|
on Labour Economics |
| By: | 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); Pierlauro Lopez (Bank of France); 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. |
| Keywords: | Unemployment volatility puzzle; Shimer puzzle; Search model; Search and matching model; Diamond-Mortenson-Pissarides model |
| JEL: | E0 E20 E24 E32 J60 J63 J64 |
| Date: | 2020–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:87571&r=all |
| By: | Gianluca Orefice (University of Paris-Dauphine, CEPII and CESifo); Giovanni Peri (University of California, Davis and NBER) |
| Abstract: | The process of matching between firms and workers is an important mechanism in determining the distribution of wages. In a labor market characterised by large dispersion of workers' productivity and worker-firm complementarity, high quality firms have strong incentives to screen for the quality of workers. This process will increase the positive quality association of firm-worker matches known as positive assortative matching (PAM). Immigration in a local labor market, by increasing the variance of workers abilities, may drive stronger PAM between firms and workers. Using French matched employer-employee (DADS) data over the period 1995-2005 we document that positive supply-driven changes of immigrant workers in a district increased the strength of PAM. We then show that this association is consistent with causality, is quantitatively significant, and is associated with higher average productivity and firm profits, but also with higher wage dispersion. We also show that the increased degree of positive assortative matching is mainly reached by high-productive firms "losing" lower quality workers and "attracting" higher quality workers. |
| Keywords: | Matching, Workers, Firms, Immigration, Productivity. |
| JEL: | F16 J20 J61 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt202002&r=all |
| By: | De Paola, Maria (University of Calabria); Lombardo, Rosetta (University of Calabria); Pupo, Valeria (University of Calabria); Scoppa, Vincenzo (University of Calabria) |
| Abstract: | Public speaking is an important skill for career prospects and for leadership positions, but many people tend to avoid it because it generates anxiety. We run a field experiment to analyze whether in an incentivized setting men and women show differences in their willingness to speak in public. The experiment involved more than 500 undergraduate students who could gain two points to add to the final grade of their exam by orally presenting solutions to a problem set. Students were randomly assigned to present only to the instructor or in front of a large audience (a class of 100 or more). We find that while women are more willing to present face-to-face, they are considerably less likely to give a public presentation. Female aversion to public speaking does not depend on differences in ability, risk aversion, self-confidence and self-esteem. The aversion to public speaking greatly reduces for daughters of working women. From data obtained through an on-line Survey we also show that neither increasing the gains deriving from public speaking nor allowing participants more time to prepare enable to close the gender gap. |
| Keywords: | public speaking, psychological gender differences, gender, leadership, glass ceiling, field experiment |
| JEL: | D91 C93 M50 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12959&r=all |
| By: | Brian K. Kovak; Rebecca Lessem |
| Abstract: | We examine how increasing the number of visas available to potential migrants would affect unauthorized immigration from Mexico to the U.S. Current U.S. policy bans people who are deported from receiving legal status for a period of time. This policy aims to serve as an additional deterrent to unauthorized immigration, but may be ineffective given that most potential Mexican migrants have an extremely low probability of ever being able to legally move to the U.S. We develop a dynamic discrete location choice model, which we estimate using data from the Mexican Migration Project, and consider various counterfactual policies that vary the intensity of enforcement and access to work visas. We find that legal entry bans for deported individuals are ineffective at current rates of legal immigration, but that increased legalization rates would amplify the deterrent effects of deportation. We also show that a temporary work visa program would yield similar deterrent effects as an increase in permanent legalization without resulting in very large increases in the total stock of migrants residing in the U.S. These findings have important implications for structuring future immigration reforms. |
| JEL: | F22 J61 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26790&r=all |
| By: | Juan Chaparro; Aaron Sojourner; Matthew J. Wiswall |
| Abstract: | This paper combines multiple sources of information on early childhood development in a unified model for analysis of a wide range of early childhood policy interventions. We develop a model of child care in which households decide both the quantities and qualities of maternal and non-maternal care along with maternal labor supply. The model introduces a novel parenting-effort channel, whereby child care subsidies that permit less parenting may enable better parenting. To estimate the model, we combine observational data with experimental data from the Infant Health and Development Program (IHDP) which randomly assigned free child care when the child was 1 and 2 years old. We estimate a cognitive skill production function and household preferences, giving insight into mechanisms driving the ex post heterogeneous effects of the IHDP intervention, accounting for alternative care substitutes available to the control group and spillovers of the child care offer across the household's decisions. We also estimate ex ante effects of counterfactual policies such as an offer of lower-quality care, requiring a co-pay for subsidized care, raising the maternal wage offer, or a cash transfer. Finally, we use the model to rationalize existing evidence from outside the US on the effects of universal child care programs. |
| JEL: | J13 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26813&r=all |
| By: | Martin Kolk (Max Planck Institute for Demographic Research, Rostock, Germany); Kieron J. Barclay (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Recent evidence suggests a positive association between fertility and cognitive ability among Swedish men. In this study we use data on 18 birth cohorts of Swedish men to examine whether and how the relationship between cognitive ability and patterns of childbearing are mediated by income, education and marriage histories. We examine whether the expected positive associations between cognitive ability and life course income, can explain this positive association. We also explore the role of marriage for understanding the positive gradient between cognitive ability and fertility. To address these question we use Swedish population administrative data that holds information on fertility histories, detailed taxation records, and data from conscription registers. We also identify siblings in order to adjust for confounding by shared family background factors. Our results show that while cognitive ability, education, income, marriage, and fertility, are all positively associated with each other, income only explains a part of the observed positive gradient between fertility and cognitive ability. We find that much of the association between cognitive ability and fertility can be explained by marriage, but that a positive association exists among both ever-married and never-married men. Both low income and low cognitive ability are strong predictors of high childlessness and low fertility in our population. The results from the full population persist in the sub-sample of brothers. |
| Keywords: | Sweden, cohort fertility, completed fertility, income, intelligence, marriage |
| JEL: | J1 Z0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2020-010&r=all |
| By: | Sandra E. Black; Jeffrey T. Denning; Jesse Rothstein |
| Abstract: | Selective college admissions are fundamentally a question of tradeoffs: Given capacity, admitting one student means rejecting another. Research to date has generally estimated average effects of college selectivity, and has been unable to distinguish between the effects on students gaining access and on those losing access under alternative admissions policies. We use the introduction of the Top Ten Percent rule and administrative data from the State of Texas to estimate the effect of access to a selective college on student graduation and earnings outcomes. We estimate separate effects on two groups of students. The first--highly ranked students at schools which previously sent few students to the flagship university--gain access due to the policy; the second--students outside the top tier at traditional “feeder” high schools--tend to lose access. We find that students in the first group see increases in college enrollment and graduation with some evidence of positive earnings gains 7-9 years after college. In contrast, students in the second group attend less selective colleges but do not see declines in overall college enrollment, graduation, or earnings. The Top Ten Percent rule, introduced for equity reasons, thus also seems to have improved efficiency. |
| JEL: | I23 I24 I26 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26821&r=all |
| By: | Lisa D. Cook; Maggie E.C. Jones; David Rosé; Trevon D. Logan |
| Abstract: | Jim Crow segregated African Americans and whites by law and practice. The causes and implications of the associated de jure and de facto residential segregation have received substantial attention from scholars, but there has been little empirical research on racial discrimination in public accommodations during this time period. We digitize the Negro Motorist Green Books, important historical travel guides aimed at helping African Americans navigate segregation in the pre-Civil Rights Act United States. We create a novel panel dataset that contains precise geocoded locations of over 4,000 unique businesses that provided non-discriminatory service to African American patrons between 1938 and 1966. Our analysis reveals several new facts about discrimination in public accommodations that contribute to the broader literature on racial segregation. First, the largest number of Green Book establishments were found in the Northeast, while the lowest number were found in the West. The Midwest had the highest number of Green Book establishments per black resident and the South had the lowest. Second, we combine our Green Book estimates with newly digitized county-level estimates of hotels to generate the share of non-discriminatory formal accommodations. Again, the Northeast had the highest share of non-discriminatory accommodations, with the South following closely behind. Third, for Green Book establishments located in cities for which the Home Owner’s Loan Corporation (HOLC) drew residential security maps, the vast majority (nearly 70 percent) are located in the lowest-grade, redlined neighborhoods. Finally, Green Book presence tends to correlate positively with measures of material well-being and economic activity. |
| JEL: | J15 L83 N32 N82 N92 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26819&r=all |
| By: | Maria De Paola (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Roberto Nisticò (Dipartimento di Economia, Statistica, Università di Napoli "Federico II"); Vincenzo Scoppa (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria) |
| Abstract: | TWe study the effect of a reduction in employment protection on fertility decisions. Using data from the Italian Labor Force Survey for the years 2013-2018, we analyze how the propensity to have a child has been affected by the 2015 Labor Market Reform, the so-called “Jobs Act”, which has essentially reduced the employment protection for large-firm employees and leaved largely unchanged that for small-firm ones. We employ a Difference-in-Differences identification strategy and compare the average change over time in fertility decisions of women employed in large firms with the average change experienced by women employed in small firms. We find that women exposed to the reduction in employment protection have a 1.4 percentage point lower probability of having a child than unexposed women. A battery of robustness checks confirms this finding. We document large heterogeneous effects by marital status, parity, geographic areas as well as by the level of education and wage. Our findings help understand the potential unintended consequences that reforms introducing more labor market flexibility have on fertility decisions by increasing insecurity on career prospects. |
| Keywords: | Fertility, Employment Protection Legislation, Labor Market Reform, Difference-inDifferences |
| JEL: | J13 J65 J41 M51 C31 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:202003&r=all |
| By: | Abeliansky, Ana (University of Göttingen); Algur, Eda (Harvard School of Public Health); Bloom, David E. (Harvard University); Prettner, Klaus (University of Hohenheim) |
| Abstract: | We explore future job creation needs under conditions of demographic, economic, and technological change. First, we estimate the implications for job creation in 2020–2030 of population growth, changes in labor force participation, and the achievement of plausible target unemployment rates, disaggregated by age and gender. Second, we analyze the job creation needs differentiated by country income group. Finally, we examine how accelerated automation could affect job creation needs over the coming decades. Overall, shifting demographics, changing labor force participation rates, reductions in unemployment to the target levels of 8 percent for youth and 4 percent for adults, and automation combine to require the creation of approximately 340 million jobs in 2020–2030. |
| Keywords: | demography, labor, unemployment |
| JEL: | J11 J21 J68 O30 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12962&r=all |
| By: | Peri, Giovanni (University of California, Davis); Rutledge, Zachariah (University of California, Davis) |
| Abstract: | Using data from the United States spanning the period between 1970 and 2017, we analyze the economic assimilation of subsequent arrival cohorts of Mexican and Central American immigrants, the more economically disadvantaged group of immigrants. We compare their wage and employment probability to that of similarly aged and educated natives across various cohorts of entry. We find that all cohorts started with a disadvantage of 40-45 percent relative to the average US native, and eliminated about half of it in the 20 years after entry. They also started with no employment probability disadvantage at arrival and they overtook natives in employment rates so that they were 5-10 percent more likely to be employed 20 years after arrival. We also find that recent cohorts, arriving after 1995, did better than earlier cohorts both in initial gap and convergence. We show that Mexicans and Central Americans working in the construction sector and in urban areas did better in terms of gap and convergence than others. Finally, also for other immigrant groups, such as Chinese and Indians, recent cohorts did better than previous ones. |
| Keywords: | Mexicans and Central Americans, economic assimilation, cohort analysis |
| JEL: | J3 J6 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12976&r=all |
| By: | Nóbrega, Valter |
| Abstract: | In this paper, we look at the relationship between Investment Specific Technological Change (ISTC) and optimal level of labor income progressivity. We develop an incomplete markets overlapping generations model that matches relevant features of the US economy and find that the observed drop in the relative price of investment since the 1980's leads optimal progressivity to increase. This result hinges on ISTC increasing the wage premium through an increase in the variance of the permanent component of labor income. This result is supported by recent findings in the literature that highlight the increasing role of the permanent component of labor income in the observed increase in income inequality. |
| Keywords: | Optimal taxation; Technological Change; Income Inequality |
| JEL: | E21 H21 J0 |
| Date: | 2020–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98917&r=all |
| By: | Trevon Logan (Ohio State University); Peter Temin (MIT) |
| Abstract: | This paper records the path by which African Americans were transformed from enslaved persons in the American economy to partial participants in the progress of the economy. The path was not monotonic, and we organize our tale by periods in which inclusiveness rose and fell. The history we recount demonstrates the staying power of the myth of black inferiority held by a changing white majority as the economy expanded dramatically. Slavery was outlawed after the Civil War, and blacks began to participate in American politics en masse for the first time during Reconstruction. This process met with white resistance, and black inclusion in the growing economy fell as the Gilded Age followed and white political will for black political participation faded. The Second World War also was followed by prosperity in which blacks were included more fully into the white economy, but still not completely. The Civil Rights Movement proved no more durable than Reconstruction, and blacks lost ground as the 20th century ended in the growth of a New Gilded Age. Resources that could be used to improve the welfare of whites and blacks continue to be spent on the continued repressions of blacks. |
| Keywords: | Economic History, Slaves, Freedmen, Jim Crow, Great Migration |
| JEL: | N31 N32 J15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:110&r=all |
| By: | Philip Armour; Melanie A. Zaber |
| Abstract: | Student loan debt in the US exceeds $1.3 trillion, and unlike credit card and medical debt, typically cannot be discharged through bankruptcy. Moreover, this debt has been increasing: the share of borrowers leaving school with more than $50,000 of federal student debt increased from 2 percent in 1992 to 17 percent in 2014. However, federal student loan debt discharge is available for disabled individuals through the Department of Education's Total and Permanent Disability Discharge (TPDD) mechanism through certification of a total and permanent disability. In July 2013, the TPDD expanded to include receipt of Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) as an eligible category for discharge, provided medical improvement was not expected. Using data from the Survey of Income and Program Participation (SIPP) matched to SSI and SSDI applications, we find that SSDI and SSI application rates increased among respondents with student loans relative to rates among those without student loans. Our estimates suggest the policy change raised the probability of applying for SSDI or SSI in a given quarter among student loan-holders by 50% (baseline rate per quarter is approximately 0.3%), generally increasing SSI and SSDI awards. However, these induced award recipients were unlikely to receive the disability designation necessary to obtain student loan discharge. Given that the geographic distributions of student loan indebtedness and historical SSDI/SSI program participation differ, there are strong implications for both the size and location of SSDI and SSI beneficiaries. Furthermore, these findings highlight the importance of learning from policy changes in programs that interact with SSDI and SSI to better understand the drivers of disability program participation. |
| JEL: | D14 H52 H81 I22 I38 J14 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26787&r=all |
| By: | Bloom, David E. (Harvard University); Khoury, Alexander (Harvard School of Public Health); Kufenko, Vadim (University of Hohenheim); Prettner, Klaus (University of Hohenheim) |
| Abstract: | Education, general health, and reproductive health are key indicators of human development. Investments in these domains can also promote economic growth. This paper argues for the importance of human development related investments based on i) a theoretical economic growth model with poverty traps, ii) a literature review of evidence that different human development related investments can promote growth, and iii) own empirical analyses that aim at estimating the relative contribution of different human development indicators to economic growth across heterogeneous growth regimes. Our results suggest the following associations: (i) a one-child decrease in the total fertility rate corresponds to a 2 percentage point (pp) increase in annual per capita GDP growth in the short run (5 years) and 0.5 pp higher annual growth in the mid to long run (35 years), (ii) a 10% increase in life expectancy at birth corresponds to a 1 pp increase in annual GDP per capita growth in the short run and 0.4 pp higher growth in the mid to long run, and (iii) a one-year increase in average educational attainment corresponds to a 0.7 pp increase in annual growth in the short run and 0.3 pp higher growth in the mid to long run. By contrast, infrastructure proxies are not significantly associated with subsequent growth in any of the models estimated. |
| Keywords: | human development, economic development |
| JEL: | I15 I25 J11 O15 O20 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12964&r=all |
| By: | Giovanni Dosi (Scuola Superiore Sant’Anna); Richard B. Freeman (Harvard University and NBER); Marcelo C. Pereira (University of Campinas and Scuola Superiore Sant’Anna); Andrea Roventini (Scuola Superiore Sant’Anna and OFCE, Sciences Po); Maria Enrica Virgillito (Scuola Superiore Sant’Anna) |
| Abstract: | This paper presents an Agent-Based Model (ABM) that seeks to explain the concordance of sluggish growth of productivity and of real wages found in macro-economic statistics, and the increased dispersion of firm productivity and worker earnings found in micro level statistics in advanced economies at the turn of the 21st century. It shows that a single market process unleashed by the decline of unionization can account for both the macro and micro economic phenomena, and that deunionization can be modeled as an endogenous outcome of competition between high wage firms seeking to raise productive capacity and low productivity firms seeking to cut wages. The model highlights the antipodal competitive dynamics between a “winner-takes-all economy” in which corporate strategies focused on cost reductions lead to divergence in productivity and wages and a “social market economy” in which competition rewards the accumulation of firm-level capabilities and worker skills with a more egalitarian wage structure. |
| Keywords: | Unionisation, productivity slowdown, market selection, reallocation, agent-based model |
| JEL: | J51 E02 E24 C63 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:2005&r=all |
| By: | Lampropoulou, Manto; Ladi, Stella |
| Abstract: | The importance of independent agencies aiming to regulate the market has increased during the crisis years. Existing agencies such as the Hellenic Telecommunications and Post Commission, the Regulatory Authority for Energy and the Hellenic Competition Committee have been strengthened while new ones such as the Regulatory Authority for Railways and the Regulatory Authority for Ports have been introduced. This has been the result of the increased pressure for privatizations and the liberalization of sectors of the economy (network industries) which used to be dominated by state-owned enterprises (DEKO). This paper aims to map the landscape of independent regulatory agencies (IRAs) in Greece and to provide an assessment their performance up to now. |
| Keywords: | independent regulatory agencies; regulatory reform; network industries; regulatory performance; Greece |
| JEL: | N0 R14 J01 |
| Date: | 2020–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103705&r=all |
| By: | Leonid Azarnert |
| Abstract: | This article analyzes the effect of public policy intervention in the production of health capital on fertility, private investment in children's health and education and human capital accumulation. I have used a growth model with endogenous fertility, in which the usual parental trade-off between the quantity and quality of their children is augmented with an additional factor that affects childrenÕs human capital, which is health. I analyze the overall society-wide effect of public policy intervention and derive a condition that determines precisely whether public provision of free health services increases or decreases the average level of human capital in the society. |
| Keywords: | fertility, health capital, human capital, growth |
| JEL: | D30 I12 J10 J13 J24 O10 O40 |
| Date: | 2020–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:eus:wpaper:ec2020_02&r=all |