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on Labour Economics |
| By: | Bertrand, Marianne (University of Chicago); Cortes, Patricia (Boston University); Olivetti, Claudia (Boston College); Pan, Jessica (National University of Singapore) |
| Abstract: | In most of the developed world, skilled women marry at a lower rate than unskilled women. We document heterogeneity across countries in how the marriage gap for skilled women has evolved over time. As labor market opportunities for women have improved, the marriage gap has been growing in some countries but shrinking in others. We discuss the comparative statics of a theoretical model in which the (negative) social attitudes toward working women might contribute to the lower marriage rate of skilled women, and might also induce a non-monotonic relationship between their labor market prospects and their marriage outcomes. The model delivers predictions about how the marriage gap for skilled women should react to changes in their labor market opportunities across economies with more or less conservative attitudes toward working women. We verify the key predictions of this model in a panel of 26 developed countries, as well as in a panel of US states. |
| Keywords: | social norms, marriage gap, labor market opportunities |
| JEL: | J12 J16 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11382&r=lab |
| By: | Bachmann, Ronald (RWI); Felder, Rahel (Ruhr University Bochum) |
| 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 E32 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11443&r=lab |
| By: | Dewit, Gerda; Görg, Holger; Temouri, Yama |
| Abstract: | We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm-specific features play a crucial role for the link between employment protection and relocation. Stricter employment protection laws in the current production location discourage firms' relocation abroad. While larger, more productive firms and firms with higher labour intensities have, ceteris paribus, higher propensities to relocate, they also face higher exit barriers if the country from which they consider relocating has strict employment protection laws. Our predictions are supported empirically, using firm level data for 28 OECD countries. |
| Keywords: | Employment Protection,Relocation,Multinational Enterprises |
| JEL: | F23 L23 J88 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kcgwps:11&r=lab |
| By: | Albert, Christoph; Monras, Joan |
| 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, expensive cities, b) the earnings gap between immigrants and natives is higher in larger, more expensive cities, and c) immigrants consume less locally than natives. In order to explain these findings, we develop a quantitative spatial equilibrium model in which immigrants consume a fraction of their income in their countries of origin. Thus, immigrants care not only about local prices, but also about price levels in their home countries. This gives them a comparative advantage relative to natives for living in high-wage, high-price, high-productivity cities, where they also accept lower wages than natives. These incentives are stronger for immigrants coming from lower-price index countries of origin. We rely on immigrant heterogeneity to estimate the model. With the estimated model, we show that current levels of immigration have reduced economic activity in smaller, less productive cities by around 5 percent, while they have expanded it in large, productive cities by around 6 percent. This has increased total aggregate output per worker by around 0.3 percent. We also discuss the welfare implications of these results. |
| Keywords: | Immigration; location choices; spatial equilibrium |
| JEL: | F22 J31 J61 R11 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12842&r=lab |
| By: | Carlsson, Mikael (Uppsala University, Nationalekonomiska institutionen); Westermark, Andreas (Research Department, Sveriges Riksbank, Stockholm) |
| Abstract: | We show that in microdata, as well as in a search and matching model with flexible wages for new hires, wage rigidities of incumbent workers have substantial effects on separations and unemployment volatility. Allowing for an empirically relevant degree of wage rigidities for incumbent workers drives unemployment volatility, as well as the volatility of vacancies and tightness to that in the data. Thus, the degree of wage rigidity for newly hired workers is not a sufficient statistic for determining the effect of wage rigidities on macroeconomic outcomes. This finding affects the interpretation of a large empirical literature on wage rigidities. |
| Keywords: | Search and matching; Unemployment volatility puzzle; Wage rigidities; Job Destruction |
| JEL: | E30 J63 J64 |
| Date: | 2018–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2018_005&r=lab |
| By: | Marc A. C. Hafstead; Roberton C. Williams III; Yunguang Chen |
| Abstract: | This paper assesses the use of full-employment computable-general equilibrium (CGE) models to predict the labor-market effects of environmental policy. Specifically, it compares the predictions of a standard full-employment CGE model with those of a new search-CGE model with labor-search frictions and resulting unemployment (but that is otherwise identical to the full-employment model). The search-CGE captures key labor market details, including a distinction between the extensive margin of labor demand (the number of employees) and the intensive margin (the number of hours each employee works). We find that some key results are robust across the two models, such as the reallocation of labor across sectors in response to a carbon tax and the overall change in total labor demand. However, the full-employment model seriously overestimates the economy-wide net change in the number of jobs (by a factor of more than 2.5 for a carbon tax with revenues returned lump-sum to households, and by a factor of almost 3.5 when carbon tax revenues are used to reduce payroll taxes). |
| JEL: | E24 H23 J64 Q52 Q58 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24505&r=lab |
| By: | Nordström Skans, Oskar (Uppsala Universitet, Nationalekonomiska institutionen); Vikström, Johan (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lombardi, Stefano (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This paper studies how New Start Jobs (Nystartsjobb) and Employment Subsidies Anställningsstöd) affect Swedish firms. We study effects on the number of employees, firm performance and other firm level outcomes. We use Swedish administrative data from the period 1998-2008. One result is that treated firms substantially outperform other recruiting firms after hiring through subsidies, both in terms of the number of employees and in terms of various production measures, despite having identical pre-match trajectories. This pattern is clear for the period with Employment Subsidies, but less clear for the period with New Start Jobs. For New Starts Jobs we instead see that they have a clear positive effect on firms' survival rates. Overall, our results suggest that targeted employment subsidies can have large positive effects on post-match outcomes of the hiring firms. |
| Keywords: | wage subsidies; labor demand; firms performance |
| JEL: | J08 J20 J60 |
| Date: | 2018–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2018_006&r=lab |
| By: | Mayda, Anna Maria; Peri, Giovanni; Steingress, Walter |
| Abstract: | In this paper we study the impact of immigration to the United States on the vote for the Republican Party by analyzing county-level data on election outcomes between 1990 and 2010. Our main contribution is to separate the effect of high-skilled and low-skilled immigrants, by exploiting the different geography and timing of the inflows of these two groups of immigrants. We find that an increase in the first type of immigrants decreases the share of the Republican vote, while an inflow of the second type increases it. These effects are mainly due to the local impact of immigrants on votes of U.S. citizens and they seem independent of the country of origin of immigrants. We also find that the pro-Republican impact of low-skilled immigrants is stronger in low-skilled and non-urban counties. This is consistent with citizens' political preferences shifting towards the Republican Party in places where low-skilled immigrants are more likely to be perceived as competition in the labor market and for public resources. |
| Keywords: | Economic and Fiscal Channels; Electoral Effects; Immigration; Republican Party |
| JEL: | F22 J61 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12848&r=lab |
| By: | Adam Jaffe (Motu Economic and Public Policy Research and Queensland University of Technology); Nathan Chappell (Motu Economic and Public Policy Research) |
| Abstract: | We use administrative data on the population of New Zealand construction firms from 2001-2012, along with linked data on their employees and working proprietors, to study the relationships among worker flows, entry, and firm productivity. We find that job churn is prevalent in construction, with around 60 percent of firm-worker pairs not existing previously or not existing subsequently. The data also show that firms gaining or losing any labour are more productive than static firms, and that firms gaining labour from other construction firms are 4-6 percent more productive than the industry average in a given year. Our analysis suggests such firms are productive in part because of knowledge flows from other construction firms; in our preferred specification, with firm fixed effects, a standard deviation increase in the productivity of new employees’ previous firms is associated with a 0.6 percent increase in productivity. New entrants are more productive than pre-existing firms. Firms that enter briefly and disappear exhibit high productivity for that brief period, and firms that enter and persist exhibit a persistent productivity advantage that averages about 5%, but which grows as experience accumulates. The entry and worker-knowledge-flow phenomena are distinct, in that the entry effect is not explained by employee composition, and non-entrant firms also benefit from worker knowledge flows. |
| Keywords: | Firm productivity, firm churn, job churn, creative destruction, knowledge flows |
| JEL: | D24 L74 J63 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:18_02&r=lab |
| By: | Garcia Mandico, Silvia (Erasmus University Rotterdam); Garcia-Gomez, Pilar (Erasmus University Rotterdam); Gielen, Anne C. (Erasmus University Rotterdam); O'Donnell, Owen (Erasmus University Rotterdam) |
| Abstract: | Using Dutch administrative data, we assess the work and earnings capacity of disability insurance (DI) recipients by estimating employment and earnings responses to benefit cuts. Reassessment of DI entitlement under more stringent criteria removed 14.4 percent of recipients from the program and reduced benefits by 20 percent, on average. In response, employment increased by 6.7 points and earnings rose by 18 percent. Recipients were able to increase earnings by €0.64 for each €1 of DI income lost. Female and younger recipients, as well as those with more subjectively defined disabilities, were able to increase earnings most. The earnings response declined as claim duration lengthened, suggesting that earnings capacity deteriorates while on DI. The deterioration was steepest for male, younger and fully disabled recipients. Working while claiming partial disability benefits appears to slow the deterioration of earnings capacity. |
| Keywords: | disability insurance, health, employment, earnings |
| JEL: | H53 H55 J14 J22 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11410&r=lab |
| By: | Gabe, Todd M. (University of Maine); Abel, Jaison R. (Federal Reserve Bank of New York); Florida, Richard (University of Toronto) |
| Abstract: | There is growing concern over rising economic inequality, the decline of the middle class, and a polarization of the U.S. workforce. This study examines the extent to which low-wage workers in the United States transition to better jobs, and explores the factors associated with such a move up the job ladder. Using data covering the expansion following the Great Recession (2011-17) and focusing on short-term labor market transitions, we find that around 70 percent of low-wage workers stayed in the same job, 11 percent exited the labor force, 7 percent became unemployed, and 6 percent switched to a different low-wage job. Troublingly, just slightly more than 5 percent of low-wage workers found a better job within a 12-month period. Study results point to the importance of educational attainment in helping low-wage workers move up the job ladder. |
| Keywords: | low-wage jobs; career ladder; labor market dynamics |
| JEL: | J01 J24 J61 J62 |
| Date: | 2018–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:846&r=lab |
| By: | Vit Hradil |
| Abstract: | Empirical evidence on the employment effects of minimum wage legislation suggests the possibility that firms react to increases in low-skilled labor costs driven by minimum wages by reducing investments in non-wage job aspects, which can mitigate the need for layoffs. Such adjustments may involve the worsening of workplace safety. To evaluate the hypothesis that increases in minimum wages result in a higher incidence of occupational injuries and illnesses, I use employer-level data from the United States and variation in state minimum wages during 1996-2013. The results suggest that states which increase their minimum wage experience an increase in the incidence of occupational injuries and illnesses. The effect appears stronger in industries that employ large numbers of low-wage workers, and those where the workforce is intensively exposed to health risks.Creation-Date: 2018-03 |
| Keywords: | minimum wage; job safety; occupational injuries and illnesses; |
| JEL: | I10 J32 J81 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp615&r=lab |
| By: | George J. Borjas; David J.G. Slusky |
| Abstract: | Disability benefit recipients in the United States have nearly doubled in the past two decades, growing substantially faster than the population. It is difficult to estimate how much of this increase is explained by changes in population health, as we often lack a valid counterfactual. We propose using undocumented immigrants as the counterfactual, as they cannot currently claim benefits. Using NHIS microdata, we estimate models of disability as a function of medical conditions for both the legal and undocumented populations. The relationship between health and disability is far stronger for those with legal status than it is for those who are undocumented. We find that almost all of the difference in disability trends between the two populations can be explained by different responses to underlying health impairments. |
| JEL: | I12 I18 J61 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24504&r=lab |
| By: | Sari Pekkala Kerr; William R. Kerr |
| Abstract: | We study immigrant entrepreneurship and firm ownership in 2007 and 2012 using the Survey of Business Owners (SBO). The survival and growth of immigrant-owned businesses over time relative to native-founded companies is evaluated by linking the 2007 SBO to the Longitudinal Business Database (LBD). We quantify the dependency of the United States as a whole, as well as individual states, on the contributions of immigrant entrepreneurs in terms of firm formation and job creation. We describe differences in the types of businesses started by immigrants and the quality of jobs created by their firms. First-generation immigrants create about 25% of new firms in the United States, but this share exceeds 40% in some states. In addition, Asian and Hispanic second-generation immigrants start about 6% of new firms. Immigrant-owned firms, on average, create fewer jobs than native-owned firms, but much of this is explained by the industry and geographic location of the firms. Immigrant-owned firms pay comparable wages, conditional on firm traits, to native-owned firms, but are less likely to offer benefits. |
| JEL: | F22 J15 J44 J61 L26 M13 O31 O32 O33 R12 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24494&r=lab |
| By: | Valfort, Marie-Anne (Paris School of Economics) |
| Abstract: | Relying on a correspondence study conducted in France before the 2015 attacks, this paper compares the callback rates of immigrants of Muslim and Christian culture who originate from the same country and whose religiosity varies from non-religious to religious. Based on responses to over 6,200 job ads, the results reveal an insignificant disadvantage for Muslims when they are not religious. However, Muslims lose further ground when they are religious, while the reverse occurs for Christians. Consequently, religious Muslims must submit twice as many applications as religious Christians before being called back by the recruiters. A follow-up survey confirms that the signal used to convey fictitious applicants' religiosity is not only viewed as relevant but that it is also correctly interpreted by employers. |
| Keywords: | religion, religiosity, Islam, discrimination, France, correspondence study |
| JEL: | C93 J15 J71 Z12 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11417&r=lab |
| By: | Fort, Teresa C; Pierce, Justin; Schott, Peter K. |
| Abstract: | We use relatively unexplored dimensions of US microdata to examine how US manufacturing employment has evolved across industries, firms, establishments, and regions from 1977 to 2012. We show that these data provide support for both trade-and technology-based explanations of the overall decline of employment over this period, while also highlighting the difficulties of estimating an overall contribution for each mechanism. Toward that end, we discuss how further analysis of these trends might yield sharper insights. |
| Keywords: | technology; Trade; US manufacturing employment |
| JEL: | E24 J6 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12839&r=lab |
| By: | Daniel F. Heuermann; Johannes F. Schmieder |
| Abstract: | We use the expansion of the high-speed rail network in Germany as a natural experiment to examine the causal effect of reductions in commuting time between regions on the commuting decisions of workers and their choices regarding where to live and where to work. We exploit three key features in this setting: i) investment in high-speed rail has, in some cases dramatically, reduced travel times between regions, ii) several small towns were connected to the high-speed rail network only for political reasons, and iii) high-speed trains have left the transportation of goods unaffected. Combining novel information on train schedules and the opening of high-speed rail stations with panel data on all workers in Germany, we show that a reduction in travel time by one percent raises the number of commuters between regions by 0.25 percent. This effect is mainly driven by workers changing jobs to smaller cities while keeping their place of residence in larger ones. Our findings support the notion that benefits from infrastructure investments accrue in particular to peripheral regions, which gain access to a large pool of qualified workers with a preference for urban life. We find that the introduction of high-speed trains led to a modal shift towards rail transportation in particular on medium distances between 150 and 400 kilometers. |
| JEL: | J61 R12 R23 R40 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24507&r=lab |
| By: | Lionel Nesta (Université Côte d'Azur; GREDEG CNRS; OFCE Sciences Po. Paris; SKEMA Business School); Stefano Schiavo (University of Trento; OFCE Sciences Po. Paris) |
| Abstract: | The paper investigates the impact of import competition on rent-sharing between firms and employees. First, by applying recent advances in the estimation of price-costs margins to a large panel of French manufacturing firms for the period 1993-2007, we are able to classify each firm into labor- and product-market regimes based on the presence/absence of market power. Second, we concentrate on dirms that operate in an efficient bargaining framework to study the effect of import penetration on workers' bargaining power. We find that French imports from other OECD countries have a negative effect on bargaining power, whereas the impact of imports from low wage countries is more muted. By providing firm-level evidence on the relationship between international trade and rent sharing, the paper sheds new light on the effect of trade liberalization on the labor market. |
| Keywords: | firm heterogeneity, import competition, mark-up, wage bargaining |
| JEL: | F14 F16 J50 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2018-11&r=lab |
| By: | David N.F. Bell; David G. Blanchflower |
| Abstract: | There remains a puzzle around the world over why wage growth is so benign given the unemployment rate has returned to pre-recession levels. It is our contention that a considerable part of the explanation is the rise in underemployment which rose in the Great Recession but has not returned to pre-recession levels even though the unemployment rate has. Involuntary part-time employment rose in every advanced country and remains elevated in many in 2018. In the UK we construct the Bell/Blanchflower underemployment index based on reports of whether workers, including full-timers and those who want to be part-time, who say they want to increase or decrease their hours at the going wage rate. If they want to change their hours they report by how many. Prior to 2008 our underemployment rate was below the unemployment rate. Over the period 2001-2017 we find little change in the number of hours of workers who want fewer hours, but a big rise in the numbers wanting more hours. Underemployment reduces wage pressure. We also provide evidence that the UK Phillips Curve has flattened and conclude that the UK NAIRU has shifted down. The underemployment rate likely would need to fall below 3%, compared to its current rate of 4.9% before wage growth is likely to reach pre-recession levels. The UK is a long way from full-employment. |
| JEL: | E5 J01 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24502&r=lab |
| By: | Knize Estrada, Veronika J. |
| Abstract: | "This paper analyzes individual, structural, and cultural factors that influence the labor-force participation of migrant women in Germany. Considering the well-established evidence that immigrant women work less than natives, with statuses and earnings differing significantly between them, I investigate the economic activity of the former by examining the cross-sectional data from the IAB-SOEP Migration Sample 2013 with multiple linear regression techniques. This evaluation is supported by three approaches which offer explanations for their employment behavior: human capital theory, segmented labor market theory, and the less examined in German research cultural hypothesis. Migrant women's employment status is, in principle, one's decision as member of a household; nevertheless, it is embedded in cross-national cultural processes and also constrained by structures; e.g., by employers and institutions. The analysis shows that classic human capital elements appear to be less reliable predictors of women's labor supply: higher education attained abroad is only marginally related to women participating in the workforce. The Middle-Eastern and North African origin, the Muslim religion, and higher levels of religiosity are negatively associated to women's labor participation reflecting a traditional gendered work division. This effect is minimized when controlling for German education, however. I argue that the lower labor-force participation among migrant women is partially explained by the fact that immigrants are on average less educated and more traditional than natives, having skills that are only restrictively transferable into the German labor market." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | O15 J15 J70 Z12 |
| Date: | 2018–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201812&r=lab |
| By: | Ajay Agrawal; John McHale; Alex Oettl |
| Abstract: | The recruitment of foreign scientists enhances US science through an expanded workforce but could also cause harm by displacing better connected domestic scientists, thereby reducing localized knowledge spillovers. We develop a model in which a sufficient condition for the absence of overall harm is that immigrant scientists generate at least the same level of localized spillovers as the domestic scientists they displace. To test this condition, we conduct an experiment in which each immigrant hypothetically displaces an appropriately matched domestic scientist. Overall, we do not find evidence that immigrant scientists harm US science by crowding out better-connected domestic scientists. |
| JEL: | F22 J61 O33 O34 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24519&r=lab |