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on Labour Economics |
| By: | Nir Jaimovich; Itay Saporta-Eksten; Henry Siu; Yaniv Yedid-Levi |
| Abstract: | The U.S. economy has experienced a significant drop in the fraction of the population employed in middle wage, “routine task-intensive” occupations. Applying machine learning techniques, we identify characteristics of those who used to be employed in such occupations and show they are now less likely to work in routine occupations. Instead, they are either non-participants in the labor force or working at occupations that tend to occupy the bottom of the wage distribution. We then develop a quantitative, heterogeneous agent, general equilibrium model of labor force participation, occupational choice, and capital investment. This allows us to quantify the role of advancement in automation technology in accounting for these labor market changes. We then use this framework as a laboratory to evaluate various public policies aimed at addressing the disappearance of routine employment and its consequent impacts on inequality. |
| Keywords: | Polarization, automation, routine employment, labor force participation, universal basic income, unemployment insurance, retraining |
| JEL: | E00 E23 E25 E60 J01 J2 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:340&r=all |
| By: | Bubonya, Melisa (ARC Centre of Excellence in Population Ageing Research (CEPAR)); Cobb-Clark, Deborah A. (University of Sydney) |
| Abstract: | Our goal is to investigate the pathways that link welfare receipt across generations. We undertake a mediation analysis in which we not only calculate the intergenerational correlation in welfare, but also quantify the portion of that correlation that operates through key mechanisms. Our data come from administrative welfare records for young people (aged 23 – 26) and their parents over nearly two decades which have been linked to survey responses from young people at age 18. The mediators we consider jointly explain nearly a third (32.2 percent) of the intergenerational correlation in welfare participation and more than half (52.6 percent) of the link between parental welfare participation and young people's total welfare benefits. The primary mechanism linking welfare receipt across generations is the failure to complete high school. Adolescents in welfare-reliant families experience more disruptions in their schooling (e.g., school changes and residential mobility, expulsions and suspensions) and receive less financial support from their families both of which impact on their chances of completing high school and avoiding the welfare roll. Young people's risk-taking behavior (smoking, illicit drug use, delinquency and pregnancy) is also a key mechanism underpinning intergenerational welfare reliance. Physical and mental health, work-welfare attitudes and academic achievement, in contrast, have a more modest role in transmitting welfare receipt across generations. |
| Keywords: | intergenerational welfare, social mobility, socioeconomic disadvantage, social assistance, welfare |
| JEL: | H53 I38 J62 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12893&r=all |
| By: | Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza) |
| Abstract: | This paper examines the time spent commuting to/from work by workers in fifteen European countries, during the last three decades, with the aim of analyzing recent trends in commuting and the factors affecting commuting behavior in those countries. Using data from several waves of the European Working Conditions Survey, results show a significant gender gap in commuting time in Austria, Belgium, France, Germany, Italy, Ireland, Luxembourg, the Netherlands, and the UK, with male workers devoting more time to commuting than their female counterparts. We further explore the factors related to commuting time, documenting a level of heterogeneity in commuting behavior as certain determinants of commuting time differ across countries. By analyzing the evolution of commuting time in Europe in recent decades, and the factors associated with commuting time, our analysis may serve to guide future planning programs. |
| Keywords: | commuting time, european working conditions survey, trends, gender, socio-demographic factors |
| JEL: | R40 O57 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12916&r=all |
| By: | Pawel Krolikowski; Kurt Graden Lunsford |
| Abstract: | We collect rich establishment-level data about advance layoff notices filed under the Worker Adjustment and Retraining Notification (WARN) Act since January 1990. We present in-sample evidence that the number of workers affected by WARN notices leads state-level initial unemployment insurance claims, changes in the unemployment rate, and changes in private employment. The effects are strongest at the one and two-month horizons. After aggregating state-level information to a national-level “WARN factor” using a dynamic factor model, we find that the factor substantially improves out-of-sample forecasts of changes of manufacturing employment in real time. |
| Keywords: | WARN act; mass layoffs; plant closings; unemployment; employment; initial UI claims. |
| JEL: | E27 J65 K31 |
| Date: | 2020–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:87416&r=all |
| By: | Ismail Baydur (School of Economics, Singapore Management University); Toshihiko Mukoyama (Department of Economics, Georgetown University) |
| Abstract: | This paper studies the cyclical behavior of job separation and the characteristics of matches between workers and jobs. We estimate a proportional hazard model with competing risks, distinguishing between different types of separations. A higher unemployment rate at the start of an employment relationship increases the probability of job-to-job transitions, whereas its effect on employment-to-unemployment transitions is negative. We then build a simple job-ladder model to interpret our empirical results. A model with two-dimensional heterogeneity in match (job) characteristics has the same qualitative features as the data. Once the model is calibrated to include cyclicality in the offered match characteristics, it can fit the quantitative features of the data. |
| Keywords: | business cycles, match characteristics, job duration, unemployment, job-to-job transitions |
| JEL: | E24 E32 J22 J63 J64 |
| Date: | 2020–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~20-20-01&r=all |
| By: | Pacheco, Gail (Auckland University of Technology); Plum, Alexander T. (Auckland University of Technology); Sloane, Peter J. (Swansea University) |
| Abstract: | Estimating economic earnings mobility is imperative for understanding the degree to which low pay employment is a temporary or long-term position. The current literature estimates transition probabilities between low and higher pay. This study extends the focus to identify the underlying pecuniary wage change via construction of an intermediate pay zone marginally above low pay. Utilising monthly administrative data we find that individuals with a strong attachment to the low pay sector have a very low probability of shifting into higher pay. Further, these individuals also have a substantially greater risk of experiencing a low pay-no pay cycle relative to those who are intermediate or higher paid. Notably, this finding is only uncovered using within year variation in wages to reveal intensity of labour market attachment. |
| Keywords: | low pay dynamics, transition probability, state dependence, dynamic models, administrative data |
| JEL: | J62 J31 C33 C55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12896&r=all |
| By: | Isaac Baley; Ana Figueiredo; Robert Ulbricht |
| 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 predicted career dynamics provide a novel narrative for the scarring effect of unemployment. The model suggests significant welfare costs associated with mismatch due to learning frictions. |
| Keywords: | Business cycles, cleansing, learning about skills, multidimensional sorting, scarring effect of unemployment, search-and-matching, skill mismatch, sullying. |
| JEL: | E24 E32 J24 J64 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1694&r=all |
| By: | Bhuller, Manudeep (University of Oslo); Kostol, Andreas Ravndal (Arizona State University); Vigtel, Trond Christian (University of Oslo) |
| Abstract: | How the internet affects job matching is not well understood due to a lack of data on job vacancies and quasi-experimental variation in internet use. This paper helps fill this gap using plausibly exogenous roll-out of broadband infrastructure in Norway, and comprehensive data on recruiters, vacancies and job seekers. We document that broadband expansions increased online vacancy-postings and lowered the average duration of a vacancy and the share of establishments with unfilled vacancies. These changes led to higher job-finding rates and starting wages and more stable employment relationships after an unemployment-spell. Consequently, our calculations suggest that the steady-state unemployment rate fell by as much as one-fifth. |
| Keywords: | unemployment, information, job search, matching |
| JEL: | D83 J63 J64 L86 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12895&r=all |
| By: | Michael Wyrwich (University of Groningen and FSU Jena) |
| Abstract: | Previous research suggests that entrepreneurs value autonomy more than non-entrepreneurs do across countries and institutional contexts. However, most evidence exists for contexts with more or less entrepreneurship-facilitating and stable institutional framework conditions while we do not know whether this connection also exists in situations, in which entrepreneurs operate under challenging institutional conditions. This paper exploits a historical episode to first analyze a context where entrepreneurs faced massive institutional barriers and, second, a context marked by significant changes of the institutional framework conditions for entrepreneurship. In both contexts, entrepreneurs are challenged either by external resistance toward their activity or by uncertainty regarding the future prospects of their endeavor. Our results show an above-average endorsement of autonomy as an important societal value among people that were entrepreneurs in the autocratic anti-entrepreneurial regime and those respondents that started or planned to start an own venture during institutional upheaval. The findings of our analysis suggest that the mark-up entrepreneurs reveal with respect to valuing autonomy found in the previous literature is not an artefact of stable entrepreneurship-facilitating institutional framework conditions. |
| Keywords: | Entrepreneurship, Value orientation, Autonomy, Institutions |
| JEL: | L26 P20 Z10 |
| Date: | 2020–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2020-001&r=all |
| By: | Ong, David; Yang, Yu; Zhang, Junsen |
| Abstract: | Reports of the difficulties of elite women in finding suitable mates have been increasing despite the growing availability and value of men in China. We rationalize this “leftover women” phenomenon within the directed/competitive search framework, which uniquely allows for equilibrium crowding out. Within this framework, we show that the leftover women phenomenon can be the result of women’s aversion to men who have a lower income than themselves (hereafter, ALM) and the long-predicted complementarity between women’s non-market traits (in particular, beauty) and male earnings. For high-income (h-)women, even when high-income (H-)men are more plentiful and richer, the direct effect of the greater number of desirable men can be overwhelmed by the indirect effect of competitive ‘entry’ by low-income (l-)women, particularly, the beautiful. We test for these competitive search effects using online dating field experimental, Census, and household survey data. Consistent with the competitive entry of l-women, when sex ratio and H-men’s income increase, the search intensity of beautiful l-women for H-men increases. In response to this competitive entry, plain h-women, who are constrained by their ALM to search predominantly for H-men, also increase the search intensity. However, only their marriage probability decreases. Our evidence is consistent with intra-female competitive search for spouses who can cover the labor market opportunity cost of marriage and childbirth, which increases with a woman’s income. |
| Keywords: | directed search, marriage, sex ratio, online dating, aversion to lower income men, beauty |
| JEL: | C93 J01 J12 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98166&r=all |
| By: | Azmat, Ghazala (Sciences Po, Paris); Cuñat, Vicente (London School of Economics); Henry, Emeric (CEPR) |
| Abstract: | Using a nationally representative longitudinal survey of lawyers in the U.S., we document a sizeable gap between men and women in their early aspirations to become law firm partners, despite similar early investments and educational characteristics. This aspiration gap can explain a large part of the gender promotion gap that is observed later. We propose a model to understand the role of aspirations and then empirically test its predictions. We show that aspirations create incentives to exert effort and are correlated with expectations of success and the preference for becoming a partner. We further show that aspirations are affected by early work experiences – facing harassment or demeaning comments early in the career affects long-term promotion outcomes mediated via aspirations. Our research highlights the importance of accounting for, and managing, career aspirations as an early intervention to close gender career gaps. |
| Keywords: | promotion, aspirations, gender gaps |
| JEL: | M51 J16 K40 J44 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12902&r=all |
| By: | Jaerim Choi (University of Hawai‘i at Manoa); Theresa M. Greaney (University of Hawaii at Manoa) |
| Abstract: | Do multinational enterprises (MNEs) from more gender-equal countries bring gender-equal employment practices with them to a less gender-equal host country? Using difference-in-differences, nearest-neighbor-matching, and event study techniques along with firm-level data for Korea, a country with low gender equality, we find evidence that MNEs bring their country of origin’s gender norms in employment with them. Korean firms that switch to majority foreign ownership report 2 to 12 percentage-points higher female shares of permanent main-task workers at firm headquarters compared with non-acquired firms and the differential increases with the level of gender equality in the MNEs’ home countries. We estimate that 1 to 7 percent of the productivity increase caused by foreign acquisition can be attributed to workforce reorganization that may reduce gender-based misallocations of talent. |
| Keywords: | Gender inequality, Foreign ownership |
| JEL: | J16 F23 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:202003&r=all |
| By: | Cockx, Bart; Lechner, Michael; Bollens, Joost |
| Abstract: | We investigate heterogenous employment effects of Flemish training programmes. Based on administrative individual data, we analyse programme effects at various aggregation levels using Modified Causal Forests (MCF), a causal machine learning estimator for multiple programmes. While all programmes have positive effects after the lock-in period, we find substantial heterogeneity across programmes and types of unemployed. Simulations show that assigning unemployed to programmes that maximise individual gains as identified in our estimation can considerably improve effectiveness. Simplified rules, such as one giving priority to unemployed with low employability, mostly recent migrants, lead to about half of the gains obtained by more sophisticated rules. |
| Keywords: | Policy evaluation, active labour market policy, causal machine learning, modified causal forest, conditional average treatment effects |
| JEL: | J68 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2020:01&r=all |