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on Labour Economics |
| By: | Tani, Massimiliano (University of New South Wales) |
| Abstract: | This paper studies occupational licensing as a possible cause of poor labour market outcomes among economic migrants. The analysis uses panel data from Australia, which implements one of the world's largest selective immigration programmes, and applies both cross-sectional and panel estimators. Licensing emerges as acting as an additional selection hurdle, mostly improving wages and reducing over-education and occupational downgrade of those working in licensed jobs. However, not every migrant continues working in a licensed occupation after settlement. In this case there is substantial skill wastage. These results do not change over time, after employers observe migrants' productivity and migrants familiarise with the workings of the labour market, supporting the case for tighter coordination between employment and immigration policies to address the under-use of migrants' human capital. |
| Keywords: | skilled immigration, over-education, occupational downgrade, immigration policy, occupational licensing |
| JEL: | J8 J24 J61 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11370&r=lab |
| By: | Ritwik Banerjee (Indian Institute of Management Bangalore, Bannerghatta Main Road, Sundar Ram Shetty Nagar, Bilekahalli, Bengaluru, Karnataka 560076 India); Nabanita Datta Gupta (Department of Economics and Business Economics, Aarhus University, Denmark, and IZA, Bonn. Fuglesangs Allé 4, 8210 Aarhus V, Denmark); Marie Claire Villeval (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69131 Ecully, France; IZA, Bonn, Germany) |
| Abstract: | Is success in a task used strategically by individuals to motivate their beliefs prior to taking action in a subsequent, unrelated, task? Also, is the distortion of beliefs reinforced for individuals who have lower status in society? Conducting an artefactual field experiment in India, we show that success when competing in a task increases the performers’ self-confidence and competitiveness in the subsequent task. We also find that such spillovers affect the self-confidence of low-status individuals more than that of high-status individuals. Receiving good news under Affirmative Action, however, boosts confidence across tasks regardless of the caste status. |
| Keywords: | Motivated beliefs, spillovers, self-confidence, competitiveness, Affirmative Action, experiment |
| JEL: | C91 J15 M52 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1806&r=lab |
| By: | Hamish Low (University Cambridge); Costas Meghir (Cowles Foundation, Yale University); Luigi Pistaferri (Stanford University, NBER, CEPR and SIEPR); Alessandra Voena (University of Chicago, NBER, CEPR and BREAD) |
| Abstract: | The 1996 PRWORA reform introduced time limits on the receipt of welfare in the United States. We use variation by state and across demographic groups to provide reduced form evidence showing that such limits led to a fall in welfare claims (partly due to \banking” benefits for future use), a rise in employment, and a decline in divorce rates. We then specify and estimate a life-cycle model of marriage, labor supply and divorce under limited commitment to better understand the mechanisms behind these behavioral responses, carry out counterfactual analysis with longer run impacts and evaluate the welfare effects of the program. Based on the model, which reproduces the reduced form estimates, we show that among low educated women, instead of relying on TANF, single mothers work more, more mothers remain married, some move to relying only on food stamps and, in ex-ante welfare terms, women are worse off. |
| Keywords: | Time limits, Welfare reform, Life-cycle, Marriage and divorce |
| JEL: | D91 H53 J12 J21 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2121&r=lab |
| By: | Moral-Arce, Ignacio; Martín-Román, Javier; Martín-Román, Ángel L. |
| Abstract: | The goal of this paper is to evaluate the effects of a public policy implemented through the Spanish Social Security system: the Cessation of Activity Benefit (CAB) for self-employed workers. Making use of the Continuous Sample of Working Lives (MCVL) and by means of a Propensity Score Matching (PSM) methodology, our results show that, when we do not take into account heterogeneity in the treatment, self-employed workers receiving CAB experience non-employment spells between 22 and 33 logarithmic points longer than their not entitled counterparts. We also detect that this difference is not constant but depends on the likelihood of being treated. We believe that the two traditional problems that affect the insurance markets, consequence of the asymmetric information, adverse selection and moral hazard, are behind these results. |
| Keywords: | Self-employment, Impact Evaluation, Propensity Score Matching, Opportunistic Behavior |
| JEL: | D04 J08 J64 J65 K31 |
| Date: | 2018–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85111&r=lab |
| By: | Frédéric DOCQUIER (Université Catholique de Louvain); Riccardo TURATI (IRES - Université Catholique de Louvain); Jérôme VALETTE (CERDI Université Clermont Auvergne - CNRS); Chrysovalantis VASILAKIS (FERDI) |
| Abstract: | This paper empirically revisits the impact of birthplace diversity on economic growth. We use panel data on US states over the 1960-2010 period. This rich data set allows us to better deal with endogeneity issues and to conduct a large set of robustness checks. Our results suggest that diversity among college-educated immigrants positively affects economic growth. We provide converging evidence pointing at the existence of skill complementarities between workers trained in different countries. These synergies result in better labor market outcomes for native workers and in higher productivity in the R&D sector. The gains from diversity are maximized when immigrants originate from economically or culturally distant countries (but not both), and when they acquired part of their secondary education abroad and their college education in the US. Overall, a 10% increase in high-skilled diversity raises GDP per capita by about 6%. On the contrary, low-skilled diversity has insignificant effects. |
| Keywords: | Immigration, Culture, Birthplace Diversity, growth |
| JEL: | F22 J61 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:4262&r=lab |
| By: | Paul Goldsmith-Pinkham; Isaac Sorkin; Henry Swift |
| Abstract: | The Bartik instrument is formed by interacting local industry shares and national industry growth rates. We show that the Bartik instrument is numerically equivalent to using local industry shares as instruments. Hence, the identifying assumption is best stated in terms of these shares, with the national industry growth rates only affecting instrument relevance. We then show how to decompose the Bartik instrument into the weighted sum of the just-identified instrumental variables estimators, where the weights sum to one, can be negative and are easy to compute. These weights measure how sensitive the parameter estimate is to each instrument. We illustrate our results through three applications: estimating the inverse elasticity of labor supply, estimating local labor market effects of Chinese imports, and using simulated instruments to study the effects of Medicaid expansions. |
| JEL: | C1 C18 C2 J0 J2 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24408&r=lab |
| By: | Bryson, Alex (University College London); Green, Francis (Institute of Education, University of London) |
| Abstract: | There is a perception among some commentators and policy analysts that leadership and managerial practices in private schools are superior to those in state schools. Analysing a survey of workplaces in Britain, we find little evidence to support this contention when examining the prevalence of modern human resource management (HRM) practices in schools. Rather, the evidence points to greater use of such practices in state schools. Those practices are correlated with improved school performance in the state sector, but not in the private sector. We discuss the implications of these findings for the policy of encouraging managers of private schools to sponsor state schools. |
| Keywords: | school performance, human resource management |
| JEL: | I21 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11373&r=lab |
| By: | Vidar Christiansen; Ray Rees |
| Abstract: | Unions appear to have an aversion to wage disparities among their members, leading to wage compression. This paper analyses the consequences of this for income tax policy. In a two-sector general equilibrium model we highlight the tradeoff between correcting the resource misallocation created by wage compression and the government’s distributional objectives. Where the union’s aversion to wage dispersion is strong, tax policy can do little to correct the distortion in the supply of trained labour, though it can come closer to achieving distributional aims. Where wage compression is less pronounced, tax policy can have significant effects on resource misallocation, at the expense of its distributional goals. |
| Keywords: | income taxation, optimal taxation, unionized economy, wage compression |
| JEL: | H21 H24 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6954&r=lab |
| By: | Severen, Christopher (Federal Reserve Bank of Philadelphia) |
| Abstract: | This paper studies the effects of Los Angeles Metro Rail on the spatial distribution of people and prices. Using a panel of bilateral commuting flows, I estimate a quantitative spatial general equilibrium model to quantify the welfare benefits of urban rail transit and distinguish the benefits of reduced commuting frictions from other channels. The subway causes a 7%-13% increase in commuting between pairs of connected tracts; I select plausible control pairs using proposed subway and historical streetcar lines to identify this effect. The structural parameters of the model are also estimated and are identified using a novel strategy that interacts tract-specific labor demand shocks with the spatial configuration of the city. These parameters indicate people are relatively unresponsive to changes in local prices and characteristics, implying that the commuting response corresponds to a large utility gain. The welfare benefits by 2000 are significant: LA Metro Rail increases aggregate welfare by $246 million annually. However, these benefits are only about one-third of annualized costs. While benefits did not outweigh costs by 2000, I employ more recent data to show that there are dynamic effects: Commuting continues to increase between connected locations. |
| Keywords: | Subways; Public transit; Commuting; Gravity; Spatial equilibrium |
| JEL: | J61 L91 R13 R40 |
| Date: | 2018–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:18-14&r=lab |
| By: | Daron Acemoglu; Pascual Restrepo |
| Abstract: | We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show that demographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country-industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data. |
| JEL: | J11 J23 J24 O33 O47 O57 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24421&r=lab |
| By: | Öberg, Stefan (Department of Economic History, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Instrumental variables based on twin births are a well-known and widespread method to find exogenous variation in the number of children when studying the effect on siblings or parents. This paper argues that there are serious problems with all versions of these instruments. Many of these problems have arisen because insufficient care has been given to defining the estimated causal effect. This paper discusses this definition and then applies the potential outcomes framework to reveal that instrumental variables based on twin birth violate the exclusion restriction, the independence assumption and one part of the stable unit treatment value assumption. These violations as well as the characteristics of the populations studied have contributed to hiding any true effect of the number of children. It is time to stop using these instrumental variables and to return to these important questions using other methods. |
| Keywords: | causal inference; natural experiments; local average treatment effect; complier average causal effect; Rubin’s causal model; quantity–quality trade-off; family size |
| JEL: | C21 C26 J13 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunhis:0023&r=lab |
| By: | Bögenhold, Dieter; Klinglmair, Robert; Kandutsch, Florian |
| Abstract: | The aim of this paperis to discuss self-employment in a historical perspective. A historiography of self-employment has to embed the observation into a broader frame-work of international relations and of economic and social developments. Related changes affect diverse institutions like labour markets, systems of education and further education, political organizations, the system of labour relations and, of course, the whole “social system of production” (Hollingsworth, 1998). Vice versa, these changes are also affected by different developments in the sphere of the social, technological and political organization of economy and society. Contemporary discourse about the nature of self-employment falls far too short, if it is not linked to an historical frame-work of thought, which gives contours to ideas and changing interpretations. Especially, the current type of “naive” admiration of self-employment, often in combination with normative upgrading in terms of entrepreneurship, must be advised to analyse and to think historically. At the same time, many present day self-employed “jobs” would have been standard employment contracts some ten years ago. In this respects current de-bates on precarization are also linked with debates on self-employment. |
| Keywords: | entrepreneurship, self-employment |
| JEL: | J01 J4 J49 Z1 Z13 |
| Date: | 2018–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:85321&r=lab |
| By: | Elliott, Matt; Nava, Francesco |
| Abstract: | This paper studies market clearing in matching markets. The model is non-cooperative, fully decentralized, and in Markov strategies. Workers and firms bargain with each other to determine who will be matched to whom and at what terms of trade. Once a worker firm pair reach agreement they exit the market. Alternative possible matches affect agents' bargaining positions. We ask when do such markets clear efficiently and find that inefficiencies { mismatch and delay { often feature. Mismatch occurs whenever an agent's bargaining position is at risk of deteriorating. Delay occurs whenever agents expect their bargaining position to improve. Delay can be extensive and structured with vertically differentiated markets endogenously clearing from the top down. |
| JEL: | J1 |
| Date: | 2018–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87219&r=lab |