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on Labour Economics |
| By: | Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | The common European labor market encourages worker mobility that enhances allocative efficiency, but certain institutional features may trigger inefficient migration. As a job in one of Europe's high-income countries typically also entails coverage in a generous welfare and social insurance system, migrants' reservation wages may lie below their opportunity cost of labor. This represents an externality because employers and migrant workers can pass some of their remuneration costs onto the welfare state. Once welfare benefit entitlement is secured, the reservation wage of the migrant worker is expected to rise, giving the firm an incentive to replace the worker with a new migrant willing to accept lower pay. This leads to excess churn—the reallocation of labor within firms simultaneously involving the flow of employees to unemployment insurance and the hiring of similar workers. Based on Norwegian data, we present evidence of high excess churn rates in firms with many workers from the new EU member states. |
| Keywords: | churning, Integrated labor markets, social dumping, EU enlargement |
| JEL: | F22 D62 E24 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12697&r=all |
| By: | Gomes, Pedro Maia (Birkbeck, University of London); Kuehn, Zoë (Universidad Autónoma de Madrid) |
| Abstract: | In most countries, the public sector hires disproportionally more women than men. We document gender differences in employment, transition probabilities, hours, and wages in the public and private sector using microdata for the United States, the United Kingdom, France, and Spain. We then build a search and matching model where men and women decide if to participate and if to enter private or public sector labor markets. We calibrate our model separately to the four countries. Running counterfactual experiments, we quantify whether the selection of women into the public sector is driven by: (i) lower gender wage gaps and thus relatively higher wages for women in the public sector, (ii) possibilities of better conciliation of work and family life for public sector workers, (iii) greater job security in the public compared to the private sector, or (iv) intrinsic preferences for public sector occupations. We find that, quantitatively, women's higher public sector wage premia and their preferences for working in the public sector explain most of the selection. We calculate the monetary value of public sector job security and work-life balance premia, for both men and women, and we estimate how higher public sector wages and employment affect male and female unemployment, inactivity rates, and wages differently. |
| Keywords: | public sector employment, female labor force participation, gender wage gap |
| JEL: | J21 J16 J45 H10 E60 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12702&r=all |
| By: | Bütikofer, Aline (Dept. of Economics, Norwegian School of Economics and Business Administration); Løken, Katrine V. (Dept. of Economics, Norwegian School of Economics and Business Administration); Willen, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | We exploit the opening of a large bridge to study how access to a larger labor market affects economic efficiency, and how these potential efficiency gains are distributed across workers. The bridge we study connected the third largest city of Sweden to the capital of Denmark, and led to a substantial increase in the labor market opportunities of Swedes. Using unique cross-country matched registry data, we find that the bridge led to a large increase in cross-country commuting among Swedes, driven both by extensive and intensive employment responses. This commuting effect translates into a significant increase in the average wage of Swedes residing close to the bridge, providing strong evidence of an efficiency gain for individuals in Sweden. However, these efficiency gains are unevenly distributed across workers: the effect is largest for high-educated men and smallest for low-educated women. Thus, the efficiency gains come at the cost of rising income inequality and an increase in the gender wage gap, both within- and across-households. These equity effects are driven not only by differences in the propensity to commute, but also by occupational segregation. |
| Keywords: | Efficiency; Gains |
| JEL: | J00 |
| Date: | 2019–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2019_019&r=all |
| By: | Luca Picariello (Università di Napoli Federico II and CSEF.) |
| Abstract: | Workers can move across firms and carry along portable human capital. I present a model where workers' talent is observable but task allocation is non-contractible. To reduce mobility firms may inefficiently match workers with tasks that reduce their outside option. I show that by organizing the firm as an equity-partnership, the efficient task allocation can be implemented and profits increase. This result is attained by shifting control rights to workers who become partners, decide over task allocation and earn dividends as compensation. This provides a new rationale for the widespread presence of firms organized as partnerships in human-capital intensive industries. |
| Keywords: | Task Allocation, Retention, Control Rights, Partnerships. |
| JEL: | D86 J24 J54 M52 |
| Date: | 2019–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:546&r=all |
| By: | Eliasson, Kent (Umeå School of Business, Economics and Statistics, Swedish Agency for Growth Policy Analysis); Westerlund, Olle (Department of Economics, Umeå University) |
| Abstract: | We use Swedish longitudinal population register data on university graduates and estimate the effect of migration on earnings. Migration between regional labour markets is used to identify static and dynamic agglomeration effects on earnings. Heterogeneity in effects is examined by individuals’ position in the ability distribution and by origin-destination size categories of regional labour markets. The results indicate that the effect of upward migration (from smaller to larger labour markets) on earnings is positive throughout. Downward migration (from larger to smaller labour markets) is generally associated with negative or no convincing signs of positive effects on earnings. The estimates indicate positive short-term urban wage premiums (UWP) for all origin-destination flows of upward migration, especially high UWP for in-migration to the Stockholm labour market region. The UWP of upward migration is positive also for movers in the lower end of the ability distribution, but it is substantially higher for high ability migrants. We also find evidence of a positive dynamic UWP of migration to Stockholm from the other regions, particularly for high ability migrants. |
| Keywords: | Urban wage premium; human capital; migration; agglomeration economies; ability |
| JEL: | J24 J61 R10 R12 R23 |
| Date: | 2019–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0962&r=all |
| By: | Amaia Palencia-Esteban |
| Abstract: | The paper studies occupational segregation by gender and immigration status in the European Union using the 2005–2015 European Labour Force Survey. Compared to prior studies, it quantifies the levels of segregation that female and male immigrants experience in each country, while undertaking counterfactual and regression analyzes to account for cross-country differences. Overall, male immigrants have lower occupational segregation than their female counterparts and the second-generation is less segregated than the first one. Regarding the geographical differences, a larger union density and involuntary part-time employment are associated with higher segregation, whereas a larger welfare provision, unemployment rate and policies easing family reunion or access to nationality reduce segregation. |
| Keywords: | Occupational segregation; gender; immigration; European Union |
| JEL: | D63 J15 J16 J71 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:vig:wpaper:1905&r=all |
| By: | Dongwoo Kim (Department of Economics at Texas Christian University); Cory Koedel (Department of Economics and Truman School of Public Affairs at the University of Missouri, Columbia); P. Brett Xiang (Department of Economics at the University of Missouri, Columbia) |
| Abstract: | We examine pension-cost crowd out of salary expenditures in the public sector using a 15-year data panel of state teacher pension plans spanning the Great Recession. While there is no evidence of salary crowd out prior to the Great Recession, there is a shift in the post-recession years such that a one percent (of salaries) increase in the annual required pension contribution corresponds to a decrease in total teacher salary expenditures of 0.24 percent. The effect operates through changes to the size of the teaching workforce, not changes to teacher wages. An explanation for the effect heterogeneity pre- and post-recession is that public employers are less able to shield the workforce from pension costs during times of fiscal stress. This problem is exacerbated because unlike other benefit costs, such as for health care, pension costs are countercyclical. |
| Keywords: | pension costs, pension liabilities, unfunded pension liabilities, pension crowd-out, countercyclical pension costs |
| JEL: | H75 I20 |
| Date: | 2019–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1913&r=all |
| By: | Lucie Schmidt (Williams College); Lara Shore-Sheppard (Williams College); Tara Watson (Williams College) |
| Abstract: | The Affordable Care Act (ACA) expanded the availability of public health insurance, decreasing the relative benefit of participating in disability programs but also lowering the cost of exiting the labor market to apply for disability program benefits. In this paper, we explore the impact of expanded access to Medicaid through the ACA on applications to the Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) programs. Using the fact that the Supreme Court decision of June 2012 made the Medicaid expansion optional for the states, we compare changes in county-level SSI and SSDI caseloads in contiguous county pairs across a state border. We find no significant effects of the Medicaid expansion on applications or awards to either SSI or SSDI, and can reject economically meaningful impacts of Medicaid expansions on applications to disability programs. |
| JEL: | I10 I13 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2019-22&r=all |
| By: | Adnan, Wifag (New York University, Abu Dhabi) |
| Abstract: | Past studies have consistently shown that cultural norms predict individual economic outcomes for second-generation US immigrants. However, due to the (mainly) European composition of immigrants prior to the 1965 Immigration Reform Act, most researchers have not accounted for the role of race and ethnicity in identifying culture parameters. Moreover, the majority of studies assume the US is a homogenous region in confronting challenges related to integrating women and disadvantaged minority groups into the labor market. Using recent micro-level data of working-age higher order immigrants, along with detailed local, social capital and source- country measures, allow me to conduct a comprehensive analysis of the relationship between cultural norms and female labor supply. For non-Hispanic Whites, the impact of culture is explained by variation in country-level factors, such as passport power and internationally standardized exam scores. In contrast, for Blacks, the relevant predictors of labor supply are local culture and social capital measures. |
| Keywords: | culture, gender, race, ethnicity, second-generation immigrants, female labor supply, selection-bias |
| JEL: | Z10 P16 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12692&r=all |
| By: | Naghsh Nejad, Maryam (University of Technology, Sydney); Schurer, Stefanie (University of Sydney) |
| Abstract: | Economic theory suggests that selective immigration policies based on observable characteristics will affect unobservable migrant quality. Little empirical evidence exists on this hypothesis. We quantify traditionally unobservable components of migrant quality in Australia, a high-migrant share OECD country with a selective immigration policy. We proxy migrant quality with widely-accepted measures of personality and cognitive ability. Both first- and second-generation immigrants outperform natives on socially-beneficial personality traits. While first-generation migrants suffer language-ability penalties, their off-spring overcome these penalties and outperform natives in cognitive ability. Immigrants do not outperform natives in the labor market, a finding which may be explained by heterogeneous wage returns to non-cognitive ability. |
| Keywords: | economics of immigration, migrant quality, selection on unobservables, non-cognitive ability, cognitive ability |
| JEL: | F22 J61 J24 J31 J62 O15 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12700&r=all |
| By: | Chise, Diana (European Central Bank); Fort, Margherita (University of Bologna); Monfardini, Chiara (University of Bologna) |
| Abstract: | We provide novel evidence on the existence and the extent of intergenerational transmission of STEM (Science, Technology, Engineering and Mathematics) education using a recent large administrative dataset of Italian graduates obtained from the Almalaurea data. Parental influence on two STEM educational outcomes (high school and university degree completion) is strong and, net of student's time-invariant unobserved heterogeneity, proves to be stronger at the stage of the educational career closer to labour market entry. At this stage, the influence of fathers outweighs the one of mothers and is larger for sons than for daughters. The documented STEM intergenerational transmission is not driven by liberal profession of parents for most of STEM fields, while it is for some non-STEM fields (economic and legal studies), consistently with the presence of entry barriers in some professions. |
| Keywords: | gender, intergenerational transmission, parents, STEM |
| JEL: | J16 J24 I24 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12688&r=all |
| By: | Stephen G. Dimmock; Jiekun Huang; Scott J. Weisbenner |
| Abstract: | We study how access to high-skill labor affects the outcomes of start-up firms. We obtain exogenous variation in firms’ ability to access skilled labor by using win rates in H-1B visa lotteries. Relative to other firms that also applied for H-1B visas, firms with higher lottery win rates are more likely to receive additional venture capital funding and to have a successful exit via an IPO or acquisition. H-1B visa lottery winners also subsequently receive more patents and patent citations. Overall, our results show that access to high-skill labor is a critical determinant of success for start-up firms. |
| JEL: | D22 G24 G32 J23 J24 J61 O3 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26392&r=all |
| By: | C. Y. Kelvin Yuen; Ping Wang |
| Abstract: | While minimum wage policy is widely adopted in the real world, can it effectively raise the average wage of lower paid jobs without having large detrimental consequences for employment? The empirical literature fails to establish robust findings. We develop a general-equilibrium search and wage-posting framework with heterogeneous workers and tasks matching in multi-tier labor markets: abstract, routine high-skilled, routine middle-skilled, manual middle-skilled and manual low-skilled. We incorporate rich cross-market spillovers and compositional effects from individual responses to market thickness. As a result of minimum wage hikes, we show that (i) the unemployment rate at the minimum wage binding market is higher, while all other markets enjoy a lower unemployment rate; (ii) employment in the manual low-skilled jobs is lower, whereas employment in the routine high-skilled and manual middle-skilled markets is higher due to cross-market substitutions; and, (iii) employment in other markets has ambiguous responses due to conflicting effects on potential worker entry and unemployment. By calibrating the model to fit the U.S. data, we evaluate the impacts of the federal minimum wage hike (2007-2009) and the on-going minimum wage increase in Seattle (2017-2021). We find that the minimum wage effects on employment on the binding markets depend crucially on the magnitudes of spillover and compositional effects and that the employment effects may be weak in a nonbinding market. Moreover, our results suggest that, while both minimum wage hikes reduce aggregate output, they only generate small effects on submarket average and overall average wages. |
| JEL: | D83 E24 E60 J64 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26378&r=all |
| By: | Caliendo, Marco (University of Potsdam); Künn, Steffen (Maastricht University); Weissenberger, Martin (University of Potsdam) |
| Abstract: | From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from non-unemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix. |
| Keywords: | entrepreneurship, start-up subsidies, business growth, innovation, job creation |
| JEL: | L26 M13 J68 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12690&r=all |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | For trans people (i.e. people whose gender is not the same as the sex they were assigned at birth) evidence suggests that transitioning (i.e. the steps a trans person may take to live in the gender with which they identify) positively affects positivity towards life, extraversion, ability to cope with stress, optimism about the future, self-reported health, social relations, self-esteem, body image, enjoyment of tasks, personal performance, job rewards and relations with colleagues. These relationships are found to be positively affected by gender affirmation and support from family members, peers, schools and workplaces, stigma prevention programmes, coping intervention strategies, socioeconomic conditions, anti-discrimination policies, and positive actions. Also important are legislation including the ability to change one's sex on government identification documents without having to undergo sex reassignment surgery, accessible and affordable transitioning resources, hormone therapy, surgical treatments, high-quality surgical techniques, adequate preparation and mental health support before and during transitioning, and proper follow-up care. Societal marginalization, family rejection, violations of human and political rights in health care, employment, housing and legal systems, gendered spaces, and internalization of stigma can negatively affect trans people's well-being and integration in societies. The present study highlights that although transitioning itself can bring well-being adjustments, a transphobic environment may result in adverse well-being outcomes. Policy makers should aim to facilitate transitioning and create cultures of inclusion in different settings, such as schools, workplaces, health services and justice. |
| Keywords: | trans people, transitioning, gender reassignment surgery, mental health, life satisfaction, job satisfaction |
| JEL: | D91 I10 J12 J10 J28 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12695&r=all |