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on Labour Economics |
| By: | van den Berg, Gerard J. (IFAU - Institute for Evaluation of Labour Market and Education Policy); Uhlendorff, Arne (CREST, CNRS, IAB Nuremberg, DIW Berlin, IZA); Wolff, Joachim (Institute for Employment Research (IAB) of the German Federal Employment Agency (BA)) |
| Abstract: | The reintegration of young welfare recipients into the labor market is a major policy goal in many European countries. In this context monitoring and sanctions are important policy tools. In this paper, we analyze the impact of strict sanctions on job search outcomes for young welfare recipients in Germany. The German benefit system is characterized by harsh sanctions for this group. Strict sanctions effectively take away the benefits for three months if young welfare recipients do not comply with their job search requirements. We jointly analyze the impact of these sanctions on job search outcomes and on dropping out of the labor force based on administrative data on a large inflow sample of young male jobseekers into welfare. We estimate multivariate duration models taking selection based on unobservables into account. Our results indicate that there is a trade off between an increased job entry rate and an increased withdrawal from the labor force as well as lower entry wages. Sanctions increase the probability of finding a job, but these jobs go along with lower earnings. Moreover, sanctions significantly increase the probability of dropping out. |
| Keywords: | social assistance; unemployment; sanctions; post unemployment outcomes; youth unemployment |
| JEL: | C21 C41 J64 J65 |
| Date: | 2019–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2019_005&r=all |
| By: | Adrien Auclert; Will S. Dobbie; Paul Goldsmith-Pinkham |
| Abstract: | This paper argues that the debt forgiveness provided by the U.S. consumer bankruptcy system helped stabilize employment levels during the Great Recession. We document that over this period, states with more generous bankruptcy exemptions had significantly smaller declines in non-tradable employment and larger increases in unsecured debt write-downs compared to states with less generous exemptions. We interpret these reduced form estimates as the relative effect of debt relief across states, and develop a general equilibrium model to recover the aggregate employment effect. The model yields three key results. First, substantial nominal rigidities are required to rationalize our reduced form estimates. Second, with monetary policy at the zero lower bound, traded good demand spillovers across states boosted employment everywhere. Finally, the ex-post debt forgiveness provided by the consumer bankruptcy system during the Great Recession increased aggregate employment by almost two percent. |
| JEL: | D14 E32 K35 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25685&r=all |
| By: | Stefania Albanesi (University of Pittsburgh) |
| Abstract: | This paper studies the impact of changing trends in female labor supply on productivity, TFP growth and aggregate business cycles. We find that the growth in women’s labor supply and relative productivity added substantially to TFP growth from the early 1980s, even if it depressed average labor productivity growth, contributing to the 1970s productivity slowdown. We also show that the lower cyclicality of female hours and their growing share can account for a large fraction of the reduced cyclicality of aggregate hours during the great moderation, as well as the decline in the correlation between average labor productivity and hours. Finally, we show that the discontinued growth in female labor supply starting in the 1990s played a substantial role in the jobless recoveries following the 1990-1991, 2001 and 2007-2009 recessions. Moreover, it depressed aggregate hours, output growth and male wages during the late 1990s and mid 2000s expansions. These results suggest that continued growth in female employment since the early 1990s would have significantly improved economic performance in the United States. |
| Keywords: | female employment, business cycles, productivity slowdown, great moderation, jobless recoveries |
| JEL: | E17 E32 E37 J11 J21 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2019-021&r=all |
| By: | Zachary Ward |
| Abstract: | To what extent does internal migration lead to upward mobility? Using within-brother variation and a new linked dataset from 1910 to 1940, I estimate that internal migrants were more likely to improve on their father’s percentile rank than non-migrants. On average, the effect of migration was nearly four times the effect of one year of education; for those raised in poorer households, migration’s effect was about nine times that of education. The evidence suggests that internal migration was a key strategy for intergenerational progress in a context of rapid industrialization, high rates of rural-to-urban migration and large interregional income gaps. |
| Keywords: | internal migration, intergenerational mobility, urbanization |
| JEL: | J61 J62 N31 N32 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:076&r=all |
| By: | Lars Højsgaard Andersen; Christian Dustmann (Department of Economics, University College London and CReAM); Rasmus Landersø (ROCKWOOL Foundation Research Unit) |
| Abstract: | Denmark's Start Aid welfare reform reduced benefits to refugee immigrants by around 50 percent for those granted residency after the reform date. The reform led to a sharp short run increase in labor earnings and employment, but it also induced a strong female labor force withdrawal, and a large and persistent drop in disposable income for most households. Furthermore, the reform caused a sharp increase in property crime among both females and males. Moreover, children's likelihood of being enrolled in childcare or preschool, their performance in language tests, and their years of education all decreased, while teenagers' crime rates increased. |
| Keywords: | Social assistance, welfare state, labor market outcomes, migration |
| JEL: | E64 I30 J60 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1905&r=all |
| By: | Lena Boneva (Bank of England; CEPR); James Cloyne (CEPR; UC Davis; NBER); Martin Weale (Centre for Macroeconomics (CFM); Kings College London); Tomasz Wieladek (CEPR; Barclays) |
| Abstract: | Firms’ expectations play a central role in modern macroeconomic models, but little is known empirically about how these are formed or whether they matter for economic outcomes. Using a novel panel data set of manufacturing firms’ expectations about prices and wage rates, new orders, employment and unit costs for the United Kingdom, we document a range of stylized facts about the properties of firms’ expectations and their relationship with recent experience. There is wide dispersion of expectations across firms. Expected future price and wage growth are influenced by firm-specific factors but macroeconomic factors also matter. Expectations of employment and new orders are influenced by firm-specific measures of past orders while expected unit costs seem to be influenced more by firm-specific cost pressures and aggregate import prices. After controlling for a wide range of variables we find a significant connection between past expected price and wage increases and their out-turns. But there is also strong evidence that firms’ expectations are clearly not rational. |
| Keywords: | Firm exceptions, Price setting, Rationality, Survey data, Inflation expectations |
| JEL: | C23 C26 E31 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1905&r=all |
| By: | Sebastian Rausch (ETH Zurich, Switzerland); Hidemichi Yonezawa (ETH Zurich, Switzerland) |
| Abstract: | We examine the lifetime incidence and intergenerational distributional effects of an economywide carbon tax swap using a numerical dynamic general equilibrium model with overlapping generations of the U.S. economy. We highlight various fundamental choices in policy design including (1) the level of the initial carbon tax, (2) the growth rate of the carbon tax trajectory of over time, and (3) alternative ways for revenue recycling. Without revenue recycling, we find that generations born before the tax is introduced experience smaller welfare losses, or even gain, relative to future generations. For suffciently low growth rates of the tax trajectory, the impacts for distant future generations decrease over time. For future generations born after the introduction of the tax, the negative welfare impacts are the smallest (largest) when revenues are recycled through lowering pre-existing capital income taxes (through per-capita lump-sum rebates). For generations born before the tax is introduced, we find that lump-sum rebates favor very old generations and labor (capital) income tax recycling favors very young generations (generations of intermediate age). |
| Keywords: | Carbon tax, Green Tax Reform, Intergenerational Incidence, Distributional Impacts, Overlapping Generations, Climate Policy |
| JEL: | H23 Q52 D91 Q43 C68 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:18-287&r=all |
| By: | Bengtsson, Erik (Department of Economic History, Lund University) |
| Abstract: | That export-led industry sets the wage norm for the whole economy, acting as the “wage leader”, is a celebrated part of the Swedish wage bargaining and labour market model. Export- led wage leadership is assumed to lead to controlled, non-inflationary wage increases, as wages are set with international competition in mind. This paper maps the origins of this export industry wage leadership model, showing that the conventional cross-class alliance story focusing on the 1930s does not square with the facts. Going through the central trade union wage bargaining protocols from 1939 to 1959, I show that industry wage leadership was non-existent in the 1930s. In fact, wage formation at the time was quite decentralized. Instead, industry wage leadership was created only in the 1950s. The driving force behind it was not a cross-class alliance between workers and employers in export industry against home market workers, but rather the integration of the trade union wage policy into a Social Democratic macroeconomic project. |
| Keywords: | Swedish model; wage bargaining; wage leadership; labour market institutions |
| JEL: | J50 J51 N14 N34 |
| Date: | 2019–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0195&r=all |
| By: | Güell, Maia; Lafuente, Cristina |
| Abstract: | In a recent paper, Alvarez, Borovickova, and Shimer (2014) revisit the analysis of the determinants of unemployment duration by proposing a new method (the ABS method hereafter) that directly estimates the importance of each component and implementing it using precise information on unemployment spells from social security administrative data for Austria. In this paper, we apply the ABS method to social security administrative data for Spain with the objective of comparing these two very different labor markets as well as Spain along the business cycle. Administrative data have many advantages compared to Labor Force Survey data, but the incomplete nature of the data needs to be addressed in order to use the data for unemployment analysis (e.g., unemployed workers that runout of unemployment insurance have no labor market status in the data). The degree and nature of such incompleteness are country-specific and are particularly important in Spain. Following Lafuente (2018), we approach the matter of data incompleteness in a systematic way by using information from the Spanish LFS data as well as institutional information. We hope that our approach will provide a useful way to apply the ABS method in other countries. Our findings are as follows: (i) The aggregate component is clearly the most important one, followed by heterogeneity and duration dependence, which are roughly comparable. (ii) The relative importance of each component and, in particular, duration dependence is quite similar in Austria and Spain, especially when minimizing the effect of fixed-term contracts in Spain. Similarly, we do not find big differences in the relative contribution of the different components along the business cycle in Spain. (iii) These comparisons suggest that statistical discrimination due to dynamic sample selection does not seem to be the main driver of duration dependence. |
| Keywords: | administrative social security data; Duration Dependence; Unemployment Duration |
| JEL: | E24 J64 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13610&r=all |
| By: | Dagmara Nikulin (Gdansk University of Technology, Gdansk, Poland; Gdansk University of Technology, Gdansk, Poland); Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland); Aleksandra Parteka |
| Abstract: | This paper investigates how involvement in Global Value Chains (GVCs) affects working conditions. We use linked employer-employee data from the Structure of Earnings Survey merged with industry-level statistics on GVCs based on the World Input-Output Database. The sample consists of almost 9 million workers in 24 European countries in 2014. Given the multidimensional nature of the dependent variable, we compare the estimates resulting from a Mincerian wage model with zero-inflated negative binomial regressions that analyse other aspects of working conditions (overtime work and bonus payments). As to the impact of production fragmentation on social upgrading, wages prove to be negatively related to sectoral GVC involvement. Workers in sectors more deeply involved in GVCs have lower and less stable earnings, meaning worse working conditions; on the other hand, they are also less likely to have to work overtime, which one may see as a sign of better labour standards. |
| Keywords: | working conditions, Global Value Chains, wellbeing of workers, social upgrading |
| JEL: | F16 J81 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:gdk:wpaper:54&r=all |