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on Labour Economics |
| By: | Nils Gottfries; Karolina Stadin |
| Abstract: | According to search-matching theory, the Beveridge curve slopes downward because vacancies are filled more quickly when unemployment is high. Using monthly panel data for local labour markets in Sweden we find no (or only weak) evidence that high unemployment makes it easier to fill vacancies. Instead, there are few vacancies when unemployment is high because there is a low inflow of new vacancies. We construct a simple model with on-the-job search and show that it is broadly consistent with the cyclical behaviour of stocks and flows in the labour market also without search frictions. In periods of high unemployment, fewer employed job seekers find new jobs and this leads to a smaller inflow of new vacancies. |
| Keywords: | Beveridge curve, frictional unemployment, matching function, turnover, mismatch, vacancy chain |
| JEL: | E24 J23 J62 J63 J64 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7689&r=all |
| By: | Mihaela Pintea (Department of Economics, Florida International University) |
| Abstract: | I develop a model with status concerns to analyze how different economic factors affect female labor participation and welfare, as well as average household incomes and wages. Reductions in the price of domestic goods and increases in female wages have positive effects on female participation. Increases in male wages have different effects on female participation depending on whether they affect female wages or not. Events that lead to increases in female participation are usually associated with decreases in the welfare of stay-at-home wives but are not necessarily associated with increases in welfare of working wives. Allowing for part-time work can lead to an increase in overall female labor force participation, but some women that would have worked full-time end up working part-time. If female wages are endogenous, an increase in male wages leads to an increase in the female participation rate even if it is not associated with a decrease in the gender wage gap. The positive feedback of increased female participation on their wages can lead to hysteresis of dual equilibria of high and low female labor force participation and a discontinuous transition between these equilibria. |
| Keywords: | Female Labor Force Participation, Relative Income, Gender Wage Gap |
| JEL: | D62 E24 J16 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:1901&r=all |
| By: | Gumpert, Anna (LMU Munich); Steimer, Henrike (Stanford GSB); Antoni, Manfred (Institut für Arbeitsmarkt- und Berufsforschung) |
| Abstract: | How do geographic frictions affect firm organization? We show theoretically and empirically that geographic frictions increase the use of middle managers in multi-establishment firms. In our model, we assume that a CEO\'s time is a resource in limited supply, shared across headquarters and establishments. Geographic frictions increase the costs of accessing the CEO. Hiring middle managers at one establishment substitutes for CEO time, which is reallocated across all establishments. Consequently, geographic frictions between the headquarters and one establishment affect the organization of all establishments of a firm. Our model is consistent with novel facts about multi-establishment firm organization that we document using administrative data from Germany. We exploit the opening of high-speed train routes to show that not only the establishments directly affected by faster travel times but also the other establishments of the firm adjust their organization. Our findings imply that local conditions propagate across space through firm organization. |
| Keywords: | firm organization; multi-establishment firm; knowledge hierarchy; geography; |
| JEL: | D21 D22 D24 |
| Date: | 2019–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:163&r=all |
| By: | Cheema, Ahmed Raza (University of Sargodha); Coxhead, Ian (University of Wisconsin-Madison,) |
| Abstract: | Dowry is a cultural practice, ubiquitous in South Asia, in which the bride’s family provides gifts and payments to the groom’s family at the time of marriage. Using data from Pakistan we find that the presence in a household of unmarried girls and young women is a very strong predictor of propensity to receive remittances from family members working elsewhere. Boys have no such effect. This is consistent with household labor reallocation in response to the need to generate savings for dowry expenses. The strength of the gender shock is modified in predictable ways by variation over wealth, location and migrant destinations. |
| JEL: | D14 J12 J61 O15 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:wisagr:593&r=all |
| By: | Cochrane, William (University of Waikato); Poot, Jacques (Vrije Universiteit Amsterdam) |
| Abstract: | The proportion of New Zealand households living in owner-occupied dwellings has declined steadily since the early 1990s. The unemployment rate declined steadily as well, except for upward shifts due to the late 1990s Asian Financial Crisis and the Global Financial Crisis a decade later. Research initiated by Andrew Oswald in the 1990s posits that declining homeownership and declining unemployment are linked and that the causality runs from high homeownership leading to high unemployment. The international empirical evidence for this hypothesis is rather mixed. In this paper we revisit the issue with New Zealand census data for commuting-defined labour market areas from 1986 until 2013. Allowing for spatial spillovers in our data, we apply a general nesting spatial econometric model. We also consider the potentially different impacts of freehold and mortgaged homeownership. Generally, the evidence that a declining homeownership rate contributes to a lower unemployment is statistically fragile, but a greater prevalence of freehold ownership and mortgaged ownership below the mean across labour market areas do have small upward effects on a labour market area’s unemployment rate. |
| Keywords: | Oswald hypothesis, unemployment, homeownership, labour market flexibility, spatial econometrics |
| JEL: | J61 J64 R23 R31 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12402&r=all |
| By: | Jonas Dovern; Christopher Zuber |
| Abstract: | Using European Commission real-time data, we show that potential output (PO) estimates were substantially and persistently revised downwards after the Great Recession. We decompose PO revisions into revisions of the capital stock, trend labor, and trend total-factor productivity (TFP). Initially, trend TFP revisions contribute most to the overall PO revisions while all three components are almost equally important in the longer run. Revisions of the capital stock happen quickly while revisions of trend labor, mainly driven by revisions of the non-accelerating wage rate of unemployment (NAWRU), are made gradually. The relative contributions of the components to overall PO revisions differ systematically across countries. This suggests that heterogeneous policies are needed to push different countries back to their previous growth paths. |
| Keywords: | potential output, trend, output gap, hysteresis, EC |
| JEL: | E32 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7681&r=all |
| By: | Margit Molnar |
| Abstract: | China’s regions have been experiencing impressive growth over the past decades, but their potentials could be better exploited by creating a single product and labour market. Local protectionism increases transaction costs and hinders competition, thereby taking a toll on productivity. Administrative monopolies have long thrived and are hard to dismantle. Restrictions on the hukou and the fragmented pension system limit labour mobility. Local regulations aim at, among other things, securing the collection of local taxes, without which cities could not afford to offer the same public services to migrants as to urbanites. Hence, dismantling local regulations and creating a single product and labour market needs to go hand-in-hand with the reform of inter-governmental finances. Recent measures on both the product and labour market front appear to aim at making up for the slow progress over the past decade or so. There are signs that these efforts are helping China’s regions at various levels to converge toward each other. Disparities are shrinking faster across provinces, compared to within provinces. Integration of product and labour markets will boost productivity over the medium-to long term by reducing transaction costs, but could potentially widen regional disparities, which are already relatively high. This will necessitate enhanced transfers and re-centralisation of the financing of spending in some key categories such as education and health. Policies to help catching up of laggard regions by better connectivity through infrastructure investment are bearing fruit, but such investments should be subject to rigorous cost-benefit criteria to enhance capital allocation efficiency and should take into account externalities. Notwithstanding significant disparities along multiple dimensions across provinces, inequalities, be it in terms of income, wealth or education, are actually most striking along the rural-urban dimension. The rural revitalisation strategy, a novel element of the 19th Party Congress outcomes, is expected to address this issue. The other recent strategy of nurturing the formation of city groups will also likely benefit rural areas in-between those cities.This Working Paper relates to the 2019 OECD Economic Survey of China (http://www.oecd.org/economy/china-econo mic-snapshot/). |
| Keywords: | administrative monopolies, competition, fiscal transfers, hukou, inter-governmental fiscal relations, labour mobility, protectionism, regional disparities, regional policies |
| JEL: | R58 L12 L51 L52 P25 J61 H77 |
| Date: | 2019–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1557-en&r=all |
| By: | Laun, Lisa (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | In-work benefits, often in the form of earned income tax credits (EITCs), have become increasingly popular over the last decades. Early versions of in-work benefits in the US, the UK and Ireland, primarily motivated as a poverty alleviation measure, have been followed by a large expansion of in-work benefits in other European countries, stressing employment goals rather than redistributive concerns. This review describes the in-work benefit schemes in a selection of countries across Europe and summarizes the evidence of these schemes. The selected countries are France, the Netherlands, Germany, Belgium, Denmark, Finland and Sweden. |
| Keywords: | Earned income tax credit; EITC; Europe; tax and benefit system |
| JEL: | H24 I38 |
| Date: | 2019–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2019_016&r=all |
| By: | Herzfeld Olsson, Petra (Law Faculty, Stockholm university) |
| Abstract: | According to EU-law, third country national labour migrants shall be treated equally to local workers with regard to wages. The aim of this working paper is to clarify whether Swedish law meets this demand with regard to highly qualified labour migrants. The analysis reveals that the combined effect of entry conditions and the content of the collective agreements applicable in the sectors where highly qualified labour migrants work makes it difficult to safeguard that they are treated equally with comparable national workers. The study also demonstrates that Swedish law does not provide highly qualified labour migrants with any robust means to enforce equal treatment. Hence, it is not likely that Swedish law complies with EU law, at least not for those workers employed by an entity in Sweden. For labour migrants intra-corporate transferred or posted to Sweden in other ways the EU law demands are less clear. |
| Keywords: | Highly qualified labour migrants; pay; collective agreements; equal treatment |
| JEL: | J31 J61 J71 J83 K31 |
| Date: | 2019–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2019_014&r=all |
| By: | Kolpashnikova, Kamila; Kan, Man-Yee; Shirakawa, Kiyomi |
| Abstract: | We analyze cross-sectional time-use diaries from the 2011 and 2016 Survey on Time Use and Leisure Activities (Shakai Seikatsu Kihon Chosa) to investigate the association between educational level and housework participation in contexts where educational attainment among women does not readily translate into workforce stability. We test whether higher levels of educational attainment are associated with the decrease in housework participation as the previous research in countries of the global north suggests. Our findings reveal that education is not likely to reduce housework participation among Japanese women. Married Japanese women with children are unlikely to reduce their time spent on housework with the increase of their educational level and married Japanese women without children are more likely to increase their housework participation proportionately to the level of their education. The results suggest that in Japan, the supply-side solutions to gender inequality (such as increasing educational opportunities for women) do not remedy the situation. The country needs to address structural and institutional barriers to gender equality. |
| Keywords: | gender, housework, Japanese households, routine housework |
| JEL: | J00 J12 |
| Date: | 2019–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94670&r=all |
| By: | Marco de Pinto; Laszlo Goerke |
| Abstract: | Trade unions are often argued to cause allocative inefficiencies and to lower welfare. We analyze whether this evaluation is also justified in a Cournot-oligopoly with free but costly entry. If input markets are competitive and output per firm declines with the number of firms (business stealing), there is excessive entry into such oligopoly. If trade unions raise wages above the competitive level, output and profits per firm decline, which could deter entry and thus improve welfare. We find that an increase in the union's bargaining power raises welfare if the (inverse) demand curve is (sufficiently) concave. We also show that collective bargaining loosens the linkage between business stealing and excessive entry. |
| Keywords: | endogenous entry, oligopoly, trade union, welfare |
| JEL: | D43 J51 L13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7668&r=all |
| By: | Zachary Schaller (Department of Economics, University of California-Irvine); Stergios Skaperdas (Department of Economics, University of California-Irvine) |
| Abstract: | We examine settings—such as litigation, labor relations, or arming and war -- in which players first make non-contractible up-front investments to improve their bargaining position and gain advantage for possible future conflict. Bargaining is efficient ex post, but we show that a player may prefer Conflict ex ante if there are sufficient asymmetries in strength. There are two sources of this finding. First, up-front investments are more dissimilar between players under Con- flict, and they are lower than under Bargaining when one player is much stronger than the other. Second, the probability of the stronger player winning in Conflict is higher than the share received under Nash bargaining. We thus provide a rationale for conflict to occur under complete information that does not depend on long-term commitment problems. Greater balance in institutional support for different sides is more likely to maintain peace and settlements. |
| Keywords: | Power asymmetries; War; Litigation; Contests |
| JEL: | C70 D74 J53 K41 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:181909&r=all |
| By: | Stjepan Srhoj (Department for Economics and Business Economics, University of Dubrovnik); Bruno Skrinjaric (The Institute of Economics, Zagreb); Sonja Radas (The Institute of Economics, Zagreb); Janette Walde (Department of Statistics, Faculty of Economics and Statistics, University of Innsbruck) |
| Abstract: | Several recent papers draw attention to a lack of rigorous research on public policies supporting women entrepreneurs' competitiveness. This paper evaluates the effect of small business development gender-specific matching grants using a quasi-experimental approach. The grants have a positive effect on firm survival, as well as positive effects on obtaining bank loans, turnover, value added, employment, and total factor productivity. Heterogeneous treatment effects show that the grants increase the chance of young women entrepreneurs' firm survival and are even more effective for firms owned by mature women. Cost-benefit analysis estimates an increase in value added, which outweighs scheme-induced costs by 80% in the short-run and 170% in the long run. |
| Keywords: | women entrepreneurship, public grants, policy evaluation, gender financing gap, behavioral additionality, nudging |
| JEL: | B54 J16 H81 L26 L38 H43 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iez:wpaper:1902&r=all |
| By: | DeWaard, Jack (University of Minnesota); Johnson, Janna (University of Minnesota); Whitaker, Stephan (Federal Reserve Bank of Cleveland) |
| Abstract: | We introduce and provide the first comprehensive comparative assessment of the Federal Reserve Bank of New York/Equifax Consumer Credit Panel (CCP) as a valuable and underutilized data set for studying internal migration within the United States. Relative to other data sources on US internal migration, the CCP permits highly detailed cross-sectional and longitudinal analyses of migration, both temporally and geographically. We compare cross-sectional and longitudinal estimates of migration from the CCP to similar estimates derived from the American Community Survey, the Current Population Survey, Internal Revenue Service data, the National Longitudinal Survey of Youth, the Panel Study of Income Dynamics, and the Survey of Income and Program Participation. Our results establish the comparative utility and illustrate some of the unique advantages of the CCP relative to other data sources on US internal migration. We conclude by identifying some profitable directions for future research on US internal migration using the CCP, as well as reminding readers of the strengths and limitations of these data. More broadly, this paper contributes to discussions and debates on improving the availability, quality, and comparability of migration data. |
| Keywords: | Internal migration; Consumer Credit Panel; Comparative; Cross-sectional; Longitudinal; |
| JEL: | C81 J61 O15 R23 |
| Date: | 2019–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:180401&r=all |
| By: | Dewan, Torun; Wolton, Stephane |
| Abstract: | From burqa ban to minaret ban, from right to detain suspected illegal immigrants to restricting the help to migrants, the number of social laws specifically targeting a tiny proportion of citizens has raised in recent years across Western democracies. These symbolic policies, we show, are far from being innocuous: they can have far reaching consequences for large parts of the population. By raising the salience of certain social traits (e.g., Muslim identity) these laws can create a labour market loaded in favor of the majority (e.g., the non-Muslims), yielding higher unemployment rates and spells for minority citizens. These deleterious effects arise even absent any form of bias against, or uncertainty about, minority workers. Instead they are fully driven by social expectations about behavior and are best understood as a form of social discrimination. Importantly, we establish conditions under which a plurality of the citizenry demands the implementation of symbolic policies anticipating their labor market consequences. We further highlight that the implementation of symbolic policies is always associated with less redistribution and can be coupled with lower tax rates. We discuss several policy recommendations to limit the possibility of social discrimination arising. |
| Keywords: | burqa, minority, redistribution, identity politics |
| JEL: | D70 J60 J64 J70 J71 J78 |
| Date: | 2019–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94394&r=all |
| By: | Elizabeth Jane Casabianca; Elena Giarda |
| Abstract: | This paper analyses short-term intra-generational income mobility in France, Italy, Spain and the UK by exploiting the longitudinal component of EU-SILC for the periods 2005-2008 and 2012-2015. We investigate whether and to what extent the ability of households to move along the income distribution changed after the 2008 crisis and whether heterogeneities among countries exist. For this purpose, we employ mobility indexes and transition matrices as well as estimation of a 2SLS regression and of a dynamic ordered probit with random effects. Overall, indexes and transition matrices point to a decrease of mobility in the aftermath of the crisis. The econometric analyses suggest both the existence of a convergence process of incomes and state dependence of current and lagged income in both periods. We also observe sluggish income convergence and lower upward mobility in the second period. Among the microeconomic drivers, education and employment status are positive determinants of mobility. Finally, our results confirm cross-country heterogeneity. |
| Keywords: | intra-generational income mobility, mobility indexes, 2SLS, dynamic ordered probit, EU-SILC |
| JEL: | C25 C26 D31 J60 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mod:wcefin:0076&r=all |
| By: | Xie, Zoe (Federal Reserve Bank of Atlanta) |
| Abstract: | Using variations in unemployment insurance policies over time and across U.S. states, this paper provides evidence that allowing unemployed workers to delay the collection of benefits increases their job-finding rate. In a model with discrete job take-up decisions, benefit entitlement, wage-indexed benefits, and heterogeneous job types, I demonstrate that the policy can increase an unemployed worker's willingness to work, even though more benefits in general reduce the relative value of employment. In a calibrated quantitative model, I find that allowing delayed benefit collection increases the overall job finding rates and may lower the unemployment rate both in a steady state stationary economy and over a transition path during 2008–12. |
| Keywords: | health; frailty index; life cycle profiles |
| JEL: | E24 J65 |
| Date: | 2019–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2019-14&r=all |
| By: | Juan Carlos Conesa; Timothy J. Kehoe; Vegard M. Nygaard; Gajendran Raveendranathan |
| Abstract: | We develop and calibrate an overlapping generations general equilibrium model of the U.S. economy with heterogeneous consumers who face idiosyncratic earnings and health risk to study the implications of exogenous trends in increasing college attainment, decreasing fertility, and increasing longevity between 2005 and 2100. While all three trends contribute to a higher old age dependency ratio, increasing college attainment has different macroeconomic implications because it increases labor productivity. Decreasing fertility and increasing longevity require the government to increase the average labor tax rate from 32.0 to 44.4 percent. Increasing college attainment lowers the required tax increase by 10.1 percentage points. The required tax increase is higher under general equilibrium than in a small open economy with a constant interest rate because the reduction in the interest rate lowers capital income tax revenues. |
| Keywords: | college attainment, aging, health care, taxation, general equilibrium |
| JEL: | H20 H51 H55 I13 J11 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2019-05&r=all |
| By: | J. Paolo Martellini (Department of Economics, University of Pennsylvania); Guido Menzio (Department of Economics, New York University); Ludo Visschers (School of Economics, University of Edinburgh) |
| Abstract: | We revisit the hypothesis that labor market ?uctuations are driven by shocks to the discount rate. Using a model in which the UE and the EU rates are endogenous, we show that an increase in the discount rate leads to a decline in both the UE and the EU rates. In the data, though, the UE and EU rates move against each other at business cycle frequency. Using a lifecycle model with human capital accumulation on the job, we show that an increase in the discount rate does indeed lead to a decline in the aggregate UE rate and to an increase in the aggregate EU rate. However, the decline in the UE rate is larger for younger workers than for older workers and the EU rate increases only for younger workers. In the data, ?uctuations in the UE and EU rates at the business cycle frequency are nearly identical across age groups. |
| Keywords: | Unemployment Fluctuations, Discount Rate, Human Capital, Lifecycle Earnings |
| JEL: | E24 J63 J64 |
| Date: | 2019–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:19-011&r=all |
| By: | Pierluigi Murro (LUISS-Guido Carli University.); Tommaso Oliviero (Università di Napoli Federico II and CSEF); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.) |
| Abstract: | Using firm-level survey information, we study if relationship lending affects companies’ employment decisions when they face adverse conditions. Our empirical analysis reveals that firms with durable lending relationships show a significantly lower degree of sensitivity of internal workforce variation to shocks in sales. This result is robust to different measures of the shocks in sales and to an instrumental variable strategy. We also show that the result is stronger for younger, smaller and more innovative firms, confirming that relationship lending provides insurance against adverse conditions for companies whose internal labor force is arguably more valuable. |
| Keywords: | Employment, relationship banking, insurance |
| JEL: | G32 G38 H53 J65 |
| Date: | 2019–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:533&r=all |