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on Labour Economics |
| By: | David Carey |
| Abstract: | New Zealand’s immigration system aims to enhance well-being by promoting economic development, reuniting families and meeting humanitarian objectives. Immigration is high and residence admissions are focused on the high skilled to enhance economic outcomes. Empirical evidence suggests that immigration has had small positive effects on per capita incomes and has not adversely affected the wage or employment outcomes of the average NZ-born worker. However, temporary migration has had small negative impacts on new hires of some groups of people, notably social welfare beneficiaries not in the (16) most urbanised areas. Immigrants have high well-being outcomes on average but suffer an initial shortfall in employment and wages relative to the comparable NZ-born. New Zealand has refined the migration system over the years to attract those who are more likely to ease labour shortages and, should they apply for residence, have better earnings prospects. It has also deployed settlement and integration programmes to improve labour market and other outcomes that affect well-being. This chapter looks at further adjustments to the system to enhance its well-being benefits for both the NZ-born and immigrants.This Working Paper relates to the 2019 OECD Economic Survey of New Zealand (http://www.oecd.org/economy/new-zealand -economic-snapshot/). |
| Keywords: | discrimination, emigration, employment effects, exploitation, immigration, integration, new hires, points system, productivity, refugees, residence, skills, temporary migration, wage effects, well-being |
| JEL: | F22 J15 J24 J61 J71 |
| Date: | 2019–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1566-en&r=all |
| By: | Mörk, Eva (Department of Economics); Sjögren, Anna (Department of Economics); Svaleryd, Helena (Department of Economics) |
| Abstract: | We study the consequences of mothers’ and fathers’ job loss for parents, families, and children. Rich Swedish register data allow us to identify plant closures and account for non-random selection of workers to closing plants by using propensity score matching and controlling for pre-displacement outcomes. Our overall conclusion is positive: childhood health, educational and early adult outcomes are not adversely affected by parental job loss. Parents and families are however negatively affected in terms of parental health, labor market outcomes and separations. Limited effects on family disposable income suggest that generous unemployment insurance and a dual-earner norm shield families from financial distress, which together with universal health care and free education is likely to be protective for children. |
| Keywords: | Parental unemployment; workplace closure; family environment; child health; human capital formation |
| JEL: | I12 J01 |
| Date: | 2019–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2019_007&r=all |
| By: | Dilger, Alexander; Schottmüller-Einwag, Ute |
| Abstract: | This paper examines how corporate governance reporting corresponds to actual conduct regarding severance payment caps for prematurely departing members of companies' executive boards in Germany. For this purpose, we first evaluate the declarations of conformity for all companies listed in the CDAX between 2010 and 2014, which we use to determine conformity and deviation rates, and analyse reasons for deviation. In a further full survey, we assess the compensation amounts of all severance payments made and published by DAX companies to their executive board members who were prematurely terminated, which allows us to compare the respective severance ratio with the cap recommended by the German Corporate Governance Codex (GCGC). We find that more than 20% of companies listed in the CDAX declared deviation in the declaration of conformity, and one-third of all deviations were justified by a rejection of the normative decision of the recommendation. Moreover, in 57% of actual severance cases where DAX companies had previously declared their compliance, the cap was exceeded; yet, none of the companies that had exceeded the cap in a severance case disclosed this in the following declaration of conformity. In the years under review, for the majority of severance cases in companies listed in the DAX, the GCGC's cap did not have any factual binding effect. Finally, in most cases the corporate reports deviated from reality and therefore could not serve as a suitable basis for decisions by the capital market. |
| JEL: | D86 G34 G38 J33 J63 J65 K12 K31 M12 M52 M55 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:umiodp:72019&r=all |
| By: | Daniel Schwab (Department of Economics and Accounting, College of the Holy Cross) |
| Abstract: | Employment protection legislation (EPL) is designed to promote security for workers by placing restrictions on firing, but it generates unintended consequences. With India as a setting, I argue that EPL shifts jobs from younger to older workers in two ways: by discouraging the hiring of unproven young workers and by preventing the firing of low-productivity workers. The identification strategy is motivated by Rajan and Zingales (1998): I assume that EPL is more binding in those manufacturing sectors where the involuntary separation rate in other countries is high. The data show that older workers are more likely to have formal jobs, and the effect is strongest in high-firing sectors, which indicates EPL shifts jobs from young to old. Additionally, EPL reduces plant-level total productivity (TFP), and this effect is seen only in plants which are large enough to fall within the purview of EPL, which provides a useful placebo test. |
| Keywords: | Unemployment, labor security |
| JEL: | J83 J60 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1906&r=all |
| By: | Barry Chiswick (George Washington University); Christina Houseworth (University of Illinois at Chicago) |
| Abstract: | This paper analyzes the status of being currently divorced among European and Mexican immigrants in the U.S., among themselves and in comparison to the native born of the same ancestries. The data are for males and females age 18 to 55, who married only once, in the 2010-2014 American Community Surveys. Among immigrants, better job opportunities, measured by educational attainment, English proficiency and a longer duration in the U.S. are associated with a higher probability of being divorced.Those who married prior to migration and who first married at an older age are less likely to be divorced. Those who live in states with a higher divorce rate are more likely to be divorced.Thus, currently being divorced among immigrants is more likely for those who are better positioned in the labor market, less closely connected to their ethnic origins, and among Mexican immigrants who live in an environment in which divorce is more prevalent. |
| Keywords: | Marriage, Divorce, Minorities, Immigrants, Gender, Human Capital |
| JEL: | J12 J15 J16 J24 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2019-12&r=all |
| By: | Fernandes, Ana (University of Applied Sciences); Huber, Martin; Plaza, Camila (University of Basel) |
| Abstract: | The apprenticeship market is the earliest possible entry into the workforce in developed economies. Since early labor market shocks are likely magnified throughout professional life, avoiding mismatches between talent and occupations e.g. due to gender- or status-based discrimination appears crucial. This experimental study investigates the effects of applicant gender and its interaction with parental occupation on callback rates in the Swiss apprenticeship market, i.e. invitations to an interview, assessment center, or trial apprenticeship. Our correspondence test consists of sending out fictitious job applications with randomized gender and parental occupation to apprenticeship vacancies in four Swiss regions. We by and large find no robust evidence of differential treatment by employers, as gender and parental occupation do not affect callback rates in a statistically significant way in most cases. |
| Keywords: | Field Experiment; Correspondence Test; Discrimination; Gender; Parental Occupation |
| JEL: | C93 J16 J71 |
| Date: | 2019–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00506&r=all |
| By: | Alessandro Ruggieri |
| Abstract: | In this paper I study how labour market institutions at the time of a trade reform determine the dynamic response of unemployment. I first document that for a large group of developing countries (1) unemployment increases on average following a trade reform, (2) there are significant cross-country differences in unemployment response, and (3) cross-country variation in the labour market institutions in place at the time of the reform can account for the observed unemployment changes. I interpret this evidence through the lens of a model of international trade, featuring heterogeneous firms, endogenous industry dynamics and search and matching frictions and a dual labour market. I estimate the model to match the pre-liberalization firm dynamic in Colombia and Mexico, two countries that differed by the labour regulations in place at the time of trade liberalization, and I characterize numerically the full transition path towards the new steady state. I show that the dynamic response of unemployment to a reduction in trade costs is non-linear across different combinations of labour market institutions in place at the time of the reform. Consistent with the cross-country evidence, the response is stronger and more persistent when the firing costs are lower and the statutory minimum wage and unemployment benefits are larger. Those three institutions account for up to 46 percent of the average unemployment response in the case of Mexico, and up to 41 percent in the case of Columbia. |
| Keywords: | Trade reform, labor market institutions, unemployment, transitional dynamics, gains from trade. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2019-15&r=all |
| By: | Gabriela Galassi; David Koll; Lukas Mayr |
| Abstract: | We document a substantial positive correlation of employment status between mothers and their children in the United States, linking data from the National Longitudinal Survey of Youth 1979 (NLSY79) and the NLSY79 Children and Young Adults. After controlling for ability, education and wealth, a one-year increase in a mother’s employment is associated with six weeks more employment of her child on average. The intergenerational transmission of maternal employment is stronger to daughters than to sons, and it is higher for low-educated and low-income mothers. Potential mechanisms we were able to rule out included networks, occupation-specific human capital and conditions within the local labor market. By contrast, we provide suggestive evidence for a role-model channel through which labor force participation is transmitted. |
| Keywords: | Econometric and statistical methods; Economic models; Labour markets |
| JEL: | E24 J21 J22 J62 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:19-33&r=all |
| By: | Isaac Baley (Universitat Pompeu Fabra); Ana Figueiredo (Erasmus School of Economics); Robert Ulbricht (Boston College) |
| Abstract: | This paper studies the dynamics of skill mismatch over the business cycle. We build a tractable directed search model, in which workers differ in skills along multiple dimensions and sort into jobs with heterogeneous skill requirements along those dimensions. Skill mismatch arises due to information and labor market frictions. Estimated to the U.S., the model replicates salient business cyclic properties of mismatch. We show that job transitions in and out of bottom job rungs, combined with career mobility of workers, are important to account for the empirical behavior of mismatch. The model suggests significant welfare costs associated with mismatch due to learning frictions. |
| Keywords: | Business cycles, cleansing, multidimensional sorting, search-and-matching, skill mismatch, sullying |
| JEL: | E24 E32 J24 J64 |
| Date: | 2019–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:981&r=all |
| By: | James Albrecht; Xiaoming Cai; Pieter A. Gautier; Susan Vroman |
| Abstract: | We consider a labor market with search frictions in which workers make multiple applications and firms can post and commit to general mechanisms that may be conditioned both on the number of applications received and on the number of offers received by its candidate. When the contract space includes application fees, there exists a continuum of equilibria of which only one is socially efficient. In the inefficient equilibria, firms have market power that arises from the fact that the value of a worker’s application portfolio depends on what other firms offer, which allows individual firms to free ride and offer workers less than their marginal contribution. Finally, by allowing for general mechanisms, we are able to examine the sources of inefficiency in the multiple applications literature. |
| Keywords: | multiple applications, directed search, competing mechanisms, efficiency, market power |
| JEL: | C78 D44 D83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7805&r=all |
| By: | Giesecke, Matthias; Schuß, Eric (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "We estimate the effect of language training on subsequent employment and wages of immigrants under essential heterogeneity. The identifying variation is based on regional differences in language training availability that we use to instrument endogenous participation. Estimating marginal treatment effects along the distribution of observables and unobservables that drive individual participation decisions, we find that immigrants with higher gains are more likely to select into language training than immigrants with lower gains. We document up to 15 percent higher employment rates and 13 percent wage gains for immigrants with a high desire to participate but the positive returns vanish with increasing resistance to treatment. This pattern of selection on gains correlates with unobserved ability and motivation, promoting investments in education and job-specific skills that yield higher returns when complemented by language capital in the host country." (Autorenreferat, IAB-Doku) |
| Keywords: | Sprachunterricht, Einwanderer, Beschäftigungseffekte, Lohnhöhe, Sprachkenntnisse |
| JEL: | F22 J24 J61 J68 O15 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201919&r=all |
| By: | Remi Jedwab (George Washington University); Daniel Pereira (George Washington University); Mark Roberts (The World Bank) |
| Abstract: | A large literature documents the positive influence of a city’s skill structure on its rate of economic growth. By contrast, the effect of a city’s age structure on its economic growth has been a hitherto largely neglected area of research. We hypothesize that cities with more working-age adults are likely to grow faster than cities with more children or seniors and set-out the potential channels through which such differential growth may occur. Using data from a variety of historical and contemporary sources, we show that there exists marked variation in the age structure of the world’s largest cities, both across cities and over time. We then study how age structure affects economic growth for a global cross-section of mega-cities. Using various identification strategies, we find that mega-cities with higher dependency ratios - i.e. with more children and/or seniors per working-age adult - grow significantly slower. Such effects are particularly pronounced for cities with high shares of children. This result appears to be mainly driven by the direct negative effects of a higher dependency ratio on the size of the working-age population and the indirect effects on work hours and productivity for working age adults within a city. |
| Keywords: | Urbanization; Cities; Age Structure; Dependency Ratios; Children; Ageing; Demographic Cycles; Agglomeration Effects; Human Capital; Growth; Development |
| JEL: | R10 R11 R19 J11 J13 J14 O11 N30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2019-13&r=all |
| By: | Tim Butcher; Karen Mumford; Peter N. Smith |
| Abstract: | The gender earnings gap in Britain currently sits at some 18%, it has declined over time (Dickens 2007) but has also displayed considerable persistence over the last two decades. There is significant and continuing debate as to the determinants of the gap and how these have also developed over time. In addition to new material, this report includes and updates results presented in Butcher et al. (2016) and Mumford and Smith (2007 and 2009). We use the latest release of the Workplace Employee Relations Survey (WERS11) to explore the determinants of the gender earning gaps between males and females in Britain allowing us to take account of a wide range of the key causes of the scale of the gap. |
| Keywords: | gender pay gap; discrimination; wages |
| JEL: | J00 J01 J31 J71 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:19/10&r=all |
| By: | Leonardo Fabio Morales (Banco de la República de Colombia); Didier Hermida (Banco de la República de Colombia); Eleonora Dávalos |
| Abstract: | In its characterizations of job creation and job destruction rates, the literature on labor dynamics has largely ignored informal labor markets. The interrelationships between job creation and destruction among informal and formal labor markets are therefore still generally unknown, despite recent developments in the study of labor market dynamics. These interrelationships are important, however, because much of what researchers identify as formal job creation in developing countries involves substitution of informal jobs for formal ones. In this paper, we use an original methodology to derive hires as well as job creation, separation, and destruction flows from standard household surveys. The great advantage of this technique is that it allows measurements of these labor dynamic measures for the informal labor market. We find that informal labor markets are less fluid than formal ones, mainly because informal job-to-job transitions seem to have a low incidence. In addition, we characterize the relationship between informal job destruction and formal job creation. We find that almost 50% of job creation in the formal sector is caused by job destruction in the informal sector, and identify this formalization process as countercyclical. Our findings portray the informal labor market as an inferior segment; in good economic times, it loses importance as a source of formal jobs and as a recipient of jobs from the formal sector. **** RESUMEN: En los estudios sobre creación y destrucción de trabajo, la literatura sobre dinámica laboral ha ignorado al segmento informal del mercado. En general no se sabe mucho sobre la interdependencia de la creación y destrucción de trabajo entre estos segmentos. Las relaciones entre estas variables son importantes, ya que mucho de lo que a menudo se identifica como creación de trabajo formal, en realidad implica una sustitución de trabajos informales por formales. En este artículo, se utiliza una metodología original para derivar los flujos de contrataciones, separaciones, creación y destrucción de trabajo a partir de encuestas de hogares. La ventaja de la metodología es que también permite medir estos flujos para el segmento informal. Este estudio encuentra que el mercado laboral informal es menos fluido que el formal, principalmente porque las reasignaciones de trabajadores y la rotación laboral tienen baja incidencia en el segmento informal. Adicionalmente, en este artículo se caracteriza la relación entre la destrucción de trabajo informal y la creación de trabajo formal. Se halla que al menos el 50% de la creación de trabajo formal es causada por destrucción de trabajo informal; adicionalmente, este proceso de formalización resulta ser contra-cíclico. Nuestros resultados permiten inferir que el mercado laboral informal es un segmento inferior, ya que en los periodos de expansión económica pierde relevancia en dos sentidos: en primer lugar, como fuente para la creación de trabajos formales y, en segundo lugar, como receptor de trabajos desde el segmento formal. |
| Keywords: | Labor market fluidity; formality, labor demand, job creation, Fluidez del Mercado laboral; formalidad, demanda laboral, creación de trabajo |
| JEL: | J60 J63 J23 J11 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:1090&r=all |