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on Labour Economics |
| By: | Acharya, Sushant (Federal Reserve Bank of New York); Wee, Shu Lin (Carnegie Mellon University) |
| Abstract: | A large and growing share of hires in the United States are replacement hires. This increase coincides with a growing productivity-wage gap. We connect these trends by building a model where firms post long-lived vacancies and engage in on-the-job search for more productive workers. These features improve a firm's bargaining position while raising workers' job insecurity and the wedge between hiring and meeting rates. All three channels lower wages while raising productivity. Quantitatively, increased replacement hiring explains half the increase in the productivity-wage gap. The socially efficient outcome features fewer low-productivity jobs and a 10 percent narrower productivity-wage gap. |
| Keywords: | replacement hiring; productivity-wage gap; unemployment; labor share; efficiency |
| JEL: | E32 J63 J64 |
| Date: | 2018–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:860&r=lab |
| By: | Herwig Immervoll; Carlo Knotz |
| Abstract: | This paper presents new information on activity-related eligibility criteria for unemployment and related benefits in OECD- and EU-countries in 2017, comparing the strictness of “demanding” elements built into unemployment benefits across countries and over time. Eligibility criteria for unemployment benefits determine what claimants need to do to successfully claim benefits initially or to continue receiving them. Benefit systems feature specific rules that define the type of job offers that claimants need to accept, requirements for papering on the outcomes of independent job-search efforts, obligations to participate in active labour market programmes, as well as sanctions for failing to meet these requirements. Such rules aim to strengthen incentives to look for, prepare for, and accept employment. They may also be used as a targeting device to reduce demands on benefit systems, and on associated employment services. While this may serve to limit support to genuine jobseekers, strict requirements can also exclude some intended recipients from financial and re-employment support, e.g., by discouraging them from applying. This paper presents detailed information on policy rules in 2017, summarises them into an overall policy indicator of eligibility strictness, and gauges recent policy trends by documenting changes in the strictness measures. A novelty is the inclusion of lower-tier unemployment or social assistance benefits in the compilation of policy rules. Results document a large number of reforms enacted after the Great Recession and suggest a slight convergence of policy rules across countries even though overall measures of the strictness of activity-related eligibility criteria have remained broadly unchanged during the recent past. In countries with multiple layers of support for the unemployed, availability requirements tend to be more demanding for lower-tier assistance benefits, while sanction rules tend to be more stringent for first-tier programmes. |
| JEL: | I38 J08 J65 J68 |
| Date: | 2018–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:215-en&r=lab |
| By: | Luisito Bertinelli; Olivier Cardi; Romain Restout |
| Abstract: | This paper develops a tractable version of a two-sector open economy model with search frictions to disentangle the implications of workers’ mobility costs and labor market institutions following higher relative productivity of tradables. Using a panel of eighteen OECD countries, our estimates show that higher productivity in tradables relative to non tradables causes a decline in non traded relative to traded wages. The fall in the relative wage reveals the presence of labor mobility costs which mitigate the appreciation in the relative price of non tradables and lower the relative unemployment rate of tradables following higher relative productivity of tradables. Whilst our evidence suggests that such responses have increased over time as the result of decreasing labor mobility costs, our estimates also reveal that the magnitude of the effects vary considerably across countries. Using a set of indicators capturing the heterogeneity of labor market frictions across economies, we find that both the relative wage and the relative unemployment rate of tradables decline significantly more and the relative price appreciates less in countries where labor market regulation is more pronounced. We show that these empirical findings can be rationalized in a two-sector open economy model with search in the labor market as long as we allow for an endogenous sectoral labor force participation decision. When we calibrate the model to country-specific data, numerical results reveal that the responses of the relative wage, the relative price, and to a lesser extent the relative unemployment rate display a wide dispersion across countries. Importantly, all variables display a significant negative relationship with labor market regulation. |
| Keywords: | Relative productivity of tradables; Search theory; Labor market institutions; Labor mobility; Sectoral price and wage differences; Sectoral unemployment; Current account. |
| JEL: | D82 K41 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2018-22&r=lab |
| By: | Golsteyn, Bart H.H. (Maastricht University); Hirsch, Stefa (Maastricht University) |
| Abstract: | Intergenerational mobility is often studied using survey data. In such settings, selective unit or item non-response may bias estimates. Linking Dutch survey data to administrative income data allows us to examine whether selective responses bias the estimated relationship between parental income and children's mathematics and language test scores in grades 6 and 9. We find that the estimates of these relationships are biased downward due to parental unit non-response, while they are biased upwards due to item non-response. In the analyses of both unit and item non-response, the point estimates for language and mathematics test scores point in the same direction but only one of the two relationships is significant. These findings suggest that estimates of intergenerational mobility based on survey data need to be interpreted with caution because they may be biased by selective non-response. The direction of such bias is difficult to predict a priori. Bias due to unit and item non-response may work in opposing directions and may differ across outcomes. |
| Keywords: | intergenerational mobility, unit non-response, item non-response |
| JEL: | I24 J62 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11561&r=lab |
| By: | Michele Battisti; Giovanni Peri; Agnese Romiti |
| Abstract: | This paper investigates how the size of co-ethnic networks at the time of arrival affect the economic success of immigrants in Germany. Applying panel analysis with a large set of fixed effects and controls, we isolate the association between initial network size and long-run immigrant outcomes. We also look at those who were assigned to an initial location independently of their choice allows a causal interpretation of our estimates. We find that immigrants initially located in places with larger co-ethnic networks are more likely to be employed at first, but have a lower probability of investing in human capital. |
| Keywords: | networks, immigration, human capital, employment |
| JEL: | J24 J61 R23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7084&r=lab |
| By: | Midori Matsushima (Faculty of Public Affairs, Osaka University of Commerce); Satoshi Shimizutani (Nakasone Yasuhiro Peace Institute); Hiroyuki Yamada (Faculty of Economics, Keio University) |
| Abstract: | This study provides the first evidence on a variety of life course outcomes of birth weight in Japan by employing new datasets covering the middle and older generations. We have several interesting observations. First, low birth weight is significantly associated with adverse outcomes in early life including school performance and self-rated health. Second, no negative effect of low birth weight is found on educational attainment or primary job status. Third, health outcomes due to low birth weight at older ages are not negatively affected except for difficulty in mobility and higher risk of diagnosis with hypertension or diabetes. Overall, our findings suggest that the negative effect of lower birth weight seems to fade out over the life course. |
| Keywords: | birth weight, long-term outcome, JSTAR, Japan |
| JEL: | I14 J14 I21 I31 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2018-008&r=lab |
| By: | BIAVASCHI Costanza; BURZYNSKI Michal; ELSNER Benjamin; MACHADO Joël |
| Abstract: | Global migration is heavily skill-biased, with tertiary-educated workers being four times more likely to migrate than workers with a lower education. In this paper, we quantify the global impact of this skill bias in migration. Based on a quantitative multi-country model with trade, we compare the current world to a counterfactual with the same number of migrants, where all migrants are neutrally selected from their countries of origin. We find that most receiving countries benefit from the skill bias in migration, while a small number of sending countries is significantly worse off. The negative effect in many sending countries is completely eliminated ? and often reversed ? once we account for remittances and additional migration-related externalities. In a model with all our extensions, the average welfare effect of skill-biased migration in both OECD and non-OECD countries is positive. |
| Keywords: | migration; skill selection; global welfare; Skill bias; remittances; brain gain; brain drain |
| JEL: | F22 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2018-11&r=lab |
| By: | Ulceluse; Magdalena |
| Abstract: | The paper investigates whether self-employment represents a way to reduce overeducation and improve labour market matching, in a comparative analysis between immigrants and natives. Using the EU Labour Force Survey for the year 2012, and controlling for a list of demographic characteristics and general characteristics of 30 destination countries, I find that the likelihood of being overeducated decreases for self-employed immigrants, with inconclusive results for self-employed natives. The results shed light on the extent to which immigrants adjust to labour market imperfections and barriers to employment and might help explain the higher incidence of self-employment that immigrants exhibit, when compared to natives. This is the first study to systematically study the nexus between overeducation and self-employment in a comparative framework. Moreover, the paper tests the robustness of the results by employing two different measures of overeducation, contributing to the literature of the measurement of overeducation. |
| Keywords: | self-employment,immigrants,skills mismatch,overeducation |
| JEL: | J15 J24 J61 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:219&r=lab |
| By: | Elena Grinza; Francesco Quatraro |
| Abstract: | In this paper, we explore the impact of a firm's workers' replacements on innovation performance, by using rich matched employer-employee panel data for the Veneto region of Italy. We take the well-known resource-based theory of the firm as our departure point, and develop a set of hypotheses which we test empirically with negative binomial regressions. Coherently with our theoretical framework, we find that workers' replacements significantly dampen innovation performance, because they generate losses in the tacit knowledge base of the firm. We also nd that workers' replacements are especially detrimental to large and young rms, because large companies have more hierarchical rigidities and innovative capabilities in young rms are mostly dependent on specific human capital. Finally, our results show that firms' localization in industrial districts significantly mitigates the negative impact of workers' replacements, and that a similar picture emerges when firms are more exposed to knowledge spillovers, particularly of related knowledge. |
| Keywords: | Workers' replacements, excess worker turnover, innovation performance, tacit knowledge, knowledge spillovers, employer-employee matched longitudinal data. |
| JEL: | J63 O30 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:550&r=lab |
| By: | Yvan Guillemette; David Turner |
| Abstract: | This paper presents long-run economic projections for 46 countries, extending the short-run projections of the Spring 2018 OECD Economic Outlook. It first sets out a baseline scenario under the assumption that countries do not carry out institutional and policy reforms. This scenario is then used as a reference point to illustrate the potential impact of structural reforms in alternative scenarios, including better governance and educational attainment in the large emerging-market economies and competition-friendly product market and labour market reforms in OECD economies. Flexibility-enhancing labour market reforms not only boost living standards but, by raising the employment rate, also help alleviate fiscal pressures associated with population ageing. Another scenario illustrates the potential positive impact of linking the pensionable age to life expectancy on the participation rate of older workers, and in particular that of women. Additional scenarios illustrate the potential economic gains from raising public investment and spending more on research and development. A final ‘negative’ scenario shows how slipping back on trade liberalisation – returning to 1990 average tariff rates – might depress standards of living everywhere. |
| Keywords: | conditional convergence, fiscal sustainability, governance reform, labour market reform, long-term growth, long-term projection, retirement age |
| JEL: | E6 H68 J11 O4 |
| Date: | 2018–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaab:22-en&r=lab |