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on Labour Economics |
| By: | Martin Guzi |
| Abstract: | Theoretical arguments and previous country-level evidence indicate that immigrants are more fluid than natives in responding to changing labor shortages across countries, skill-groups or industries. The diversity across EU member states enables us to test this hypothesis across various institutional, economic and policy contexts. Drawing on the EU LFS and EU SILC datasets we study the relationship between residual wage premia as a measure of labor shortages in different skill-industry-country cells and the shares of migrants and natives working in these cells. We find that immigrants’ responsiveness to labor market shortages exceeds that of natives in the EU15, in particular in member states with higher unemployment rates, higher levels of (recent) immigration, and more open immigration and integration policies; but also those with barriers to citizenship acquisition or family reunification. Whereas higher welfare expenditures seem to exert a lock-in effect, a comparison across different types of welfare states indicates that institutional complementarities neutralize that effect. |
| Keywords: | labor supply, skill matching, migration, labor shortage, welfare state,institutions, policy |
| JEL: | J15 J24 J61 J68 |
| Date: | 2017–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:cel:dpaper:45&r=lab |
| By: | López-Mourelo, Elva; Alba Ramírez, Alfonso |
| Abstract: | We use a sample of social security records containing work histories and sick leave episodes to investigate gender differences in the incidence and duration of absence from work due to sickness in Spain. For sick leave incidence we apply a competing risk model to a panel of newly employed workers who can be followed for two years until an episode of sick leave occurs or the job ends. For the duration of sick leave spells, we estimate a Weibull model. We distinguish between sick leave due to occupational illness or injury and sick leave due to common disease or accident. This distinction is important because only for the latter women have higher incidence and longer duration than men. In this respect, the presence of children under 3 years of age in the household becomes a significant explanatory factor. |
| Keywords: | Proportional hazard model; Competing risks; Cumulative incidence; Gender differences; Sick leave |
| JEL: | J81 J28 J14 |
| Date: | 2017–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:25937&r=lab |
| By: | Netz, Nicolai; Parey, Matthias; Ruhose, Jens; Waldinger, Fabian |
| Abstract: | We measure selection among high-skilled emigrants from Germany using predicted earnings. Migrants to less equal countries are positively selected relative to non-migrants, while migrants to more equal countries are negatively selected, consistent with the prediction in Borjas (1987). Positive selection to less equal countries reflects university quality and grades, and negative selection to more equal countries reflects university subject and gender. Migrants to the United States are highly positively selected and concentrated in STEM fields. Our results highlight the relevance of the Borjas model for high-skilled individuals when credit constraints and other migration barriers are unlikely to be binding. |
| Keywords: | emigrants; high-skilled; migrant selection; migrants |
| JEL: | F22 I23 J61 O15 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12403&r=lab |
| By: | Bruce Hollingsworth (Lancaster University, United Kingdom); Asako Ohinata (Department of Economics, University of Leicester, United Kingdom; CentER, Tilburg University, The Netherlands.); Matteo Picchio (Department of Economics and Social Sciences, Marche Polytechnic University, Ancona, Italy; Sherppa, Ghent University, Belgium; IZA, Germany.); Ian Walker (Management School, Lancaster University, United Kingdom; IZA, Germany.) |
| Abstract: | We investigate the impact of a policy reform, which introduced free formal personal care for all those aged 65 and above, on caregiving behaviour. Using a difference-indifferences estimator, we estimate that the free formal care reduced the probability of co-residential informal caregiving by 12.9%. Conditional on giving co-residential care, the mean reduction in the number of informal care hours is estimated to be 1:2 hours per week. The effect is particularly strong among older and less educated caregivers. In contrast to co-residential informal care, we find no change in extra-residential caregiving behaviour. We also observe that the average labour market participation and the number of hours worked increased in response to the policy introduction. |
| Keywords: | Long-term elderly care; ageing; financial support; informal caregiving; difference-in-differences |
| JEL: | C21 D14 I18 J14 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:424&r=lab |
| By: | Elsby, Michael (University of Edinburgh); Michaels, Ryan (Federal Reserve Bank of Philadelphia); Ratner, David (Board of Governors of the Federal Reserve System) |
| Abstract: | Labor market frictions are able to induce sluggish aggregate employment dynamics. However, these frictions have strong implications for the source of this propagation: They distort the path of aggregate employment by impeding the flow of labor across firms. For a canonical class of frictions, we show how observable measures of such flows can be used to assess the effect of frictions on aggregate employment dynamics. Application of this approach to establishment microdata for the United States reveals that the empirical flow of labor across firms deviates markedly from the predictions of canonical labor market frictions. Despite their ability to induce persistence in aggregate employment, firm-size flows in these models are predicted to respond aggressively to aggregate shocks but react sluggishly in the data. This paper therefore concludes that the propagation mechanism embodied in standard models of labor market frictions fails to account for the sources of observed employment dynamics. |
| Keywords: | Labor market frictions; firm dynamics; adjustment costs |
| JEL: | E32 J63 J64 |
| Date: | 2017–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:17-40&r=lab |
| By: | Matteo Cacciatore; Romain Duval; Giuseppe Fiori; Fabio Ghironi |
| 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. |
| JEL: | E24 E32 E52 F41 J64 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23960&r=lab |
| By: | Verstegen, Loes (Tilburg University, School of Economics and Management) |
| Abstract: | This dissertation consists of three chapters on fiscal and monetary integration in Europe. The first chapter investigates quantitatively the benefits from participation in the Economic and Monetary Union for individual Euro area countries. The synthetic control method is used to estimate how real GDP per capita would have developed for the EMU member states, if those countries had not joined the EMU. The estimates show that most countries have profited from having the euro, though the crisis leads to negative effects of EMU membership. The PIGS countries in particular would have been better off if they had not been an EMU member during the crisis. The second chapter examines the effectiveness of an automatic fiscal transfer mechanism for the Economic and Monetary Union. A transfer scheme is incorporated into a DSGE model for a monetary union with an extensive fiscal sector. Using a heterogeneous setup, the model is estimated for the North and the South of Europe using Bayesian methods. The transfer mechanism is shown to be effective in stabilizing the economy of the southern block of countries during the financial crisis, although the total welfare effect for the EMU is negative, though small. Ex ante, a transfer mechanism would be beneficial for both the North and the South in terms of welfare and stabilization purposes. In the third chapter, an EMU-wide unemployment insurance is incorporated into an estimated DSGE model for the Euro area. The European unemployment benefit scheme, if introduced in 2013 replacing the regional systems, would have had positive risk sharing effects on the North and the South. If this introduction would have led to a higher level of the unemployment benefit in a region, unemployment would have increased. Ex ante, the European unemployment benefit scheme would be beneficial for both the northern and southern block of countries in terms of welfare and stabilization of employment. Labor market harmonization would lead to higher gains from European unemployment insurance. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:49f73a6c-d32d-4dff-b5ec-4068b371a643&r=lab |
| By: | Clément Bosquet; Pierre-Philippe Combes; Cecilia García-Peñalosa |
| Abstract: | The promotion system for French academic economists provides an interesting environment to examine the promotion gap between men and women. Promotions occur through national competitions for which we have information both on candidates and on those eligible to be candidates. We can then examine the two stages of the process: application and success. Women are less likely to seek promotion and this accounts for up to 76% of the promotion gap. Being a woman also reduces the probability of promotion conditional on applying, although the gender difference is not statistically significant. Our results highlight the importance of the decision to apply. |
| Keywords: | gender gaps, promotions, academic labour markets |
| JEL: | J16 J7 I23 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1511&r=lab |
| By: | Benjamin W. Pugsley (University of Notre Dame); Petr Sedlacek (Centre for Macroeconomics (CFM); University of Oxford); Vincent Sterk (Centre for Macroeconomics (CFM); University College London (UCL)) |
| Abstract: | Only half of all startups survive past the age of ve and surviving businesses grow at vastly dierent speeds. Using micro data on employment in the population of U.S. businesses, we estimate that the lion's share of these differences is driven by ex-ante heterogeneity across firms, rather than by ex-post shocks. We embed such heterogeneity in a firm dynamics model and study how ex-ante differences shape the distribution of firm size, "up-or-out" dynamics, and the associated gains in aggregate output. "Gazelles" - a small subset of startups with particularly high growth potential - emerge as key drivers of these outcomes. Analyzing changes in the distribution of ex-ante firm heterogeneity over time reveals that gazelles are driven towards extinction, creating substantial aggregate losses. |
| Keywords: | Firm dynamics, Startups, Macroeconomics, Big data |
| JEL: | D22 E23 E24 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1737&r=lab |
| By: | Magdalena M. Ulceluse |
| Abstract: | The paper contributes to existing debates concerning the effectiveness of immigration policies, by investigating the particular case of transitional arrangements implemented during the European Union enlargement rounds of 2004 and 2007. A number of authors have argued that instead of deterring immigration, the arrangements have changed the channels EU8 and EU2 migrants have chosen to enter the country of destination, by becoming self-employed. Self- employed individuals were not subjected to restrictions. Our results suggest that EU2 migrants have indeed turned to self-employment as a way to circumvent the restrictions, and point to a substitution effect in the case of EU8 migrants. The results have broader research and policy implications, revealing the importance of considering the effect immigration policies have in shaping the volume and skill composition of migrants, as well as their labour market trajectories and subsequent economic activities. |
| Keywords: | transitional arrangements, immigration policy, immigrant self-employment, EU enlargement, EU mobility |
| JEL: | J15 J18 J61 J68 |
| Date: | 2017–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:cel:dpaper:47&r=lab |
| By: | Christl, Michael; Köppl-Turyna, Monika; Gnan, Phillipp |
| Abstract: | This paper analyzes wage differences between natives and immigrants in Austria. First, we show that for both groups, literacy skills are an important determinant of the hourly wage. In the second step, we show that differences in proficiency with respect to literacy can explain more than three log points of the total wage gap of 9.7 log points between natives and immigrants. When adding literacy skills to the wage decomposition, the discriminatory part vanishes completely, suggesting that the wage difference between immigrants and natives in Austria can be to a large extent explained. Furthermore, we account for a possible sample selection bias. After controlling for literacy skills, the unexplained part of the gap becomes statistically insignificant. The importance of literacy skills in explaining wage differences between natives and immigrants is robust across several sensitivity tests. |
| Keywords: | wage,decomposition,gap,immigrants,natives,Austria |
| JEL: | J71 J15 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:agawps:12&r=lab |
| By: | Acharya, Sushant (Federal Reserve Bank of New York); Bengui, Julien (Université de Montréal); Dogra, Keshav (Federal Reserve Bank of New York); Wee, Shu Lin (Carnegie Mellon University) |
| Abstract: | We present a model in which temporary shocks can permanently scar the economy's productive capacity. Unemployed workers lose skill and are expensive to retrain, generating multiple steady state unemployment rates. Large temporary shocks push the economy into a liquidity trap, generating deflation. With nominal wages unable to adjust freely, real wages rise, reducing hiring and catapulting the economy toward the high-unemployment steady state. Even after a short-lived liquidity trap, the economy recovers slowly at best; at worst, it falls into a permanent unemployment trap. Because monetary policy may be powerless to escape such a trap ex post, it is especially important to avoid it ex ante: policy should be preventive rather than curative. The model can quantitatively account for the slow recovery in the United States following the Great Recession. The model also suggests that a lack of swift monetary accommodation by the ECB can help explain stagnation in the European periphery. |
| Keywords: | hysteresis; monetary policy; multiple steady states; skill depreciation |
| JEL: | E24 E3 E5 J23 J64 |
| Date: | 2017–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:831&r=lab |
| By: | Bernard Michael Gilroy (Paderborn University); Julia Günthner (Paderborn University) |
| Abstract: | The international business competition fostered new forms of flexible working and atypical employment. The flexibilization process started during the 1970s and continues to change the labor market and the perception of labor to the present day. As a result, a new class, called the precariat, is establishing which can be characterized by insecure employment and living. Precarity resulting from fixed-term, short-term, part-time or temporary employment can concern everyone and has negative consequences on society, economy and health. In parallel to the development of precarity, a possibility of basic security in the form of the Unconditional Basic Income (UBI) is discussed globally. However, the particular situation in Germany, regarding the precariat and the UBI as a possible solution has not been outlined yet. Although, UBI implementation models have been proposed for Germany, there is no analysis in the current literature that would show the effect of the UBI on the German precariat. Applying a modern macroeconomic analysis within the scope of the jobless growth argument, the paper investigates the effect of an UBI on goods demand, economic growth, employment level and consequently, the precariat. The paper shows that an implemented UBI as well as labor-related security increase economic growth and can reduce the German precariat. Politicians and employers should be aware of this positive aspect of the UBI and implement policies to reduce labor-related insecurities in order to decrease the growing precarity. |
| Keywords: | Precariat, atypical employment, flexibility, basic income, jobless growth, AS, AD |
| JEL: | E21 E24 E27 H53 I13 J68 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:ciepap:109&r=lab |
| By: | Magdalena M. Ulceluse |
| Abstract: | The paper analyses the effect of employment protection legislation on immigrant self- employment rates, using OECD indicators on the strictness of employment protection legislation (EPL). As migrants are outsiders in the labour market, the effect of employment protection on their probability of finding a job should be most likely negative, even if the net effect of employment protection on aggregate employment is unclear. We find no significant effects of EPL of migrant self-employment rates, in a multivariate context. |
| Keywords: | immigrant self-employment, employment protection legislation |
| JEL: | J81 J88 J15 |
| Date: | 2017–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:cel:dpaper:46&r=lab |