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on Labour Economics |
| By: | Gaurav Khanna (Center for Global Development); Nicolas Morales (University of Michigan) |
| Abstract: | With the majority of all H-1B visas going to Indians, we study how US immigration policy coupled with the internet boom affected both the US and Indian economies, and in particular both countries’ IT sectors. The H-1B scheme led to a tech boom in both countries, inducing substantial gains in firm productivity and consumer welfare in both the United States and India. We find that the US-born workers gained $431 million in 2010 as a result of the H-1B scheme. In India, the H-1B program induced Indians to switch to computer science (CS) occupations, increasing the CS workforce and raising overall IT output in India by 5 percent. Indian students enrolled in engineering schools to gain employment in the rapidly growing US IT industry via the H-1B visa program. Those who could not join the US workforce, due to the H-1B cap, remained in India, and along with return-migrants, enabled the growth of an Indian IT sector, which led to the outsourcing of some production to India. The migration and rise in Indian exports induced a small number of US workers to switch to non-CS occupations, with distributional impacts. Our general equilibrium model captures firm-hiring across various occupations, innovation and technology diffusion, and dynamic worker decisions to choose occupations and fields of major in both the United States and India. Supported by a rich descriptive analysis of the changes in the 1990s and 2000s, we match data moments and show that our model captures levels and trends of key variables in validation tests. We perform counter-factual exercises and find that on average, workers in each country are better off because of high-skill migration. |
| Keywords: | High-skill immigration, H-1B visas, India, computer scientists, IT sector |
| JEL: | I25 J30 J61 |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:460&r=lab |
| By: | Donna Feir & Jasmin Thomas (Department of Economics, University of Victoria) |
| Abstract: | We study the labour force impact of introducing formal childcare services to 34 Inuit communities in Canada's North. We use geographic variation in the timing and intensity of the introduction of childcare services in the late 1990s and early 2000s to estimate the impact of increased access to childcare. We combine the 1996, 2001, and 2006 long-form census files with data on the number of childcare spaces in each of the 34 communities over time. We find that a one standard deviation increase in the number of childcare spaces per 100 children increases labour force participation in single-adult households by 3.6 percent. We find no impact in households with more than one adult present. We suggest plausible explanations for these findings and avenues for future research. |
| Keywords: | Inuit, childcare, labour force participation |
| JEL: | J13 J15 J18 |
| Date: | 2017–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:vic:vicddp:1702&r=lab |
| By: | Malo, Miguel Á. |
| Abstract: | This report consists of a comprehensive overview of labour market institutions in the small Pacific island countries in order to propose recommendations to improve the performance of their labour markets. We pay particular attention to three countries: Fiji, Palau and Papua New Guinea. We focus on the main pillars of labour market institutions, as employment protection legislation, minimum wage, and labour organization. The analysis considers the possibilities for institutional change in the next future. The main guidelines for eventual reforms are discussed, for the region as a whole and for the above three countries. |
| Keywords: | Pacific,employment protection legislation,minimum wage,unions,institutions,labour law |
| JEL: | J32 J51 J63 J80 K31 O17 O56 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:100&r=lab |
| By: | Lorenzo Caliendo; Luca David Opromolla; Fernando Parro; Alessandro Sforza |
| Abstract: | The economic effects from labor market integration are crucially affected by the extent to which countries are open to trade. In this paper we build a multi-country dynamic general equilibrium model with trade in goods and labor mobility across countries to study and quantify the economic effects of trade and labor market integration. In our model trade is costly and features households of different skills and nationalities facing costly forward-looking relocation decisions. We use the EU Labour Force Survey to construct migration flows by skill and nationality across 17 countries for the period 2002-2007. We then exploit the timing variation of the 2004 EU enlargement to estimate the elasticity of migration flows to labor mobility costs, and to identify the change in labor mobility costs associated to the actual change in policy. We apply our model and use these estimates, as well as the observed changes in tariffs, to quantify the effects from the EU enlargement. We find that new member state countries are the largest winners from the EU enlargement, and in particular unskilled labor. We find smaller welfare gains for EU-15 countries. However, in the absence of changes to trade policy, the EU-15 would have been worse off after the enlargement. We study even further the interaction effects between trade and migration policies and the role of different mechanisms in shaping our results. Our results highlight the importance of trade for the quantification of the welfare and migration effects from labor market integration. |
| Keywords: | international trade, factor mobility, market integration, EU enlargement, welfare |
| JEL: | F16 F22 F13 J61 R13 E24 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1494&r=lab |
| By: | Pizzinelli, Carlo (University of Oxford); Speigner, Bradley (Bank of England) |
| Abstract: | This paper investigates how compositional changes in the UK labour market affect the matching process between vacancies and job seekers. We augment a state space representation of the aggregate matching function with a measure of job seekers’ ‘search intensity’ that is recovered from micro-data on individual unemployment-to-employment transitions, in line with recent developments in the literature. The baseline results show that matching efficiency declined by around 15% between 1995 and 2010 but subsequently recovered by about 5 percentage points in the last six years. Compositional changes in the labour force that improved aggregate search intensity prior to the 2008 recession will tend to obscure the decline in aggregate matching efficiency unless controlled for properly. Considering broader definitions of job seekers that include marginally-attached workers and on-the-job searchers exacerbates the registered decline in matching efficiency. Changes in ‘recruiting intensity’ and the share of vacancies posted by different industries provide a potential explanation for some, but not all, of the initial fall in matching efficiency that preceded the 2007–08 recession. Finally, we quantitatively analyse how labour force heterogeneity and changes in matching efficiency have affected the shape and location of the UK Beveridge Curve. |
| Keywords: | Unemployment; labour heterogeneity; matching function; Beveridge Curve |
| JEL: | E24 E32 J64 J82 |
| Date: | 2017–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0667&r=lab |
| By: | David N. Figlio; Umut Özek |
| Abstract: | The world is experiencing the second largest refugee crisis in a century, and one of the major points of contention involves the possible adverse effects of incoming refugees on host communities. We examine the effects of a large refugee influx into Florida public schools following the Haitian earthquake of 2010 using unique matched birth and schooling records. We find precise zero estimated effects of refugees on the educational outcomes of incumbent students in the year of the earthquake or in the two years that follow, regardless of the socioeconomic status, grade level, ethnicity, or birthplace of incumbent students. |
| JEL: | I20 J10 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23661&r=lab |
| By: | Adriaan (A.R.) Soetevent (University of Groningen, The Netherlands; Tinbergen Institute, The Netherlands); Gert-Jan Romensen (University of Groningen, The Netherlands;) |
| Abstract: | How to engage workers in conservation efforts when the company pays the bill? In a field experiment with 409 bus drivers, we investigate the potential of targeted peer-comparison feedback and on-the-road coaching. Drivers receive individualized reports with peer-comparison messages on multiple driving dimensions. In addition, coaches quasi randomly provide drivers with in person coaching moments on the bus. Based on 800,000 trip-level observations, we find that the targeted peer-comparison treatments do not improve driving. On-the-road coaching significantly improves driving on multiple dimensions but only temporarily. Further analysis reveals negative interaction effects between the two programs. |
| Keywords: | peer comparisons; coaching; worker motivation; fuel conservation |
| JEL: | D2 M5 Q5 |
| Date: | 2017–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170073&r=lab |
| By: | Cho, Cheol-Joo |
| Abstract: | In this paper, two migratory impact-assessment schemes are constructed within the framework of Ghoshian and Leontief input-output analysis. These schemes are designed to estimate the rural-to-urban migration-induced and the urban-to-rural migration-induced effects on interurban migration, where the former effect is termed the replacement effect, while the latter the attraction effect. The established input-output schemes are empirically applied to the 2012 data on interregional migration in Korea. The results show that an arrival of migrants to and/or a departure of residents from the 20 largest cities in Korea induce direct and indirect ripples of population flow between those cities. A combination of the displacement and the attraction effects yields a classification of cities by which the 20 largest cities are grouped into four different types. |
| Keywords: | interregional migration,displacement effect,attraction effect,input-output schemes,classification of cities,largest cities in Korea |
| JEL: | D57 R15 R23 R58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201749&r=lab |
| By: | Christina Gathmann; Björn Sass |
| Abstract: | Previous studies report a range of estimates for the response of female labor supply and childcare attendance to childcare prices. We shed new light on these questions using a policy reform that raises the price of public daycare. After the reform, children are 8 percentage points less likely to attend public daycare which implies a compensated price elasticity of -0.6. There is little labor supply response in the full sample, though declines for vulnerable subgroups. Spillover effects on older siblings and fertility decisions show that the policy affects the whole household, not just targeted family members. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp923&r=lab |
| By: | Robert M. Sauer; Christopher R. Taber |
| Abstract: | This paper has two main parts. In the first, we describe a method that smooths the objective function in a general class of indirect inference models. Our smoothing procedure makes use of importance sampling weights in estimation of the auxiliary model on simulated data. The importance sampling weights are constructed from likelihood contributions implied by the structural model. Since this approach does not require transformations of endogenous variables in the structural model, we avoid the potential approximation errors that may arise in other smoothing approaches for indirect inference. We show that our alternative smoothing method yields consistent estimates. The second part of the paper applies the method to estimating the effect of women’s fertility on their human capital accumulation. We find that the curvature in the wage profile is determined primarily by curvature in the human capital accumulation function as a function of previous human capital, as opposed to being driven primarily by age. We also find a modest effect of fertility induced nonemployment spells on human capital accumulation. We estimate that the difference in wages among prime age women would be approximately 3% higher if the relationship between fertility and working were eliminated. |
| JEL: | C51 J16 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23669&r=lab |
| By: | Jerzmanowski, Michal; Tamura, Robert |
| Abstract: | Research aimed at understanding cross-country income differences finds that inputs of human and physical capital play a limited role in explaining those differences. However, most of this work assumes workers with different education levels are perfect substitutes. Does moving away from this assumption affect our conclusions about the causes of long run development? To answer this question we construct measures of skill-specific productivity and barriers to innovation for a large sample of countries over the period 1910-2010. We use a model of endogenous directed technological change together with a new data set on output and labor force composition across countries. We find that rich countries use labor of all skill categories more efficiently, however, in the absence or barriers to entry, poor countries would actually be more efficient at using low-skill labor. Our estimates imply that after 1950 the world technology frontier expanded much faster for college-educated workers than for those with lower skill sets. This technology diffused to many countries, allowing even poorer countries to experience relatively robust growth of high-skill-specific productivity. Their GDP growth failed to reflect that because of their labor composition; they have very few workers in the higher skilled category. Finally, we investigate the relative importance of factor endowments versus barriers to technology in explaining the current disparities of standards of living and find it to depend crucially on the value of the elasticity of substitution between skill-types. Under a lower value of 1.6, our model yields barrier estimates that are lower and relatively less important in explaining cross-country income differences: in this scenario physical and human capital account almost 70% of variance in 2010 GDP per worker in our sample. Using elasticity of 2.6, we find barriers that are higher and explain most of the variation in output. We provide some evidence that the higher value of elasticity is preferred. |
| Keywords: | endogenous directed technology, heterogeneous labor, cross country income differences |
| JEL: | E1 J0 O1 |
| Date: | 2017–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80582&r=lab |
| By: | Vladisavljević, Marko; Narazani, Edlira; Golubović, Vojin |
| Abstract: | This paper investigates wage differences between the public and private sectors in the Western Balkan countries. As currently there are no micro data sets that are fully comparable across countries, we provide evidence based on the available macro-level data and results from recent micro-level research which typically focus on the individual countries. We find that in all Western Balkan countries the average wages in the public sector are higher than the wages in the private sector, but also that the high-skilled workers work more frequently in the public sector, therefore partially or fully "justifying" the wage differences. Around the begining of 2010s, wage differences were lower in Montenegro, Albania and Kosovo, where when adjusted for the differences in workers characteristics they become insignificant. The differences were more promenent in Serbia, Macedonia and Bosnia and Herzegovina, where the differences in characteristic cannot explain the gap fully, and where the public sector wage premium is positive and significant. However, public private wage differences are still very volatile and under the impact of countries' political decisions. The differences in the size of the premium is discussed in the context of previously estblished correlates: differences in the total public sector size and private sector job security, as well as different size of the public sector wage premium at the different parts of the wage distribution. As public private wage gaps have important micro and macro level implications, their trends and mechanisms should be closely monitored and investigated in future research. |
| Keywords: | Public private wage differences, Western Balkans |
| JEL: | J31 J45 J50 |
| Date: | 2017–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80739&r=lab |
| By: | Miguel Flores; Alexander Patt; Jens Ruhose; Simon Wiederhold |
| Abstract: | We present the first evidence that international emigrant selection on education and earnings materializes through occupational skills. Combining novel data from a representative Mexican task survey with rich individual-level worker data, we find that Mexican migrants to the United States have higher manual skills and lower cognitive skills than non-migrants. Conditional on occupational skills, education and earnings no longer predict migration decisions. Differential labor-market returns to occupational skills explain the observed selection pattern and significantly outperform previously used returns-to-skills measures in predicting migration. Results are persistent over time and hold within narrowly defined regional, sectoral, and occupational labor markets. |
| Keywords: | occupational skills, emigrant selection |
| JEL: | F22 O15 J61 J24 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:84a&r=lab |
| By: | Neidhöfer, Guido; Serrano, Joaquín; Gasparini, Leonardo |
| Abstract: | The causes and consequences of the intergenerational persistence of inequality are a topic of great interest among various fields in economics. However, until now, issues of data availability have restricted a broader and cross-national perspective on the topic. Based on rich sets of harmonized household survey data, we contribute to filling this gap computing time series for several indexes of relative and absolute intergenerational education mobility for 18 Latin American countries over 50 years, and making them publicly available. We find that intergenerational mobility has been rising in Latin America, on average. This pattern seems to be driven by the high upward mobility of children from low-educated families; at the same time, there is substantial immobility at the top of the distribution. Significant cross-country differences are observed and are associated with income inequality, poverty, economic growth, public educational expenditures and assortative mating. |
| Keywords: | inequality,intergenerational mobility,equality of opportunity,transition probabilities,assortative mating,education,human capital,Latin America |
| JEL: | D63 I24 J62 O15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201720&r=lab |