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on Labour Economics |
| By: | Braun, Sebastian Till (University of Bayreuth); Dwenger, Nadja (DIW Berlin) |
| Abstract: | Following one of the largest displacements in human history, almost eight million forced migrants arrived in West Germany after WWII. We study empirically how the settlement location of migrants affected their economic, social and political integration in West Germany. We first document large differences in integration outcomes across West German counties. We then show that high inflows of migrants and a large agrarian base hampered integration. Religious differences between migrants and natives had no effect on economic integration. Yet, they decreased intermarriage rates and strengthened anti-migrant parties. Based on our estimates, we simulate the regional distribution of migrants that maximizes their labor force participation. Inner-German migration in the 1950s brought the actual distribution closer to its optimum. |
| Keywords: | forced migration, regional integration, post-war Germany |
| JEL: | N34 J15 J61 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12741&r=all |
| By: | Constant, Amelie (Princeton University, and UNU-MERIT) |
| Abstract: | This paper provides a state-of-the-art literature review about research that aims to explain the return, repeat, circular and onward migration of the highly-skilled migrants around the world. After it describes the status quo in the knowledge economy and the international race for talent, it presents the relevant theories and concepts of migration in the social sciences and how these theories accommodate the phenomena of return, repeat and onward migration. A special section is devoted to selection. The chapter then summarizes, evaluates, and juxtaposes existing empirical evidence related to theoretical predictions. Observables such as education, income, gender and home country as well as unobservables such as ability, social capital and negotiating skills play a strong role in influencing return, repeat and onward migration decisions. Yet, there is no consensus on the direction of the effect. The chapter discusses shortcomings and limitations along with policy lessons. It concludes by highlighting holes in the literature and the need for better data. |
| Keywords: | return, circular, onward, migration, international labor migration, knowledge economy, high-skilled, public policy |
| JEL: | F22 J15 J18 J20 J61 O15 |
| Date: | 2019–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019040&r=all |
| By: | Sato, Yasuhiro (Osaka University); Zenou, Yves (Monash University) |
| Abstract: | We develop a model in which ethnic minorities can either assimilate to the majority's norm or reject it by trading off higher productivity and wages with a greater social distance to their culture of origin. We show that "oppositional" ethnic minorities reside in more segregated areas, have worse outcomes (in terms of income) but are not necessary worse off in terms of welfare than assimilated ethnic minorities who live in less segregated areas. We find that a policy that reduces transportation cost decreases rather than increases assimilation in cities. We also find that when there are more productivity spillovers between the two groups, ethnic minorities are more likely not to assimilate and to reject the majority's norm. Finally, we show that ethnic minorities tend to assimilate more in bigger and more expensive cities. |
| Keywords: | identity, agglomeration economies, cities, ethnic minorities, welfare |
| JEL: | J15 R14 Z13 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12751&r=all |
| By: | Guner, Nezih (CEMFI, Madrid); Kaya, Ezgi (Cardiff University); Sánchez Marcos, Virginia (Universidad de Cantabria) |
| Abstract: | The total fertility rate is well below its replacement level of 2.1 children in high- income countries. Why do women choose such low fertility levels? We study how labor market frictions affect the fertility of college-educated women. We focus on two frictions: uncertainty created by dual labor markets (the coexistence of jobs with temporary and open-ended contracts) and inflexibility of work schedules. Using rich administrative data from the Spanish Social Security records, we show that women are less likely to be promoted to permanent jobs than men. Temporary contracts are also associated with a lower probability of first birth. With Time Use data, we also show that women with children are less likely to work in jobs with split-shift schedules, which come with a fixed time cost. We then build a life-cycle model in which married women decide whether to work or not, how many children to have, and when to have them. In the model, women face a trade-off between having children early and waiting and building their careers. We show that reforms that reduce the labor market duality and eliminate split-shift schedules increase the completed fertility of college-educated from 1.52 to 1.88. These reforms enable women to have more children and have them early in their life-cycle. They also increase the labor force participation of women and eliminate the employment gap between mothers and non-mothers. |
| Keywords: | fertility, labor market frictions, temporary contracts, split-shift schedules |
| JEL: | E24 J13 J21 J22 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12771&r=all |
| By: | Neyt, Brecht (Ghent University); Baert, Stijn (Ghent University); Vynckier, Jana (Ghent University) |
| Abstract: | Research exploiting data on classic (offline) couple formation has confirmed predictions from evolutionary psychology in a sense that males attach more value to attractiveness and women attach more value to earnings potential. We examine whether these human partner preferences survive in a context of fewer search and social frictions. We do this by means of a field experiment on the mobile dating app Tinder, which takes a central place in contemporary couple formation. Thirty-two fictitious Tinder profiles that randomly differ in job status and job prestige are evaluated by 4,800 other, real users. We find that both males and females do not use job status or job prestige as a determinant of whom to show initial interest in on Tinder. However, we do see evidence that, after this initial phase, males less frequently begin a conversation with females when those females are unemployed but also then do not care about the particular job prestige of employed females. |
| Keywords: | job prestige, partner preferences, dating apps, online dating, Tinder |
| JEL: | J12 J16 J13 C93 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12746&r=all |
| By: | Etgeton, Stefan (Federal Ministry of Labor and Social Affairs (BMAS), Germany); Fischer, Björn (DIW Berlin); Ye, Han (University of Mannheim) |
| Abstract: | Facing a reduction in pension generosity, individuals can compensate the loss by working longer or saving more. This paper shows that the impact of changes in pension generosity on saving crucially depends on the possibility of prolonging future employment. Exploiting across cohort variation in expected pension wealth induced by a 3-year lift in early retirement age for women born after 1951 in Germany, we show evidence of a reduction in private savings rate and an increase in leisure consumptions in case of strong responses in future labor earnings. |
| Keywords: | pension reform, early retirement age, savings, pension wealth |
| JEL: | D14 J14 J26 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12744&r=all |
| By: | Ardito, Chiara (University of Turin); Berton, Fabio (University of Turin); Pacelli, Lia (University of Turin) |
| Abstract: | Two decades of unsuccessful marginal labour market reforms provided the political support to reduce the flexibility gap between temporary and open-ended workers by means of a retrenchment of the employment protection benefitting the latter. To support employment levels during the crisis years, these policies have generally been combined with generous employment subsidies. While the theoretical and empirical literature on the two interventions taken in isolation appears generally abundant, almost nothing is known when they come combined. Analogously, no evidence is available about their distributional effects. This paper aims at filling these two gaps by means of non-linear difference-in-differences duration models estimated on high-frequency employer-employee linked Italian data. Taking advantage of the quasi-experimental conditions set by the Italian "Jobs Act", we find that large firms are less sensitive than small ones to hiring subsidies, unless they come combined with lower firing costs. Small firms substitute temporary for permanent employment, while larger ones do not seem to give up on fixed-term contracts, possibly as a probationary period. The reforms have benefitted domestic workers over foreigners, and those with a lower or more general human capital. No gender effects emerge. |
| Keywords: | employment protection legislation, hiring incentives, non-linear DiD, duration models, impact evaluation, jobs act |
| JEL: | J08 J63 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12748&r=all |
| By: | Parenti, Angela (University of Pisa); Tealdi, Cristina (Heriot-Watt University, Edinburgh) |
| Abstract: | In this paper we study the effects of Switzerland implementing the Schengen agreement on cross-border commuting from regions of neighbouring countries. As vehicles are allowed to cross borders without stopping and residents in border areas are granted freedom to cross borders away from fixed checkpoints, commuting costs are severely reduced. Using data from the European Labour Force Survey, we estimate that the individual probability to cross-border commute to Switzerland in response to this policy has increased among inter-regional commuters in the range between 3 and 6 percentage points, according to different model specifications. Our result is particularly important due the meaningful policy implications, in a time in which the Schengen agreement is under scrutiny and at risk of termination. |
| Keywords: | Schengen agreement, labour mobility, commuting costs, policy change |
| JEL: | D04 J61 R10 R23 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12754&r=all |
| By: | Massimo Anelli (Bocconi Univerity); Gaetano Basso (Bank of Italy); Giuseppe Ippedico (University of California, Davis); Giovanni Peri (University of California, Davis) |
| Abstract: | Migration outflows, especially of young people, may deprive an economy of entrepreneurial energy and innovative ideas. We exploit exogenous variation in emigration from Italian local labor markets to show that between 2008 and 2015 larger emigration flows reduced firm creation. The decline affected firms owned by young people and innovative industries. We estimate that for every 1,000 emigrants, 100 fewer young-owned firms were created cumulatively over the whole period. A simple accounting exercise shows that about 60 percent of the effect is generated simply by the loss of young people; the remaining 40 percent is due to a combination of selection of emigrants among highly entrepreneurial people, negative spillovers on the entrepreneurship rate of locals, and negative local firm multiplier effect. |
| Keywords: | emigration, demography, brain drain, entrepreneurship, innovation |
| JEL: | J61 H7 O3 M13 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1240_19&r=all |
| By: | Ran Abramitzky; Victor Lavy; Maayan Segev |
| Abstract: | We study the impact of financial incentives on higher education decisions and the choice of major. We rely on a reform whereby Israeli kibbutzim shifted from their traditional policy of equal sharing to productivity-based wages. We use for identification the staggered implementation of this reform in different kibbutzim. In this setting of very low initial returns to education, we find that the dramatic increase in the rate of return and its sharp variation across fields of study led to a large increase in the probability of receiving a Bachelor degree, especially in STEM fields of study that are expected to yield higher financial returns. For men this increase was largely in computer science and engineering, and for women in biology, chemistry and computer science. Our findings suggest that investment in higher education and the choice of major are responsive to increases in the return to education for both men and women. |
| JEL: | J01 J16 J24 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26420&r=all |
| By: | Groshen, Erica L. (Cornell University); Holzer, Harry J. (Georgetown University) |
| Abstract: | What are the prospects for improving the lot of US workers in the 21st century? This introduction to the topic examines the most important US labor market trends of the late 20th and early 21st centuries, considers their causes and likely future trends; and then explores policies that might improve these outcomes. The most important broad labor market trends in recent decades have been: 1) Modest real wage growth; 2) Rising earnings inequality; and 3) Declining labor force participation, recently among both men and women, but especially among less-educated or African-American men and low-income youth over several decades. Key causes of these trends include labor demand and supply factors (such as automation, immigration, and limited college attainment); changing labor market institutions (such as declining unionism and stagnant federal wage/hours laws); rising alternative staffing arrangements, informal work and "fissuring"; and uneven labor market progress and policies affecting women, African-Americans and the young. After that review, we summarize what the papers in our volume tell us about the public policies that could help improve outcomes for US workers. The main message is that further deterioration in many US workers' lives in the 21st century likely requires public and employer policy changes to help to translate the forces at work into better outcomes for them. |
| Keywords: | employment, earnings, inequality, labor force |
| JEL: | J01 J08 J2 J5 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12776&r=all |
| By: | Susan Athey; Raj Chetty; Guido W. Imbens; Hyunseung Kang |
| Abstract: | A common challenge in estimating the long-term impacts of treatments (e.g., job training programs) is that the outcomes of interest (e.g., lifetime earnings) are observed with a long delay. We address this problem by combining several short-term outcomes (e.g., short-run earnings) into a \surrogate index," the predicted value of the long-term outcome given the short-term outcomes. We show that the average treatment effect on the surrogate index equals the treatment effect on the long-term outcome under the assumption that the long-term outcome is independent of the treatment conditional on the surrogate index. We then characterize the bias that arises from violations of this assumption, deriving feasible bounds on the degree of bias and providing simple methods to validate the key assumption using additional outcomes. Finally, we develop efficient estimators for the surrogate index and show that even in settings where the long-term outcome is observed, using a surrogate index can increase precision. We apply our method to analyze the long-term impacts of a multi-site job training experiment in California. Using short-term employment rates as surrogates, one could have estimated the program's impacts on mean employment rates over a 9 year horizon within 1.5 years, with a 35% reduction in standard errors. Our empirical results suggest that the long-term impacts of programs on labor market outcomes can be predicted accurately by combining their short-term treatment effects into a surrogate index. |
| JEL: | C01 J0 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26463&r=all |
| By: | Ole Agersnap; Amalie Sofie Jensen; Henrik Kleven |
| Abstract: | We study the effects of welfare generosity on international migration using a series of large changes in welfare benefits for immigrants in Denmark. The first change, implemented in 2002, lowered benefits for immigrants from outside the EU by about 50%, with no changes for natives or immigrants from inside the EU. The policy was later repealed and re-introduced. The differential treatment of immigrants from inside and outside the EU, and of different types of non-EU immigrants, allows for a quasi-experimental research design. We find sizeable effects: the benefit reduction reduced the net flow of immigrants by about 5,000 people per year, or 3.7 percent of the stock of treated immigrants, and the subsequent repeal of the policy reversed the effect almost exactly. Our study provides some of the first causal evidence on the widely debated “welfare magnet” hypothesis. While there are many non-welfare factors that matter for migration decisions, our evidence implies that, conditional on moving, the generosity of the welfare system is important for destination choices. |
| JEL: | H20 H31 J61 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26454&r=all |
| By: | Konte, Maty (UNU-MERIT); Osei Kwadwo, Victor (UNU-MERIT); Zinyemba, Tatenda (UNU-MERIT) |
| Abstract: | This chapter reviews recent literature on the determinants of women's political and reproductive-health empowerment in Africa and tracks the progress that has been made during the Millennium Development Goals period and onwards. The chapter highlights important facts. First, in Africa, there is little to no gender gap in voting during elections, but there is a significant gender gap in inter-electoral participation, such as participation in political meetings, or any other relevant political actions that can influence policy and political outcomes. The literature on the determinants of the gender gap in political participation has shown that the well-established determinants thereof in Western countries, such as income, education, and employment, have very little relevance in explaining the gender gap in political participation in Africa. Factors such as intra-household bargaining power and discriminatory social norms play an important role in explaining the gender gap in inter-electoral participation in Africa. Second, while the number of women policy-makers has significantly increased, these women have little influence and control a small fraction of the budget. Third, the use of contraceptives in Africa has increased by approximately 6 percent between 2000 and 2014, but Africa still records among the lowest rates of contraceptive usage and highest unmet need for family planning in the world. Lastly, the literature review has shown that factors such as education, area of residence, religion, socioeconomic status, and funding of reproductive health services are key determinants of contraceptive use. This chapter has several implications for SDG 5 on gender equality and women's empowerment, more specifically targets 5.4 and 5.6. |
| Keywords: | Africa, Gender gap, Political Participation, Reproductive Health, Women's empowerment |
| JEL: | J13 J16 O55 |
| Date: | 2019–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019044&r=all |
| By: | Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper addresses the complexity of, and the interrelationships between, two important aspects of integration of refugees in Austria, namely labour market integration and social integration. While labour market integration is captured in terms of being employed as compared to being unemployed or inactive, social integration distinguishes between social networks and their ethnic composition and social capital. It identifies the key determinants of each of these domains of integration and investigates the direction as well as the size of interdependencies among them. The analysis uses a unique dataset built on the basis of a survey of about 1,600 refugees from Syria, Iraq, Afghanistan and Iran who had come to Austria since 2010. The analysis establishes an important causal link between social integration and labour market integration (i.e. employment). Both social network effects with Austrians as well as with co-ethnics are important in this context but the former is more powerful than the latter. It shows that both education and length of stay are key determinants of successful labour market integration. Furthermore, tests regarding the relevance of language command for both social and labour market integration show the strong importance of speaking and understanding German, and much less so, of writing German. Disclaimer Research for this paper was financed by the Anniversary Fund of the Oesterreichische Nationalbank (Project No. 17166). Support provided by Oesterreichische Nationalbank for this research is gratefully acknowledged. |
| Keywords: | social integration, labour market integration, refugees, migration |
| JEL: | J60 J15 Z10 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:168&r=all |