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on Labour Economics |
| By: | Bazen, Stephen (Aix-Marseille University); Waziri, Khalid Maman (Aix Marseille University) |
| Abstract: | Stochastic earnings frontiers have been used in a relatively small number of papers to analyse workers' ability to capture their full potential earnings in labour markets where there is inefficient job matching (due to lack of information, discrimination, over-education or during process of assimilation of migrants). Using a representative survey of young persons having left full-time education in France in 1998 and interviewed in 2001 and 2005, this paper examines the process of their assimilation into normal employment and the extent to which job matches are inefficient in the sense that the pay in a job is below an individual's potential earnings (determined by education, other forms of training and labour market experience). Our results suggest that young workers manage to obtain on average about 82% of their potential earnings three years after leaving full-time education and earnings inefficiency had disappeared four years later. The results are robust to the treatment of selectivity arising from the exclusion of the unemployed in the estimation of the frontier. |
| Keywords: | stochastic earnings frontier, job matching, youth employment, earnings determination, sample selection stochastic frontier |
| JEL: | J30 J13 J24 C24 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10841&r=lab |
| By: | Lammers, Marloes (Vrije Universiteit Amsterdam); Bloemen, Hans (Vrije Universiteit Amsterdam); Hochguertel, Stefan (Vrije Universiteit Amsterdam) |
| Abstract: | This paper makes use of a natural experiment to examine effects of potential capital losses and general attractiveness of pension schemes on employees' propensity to change jobs. On January 1st 2004, the two largest pension funds in the Netherlands, for civil servants and for the health care sector, changed their pension scheme from a final salary to an average salary. This industry-level change excludes the possibility that a negative correlation between having a job with an attractive pension scheme and the number of labour market transitions is driven by self-selection of workers into jobs with an attractive pension arrangement. Using individual data covering the entire Dutch population, we estimate discrete choice models for job-to-job transitions. The results show that the number of job transitions of civil servants significantly increased at the onset of the new pension rules. The changing pension rules affected the propensity to change jobs for individuals working in the health care sector only to a smaller extent. |
| Keywords: | discrete choice models, policy evaluation, labour market flexibility, pension systems |
| JEL: | C35 J26 J32 J63 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10840&r=lab |
| By: | Martin Halla; Nicole Schneeweis; Martina Zweimüller; Natalia Danzer |
| Abstract: | We provide a novel interpretation of the estimated treatment effects from evaluations of parental leave reforms. Accounting for the counterfactual mode of care is crucial in the analysis of child outcomes and potential mediators. We evaluate a large and generous parental leave extension in Austria exploiting a sharp birthday cutoff-based discontinuity in the eligibility for extended parental leave and geographical variation in formal childcare. We find that estimated treatment effects on long-term child outcomes differ substantially according to the availability of formal childcare and the mother’s counterfactual work behavior. We show that extending parental leave has significant positive effects on children’s health and human capital outcomes only if the reform induces a replacement of informal childcare with maternal care. We conclude that care provided by mothers (or formal institutions) is superior to informal care-arrangements. |
| Keywords: | : Parental leave, formal childcare, informal childcare, child development, maternal labor supply, fertility |
| JEL: | J13 H52 J22 J12 I38 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2017_06&r=lab |
| By: | Michael Clemens (Center for Global Development); Jennifer Hunt |
| Abstract: | An influential strand of research has tested for the effects of immigration on natives’ wages and employment using exogenous refugee supply shocks as natural experiments. Several studies have reached conflicting conclusions about the effects of noted refugee waves such as the Mariel Boatlift in Miami and post-Soviet refugees to Israel. We show that conflicting findings on the effects of the Mariel Boatlift can be explained by a sudden change in the race composition of the Current Population Survey extracts in 1980, specific to Miami but unrelated to the Boatlift. We also show that conflicting findings on the labor market effects of other important refugee waves can be produced by spurious correlation between the instrument and the endogenous variable introduced by applying a common divisor to both. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and fails to substantiate claims of large detrimental impacts on workers with less than high school. |
| JEL: | J61 O15 R23 |
| Date: | 2017–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:455&r=lab |
| By: | Eric J. Baron (Department of Economics, Florida State University) |
| Abstract: | In this study, I estimate the causal impact of a weakening of teachers' unions on student achievement. I do so by exploiting a quasi-experiment that took place in Wisconsin following the passage of Act 10, a measure that significantly limited the bargaining power of teachers' unions in the state. Specifically, I exploit plausibly exogenous variation in the length of pre-Act 10 collective bargaining agreements among school districts that led to differences in the timing of exposure to Act 10. I find that test scores on the state's standardized exam decreased by approximately 30% of a standard deviation in initially low-performing schools, but find no evidence that the law impacted students in initially high-performing schools. Lastly, I show that the reduction in test scores was at least partially driven by a combination of teacher retirements and a decrease in the quality of the teaching workforce. |
| Keywords: | Public Sector Unions, Collective Bargaining, Student Achievement, Economics of Education |
| JEL: | I20 I28 J45 J50 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2017_07_01&r=lab |
| By: | Bredtmann, Julia (RWI); Vonnahme, Christina (RWI) |
| Abstract: | The 2008 alimony reform in Germany considerably reduced post-marital and caregiver alimony. We analyze how individuals adapted to these changed rulings in terms of labor supply, the intra-household allocation of leisure, and marital stability. We use the German Socio-Economic Panel (SOEP) and conduct a difference-in-difference analysis to investigate couples' behavioral responses to the reform. The results do not confirm theoretical expectations from labor supply and household bargaining models. In particular, we do not find evidence that women increase their labor supply as a result of the negative expected income effect. Neither do our results reveal that leisure is shifted from women to men as a response to the changed bargaining positions. In contrast, we find evidence that the reform has led to an increase in the probability to separate for married as opposed to non-married cohabiting couples. |
| Keywords: | alimony, marital instability, female labor supply, intra-household bargaining |
| JEL: | J12 J13 J22 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10864&r=lab |
| By: | Lee, Wang-Sheng (Deakin University); McKinnish, Terra (University of Colorado, Boulder) |
| Abstract: | We investigate how the marital age gap affects the evolution of marital satisfaction over the duration of marriage using household panel data from Australia. We find that men tend to be more satisfied with younger wives and less satisfied with older wives. Interestingly, women likewise tend to be more satisfied with younger husbands and less satisfied with older husbands. Marital satisfaction declines with marital duration for both men and women in differently-aged couples relative to those in similarly-aged couples. These relative declines erase the initial higher levels of marital satisfaction experienced by men married to younger wives and women married to younger husbands within 6 to 10 years of marriage. A possible mechanism is that differently-aged couples are less resilient to negative shocks compared to similarly-aged couples, which we find some supportive evidence for. |
| Keywords: | assortative matching, marital age gap, marital duration, marital satisfaction |
| JEL: | D1 J12 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10863&r=lab |
| By: | Eliason, Marcus; Hensvik, Lena; Kramarz, Francis; Nordstrom Skans, Oskar |
| Abstract: | The paper studies how social connections affect firm-level hiring decisions and performance. We use register data to characterize the social connections of firms' employees. For causal identification, we use displacements which create directed supply shocks towards the firms of the displaced workers' social connections. We make sure that our results are fully driven by these directed supply shocks. Results show that firms appear to prefer employed workers they are connected to over unconnected or unemployed workers when hiring. The employed and connected mostly go to high-productivity firms whereas the unemployed and unconnected tend to go to low-productivity firms. Strong connections - family, recent, durable, formed in small groups, between socially similar agents - matter the most. Displacements shocks cause connected firms, in particular low-productivity ones, to hire those workers they are connected to. Unconnected hires and separations are essentially unaffected. These supply shocks therefore cause the creation of additional jobs which increase firms' employment. In addition, we use these shocks to show that hiring connected workers has a positive causal impact on firm performance. These results are consistent with a stylized framework where connections reduce hiring frictions and where the firm-level possibility to hire connected workers is a function of changing outside options of these workers. |
| Keywords: | job creation; Job Displacement; job search; networks |
| JEL: | J23 J30 J60 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12135&r=lab |
| By: | Anthony Edo; Hillel Rapoport |
| Abstract: | This paper exploits the non-linearity in the level of minimum wages across U.S. States created by the coexistence of federal and state regulations to investigate how the prevalence of minimum wages affects the labor market impact of immigration. We find that the effects of immigration on the wages and employment of native workers within a given state-skill cell are more negative in U.S. States with low minimum wages (i.e., where the federal minimum wage is binding). The results are robust to instrumenting immigration and state effective minimum wages, and to implementing a difference-in-differences approach comparing U.S. States where effective minimum wages are fully determined by the federal minimum wage over the whole period considered (2000-2013) to U.S. States where this is never the case. This paper thus underlines the important role played by minimum wages in mitigating any adverse labor market effects of low-skill immigration. |
| Keywords: | immigration;minimum wages;labor markets |
| JEL: | F22 J61 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2017-12&r=lab |
| By: | de la Rica, Sara (University of the Basque Country); Gorjón, Lucía (University of the Basque Country) |
| Abstract: | In this paper we assess the impact of a Minimum Income Scheme (MIS) which has been operating in the Basque Country, one of Spain's 17 regions, for more than twenty years. In particular, we test whether the policy delays entry into employment for recipients. In addition, we test the efficacy of policies aimed at enabling recipients of the MIS to re-enter employment. Our results indicate that on average the Minimum Income Scheme, in addition to preventing social exclusion by providing financial support, does not delay entry into employment. However, the impact differs from one demographic group to another. Furthermore, Active Labour Market Policies designed for this group, in particular training, have a strong positive impact on finding a new job. |
| Keywords: | minimum income schemes, active labour market policies, poverty, inverse probability weighting, propensity score matching |
| JEL: | C14 C21 C52 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10867&r=lab |
| By: | Popov, Alexander; Zaharia, Sonia |
| Abstract: | We exploit the exogenous variation in regional credit market contestability brought on by banking deregulation in the United States to study the narrowing of the gender gap in local labor markets. We find that deregulation reduced the gender gap in labor force participation, as the subsequent increase in the demand for labor induced non-working women to enter the labor force. Deregulation also reduced wage inequality as women became more likely to work in the private sector, to enter high-paid "male" jobs, and to acquire higher education. Tests of contiguous MSAs sharing a state border corroborate a genuine deregulation effect. JEL Classification: G28, J16, J22 |
| Keywords: | bank deregulation, gender gap, labor force participation, wage inequality |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172086&r=lab |
| By: | Chen, Joyce J (Ohio State University); Kosec, Katrina (IFPRI, International Food Policy Research Institute); Mueller, Valerie (IFPRI, International Food Policy Research Institute) |
| Abstract: | Internal migration has the potential to substantially increase income, especially for the poor in developing countries, and yet migration rates remain low. We explore the role of psychic costs by evaluating the impacts of internal migration on a suite of well-being indicators using a unique, 22-year longitudinal study in rural Pakistan. We account for selection into migration using covariate matching. Migrants have roughly 35 to 40 percent higher consumption per adult equivalent, yet are 12 to 14 percentage points less likely to report feeling either happy or calm. Our results suggest that deteriorating physical health coupled with feelings of relative deprivation underlie the disparity between economic and mental well-being. Thus, despite substantial monetary gains from migration, people may be happier and less mentally distressed remaining at home. If traditional market mechanisms cannot reduce psychic costs, it may be more constructive to address regional inequality by shifting production – rather than workers – across space. |
| Keywords: | internal migration, psychic costs, well-being, Pakistan |
| JEL: | J61 O15 I31 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10853&r=lab |
| By: | Peter Haan; Victoria Prowse |
| Abstract: | We analyze empirically the optimal mix and optimal generosity of social insurance and assistance programs. For this purpose, we specify a structural life-cycle model of the labor supply and savings decisions of singles and married couples. Partial insurance against wage and employment shocks is provided by social programs, savings, and the labor supplies of all adult household members. We show that the optimal policy mix focuses mainly on social assistance, which guarantees a permanent universal minimum household income, with a minor role for temporary earnings-related unemployment insurance. Optimal social assistance is moderately generous. Re ecting that married couples obtain intra-household insurance by making labor supply choices for both spouses, we also show that the optimal generosity of social assistance is decreasing in the proportion of married individuals in the population. |
| Keywords: | Unemployment insurance; Social assistance; Design of bene t programs; Life-cycle labor supply; Family labor supply; Intra-household insurance; Household savings; Employment risk; Added worker e ect. |
| JEL: | J18 J68 H21 I38 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1294&r=lab |