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on Labour Economics |
| By: | Orrenius, Pia M. (Federal Reserve Bank of Dallas); Zavodny, Madeline (University of North Florida) |
| Abstract: | Immigrants’ descendants typically assimilate toward mainstream social and economic outcomes across generations. Hispanics in the United States are a possible exception to this pattern. Although there is a growing literature on intergenerational progress, or lack thereof, in education and earnings among Hispanics, there is little research on employment differences across immigrant generations. Using data from 1996 to 2017, this study reveals considerable differences in Hispanics’ employment rates across immigrant generations. Hispanic immigrant men tend to have higher employment rates than non-Hispanic whites and second- and third-plus generation Hispanics. Hispanic immigrant women have much lower employment rates, but employment rates rise considerably in the second generation. Nonetheless, U.S.-born Hispanic women are less likely than non-Hispanic white women to work. The evidence thus suggests segmented assimilation, in which the descendants of Hispanic immigrants have worse outcomes across generations. While relatively low education levels do not appear to hamper Hispanic immigrants’ employment, they play a key role in explaining low levels of employment among Hispanic immigrants’ descendants. Race and selective ethnic attrition may also contribute to some of the patterns uncovered here. |
| Keywords: | Hispanics; immigrant generations; assimilation |
| JEL: | E24 J11 J15 |
| Date: | 2018–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1809&r=lab |
| By: | Albert Jan Hummel (Erasmus University Rotterdam); Bas Jacobs (Erasmus University Rotterdam) |
| Abstract: | This paper extends the Diamond (1980) model with labor unions to study optimal income taxation and to analyze whether unions can be desirable for income redistribution. Unions bargain with firms over wages in each sector and firms unilaterally determine employment. Unions raise the efficiency costs of income redistribution, because unemployment benefits and income taxes raise wage demands and thereby generate involuntary unemployment. Optimal unemployment benefits and optimal income taxes are lower in unionized labor markets. We show that unions are socially desirable only if they represent (low-income) workers whose participation is subsidized on a net basis. By creating implicit taxes on work, unions alleviate the labor-market distortions caused by income taxation. Numerical simulations demonstrate that optimal taxes and transfers are much less redistributive in unionized labor markets than in competitive labor markets. |
| Keywords: | optimal taxation; unions; wage bargaining; labor participation |
| JEL: | H21 H23 J51 J58 |
| Date: | 2018–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20180064&r=lab |
| By: | Michela Carlana (Harvard Kennedy School); Marco Tabellini (Harvard Business School, Business, Government and the International Economy Unit) |
| Abstract: | In this paper, we study the effects of immigration on natives' marriage, fertility, and family formation across US cities between 1910 and 1930. Instrumenting immigrants' location decision by interacting pre-existing ethnic settlements with aggregate migration flows, we find that immigration raised marriage rates, the probability of having children, and the propensity to leave the parental house for young native men and women. We show that these effects were driven by the large and positive impact of immigration on native men's employment and occupational standing, which increased the supply of "marriageable men". We also explore alternative mechanisms - changes in sex ratios, natives' cultural responses, and displacement effects of immigrants on female employment - and provide evidence that none of them can account for a quantitatively relevant fraction of our results. |
| JEL: | J12 J13 J61 N32 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:19-004&r=lab |
| By: | Todd R. Stinebrickner; Ralph Stinebrickner; Paul J. Sullivan |
| Abstract: | Gender differences in current and past job tasks may be crucial for understanding the gender wage gap. We use novel task data to address well-known measurement concerns, including that standard task measures assume away within-occupation gender differences in tasks. We find that unique measures of task-specific experience, in particular high-skilled information experience, are of particular importance for understanding the substantial widening of the wage gap early in the career. Highlighting the importance of these measures, traditional work-related proxies for gender differences in human capital accumulation are not informative because general work experience is similar by gender for our recent graduates. |
| JEL: | J01 J16 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24790&r=lab |
| By: | Ilyana Kuziemko; Jessica Pan; Jenny Shen; Ebonya Washington |
| Abstract: | After decades of convergence, the gender gap in employment outcomes has recently plateaued in many rich countries, despite the fact that women have increased their investment in human capital over this period. We propose a hypothesis to reconcile these two trends: that when they are making key human capital decisions, women in modern cohorts underestimate the impact of motherhood on their future labor supply. Using an event-study framework, we show substantial and persistent employment effects of motherhood in U.K. and U.S. data. We then provide evidence that women do not anticipate these effects. Upon becoming parents, women (and especially more educated women) adopt more negative views toward female employment (e.g., they are more likely to say that women working hurts family life), suggesting that motherhood serves as an information shock to their beliefs. Women on average (and, again, more educated women in particular) report that parenthood is harder than they expected. We then look at longer horizons—are young women's expectations about future labor supply correct when they make their key educational decisions? In fact, female high school seniors are increasingly and substantially overestimating the likelihood they will be in the labor market in their thirties, a sharp reversal from previous cohorts who substantially underestimated their future labor supply. Finally, we specify a model of women's choice of educational investment in the face of uncertain employment costs of motherhood, which demonstrates that our results can be reconciled only if these costs increased unexpectedly across generations. We end by documenting a collage of empirical evidence consistent with such a trend. |
| JEL: | J13 J16 J22 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24740&r=lab |
| By: | Gaurav Khanna; Munseob Lee |
| Abstract: | Economists have identified product entry and exit as a primary channel through which innovation impacts economic growth. In this paper, we document how high-skill immigration affects product reallocation (entry and exit) at the firm level. Using data on H-1B Labor Condition Applications (LCAs) matched to retail scanner data on products and Compustat data on firm characteristics, we find that H-1B certification is associated with higher product reallocation and revenue growth. A ten percent increase in the share of H-1B workers is associated with a two percent increase in product reallocation rates -- our measure of innovation. These results shed light on the economic consequences of innovation by high-skill immigrant to the United States. |
| JEL: | D22 D24 F22 J61 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24824&r=lab |
| By: | Gabriella Conti (University College London); Rita Ginja (University of Bergen); Renata Narita (University of São Paulo) |
| Abstract: | Do households value access to free health insurance when making labor supply decisions? We answer this question using the introduction of universal health insurance in Mexico, the Seguro Popular (SP), in 2002. The SP targeted individuals not covered by Social Security and broke the link between access to health care and job contract. We start by using the rollout of SP across municipalities in a differences-in-differences approach, and find an increase in informality of 4% among low-educated families with children. We then develop and estimate a household search model that incorporates the pre-reform valuation of formal sector amenities relative to the alternatives (informal sector and non-employment) and the value of SP. The estimated value of the health insurance coverage provided by SP is below the government’s cost of the program, and the corresponding utility gain is, at most, 0.56 per each peso spent. |
| Keywords: | search, household behavior, health insurance, informality, unemployment |
| JEL: | J64 D10 I13 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2018-050&r=lab |
| By: | Jesus Ferreiro; Carmen Gómez |
| Abstract: | For mainstream economics, rigidities in the labour market are the primary determinants of high and persistent long-term unemployment rates, leading to the need to reform labour market institutions and make them more flexible. Flexible labour markets would not only help to smooth normal business cycle fluctuations (implying a small impact of these fluctuations on employment and unemployment) but also to reduce the negative impacts on labour market of structural shocks. If we focus on the labour market performances in the European Union during the Great Recession, we can easily detect the existence of significant differences in the impact of this common structural shock on the domestic labour markets. For mainstream economics, the countries with the best results in terms of unemployment and employment would have been those that had a more flexible labour market at the beginning of the crisis and/or those having implemented reforms to increase this flexibility.The aim of this paper is to determine the validity of this argument, that is, whether labour reforms making the labour market more flexible effectively ensure macroeconomic stability by reducing the impact on the labour market of economic shocks. Using panel data techniques, we investigate whether, as mainstream studies argue, the evolution of employment and unemployment in the EU labour markets is explained, and to what extent, by the levels and changes registered in the indicators of employment protection legislation. Conversely, we examine whether, as heterodox and post-Keynesian studies suggest, this evolution is explained by the changes registered in economic activity (i.e., GDP growth). |
| Keywords: | employment, unemployment, Great Recession, employment protection |
| JEL: | C23 E24 J21 J64 J88 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:imk:fmmpap:31-2018&r=lab |
| By: | Barbara Biasi |
| Abstract: | Compensation of most US public school teachers is rigid and solely based on seniority. This paper studies a 2011 reform that gave school districts in Wisconsin full autonomy to redesign teacher pay schemes. I show that, following the reform, some districts switched to flexible compensation and started paying high-quality teachers more. Teacher quality increased in these districts relative to those with seniority pay, due to a change in workforce composition and an increase in effort. I estimate a structural model of this labor market to investigate the effects of alternative pay schemes on the composition of the teaching workforce. |
| JEL: | I20 J31 J45 J51 J61 J63 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24813&r=lab |
| By: | Sascha O. Becker; Irena Grosfeld; Pauline Grosjean; Nico Voigtländer; Ekaterina Zhuravskaya |
| Abstract: | We exploit a unique historical setting to study the long-run effects of forced migration on investment in education. After World War II, the Polish borders were redrawn, resulting in large-scale migration. Poles were forced to move from the Kresy territories in the East (taken over by the USSR) and were resettled mostly to the newly acquired Western Territories, from which Germans were expelled. We combine historical censuses with newly collected survey data to show that, while there were no pre-WWII differences in education, Poles with a family history of forced migration are significantly more educated today. Descendants of forced migrants have on average one extra year of schooling, driven by a higher propensity to finish secondary or higher education. This result holds when we restrict ancestral locations to a subsample around the former Kresy border and include fixed effects for the destination of migrants. As Kresy migrants were of the same ethnicity and religion as other Poles, we bypass confounding factors of other cases of forced migration. We show that labor market competition with natives and selection of migrants are also unlikely to drive our results. Survey evidence suggests that forced migration led to a shift in preferences, away from material possessions and towards investment in a mobile asset – human capital. The effects persist over three generations. |
| JEL: | D74 I25 N33 N34 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24704&r=lab |
| By: | Abel Brodeur (Department of Economics, University of Ottawa, Ottawa, ON); Joanne Haddad (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | This paper analyzes the determinants behind the spatial distribution of the LGBT population in the U.S. We relate the size of the present-day LGBT population to the discovery of gold mines during the 19th century gold rushes. Comparing the surroundings of these gold mines to other current and former mining counties, we find that there are currently 10-15% more same-sex couples in counties in which gold discoveries were made during the gold rushes. We also provide empirical evidence that residents of gold rush counties still have more favorable attitudes toward homosexuality nowadays. Our findings are consistent with two mechanisms. First, gold rushes led to a large (temporary) increase in the male-to-female ratio. Second, we show that gold rush counties were less likely to house a notable place of worship at the time of the discovery (and in the following decades) and are currently less religious, suggesting a role of institutions in shaping attitudes and norms. |
| Keywords: | persistence, LGBT, attitudes, institutions, religion. |
| JEL: | O13 O18 J10 R23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1808e&r=lab |
| By: | George Deltas; Dakshina Garfield De Silva; Robert McComb |
| Abstract: | We estimate the effects of industrial localization on the spatial persistence of employment in the software industry, using micro-data from Texas for the 2000-2006 period. Locations with an initial concentration of software employment retain an excess number of employees, beyond that expected from job turnover and job persistence at the establishment level. This is not driven by differential establishment growth or survival, but it is due to (a) the retention by establishments in a location of jobs lost by other establishments in that location, and (b) the propensity of software establishments to enter in locations with prior software establishment presence. These findings are more consistent with labor channel effects than with human capital spillovers. |
| Keywords: | Agglomeration economies, labor pools, knowledge spillovers, firm growth, spatial effects |
| JEL: | R32 L86 R12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:242312727&r=lab |
| By: | Ulrike Malmendier; Leslie Sheng Shen |
| Abstract: | We show that personal experiences of economic shocks can “scar'” consumer behavior in the long run. We first illustrate the effects of experience-based learning in a simple stochastic life-cycle consumption model with time-varying financial constraints. We then use data from the Panel Study of Income Dynamics (PSID), the Nielsen Homescan Panel, and the Consumer Expenditure Survey (CEX) to estimate the long-term effects of lifetime experiences on consumption. We show that households who have lived through times of high local and national unemployment, or who have experienced more personal unemployment, spend significantly less on food and total consumption, after controlling for income, wealth, employment, demographics, and macro-economic factors, such as the current unemployment rate. The reverse holds for past experiences of low unemployment. We also estimate significant experience-based variation in consumption within household, i. e., after including household fixed effects. At the same time, lifetime experiences do not predict individuals' future income. The Nielsen data reveals that households who have lived through times of high unemployment are particularly likely to use coupons and to purchase sale items or lower-end products. As predicted by the experience-based learning model, the effects of a given macro shock are stronger for younger than for older cohorts. Finally, past experiences predict beliefs about future economic conditions in the Michigan Survey of Consumers (MSC), implying a beliefs-based channel. Our results suggest a novel micro-foundation of fluctuations of aggregate demand, and explain long-run effects of macroeconomic shocks. |
| JEL: | D12 D83 D91 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24696&r=lab |
| By: | Bilal, Adrien; Rossi-Hansberg, Esteban |
| Abstract: | The location of individuals determines their job opportunities, living amenities, and housing costs. We argue that it is useful to conceptualize the location choice of individuals as a decision to invest in a `location asset'. This asset has a cost equal to the location's rent, and a payoff through better job opportunities and, potentially, more human capital for the individual and her children. As with any asset, savers in the location asset transfer resources into the future by going to expensive locations with good future opportunities. In contrast, borrowers transfer resources to the present by going to cheap locations that offer few other advantages. As in a standard portfolio problem, holdings of this asset depend on the comparison of its rate of return with that of other assets. Differently from other assets, the location asset is not subject to borrowing constraints, so it is used by individuals with little or no wealth that want to borrow. We provide an analytical model to make this idea precise and to derive a number of related implications, including an agent's mobility choices after experiencing negative income shocks. The model can rationalize why low wealth individuals locate in low income regions with low opportunities even in the absence of mobility costs. We document the investment dimension of location, and confirm the core predictions of our theory with French individual panel data from tax returns. |
| JEL: | D14 E21 J61 R23 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13063&r=lab |
| By: | Goel, Deepti; Deshpande, Ashwini |
| Abstract: | Economists are increasingly interested in subjective well-being, but the economic literature on perceptions of income adequacy, which is one of the factors that shapes subjective well-being, is small. Our paper fills this lacuna in the literature. We utilize nationally representative data on perceptions of amounts considered as remunerative earnings from self-employment in India, and examine how these are shaped by social identity, namely, caste. We also investigate if institutional change such as the introduction of an employment guarantee scheme alters these perceptions. Finally, we examine the relationship between caste identity and actual earnings. We find that caste identity does shape both perceptions of income adequacy as well as actual earnings: lower-ranked groups perceive lower amounts as being remunerative, and also earn lower amounts. Further, the employment guarantee scheme alters self-perceptions differentially for different caste groups, but in more nuanced ways than our ex-ante beliefs. |
| Keywords: | Caste,Perceptions,Income Adequacy,Discrimination,India |
| JEL: | J15 O15 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:232&r=lab |
| By: | Marco Tabellini (Harvard Business School, Business, Government and the International Economy Unit) |
| Abstract: | In this paper, I show that political opposition to immigration can arise even when immigrants bring significant economic prosperity to receiving areas. I exploit exogenous variation in European immigration to US cities between 1910 and 1930 induced by World War I and the Immigration Acts of the 1920s, and instrument immigrants' location decision relying on pre-existing settlement patterns. Immigration increased natives' employment and occupational standing, and fostered industrial production and capital utilization. However, despite these economic benefits, it triggered hostile political reactions, such as the election of more conservative legislators, higher support for anti-immigration legislation, and lower public goods provision. Stitching the economic and the political results together, I provide evidence that natives' backlash was, at least in part, due to cultural differences between immigrants and natives, suggesting that diversity might be economically beneficial but politically hard to manage. |
| Keywords: | Immigration; Political Backlash; Age of Mass Migration; Cultural Diversity |
| JEL: | J15 J24 N32 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:19-005&r=lab |
| By: | David N.F. Bell; David G. Blanchflower |
| Abstract: | In this paper we build on our earlier work on underemployment using data from the UK. In particular, we explore their well-being based on hours preferences rather than on involuntary part-time work used in the prior literature. We make use of five main measures of well-being: happiness; life satisfaction; whether life is worthwhile; anxiety and depression. The underemployed have higher levels of well-being than the unemployed and disabled but lower levels than any other group of workers, full or part-time. The more that actual hours differ from preferred hours the lower is a worker's well-being. This is true for those who say they want more hours (the underemployed) and those who say they want less (the over employed). We find strong evidence of a rise in depression and anxiety (negative affect) in the years since the onset of austerity in 2010 that is not matched by declines in happiness measures (positive affect). The fear of unemployment obtained from monthly surveys from the EU has also been on the rise since 2015. We find evidence of an especially large rise in anxiety and depression among workers in general and the underemployed in particular. The underemployed don't want to be underemployed. |
| JEL: | I20 I31 J64 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24840&r=lab |
| By: | Jason Furman; Robert Seamans |
| Abstract: | We review the evidence that artificial intelligence (AI) is having a large effect on the economy. Across a variety of statistics—including robotics shipments, AI startups, and patent counts—there is evidence of a large increase in AI-related activity. We also review recent research in this area which suggests that AI and robotics have the potential to increase productivity growth but may have mixed effects on labor, particularly in the short run. In particular, some occupations and industries may do well while others experience labor market upheaval. We then consider current and potential policies around AI that may help to boost productivity growth while also mitigating any labor market downsides including evaluating the pros and cons of an AI specific regulator, expanded antitrust enforcement, and alternative strategies for dealing with the labor-market impacts of AI, including universal basic income and guaranteed employment. |
| JEL: | H23 J24 J65 L1 L4 L78 O3 O4 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24689&r=lab |
| By: | Bellido, Héctor; Marcén, Miriam |
| Abstract: | This paper studies the effect of the business cycle on the marriage rate, using a panel data of 30 European countries covering 1991 to 2013. We find a negative effect of the business cycle on the marriage rate, pointing to the pro-cyclical behaviour of marriage decisions, which holds after controlling for country-level specific characteristics and family law, and after taking possible endogeneity problems into account. We also analyse this issue considering a wide range of country-level regulations affecting couples (taxation, property division, and reproduction, among others). Supplemental analysis reveals gender differences in the impact of the business cycle on the marital decision, depending on the previous legal marital status of the individuals. |
| Keywords: | Marriage,unemployment,business cycle |
| JEL: | J12 J64 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:229&r=lab |