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on Labour Economics |
| By: | Piton, Céline; Rycx, François |
| Abstract: | This paper provides a comprehensive quantitative assessment of the employment performance of first- and second-generation immigrants in Belgium compared to that of natives. Using detailed quarterly data for the period 2008-2014, we find not only that first-generation immigrants face a substantial employment penalty (up to -36% points) vis-à-vis their native counterparts, but also that their descendants continue to face serious difficulties in accessing the labour market. The social elevator appears to be broken for descendants of two non-EU-born immigrants. Immigrant women are also found to be particularly affected. Among the key drivers of access to employment, we find: i) education for the descendants of non-EU-born immigrants, and ii) proficiency in the host country language, citizenship acquisition, and (to a lesser extent) duration of residence for first-generation immigrants. Finally, estimates suggest that around a decade is needed for the employment gap between refugees and other foreign-born workers to be (largely) suppressed. |
| Keywords: | First- and second-generation immigrants,employment,moderating factors |
| JEL: | J15 J16 J21 J24 J61 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:485&r=all |
| By: | Thomas Bassetti (Department of Economics and Management, University of Padova and CICSE); Luca Corazzini (Department of Economic Sciences, University of Venice); Darwin Cortes (Facultad de Economia, Universidad del Rosario); Luca Nunziata (DSEA, University of Padova and IZA) |
| Abstract: | We present a two-country labor matching model to account for the existing, inconclusive empirical evidence on the relationship between immigration and crime. According to our model, inflows of relatively un- skilled immigrants negatively affect the labor market equilibrium and, therefore, sharpen criminal activities. On the other hand, inflows of relatively skilled immigrants boost economic activity and reduce the crime rate. Given this preliminary result, we endogenize the migration decision, showing that the host country’ s labor-market characteristics are crucial in determining the impact of migrants on crime rate. Countries characterized by low unemployment rates attract both skilled and unskilled immigrants, making the direction of the relationship between immigration and crime unclear. Countries with high unemployment rates attract only unskilled workers, thus favoring the emergence of a positive relationship between immigration and crime. We test the theoretical predictions of our model on a panel of 97 regions located in 12 European host countries built by combining the European Social Survey and the Eurostat Labor Force Survey. We identify a threshold level of unemployment rate above which the crime rate positively responds to immigration. |
| Keywords: | Immigration, Crime, Labor Market, Frictional Unemployment |
| JEL: | F22 J61 J64 K42 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0248&r=all |
| By: | Pia M. Orrenius; Madeline Zavodny; Alexander T. Abraham |
| Abstract: | Immigration, like any positive labor supply shock, should increase the return to capital and spur business investment. These changes should have a positive impact on business creation and expansion, particularly in areas that receive large immigrant inflows. Despite this clear prediction, there is sparse empirical evidence on the effect of immigration on business dynamics. One reason may be data unavailability since public-access firm-level data are rare. This study examines the impact of immigration on business dynamics and employment by combining U.S. data on immigrant inflows from the Current Population Survey with data on business formation and survival and job creation and destruction from the National Establishment Time Series (NETS) database for the period 1997 to 2013. The results indicate that immigration increases the business growth rate by boosting business survival and raises employment by reducing job destruction. The effects are largely driven by less-educated immigrants. |
| Keywords: | immigration; business dynamics; firm entry; firm exit; job creation; job destruction |
| JEL: | J15 J61 L25 |
| Date: | 2020–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:87560&r=all |
| By: | Raquel Fonseca Benito; Simon Lord; Simon C. Parker |
| Abstract: | This paper examines the work motivations and incentives of employees and selfemployed workers near retirement age. We use a sample of Canadians 50 years and older taken from LISA, the Longitudinal and International Study of Adult. Results are as follows. Poverty is associated positively with the transition from employment to self-employment after 50. Optimism appears to explain in part why employees decide to do the switch. For respondents who were self-employed at least once between 50 and 64 years old, it appears that having had prior self-employment experience does not reduce significantly the probability of being poor after 65. |
| Keywords: | Self-Employment,Elderly,Retirement,Canada,Poverty, Travail autonome,Ainés,Retraite,Canada,Pauvreté |
| JEL: | E24 E32 J14 J20 L26 |
| Date: | 2020–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2020s-11&r=all |
| By: | Adda, Jérôme (Bocconi University); Fawaz, Yarine (CEMFI, Madrid) |
| Abstract: | This paper assesses the effect of import competition on the labor market and health outcomes of US workers. We first show that import shocks affect employment and income, but only in areas where jobs are more intense in routine tasks. Exploiting over 40 million individual observations on health and mortality, we find that import had a detrimental effect on physical and mental health that is concentrated in those areas and exhibits strong persistence. It decreased health care utilisation and increased hospitalisation for a large set of conditions, more difficult to treat. The mortality hazard of workers in manufacturing increased by up to 6 percent per billion dollar import increase. |
| Keywords: | import competition, routine tasks, health, health behaviour, hospitalisation, mortality |
| JEL: | F16 I12 I18 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12924&r=all |
| By: | Nigar Hashimzade |
| Abstract: | This paper investigates the effects of parenting time on macroeconomic outcomes and welfare when parenting choices are determined by own childhood experience and social norms in an overlapping generations framework. Parenting time and material expenditures on children generate children’s human capital. When the share of parenting time is relatively low and parenting and leisure are complements or weak substitutes the model has two steady-state equilibria with different welfare levels. In the high-welfare equilibrium parents have stronger endogenous taste for parenting and spend more time with children and less in paid work. Higher productivity due to the higher human capital more than compensates for the reduction in working hours, leading to a higher output level, in comparison to the low-welfare equilibrium. |
| Keywords: | endogenous preferences, parenting, time use, overlapping generations, human capital |
| JEL: | D91 J13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8062&r=all |
| By: | Pierlauro Lopez (Bank of France); Patrick J. Kehoe (Stanford University; University of Minnesota; Federal Reserve Bank of Minneapolis; Harvard University; National Bureau of Economic Research; University College London; Federal Reserve Bank; University of Pennsylvania); Virgiliu Midrigan; Elena Pastorino |
| Abstract: | Recent critiques have demonstrated that existing attempts to account for the unemployment volatility puzzle of search models are inconsistent with the procylicality of the opportunity cost of employment, the cyclicality of wages, and the volatility of risk-free rates. We propose a model that is immune to these critiques and solves this puzzle by allowing for preferences that generate time-varying risk over the cycle, and so account for observed asset pricing fluctuations, and for human capital accumulation on the job, consistent with existing estimates of returns to labor market experience. Our model reproduces the observed fluctuations in unemployment because hiring a worker is a risky investment with long-duration surplus flows. Intuitively, since the price of risk in our model sharply increases in recessions as observed in the data, the benefit from creating new matches greatly drops, leading to a large decline in job vacancies and an increase in unemployment of the same magnitude as in the data. |
| JEL: | E24 E32 E44 J64 |
| Date: | 2020–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:87582&r=all |
| By: | Eiji Goto; Constantin Bürgi; |
| Abstract: | We estimate Okun’s law, the negative relationship between output and the unemployment rate, at the sector level for the US, the UK, Japan, and Switzerland to test several hypotheses that may explain why the aggregate Okun’s coeffcients are different across countries. Specifically, we show that the sectoral composition is not a driver and find that the sectoral coefficients are proportional to the aggregate in all four countries. We also show that the standard deviation of unemployment is the main driver of the cross-country differences. This is consistent with labor market policies being crucial to explain the cross-country cyclical differences in the aggregate Okun’s coefficient. |
| Keywords: | Okun’s law, cross-country differences, sectors |
| JEL: | E24 E32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8101&r=all |
| By: | Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza) |
| Abstract: | This paper analyzes the existence of short- and long-term intergenerational correlation of employment and self-employment in European countries, using data from the European Union Statistics on Income and Living Conditions. Using longitudinal data for the period 2003-2016, fixed effect estimates show a significant short-term correlation between the current employment status of parents and that of their children. However, short-term correlation of self-employment seems to be driven only by father-son correlations. Conversely, using the special module on Intergenerational Transmissions for the year 2011, estimates show a strong and significant correlation between respondents' self-employment status, and that of their parents when respondents were 14 years old. This suggests that self-employment decisions are not related to short-term family labor supply decisions, but to long-term intergenerational transmission. |
| Keywords: | short- and long-term, Intergenerational transmissions, employment, self-employment, EU-SILC data |
| JEL: | J62 E24 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12933&r=all |
| By: | Oleksandr Faryna (National Bank of Ukraine); Tho Pham (Department of Economics, University of Reading); Oleksandr Talavera (University of Birmingham); Andriy Tsapin (National Bank of Ukraine) |
| Abstract: | This paper examines the relationship between labour market conditions and wage dynamics by exploiting a unique dataset of 0.8 million online job vacancies. We find a weak trade-off between aggregated national-level wage inflation and unemployment. This link becomes more evident when wage inflation is disaggregated at sectoral and occupational levels. Using exogenous variations in local market unemployment as the main identification strategy, a negative correlation between vacancy-level wage and unemployment is also established. The correlation magnitude, however, is different across regions and skill segments. Our findings suggest the importance of micro data's unique dimensions in examining wage setting – unemployment relationship. |
| Keywords: | Phillips curve, wage curve, heterogeneity, micro data, online vacancies |
| JEL: | C55 E24 E31 E32 |
| Date: | 2020–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2020-02&r=all |
| By: | Ham, Andrés; Maldonado, Darío; Guzmán-Gutiérrez, Carlos Santiago |
| Abstract: | This paper characterizes the youth labor market in Colombia from 2008 to 2017. We estimate labor market indicators for individuals aged between 14-28 years using microdata from Colombia’s household surveys over the study period. Our estimates document the main patterns and trends in the labor market for youth in labor force participation, employment, unemployment, informality, and earnings. We compare these statistics to the same indicators for adults (individuals aged between 29-65 years), and explore differences within youth by characteristics such as gender, region, educational attainment, socioeconomic status, and experience. Results indicate that young Colombians have increased their participation rate in recent years, but are mostly employed in low-quality jobs: unsalaried and informal. We also document marked inequalities in labor market outcomes across youth characteristics. We provide a series of recommendations to guide future youth labor policy given these estimates and a critical analysis of recent youth policies in Colombia. |
| Keywords: | Youth; Llabor market; Transition into the labor market; Labor policy; Colombia |
| JEL: | J08 J13 J21 J24 O17 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:rie:riecdt:32&r=all |
| By: | Jayachandran, Seema (Northwestern University) |
| Abstract: | This article reviews the recent literature in economics on small-scale entrepreneurship ("microentrepreneurship") in low-income countries. Major themes in the literature include the determinants and consequences of joining the formal sector; the impacts of access to credit and other financial services; the impacts of business training; barriers to hiring; and the distinction between self-employment by necessity and self-employment as a calling. The article devotes special attention to unique issues that arise with female entrepreneurship. |
| Keywords: | small businesses, female entrepreneurship, self-employment, informal sector |
| JEL: | L26 J16 J24 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12943&r=all |
| By: | Astri Syse; Lars Dommermuth; Rannveig K. Hart (Statistics Norway) |
| Abstract: | Poor health may constrain women’s capacity for active leisure, including family life and childrearing, for participation in the labor market and potentially affect preferences. Still, health remains remarkably understudied as a fertility determinant. We explore the association between health and fertility, using uptake of doctor-certified sickness absences and long-term health-related benefits as proxies for health. We examine whether compositional changes in health distributions and/or changes in the health-fertility association have contributed to the distinct fall in the total fertility rate in Norway since 2009. We use nationwide registry data on women aged 16-45 from 2004-2018. We analyse first, second and third births separately, and use annual observations with lagged timevarying covariates for education, sickness absence and long-term benefits. Income, employment and partnership status are also included in some subanalyses. Long-term benefit uptake is negatively associated with fertility, and the association weakens over time. In addition, such uptake is relatively rare, but increases slightly over time. The use of sickness absence is positively associated with fertility, and the association strengthens over time. Sickness absence uptake is common but decreases over time. It is thus unlikely that changes in women’s health and/or changes in the health-fertility association can help explain the observed decline in fertility observed after 2009. However, if the decrease in sickness absence uptake reflects a stronger labor market preference among women in fertile ages, it might help explain parts of the observed decline. Overall, the decline in fertility is most pronounced for healthy women. Health as a fertility determinant warrants further research, from other countries and with other proxies for health. |
| Keywords: | fertility; health; sick leave; TFR; total fertility rate |
| JEL: | I14 J10 J11 J13 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:921&r=all |
| By: | Eibich, Peter (DIW Berlin); Siedler, Thomas (University of Hamburg) |
| Abstract: | Retired parents might invest time into their adult children by providing childcare. Such intergenerational time transfers can have important implications for family decisions. This paper estimates the effects of parental retirement on adult children's fertility. We use representative panel data from Germany to link observations on parents and adult children. We exploit eligibility ages for early retirement for identification in a regression discontinuity design. The results show that parent's early retirement significantly increases the probability of childbirth for adult children. However, parental retirement affects only the timing of adult children's fertility, without having an effect on total fertility. |
| Keywords: | retirement, fertility, intergenerational transfer, time use |
| JEL: | J13 J14 J22 J26 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12993&r=all |
| By: | Hoffmann, Manuel (Texas A&M University); Mosquera, Roberto (Universidad de las Américas); Chadi, Adrian (University of Konstanz) |
| Abstract: | Influenza vaccination could be a cost-effective way to reduce costs in terms of human lives and productivity losses, but low take-up rates and vaccination unintentionally causing moral hazard may decrease its benefits. We ran a natural field experiment in cooperation with a bank in Ecuador, where we modified its vaccination campaign. Experimentally manipulating incentives to participate in this health intervention allows us to study peer effects with organizational data and to determine the personal consequences of being randomly encouraged to get vaccinated. We find that assigning employees to get vaccinated during the workweek roughly doubled take-up compared to employees assigned to the weekend, which indicates that reducing opportunity costs plays an important role in increasing vaccination rates. Coworker take-up also increased individual take-up significantly and is driven by social norms. Contrary to the company's expectation, vaccination did not reduce sickness absence during the flu season. Getting vaccinated was ineffective with no measurable health externalities from coworker vaccination. We rule out meaningful individual health effects when considering several thresholds of expected vaccine effectiveness. Using a dataset of administrative records on medical diagnoses and employee surveys, we find evidence consistent with vaccination causing moral hazard, which could decrease the effectiveness of vaccination. |
| Keywords: | health intervention, flu vaccination, sickness-related absence, field experiment, random encouragement design, moral hazard, technology adoption |
| JEL: | D90 I12 J01 N36 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12939&r=all |
| By: | Chantreuil, Frédéric (University of New Caledonia); Fourrey, Kévin; Lebon, Isabelle (University of Caen); Rebiere, Therese (CNAM, Paris) |
| Abstract: | This paper is an application of a new Shapley income decomposition methodology, in which we isolate two subjective factors in income differences - race and gender - that contribute to income inequality within the population of blacks and whites in the United States over the period 2005-2017. We show that the purely racial contribution to income inequality as defined by the Gini index varies from 1% to 4% depending on the geographical administrative divisions used. Race tends to contribute more to inequality in the Western and Southern part of the country. Whatever the division, the share of income inequality associated with gender exceeds greatly that of race. While gender income inequality falls over time, income inequality associated with race tends to increase. |
| Keywords: | income inequality, decomposition, Shapley value, racial discrimination, gender discrimination |
| JEL: | C71 D63 J15 J71 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12950&r=all |
| By: | Kwenda, Prudence (Wits University); Benhura, Miracle (University of the Witwatersrand, Johannesburg); Mudiriza, Gibson (University of Cape Town) |
| Abstract: | This study estimates and decomposes the unemployment rate gap between former and non-former homeland areas in South Africa. We apply the Oaxaca-Blinder (1973) decomposition technique to the 2011 population census community profiles at main place level to identify the factors underpinning observed spatial patterns in unemployment. Results indicate that former homeland areas suffer from relatively higher rates of unemployment compared to non-former homeland areas. The 24%-point difference is primarily explained by differences in endowments. If main-place observed characteristics are equalised between former and non-former homeland areas, the unemployment gap can be reduced by as much as 80%. Factors driving the endowment effect are area compositional differences in age, gender, race, marital status and education. While the bulk of these factors are structural in nature, interventions that improve education attainment in former homeland areas and those that are sensitive to the challenges faced by black South African youth and women in the labour market will contribute immensely towards alleviating the spatial gap. |
| Keywords: | unemployment, former homeland area, decomposition and South Africa |
| JEL: | N37 J01 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12941&r=all |