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on Labour Economics |
| By: | Inés Berniell (Centro de Estudios Distributivos Laborales y Sociales (CEDLAS) - Instituto de Investigaciones Económicas, Facultad de Ciencias Económicas, Universidad Nacional de La Plata); Lucila Berniell (CAF-Development Bank of Latin America, Research Department); Dolores de la Mata (CAF-Development Bank of Latin America, Research Department); María Edo (Universidad de San Andr´es and CONICET); Mariana Marchionni (Centro de Estudios Distributivos Laborales y Sociales (CEDLAS) - Instituto de Investigaciones Económicas, Facultad de Ciencias Económicas, Universidad Nacional de La Plata and CONICET) |
| Abstract: | Recent work has quantified the large negative effects of motherhood on female labor market outcomes in Europe and the US. But these results may not apply to developing countries, where labor markets work differently and informality is widespread. In less developed countries, informal jobs, which typically include microenterprises and self-employment, offer more time flexibility but poorer social protection and lower labor earnings. These characteristics affect the availability of key inputs in the technology to raise children, and therefore may affect the interplay between parenthood and labor market outcomes. Through an event-study approach we estimate short and long-run labor market impacts of children in Chile, an OECD developing country with a relatively large informal sector. We find that the birth of the first child has strong and long lasting effects on labor market outcomes of Chilean mothers, while fathers remain unaffected. Becoming a mother implies a sharp decline in mothers’ labor supply, both in the extensive and intensive margins, and in hourly wages. We also show that motherhood affects the occupational structure of employed mothers, as the share of jobs in the informal sector increases remarkably. In order to quantify what the motherhood effect would have been in the absence of an informal labor market, we build a quantitative model economy, that includes an informal sector which offers more flexible working hours at the expense of lower wages and weaker social protection, and a technology to produce child quality that combines time, material resources and the quality of social protection services. We perform a counterfactual experiment that indicates that the existence of the informal sector in Chile helps to reduce the drop in LFP after motherhood in about 35%. We conclude that mothers find in the informal sector the flexibility to cope with both family and labor responsibilities, although at the cost of resigning contributory social protection and reducing their labor market prospects. |
| JEL: | J13 J16 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0247&r=all |
| By: | Cahuc, Pierre (Sciences Po, Paris); Malherbet, Franck (CREST (ENSAE)); Prat, Julien (CREST) |
| Abstract: | According to French law, employers have to pay at least six months salary to employees whose seniority exceeds two years in case of unfair dismissal. We show, relying on data, that this regulation entails a hike in severance payments at two-year seniority which induces a significant rise in the job separation rate before the two-year threshold and a drop just after. The layoff costs and its procedural component are evaluated thanks to the estimation of a search and matching model which reproduces the shape of the job separation rate. We find that total layoff costs increase with seniority and are about four times higher than the expected severance payments at two years of seniority. Counterfactual exercises show that the fragility of low-seniority jobs implies that layoff costs reduce the average job duration and increase unemployment for a wide set of empirically relevant parameters. |
| Keywords: | employment protection legislation, dismissal costs, unemployment |
| JEL: | J65 J63 J32 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12384&r=all |
| By: | Poschke, Markus (McGill University) |
| Abstract: | Poor countries have low rates of wage employment and high rates of self-employment. This paper shows that they also have high rates of unemployment relative to wage employment, and that self-employment is particularly high where the unemployment-wage employment ratio is high. I interpret high unemployment-employment ratios as evidence of labor market frictions, and develop a simple heterogeneous-firm search and matching model with choice between job search and self-employment to analyze their effect. Quantitative analysis of the model, separately calibrated to eight countries, shows that variation in labor market frictions can explain almost the entire variation in not only unemployment, but also wage employment and self-employment across the calibration countries. The model generates joint variation in unemployment and self-employment accounting for at least a third of their relationship in the data. Labor market frictions reduce output not only by affecting employment, but also by pushing searchers into low-productivity own-account work. |
| Keywords: | entrepreneurship, occupational choice, labor market frictions, self-employment, unemployment, wage employment, firm size, productivity |
| JEL: | O40 L26 J64 J23 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12367&r=all |
| By: | Zachary Parolin |
| Abstract: | Routine-biased technological change has emerged as a leading explanation for the differential wage growth of routine occupations, such as manufacturers or office clerks, relative to less routine occupations. Less clear, however, is how the effects of technological advancement on occupational wage trends vary across political-institutional context. This paper investigates the extent to which collective bargaining agreements and union coverage shape the relative wage growth of occupations at higher risk of automation. Using data from the Luxembourg Income Study and the U.S. Current Population Survey, I measure the ‘routine task intensity’ of occupations across 15 OECD Member States and the 50 United States from the 1980s onward. Findings suggest that bargaining coverage is more consequential for the wage growth of high routine occupations relative to less routine occupations, and that high routine occupations lose coverage at a faster rate when bargaining coverage at the national level declines. As a result, declines in bargaining coverage within a country are associated with declining relative wage growth for occupations at higher risk of automation. Estimates suggest that had union coverage in the U.S. not declined from 1984 levels, the earnings of high routine occupations might have grown at the same rate as low pay occupations between 1984 and 2015, rather than experiencing a relative wage decline. However, the findings also suggest that gains in the relative wage growth may increasingly come at the cost of reduced employment shares of high routine occupations. |
| JEL: | E24 J51 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:lis:liswps:767&r=all |
| By: | Michael Amior; Alan Manning |
| Abstract: | Britain suffers from persistent spatial disparities in employment rates. This paper develops an integrated framework for analyzing two forces expected to equalize economic opportunity across areas: commuting and migration. Our framework is applicable to any level of spatial aggregation, and we use it to assess their contribution to labor market adjustment across British wards (or neighborhoods). Commuting offers only limited insurance against local shocks, because commutes are typically short and shocks are heavily correlated spatially. Analogously, migration fails to fully equalize opportunity because of strong temporal correlation in local demand shocks. |
| Keywords: | spatial inequality, commuting, migration |
| JEL: | J21 J61 J64 R23 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1623&r=all |
| By: | Yuksel, Mutlu (Dalhousie University); Akbulut-Yuksel, Mevlude (Dalhousie University); Guven, Cahit (Deakin University) |
| Abstract: | This paper estimates the returns to English-speaking fluency on the socioeconomic outcomes of childhood immigrants. We further investigate whether Muslim childhood immigrants face additional hurdles in economic and social integration into the host country. Motivated by the critical age hypothesis, we identify the causal effects of English skills on socioeconomic outcomes by exploring the differences in the country of origin and age at arrival across childhood immigrants. We first document that all childhood immigrants who migrate from non-English-speaking countries at a younger age attain higher levels of English skills. We also find that acquiring better English-language skills improves the educational attainment and labor and marriage market prospects of non-Muslim childhood immigrants significantly and increases their participation in volunteer work. However, our results show that while a good command of English enhances the educational attainments of Muslim childhood immigrants, it shows no positive return in either the labor or marriage markets. Our results also show that progress in English fails to improve Muslim childhood immigrants' engagement in voluntary work, meaning that the opportunity for social cohesion is missed. |
| Keywords: | immigration, english proficiency, socioeconomic outcomes, Muslims |
| JEL: | J12 J13 J24 J31 J61 J62 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12381&r=all |
| By: | Garanina, Tatiana (University of Vaasa); Muravyev, Alexander (Higher School of Economics) |
| Abstract: | This paper studies economic effects of the gender composition of corporate boards, employing a new and unique longitudinal dataset of virtually all Russian companies whose shares were traded on the national stock market between 1998 and 2014. Using multiple identification approaches, alternative measures of gender diversity, and several performance indicators, we find some evidence that companies with gender-diverse boards have higher market values and better profitability. These effects are particularly pronounced when firms appoint several women directors, which is consistent with the critical mass theory. The effects appear to be stronger in bad economic times or for firms experiencing economic difficulties. Overall, the Russian data lend some support to "the business case" for more women on corporate boards. |
| Keywords: | board of directors, gender diversity, firm performance, Russia |
| JEL: | G34 J16 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12357&r=all |
| By: | Emran, M. Shahe; Ferreira, Francisco; Jiang, Yajing; Sun, Yan |
| Abstract: | We extend the Becker-Tomes (1986) model of intergenerational educational mobility to a rural economy characterized by occupational dualism (farm vs. nonfarm) and provide a comparative analysis of rural India and rural China. Using two exceptional data-sets, we estimate father-sons intergenerational educational persistence in farm and nonfarm households free of truncation bias due to coresidency. The sons in rural India faced lower educational mobility compared to the sons in rural China in the 1990s and earlier. Father’s nonfarm occupation and education were complementary in determining a son’s schooling in India, but separable in China. However, the separability observed for the older cohorts in rural China broke down for the younger cohort. Evidence from supplementary data on economic mechanisms shows that the extended Becker-Tomes model provides plausible explanations for both the cross-country heterogeneity (India vs. China), and the evolution of mobility across cohorts in China. |
| Keywords: | Educational Mobility, Rural Economy, Occupational Dualism, Farm-Nonfarm, Complementarity, Coresidency Bias, China, India |
| JEL: | J6 J62 O1 O15 |
| Date: | 2019–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94121&r=all |
| By: | Edward L. Glaeser; Naomi Hausman |
| Abstract: | American technological creativity is geographically concentrated in areas that are generally distant from the country’s most persistent pockets of joblessness. Could a more even spatial distribution of innovation reduce American joblessness? Could Federal policies disperse innovation without significant costs? If research funding is already maximizing knowledge production, then spatial reallocation of that funding will reduce America’s overall innovation unless that reallocation comes with greater spending. Without any spatial reallocation, the primarily inventive parts of innovation policy, such as N.I.H. grants, can potentially aid underperforming areas by targeting the problems of those areas, like widespread disability. The educational aspects of innovation policy, such as Pell Grants, work-study, vocational training, and Federal overhead reimbursement on grants, currently have multiple objective and could focus more on employability in distressed areas. Lifting the cap on H1B visas in poorer places could attract outside human capital to those places. Geographically targeted entrepreneurship policies, such as eliminating the barriers to new business formation near universities and in distressed places, could potentially enhance employment growth in those regions. Spatially targeted employment subsidies will increase the returns to labor-intensive innovation in depressed areas, but we know little about how much innovation will respond to such subsidies. |
| JEL: | O31 R11 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25913&r=all |
| By: | Petra Persson; Maya Rossin-Slater |
| Abstract: | While workplace flexibility is perceived to be a key determinant of maternal labor supply, less is known about fathers' demand for flexibility or about intra-household spillover effects of flexibility initiatives. This paper examines these issues in the context of a critical period in family life–the months immediately following childbirth–and identifies the impacts of paternal access to workplace flexibility on maternal postpartum health. We model household demand for paternal presence at home as a function of domestic stochastic shocks, and use variation from a Swedish reform that granted new fathers more flexibility to take intermittent parental leave during the postpartum period in a regression discontinuity difference-in-differences (RD-DD) design. We find that increasing the father's temporal flexibility reduces the risk of the mother experiencing physical postpartum health complications and improves her mental health. Our results suggest that mothers bear the burden from a lack of workplace flexibility–not only directly through greater career costs of family formation, as previously documented–but also indirectly, as fathers' inability to respond to domestic shocks exacerbates the maternal health costs of childbearing. |
| JEL: | I12 I18 I31 J12 J13 J38 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25902&r=all |
| By: | Tortia, Ermanno Celeste |
| Abstract: | This paper discusses the possibility of strong employment protection in co-operatives (exclusion of dismissal) and of the imposition of a minimum wage equal for all worker members in worker co-operatives. It maintains that the worker co-operative has unique features in its ability to reach employment stabilization. It shows, both theoretically and with reference to existing empirical evidence, why and how worker co-operatives are able to overcome the lay-off of workers, strongly reducing employment fluctuation when compared to other organizational forms. The development of more thorough and radical regimes of employment protection and distributive justice fulfil satisfaction of basic needs, workers’ right to work and to keep the job position. While stricter constraints on layoffs can cause inefficiencies (e.g. make it more difficult to dismiss under-performing workers), they also serve an insurance function against unemployment, favor the accumulation of firm-specific human, relational and social capital, and can increase performance in the medium to long run. Voluntary resignation, not involuntary layoff would the dominant mechanism allowing allocation of labor resources to the most productive occupations. |
| Keywords: | Worker co-operatives; membership rights; dismissal; minimum wage; distributive fairness |
| JEL: | J31 J41 J54 J83 |
| Date: | 2019–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94536&r=all |
| By: | Everding, Jakob; Marcus, Jan |
| 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-indifferences 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-doubleselection method |
| JEL: | I12 J63 J65 C23 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hcherp:201917&r=all |
| By: | Vejlin, Rune Majlund (Aarhus University); Veramendi, Gregory (Arizona State University) |
| Abstract: | This paper develops a sufficient statistics approach for estimating the role of search frictions in wage dispersion and lifecycle wage growth. We show how the wage dynamics of displaced workers are directly informative of both for a large class of search models. Specifically, the correlation between pre- and post-displacement wages is informative of frictional wage dispersion. Furthermore, the fraction of displaced workers who suffer a wage loss is informative of frictional wage growth, independent of the job-offer distribution. Applying our methodology to US data, we find that search frictions account for less than 20 percent of wage dispersion. In addition, we estimate an employed job-offer to job-destruction ratio less than one, implying little frictional wage growth. We finish by estimating two versions of a random search model to show how at least two different mechanisms — involuntary job transitions or compensating differentials — can reconcile our results with the job-to-job mobility seen in the data. Regardless of the mechanism, the estimated models show that frictional wage growth accounts for about 15% of lifecycle wage growth. |
| Keywords: | search models, wage dispersion, wage growth, sufficient statistics, displacement |
| JEL: | E24 J31 J64 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12387&r=all |
| By: | Miguel Sánchez-Romero; Ronald D. Lee; Alexia Prskawetz |
| Abstract: | We propose a general analytical framework to model the redistributive features of alternative pension systems when individuals face ex ante differences in mortality. Differences in life expectancy between high and low socioeconomic groups are often large and have widened recently in many countries. Such longevity gaps affect the actuarial fairness and progressivity of public pension systems. However, behavioral responses to longevity and policy complicate analysis of possible reforms. Here we consider how various pension systems would perform in a general equilibrium OLG setting with heterogeneous longevity and ability. We evaluate redistributive effects of three Notional Defined Contribution plans and three Defined Benefit plans, calibrated on the US case. Compared to a benchmark non-redistributive plan that accounts for differences in mortality, US Social Security reduces regressivity from longevity differences, but would require group-specific life tables to achieve progressivity. Moreover, without separate life tables, despite apparent accounting gains, lower income groups would suffer welfare losses and higher income groups would enjoy welfare gains through indirect effects of pension systems on labor supply. |
| JEL: | H55 J1 J11 J14 J18 J26 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25944&r=all |
| By: | Deshpande, Ashwini; Kabeer, Naila |
| Abstract: | Based on primary data from a large household survey in seven districts in West Bengal in India, this paper analyses the reasons underlying low labor force participation of women. In particular, we try to disentangle the intertwined strands of choice, constraints posed by domestic work and care responsibilities, and the predominant understanding of cultural norms as factors explaining the low labor force participation as measured by involvement in paid work. We document the fuzziness of the boundary between domestic work and unpaid (and therefore invisible) economic work that leads to mis-measurement of women’s work and suggest methods to improve measurement. We find that being primarily responsible for domestic chores lower the probability of “working”, after accounting for all the conventional factors. We also document how, for women, being out of paid work is not synonymous with care or domestic work, as they are involved in expenditure saving activities. We also find that religion and visible markers such as veiling are not significant determinants of the probability of working. Our data shows substantial unmet demand for work. Given that women are primarily responsible for domestic chores, we also document that women express a demand for work that would be compatible with household chores. |
| Keywords: | women; gender; labor force participation; India |
| JEL: | J16 J21 J40 B54 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100992&r=all |
| By: | Gonzalez Sauri, Mario (UNU-MERIT); Rossello, Giulia (UNU-MERIT) |
| Abstract: | Prestige and mobility are important aspects of academic life that play a critical role during early-career. After PhD graduation scholars have to compete for positions in the labour market. Unfortunately, many of them have few research products such that their inherent ability and skills remain mostly unobserved for hiring committees. Institutional prestige in this context is a key mechanism that signals the quality of candidates, and many studies have shown that a "good" affiliation can confer many opportunities for future career development. We know little, however, about how changes of scholar's institutional prestige during early-career relate to future academic performance. In this paper, we use an algorithm to rank universities based on hiring networks in Mexico. We distinguish three groups of scholars that move Up, Down or Stay in the prestige hierarchy between PhD graduation and first job. After controlling for individual characteristics by matching scholars with equal training or the same first job institution, we find that scholars hired by their existing faculty sustain higher performance over their career in comparison to other groups. Interestingly, we find that scholars that move up the hierarchy exhibit, on average, lower academic performance than the other groups. We argue that the negative relation between upward ranking mobility and performance is related to the difficulties in changing research teams at an early-career stage and to the so-called "big-fish-small-pond" effect. We observe a high stratification of universities by prestige and a negative association between mobility and performance that can hinder the flows of knowledge throughout the science system. |
| Keywords: | University Prestige, Academic Performance, Early Career, Mobility, Faculty hiring network, Institutional Stratification, Scholars Research Performance, University System, University Ranking Emerging Countries, Matched Pair Analysis, PhD Job Market, Mexico |
| JEL: | D70 I20 I23 J62 O30 Z13 |
| Date: | 2019–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019018&r=all |
| By: | Arjan Non; Ingrid Rohde; Andries de Grip; Thomas Dohmen |
| Abstract: | We conduct a discrete choice experiment to investigate how the mission of high-tech companies affects job attractiveness and induces self-selection of science and engineering graduates with respect to their prosocial attitudes. We characterize mission by whether or not the company combines its profit motive with a mission on innovation or corporate social responsibility (CSR). Furthermore, we vary job design (e.g. autonomy) and contractible job attributes (e.g. job security). We find that companies with a mission on innovation or CSR are considered more attractive. Women and individuals who are more altruistic and less competitive feel particularly attracted to such companies. |
| Keywords: | Mission of the company, sorting, discrete choice experiment, job characteristics, social preferences disclosure |
| JEL: | J81 J82 M52 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2019_100&r=all |
| By: | Rujiwattanapong, W. Similan |
| Abstract: | This paper investigates the impact of endogenous unemployment insurance (UI) extensions on the dynamics of unemployment and its duration structure in the US. Using a search and matching model with worker heterogeneity, I allow for the maximum UI duration to depend on unemployment and for UI benefits to depend on worker characteristics. UI extensions have a large effect on long-term unemployment during the Great Recession via job search responses and a moderate effect on total unemployment via job separations. Disregarding rational expectations about the timing of UI extensions implies an overestimation of the unemployment rate by over 2 percentage points. |
| Keywords: | Business cycles; long-term unemployment; unemployment insurance; unemployment duration; rational expectations |
| JEL: | E24 E32 J24 J64 J65 |
| Date: | 2019–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100948&r=all |
| By: | Kirker, Michael |
| Abstract: | This paper develops an endogenous growth model in which the job-to-job transition of workers provides a channel for the spillover of knowledge between firms. Workers learn some of the productive knowledge used by their employer while working on the job. When a worker moves to another firm, they are able to adapt some of this knowledge for use at the hiring firm. Firms endogenously control their exposure to new knowledge by choosing the intensity that they post vacancies in a search-and-matching labor market. It is shown that under a set of assumptions regarding the initial distribution of firm types and the vacancy posting cost function, the competitive equilibrium leads to a balanced growth path that has a constant growth rate and stationary distribution of firm size. |
| Keywords: | Endogenous growth; productivity; labor mobility; search and matching market; knowledge diffusion |
| JEL: | J60 O33 O40 |
| Date: | 2019–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94505&r=all |
| By: | Ingwersen, Kai (Leibniz University of Hannover); Thomsen, Stephan L. (Leibniz University of Hannover) |
| Abstract: | This study provides new evidence on the levels of economic integration experienced by foreigners and naturalised immigrants relative to native Germans from 1994 to 2015. We decompose the wage gap using the method for unconditional quantile regression models by employing a regression of the (recentered) influence function (RIF) of the gross hourly wage on a rich set of explanatory variables. This approach enables us to estimate contributions made across the whole wage distribution. To allow for a detailed characterization of labour market conditions, we consider a comprehensive set of socio-economic and labour-related aspects capturing influences of, e.g., human capital quality, cultural background, and the personalities of immigrants. The decomposition results clearly indicate a significant growing gap with higher wages for both foreigners (13.6 to 17.6 %) and naturalised immigrants (10.0 to 16.4 %). The findings further display a low explanation for the wage gap in low wage deciles that is even more pronounced within immigrant subgroups. Cultural and economic distances each have a significant influence on wages. A different appreciation of foreign educational qualifications, however, widens the wage gap substantially by 4.5 ppts on average. Moreover, we observe an indication of deterioration of immigrants’ human capital endowments over time relative to those of native Germans. |
| Keywords: | immigration, wage gap, unconditional quantile regression, Germany |
| JEL: | J61 J31 J15 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12358&r=all |