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on Labour Economics |
| By: | Bart Cockx (Department of Economics, Ghent University); Koen Declercq (Leuven Economics of Education Research, KU Leuven; IRES/LIDAM, UCLouvain and FNRS); Muriel Dejemeppe (IRES/LIDAM, UCLouvain); Leda Inga (Centre for Research in Economics and Management, University of Luxembourg); Bruno Van der Linden (IRES/LIDAM, UCLouvain and FNRS) |
| Abstract: | We examine the impact of scrapping entitlement to unemployment insurance (UI) on job finding and employment of young labor market entrants. In Belgium, young labor market entrants with short or no employment record are eligible for non-means-tested UI after a one-year waiting period. This zero benefit period gives rise to an unusual inclining benefit profile. We exploit a policy change that restricted access to UI for two groups of job seekers in 2015: university graduates aged 25 and older at the end of their waiting period and high school dropouts younger than 21. At the moment when the reform was announced, many job seekers realized that they were not eligible anymore for UI by the end of their waiting period. We use a differences-in-differences approach to identify the causal impact of the reform. Our main finding is that losing eligibility to UI does not increase the employment probability of targeted youths. |
| Keywords: | Youth unemployment, Unemployment insurance, Policy evaluation, Difference-indifferences |
| JEL: | J64 J65 J68 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201906-379&r=all |
| By: | Boehnke, Jörn; Gay, Victor |
| Abstract: | Using spatial variation in World War I military fatalities in France, we show that the scarcity of men due to the war generated an upward shift in female labor force participation that persisted throughout the interwar period. Available data suggest that increased female labor supply accounts for this result. In particular, deteriorated marriage market conditions for single women and negative income shocks to war widows induced many of these women to enter the labor force after the war. In contrast, demand factors such as substitution toward female labor to compensate for the scarcity of male labor were of second-order importance. |
| Keywords: | Female labor, World War I, Sex ratio, Marriage market, Labor supply |
| JEL: | J12 J16 J22 N34 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:123953&r=all |
| By: | Alexandre Mas; Amanda Pallais |
| Abstract: | Alternative work arrangements, defined both by working conditions and by workers’ relationship to their employers, are heterogeneous and common in the U.S. This article reviews the literature on workers’ preferences over these arrangements, inputs to firms’ decision to offer them, and the impact of regulation. It also highlights several descriptive facts. Work arrangements have been relatively stable over the past 20 years, work conditions vary substantially with education, and jobs with schedule or location flexibility are less family-friendly on average. This last fact helps explain why women are not more likely to have schedule or location flexibility and seem to largely reduce hours to get more family-friendly arrangements. |
| JEL: | H0 J0 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26605&r=all |
| By: | Anne A. Brenøe; Serena P. Canaan; Nikolaj A. Harmon; Heather N. Royer |
| Abstract: | Most of the existing evidence on the effectiveness of family leave policies comes from studies focusing on their impacts on affected families - that is, mothers, fathers, and their children - without a clear understanding of the costs and effects on firms and coworkers. We use data from Denmark to evaluate the effect on firms and coworkers when a worker gives birth and goes on leave. Using a dynamic difference-in-differences design, we compare small firms in which a female employee is about to give birth to an observationally equivalent sample of small firms with female employees who are not close to giving birth. Identification rests on a parallel trends assumption, which we substantiate through a set of natural validity checks. When an employee gives birth she goes on leave from her firm for 9.5 months on average. Firms respond by increasing their labor inputs along several margins such that the net effect on total work hours is close to zero. Firms' total wage bill increases in response to leave take up, but this is driven entirely by wages paid to workers on leave for which firms receive reimbursement. There are no measurable effects on firm output, profitability or survival. Finally, coworkers of the woman going on leave see temporary increases in their hours, earnings, and likelihood of being employed but experience no significant changes in well-being at work as proxied by sick days. Overall, our results suggest that employees going on parental leave impose negligible costs on their firm and coworkers. |
| JEL: | H0 J13 J2 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26622&r=all |
| By: | Rodrigo Adão; Martin Beraja; Nitya Pandalai-Nayar |
| Abstract: | Why are some technological transitions particularly unequal and slow to play out? We develop a theory to study transitions after technological innovations driven by worker reallocation within a generation and changes in the skill distribution across generations. The economy's transitional dynamics have a representation as a q-theory of skill investment. We exploit this in two ways. First, to show that technology-skill specificity and the cost of skill investment determine how unequal and slow transitions are by affecting the two adjustment margins in the theory. Second, to connect these determinants to measurable, short-horizon changes in labor market outcomes within and between generations. We then empirically analyze the adjustment to recent cognitive-biased innovations in developed economies. Strong responses of cognitive-intensive employment for young but not old generations suggest that cognitive-skill specificity is high and that the supply of cognitive skills is more elastic for younger generations. This evidence indicates that cognitive-biased transitions slowly unfold over many generations. As such, naively extrapolating from observed changes at short horizons leads to overly pessimistic views about their welfare and distributional implications. |
| JEL: | C0 E0 F0 J0 O0 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26625&r=all |
| By: | Debdeep Chattopadhyay (DSEA, University of Padova) |
| Abstract: | By providing affordable health insurance untied from employer provision, the Massachusetts Health Reform Program could increase self-employment. Previous studies have estimated both positive and negative effects of the reform on aggregate self-employment using difference-in-differences designs. In this study, I use the synthetic control methodology to confirm the absence of a statistically significant effect of the reform on aggregate self-employment. However, I do detect positive and significant short-run effects of the reform on the probability that individuals become incorporated self-employed. This effect is restricted to individuals 40 years old or younger. I also find that for employees in this age range the reform caused a significant wage reduction. This finding highlights that the higher reform-mandated health insurance coverage was at least in part financed by employees. |
| Keywords: | Health Insurance, Self-Employment, Synthetic Control, Randomization Inference, Massachusetts Health Care Reform |
| JEL: | I11 I13 J18 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0244&r=all |
| By: | Lajos Tamás Szabó (Magyar Nemzeti Bank (Central Bank of Hungary)) |
| Abstract: | In this paper, I examine the effect of tightness on wages in three Central European countries. The estimation is relevant for at least three reasons. Firstly, it is a novel exercise to check the implication of the Mortansen–Pissarides model on Central European data. Secondly, from the central bank’s perspective it is important to know the effect of tightness on wages, since these are the major determinants of cost-push inflation. Thirdly, the magnitude of the spillover effect from tightness to wages can help determine the efficiency of a targeted development policy. My contribution is directly identifying the effect of tightness on wages from regional heterogeneity. I examine the effect of tightness on wages in Hungary, Slovakia and Poland using panel IV method on district level data. The direct effects are similar in the three countries, i.e. there is a positive link between tightness and wages. The magnitudes are somewhat different in Poland then in Hungary and Slovakia. There is spatial spillover effect in Hungary but this indirect effect is missing in Poland and Slovakia. |
| Keywords: | local labour markets, labour market tightness, wage equation. |
| JEL: | J31 J61 J63 J64 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2019/4&r=all |
| By: | Sebastian Doerr; Philipp Schaz |
| Abstract: | We classify a large sample of banks according to the geographic diversification of their international syndicated loan portfolio. Our results show that diversified banks maintain higher loan supply during banking crises in borrower countries. The positive loan supply effects lead to higher investment and employment growth for firms. Diversified banks have a stabilizing effect, thanks to their ability to raise additional funding during times of distress, which also shields connected markets from spillovers. Further distinguishing banks by nationality reveals a pecking order: diversified domestic banks are the most stable source of funding, while foreign banks with little diversification are the most fickle. Our findings suggest that the decline in financial integration since the recent crisis increases countries' vulnerability to local shocks. |
| Keywords: | global banks, diversification, syndicated loans, financial crisis |
| JEL: | F30 G2 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:827&r=all |
| By: | Rota, Mauro (Sapienza University of Rome); Weisdorf, Jacob (Sapienza University of Rome) |
| Abstract: | In explaining the Industrial Revolution, the so-called high-wage hypothesis argues that mechanisation served to replace expensive labour. Supporting evidence comes from daily wages of urban construction workers and shows that these were higher in northwest Europe than in the south. We argue that casual urban wages overestimate the cost of early-industrial labour. Early factories were rural and thus did not pay an urban wage premium. Moreover, early factories employed stable rather than casual workers and thus did not pay a premium for job insecurity. We present novel premia-free wages paid to stable workers in rural Italy, which we compare to wages paid to similar workers in England. We find that English workers earned only 20 per cent more than their Italian counterparts in 1650, but a staggering 150 per cent more in 1800. Although our empirical evidence shows that the precondition for the high-wage hypothesis is still in place, it is no longer clear – because growing English wages and early industrialisation coincide – whether it was high wages that drove mechanisation or the other way around. |
| Keywords: | Stable Employment, Economic Growth, Industrial Revolution, Great Divergence; Living Standards, Prices, Wages. JEL Classification: J3, J4, J8, I3, N33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:442&r=all |
| By: | LEROUX Marie-Louise, (Université du Québec à Montréal and CORE); PESTIEAU Pierre, (Université de Liège, CORE and PSE); PONTHIERE Gregory, (Université Paris Est, PSE and IUF) |
| Abstract: | We study the design of a fair family policy in an economy where parent-hood is regarded either as desirable or as undesirable, and where there is imperfect fertility control, leading to involuntary childlessness/parenthood. Using an equivalent consumption approach in the consumption-fertility space, we rst show that the identi cation of the worst-o¤ individuals is not robust to how the social evaluator xes the reference fertility level. Adopting the ex post egalitarian social criterion, which gives priority to the worst o¤ in realized terms, we then examine the compensation for involuntary childlessness/parenthood. Unlike real-world family policies, a fair family policy does not always involve positive family allowances to (voluntary) parents, and may also, under some reference fertility lev-els, involve positive childlessness allowances. Our results are robust to assuming asymmetric information and to introducing Assisted Reproductive Technologies. |
| Keywords: | fertility, childlessness, family policy, compensation, fairness. |
| JEL: | J13 I38 |
| Date: | 2019–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2019024&r=all |
| By: | Daniele Vignoli (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Raffaele Guetto (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Giacomo Bazzani (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Elena Pirani (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze); Alessandra Minello (Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti", Università di Firenze) |
| Abstract: | BACKGROUND: In the last decade fertility rates have declined in most European countries, and explanations have tended to focus on the rise of economic uncertainty after the Great Recession. The empirical demographic tradition operationalized the forces of economic uncertainty through objective indicators of individuals’ labor market situation; for example, holding a temporary contract or being unemployed. However, contemporary European fertility trends are not comprehensively captured by these traditional indicators and statistical models, because fertility decisions are not a mere “statistical shadow of the past†. OBJECTIVE: We propose a novel framework on economic uncertainty and fertility. This framework proffers that the conceptualization and operationalization of economic uncertainty needs to take into account that people use works of imagination, producing their own “narrative of the future†– namely, imagined futures embedded in social elements and their interactions. Narratives of the future allow people to act according to or in spite of the uncertainty they face, irrespective of structural constraints and their subjective perceptions. CONTRIBUTION: In this reflection we suggest that the focus of contemporary fertility studies should partly shift to assessing how people build their narratives of the future. To this end, we propose several methodological strategies to empirically assess the role of narratives for fertility decisions. Future studies should also take into account that personal narratives are shaped by the “shared narratives†produced by several agents of socialization, such as parents and peers, as well as by the narratives produced by the media and other powerful opinion formers. |
| Keywords: | Fertility; Economic Unvertainty; Narratives of the Future |
| JEL: | J13 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:fir:econom:wp2020_01&r=all |