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on Labour Economics |
| By: | William J. Collins; Marianne H. Wanamaker |
| Abstract: | We document the intergenerational mobility of black and white American men from 1880 through 2000 by building new datasets to study the late 19th and early 20th century and combining them with modern data to cover the mid- to late 20th century. We find large disparities in intergenerational mobility, with white children having far better chances of escaping the bottom of the distribution than black children in every generation. This mobility gap was more important than the gap in parents’ status in proximately determining each new generation’s racial income gap. Evidence suggests that human capital disparities underpinned the mobility gap. |
| JEL: | J15 J62 N31 N32 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23395&r=lab |
| By: | Bergemann, Annette; Pohlan, Laura; Uhlendorff, Arne |
| Abstract: | This paper analyzes the impact of job creation schemes (JCSs) on job search outcomes in the context of the turbulent East German labor market in the aftermath of the German reunification. High job destruction characterized the economic environment. JCSs were heavily used in order to cushion this development. Using data from 1990-1999 and building upon the timing-of-events approach, we estimate multivariate discrete time duration models taking selection based on both observed and unobserved heterogeneity into account. Our results indicate that participation in JCSs increases the unemployment duration mainly due to locking-in effects. However, twelve months after the program start the significantly negative impact on the job finding probability vanishes. We find evidence for effect heterogeneity. Our results suggest that female and highly skilled participants leave unemployment quicker than other groups, which results in highly skilled women benefiting from participation. However, we find no significant impact on post-unemployment employment stability. Our results are robust to allowing for random treatment effects. Also taking into account endogenous participation in training programs, endogenous censoring, or multiple treatment effects do not change the results. |
| Keywords: | active labor market policy,job creation schemes,unemployment duration,employment stability,timing-of-events model,East Germany,transition economy,structural change |
| JEL: | C41 J64 J68 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17021&r=lab |
| By: | Cai, Zhengyu (Southwestern University of Finance and Economics); Winters, John V. (Oklahoma State University) |
| Abstract: | This paper uses the American Community Survey to examine the previously overlooked fact that foreign STEM (science, technology, engineering, and mathematics) graduates have much lower self-employment rates than their non-STEM counterparts, with an unconditional difference of 3.3 percentage points. We find empirical support for differing earnings opportunities as a partial explanation for this self-employment gap. High wages in STEM paid-employment combined with reduced earnings in self-employment make self-employment less desirable for STEM graduates. High self-employment rates among other foreign-born workers partially reflect weak paid-employment opportunities. Public policy should encourage efficient use of worker skills rather than low-value business venture creation. |
| Keywords: | self-employment, immigration, foreign-born, college major, STEM, earnings |
| JEL: | F22 J15 J31 L26 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10688&r=lab |
| By: | Thomas Le Barbanchon; Roland Rathelot; Alexandra Roulet |
| Abstract: | Although the reservation wage plays a central role in job search models, empirical evidence on the determinants of reservation wages, including key policy variables such as unemployment insurance (UI), is scarce. In France, unemployed people must declare their reservation wage to the Public Employment Service when they register to claim UI benefits. We take advantage of these rich French administrative data and of a reform of UI rules to estimate the effect of the potential benefit duration (PBD) on reservation wages and on other dimensions of job selectivity, using a difference-in-difference strategy. We cannot reject that the elasticity of the reservation wage with respect to PBD is zero. Our results are precise and we can rule out elasticities larger than 0.006. Furthermore, we do not find any significant effects of PBD on the desired number of hours, duration of labor contract and commuting time/distance. The estimated elasticity of actual benefit duration with respect to PBD of 0.3 is in line with the consensus in the literature. Exploiting a regression discontinuity design as an alternative identification strategy, we find similar results. |
| JEL: | J64 J65 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23406&r=lab |
| By: | Melissa S. Kearney; Riley Wilson |
| Abstract: | There has been a well-documented retreat from marriage among less educated individuals in the U.S. and non-marital childbearing has become the norm among young mothers and mothers with low levels of education. One hypothesis is that the declining economic position of men in these populations is at least partially responsible for these trends. That leads to the reverse hypothesis that an increase in potential earnings of less-educated men would correspondingly lead to an increase in marriage and a reduction in non-marital births. To investigate this possibility, we empirically exploit the positive economic shock associated with localized “fracking booms” throughout the U.S. in recent decades. We confirm that these localized fracking booms led to increased wages for non-college-educated men. A reduced form analysis reveals that in response to local-area fracking production, both marital and non-marital births increase and there is no evidence of an increase in marriage rates. The pattern of results is consistent with positive income effects on births, but no associated increase in marriage. We compare our findings to the family formation response to the Appalachian coal boom experience of the 1970s and 1980s, when it appears that marital births and marriage rates increased, but non-marital births did not. This contrast potentially suggests important interactions between economic forces and social context. |
| JEL: | I3 J1 J12 J13 J18 R2 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23408&r=lab |
| By: | Blit, Joel (University of Waterloo); Skuterud, Mikal (University of Waterloo); Zhang, Jue (University of Waterloo) |
| Abstract: | We examine the effect of changes in skilled-immigrant population shares in 98 Canadian cities between 1981 and 2006 on per capita patents. The Canadian case is of interest because its 'points system' for selecting immigrants is viewed as a model of skilled immigration policy. Our estimates suggest unambiguously smaller beneficial impacts of increasing the university-educated immigrant population share than comparable U.S. estimates, whereas our estimates of the contribution of Canadian-born university graduates are virtually identical in magnitude to the U.S. estimates. The modest contribution of Canadian immigrants to innovation is, in large part, explained by the low employment rates of Canadian STEM-educated immigrants in STEM jobs. Our results point to the value of providing employers with a role in the immigrant screening process. |
| Keywords: | immigration, innovation, immigration policy |
| JEL: | J61 J18 O31 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10689&r=lab |
| By: | Costas Cavounidis; Kevin Lang |
| Abstract: | We develop a fairly general and tractable model of investment when workers can invest in multiple skills and different jobs put different weights on those skills. In addition to expected findings such as that younger workers are more likely than older workers to respond to a demand shock by investing in skills whose value unexpectedly increases, we derive some less obvious results. Credit constraints may affect investment even when they do not bind it equilibrium. If there are mobility costs, firms will generally have an incentive to invest in some of their workers' skills even when there are a large number of similar competitors, and, in equilibrium, there can be overinvestment in all skills. Worker skill accumulation resembles learning by doing even in its absence. We demonstrate how the model can be simulated to show the effect of a shock to the price of individual skills. |
| JEL: | J01 J24 J3 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23367&r=lab |
| By: | Andrew Barr; Sarah Turner |
| Abstract: | For individuals who experience job loss, enrollment in post-secondary programs may provide an opportunity to improve future employment outcomes. However, decisions to enroll may be hampered by insufficient information about the benefits and costs and the necessary steps and assistance available to facilitate such investments. Using variation in the dissemination and timing of letters sent to UI recipients containing this information, we find that individuals sent the information are 40% more likely to enroll. These findings suggest that well-coordinated information interventions delivered with institutional support may be more effective than raising the generosity of existing government programs in increasing participation. |
| JEL: | I23 J18 J24 J64 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23374&r=lab |
| By: | Masayuki Inui (Bank of Japan); Nao Sudo (Bank of Japan); Tomoaki Yamada (Meiji University) |
| Abstract: | Impacts of monetary easing on inequality have recently attracted increasing attention. In this paper, we use the micro-level data of Japanese households to study the distributional effects of monetary policy. We construct quarterly series of income and consumption inequality measures from 1981 to 2008, and estimate their response to a monetary policy shock. We do find that monetary policy shocks do not have statistically significant impacts on inequalities across Japanese households in a stable manner. We find evidence, when considering inequality across households whose head is employed, an expansionary monetary policy shock increased income inequality through a rise in earnings inequality, in the period before the 2000s. Such procyclical responses are, however, scarcely observed when the current data is included in the sample period, or when earnings inequality across all households is considered. We also find that, transmission of income inequality to consumption inequality is minor even during the period when procyclicality of income inequality was pronounced. Using a two-sector dynamic general equilibrium model with attached labor inputs, we show that labor market flexibility is the central to the dynamics of income inequality after monetary policy shocks. We also use the micro-level data of households' balance sheet and show that distributions of households' financial assets and liabilities do not play a significant role in the distributional effects of monetary policy. |
| Keywords: | Monetary Policy; Income inequality; Consumption inequality |
| JEL: | E3 E4 E5 |
| Date: | 2017–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:boj:bojwps:wp17e03&r=lab |
| By: | William J. Collins; Michael Q. Moody |
| Abstract: | This paper documents and explores black-white differences in U.S. women’s labor force participation, occupations, and wages from 1940 to 2014. It draws on closely related research on selection into the labor force, discrimination, and pre-labor market characteristics, such as test scores, that are strongly associated with subsequent labor market outcomes. Both black and white women significantly increased their labor force participation in this period, with white women catching up to black women by 1990. Black-white differences in occupational and wage distributions were large circa 1940. They narrowed significantly as black women’s relative outcomes improved. Following a period of rapid convergence, the racial wage gap for women widened after 1980 in census data. Differences in human capital are an empirically important underpinning of the black-white wage gap throughout the period studied. |
| JEL: | J0 N12 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23397&r=lab |
| By: | Pietro Biroli; Daniela Del Boca; James J. Heckman; Lynne Pettler Heckman; Yu Kyung. Koh; Sylvi Kuperman; Sidharth Moktan; Chiara D. Pronzato; Anna Ziff |
| Abstract: | We evaluate the Reggio Approach using non-experimental data on individuals from the cities of Reggio Emilia, Parma and Padova belonging to one of five age cohorts: ages 50, 40, 30, 18, and 6 as of 2012. The treated were exposed to municipally offered infant-toddler (ages 0-3) and preschool (ages 3-6) programs. The control group either did not receive formal childcare or were exposed to programs offered by the state or religious systems. We exploit the city-cohort structure of the data to estimate treatment effects using three strategies: difference-in-differences, matching, and matched-difference-in-differences. Most positive and significant effects are generated from comparisons of the treated with individuals who did not receive formal childcare. Relative to not receiving formal care, the Reggio Approach significantly boosts outcomes related to employment, socio-emotional skills, high school graduation, election participation, and obesity. Comparisons with individuals exposed to alternative forms of childcare do not yield strong patterns of positive and significant effects. This suggests that differences between the Reggio Approach and other alternatives are not sufficiently large to result in significant differences in outcomes. This interpretation is supported by our survey, which documents increasing similarities in the administrative and pedagogical practices of childcare systems in the three cities over time. |
| JEL: | I21 I26 I28 J13 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23390&r=lab |
| By: | Maarten J. Bijlsma (Max Planck Institute for Demographic Research, Rostock, Germany); Ben Wilson |
| Abstract: | Most theories of fertility predict that a range of socio-economic factors have an impact on the quantum and tempo of childbearing. Despite this, methods often struggle to investigate the interrelationships between these factors, and the time-varying influence that they have on fertility over the life course. In this study, we propose a new approach for studying the socio-economic determinants of fertility. This approach uses the parametric g-formula, which enables analyses of simultaneous and interdependent influences of time-varying socio-economic factors (such as education, employment and partnership) on fertility. Importantly, and unlike many other approaches, this method allows us to incorporate reverse causality and time-varying confounding in a study of total, direct, and indirect (mediating) effects. It also enables these effects to be generalized to a heterogeneous nationally-representative population, linking micro- and macro-level analyses, while avoiding the ecological fallacy. To demonstrate this approach, we study a cohort of women who were born in the UK in 1970. Our results show that a significant reduction in fertility rates would be produced by a reduction in marriage rates, and to a lesser extent by a rise in either education participation or full-time employment immediately after giving birth. For marriage, the majority of this effect is direct, rather than mediated by either education or employment. We conclude our analysis by demonstrating the sensitivity of results to unobserved confounding. We then discuss how our approach can be developed and applied in future research in order to provide researchers with a valuable tool for the analysis of total effects and mediation in studies of correlated life course processes. |
| Keywords: | fertility, fertility determinants, socio-economic conditions, statistical analysis |
| JEL: | J1 Z0 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2017-013&r=lab |
| By: | Buckles, Kasey (University of Notre Dame) |
| Abstract: | A rich literature in economics and the social sciences has shown that improvements in women's socio-economic status (SES) can also improve the well-being of their children. This chapter identifies several channels for this effect, drawing on both theoretical and empirical work in economics. Empirical evidence on the effects of maternal SES on child outcomes like health, education, and labor market success is presented, with a focus on recent work using new data sets and methodological innovations that allow for credible identification. The chapter also discusses emerging evidence that shocks to maternal well-being can affect not only a woman's own children, but future generations as well. Finally, the chapter highlights several fertile areas for future work. |
| Keywords: | maternal socio-economic status, intergenerational transmission of education, intergenerational transmission of income, child well-being, infant health, child health, child quality production function |
| JEL: | I14 I24 I3 J1 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10714&r=lab |
| By: | Doris, Aedin (National University of Ireland, Maynooth); O'Neill, Donal (National University of Ireland, Maynooth); Sweetman, Olive (National University of Ireland, Maynooth) |
| Abstract: | We use administrative data to examine the effect of a 50% benefit cut for young unemployed workers in Ireland during the Great Recession. Because the cut applied only to new benefit claims, claimants whose unemployment start dates differed by a matter of days received very different benefits; we exploit this fact in our Regression Discontinuity and Difference-in-Difference analyses. While we find no impact on unemployment duration for those aged 20–21, the benefit cut significantly reduced duration for 18 year olds, with an estimated elasticity close to one. We consider possible explanations for our findings and also examine long-run effects. |
| Keywords: | unemployment assistance, labour supply, regression discontinuity |
| JEL: | J64 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10727&r=lab |
| By: | Alessie, R.; Angelini, V.; Mierau, J.O.; Viluma, L.; |
| Abstract: | We study the impact of provincial unemployment levels on birthweight using a sample of over 50,000 respondents from Lifelines – a cohort study from the northeastern Netherlands and we allow the effects to differ by babies’ gender. We find that during periods of high unemployment fertility decreases and male babies are born with lower birthweight. The effect of unemployment on birthweight is particularly strong for boys born to older mothers and for babies born to smoking mothers. In addition, we study whether the effects are attributable to changes in cohort composition or in health behaviour of pregnant women. Our results indicate that even though the women who are pregnant during economic downturns are more likely to have higher socio-economic status, the total effect of economic downturns on babies’ health is negative. |
| Keywords: | Birthweight; Unemployment; Cohort Studies; |
| JEL: | I10 J13 J11 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:17/11&r=lab |
| By: | Narayanan, Sudha; Das, Upasak; Liu, Yanyan; Barrett, Christopher B. |
| Abstract: | This study investigates the consequences of poor implementation in public workfare programs, focusing on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in India. Using nationally representative data, we test empirically for a discouraged worker effect arising from either of two mechanisms: administrative rationing of jobs among those who seek work and delays in wage payments. We find strong evidence at the household and district levels that administrative rationing discourages subsequent demand for work. Delayed wage payments seem to matter significantly during rainfall shocks. We find further that rationing is strongly associated with indicators of implementation ability such as staff capacity. Politics appears to play only a limited role. The findings suggest that assessments of the relevance of public programs over their lifecycle need to factor in implementation quality. |
| Keywords: | wages; labor, social protection; social safety net; Mahatma Gandhi National Rural Employment Guarantee Scheme; administrative rationing; discouraged worker effect; employment guarantee, J08 Labor Economics Policies; J38 Wages, Compensation, and Labor Costs: Public Policy, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1633&r=lab |