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on Labour Economics |
| By: | Wolfgang Keller; Hale Utar |
| Abstract: | This paper shows that globalization has far-reaching implications for the economy’s fertility rate and family structure because it influences work-life balance. Employing population register data on all births, marriages, and divorces together with employer-employee linked data for Denmark, we show that lower labor market opportunities due to Chinese import competition lead to a shift towards family, with more parental leave and higher fertility as well as more marriages and fewer divorces. This shift is driven largely by women, not men. Correspondingly, the negative earnings implications of the rising import competition are concentrated on women, and gender earnings inequality increases. The paper establishes the market- versus family choice as a major determinant of trade adjustment costs. While older workers respond to the shock rather similarly whether female or male, for young workers the family response takes away the adjustment advantage they typically have–if the worker is a woman. The female biological clock–low fertility beyond the early forties–is central to this gender difference in adjustment, rather than the composition of jobs or workplaces, as well as other potential causes. |
| Keywords: | fertility, earnings inequality, marriage, divorce, import competition, gender gap |
| JEL: | F16 J12 J13 J16 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7735&r=all |
| By: | Kozo Kiyota (Keio University); Toshiyuki Matsuura (Keio University); Yoshio Higuchi (Keio University) |
| Abstract: | This paper examines the theoretically ambiguous relationship between the volatility of employment growth and the foreign exposure of firms. We employ unique Japanese firm-level data over the period 1994--2012. This allows us to investigate any differences in this relationship across multinational firms and trading and nontrading firms, manufacturing and wholesale trade, and intrafirm and interfirm trade. One major finding is that in manufacturing, employment volatility increases as the share of intrafirm exports to total sales increases. In contrast, in wholesale trade, employment volatility declines as the share of intrafirm imports to total imports increases. One possible interpretation of these results is that the transmission of foreign supply and demand shocks could be through not only manufacturing, but also wholesale trade firms. Further, a higher share of intrafirm trade could magnify foreign demand shocks in manufacturing, and could mitigate foreign supply shocks in wholesale trade. |
| Keywords: | Employment volatility, Multinational firm, Intrafirm trade, Wholesale trade |
| JEL: | F1 F16 L25 L81 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201911&r=all |
| By: | Harmenberg, Karl (Department of Economics, Copenhagen Business School); Ôberg, Erik (Uppsala University) |
| Abstract: | Private consumption demand falls in response to increased unemployment risk during a recession, as households increase their precautionary savings and postpone irreversible durable investments. The postponement effect is seven times as large as the precautionary-savings effect in a calibrated buffer-stock savings model. In consequence, anticipation of future unemployment risk is more important than realized unemployment shocks in accounting for durable expenditure dynamics during recessions, while the opposite is true for nondurables. The importance of anticipation of future unemployment risk also means that having many ’hand-to-mouth’ households, who do not respond to changes in income risk, significantly dampens the demand response for durables to an adverse labor market shock. We find that the model elasticities of durable and nondurable expenditures with respect to unemployment risk are close to what we estimate in micro survey data. |
| Keywords: | household consumption; income risk; unemployment; business cycles |
| JEL: | E21 E24 E32 J64 |
| Date: | 2019–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2019_008&r=all |
| By: | Nikos Terzidis; Steven Brakman; Raquel Ortega-Argiles |
| Abstract: | Technological progress and trade potentially affect wages and employment. Technological progress can make jobs obsolete and trade can increase unemployment in import competing sectors. Empirical evidence suggests that both causes are important to explain recent labour market developments in many OECD countries. Both causes are often mentioned in tandem, but the relative contribution of each cause is less clear. This study presents a meta-analysis to shed light on the relative contribution of technological progress and trade in recent labour market developments and allows us to identify the winners and losers of automation and globalization. Using a sample of 77 studies and 1158 estimates, we find that both effects are important. Automation is beneficial at the firm level, and is more likely to displace low-skilled employment. Trade is more likely to benefit high-skilled employment and affects industry negatively. Somewhat surprisingly, given the consensus in the literature, automation has a positive effect for estimates considering the period before 1995, and trade a negative effect. We also find some evidence of publication biases. |
| Keywords: | labour markets, technological progress, trade, meta-study |
| JEL: | F23 J31 J63 O11 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7719&r=all |
| By: | Daniel Borup (Aarhus University and CREATES); Erik Christian Montes Schütte (Aarhus University and CREATES) |
| Abstract: | We show that Google search activity on relevant terms is a strong out-of-sample predictor for future employment growth in the US over the period 2004-2018 at both short and long horizons. Using a subset of ten keywords associated with “jobs”, we construct a large panel of 173 variables using Google’s own algorithms to find related search queries. We find that the best Google Trends model achieves an out-of-sample R2 between 26% and 59% at horizons spanning from one month to a year ahead, strongly outperforming benchmarks based on a large set of macroeconomic and financial predictors. This strong predictability extends to US state-level employment growth, using state-level specific Google search activity. Encompassing tests indicate that when the Google Trends panel is exploited using a non-linear model it fully encompasses the macroeconomic forecasts and provides significant information in excess of those. |
| Keywords: | Google Trends, Forecast comparison, US employment growth, Targeting predictors, Random forests, Keyword search. |
| JEL: | C22 C53 E17 E24 |
| Date: | 2019–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2019-13&r=all |
| By: | Binkai Chen; Ming Lu; Christopher Timmins; Kuanhu Xiang |
| Abstract: | Using the mass closure of development zones in 2004 as a natural experiment, we examine the causal effect of development zones on firm level TFP in China. The difference-in-difference estimator shows that on average, loss of development zone policies results in 6.5% loss of firms’ TFP. Locational heterogeneity is important. Within 500 kilometers from the three major seaports in China, closure of zones reduced firm-level TFP by 9.62%, whereas closure of zones farther away did not show significant effects. Market potential and local within-industry spillover effects can explain much of this locational heterogeneity. We conclude that China’s strategy of using development zones as a place-based policy to encourage inland development may have led to spatial misallocation. |
| JEL: | O53 R1 R58 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26148&r=all |
| By: | Abeliansky, Ana Lucia; Beulmann, Matthias |
| Abstract: | We investigate how an increase in the robot intensity (the ratio of industrial robots over employment) affects the self-reported mental health of workers in Germany. To do so, we combine individual mental health data from the German Socioeconomic Panel with the deliveries of robots to 21 German manufacturing sectors provided by the International Federation of Robotics for the period 2002-2014 (every two years). Controlling for a range of individual and sectoral characteristics, and employing individual-, time- and sectoral fixed effects, we find that an increase in robot intensity of 10% is associated with an average decrease of 0.59% of the average mental health standard deviation. This suggests that in a fast automating sector (i.e. rubber and plastics), where the robot intensity increased by approximately 2000%, mental health would have decreased by 118% of one standard deviation. This effect seems to be driven by job security fears of individuals working in noninteractive jobs and the fear of a decline in an individual's economic situation. Moreover, further sample divisions into low, middle and high occupational groups shows that the negative effects are affecting mostly the middle-level occupational group. Splitting the sample according to different age groups shows that the mental health of younger workers is the most vulnerable to an increase in automation. Results are also robust to instrumenting the stock of robots, and to different changes in the sample. |
| Keywords: | Mental Health,Industrial Robots,Germany,Job Loss Fear,Job Polarization |
| JEL: | I10 O30 I31 J6 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:379&r=all |
| By: | Peter Bergman; Raj Chetty; Stefanie DeLuca; Nathaniel Hendren; Lawrence F. Katz; Christopher Palmer |
| Abstract: | Low-income families in the United States tend to live in neighborhoods that offer limited opportunities for upward income mobility. One potential explanation for this pattern is that families prefer such neighborhoods for other reasons, such as affordability or proximity to family and jobs. An alternative explanation is that they do not move to high-opportunity areas because of barriers that prevent them from making such moves. We test between these two explanations using a randomized controlled trial with housing voucher recipients in Seattle and King County. We provided services to reduce barriers to moving to high-upward-mobility neighborhoods: customized search assistance, landlord engagement, and short-term financial assistance. The intervention increased the fraction of families who moved to high-upward-mobility areas from 14% in the control group to 54% in the treatment group. Families induced to move to higher opportunity areas by the treatment do not make sacrifices on other dimensions of neighborhood quality and report much higher levels of neighborhood satisfaction. These findings imply that most low-income families do not have a strong preference to stay in low-opportunity areas; instead, barriers in the housing search process are a central driver of residential segregation by income. Interviews with families reveal that the capacity to address each family's needs in a specific manner – from emotional support to brokering with landlords to financial assistance – was critical to the program's success. Using quasi-experimental analyses and comparisons to other studies, we show that more standardized policies – increasing voucher payment standards in high-opportunity areas or informational interventions – have much smaller impacts. We conclude that redesigning affordable housing policies to provide customized assistance in housing search could reduce residential segregation and increase upward mobility substantially. |
| JEL: | H0 J0 R0 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26164&r=all |
| By: | Schmitz, Sophia (Federal Ministry of Finance); Weinhardt, Felix (DIW Berlin) |
| Abstract: | We study the local evolution of cultural norms in West Germany in reaction to the sudden presence of East Germans who migrated to the West after reunification. These migrants grew up with very high rates of maternal employment, whereas West German families followed the traditional breadwinner-housewife model. We find that West German women increase their labor supply and that this holds within household. We provide additional evidence on stated gender norms, West-East friendships, intermarriage, and childcare infrastructure. The dynamic evolution of the local effects on labor supply is best explained by local cultural learning and endogenous childcare infrastructure. |
| Keywords: | cultural norms, local learning, gender, immigration |
| JEL: | J16 J21 D1 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12509&r=all |
| By: | Hartmut Egger; Udo Kreickemeier; Christoph Moser; Jens Wrona |
| Abstract: | We develop a model of international trade with a monopsonistically competitive labour market in which firms employ skilled labour for headquarter tasks and unskilled workers to conduct a continuum of production tasks. Firms can enter foreign markets through exporting and through offshoring, and we show that due to monopsonistic competition our model makes sharply different predictions, both at the firm level and at the aggregate level, about the respective effects of the export of goods and the offshoring of tasks. At the firm-level, exporting leads to higher wages and employment, while offshoring of production tasks reduces the wages paid to unskilled workers as well as their domestic employment. At the aggregate level, trade in goods is unambiguously welfare increasing since domestic resources are reallocated to large firms with high productivity, and firms with low productivities exit the market. This reduces the monopsony distortion present in autarky, where firms restrict employment to keep wages low, resulting in too many firms that are on average too small. Offshoring on the other hand gives firms additional scope for exercising their monopsony power by reducing their domestic size, and as a consequence the resources spent on it can be wasteful from a social planner’s point of view, leading to a welfare loss. |
| Keywords: | monopsonistic labour markets, exporting, two-way offshoring, tasks, heterogeneous firms, wages, employment |
| JEL: | F12 F16 F23 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7774&r=all |
| By: | Francesca Barigozzi; Cremer,Helmuth; Chiara Monfardini |
| Abstract: | Our model studies couples’ time allocation and career choices, which are affected by a social norm on gender roles in the family. Parents can provide two types of informal child care: basic care (feeding, changing children, baby-sitting) and quality care (activities that stimulate children’s social and cognitive skills). We obtain the following main results. Traditional mothers provide some informal basic care, whereas career mothers purchase full time formal basic care in the market. Informal basic care is too large and the group of career mothers is too small because of the social norm. Informal quality care is increasing in the couple’s income and is provided in larger amount by mothers. We test the model’s predictions for Italy using the most recent ISTAT “Use of Time” survey. In line with the model, mothers devote more time than fathers to both basic and quality informal care; more educated parents devote more time to quality informal care than less educated parents; more educated mothers spend more time in the labor market than less educated mothers. |
| Keywords: | social norms , gender gaps, women’s career choices, basic and quality child care |
| JEL: | D13 H23 J16 J22 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7705&r=all |
| By: | Teodora Boneva (Oxford University); Marta Golin (Oxford University); Christopher Rauh (University of Montreal) |
| Abstract: | Postgraduate-degree holders comprise a significant share of the workforce and have better labor-market outcomes than workers who only hold a first degree. To understand students' motives to obtain postgraduate qualifications and what drives socioeconomic gaps in this decision, we elicit intentions to pursue postgraduate education and beliefs about its returns in a sample of 1,002 enrolled university students. We document large gaps in perceptions about different immediate and later-life benefits of postgraduate education, both between first- and continuing-generation students and within the latter group. Differences in student beliefs about returns across socioeconomic groups can account for 70% of the gaps in intentions to pursue postgraduate studies. We also document large differences in students' current undergraduate experiences by socioeconomic background and find these to be predictive of perceived returns to postgraduate education. |
| Keywords: | higher education, beliefs, socioeconomic inequality, intergenerational mobility, postgraduate education |
| JEL: | I24 J13 J24 J62 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2019-045&r=all |
| By: | Pal, Sumantra |
| Abstract: | The reverse causality between female employment and domestic violence is debatable. Due to the adverse health consequences of domestic violence women shy away from employment. For fears about backlash from their husbands, wives may abstain from working. Battered women may also take up employment to liberate themselves from the grip of domestic violence. Using a new dataset that combines ethnographic data with the third wave of the National Family and Health Survey, I identify three instruments. Those are traditional tribal norms that are more conducive to the participation of women in activities outside of their homes, namely, female political engagement, female hunting, and female gathering of food, fodder and fuel. The instrument variable procedure generates significant protective effects for working wives with a 38 percent reduction in the probability of physical violence, while controlling for observable social norms surrounding tribal marriage, separation, descent, inheritance, subsistence, and settlement patterns. |
| Keywords: | Female employment,Domestic Violence,Male-backlash,India |
| JEL: | B54 J12 Z13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:201543&r=all |
| By: | Kamhöfer, Daniel A.; Westphal, Matthias |
| Abstract: | Using arguably exogenous variation in college expansions we estimate the effects of college education on female fertility. While college education reduces the probability of becoming a mother, college-educated mothers have more children than mothers without a college education. Lower child-income penalties of college-educated mothers of two relative to mothers without college up to nine years after birth suggest a stronger polarization of college graduate jobs into family-friendly and career-oriented as a potential explanation. We conclude that policies aiming at increasing female educational participation should be counteracted by policies enabling especially college graduates to have both a career and a family. |
| Keywords: | family planning,college education,augmented quantity-quality model |
| JEL: | C36 I21 J13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:316&r=all |
| By: | Charles Beach; Aidan Worswick |
| Abstract: | This paper develops an economic model of the distribution of income based on shares of family incomes in Canada over 1976 - 2016. Major determinants of quintile and decile shares of total and market income include male and female participation rates, unemployment rate, inflation rate, GDP growth rate and manufacturing-to-services employment ratio. The analysis tests the hypothesis of GDP growth neutrality ("a rising tide lifts all boats") and strongly rejects it. It also examines the distributional benefits and losses from automation and globalization, and finds significant effects of both over the middle and upper two quintile shares, but mixed effects over the lower two quintiles. |
| Keywords: | income share model, family income distribution, Canadian income distribution |
| JEL: | D30 D31 J01 J30 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1419&r=all |
| By: | Marc A. C. Hafstead; Roberton C. Williams III |
| Abstract: | Political debates around environmental regulation often center around the effect of policy on jobs. Opponents decry the “job-killing” EPA and proponents point to “green jobs” as a positive policy outcome. And beyond the political debates, Congress requires the EPA to evaluate “potential losses or shifts of employment” that regulations under the Clean Air Act may cause. Yet there is a sharp disconnect between the political importance of the jobs question and the limited research on job effects of policy and general skepticism in the academic literature about the importance of those job effects for the costs and benefits of environmental regulation. In this paper, we discuss how the existing research on jobs and environmental regulations often falls short in evaluating these questions and consider recent new work that has attempted to address these problems. We provide an intuitive discussion of key questions for how job effects should enter into economic analysis of regulations. And, using an economic model from Hafstead, Williams, and Chen (2018), we evaluate a range of environmental regulations in both the short and long-run to develop a set of key stylized facts related to jobs and environmental regulations and to identify the key questions that current models can’t yet answer well. |
| JEL: | E24 H23 J64 Q52 Q58 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26093&r=all |
| By: | Kasrin, Zein; Smolny, Werner |
| Abstract: | The U-shaped hypothesis of the relation between economic development and female labor market participation has been a main framework for analyzing female labor market patterns. However, it mixes up two dimensions of development: the increase in income level and the development of social norms from traditional to modern. We disentangle the U-shaped hypothesis by explicitly accounting for social norms within the socioeconomic development process. This allows for a richer analysis of female labor market participation in countries which have developed more in one of the development dimensions rather than the other. To demonstrate, Saudi Arabia is a rich and traditional country while many countries in Eastern Europe are relatively poor and modern. We hypothesize implications of these ‘rather one-sided’ development scenarios on female labor market participation outcomes. We then test this framework on a regional level for Egypt and Germany and find family formation to be much more detrimental for female employment in the rich and traditional regions. |
| Keywords: | Female Labor Market Participation, Socioeconomic Development, Social Norms, Germany, Egypt |
| JEL: | A13 I25 J16 R11 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95561&r=all |