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on Labour Economics |
| By: | Saporta-Eksten, Itay; Shurtz, Ity; Weisburd, Sarit |
| Abstract: | We study the effects of public pension systems on the retirement timing of older workers and, in turn, the health consequences of delaying retirement by those workers. Causal inference relies on a social security reform in Israel that shifted payments from husbands to their (non-working) wives, thereby substantially reducing the implied tax on the husband's employment while keeping overall household wealth constant. Using administrative social security data, we estimate extensive-margin labor supply elasticities w.r.t. the average net-of-tax rate of about 0.43 for men over 65. Using the reform to instrument for employment, we find that working an additional full year at old age decreases longevity. This mortality effect occurs after age 75 and is driven by workers holding blue-collar jobs. Finally, we evaluate the effect of the reform on earnings. The results imply a small value for an additional year of life, suggesting that workers underestimate the health cost of employment at older ages. |
| Keywords: | health; Labor Supply; Mortality; Social Security; tax reform |
| JEL: | H31 J10 J22 J26 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14769&r=all |
| By: | Carrillo-Tudela, Carlos; Visschers, Ludo |
| Abstract: | This paper studies the extent to which the cyclicality of gross and net occupational mobility shapes that of aggregate unemployment and its duration distribution. Using the SIPP, we document the relation between workers' (gross and net) occupational mobility and unemployment duration over the long run and business cycle. To interpret this evidence, we develop an analytically and computationally tractable stochastic equilibrium model with heterogenous agents and occupations as well as aggregate uncertainty. The model is quantitatively consistent with several important features of the US labor market: procyclical gross and countercyclical net occupational mobility, the large volatility of unemployment and the cyclical properties of the unemployment duration distribution, among others. Our analysis shows that "excess" occupational mobility due to workers' changing career prospects interacts with aggregate conditions to drive fluctuations of aggregate unemployment and its duration distribution. |
| Keywords: | Business cycle; Occupational Mobility; Rest; search; unemployment |
| JEL: | E24 E30 J62 J63 J64 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14697&r=all |
| By: | Ikeda, Kiyohiro; Takayama, Yuki; Thisse, Jacques-François |
| Abstract: | This paper explores the conditions for the emergence of a system of cities in a general equilibrium setting that accounts for the mobility of labor, transportation costs between cities and commuting costs within cities. Locations are equally distributed over a circular space. We find that the multiplicity of stable spatial equilibria is the rule and not the exception. Using the concept of stability areas to study the transition from one stable equilibrium to the next, we show that decreasing commuting or transportation costs generate equilibrium paths that may feature a megalopolis or hierarchical system of cities having different sizes. We confirm that transportation and commuting costs have opposite impacts on the space-economy. |
| Keywords: | Cities; Commuting costs; Economic Geography; Multiplicity of stable equilibria; Racetrack economy; Transportation Costs |
| JEL: | F12 R12 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14728&r=all |
| By: | Ajzenman, Nicolas; Aksoy, Cevat Giray; Guriev, Sergei |
| Abstract: | Does exposure to mass migration affect economic behavior, attitudes and beliefs of natives in transit countries? In order to answer this question, we use a unique locality-level panel from the 2010 and 2016 rounds of the Life in Transition Survey and data on the main land routes taken by migrants in 18 European countries during the refugee crisis in 2015. To capture the exogenous variation in natives' exposure to transit migration, we construct an instrument that is based on the distance of each locality to the optimal routes that minimize travelling time between the main origin and destination cities. We first show that the entrepreneurial activity of natives falls considerably in localities that are more exposed to mass transit migration, compared to those located further away. We then explore the mechanisms and find that our results are likely to be explained by a decrease in the willingness to take risks as well as in the confidence in institutions. We also document an increase in the anti-migrant sentiment while attitudes towards other minorities remained unchanged. We rule out the possibility of out-migration of natives or of trade-related shocks (potentially confounded with the mass-transit migration) affecting our results. Using locality-level luminosity data, we also rule out any effect driven by changes in economic activity. Finally, we find no statistically significant effects on other labor market outcomes, such as unemployment or labor force participation. |
| Keywords: | entrepreneurship; migration; refugee crisis |
| JEL: | D91 F22 L26 O10 O15 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14605&r=all |
| By: | Alessandra Michelangeli; John Östh; Umut Türk |
| Abstract: | This paper provides a comprehensive overview of intergenerational income mobility in Sweden. Intergenerational income mobility is considered in both relative and absolute terms, and the analysis is carried out at the individual and municipality-level. We use multilevel models to explore the correlation between upward mobility and social, economic and demographic characteristics of cities. The analyses is carried out on three subpopulations: offspring who live in a different municipality than their parents (mobile population); offspring who live in the municipality where they grew up (immobile population); offspring belonging to visible minority groups. Our results confirm those of previous studies showing a relatively high intergenerational mobility in Sweden compared to other European and North American countries. Substantial differences are observed across municipalities meaning that the particular combination of municipality attributes contributes to shaping the chance of status attainment among young generations. Highly mobile municipalities have more significant human capital, more residential segregation by income, more income inequality, and greater accessibility to jobs. |
| Keywords: | Intergenerational social mobility; multilevel models; cities. |
| JEL: | J62 R11 R12 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:443&r=all |
| By: | Andrea Camilli |
| Abstract: | To what extent labor market institutions can explain homeownership rate differences over time and across countries? Using data from 19 countries over fifty years, I find a positive correlation between employment rigidities and homeownership, and a negative correlation with wage rigidities. I rationalize these findings through a DSGE model where heterogeneous households face a housing tenure decision in presence of labor frictions. Labor rigidities affect housing tenure choice through their impact on employment and wage volatility. Labor institutions explain a relevant share of homeownership heterogeneity between countries and over time and labor reforms can interfere with policies targeted to increase homeownership. |
| Keywords: | Housing markets; Labor market institutions; DSGE; Labor reforms. |
| JEL: | J08 J30 J50 R20 R21 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:440&r=all |
| By: | Andrew E. Clark (Paris School of Economics and CNRS); Anthony Lepinteur (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: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-532&r=all |
| By: | Amaia Palencia-Esteban (Universidade de Vigo); Coral del RiÌ o (Universidade de Vigo) |
| Abstract: | The concentration of different social groups in certain occupations creates and perpetuates inequalities inside and outside the labor market. This paper quantifies the economic and well-being consequences of occupational segregation by gender and migration status in 12 European countries. The effects are negative for most foreign workers, especially for women, who always derive larger welfare losses than men. In general, these losses are remarkably high in southeast Europe and smaller in the northwest, whereas immigrant men derive very small gains in Portugal and the UK. Female natives are also deprived in most countries. However, immigrants’ characteristics, particularly education, explain a significant part of these geographical disparities. In fact, while the UK is in a somewhat better position thanks to its immigrants' higher educational levels, the counterfactual analysis reinforces Portugal's good position, reflecting higher levels of labor market integration among its immigrant population. |
| Keywords: | Occupational segregation, welfare, gender, immigration, Europe. |
| JEL: | D63 F22 J10 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-533&r=all |
| By: | António R. Antunes; Valerio Ercolani |
| Abstract: | During the last three decades in the US, the older part of the population has become significantly richer, in contrast with the younger part, which has not. We show that demographics account for a significant part of this intergenerational wealth gap rise. In particular, we develop a general equilibrium model with an OLG structure which is able to mimic the wealth distribution of the household sector in the late 1980s, conditional on its age structure. Inputting the observed rise of life expectancy and the fall in population growth rate into the model generates an increase in wealth inequality across age groups which is between one third and one half of that actually observed. Furthermore, the demographic factors help explain the change of the wealth concentration conditional on the age structure; for example, they account for more than one third of the rise of the share of the elderly within the top 5% wealthiest households. Finally, consistent with a stronger life-cycle motive and an increase of the capital-labor ratio, the model produces an interest rate fall of 1 percentage point. |
| JEL: | E21 J1 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w202009&r=all |
| By: | Bárcena‐Martín, Elena (University of Malaga, Dept. Applied Economics); Medina‐Claros, Samuel (University of Malaga, Dept. Applied Economics); Pérez‐Moreno, Salvador (UNU-MERIT, Maastricht University, and University of Malaga, Dept. Applied Economics) |
| Abstract: | One of the most challenging gender gaps in the Global South remains in the economic sphere. This paper examines how public institutional quality affects the gender gap in economic participation and opportunities in 74 developing and emerging countries during the period 2006-2016. We find that the quality of public institutions is closely associated with the economic gender gap. Specifically, the protection of property rights, security guarantees and government efficiency seem to be the main factors associated to lower values of the economic gender gap. Nevertheless, public institutions do not matter equally throughout economically backward countries. Whereas in emerging countries, particularly in Latin America and the Caribbean, a broad variety of institutional aspects, including undue influence on judicial and government decisions, are closely related to the economic gender gap, in low-income developing countries, such as Sub-Saharan countries, the problems of ethics and corruption stand out as a key element against economic gender equality. Some significant policy implications are derived from our findings on the potential of public institutions reforms to reduce economic gender gap. |
| Keywords: | economic gender gap, economic participation, economic opportunities, public institutions, developing and emerging countries |
| JEL: | E02 J16 O34 |
| Date: | 2020–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2020025&r=all |
| By: | Zbigniew Mogila; Patricia C. Melo; José M. Gaspar |
| Abstract: | This paper investigates empirically the impact of labour-related income inequality on income mobility in French and Spanish NUTS2 regions. We explore whether the negative relation between income inequality and mobility - known as the Great Gatsby Curve - is also present in the short and medium run. Using longitudinal microdata from the EU-SILC, we construct NUTS2-level measures of relative income mobility from transition matrices between income deciles for 2-year and 4-year income trajectories and measures of income inequality based on the Gini index and inter-decile ratios. We then combine these measures with other regional-level factors and implement regression models to test the relation between income inequality and income mobility. The regional perspective allows us to investigate the extent to which territorial heterogeneity may also affect income mobility. The findings from the regression analyses do not provide evidence of a significant relationship between income mobility and income inequality,at least when considering mobility over the short-to-medium term (i.e. up to 4 years). |
| Keywords: | income inequality, income mobility, territorial heterogeneity, the Great Gatsby Curve |
| JEL: | D31 J62 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp01342020&r=all |
| By: | Lipowski, Cäcilia; Wilke, Ralf A.; Koebel, Bertrand M. |
| Abstract: | Birth rates differ strongly across European states, despite the deep economic harmonisation process related to European integration. This study uses large scale administrative data from France and Germany to analyse and directly compare fertility patterns in two major European economies over a period of 15 years. Strong evidence is found that opportunity costs play a role in fertility decisions, and for a positive income effect for females with high earnings. Females in Germany adapt their fertility behaviour more strongly in response to economic incentives than their counterpartsin France. This is explained by pronounced differences in the national approaches to childcare support. |
| Keywords: | family policy,fertility behaviour,count data,panel data |
| JEL: | J13 J11 C23 C25 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20025&r=all |
| By: | Luiza Nassif Pires |
| Abstract: | This paper presents a critique of Karl Marx's labor theory of value and his theory of falling profit rates from an intersectional political economy perspective. Specifically, I rely on social reproduction theory to propose that Marx-biased technical change disrupts the social order and leads to competition between workers. The bargaining power of workers cannot be dissociated from class struggle within the working class. I argue that technical change increases social conflict, which can counterbalance the long-run tendency of the profit rate to fall. The conclusion is that class struggle is multilayered and endogenous to the process of accumulation. |
| Keywords: | Political Economy; Social Reproduction Theory; Gender and Racial Economics; Labor Unions; Technical Change |
| JEL: | B54 B51 J51 O33 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_957&r=all |
| By: | Couch, Kenneth A. (University of Connecticut); Fairlie, Robert W. (University of California, Santa Cruz); Xu, Huanan (Indiana University) |
| Abstract: | COVID-19 abruptly impacted the labor market with the unemployment rate jumping to 14.7 percent less than two months after state governments began adopting social distancing measures. Unemployment of this magnitude has not been seen since the Great Depression. This paper provides the first study of how the pandemic impacted minority unemployment using CPS microdata through April 2020. African-Americans experienced an increase in unemployment to 16.6 percent, less than anticipated based on previous recessions. In contrast, Latinx, with an unemployment rate of 18.2 percent, were disproportionately hard hit by COVID-19. Adjusting for concerns of the BLS regarding misclassification of unemployment, we create an upper-bound measure of the national unemployment rate of 26.5 percent, which is higher than the peak observed in the Great Depression. The April 2020 upper-bound unemployment rates are an alarming 31.8 percent for blacks and 31.4 percent for Latinx. Difference-in-difference estimates suggest that blacks were, at most, only slightly disproportionately impacted by COVID-19. Non-linear decomposition estimates indicate that a slightly favorable industry distribution partly protected them being hit harder by COVID-19. The most impacted group are Latinx. Difference-in-difference estimates unequivocally indicate that Latinx were disproportionately impacted by COVID-19. An unfavorable occupational distribution and lower skills contributed to why Latinx experienced much higher unemployment rates than whites. These findings of early impacts of COVID-19 on unemployment raise important concerns about long-term economic effects for minorities. |
| Keywords: | unemployment, inequality, labor, race, minorities, COVID-19, coronavirus, shelter-in-place, social distancing |
| JEL: | J6 J7 J15 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13264&r=all |
| By: | Ahmed Lahsen, Amina; Piper, Alan T.; Thiele, Ida-Anna |
| Abstract: | One reason often put forward for South Korea’s rapid economic growth has been the rising level of educational attainment of its workforce. Correspondingly, the proportion of Koreans who complete tertiary education has also rapidly increased (and is also considerably higher than the OECD average). Such increases raise the possibility of overeducation if the amount of jobs which require such education do not increase at a similar pace. Among the consequences of overeducation are reduced life satisfaction and underutilised human capital. Given that Korean females are better educated than males, and they also face more discrimination in the labour market, the consequences of overeducation are likely to differ by gender. Using Korean panel data and both a subjective and objective measure of overeducation, the results are consistent with females having lower aspirations despite their high levels of education, and indicate that a more female friendly labour market could address the country’s currently underutilised human capital, for the benefit of the females themselves, as well as males, and the Korean economy. |
| Keywords: | Overeducation; gender; gender inequality; income; life satisfaction; Korea. |
| JEL: | I26 I31 J0 N35 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100616&r=all |
| By: | Rebecca Brough (Wilson Sheehan Lab for Economic Opportunities, University of Notre Dame); Matthew Freedman (Department of Economics, University of California-Irvine); David C. Phillips (Department of Economics, University of Notre Dame) |
| Abstract: | We document the magnitudes of and mechanisms behind socioeconomic differences in travel behavior during the Covid-19 pandemic. We focus on King County, Washington, one of the first places in the U.S. where Covid-19 was detected. We leverage novel and rich administrative and survey data on travel volumes, modes, and preferences for different demographic groups. Large average declines in travel, and in public transit use in particular, due to the pandemic and related policy responses mask substantial heterogeneity across socioeconomic groups. Travel intensity declined considerably less among less-educated and lower-income individuals, even after accounting for mode substitution and variation across neighborhoods in the impacts of public transit service reductions. The relative inability of less-educated and lower-income individuals to cease commuting explains at least half of the difference in travel responses across groups. |
| Keywords: | Covid-19; Coronavirus; Mobility; Transportation; Commuting; Inequality |
| JEL: | R41 J61 H12 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:192007&r=all |
| By: | Battistin, Erich; Becker, Sascha O.; Nunziata, Luca |
| Abstract: | We investigate how changes in the sex ratio induced by World War II affected the bargaining patterns of Italian men in the marriage market after the war. Marriage data from the first wave of the Italian Household Longitudinal Survey (1997) are matched with newly digitized information on war casualties coming from Italian National Bureau of Statistics. We find that men in post-war marriages were better off in terms of their spouse's education, this gain amounting to about half a year of education. By considering heterogeneity across provinces, we find that the effects were more pronounced in more rural provinces, mountainous provinces, and those with a higher share of population employed in agriculture. This suggests that here, the shock provided for a more fundamental change in marriage patterns compared to urban, lower-lying, and less agricultural provinces where marriage markets might have been more flexible to begin with. |
| Keywords: | education; Marriage; Sex ratio; World War II |
| JEL: | J12 N34 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14698&r=all |
| By: | Richard V. Burkhauser (Cornell University); Nicolas Herault (University of Melbourne); Stephen P. Jenkins (London School of Economics); Roger Wilkins (University of Melbourne) |
| Abstract: | The share of women in the top 1\% of the UK's income distribution has been growing over the last two decades (as in several other countries). Our first contribution is to account for this secular change using regressions of the probability of being in the top 1\%, fitted separately for men and women, in order to contrast between the sexes the role of changes in characteristics and changes in returns to characteristics. We show that the rise of women in the top 1\% is primarily accounted for by their greater increases (relative to men) in the number of years spent in full-time education. Although most top income analysis uses tax return data, we derive our findings taking advantage of the much more extensive information about personal characteristics that is available in survey data. Our use of survey data requires justification given survey under-coverage of top incomes. Providing this justification is our second contribution. |
| Keywords: | Top 1%; top incomes; inequality; gender differences; survey under-coverage. |
| JEL: | D31 J16 C81 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-544&r=all |
| By: | Freund, Lukas; Rendahl, Pontus |
| Abstract: | This paper studies the role of uncertainty in a search-and-matching framework with risk-averse households. A mean-preserving spread to future productivity contracts current economic activity even in the absence of nominal rigidities, although the effect is reinforced by the presence of the latter. That is, uncertainty shocks carry both contractionary demand- and supply effects. The reason is that a more uncertain future increases the precautionary behavior of households, which reduces interest rates and contracts demand. At the same time, as future asset prices becomes more volatile and positively covary with aggregate consumption, households demand a larger risk premium, which puts negative pressure on current asset values and thereby contracts supply. Thus, in comparison to a pure negative demand shock, an uncertainty shock puts less deflationary pressure on the economy and, as a result, renders a flatter Phillips curve. |
| Keywords: | inflation; search frictions; uncertainty; unemployment |
| JEL: | E21 E32 J64 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14690&r=all |
| By: | Edoardo Di Porto (Università di Napoli, INPS and CSEF.); Paolo Naticchioni (Università di Roma Tre, INPS, AIEL and IZA); Vincenzo Scrutinio (Centre for Economic Performance, IZA and Università di Bologna) |
| Abstract: | This paper investigates the effect of the lockdown on COVID-19 infections. After the 22nd of March 2020, the Italian government shut down many economic activities to limit the contagion. Sectors deemed essentials for the economy were, however, allowed to remain active. We exploit the distribution of the density of essential workers across provinces and rich administrative data in a difference in difference framework. We find that a standard deviation increase in essential workers per square kilometre leads to an additional daily registered case per 100,000 inhabitants. This is a sizeable impact, and it represents about 18% of the daily increase in COVID-19 cases after the 22nd of March. Back of envelope computations suggest that the about one third of the cases considered could be attributed to the less stringent lockdown for essential sectors, with an additional 107 million Euros in direct expenditure. Although this assessment should be taken with caution, this suggests that the less stringent lockdown came at moderate public health related economic costs. In addition, we find that these effects are heterogeneous across sectors, with services having a much larger impact than Manufacturing, while there are only small differences across geographic areas. These results are stable across a wide range of specifications and robustness check. |
| Keywords: | COVID-19, lockdown, essential sectors |
| JEL: | J18 I18 |
| Date: | 2020–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:569&r=all |