ribeiro, Ana Paula |
| Abstract: | Economic growth crucially depends on the level of R&D investment, as well as on the existing labour market institutions (LMI); the latter might shape the amount of profit obtained by each firm and its incentives to continuously innovate. This paper proposes a novel analysis combining a Schumpeterian growth model with cash-in-advance (CIA) constraints on R&D to study the impact of trade unions on economic growth and social welfare. Two main results arise: one the one hand, economic growth is always decreasing in trade union’s markup and interest rate. However, in terms of social welfare, although Friedman rule appears to be optimal across all the considered scenarios, free labour market can be suboptimal below a specific threshold level of economic growth, depending on whether there is over or underinvestment in R&D. Hence, by demanding a wage above the perfect competition equilibrium, trade unions can have a positive impact on welfare through a reallocation of labour among sectors. This relationship seems to be stronger for countries with lower labour share and higher rents in the intermediate sector. This latter case highlights the redistributive effect of trade unions, contributing for a decrease in inequality between monopolists and workers. Therefore, for the case of the Eurozone, a “common” labour market setting might be more “inefficient” than a common monetary policy. |
| Keywords: | Employment, trade unions, economic growth, R&D |
| JEL: | E24 J51 O40 O42 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77312&r=lab |
| By: | Razin, Assaf |
| Abstract: | US attracts more high skill immigrants than Europe. One key factors is US research centers. US universities and research centers, funded directly and indirectly by the US federal and state governments, attract talented researchers from all over the world. Many of them remained in the US after completing their original term of education, training or research. Many became citizens. In the confines of the generous welfare state, low skill immigrants impose fiscal burden on the native born. In contrast, high-skill immigrants help in relieving the burden. This is the economic rationale behind skill-based immigration policies. The other side of the skill bias in immigration policy is that the international migration of skilled workers (the so-called brain drain) deprives the origin country from its scarce resource - human capital. Israel supply of high skill workers is unique. Today, Israel ranks third in the world in the number of university graduates per capita, after the United States and the Netherlands. It possesses the highest per capita number of scientists in the world, The paper links Israel's brain drain to skill-based immigration policies, prevailing in the advanced economies. The paper links Israel's brain drain to skill-based immigration policies, prevailing in the advanced economies. |
| JEL: | F22 H10 J1 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11903&r=lab |
| By: | Marco Le Moglie; Letizia Mencarini; Chiara Rapallini (Dipartimento di Scienze per l'Economia e l'Impresa) |
| Abstract: | We investigate the role of individual labor income as a moderator of parental subjective well-being trajectories before and after the first childbirth in Germany, a very low fertility country. Analyzing German Socioeconomic Panel Survey data, we found that income matters negatively for parental subjective well-being after childbirth, though with important differences by education and gender. In particular, among better educated parents, the richer see the arrival of a child more negatively. These findings contribute to the debate on the relationship between income and fertility adding information on how parents perceive the birth of a child beyond the strict financial cost of childbearing and raising. Results are discussed in terms of preferences among different groups of parents, costs of children, and work and family balance. Results are robust to potential endogeneity between income and childbirth, as well as for alternative measures of income. |
| Keywords: | First child, subjective well-being, individual income, Germany |
| JEL: | J1 J13 D1 I31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2017_08.rdf&r=lab |
| By: | Matthias Blum; Alan de Bromhead |
| Abstract: | This paper explores the relationship between Nazi membership and social mobility using a unique and highly detailed dataset of military con- scripts and volunteers during the Third Reich. We find that membership of a Nazi organisation is positively related to social mobility when measured by the difference between fathers' and sons' occupations. This relationship is stronger for the more 'elite' NS organisations, the NSDAP and the SS. However, we find that this observed difference in upward mobility is driven by individuals with different characteristics self-selecting into these organisations, rather than from a direct reward to membership. These results are confirmed by a series of robustness tests. In addition, we employ our highly-detailed dataset to explore the determinants of Nazi membership. We find that NS membership is associated with higher socio-economic background and human capital levels. |
| Keywords: | National Socialism, Third Reich, Social Mobility, Nazi Membership, Second World War, Political Economy, Germany, Economic History |
| JEL: | J62 N24 N44 P16 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:qub:wpaper:1701&r=lab |
| By: | Anna Oksuzyan (Max Planck Institute for Demographic Research, Rostock, Germany); Angela Carollo (Max Planck Institute for Demographic Research, Rostock, Germany); Sven Drefahl (Max Planck Institute for Demographic Research, Rostock, Germany); Carlo G. Camarda (Max Planck Institute for Demographic Research, Rostock, Germany); Kaare Christensen; Alyson A. van Raalte (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Women earn less than men at most career stages, and they also tend to partner with older men. This study investigates whether being the younger partner in a marriage reduces a woman’s incentive to pursue an independent career. We hypothesize that the income gender gap might be partially explained by the age differences between spouses. Using both a within-twin (n = 4716) and pooled-twin (n = 13354) design to more readily account for differences in early household environments, we investigated for Denmark whether the age gap between a female twin and her partner has any influence on her income. The hypothesis could not be confirmed, as the age gap between partners did not appear to be associated with women’s earnings. The finding that women’s wages were generally unaffected by partnering with an older man could be a result of heterogeneous groups of women entering men-older partnerships. Future research should explore this question further by using the number of promotions to assess the career success of women, and should extend this work to countries with different social welfare systems and less egalitarian gender norms. |
| JEL: | J1 Z0 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2017-008&r=lab |
| By: | Sarah Flèche |
| Abstract: | Schooling can produce both cognitive and non-cognitive skills, both of which are important determinants of adult outcomes. Using very rich data from a UK birth cohort study, I estimate teacher value added (VA) models for both pupils' test scores and non-cognitive skills. I show that teachers are equally important in the determination of pupils' test scores and non-cognitive skills. This finding extends the economics literature on teacher effects, which has primarily focused on pupils' test scores and may fail to capture teachers' overall effects. In addition, the large estimates reveal an interesting trade-off: teacher VA on pupils' test scores are weak predictors of teacher VA on non-cognitive skills, which suggests that teachers recourse to different techniques to improve pupils' cognitive and non-cognitive skills. Finally, I find that teachers' effects on pupils' non-cognitive skills have long-run impacts on adult outcomes such as higher education attendance, employment and earnings, conditional on their effects on test scores. This result indicates that long-run outcomes are improved by a combination of teachers increasing pupils' test scores and non-cognitive skills and has large policy implications. |
| Keywords: | teacher quality, test scores, non-cognitive skills, long-run impacts, teaching practices, ALSPAC |
| JEL: | I21 J00 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1472&r=lab |
| By: | Omoniyi B Alimi (University of Waikato); David C Maré (Motu Economic and Public Policy Research); Jacques Poot (University of Waikato) |
| Abstract: | As is the case in most developed countries, the population of New Zealand is ageing numerically and structurally. Population ageing can have important effects on the distribution of personal income within and between urban areas. The age structure of the population may affect the distribution of income through the life-cycle profile of earnings but also through the spatial-temporal distribution of income within the various age groups. By decomposing New Zealand census data from 1986 to 2013 by age and urban area, this chapter examines the effects of population ageing on spatial-temporal changes in the distribution of personal income to better understand urban area-level income inequality (measured by the Mean Log Deviation index). We focus explicitly on differences between metropolitan and non-metropolitan urban areas. New Zealand has experienced a significant increase in income inequality over the last few decades, but population ageing has slightly dampened this trend. Because metropolitan areas are ageing slower, the inequality-reducing effect of ageing has been less in these areas. However, this urban-size differential-ageing effect on inequality growth has been relatively small compared with the faster growth in intra-age group inequality in the metropolitan areas. |
| Keywords: | Inequality, age composition, urbanisation, population aging |
| JEL: | J11 D31 R23 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:17_02&r=lab |