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on Labour Economics |
| By: | Mayda, Anna Maria; Ortega, Francesc; Peri, Giovanni; Shih, Kevin; Sparber, Chad |
| Abstract: | The H-1B program allows skilled foreign-born individuals to work in the United States. The annual quota on new H-1B issuances fell from 195,000 to 65,000 for employees of most firms in fiscal year 2004. This cap did not apply to new employees of colleges, universities, and non-profit research institutions. Existing H-1B holders seeking to renew their visa were also exempt from the quota. Using a triple difference approach, this paper demonstrates that cap restrictions significantly reduced the employment of new H-1B workers in for-profit firms relative to what would have occurred in an unconstrained environment. Employment of similar natives in for-profit firms did not change, consistent with a low degree of substitutability between H-1B and native workers. The restriction also redistributed H-1Bs toward computer-related occupations, Indian-born workers, and firms using the H-1B program intensively. |
| Keywords: | H-1B; Natural Experiment; Skilled Workers |
| JEL: | F22 J61 O33 R10 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12736&r=lab |
| By: | Bruno Rodrigues; Vincent Vergnat |
| Abstract: | Previous studies have shown that childrearing has a different impact on a mother’s professional career, depending, among other reasons, on how much time passed from birth to returning to work. In this paper, we use a competing risks model to determine which variables may explain time out of work, as well as the transition back to work. In our study, mothers can decide to go back to the same employer, change employer and/or change labour supply. Our results show that it is mostly the age of the mothers at birth, their pre-birth wages, tenure, firm size, activity sector as well as the state of the economy as a whole that play a large role in the way young mothers go back to work, if at all. |
| Keywords: | Maternity Leave, Labour Supply, Competing Risks. |
| JEL: | C14 D10 J13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2018-14&r=lab |
| By: | Fasani, Francesco (Queen Mary, University of London); Frattini, Tommaso (University of Milan); Minale, Luigi (Universidad Carlos III de Madrid) |
| Abstract: | In this paper, we use repeated cross-sectional survey data to study the labour market performance of refugees across several EU countries and over time. In the first part, we document that labour market outcomes for refugees are consistently worse than those for other comparable migrants. The gap remains sizeable even after controlling for individual characteristics as well as for unobservables using a rich set of fixed effects and interactions between area of origin, entry cohort and destination country. Refugees are 11.6 percent less likely to have a job and 22.1 percent more likely to be unemployed than migrants with similar characteristics. Moreover, their income, occupational quality and labour market participation are also relatively weaker. This gap persists until about 10 years after immigration. In the second part, we assess the role of asylum policies in explaining the observed refugee gap. We conduct a difference-in-differences analysis that exploits the differential timing of dispersal policy enactment across European countries: we show that refugee cohorts exposed to these polices have persistently worse labour market outcomes. Further, we find that entry cohorts admitted when refugee status recognition rates are relatively high integrate better into the host country labour market. |
| Keywords: | asylum seekers, assimilation, refugee gap, asylum policies |
| JEL: | F22 J61 J15 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11333&r=lab |
| By: | Sascha Drahs; Luke Haywood; Amelie Schiprowski |
| Abstract: | This paper analyzes how subjective expectations about wage opportunities influence the job search decision. We match data on subjective wage expectations with administrative employment records. The data reveal that unemployed individuals over-estimate their future net re-employment wage by 10% on average. In particular, the average individual does not anticipate that wage offers decline in value with their elapsed time out of employment. How does this optimism affect job finding? We analyze this question using a structural job search framework in which subjective expectations about future wage offers are not constrained to be consistent with reality. Results show that wage optimism has highly dynamic effects: upon unemployment entry, optimism decreases job finding by about 8%. This effect weakens over the unemployment spell and eventually switches sign after about 8 months of unemployment. From then onward, optimism prevents un- employed individuals from becoming discouraged and thus increases search. On average, optimism increases the duration of unemployment by about 6.5%. |
| Keywords: | Job search, subjective expectations, structural estimation |
| JEL: | J64 D83 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1725&r=lab |
| By: | Dahl, Gordon B. (University of California, San Diego); Gielen, Anne C. (Erasmus University Rotterdam) |
| Abstract: | Does participation in a social assistance program by parents have spillovers on their children's own participation, future labor market attachment, and human capital investments? While intergenerational concerns have figured prominently in policy debates for decades, causal evidence is scarce due to non-random participation and data limitations. In this paper we exploit a 1993 policy reform in the Netherlands which tightened disability insurance (DI) criteria for existing claimants, and use rich panel data to link parents to children's long-run outcomes. The key to our regression discontinuity design is that the reform applied to younger cohorts, while older cohorts were exempted from the new rules. We find that children of parents who were pushed out of DI or had their benefits reduced are 11% less likely to participate in DI themselves, do not alter their use of other government safety net programs, and earn 2% more in the labor market as adults. The combination of reduced government transfers and increased tax revenue results in a fiscal gain of 5,900 euros per treated parent due to child spillovers by 2014. Moreover, children of treated parents complete an extra 0.12 years of schooling on average, an investment consistent with an anticipated future with less reliance on DI. Our findings have important implications for the evaluation of this and other policy reforms: ignoring parent-to-child spillovers understates the long-run cost savings of the Dutch reform by between 21 and 40% in present discounted value terms. |
| Keywords: | peer effects, disability insurance, intergenerational links |
| JEL: | I38 H53 J62 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11334&r=lab |
| By: | Uschi Backes-Gellner; Holger Herz; Michael Kosfeld; Yvonne Oswald |
| Abstract: | Evidence suggests that acquiring human capital is related to better life outcomes, yet young peoples’ decisions to invest in or stop acquiring human capital are still poorly understood. We investigate the role of time and reference-dependent preferences in such decisions. Using a data set that is unique in its combination of real-world observations on student outcomes and experimental data on economic preferences, we find that a low degree of long-run patience is a key determinant of dropping out of upper-secondary education. Further, for students who finish education we show that one month before termination of their program, present-biased students are less likely to have concrete continuation plans while loss averse students are more likely to have a definite job offer already. Our findings provide fresh evidence on students’ decision-making about human capital acquisition and labor market transition with important implications for education and labor market policy. |
| Keywords: | economic preferences, education, dropout, human capital, job search |
| JEL: | D01 D03 D91 I21 J64 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6863&r=lab |
| By: | Clarke, Andrew (University of Melbourne); Ferrer, Ana (University of Waterloo); Skuterud, Mikal (University of Waterloo) |
| Abstract: | We examine data from Australia, Canada, and the U.S. to inform the potential for immigrant screening policies to influence the labour market performance of skilled immigrants. Our estimates point to improvements in employment rates and weekly earnings of male university-educated immigrants in all three countries concomitant with skilled immigration policy reforms. Nonetheless, the gains are modest in comparison to a substantial and persistent performance advantage of U.S. skilled immigrants. Given that there is increasingly little to distinguish the skilled immigration policies of these countries, we interpret the U.S. advantage as primarily reflecting the relative positive selectivity of U.S. immigrants. |
| Keywords: | skilled migration, immigrant selection policies, immigrant labour market performance |
| JEL: | J24 J15 J08 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11344&r=lab |
| By: | Kasey Buckles; Daniel Hungerman; Steven Lugauer |
| Abstract: | Many papers show that aggregate fertility is pro-cyclical over the business cycle. In this paper we do something else: using data on more than 100 million births and focusing on within-year changes in fertility, we show that for recent recessions in the United States, the growth rate for conceptions begins to fall several quarters prior to economic decline. Our findings suggest that fertility behavior is more forward-looking and sensitive to changes in short-run expectations about the economy than previously thought. |
| JEL: | E32 E37 J11 J13 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24355&r=lab |
| By: | Dagnelie, Olivier; Mayda, Anna Maria; Maystadt, Jean-François |
| Abstract: | We investigate whether entrepreneurs in the network of refugees - from the same country of origin - help refugees' labor-market integration by hiring them in their businesses. We analyze the universe of refugee cases without U.S. ties who were resettled in the United States between 2005 and 2010. We address threats to identification due to sorting of refugees into specific labor markets and to strategic placement by resettlement agencies. We find that the probability that refugees are employed 90 days after arrival is positively affected by the number of business owners in their network, but negatively affected by the number of those who are employees. This suggests that network members who are entrepreneurs hire refugees in their business, while network members working as employees compete with them, consistent with refugees complementing the former and substituting for the latter. |
| Keywords: | entrepreneurship; labor market integration; Refugees |
| JEL: | F22 J61 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12735&r=lab |
| By: | Janssen, Simon (Institute for Employment Research (IAB), Nuremberg); Mohrenweiser, Jens (Bournemouth University) |
| Abstract: | In periods of accelerating technological change, incumbent workers must continuously update their skills to remain productive. In contrast, high school or college graduates recently entering the labor market often have the most up-to-date skills. We investigate how incumbent workers' careers respond to the increasing labor supply of graduates with more technologically advanced IT skills during a period of accelerating technological change. We identify a supply shock of more technologically advanced IT-skilled graduates by exploiting a reform of a German training regulation, a reform mandating all new apprentices in a large manufacturing occupation to acquire in-depth IT skills. We use a difference-in-differences approach to analyze how this supply shock of IT-skilled workers affected the careers of incumbent workers. The results show that even young incumbents experienced long-lasting earnings losses in the form of lower wage growth after the IT-skilled graduates entered the labor market. A detailed analysis of the mechanisms suggests that incumbents on average forwent promotions and technologically advanced IT-skilled graduates crowded incumbents out of their occupation. However, despite losing their occupation, incumbents experienced relatively little unemployment during the transition period following the supply shock and on average resumed stable careers in other occupations and sectors. |
| Keywords: | skill-biased technological change, wage adjustments, supply shock, apprenticeship |
| JEL: | J24 J64 O30 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11312&r=lab |
| By: | Lochmann, Alexia (University of Paris 1 Panthéon-Sorbonne, PSE); Rapoport, Hillel (Paris School of Economics); Speciale, Biagio (Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | We examine the impact of language training on the economic integration of immigrants in France. The assignment to this training, offered by the French Ministry of the Interior, depends mainly on a precise rule: the training is provided if the test score of an initial language exam is below a certain threshold. This eligibility rule creates a discontinuity in the relation between the test result and the variables of interest, which is used to estimate the causal effect of language training, through the method of Regression Discontinuity Design. We find that the number of assigned hours of training significantly increases labor force participation of the treated individuals. The language classes appear to have a larger effect for labor migrants and refugees relative to family migrants, for men and individuals below the median age, and for individuals with higher levels of education. Our estimated coefficients are remarkably similar when we rely on local linear regressions using the optimal bandwidth with few observations around the threshold and when we control parametrically for a polynomial of the forcing variable and use the whole estimation sample. We discuss extensively why manipulation of the entry test score is theoretically unlikely and show robustness checks that consider the possibility of misclassification. We conclude with a discussion of the candidate mechanisms for the improved labor market participation of immigrants. |
| Keywords: | immigrants' integration, language training, Regression Discontinuity Design |
| JEL: | J15 J61 J68 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11331&r=lab |
| By: | Edgar Salgado Chavez (Department of Economics, University of Sussex) |
| Abstract: | Using two rounds of population census for 1043 districts in Peru I document that large-scale mining activity had a positive effect on local employment over 14 years. The effect is differentiated by industry, skill and migration status. Employment grew by 0.04 percentage points faster by one standard deviation increase in the mineral prices. Both high and low skilled workers enjoyed similar employment increase, however only low skilled workers experienced a decline in unemployment. Using data from 10 annual household surveys I find that, consistent with a model of heterogeneous firms and labor, wages for low skilled workers in districts close to the mining activity was 0.05 percentage points higher by every standard deviation increase in the index of mineral prices. Additional evidence with the census data suggests that locals working in the mining or the agricultural sector filled the new employment opportunities. More evidence suggests that mobility costs and not the elasticity of substitution between high and low skilled workers or skill acquisition may explain the outcome. Together these findings suggest that large-scale mining activity increases the demand for mining and agricultural local employment, and the wages in the local economy. |
| Keywords: | local labour markets; mining; productivity |
| JEL: | J61 O12 R12 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:0718&r=lab |
| By: | Chłoń-Domińczak, Agnieszka (Warsaw School of Economics); Góra, Marek (Warsaw School of Economics); Kotowska, Irena E. (Warsaw School of Economics); Magda, Iga (Warsaw School of Economics); Ruzik-Sierdzińska, Anna (Warsaw School of Economics); Strzelecki, Pawel (Warsaw School of Economics) |
| Abstract: | Old-age pensions in the NDC systems reflect the accumulated lifetime labour income. Interrupted careers and differences in the employment rates, particularly between men and women will have a significant impact on pension incomes in NDC countries. In the paper, we compare the labour market developments in four countries: Germany, Italy, Poland, and Sweden. There are pronounced differences in the labour market participation in the four countries: high levels of employment in Germany and Sweden are in contrast with low levels of employment in Italy and Poland. In the latter two countries, there is also a large gender gap in the labour market participation and employment pathways. Lower employment rates and gender pay gaps, as well as country-specific employment paths are important causes of differences in expected pension levels, but there are also differences due to the design of pension system and demographic developments. Prolonging working lives and reducing gender gaps in employment and pay, particularly for those at risk of interrupted careers, is key to ensure decent old-age pensions in the future. We argue that the pension systems' design modifications that weaken the link between contribution and benefits would not solve the challenge of providing adequate old-age pensions to people with interrupted careers. On the contrary, it would make the pension systems less sustainable, while the problem would be more challenging in the future. |
| Keywords: | NDC, old-age pensions, lifetime labour income, gender pay gap, interrupted carriers, sequence analysis, employment path |
| JEL: | H55 J16 J26 J31 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11341&r=lab |
| By: | Jauer, Julia (Federal Ministry of Labor and Social Affairs (BMAS), Germany); Liebig, Thomas (OECD); Martin, John P. (University College Dublin); Puhani, Patrick A. (Leibniz University of Hannover) |
| Abstract: | We estimate whether migration can be an equilibrating force in the labour market by comparing pre- and post-crisis migration movements at the regional level in both Europe and the United States, and their association with asymmetric labour market shocks. Based on fixed-effects regressions using regional panel data, we find that Europe's migratory response to unemployment shocks was almost identical to that recorded in the United States after the crisis. Our estimates suggest that, if all measured population changes in Europe were due to migration for employment purposes – i.e. an upper-bound estimate – up to about a quarter of the asymmetric labour market shock would be absorbed by migration within a year. However, in Europe and especially in the Eurozone, the reaction to a very large extent stems from migration of recent EU accession country citizens as well as of third-country nationals. |
| Keywords: | free mobility, migration, economic crisis, labour market adjustment, Eurozone, Europe, United States |
| JEL: | F15 F22 J61 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11328&r=lab |
| By: | Dolado, Juan J.; Motyovszki, Gergo; Pappa, Evi |
| Abstract: | Contrary to previous beliefs, recent empirical work has found that the effects of monetary policy on inequality are far from modest. In order to improve our understanding of the channels through which monetary policy has distributional consequences, we build a New Keynesian model with incomplete asset markets, asymmetric search and matching (SAM) frictions across skilled and unskilled workers and, foremost, capital-skill complementarity (CSC) in the production function. Our main finding is that an unexpected monetary easing increases labor income inequality between high and low-skilled workers, and that the interaction between CSC and SAM asymmetry is crucial in delivering this result. This is so since the increase in labor demand driven by a monetary expansion leads to larger wage increases for high-skilled workers than for low-skilled workers since the former have smaller matching frictions (SAM-asymmetry channel). Moreover, the increase in capital demand amplifies this wage divergence due to skilled workers being more complementary to capital than substitutable unskilled workers are (CSC channel). Strict inflation targeting is often the most successful rule in stabilizing measures of earnings inequality even in the presence of shocks which introduce a trade-off between stabilizing inflation and aggregate demand. |
| Keywords: | capital-skill complementarity; inequality; monetary policy; Search and Matching |
| JEL: | E24 E25 E52 J64 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12734&r=lab |
| By: | Ann Barbara Bauer; Reiner Eichenberger |
| Abstract: | In 2003, the retirement age of Swiss construction workers was lowered from 65 to 60. This reform has been intended to improve their health. Our study shows the opposite outcome. The human capital theory suggests that investments in employees’ productivity by the employer and the employees themselves depend on the time remaining until their retirement. Hence, we hypothesize that pension reforms that reduce employees’ working horizon decrease investments in work-related human capital, which translates into a higher prevalence of sickness absences, a longer absence duration, and worse health. By econometrically comparing pre- and post-reform cohorts of construction workers with other blue-collar workers, we find that among 56–60-year-old construction workers, their sickness absences increase from 3.2% to 5.6%, their sickness duration increases by 33%, and their probability of having health problems increases from 9% to 12.7% due to the reform. |
| Keywords: | Pension reform; natural experiment; construction worker; sickness absence; sickness duration; poor health |
| JEL: | I12 J14 J26 L74 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2018-02&r=lab |
| By: | van den Berg, Gerard J. (University of Bristol); Paul, Alexander (Aarhus University); Reinhold, Steffen (University of Mannheim) |
| Abstract: | We examine whether economic downturns are beneficial to health outcomes of newborn infants in developed countries. For this we use merged population-wide registers on health and economic and demographic variables, including the national medical birth register and intergenerational link registers from Sweden covering 1992–2004. We take a rigorous econometric approach that exploits regional variation in unemployment and compares babies born to the same parents so as to deal with possible selective fertility based on labor market conditions. We find that downturns are beneficial; for example, a one-percentage-point increase in the unemployment rate during pregnancy reduces the probability of having a birth weight less than 1,500 grams or of dying within 28 days of birth by 10–15%. Effects are larger in low socio-economic status households. Health improvements cannot be attributed to the parents' own employment status. The results suggest pathways through stress and air pollution. |
| Keywords: | recession, unemployment, fertility, infant health, stress |
| JEL: | I1 J1 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11338&r=lab |
| By: | Grimm, Stefan; Klimm, Felix |
| Abstract: | Do people blame refugees for negative events? We propose a novel experimental paradigm to measure discrimination in responsibility attribution towards Arabic refugees. Participants in the laboratory experience a positive or negative income shock, which is with equal probability caused by a random draw or another participant’s performance in a real effort task. Responsibility attribution is measured by beliefs about whether the shock is due to the other participant’s performance or the random draw. We find evidence for reverse discrimination: Natives attribute responsibility more favorably to refugees than to other natives. In particular, refugees are less often held responsible for negative income shocks. Moreover, natives with negative implicit a sociations towards Arabic names attribute responsibility less favorably to refugees than natives with positive associations. Since neither actual performance differences nor beliefs about natives’ and refugees’ performance can explain our finding of reverse discrimination, we rule out statistical discrimination as the driving force. We discuss explanations based on theories of self-image and identity concerns. |
| Keywords: | Refugees; discrimination; responsibility attribution |
| JEL: | C91 D03 D83 J15 |
| Date: | 2018–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:42657&r=lab |