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on Labour Economics |
| By: | DellaVigna, Stefano; Heining, Jörg (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schmieder, Johannes F.; Trenkle, Simon (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "The job finding rate of Unemployment Insurance (UI) recipients declines in the initial months of unemployment and then exhibits a spike at the benefit exhaustion point. A range of theoretical explanations have been proposed, but those are hard to disentangle using data on job finding alone. To better understand the underlying mechanisms, we conducted a large text-message-based survey of unemployed workers in Germany. We surveyed 6,800 UI recipients twice a week for 4 months about their job search effort. The panel structure allows us to observe how search effort evolves within individual over the unemployment spell. We provide three key facts: 1) search effort is flat early on in the UI spell, 2) search effort exhibits an increase up to UI exhaustion and a decrease thereafter, 3) UI recipients do not appear to time job start dates to coincide with the UI exhaustion point. A model of reference-dependent job search can explain these facts well, while a standard search model with unobserved heterogeneity struggles to explain the second fact. The third fact also leaves little room for a model of storable offers to explain the spike." (Author's abstract, IAB-Doku) ((en)) Additional Information Online Appendix |
| JEL: | J64 J65 D91 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:202013&r=all |
| By: | Jose Maria Barrero; Nicholas Bloom; |
| Abstract: | Drawing on firm-level expectations at a one-year forecast horizon in the Survey of Business Uncertainty (SBU), we construct novel, forward-looking reallocation measures for jobs and sales. These measures rise sharply after February 2020, reaching rates in April that are 2.4 (3.9) times the pre-COVID average for jobs (sales). We also draw on special questions in the April SBU to quantify the near-term impact of the COVID-19 shock on business staffing. We find 3 new hires for every 10 layoffs caused by the shock and estimate that 42 percent of recent layoffs will result in permanent job loss. Our survey evidence aligns well with anecdotal evidence of large pandemic-induced demand increases at some firms, with contemporaneous evidence on gross business formation, and with a sharp pandemic-induced rise in equity return dispersion across firms. After developing the evidence, we consider implications of our evidence for the economic outlook and for policy responses to the pandemic. Unemployment benefit levels that exceed worker earnings, policies that subsidize employee retention, occupational licensing restrictions, and regulatory barriers to business formation will impede reallocation responses to the COVID-19 shock. |
| JEL: | D22 D84 E24 H12 H25 J21 J62 J63 J65 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27137&r=all |
| By: | Li, Jinhu (Deakin University); Menon, Nidhiya (Brandeis University) |
| Abstract: | Few studies have examined the "echo effect" of early-life shocks related to prenatal malnutrition, that is, whether the legacy of such shocks is transmitted to the next generation. This study addresses this gap by leveraging extreme malnutrition during the Great Leap Forward famine in China, and by examining the intergenerational consequences of the famine on those who were not directly impacted. Using a difference-in-differences framework, we estimate the causal effect of the famine on a wide range of outcomes of children of mothers who were exposed in-utero including income, education, employment, and intergenerational income mobility; indicators that have not been considered in detail in the literature. We further contribute by using a refined measure of famine exposure at the prefecture level in rural areas, and by exploiting rich data on those directly affected and their children. We find that on average, the famine had negative echo effects on second-generation outcomes. These echo effects are primarily due to the adverse impacts on daughters, perhaps reflecting a combination of positive selection of sons born to mothers exposed to prenatal malnutrition during the famine and cultural aspects such as son preference. Our results withstand a battery of robustness and specification checks. |
| Keywords: | foetal origins, great leap forward famine, malnutrition, intergenerational impacts, labour market, China |
| JEL: | I15 J62 I32 P36 N45 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13171&r=all |
| By: | Bergemann, Annette (University of Bristol); Riphahn, Regina T. (Friedrich-Alexander University) |
| Abstract: | We study the short, medium, and long run employment effects of a substantial change in the parental leave benefit program in Germany. In 2007, a means-tested parental leave transfer program, which had paid benefits for up to two years, was replaced by an earnings related transfer, which paid benefits for up to one year. The reform generated winners and losers with heterogeneous response incentives. We find that the reform sped up the labor market return of all mothers after benefit expiration. Likely pathways for this substantial reform effect are changes in social norms and mothers' preferences for economic independence |
| Keywords: | female labor supply; maternal labor supply; parental leave; parental leave benefit; child-rearing benefit |
| JEL: | J13 J21 |
| Date: | 2020–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_006&r=all |
| By: | Aso, Hiroki |
| Abstract: | Abstract This paper analyzes the interactions between demographic transition and economic development, focusing on two child costs: time child-rearing cost and physical child-rearing cost. To analyze the interactions, we construct two overlapping generations model: human capital accumulation model and physical capital accumulation model. The two child costs, in particular, physical child cost plays crucial role in appearing non-monotonous fertility dynamics since it generates income effect. In both growth models, increase in physical child cost decreases the fertility, while it promotes economic development by dilution effect. Since increase in physical child cost encourages to start investing in human capital, it facilitates more rapid the timing of demographic transition in human capital accumulation model and therefore it gets the economy out of development trap. In contrast, it slows down the timing in physical capital accumulation model due to increase in income effect. |
| Keywords: | Demographic transition, Economic development, Child costs, Overlapping generations model. |
| JEL: | I25 J11 J13 O11 |
| Date: | 2020–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99966&r=all |
| By: | Alessandra Colombelli (DIGEP, Politecnico di Torino); Elena Grinza (LUISS University); Valentina Meliciani (Department of Management, University of Turin); Mariacristina Rossi (Collegio Carlo Alberto) |
| Abstract: | In this paper, we examine whether the existing stock of migrant firms induces more new firms of the same co-ethnic group in the same sector and province. We do so by analyzing the number of new firms created each year by country of origin, sector, and province, drawing on administrative data of the population of individual entrepreneurs observed over the period 2002-2013. We find support for a strong attractiveness (pulling) effect. We also find that this effect significantly differs by gender: female migrant entrepreneurs show lower reactiveness to the existing stock of firms compared to their male counterparts. We finally show that such gender differences are stronger for migrants coming from more gender-unequal countries. On the contrary, the degree of gender inequality in the region of destination does not matter. |
| Keywords: | Migrant entrepreneurship, pulling effect, gender differences, gender inequality, country of origin, region of destination |
| JEL: | L26 J15 J16 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2020-05&r=all |
| By: | Briscese, Guglielmo (University of Chicago); Zanella, Giulio (University of Adelaide); Quinn, Veronica (Macquarie University, Sydney) |
| Abstract: | Finding a job requires effective search skills to engage successfully with employers with vacancies. In a field experiment, we test a website that supplements such search skills by providing editable resume and cover letter templates as well as tips on how to look and apply for jobs. Exposure to the website was randomized among about 2,700 job seekers in Australia. The intervention increased job-finding rates, particularly among job seekers aged 35-50 (up to 8 percentage points), with larger effects for women within this age group (up to 10 percentage points). The quality of job matches improved too. |
| Keywords: | online job search assistance, search skills, active labor market policy |
| JEL: | J08 J64 J68 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13170&r=all |
| By: | Laura Montenovo; Xuan Jiang; Felipe Lozano Rojas; Ian M. Schmutte; Kosali I. Simon; Bruce A. Weinberg; Coady Wing |
| Abstract: | We make several contributions to understanding how the COVID-19 epidemic and policy responses have affected U.S. labor markets, benchmarked against two previous recessions. First, monthly Current Population Survey (CPS) data show greater declines in employment in March 2020 (relative to February) for Hispanics, workers aged 20 to 24, women, those with large families, and less-educated workers. Second, we show that job loss was larger in occupations that require more interpersonal contact and that cannot be performed remotely. Third, occupational sorting explains about half of the Hispanic/non-Hispanic gap in employment outcomes, but less than a quarter of the employment gaps between other groups. Finally, the labor market effects of the epidemic are widespread across the country and do not appear to be stronger in states that were hit early, nor in states that were earlier in limiting social and economic activity. We also address measurement issues known to have affected the March CPS. In particular, non-response increased dramatically, especially among the incoming rotation groups. Some of the increase appears non-random, but is not likely to be driving our conclusions. We also demonstrate the importance of tracking workers who report having a job but being absent, in addition to tracking employed vs. unemployed workers. Our work shows trends in employment disparities that arise in the very early days of the epidemic and its policy responses. Data from future months will improve the accuracy of our estimates and provide further evidence on the labor market disparities that have already emerged. |
| JEL: | I1 J0 J08 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27132&r=all |
| By: | Sedai, Ashish Kumar (Department of Economics, Colorado State University); Nepal, Rabindra (Department of Acconting Economics and Finance, University of Wollongong); Jamasb, Tooraj (Department of Economics, Copenhagen Business School) |
| Abstract: | This study examines the effect of quality of electrification on empowerment of women in terms of economic autonomy, agency, mobility, decision-making abilities, and time allocation in fuel collection in India. It moves beyond the consensus of counting electrified households as a measure of progress in gender parity, and analyzes how the quality of electrification affects women’s intra-household bargaining power, labor sup-ply and fuel collection time. We develop a set of indices using principal component analysis from a large cross-section of gender-disaggregated survey. We use two stage least squares instrumental variables regression to assess the causal effect of access and hours of electricity on women’s empowerment using geographic instrumental variables along with district and caste fixed effects. The results show that quality of electrification has significant positive effects on all empowerment indices. However, the effect differs at the margin of deficiency, location, living standards and education. The study recommends revisiting the paradigm of access to electrification and women empowerment by focusing on the quality of not only extensive but also intensive electrification to enhance life and economic opportunities for women and their households. |
| Keywords: | Women empowerment; Quality of electrification; Instrumental variables |
| JEL: | D13 D63 H42 Q43 |
| Date: | 2020–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2020_010&r=all |
| By: | Pencavel, John (Stanford University) |
| Abstract: | Income inequality has been lower in periods when trade unionism has been strong. Using observations on wages by occupation, by geography, and by gender in collective bargaining contracts from the 1940s to the 1970s, patterns in movements of wage differentials are revealed. As wages increased, some contracts maintained relative wage differentials constant, some maintained absolute differences in wages constant, others combined these two patterns, and some did not reveal an obvious pattern. The patterns persisted even as price inflation increased in the 1970s. The dominant pattern implies a reduction in inequality as usually measured. |
| Keywords: | income inequality, wage differentials, bargaining, trade unions |
| JEL: | J31 J51 N32 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13175&r=all |
| By: | Clark, Andrew E. (Paris School of Economics); Lepinteur, Anthony (University of Luxembourg) |
| Abstract: | Job insecurity can have wide-ranging consequences outside of the labour market. We here argue that it reduces fertility amongst the employed. The 1999 rise in the French Delalande tax, paid by large private firms when they laid off workers aged over 50, produced an exogenous rise in job insecurity for younger workers in these firms. A difference-in-differences analysis of French ECHP data reveals that this greater job insecurity for these under-50s significantly reduced their probability of having a new child by 3.9 percentage points. Reduced fertility is only found at the intensive margin: job insecurity reduces family size but not the probability of parenthood itself. Our results also suggest negative selection into parenthood, as this fertility effect does not appear for low-income and less-educated workers. |
| Keywords: | employment protection, layoff tax, perceived job security, difference-in-differences, fertility |
| JEL: | I38 J13 J18 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13144&r=all |
| By: | Barbara Petrongolo; Maddalena Ronchi |
| Abstract: | In this paper we discuss some strands of the recent literature on the evolution ofgender gaps and their driving forces. We will revisit key stylized facts about gendergaps in employment and wages in a few high-income countries. We then discuss andbuild on one gender-neutral force behind the rise in female employment, namely therise of the service economy, which is also closely related to the polarization of femaleemployment and to the geographic distribution of jobs, which is expected to be espe-cially relevant for female employment prospects. We nally turn to currently debatedcauses of remaining gender gaps and discuss existing evidence on labor market con-sequences of women's heavier caring responsibilities in the household. In particular,we highlight how women's stronger distaste for commuting time may feed into genderpay gaps by making women more willing to trade o steeper wage gains for shortercommutes. |
| Keywords: | gender gaps; industry structure; local labor markets. |
| JEL: | J16 J21 J31 J16 |
| Date: | 2020–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:901&r=all |
| By: | Deven E. Carlson; Alex Schmidt; Sarah Souders; Barbara L. Wolfe |
| Abstract: | In this paper, we leverage the random assignment of a need-based financial aid grant offer—the Fund for Wisconsin Scholars (FFWS) grant—and several sets of administrative records to provide experimental evidence on the effects of the grant offer on students’ in-state employment and earnings. For students in four-year universities, our results demonstrate significant employment reductions in the two years immediately following the aid offer as well as in the sixth, seventh, and eighth after receiving the randomized grant offer. We also find the aid offer to reduce these students’ in-state earnings throughout the full eight-year period we study. However, we show that the aid offer increases student grade point average, suggesting that the employment and earnings reductions during students’ in-college years are attributable to a reallocation of time and effort away from employment and toward coursework. For students’ post-college years, we provide suggestive evidence that the reductions are attributable to a combination of two mechanisms: 1) Reduced loan debt offering greater financial flexibility when selecting among employment options, and 2) Offer-induced outstate migration. We find little evidence that the FFWS grant offer affects the labor market outcomes of students in two-year institutions, although the effects for students in technical colleges are significantly more positive than the effects for students in two-year colleges in the University of Wisconsin System. |
| JEL: | I23 I24 I28 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27125&r=all |
| By: | Andrew Ellul (Indiana University and CSEF); Marco Pagano (Università di Napoli Federico II, CSEF, EEIF, CEPR and ECGI); Annalisa Scognamiglio (Università di Napoli Federico II and CSEF) |
| Abstract: | Employees in finance are known to earn higher wages and returns to talent than non-finance workers since the 1990s, suggesting that finance may have attracted talent at the expense of other industries. However, the allocation of talent is likely to respond to differences in career paths across industries, not in wages at a given date. We analyze the careers of 9,964 individuals from 1980 to 2017 based on their resumes, and find that they tend to remain in the same industry for most of their working lives, consistently with them choosing occupations based on comparisons of entire career paths. Comparing various aspects of careers – levels, slopes, PDV and risk of pay profiles – we document that finance as a whole offers a career premium compared to manufacturing and high tech, through higher and steeper pay profiles. This however masks significant diversity within finance: while asset managers enjoy a large career premium and no commensurate career risks, the opposite applies to banking and insurance employees. Furthermore, relative to manufacturing, the asset management career premium has risen for cohorts entering soon before and during the financial crisis, even after controlling for career risk, while the high- tech career premium has become commensurately large for the latest cohorts. |
| Keywords: | careers, hedge funds, asset managers, market discipline, scarring effects. |
| JEL: | G20 G23 J24 J62 J63 |
| Date: | 2020–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:561&r=all |
| By: | Martin Andersen; Johanna Catherine Maclean; Michael F. Pesko; Kosali I. Simon |
| Abstract: | We study the effects of the temporary federal paid sick leave mandate that became effective April 1st, 2020 on ‘social distancing,’ as proxied by physical mobility behavior gleaned from cellular devices. The national paid leave policy was implemented in response to the COVID-19 outbreak and provided many private and many public employees, including individuals employed in the gig economy, with up to two weeks of paid leave. We study the early impact of the federal paid sick leave policy using interrupted time series analyses and difference-in-differences methods leveraging pre-FFCRA county-level differences in mobility. Our proxies for the ability to social distance are the share of cellular devices that are located in the workplace eight or more hours per day (‘full-time work’) and leave the home for less than one hour per day (‘at home’) in each county. Our findings suggest that the federal mandate decreased our full-time work proxy and increased our at home proxy. In particular, we find an initial decrease in working full-time of 17.7% and increase in staying home of 7.5%, with effects dissipating within three weeks. Given that up to 47% of employees are covered by the federal mandate, our effect sizes are arguably non-trivial. |
| JEL: | H0 I1 J0 K0 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27138&r=all |
| By: | Annette Alstadsæter; Bernt Bratsberg; Gaute Eielsen; Wojciech Kopczuk; Simen Markussen; Oddbjorn Raaum; Knut Røed |
| Abstract: | Using real-time register data we document the magnitude, dynamics and socio-economic characteristics of the crisis-induced temporary and permanent layoffs in Norway. We find evidence that the effects of social distancing measures quickly spread to industries that were not directly affected by policy. Close to 90% of layoffs are temporary, although this classification may change as the crisis progresses. Still, there is suggestive evidence of immediate stress on a subset of firms that manifests itself in permanent rather than temporary layoffs. We find that the shock had a strong socio-economic gradient, hit a financially vulnerable population, and parents with younger children, and was driven by layoffs in smaller, less productive, and financially weaker firms. Consequently though, the rise in unemployment likely overstates the loss of output associated with the layoffs by about a third. |
| JEL: | E24 J11 J4 J6 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27131&r=all |
| By: | Marcin Bielecki (Narodowy Bank Polski); Michał Brzoza-Brzezina (Narodowy Bank Polski); Marcin Kolasa (Marcin Kolasa) |
| Abstract: | This paper uses a life-cycle model with a rich asset structure, and standard nominal and real rigidities, to investigate the distributional consequences of traditional monetary policy and communication about its future course (forward guidance). The model is calibrated to the euro area using both macroeconomic aggregates and microeconomic evidence from the Household Finance and Consumption Survey. We show that the lifecycle profiles of income and asset accumulation decisions are important determinants of redistributive effects of both anticipated and unanticipated monetary shocks. Even though house prices respond strongly to monetary policy easing, hurting young households, their distributional effects are dwarfed by changes in returns on nominal assets and labor market revival that work in the opposite direction. Both anticipated and unanticipated policy easing hence redistribute welfare from older to younger generations. The scale of this redistribution is larger for forward guidance if nominal interest rates are constrained by the effective lower bound. |
| Keywords: | monetary policy, forward guidance, life-cycle models, redistribution |
| JEL: | E31 E52 J11 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:327&r=all |
| By: | Lange, Fabian (McGill University); Papageorgiou, Theodore (Boston College) |
| Abstract: | Exploiting results from the literature on non-parametric identification, we make three methodological contributions to the empirical literature estimating the matching function, commonly used to map unemployment and vacancies into hires. First, we show how to non-parametrically identify the matching function. Second, we estimate the matching function allowing for unobserved matching efficacy, without imposing the usual independence assumption between matching efficiency and search on either side of the labor market. Third, we allow for multiple types of jobseekers and consider an "augmented" Beveridge curve that includes them. Our estimated elasticity of hires with respect to vacancies is procyclical and varies between 0.15 and 0.3. This is substantially lower than common estimates suggesting that a significant bias stems from the commonly-used independence assumption. Moreover, variation in match efficiency accounts for much of the decline in hires during the Great Recession. |
| Keywords: | matching function, search, unemployment, hiring, vacancy |
| JEL: | E24 J6 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13177&r=all |
| By: | Antoine Bommier (ETH Zurich); Daniel Harenberg (ETH Zurich); François Le Grand (EMLyon Business School); Cormac O'Dea (Cowles Foundation, Yale University) |
| Abstract: | We analyze lifecycle saving strategies using a recursive utility model calibrated to match empirical estimates for the value of a statistical life. We show that, with a positive value of life, risk aversion reduces savings and annuity purchase. Risk averse agents are willing to make an early death a not-so-adverse outcome by enjoying greater consumption when young and bequeathing wealth in case of death. We also ï¬ nd that greater risk aversion lowers stock market participation. We show that this model can rationalize low annuity demand while also matching empirically documented levels of wealth and private investments in stocks. Our ï¬ ndings stand in contrast to studies that implicitly assume a negative value of life. |
| Keywords: | Recursive utility, Lifecycle model, Value of life, Risk aversion, Saving choices, Portfolio choices, Annuity puzzle |
| JEL: | D91 G11 J14 J17 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2231&r=all |