|
on Labour Economics |
| By: | Girum Abebe; Stefano Caria; Marcel Fafchamps; Paolo Falco; Simon Franklin; Simon Quinn |
| Abstract: | Do obstacles to job search contribute to labour market exclusion in developing countries? To answer this question, we contrast two very different interventions, designed to alleviate spatial and informational constraints for unemployed youth in a congested African city: a transport subsidy and a job-application workshop. Both treatments have large positive effects on the probability of finding stable and formal jobs. Neither treatment has a significant average effect on the overall probability of employment, but we detect a sizeable increase in earnings and employment rates among the most disadvantaged job-seekers. Our results highlight the importance of job-search constraints as mechanisms for exclusion of the most disadvantaged. They also show that, if targeted well, low-cost interventions can have large impacts, improving equity in the labour market. |
| JEL: | O18 J22 J24 J61 J64 M53 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0224&r=lab |
| By: | Gottfries, A.; Teulings, T. |
| 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: | On-the-job search, Wage dispersion, Job duration |
| JEL: | J31 J63 J64 |
| Date: | 2017–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1737&r=lab |
| By: | Guerrieri, Veronica; Julien, Benoit; Kircher, Philipp; Wright, Randall |
| Abstract: | This essay surveys the literature on directed/competitive search, covering theory and applications in, e.g., labor, housing and monetary economics. These models share features with traditional search theory, yet differ in important ways. They share features with general equilibrium theory, but with explicit frictions. Equilibria are typically efficient, in part because markets price goods plus the time required to get them. The approach is tractable and arguably realistic. Results are presented for finite and large economies. Private information and sorting with heterogeneity are analyzed. Some evidence is discussed. While emphasizing issues and applications, we also provide several hard-to-find technical results. |
| Keywords: | competitive search; directed search; job search; survey; Wage setting |
| JEL: | J3 J64 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12315&r=lab |
| By: | Sebastian Till Braun (School of Economics and Finance, University of St Andrews); Anica Kramer (RWI); Michael Kvasnicka (Otto von Guericke University Magdeburg) |
| Abstract: | This paper studies the persistence of a large, unexpected, and regionally very unevenly distributed population shock, the inflow of eight million ethnic Germans from Eastern Europe to West Germany after World War II. Using detailed census data from 1939 to 1970, we show that the shock had a persistent effect on the distribution of population within local labor markets, but only a temporary effect on the distribution between labor markets. These results suggest that locational fundamentals determine population patterns across but not within local labor markets, and they can help to explain why previous studies on the persistence of population shocks reached such different conclusions. |
| Keywords: | Population shock, locational fundamentals, agglomeration economies, regional migration, post-war Germany |
| JEL: | J61 R12 R23 N34 |
| Date: | 2017–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:san:wpecon:1716&r=lab |
| By: | Cacciatore, Matteo; Duval, Romain; Fiori, Giuseppe; Ghironi, Fabio |
| Abstract: | This paper studies the impact of product and labor market reforms when the economy faces major slack and a binding constraint on monetary policy easing---such as the zero lower bound. To this end, we build a two-country model with endogenous producer entry, labor market frictions, and nominal rigidities. We find that while the effect of market reforms depends on the cyclical conditions under which they are implemented, the zero lower bound itself does not appear to matter. In fact, when carried out in a recession, the impact of reforms is typically stronger when the zero lower bound is binding. The reason is that reforms are inflationary in our structural model (or they have no noticeable deflationary effects). Thus, contrary to the implications of reduced-form modeling of product and labor market reforms as exogenous reductions in price and wage markups, our analysis shows that there is no simple across-the-board relationship between market reforms and the behavior of real marginal costs. This significantly alters the consequences of the zero (or any effective) lower bound on policy rates. |
| Keywords: | Employment protection; Monetary policy; Producer entry; Product market regulation; Structural reforms; Unemployment benefits; Zero lower bound |
| JEL: | E24 E32 E52 F41 J64 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12334&r=lab |
| By: | Katherine A. Moos (Department of Economics, University of Massachusetts Amherst) |
| Abstract: | This paper proposes a theory of why the state enacted social policy that regulated the length of the working day in 19th century industrial England. This paper will argue that, far from being capable of self-regulation, the capitalist labor market during Britain’s industrial revolution is best conceptualized as consisting of two major social coordination problems resulting from conflicting interests between and within capital and labor. Left unregulated, this dual social coordination problem caused the overexploitation of labor, with dire consequences for both the capitalist and working classes. The reason why this coordination problem could not self-correct was because the wage-labor bargain contained the externality of unwaged household labor. The existence of this externality became deleterious to firms’ profitability and workers’ survival, especially given the high levels of female labor force participation. This social coordination problem justified and required state regulation into industrial relations. By conceptualizing protective policy as the solution to a dual social coordination problem caused by conflicting interests among heterogeneous firms and workers, this paper extends the Polanyian framework with an explicit theory of exploitation based on the classical theory of competition and a feminist emphasis on social reproduction and unwaged labor. |
| Keywords: | English Factory Legislation, Social Coordination Problem, Game Theory, Labor Policy, Regulation, Hours of Work, Child Labor, Female Labor Force Participation |
| JEL: | B54 C72 J88 N3 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2017-17&r=lab |
| By: | Michael Knaus; Michael Lechner; Anthony Strittmatter |
| Abstract: | We systematically investigate the effect heterogeneity of job search programmes for unemployed workers. To investigate possibly heterogeneous employment effects, we combine non-experimental causal empirical models with Lasso-type estimators. The empirical analyses are based on rich administrative data from Swiss social security records. We find considerable heterogeneities only during the first six months after the start of training. Consistent with previous results of the literature, unemployed persons with fewer employment opportunities profit more from participating in these programmes. Furthermore, we also document heterogeneous employment effects by residence status. Finally, we show the potential of easy-to-implement programme participation rules for improving average employment effects of these active labour market programmes. |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1709.10279&r=lab |
| By: | Goeddeke, Anna; Haucap, Justus; Herr, Annika; Wey, Christian |
| Abstract: | Relocation of production to countries with low labour cost have induced increased labour market flexibility, which has been praised as a silver bullet for economic growth and low unemployment. Within a unionised oligopoly framework, in which a multi-national firm has the option to relocate its production to a foreign country, we analyse the welfare implications of both centralised and flexible wage setting regimes. For very low foreign wages, wage flexibility leads to higher welfare than a rigid centralised regime. In contrast, for 'intermediate' wage levels in the foreign country, an industry-wide uniform wage leads to higher social welfare than flexible wages. |
| Keywords: | Union,Centralised Wage,Wage Flexibility,Relocation,Labour Market Flexibility |
| JEL: | F23 J51 L13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:269&r=lab |
| By: | Bachmann, Ronald; Felder, Rahel |
| Abstract: | This paper analyses the impact of the business cycle on labour market dynamics in EU member states and the US during the first decade of the 21st century. Using unique measures of labour market flows constructed from worker-level micro data, we examine to what extent macro shocks were transmitted to national labour markets. We apply the approach by Blanchard and Wolfers (2000) to analyse the role of the interaction of macroeconomic shocks and labour market institutions for worker transitions in order to explain cross-country differences in labour market reactions in a period including the Great Recession. Our results suggest a significant influence of trade unions in channelling macroeconomic shocks. Specifically, union density moderates these impacts over the business cycle, i.e. countries with stronger trade unions experience weaker reactions of the unemployment rate and of worker transitions. |
| Keywords: | worker flows,labour market dynamics,institutions,Great Recession |
| JEL: | J6 E24 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:709&r=lab |
| By: | Asmus Zoch (Department of Economics, University of Mannheim) |
| Abstract: | This study evaluates the relative importance of family, neighbourhood and school quality in explaining variation in standardized test results, reaching and passing matric, university attendance and labour market earnings. It adds to the literature, by using a spatial approach to link a neighbourhood wealth index from the Census 2011 community survey to a unique administrative school data set from the Western Cape. For the long-term perspective the household and school information from the National Income Dynamics Study are explored. The results from administrative school data show how student wealth and differences in school quality produce vastly different outcomes for a cohort of grade 6 to 12 learners in Cape Town. It shows how grade 6 children going to the richest 20% of all schools are 30% more likely to pass matric in time, furthermore by grade 9 the learning gap is approximately four grade-levels worth of learning in comparison to children going to the poorest 20% of schools. However, this study also demonstrates that even children from the poorest neighbourhood would perform well if they go to one of the richest 20% of schools. Yet, given the limited number of quality schools, the segregated location of quality schools, financial as well as transport constraints, only very few children from the poorest 60% actually attend a top quintile schools. These results can be replicated for the national data set and show that in order to achieve more equal education outcomes, the quality of schools in the poor neighbourhoods have to be drastically improved. In addition, using the new school wealth index as an instrument for school quality, there seems to be a significant premium for quality education in labour markets earnings regressions, which show the long-term implications of the schooling system. |
| Keywords: | South Africa, Education, Spatial analysis, Neighbourhood effects, Family effects |
| JEL: | D10 I24 J15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers284&r=lab |
| By: | Chen, Siyan; Desiderio, Saul |
| Abstract: | Understanding what moves the Phillips curve is important to monetary policy. Because the Phillips curve has experienced over time movements similar to those characterizing the Beveridge curve, the authors jointly analyze the two phenomena. They do that through an agent-based macro model based on adaptive micro-foundations, which works fairly well in replicating a number of stylized facts, including the Beveridge curve, the Phillips curve and the Okun curve. By Monte Carlo experiments the authors explore the mechanisms behind the movements of the Beveridge curve and the Phillips curve. They discovered that shifts of the Beveridge curve are best explained by the intensity of worker reallocation. Reallocation also shifts the Phillips curve in the same direction, suggesting that it may be the reason behind the similarity of the patterns historically recorded for these two curves. This finding may shed new light on what moves the Phillips curve and might have direct implications for the conduction of monetary policy. |
| Keywords: | Beveridge curve,Phillips curve,labor market dynamics,agent-based simulations,sensitivity analysis |
| JEL: | C63 D51 E31 J30 J63 J64 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201765&r=lab |