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on Labour Economics |
| By: | Cobb-Clark, Deborah A. (University of Sydney); Dahmann, Sarah (University of Sydney); Salamanca, Nicolas (Melbourne Institute of Applied Economic and Social Research); Zhu, Anna (University of Melbourne) |
| Abstract: | We use variation in the extent of generational persistence across social assistance payments to shed light on the factors leading to intergenerational disadvantage. Our administrative data come from the Australian social security system and provide us with detailed social assistance trajectories – across the entire social safety net – for a birth cohort of young people and their families over an 18-year period. We find that young people are 1.8 times more likely to need social assistance if their parents have a history of receiving social assistance themselves. These young people also receive more intensive support; an additional $12,000 over an 8-year period. The intergenerational correlation is particularly strong in the case of disability payments, payments for those with caring responsibilities, and parenting payments for single parents. Disadvantage stemming from parents' poor labor market outcomes seems to be easier for young people to overcome. This suggests that parental disadvantage may be more harmful to children's later life outcomes if it is more strongly driven by circumstances rather than personal choice. |
| Keywords: | intergenerational correlations, socioeconomic disadvantage, social assistance |
| JEL: | H53 I38 J62 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11070&r=lab |
| By: | Hsin, Amy (Queens College, CUNY); Ortega, Francesc (Queens College, CUNY) |
| Abstract: | Deferred Action for Childhood Arrivals (DACA) is the first large-scale immigration reform to affect undocumented immigrants in the United States in decades and offers eligible undocumented youth temporary relief from deportation and renewable work permits. While DACA has improved the economic conditions and mental health of undocumented immigrants, we do not know how DACA improves the social mobility of undocumented immigrants through its effect on educational attainment. This paper uses administrative data on students attending a large public university to estimate the effect of DACA on undocumented students' educational outcomes. The data are unique because they accurately identify students' legal status, account for individual heterogeneity, and allow separate analysis of students attending community colleges versus baccalaureate-granting, 4-year colleges. Results from difference-in-difference estimates demonstrate that as a temporary work-permit program, DACA incentivizes work over educational investments but that the effect of DACA on educational investments depends on how easily colleges accommodate working students. At 4-year colleges, DACA induces undocumented students to make binary choices between attending school on a full-time basis or dropping out of school to work. At community colleges, undocumented students have the flexibility to simply reduce course work to accommodate increased work hours. Overall, the results suggest that the precarious and temporary nature of DACA creates barriers to educational investments. |
| Keywords: | immigration, undocumented immigration, education, Deferred Action for Childhood Arrivals, natural experiment |
| JEL: | J15 J24 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11078&r=lab |
| By: | Grinza, Elena (University of Turin); Devicienti, Francesco (University of Turin); Rossi, Mariacristina (University of Turin); Vannoni, Davide (University of Turin) |
| Abstract: | Attitudes of women and men about how paid and unpaid work should be divided in the couple largely determine women's earnings and career prospects. Hence, it is important to understand how people's gender role attitudes are formed and evolve over the lifetime. In this paper, we concentrate on one of the most path-breaking events in life: becoming a parent. Using longitudinal panel data for the UK, we first show that, in general, entry into parenthood significantly shifts women's attitudes toward more conservative views, while leaving men unaffected. We also show that the impact on women emerges only after some time from the childbirth, suggesting that attitudes change relatively slowly over time and do not react immediately after becoming a parent. Finally, we show that the impact gets large and strongly significant for women and men whose prenatal attitudes were progressive. In particular, we find that the change in attitudes for such individuals increases as the postnatal arrangements are more likely to be traditional. Overall, these findings suggest that the change in attitudes is mainly driven by the emergence of a cognitive dissonance. Broad policy implications are drawn. |
| Keywords: | gender equality, gender role attitudes, entry into parenthood, cognitive dissonance, changes in the hormonal production, Understanding Society (US) data set |
| JEL: | J16 J13 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11088&r=lab |
| By: | Parsons, Donald O. (George Washington University) |
| Abstract: | Employer-provided severance pay in the U.S. emerged among salaried workers during the Great Depression as an alternative to modest advance notice and expanded in the late 1950s and 1960s, especially among union (hourly) workers. A variety of sources are employed to estimate variations in severance coverage and design over the remainder of the 20th Century. The Bureau of Labor Statistics provided coverage estimates from 1980 to 2000, but these offered little information on severance plan structures, forcing reliance on surveys by private, for-profit management consulting firms. Although the studies differ in sample and survey instrument design, they broadly reveal a standard benefit form –essentially scheduled wage insurance, similar to severance plans mandated internationally. Coverage is another matter, with voluntary coverage narrowly focused on firms/workers vulnerable to large job displacement wage losses, while mandated coverage is quite broad. Labor market events of the new century highlight the limits of standard benefit schedules as wage insurance, whether voluntary or mandated. |
| Keywords: | severance pay, wage insurance, unemployment insurance, layoff, job displacement |
| JEL: | J65 J32 J33 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11067&r=lab |
| By: | Mosca, Irene (Trinity College Dublin); O'Sullivan, Vincent (Lancaster University); Wright, Robert E. (University of Strathclyde) |
| Abstract: | This paper investigates the relationship between maternal employment and child outcomes using micro-data collected in the third wave of The Irish Longitudinal Study on Ageing. A novel source of exogenous variation in the employment decisions of women is used to investigate this relationship. Between the 1920s and the 1970s in Ireland, women working in certain sectors and jobs were required to leave their jobs once they married. The majority of women affected by this "Marriage Bar" then became mothers and never returned to work, or returned only after several years. Regression analysis is used to compare the educational attainment of the children of mothers who were required to leave employment on marriage because of the Marriage Bar to the educational attainment of the children of mothers who were not required to do so. It is found that the children of mothers affected by the Marriage Bar were about seven percentage points more likely to complete university education than the children of mothers who were not. This is a sizeable effect when compared to the observation that about 40% of the children in the sample completed university education. This effect is found to be robust to alternative specifications that include variables aimed at controlling for differences in maternal occupation, personality traits, and differences in paternal education. |
| Keywords: | marriage, mother, employment, child, university education |
| JEL: | J12 J16 J20 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11085&r=lab |
| By: | Fabio Berton (University of Torino); Francesco Devicienti (University of Torino); Sara Grubanov-Boskovice (University of Torino) |
| Abstract: | Liberalization of temporary contracts has been a hallmark of labor market reforms during the last decades. More recently, factors like the sovereign debt crisis pushed the most indebted countries to unprecedented reductions of employment protection legislation (EPL) also on open-ended contracts. These policies are justified under the assumption that EPL harms the allocation of workers on the jobs where they are most productive. How EPL affects the quality of job matches is nonetheless an underexplored issue. In this paper, we provide new evidence that exploits exactly one of these recent reforms, the so-called Fornero Law, introduced in Italy in 2012 in the background of austerity reforms. Results show that good matches have increased. Further, the reduction in EP favored labor reallocation. Eventually, it was also followed by an increase in productivity, albeit small. While the results are consistent with the economic theory that informed deregulation, we highlight caveats and limitations. |
| Keywords: | Employment Protection Legislation, Turnover, Mismatch, Productivity, Fornero Law, Difference-in-differences |
| JEL: | J24 J63 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201711&r=lab |
| By: | Braun, Sebastian; Kramer, Anica; Kvasnicka, Michael |
| 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,postwar Germany |
| JEL: | J61 R12 R23 N34 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:712&r=lab |
| By: | Albert, Christoph (Pompeu Fabra University); Monras, Joan (CEMFI, Madrid) |
| Abstract: | This paper investigates the causes and effects of the spatial distribution of immigrants across US cities. We document that: a) immigrants concentrate in large, high-wage, and expensive cities, b) the earnings gap between immigrants and natives is higher in larger and more expensive cities, and c) immigrants consume less locally than natives. In order to explain these findings, we develop a simple quantitative spatial equilibrium model in which immigrants consume (either directly, via remittances, or future consumption) a fraction of their income in their countries of origin. Thus, immigrants not only care about local prices, but also about price levels in their home country. Hence, if foreign goods are cheaper than local goods, immigrants prefer to live in high-wage, high-price, and high-productivity cities, where they also accept lower wages than natives. Using the estimated model we show that current levels of immigration have reduced economic activity in smaller, less productive cities by around 3 percent, while they have expanded the activity in large and productive cities by around 4 percent. This has increased total aggregate output per worker by around 15 percent. |
| Keywords: | immigration, location choices, spatial equilibrium |
| JEL: | F22 J31 J61 R11 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11075&r=lab |
| By: | Biewen, Martin (University of Tuebingen); Fitzenberger, Bernd (Humboldt University Berlin) |
| Abstract: | This study revisits the increase in wage inequality in Germany. Accounting for changes in various sets of observables, composition changes explain a large part of the increase in wage inequality among full-time workers. The composition effects are larger for females than for males, and increasingly heterogenous labor market histories play an important role. Furthermore, we find strong effects of education for males and strong effects of age and experience for females. Changes in industry and occupation explain fairly little. Extending the analysis to total employment confirms the basic findings, while revealing substantial negative selection into part-time work. |
| Keywords: | wage inequality, reweighting, composition effects, Germany |
| JEL: | J31 J20 J60 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11072&r=lab |
| By: | Parsons, Donald O. (George Washington University) |
| Abstract: | Employer-provided severance pay plans became common during the Great Depression, a reaction to (i) large-scale layoffs of long-service workers, and (ii) the growing formalism of the employment relationship. Reasonably consistent series are constructed for severance plan coverage and structure by broad occupational group (office or factory workers) over the next two decades based on an ambitious series of surveys conducted by the National Industrial Conference Board. By 1953/54, approximately one-third of surveyed companies reported having a formal severance plan for nonexempt salary workers and one-sixth for hourly workers. Over much of the period, modal long-service plans offered benefits of a week's pay for each year of service, although many firms, especially those outside the manufacturing sector, offered flat-rate "notice" payments of only a week or two. Surprisingly, coverage levels were only modest higher in 1954 than in the late 1930s. The stability of plan coverage and design in the face of large changes in economic conditions and labor relations remains a puzzle. |
| Keywords: | severance pay, wage insurance, unemployment insurance, job displacement insurance, advance notice, layoff, Great Depression |
| JEL: | J65 J32 J33 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11068&r=lab |
| By: | Sarkar, Sudipa (University of Warwick); Sahoo, Soham (University of Goettingen); Klasen, Stephan (University of Göttingen) |
| Abstract: | This study analyses employment transitions of working-age women in India. The puzzling issue of low labour force participation despite substantial economic growth, strong fertility decline and expanding female education in India has been studied in the recent literature. However, no study so far has looked into the dynamics of employment in terms of labour force entry and exit in this context. Using a nationally representative panel dataset, we show that women are not only participating less in the labour force, but also dropping out at an alarming rate. We estimate an endogenous switching model that corrects for selection bias due to initial employment and panel attrition, to investigate the determinants of women's entry into and exit from employment. We find that an increase in income of other members of the household leads to lower entry and higher exit probabilities of women. This income effect persists even after controlling for the dynamics of asset holding of the household. Along with the effects of caste and religion, this result reveals the importance of cultural and economic factors in explaining the declining workforce participation of women in India. We also explore other individual and household level determinants of women's employment transitions. Moreover, we find that a large public workfare program significantly reduces women's exit from the labour force. |
| Keywords: | female labour force participation, employment transition, panel data, sample selection, attrition, India |
| JEL: | J21 J16 O15 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11086&r=lab |
| By: | Bredtmann, Julia (RWI); Otten, Sebastian (RWI); Rulff, Christian (Ruhr University Bochum) |
| Abstract: | This paper investigates the responsiveness of women's labor supply to their husband's job loss – the so-called added worker effect. We contribute to the literature by taking an explicit internationally comparative perspective and analyze the variation of the added worker effect across welfare regimes. Using longitudinal data from the European Union Statistics on Income and Living Conditions (EU-SILC) covering 28 European countries from 2004 to 2013, we find evidence for the existence of an added worker effect. However, our results also reveal that the added worker effect varies over both the business cycle and the different welfare regimes within Europe. |
| Keywords: | added worker effect, labor supply, unemployment, cross-country analysis |
| JEL: | J22 J64 J82 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11087&r=lab |
| By: | Kraft, Kornelius |
| Abstract: | Codetermination can be regarded as an extreme regulatory intervention of the legislator in the labor market which might affect the efficiency of production and the bargaining power of labor. Based on a model that covers both efficient bargaining and employment bargaining a simple equation is derived that is suited to empirical testing. The empirical test is based on German data and includes years before and after the extension of German codetermination law in 1976. The estimates determine the productivity of labor and relative bargaining power of capital and labor. It turns out that codetermination does not affect productivity, but leads to a significant increase in workers' bargaining power and the distribution of rents. |
| Keywords: | codetermination,productivity,wage-bill share,bargaining |
| JEL: | L22 L23 J52 J53 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17039&r=lab |
| By: | Oberfichtner, Michael (University of Erlangen-Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg) |
| Abstract: | Using data from the representative IAB Establishment Panel, this paper charts changes in the two main pillars of the German IR model over the last 20 years. It shows that collective bargaining coverage and worker representation via works councils have substantially fallen outside the public sector. Less formalized and weaker institutions such as voluntary orientation of uncovered firms towards sectoral agreements and alternative forms of employee representation at the workplace have partly attenuated the overall erosion in coverage. Multivariate analyses indicate that the traditional German IR model (with both collective agreements and works council presence) is more likely to be found in larger and older establishments, and it is less likely in establishments managed by the owner, in single and foreign-owned establishments, in individually-owned firms or partnerships, and in exporting establishments. In contrast, more than 60 percent of German establishments did not exhibit bargaining coverage or orientation or any kind of worker representation in 2015. Such a complete absence of the main institutional features of the German IR model is predominantly found in small and medium-sized establishments, in particular in the service sector and in eastern Germany, and its extent is increasing dramatically. |
| Keywords: | collective bargaining, bargaining coverage, works council, worker participation, industrial relations, Germany |
| JEL: | J50 J52 J53 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11064&r=lab |
| By: | Jirjahn, Uwe (University of Trier); Smith, Stephen C. (George Washington University) |
| Abstract: | Theories of how nonunion employee representation impacts firm performance, affects market equilibria, and generates externalities on labor and society are synthesized. Mandated works councils in Germany provide a particularly strong form of nonunion employee representation. A systematic review of research on the German experience with mandated works councils finds generally positive effects, though these effects depend on a series of moderating factors and some impacts remain ambiguous. Finally, key questions for empirical research on nonunion employee representation, which have previously been little analyzed in the literature, are reviewed. |
| Keywords: | nonunion representation, works councils, organizational failures, market failures, society |
| JEL: | J50 M50 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11066&r=lab |
| By: | Joan Costa-i-Font; Martin Ljunge |
| Abstract: | The association between occupational status and health has been taken to reveal the presence of health inequalities shaped by occupational status. However, that interpretation assumes no influence of health status in explaining occupational standing. This paper documents evidence of non-negligible returns to occupation status on health (which we refer as ‘healthy worker effect’). We use a unique empirical strategy that addressed reverse causality, namely an instrumental variable strategy using the variation in average health in the migrant’s country of origin, a health measure plausibly not determined by the migrant’s occupational status. Our findings suggest that health status exerts significant effects on occupational status in several dimensions; having a supervising role, worker autonomy, and worker influence. The effect size of health is larger than that of an upper secondary education. |
| Keywords: | occupational status, self-reported health, immigrants, work autonomy, supervising role |
| JEL: | J50 I18 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6712&r=lab |