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on Labour Economics |
| By: | Andersen, Torben M; Ellermann-Aarslev, Christian |
| Abstract: | Unemployment insurance schemes typically include eligibility conditions depending on the employment history of the unemployed. The literature on the design of unemployment insurance schemes has largely ignored this aspect, perhaps due to the implied history dependence and heterogeneity across otherwise identical workers. We develop an analytically tractable matching model permitting an analysis of the consequences of such history dependencies. Unemployed determine reservation durations to the jobs they find acceptable, and the stronger employment histories lead to higher reservation durations. Consequently, short-term jobs are only acceptable to unemployed with a weak employment history, while unemployed with a stronger employment history have higher reservation durations. This affects the equilibrium distribution of employment according to job durations; fewer short duration jobs are filled, but this also means that fewer are locked-into such jobs, and therefore more jobs with long durations are filled, although the net effect generally is to lower employment. Employment history contingencies this affect both the level and structure of employment. Equilibrium (un)employment depends not only on reservation durations, and a longer benefit duration combined with a decrease in the benefit level to retain reservation durations has a negative effect on employment. |
| Keywords: | Employment conditions; Employment history; job search; Unemployment insurance |
| JEL: | E24 J64 J65 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12163&r=lab |
| By: | Michael Bailey; Ruiqing (Rachel) Cao; Theresa Kuchler; Johannes Stroebel; Arlene Wong |
| Abstract: | We introduce a new measure of social connectedness between U.S. county-pairs, as well as between U.S. counties and foreign countries. Our measure, which we call the "Social Connectedness Index" (SCI), is based on the number of friendship links on Facebook, the world's largest online social networking service. Within the U.S., social connectedness is strongly decreasing in geographic distance between counties: for the population of the average county, 62.8% of friends live within 100 miles. The populations of counties with more geographically dispersed social networks are generally richer, more educated, and have a higher life expectancy. Region-pairs that are more socially connected have higher trade flows, even after controlling for geographic distance and the similarity of regions along other economic and demographic measures. Higher social connectedness is also associated with more cross-county migration and patent citations. Social connectedness between U.S. counties and foreign countries is correlated with past migration patterns, with social connectedness decaying in the time since the primary migration wave from that country. Trade with foreign countries is also strongly related to social connectedness. These results suggest that the SCI captures an important role of social networks in facilitating both economic and social interactions. Our findings also highlight the potential for the SCI to mitigate the measurement challenges that pervade empirical research on the role of social interactions across the social sciences. |
| JEL: | D1 E0 F1 I1 J6 O3 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23608&r=lab |
| By: | Meekes, Jordy (Utrecht University); Hassink, Wolter (Utrecht University) |
| Abstract: | We examine the role of the housing market in workers' adjustment to job displacement. Dutch administrative data were used and analysed with a quasi-experimental design involving job displacement. The empirical design eliminates the potential of endogenous selection into labour turnover. The estimates show that displaced workers experience, in addition to substantial losses in employment and wage, an increase in the commuting distance and a decrease in the probability of moving home. These patterns change over the worker's post-displacement period – the negative displacement effect on wages becomes more pronounced, whereas the increase in the commuting distance diminishes. Also, we examine the role of workers' housing tenure in the displacement effects. Compared with displaced tenants and outright owners, we find that more leveraged displaced owners are more rapidly re-employed and experience a smaller increase in the commuting distance, but experience also a higher loss in wage. |
| Keywords: | commuting distance, geographic mobility, housing tenure, employment, wages |
| JEL: | J31 J32 J63 J65 R21 R23 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10894&r=lab |
| By: | Eugster, Beatrix; Deuchert, Eva |
| Abstract: | Disability insurance (DI) systems are widely criticized for their inherent work disincentives. This paper evaluates the effects of a Swiss DI reform that aims to lower pensions for a group of existing DI bene?ciaries and introduces an additional notch to the pension schedule. The reform does not signi?cantly affect average earnings and employment, but increases the disability degree of those threatened by a pension decline. We estimate bounds on the income and substitution effects employing the principal strati?cation framework. The in-come effect is quantitatively important, while the substitution e?ect is smaller and bounds include zero. |
| Keywords: | Disability insurance, work disincentives, income and substitution effects, partial bene?t system |
| JEL: | C30 I13 J01 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2017:09&r=lab |
| By: | Kosfeld, Reinhold (University of Kassel); Dreger, Christian (DIW Berlin) |
| Abstract: | The relevance of spatial effects in the wage curve can be rationalized by the model of monopsonistic competition in regional labour markets. However, distortions in extracting the regional unemployment effects arise in standard regional (i.e. NUTS) classifications as they fail to adequately capture spatial processes. In addition, the nonstationarity of wages and unemployment is often ignored. Both issues are particularly important in high unemployment regimes like East Germany where a wage curve is difficult to establish. In this paper, labour market regions defined by economic criteria are used to examine the existence of an East German wage curve. Due to the nonstationarity of spatial data, a global panel cointegration approach is adopted. By specifying a spatial error correction model (SpECM), equilibrium adjustments are investigated in time and space. The analysis gives evidence on a locally but not a spatially cointegrated wage curve for East Germany. |
| Keywords: | wage curve, labour market regions, global cointegration, spatial error-correction model |
| JEL: | J30 J60 C33 R15 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10892&r=lab |
| By: | Jain, Apoorva (University of North Carolina, Chapel Hill); Peter, Klara Sabirianova (University of North Carolina, Chapel Hill) |
| Abstract: | This paper develops and estimates a joint hazard-longitudinal (JHL) model of the timing of migration and labor market assimilation – two processes that have been assumed to be independent in the existing literature. The JHL model accounts for the endogenous age of entry in estimating the returns to years since migration by allowing cross-equation correlations of random intercepts with individual rates of wage assimilation. Commonly ignored sample selection issues due to non-random survey attrition and missing wages are also addressed. Using German household panel surveys from 1984 to 2014 and home country-level data from 1961, we find large upward bias in the OLS-estimated average rate of wage assimilation. Our estimates suggest that immigrants with lower unobserved skills and with a higher unobserved propensity to migrate early have a faster assimilation rate. |
| Keywords: | migration, joint hazard-longitudinal model, mixed effects, random slope, individual-specific wage assimilation, unobserved skills, survival analysis, timing of migration, maximum likelihood, selection due to endogenous entry, Germany |
| JEL: | J24 J31 J61 N30 C41 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10887&r=lab |
| By: | Jain, Apoorva (University of North Carolina, Chapel Hill); Peter, Klara Sabirianova (University of North Carolina, Chapel Hill) |
| Abstract: | This study finds evidence of wage divergence between immigrants and natives in Germany using a country-wide household panel from 1984 to 2014. We incorporate the possibility of wage divergence into a two-period model of economic assimilation by modeling the differences in the efficiency of human capital production and prices per unit of human capital between immigrants and natives. Individual rates of wage convergence are found to be higher for immigrants who fled warfare zones, belong to established ethnic networks, and acquired more years of pre-migration schooling. Using a doubly robust treatment effect estimator and the IV method, the study finds that the endogenous post-migration education in the host country contributes substantially to closing the wage gap with natives. The treatment effect is heterogeneous, favoring immigrants who are similar to natives. This paper also addresses the commonly ignored sample selection issue due to non-random survey attrition and employment participation. Empirical evidence favors the "efficiency" over the "discrimination" channels of wage divergence. |
| Keywords: | migration, assimilation, divergence, wage growth, skill prices, post-migration human capital, discrimination, doubly robust estimator, instrumental variables, panel, Germany |
| JEL: | J15 J24 J31 J61 F22 I26 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10891&r=lab |
| By: | Landmann, Andreas (Paris School of Economics); Seitz, Helke (DIW Berlin); Steiner, Susan (Leibniz University of Hannover) |
| Abstract: | We examine the role of intergenerational co-residence for female labour supply in a patrilocal society. To account for the endogeneity of women's co-residence with parents or in-laws, we exploit a tradition in Central Asia, namely that the youngest son of a family usually lives with his parents. Using data from Kyrgyzstan, we therefore instrument co-residence with being married to a youngest son. We find the effect of co-residence on female labour supply to be negative and insignificant. This is in contrast to the previous literature, which found substantial positive effects in less patrilocal settings. Women who co-reside in Kyrgyzstan have more children, spend similar time on housekeeping tasks and child care, and invest more time in elder care compared with women who do not co-reside. These mechanisms appear to be inherently different from those in less patrilocal settings where co-residing parents relieve the women from household chores. |
| Keywords: | family structure, co-residence, labour supply, patrilocality, Kyrgyzstan |
| JEL: | J12 J21 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10890&r=lab |
| By: | James Mabli; Irina Cheban |
| Abstract: | This report examines the labor force participation and employment decisions of SNAP participants, job characteristics among employed participants, and barriers to work among participants who are not working, using the most recently available national longitudinal survey data. |
| Keywords: | SNAP, employment, barriers, SIPP, food stamp program |
| JEL: | I0 I1 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:1ebf87cab08b460692a80530cfcfbb95&r=lab |
| By: | Raj Chetty; John N. Friedman; Emmanuel Saez; Nicholas Turner; Danny Yagan |
| Abstract: | We characterize intergenerational income mobility at each college in the United States using data for over 30 million college students from 1999-2013. We document four results. First, access to colleges varies greatly by parent income. For example, children whose parents are in the top 1% of the income distribution are 77 times more likely to attend an Ivy League college than those whose parents are in the bottom income quintile. Second, children from low- and high-income families have similar earnings outcomes conditional on the college they attend, indicating that low-income students are not mismatched at selective colleges. Third, rates of upward mobility – the fraction of students who come from families in the bottom income quintile and reach the top quintile – differ substantially across colleges because low-income access varies significantly across colleges with similar earnings outcomes. Rates of bottom-to-top quintile mobility are highest at certain mid-tier public universities, such as the City University of New York and California State colleges. Rates of upper-tail (bottom quintile to top 1%) mobility are highest at elite colleges, such as Ivy League universities. Fourth, the fraction of students from low-income families did not change substantially between 2000-2011 at elite private colleges, but fell sharply at colleges with the highest rates of bottom-to-top-quintile mobility. Although our descriptive analysis does not identify colleges' causal effects on students' outcomes, the publicly available statistics constructed here highlight colleges that deserve further study as potential engines of upward mobility. |
| JEL: | J0 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23618&r=lab |
| By: | Koerselman, Kristian (Abo Akademi University); Pekkarinen, Tuomas (VATT, Helsinki) |
| Abstract: | In this paper, we study the effect of the timing of puberty on educational achievement and examine to what extent the gender differences in the timing of puberty can explain gender differences in achievement. We use British cohort data that combine information on pubertal development with test scores, behavioral outcomes as well as final educational attainment and earnings. Controlling for age 7 cognitive skills and family background, we show that late pubertal development is associated with a slower rate of cognitive skill growth during adolescence. This disadvantage in cognitive development is also reflected in lower levels of educational attainment and earnings for late developed individuals. The number of late developing boys is however too small to explain more than a fraction of the gender gap in educational outcomes. Furthermore, we find no effects on self-discipline or other behavioral outcomes in adolescence, suggesting a mechanism wholly separate from other causes of the gender gap. |
| Keywords: | education, gender, adolescence, puberty, cognitive skills, non-cognitive skills, attainment, earnings |
| JEL: | I20 J16 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10889&r=lab |