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on Labour Economics |
| By: | Fatih Karahan; Benjamin Pugsley; Ayşegül Şahin |
| Abstract: | We propose a simple explanation for the long-run decline in the startup rate. It was caused by a slowdown in labor supply growth since the late 1970s, largely pre-determined by demographics. This channel explains roughly two-thirds of the decline and why incumbent firm survival and average growth over the lifecycle have been little changed. We show these results in a standard model of firm dynamics and test the mechanism using shocks to labor supply growth across states. Finally, we show that a longer startup rate series imputed using historical establishment tabulations rises over the 1960-70s period of accelerating labor force growth. |
| JEL: | D22 E24 J11 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25874&r=all |
| By: | Jirjahn, Uwe (University of Trier); Mohrenweiser, Jens (Bournemouth University) |
| Abstract: | While education and labor force participation of women have been increased, there is still a substantial gender gap in labor market opportunities. This gives rise to the question of what factors lead employers to promote work-family balance and gender equality. We address this question by examining the influence of works councils on the gender policies of establishments in Germany. Using data of the IAB Establishment Panel, we find that the incidence of a works council is associated with an increased likelihood that an establishment provides family-friendly practices and promotes equal opportunities of men and women. This finding also holds in a recursive multivariate probit model that accounts for potential endogeneity of works council incidence. |
| Keywords: | non-union employee representation, works councils, gender equality, work-family balance, equal opportunities, organizational gender policies |
| JEL: | J13 J16 J52 J53 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12344&r=all |
| By: | Panle Jia Barwick; Yanyan Liu; Eleonora Patacchini; Qi Wu |
| Abstract: | Information is a crucial ingredient in economic decision making. Yet measuring the extent of information exchange among individuals and its effect on economic outcomes is a difficult task. We use the universe of de-identified cellphone usage records from more than one million users in a Chinese city over twelve months to quantify information exchange among individuals and examine the role of referrals – human carriers of information – in urban labor markets. We present the first evidence that information flow (measured by call volume) correlates strongly with worker flows, a pattern that persists at different levels of geographic aggregation. Condition on information flow, socioeconomic diversity in information sources (social contacts), especially that associated with the working population, is crucial and helps to predict worker flows. We supplement our phone records with auxiliary data sets on residential housing prices, job postings, and firm attributes from administrative data. Information passed on through referrals is valuable: referred jobs are associated with higher monetary gains, a higher likelihood to transition from part-time to full-time, reduced commuting time, and a higher probability of entering desirable jobs. Referral information is more valuable for young workers, people switching jobs from suburbs to the inner city, and those changing their industrial sector. Firms receiving referrals are more likely to have successful recruits and experience faster growth. |
| JEL: | J60 R23 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25873&r=all |
| By: | Eliason, Marcus (IFAU); Hensvik, Lena (IFAU); Kramarz, Francis (CREST (ENSAE)); Nordström Skans, Oskar (Uppsala University) |
| Abstract: | The literature on social networks often presumes that job search through (strong) social ties leads to increased inequality by providing privileged individuals with access to more attractive labor market opportunities. We assess this presumption in the context of sorting between AKM-style person and establishment fixed effects. Our rich Swedish register data allow us to measure connections between agents – workers to workers and workers to firms – through parents, children, siblings, spouses, former co-workers and classmates from high school/college, and current neighbors. In clear contrast with the above presumption, there is less sorting inequality among the workers hired through social networks. This outcome results from opposing factors. On the one hand, reinforcing positive sorting, high-wage job seekers are shown to have social connections to high-wage workers, and therefore to high-wage firms (because of sorting of workers over firms). Furthermore, connections have a causal impact on the allocation of workers across workplaces – employers are much more likely to hire displaced workers to whom they are connected through their employees, in particular if their social ties are strong. On the other hand, attenuating positive sorting, the (causal) impact is much stronger for low-wage firms than it is for high-wage firms, irrespective of the type of worker involved, even conditional on worker fixed effects. The lower degree of sorting among connected hires thus arises because low-wage firms use their (relatively few) connections to high-wage workers to hire workers of a type that they are unable to attract through market channels. |
| Keywords: | networks, job search, job displacement, hiring |
| JEL: | J60 J30 J23 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12323&r=all |
| By: | Corneo, Giacomo G.; Neidhöfer, Guido |
| Abstract: | We analyze the effects of governmental redistribution of income on migration patterns,using an Italian administrative dataset that includes information on almost every Italian citizen living abroad. Since Italy takes a middle ground in terms of redistribution, both the welfare-magnet effect from more redistributive countries and the propensity of the high-skilled to settle in countries with lower taxes can be empirically studied. Our findings confirm the hypothesis that destination countries with more redistribution receive a negative selection of Italian migrants. This holds true after accounting for many individual and country level covariates, migration costs, and when testing for stochastic dominance of the skill distributions of migrants and stayers. Policy simulations are run in order to gauge the magnitude of these migration effects. Based on estimated elasticities, we find that sizable increases in the amount of redistribution in Italy have small effects on the skill composition of the resident population. |
| Keywords: | Roy-Model,Self-selection,Migration,Redistribution |
| JEL: | D31 F22 H23 J61 O15 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19019&r=all |
| By: | Nikolova, Milena (University of Groningen); Popova, Olga (CERGE-EI); Otrachshenko, Vladimir (Nova School of Business and Economics) |
| Abstract: | We show that current differences in trust levels within former Soviet Union countries can be traced back to the system of forced prison labor during Stalin's rule, which was marked by high incarceration rates, repression, and harsh punishments. We argue that those exposed to forced labor camps (gulags) became less trusting and transferred this social norm to their descendants. Combining contemporary individual-level survey data with historical information on the location of forced labor camps, we find that individuals who live near former gulags have low levels of social and institutional trust. Our results are robust to a battery of sensitivity checks, which suggests that the relationship we document is causal. We outline several causal mechanisms and test whether the social norm of mistrust near gulags developed because of political repression or due to fear that inmates bring criminality. As such, we provide novel evidence on the channels through which history matters for current socio-economic outcomes today. |
| Keywords: | social trust, institutional trust, trustworthiness, forced labor, economic history, former Soviet Union |
| JEL: | D02 H10 N94 Z13 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12326&r=all |
| By: | Dang, Hai-Anh H.; Hiraga, Masako; Nguyen, Cuong Viet |
| Abstract: | Little literature currently exists on the effects of childcare use on maternal labor market outcomes in a developing country context, and recent studies offer mixed results. We attempt to fill these gaps by analyzing several of the latest rounds of the Vietnam Household Living Standards Survey spanning the early to mid-2010s. Addressing endogeneity issues with a regression discontinuity estimator based on children’s birth months, we find a sizable effect of childcare attendance on women’s labor market outcomes, including their total annual wages, household income, and poverty status. The effects of childcare attendance differ by women’s characteristics and are particularly strong for younger, more educated women. Furthermore, childcare has a medium-term effect and positively impacts men’s labor market outcomes as well. |
| Keywords: | Gender equality,child care,maternal employment,women’s empowerment,Vietnam |
| JEL: | J13 J16 J22 H42 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:349&r=all |
| By: | Yen-Chien Chen; Elliott Fan; Jin-Tan Liu |
| Abstract: | In this paper we evaluate the degree to which the adverse parental divorce effect on university education operates through deprivation of economic resources. Using one million siblings from Taiwan, we first find that parental divorce occurring at ages 13-18 led to a 10.6 percent decrease in the likelihood of university admission at age 18. We then use the same sample to estimate the effect of parental job loss occurring at the same ages, and use the job-loss effect as a benchmark to indicate the potential parental divorce effect due to family income loss. We find the job-loss effect very little. Combined, these results imply a minor role played by reduced income in driving the parental divorce effect on the child’s higher education outcome. Non-economic mechanisms, such as psychological and mental shocks, are more likely to dominate. Our further examinations show that boys and girls are equally susceptible, and younger teenagers are more vulnerable than the more mature ones, to parental divorce. |
| JEL: | I20 J12 J64 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25886&r=all |
| By: | Hope, David; Martelli, Angelo |
| Abstract: | The transition from Fordism to the knowledge economy in the world's advanced democracies was underpinned by the revolution in information and communications technology (ICT). The introduction and rapid diffusion of ICT pushed up wages for college-educated workers with complementary skills and allowed top managers and CEOs to reap greater rewards for their own talents. Despite these common pressures, income inequality did not rise to the same extent everywhere; income in the Anglo-Saxon countries remains particularly unequally distributed. To shed new light on this puzzle, the authors carry out a panel data analysis of eighteen OECD countries between 1970 and 2007. Their analysis stands apart from the existing empirical literature by taking a comparative perspective. The article examines the extent to which the relationship between the knowledge economy and income inequality is influenced by national labor market institutions. The authors find that the expansion of knowledge employment is positively associated with both the 90/10 wage ratio and the income share of the top 1 percent, but that these effects are mitigated by the presence of strong labor market institutions, such as coordinated wage bargaining, strict employment protection legislation, high union density, and high collective bargaining coverage. The authors provide robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy. |
| Keywords: | ICT; income inequality; industrial relations; information and communications technology; knowledge economy; labor market institutions; technological change; wage inequality |
| JEL: | N0 R14 J01 |
| Date: | 2019–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100382&r=all |
| By: | Crump, Richard K. (Federal Reserve Bank of New York); Eusepi, Stefano (University of Texas at Austin); Giannoni, Marc (Federal Reserve Bank of Dallas); Sahin, Aysegul (University of Texas at Austin) |
| Abstract: | This paper bridges the gap between two popular approaches to estimating the natural rate of unemployment, u*. The first approach uses detailed labor market indicators, such as labor market flows, cross-sectional data on unemployment and vacancies, or various measures of demographic changes. The second approach, which employs reduced-form models and DSGE models, relies on aggregate price and wage Phillips curve relationships. We combine the key features of these two approaches to estimate the natural rate of unemployment in the United States using both data on labor market flows and a forward-looking Phillips curve that links inflation to current and expected deviations of unemployment from its unobserved natural rate. We estimate that the natural rate of unemployment was around 4.0 percent toward the end of 2018 and that the unemployment gap was roughly closed. Identification of a secular downward trend in the unemployment rate, driven solely by the inflow rate, facilitates the estimation of u*. We identify the increase in labor force attachment of women, decline in job destruction and reallocation intensity, and dual aging of workers and firms as the main drivers of the secular downward trend in the inflow rate. |
| Keywords: | firm dynamics; demographics; business dynamism; macroeconomics |
| JEL: | D22 E24 J11 |
| Date: | 2019–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:889&r=all |
| By: | Gizem Kosar (Federal Reserve Bank of New York); Tyler Ransom (Oklahoma University); Wilbert van der Klaauw (Federal Reserve Bank of New York) |
| Abstract: | Residential mobility rates in the U.S. have fallen considerably over the past three decades. The cause of the long-term decline remains largely unexplained. In this paper we investigate the relative importance of alternative drivers of residential mobility, including job opportunities, neighborhood and housing amenities, social networks and housing and moving costs, using data from two waves of the NY Fed’s Survey of Consumer Expectations. Our hypothetical choice methodology elicits choice probabilities from which we recover the distribution of preferences for location and mobility attributes without concerns about omitted variables and selection biases that hamper analyses based on observed mobility choices alone. We estimate substantial heterogeneity in the willingness-to-pay (WTP) for location and housing amenities across different demographic groups, with income considerations, proximity to friends and family, neighbors’ shared norms and social values, and monetary and psychological costs of moving being key drivers of migration and residential location choices. The estimates point to potentially important amplifying roles played by family, friends, and shared norms and values in the decline of residential mobility rates. |
| Keywords: | migration, geographic labor mobility, neighborhood characteristics |
| JEL: | J61 R23 D84 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2019-037&r=all |
| By: | Jakob Everding; Jan Marcus |
| Abstract: | Although unemployment likely entails various externalities, research examining its spillover effects on spouses is scarce. This is the first paper to estimate effects of unemployment on the smoking behavior of both spouses. Using German Socio-Economic Panel data, we combine matching and difference-in-differences estimation, employing the post-double-selection method for control-variable selection via Lasso regressions. One spouse’s unemployment increases both spouses’ smoking probability and intensity. Smoking relapses and decreased smoking cessation drive the effects. Effects are stronger if the partner already smokes and if the male partner becomes unemployed. Of several mechanisms discussed, we identify smoking to cope with stress as relevant. |
| Keywords: | smoking, risky health behaviors, unemployment, job loss, spillover effects, post-double-selection method |
| JEL: | I12 J63 J65 C23 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1037&r=all |
| By: | Sagiri Kitao; Minamo Mikoshiba; Hikaru Takeuchi |
| Abstract: | The speed and magnitude of ongoing demographic aging in Japan are unprecedented. A rapid decline in the labor force and a rising fiscal burden to finance social security expenditures could hamper growth over a prolonged period. We build a dynamic general equilibrium model populated by overlapping generations of males and females who differ in employment type and labor productivity as well as life expectancy. We study how changes in the labor market over the coming decades will affect the transition path of the economy and fiscal situation of Japan. We find that a rise in the labor supply of females and the elderly of both genders in an extensive margin and in labor productivity can significantly mitigate effects of demographic aging on the macroeconomy and reduce fiscal pressures, despite a decline in wage during the transition. We also quantify effects of alternative demographic scenarios and fiscal policies. The study suggests that a combination of policies that remove obstacles hindering labor supply and that enhance a more efficient allocation of male and female workers of all age groups will be critical to keeping government deficit under control and raising income across the nation. |
| Keywords: | Japanese Economy, Demographic Trends, Female and Elderly Labor Force Participation, Overlapping Generation Model. |
| JEL: | E62 J11 J21 H55 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2019-37&r=all |
| By: | Immervoll, Herwig (OECD); Pacifico, Daniele (OECD); Vandeweyer, Marieke (OECD) |
| Abstract: | Australia's economy and labour market have escaped a dramatic downturn following the global financial economic crisis. Yet, a substantial share of working-age Australians either were not working or worked only to a limited extent as the global recovery gathered pace between 2013 and 2014. 18% were without employment during an entire year; a further 6% had weak labour-market attachment, e.g. working only a fraction of the year. This paper extends a method proposed by Fernandez et al. (2016) to measure and visualise employment barriers of individuals with weak labour-market attachment using household micro-data. It first develops indicators to quantify employment obstacles under three headings: (i) work-related capabilities, (ii) incentives, and (iii) employment opportunities. A novelty in this paper is a statistical procedure for calibrating the definition of barriers in a way that maximises their explanatory power in predicting employment outcomes. A statistical clustering algorithm then identify groups with similar combinations of barriers. The resulting typology provides insights on the most pressing policy priorities in supporting different groups into employment in Australia. We identify seven distinct groups, each calling for a specific flavour of activation and employment-support policies. The most common employment obstacles are limited work experience, low skills and poor health. Financial disincentives, care responsibilities and scarce job opportunities are less widespread overall but were important barriers for some groups. Almost one third of jobless or low-intensity workers face three or more simultaneous barriers, highlighting the limits of 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: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12321&r=all |
| By: | Gaurab Aryal; Manudeep Bhuller; Fabian Lange |
| Abstract: | The social and the private returns to education differ when education can increase productivity and also be used to signal productivity. We show how instrumental variables can be used to separately identify and estimate the social and private returns to education within the employer learning framework of Farber and Gibbons (1996) and Altonji and Pierret (2001). What an instrumental variable identifies depends crucially on whether the instrument is hidden from or observed by the employers. If the instrument is hidden, it identifies the private returns to education, but if the instrument is observed by employers, it identifies the social returns to education. Interestingly, however, among experienced workers the instrument identifies the social returns to education, regardless of whether or not it is hidden. We operationalize this approach using local variation in compulsory schooling laws across multiple cohorts in Norway. Our preferred estimates indicate that the social return to an additional year of education is 5%, and the private internal rate of return, aggregating the returns over the life-cycle, is 7.2%. Thus, 70% of the private returns to education can be attributed to education raising productivity and 30% to education signaling workers' ability. |
| JEL: | J01 J24 J3 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25885&r=all |
| By: | Delaporte, Isaure |
| Abstract: | A growing concern in Western countries is the fact that immigrants might adopt oppositional identities. Although identity is expected to affect the economic outcomes of immigrants, little is known about the factors that in uence the identity choice of the migrants and thus, their employment outcomes. This study investigates the effect of the 9/11 terrorist attacks on the process of identity formation and the employment outcomes of Turkish immigrants in Germany. Using longitudinal data from the German Socio-Economic Panel, this study relies on a difference-in-differences strategy to compare the outcomes of Turks with non-Turks before and after the attacks. The results show that Turks have adopted more extreme identities after 9/11 compared to non-Turks: they are more likely to feel completely German; they are less likely to feel in some respects Turkish whereas they are more likely to feel mostly Turkish. There is no significant impact of the 9/11 terrorist attacks on the Turks' employment outcomes relative to non-Turks. |
| Keywords: | Immigrant,Integration,Ethnic Identity,Employment,Terrorism,Difference-in-Differences Estimation |
| JEL: | J15 J71 Z13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:353&r=all |