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on Labour Economics |
| By: | Sophie Piton |
| Abstract: | From the introduction of the Euro up to the 2008 global financial crisis, macroeconomic imbalances widened among Member States. This divergence took the form of strong differences in the dynamics of unit labour costs. This paper asks why this happened. Is it the result of distortionary public spending, or the consequence of economic integration? To answer this question, this paper builds a theoretical framework that is able to provide a decomposition of unit labour costs growth into various effects of economic integration and policy intervention. Using a novel dataset, it then measures the contribution of each effect to the dynamics of unit labour costs in 12 countries of the Euro area from 1995 to 2014. Results show that trade and financial integration are significant drivers of unit labour costs divergence. Before the global financial crisis, in Greece and Portugal for example, trade and financial integration explain up to 30% of the increase in unit labour costs relative to core countries. On the contrary, distortionary public spending plays a minor role. These results suggest that, in peripheral economies, increasing unit labour costs reflect more the process of real convergence than fiscal profligacy. |
| Keywords: | Economic Integration;Productivity;Structural Change;Non-tradable Sector;Macroeconomic Imbalances;Capital Flows;Growth Accounting;Euro Area |
| JEL: | E32 E65 F41 O33 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2018-07&r=lab |
| By: | Tani, Massimiliano |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:206&r=lab |
| By: | Ngai, L. Rachel; Pissarides, Christopher; Wang, Jin |
| Abstract: | China's hukou system imposes two main barriers to population movements. Agricultural workers get land to cultivate but are unable to trade it in a frictionless market. Social transfers (education, health, etc.) are conditional on holding a local hukou. We show that the land policy leads to over-employment in agriculture and it is the more important barrier to industrialization. Effective land tenure guarantees and a perfect competitive rental market would correct this inefficiency. The local restrictions on social transfers favour rural enterprises over urban employment with a relatively smaller impact on industrialization. |
| Keywords: | Chinese immigration; Chinese land policy; imperfect rental market; mobility barriers; hukou registration; social transfers |
| JEL: | J61 O18 R23 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87619&r=lab |
| By: | Adermon, Adrian (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Mikael (Department of Economics, University of Gothenburg); Waldenström, Daniel (Paris School of Economics) |
| Abstract: | This study estimates intergenerational correlations in mid-life wealth across three generations, and a young fourth generation, and examines how much of the parent-child association that can be explained by inheritances. Using a Swedish data set we find parent-child rank correlations of 0.3–0.4 and grandparents-grandchild rank correlations of 0.1–0.2. Conditional on parents’ wealth, grandparents’ wealth is weakly positively associated with grandchild’s wealth and the parent-child correlation is basically unchanged if we control for grandparents’ wealth. Bequests and gifts strikingly account for at least 50 per cent of the parent-child wealth correlation while earnings and education are only able to explain 25 per cent. |
| Keywords: | multigenerational mobility; bequests; mid-life wealth |
| JEL: | D31 J62 |
| Date: | 2018–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2018_008&r=lab |
| By: | M. Alper Çenesiz (cef.up, Faculdade de Economia, Universidade do Porto); Luís Guimarães (cef.up, Faculdade de Economia, Universidade do Porto) |
| Abstract: | The canonical matching model predicts procyclical job search effort while recent evidence suggests that it is not. In this paper, we assess whether accounting for income effects in a model with matching frictions reconciles it with the evidence. We find that: (i) low income effects imply procyclical search effort; (ii) moderate income effects imply acyclical search effort but also acyclical unemployment; and (iii) high income effects imply countercyclical search effort but also procyclical unemployment. In our experiments, only fully rigid wages or excessively high replacement rate of unemployment benefits improves the predictions of the model. In short, the predictions of the model with income effects are sound under unsound assumptions. |
| Keywords: | Matching Frictions; Job Search Effort; Income Effects. |
| JEL: | E24 E32 J64 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:1803&r=lab |
| By: | Janna Bergsvik; Kenneth Aarskaug Wiik (Statistics Norway); Ragni Hege Kitterød |
| Abstract: | In the current paper, we investigate within-couple inequality in earnings using Norwegian register data on married and cohabiting couples. We are particularly interested in assessing whether the negative relation between children and women’s relative earnings changed during the study period 2005 to 2014. In this period, work-family policy measures meant to facilitate mothers’ employment and promoting fathers’ family involvement were strengthened, and there was a sharp increase in women’s level of education. Controlling for demographic and socioeconomic variables, results showed that women on average still earn less than their male partners and that the presence of small children in the household was negatively related to women’s earnings. However, results from interaction models showed that the negative association between having young children and women’s relative earnings was reduced during the study period. Additional analyses confirmed that this latter finding was mainly due to an income reduction among new fathers. |
| Keywords: | Women’s relative earnings; Parenthood; Cohabitation; Marriage; Family policy; Gender equality |
| JEL: | D13 J12 J13 J16 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:873&r=lab |
| By: | Dan Anderberg; Noemi Mantovan; Robert M. Sauer |
| Abstract: | We present a dynamic lifecycle model of women’s choices with respect to partnership status, labour supply and fertility when a male partner’s true tendency for abusive behaviour is unobserved. The model is estimated by the method of simulated moments using longitudinal data from the Avon Longitudinal Study of Parents and Children. The results indicate that uncertainty about a partner’s abusive type creates incentives for women to delay fertility, reduce fertility overall, divorce more often and increase labour supply. We also study the impact of higher female wages, income support to single mothers, and subsidized childcare when the mother is working. While higher wages reduce women’s overall exposure to abuse, both income support and subsidized childcare fail to do so because they encourage early fertility. Income support also leads to less accumulated labour market experience and hence higher abuse rates. |
| Keywords: | domestic violence, learning, fertility, ALSPAC |
| JEL: | J12 J13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6983&r=lab |
| By: | Chunzan Wu; Dirk Krueger |
| Abstract: | We show that a calibrated life-cycle two-earner household model with endogenous labor supply can rationalize the extent of consumption insurance against shocks to male and female wages, as estimated empirically by Blundell, Pistaferri and Saporta-Eksten (2016) in U.S. data. With additively separable preferences, 43% of male and 23% of female permanent wage shocks pass through to consumption, compared to the empirical estimates of 34% and 20%. With non-separable preferences the model predicts more consumption insurance, with pass-through rates of 29% and 16%. Most of the consumption insurance against permanent male wage shocks is provided through the labor supply response of the female earner. |
| JEL: | D31 E21 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24472&r=lab |
| By: | Krieger, Tim; Renner, Laura; Ruhose, Jens |
| Abstract: | This paper studies the effect of the long-term relatedness between countries, measured by their genetic distance, on educational migrant selection. Analyzing bilateral migrant stocks of the 15 main destination countries and 85 sending countries for the year 2000, we find that migrant selection and genetic distance follow a nonlinear J-shaped pattern: at low levels of genetic distance, increases in genetic distance reduce the positive selection of migration. However, at higher levels of genetic distance, this pattern is reversed and migration becomes more positively selected. We complement this finding by showing that the net benefits of genetic distance are strongly decreasing for low-skilled migrants with increasing genetic distance, while high-skilled migrants are less responsive to genetic distance in general. Results are robust to conditioning on bilateral control variables, including various destination- and sending-country-specific fixed effects and applying an instrumental variables approach that exploits exogenous variation in genetic distances in the year 1500. |
| Keywords: | Long-term Relatedness,Genetic Distance,Culture,International Migration,Selection |
| JEL: | F22 J61 Z1 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:205&r=lab |
| By: | Stefan Leknes; Jørgen Modalsli (Statistics Norway) |
| Abstract: | This paper studies the impact of the construction of hydropower facilities on labor market outcomes in Norway at the turn of the twentieth century (1891-1920). The sudden breakthrough in hydropower technology provides a quasi-experimental setting, as not all municipalities had suitable natural endowments and the possible production sites where often located in remote areas. We find that hydropower municipalities experienced faster structural transformation and displayed higher occupational mobility. Unskilled workers and workers from low-status families did to a greater extent obtain skilled jobs in hydropower municipalities. We interpret this as evidence that this early twentieth-century technology was skill-biased, and that workers in the new skilled jobs were recruited from a broad segment of the population. However, areas affected by the new technology also experienced occupational polarization, with an increase in high- and low-skilled manual jobs at the expense of intermediate-skilled jobs. |
| Keywords: | industrial revolution; hydropower production; structural transformation; occupational mobility; intergenerational mobility |
| JEL: | J62 N7 N9 R1 R12 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:874&r=lab |