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on Labour Economics |
| By: | Piton, Céline (National Bank of Belgium); Rycx, Francois (Free University of Brussels) |
| Abstract: | This paper provides robust estimates of the impact of both product and labour market regulations on unemployment using data for 24 European countries over the period 1998-2013. Controlling for country-fixed effects, endogeneity and a large set of covariates, results show that product market deregulation overall reduces the unemployment rate. This finding is robust across all specifications and in line with theoretical predictions. However, not all types of reforms have the same effect: deregulation of state controls and in particular involvement in business operations tends to push up the unemployment rate. Labour market deregulation, proxied by the employment protection legislation index, is detrimental to unemployment in the short run while a positive impact (i.e. a reduction of the unemployment rate) occurs only in the long run. Analysis by sub-indicators shows that reducing protection against collective dismissals helps in reducing the unemployment rate. The unemployment rate equation is also estimated for different categories of workers. While men and women are equally affected by product and labour market deregulations, workers distinguished by age and by educational attainment are affected differently. In terms of employment protection, young workers are almost twice as strongly affected as older workers. Regarding product market deregulation, highly-educated individuals are less impacted than low- and middle-educated workers. |
| Keywords: | unemployment, structural reform, product market, labour market, regulation, employment protection |
| JEL: | E24 E60 J48 J64 L51 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11582&r=lab |
| By: | de Pleijt, Alexandra; Nuvolari, Alessandro; Weisdorf, Jacob |
| Abstract: | We examine the effect of technical change on human capital formation during England's Industrial Revolution. Using the number of steam engines installed by 1800 as a synthetic indicator of technological change, and occupational statistics to measure working skills (using HISCLASS), we establish a positive correlation between the use of steam engines and the share of skilled workers at the county level. We use exogenous variation in carboniferous rock strata (containing coal to fuel the engines) to show that the effect was causal. While technological change stimulated the formation of working skills, it had an overall negative effect on the formation of primary education, captured by literacy and school enrolment rates. It also led to higher gender inequality in literacy. |
| Keywords: | Economic Growth; education; Human Capital; Industrialisation; Steam Engines; Technological change |
| JEL: | J82 N33 O14 O33 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12987&r=lab |
| By: | Browne, James (OECD); Immervoll, Herwig (OECD); Fernandez, Rodrigo (OECD); Neumann, Dirk (OECD); Pacifico, Daniele (OECD); Thévenot, Céline (OECD) |
| Abstract: | In the aftermath of the financial and economic crisis, large shares of working-age individuals in Ireland either did not work or only to a limited extent. As the labour-market recovery gathered pace during 2013, 32% were without employment during the entire year, and a further 14% had weak labour-market attachment, working only a fraction of the year, or on restricted working hours. This paper applies a novel method for measuring and visualising employment barriers of individuals with no or weak labour-market attachment, using household micro-data. It first develops indicators to quantify employment obstacles under three broad headings: (i) work-related capabilities, (ii) incentives, and (iii) employment opportunities. It then uses these indicators in conjunction with a statistical clustering approach to identify unobserved ("latent") groups of individuals facing similar combinations of barriers. The resulting typology of labour-market difficulties provides insights on the most pressing policy priorities in supporting different groups into employment. A detailed policy discussion illustrates how the empirical results can inform people-centred assessments of existing labour-market integration measures and of key challenges across different policy areas and institutions. The most common employment obstacles in Ireland were limited work experience, low skill levels, and scarce job opportunities. Although financial disincentives, health problems and care responsibilities were less widespread overall, they remained important barriers for some groups. A notable finding is that just under 40% of jobless or low-intensity workers face three or more simultaneous barriers, highlighting the limits of narrow policy approaches that focus on subsets of these employment obstacles in isolation. |
| Keywords: | employment barriers, profiling, activation, policy coordination |
| JEL: | C38 H31 J2 J6 J8 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11583&r=lab |
| By: | Colmer, Jonathan |
| Abstract: | Temperature-driven reductions in the demand for agricultural labor are associated with increases in the share of workers engaged in manufacturing, suggesting that the ability of non-agricultural sectors to absorb workers may play a key role in attenuating the economic consequences of weather-driven changes in agricultural productivity. Exploiting firm-level variation in the propensity to absorb these workers, I find that this reallocation is associated with relative expansions in manufacturing activity in exible labor market environments. Counter-factual estimates suggest that in the absence of labor reallocation the aggregate consequences of temperature increases would be up to 40% higher. |
| Keywords: | labor reallocation; agricultural productivity; labor regulation; industrial production |
| JEL: | J62 O13 Q54 |
| Date: | 2018–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:88695&r=lab |
| By: | Masuda, Kazuya; Sakai, Yoko |
| Abstract: | International labor mobility is a key factor for a well-functioning labor market. Although educational attainment is known to affect regional labor mobility within a country, evidence of a relationship between schooling and international labor mobility is limited, particularly in developing countries. This study uses the across-cohort variation in the exposure to the 1988 free secondary education reform in the Philippines to examine the impact of years of education on the propensity of working abroad. The results suggest that attaining another year of schooling increases the likelihood of working abroad by 3 and 8 percentage points for men and women, respectively. These results suggest that education improves the ability to deal with negative economic shocks by allowing individuals to find employment in the international labor market. |
| Keywords: | Labor mobility, Migration, Education, Philippines, Free secondary education |
| JEL: | J61 R23 I20 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2018-5&r=lab |
| By: | Guerrazzi, Marco; Ksebi, Ilham |
| Abstract: | This paper addresses the measurement of unemployment in the Italian regional context. Specifically, retrieving data from Tuscany, we compare the picture of unemployment that emerges by exploring official data and administrative records over the period after the burst of the Great Recession. Consistently with previous findings, we find that registered unemployment is higher, more persistent and more concentrated on women than its official measure. However, despite those heterogeneities, we show that the cyclical behaviour of registered job seekers is similar to the one of official job seekers. Moreover, we provide a way to reconcile the two measures of unemployment. Thereafter, we develop a model that provides a rationale for the coexistence of official and registered job seekers and we explore how it reacts to productivity shocks and its policy implications. Finally, we offer some insights about the desirability of an integrated use of these data. |
| Keywords: | Unemployment; Official data; Administrative records; Unconstructive search; Claimants in employment |
| JEL: | E24 J64 |
| Date: | 2018–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87227&r=lab |
| By: | Fabio D'Orlando (University of Cassino and Lazio Meridionale) |
| Abstract: | The aim of this paper is to discuss possible solutions to the “third wave” of technological unemployment and their main drawbacks. The process has just started and will only be fully realized in the future, but its main novelty is already well known and concerns robots (and artificial intelligence) entering the production process. Robots do not simply increase labor productivity, in cooperation with humans, but can totally substitute labor, making it possible to produce commodities without the use of human input. This in turn generates technological unemployment. Past “compensation” theories have argued that technological unemployment could be reabsorbed thanks to wage reduction and demand (and production) increase. But these theories have ignored robots. If robots are more productive and less expensive than humans, wage reduction may be insufficient due to the minimum wage subsistence boundary; and, in any case, an increase in demand would only determine an increase in the production of goods by robots alone, without any impact on human employment. Meanwhile, the resulting mass unemployment will require redistributive policies. The paper discusses the most relevant among these policies, emphasizing their drawbacks and their unwanted implications, and proposes an alternative rooted in Tietenberg’s tradable permits approach. |
| JEL: | B12 D21 D30 E24 J64 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:csn:wpaper:2018-02&r=lab |
| By: | Julie Beugnot; Olivier Charlot; Guy Lacroix |
| Abstract: | In this paper we analyse the link between homeownership and various aggregate and individual labour market outcomes. Our aim is to investigate the likely consequences of public policies that promote homeownership. To this end, we develop a circular firm-worker matching model with Nash-bargained wage setting and free market entry. Homeowners are assumed to be less mobile than tenants and to bear higher mobility costs. Our numerical exercises show that tenants usually have lower unemployment rates and lower wage rates than homeowners. Importantly, workers’ performances do not necessarily improve following an increase in the proportion of homeowners. The latter crucially depends on the relative utility enjoyed by homeowners and tenants when unemployed. In the aggregate, nevertheless, we find that the unemployment rate generally increases following an increase in the proportion of homeowners. Yet, the link between the two can be reversed if the homeowners’ utility is lower than that of tenants when unemployed. Our model thus identifies a number of conditions under which Oswald’s conjecture is likely to hold or not. Thus, our results do not necessarily support the view that policies fostering homeownership are adequate public policies given their potentially negative effect on the labour market. |
| Keywords: | Stochastic job matching, Homeownership, Unemployment, Mobility |
| JEL: | H31 J61 J64 R23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:crrecr:1812&r=lab |
| By: | Iva Trako (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper examines the effect of fertility on parental labor-force participation in a developing country in the Balkans, with particular attention to the intervening role of childcare provided by grandparents in extended families. In order to address the potential endogeneity in the fertility decision, I exploit Albanian parental preference for having sons combined with the siblings sex-composition instrument as an exogenous source of variation. Using a repeated cross-section of parents with at least two children, I find a positive and statistically significant effect of fertility on parental labor supply for those parents who are more likely to be younger, less educated or live in extended families. In particular, IV estimates for mothers show that they increase labor supply, especially in terms of hours worked per week and the likelihood of working off-farm. Similarly, father's likelihood of working off-farm and having a second occupation increase as a consequence of further childbearing. The heterogeneity analysis suggests that this positive effect might be the result of two plausible mechanisms: childcare provided by non-parental adults in extended families and greater financial costs of maintaining more children. |
| Keywords: | fertility,parental labor-force participation,instrumental variables |
| Date: | 2018–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01828471&r=lab |
| By: | Andrea Brandolini (Bank of Italy); Romina Gambacorta (Bank of Italy); Alfonso Rosolia (Bank of Italy) |
| Abstract: | The paper analyses the evolution of inequality in Italy from 1989 to 2014, focusing on three business-cycle phases: the 1992 currency crisis, the moderate growth from 1993 to 2007, and the double-dip recession from 2008 to 2013. Data from the national accounts and the Bank of Italy’s Survey on Household Income and Wealth are used. Results show that income inequality, as measured by the Gini coefficient, rose sharply during the recession of the early 1990s but much less during the recent double-dip recession, though the share of people at risk of poverty rose similarly during the two crises. The stability of (synthetic) distributive inequality measures is explained by the fact that the reduction in income during the double-dip recession hit the whole population. Despite this apparent stability, two changes stand out: the widening gap between the young and the elderly and the fact that the deterioration in living conditions was borne wholly by households whose primary earner was foreign born. |
| Keywords: | inequality, household income distribution |
| JEL: | D31 E24 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_442_18&r=lab |
| By: | Gaillard, Alexandre; Kankanamge, Sumudu |
| Abstract: | This paper introduces a quantitative general equilibrium model with risky entrepreneurship and search frictions designed to endogenously match the magnitude of the occupational flows between entrepreneurship, paid-employment and unemployment. The model also accounts for the general shape of these flows as well as key entrepreneurial and labor market features in the US, based mostly on micro CPS and SCF data. We use this model to examine the mitigation of the bias created by most current unemployment insurance programs in favor of paid-employment and at the expense of self-employment. We show that an entrepreneurial insurance program can significantly reduce this bias and we decompose the elements that most contribute to this reduction. Comparing this policy to an entrepreneurial subsidy, we find that entrepreneurial insurance selects more talented, wealthier, faster growing and longer lasting entrepreneurs from the unemployment pool. Finally, we find that UI system attributes have a significant impact on entrepreneurship, which might be an important additional concern for optimal UI design. |
| Keywords: | entrepreneurship; labor market mobility; unemployment; insurance; |
| JEL: | E24 E61 J68 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:32738&r=lab |
| By: | Blanca Sánchez-Alonso (Dept. of Economics, Universidad CEU-San Pablo, Madrid) |
| Abstract: | The experiences of Latin American countries are not fully incorporated into current debates concerning the age of mass migration even though 13 million Europeans migrated to the region between 1870 and 1930. This paper draws together different aspects of the Latin America immigration experience. Its main objective is to rethink the role of European migration to the region, addressing several major questions in the economics of migration: whether immigrants were positively selected from their sending countries, how immigrants assimilated into the host economies, the role of immigration policies, and the long-run effects of immigration. Immigrants came from the economically backward areas of Southern and Eastern Europe, yet their adjustment to the host labour markets in Latin America seems to have been successful. The possibility of rapid social upgrading made Latin America attractive for European immigrants. Migrants were positively selected from origin according to literacy. The most revealing aspect of new research is showing the positive long-run effects that European immigrants had in Latin American countries. The political economy of immigration policies deserves new research, particularly for Brazil and Cuba. The case of Argentina shows a more complex scenario than the classic representation of landowners constantly supporting an open-door policy. |
| Keywords: | Historical migration, Latin America, Immigrants’ selection, Socioeconomic impact. |
| JEL: | N36 O15 J61 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0134&r=lab |
| By: | Razzu, Giovanni; Singleton, Carl; Mitchell, Mark |
| Abstract: | Using over four decades of British micro data, this paper asks why progress in closing the gender employment rate gap has stalled since the early 1990s. We find that how partner characteristics affected women’s likelihood of employment explain most of the gap’s shift in trend. Instead, changes to the structure of employment both between and within industry sectors impacted the gap at approximately constant rates throughout the period. There is evidence that continuing improvements in women’s employment when they had children or higher qualifications worked towards narrowing the gap, even after progress overall had stalled. |
| Keywords: | gender employment gaps; structural change; micro time series dataset |
| JEL: | E24 J16 J21 |
| Date: | 2018–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87190&r=lab |
| By: | Sophie Piton (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| 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 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01785345&r=lab |
| By: | Balázs Égert; Peter Gal |
| Abstract: | This paper presents country-specific effects of structural reforms. It discusses how sizeable and interesting country-specific effects can be identified in a panel setting by conditioning the impact of individual policies on their own level or on the stance of other policies and institutions. This approach allows for the incorporation of a potentially large set of additional policy areas including institutions and policy areas with limited time-series availability (e.g. sub-components of the Product Market Regulation indicator, housing market regulations and policies, Doing Business indicators and the quality of institutions such as the rule of law indicator or the efficiency of the legal system). Results suggest that for instance, when more stringent product market regulation hurts more in more open economies. Better institutions amplify the positive effect of R&D spending. Tax wedge reduction leads to less employment gains when EPL is not very stringent. |
| Keywords: | employment, institutions, investment, non-linear effects, OECD, policy interactions, product and labour market regulation, productivity, structural reform |
| JEL: | D24 E17 E22 E24 J08 |
| Date: | 2018–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1487-en&r=lab |
| By: | Jake Anders (University College London); Simon Burgess (University of Bristol); Jonathan Portes (King's College London) |
| Abstract: | Refugees are often perceived as an economic "burden", as the current debate on the European refugee crisis illustrates. But there is little quantitative evidence on the medium-term outcomes of refugees in the UK. We fill this gap by looking at the case of "East African Asians" who arrived as refugees in the late 1960s and early 1970s. We use data from the UK Census to describe their economic outcomes forty years later. We show that their outcomes are at least as good as the population average, with the younger cohort performing better. Refugee status, as distinct from ethnicity or immigrant status, appears to have a positive impact. |
| Keywords: | Migration, Refugees, East African Asians |
| JEL: | J15 |
| Date: | 2018–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1805&r=lab |