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on Labour Economics |
| By: | Isabel Cairo; Shigeru Fujita; Camilo Morales-Jimenez |
| Abstract: | Using a representative-household search and matching model with endogenous labor force participation, we study the cyclicality of labor market transition rates between employment, unemployment, and nonparticipation. When interpreted through the lens of the model, the behavior of transition rates implies that the participation margin is strongly countercyclical: the household’s incentive to send more workers to the labor force falls in expansions. We identify two key channels through which the model delivers this result: (i) the procyclical values of non-market activities and (ii) wage rigidity. The smaller the value of the extensive-margin labor supply elasticity is, the stronger the first channel is. Wage rigidity helps because it mitigates increases in the return to market work during expansions. Our estimated model replicates remarkably well the behavior of transition rates between the three labor market states and thus the stocks, once these two features are in place. |
| Keywords: | Labor force participation; unemployment; labor supply elasticity |
| JEL: | E24 J64 |
| Date: | 2020–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:88122&r=all |
| By: | Barth, Erling (Institute for Social Research, Oslo); Finseraas, Henning (Norwegian University of Science and Technology (NTNU)); Kjelsrud, Anders (University of Oslo); Moene, Karl Ove (University of Oslo) |
| Abstract: | Coordination in collective wage setting can constrain potential monopoly gains to unions in non-traded-goods industries. Countries with national wage coordination can thus stabilize overall employment against fluctuations and shocks in the world economy. We test this theory by exploring within-country variation in exposure to competition from China in 13 European countries. Our causal estimates demonstrate that in countries with uncoordinated wage setting, regions with higher import exposure from China experienced a marked fall in employment, while countries with wage-coordination experienced no such employment effects. We test our main mechanism against other explanations, and show that our findings are robust to alternative measures of wage coordination, industry classifications, and trade exposure. |
| Keywords: | wage-coordination, employment, globalization, China-shock |
| JEL: | F16 F66 J51 J60 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13259&r=all |
| By: | Guven, Cahit (Deakin University); Tong, Lan Anh (Foreign Trade University Vietnam); Yuksel, Mutlu (Dalhousie University) |
| Abstract: | This paper examines the efficacy of Australian points system in a family context among working-age permanent resident immigrants who arrived between 2000 and 2011 when there was a major focus on skills selection. 67% of these immigrants were granted a skilled visa while 25% hold a spousal visa (spouses of Australian citizens). More than half of the skilled visa recipients are the spouses of the primary applicants. Primary applicants among skilled visa holders are assessed for their skills in line with Australian points system but secondary applicants, such as spouses, among skilled visa holders and spousal visa holders are not subject to any skills assessment before becoming permanent residents. We study differences in economic outcomes by permanent visa types and the role of points system factors in explaining these differences using Personal Income Tax and Migrants Integrated Dataset and Australian Census Longitudinal Dataset. We find that primary skilled visa holders earn at least 26-28 percent higher than spousal visa holders and this is similar for both genders. However, spouses of primary skilled visa holders earn 13-18 percent higher than spousal visa holders. This difference is higher among females than males. Occupation differences can account for nearly half of the differences in income and can entirely capture the role of education and English proficiency. Primary skilled immigrants and their spouses have higher rates of labour force participation and employment than spousal visa holders starting in the first year of arrival and the gap is much higher for primary skilled visa holders but these differences do not disappear quickly. |
| Keywords: | points system, immigration, administrative data, Australia |
| JEL: | J12 J13 J24 J31 J61 J62 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13377&r=all |
| By: | Carlos Carrillo-Tudela; Ludo Visschers |
| 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: | unemployment, business cycle, rest, search, occupational mobility |
| JEL: | E24 E30 J62 J63 J64 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8288&r=all |
| By: | Robert E. Hall; Marianna Kudlyak |
| Abstract: | It is a remarkable fact about the historical US business cycle that, after unemployment reached its peak in a recession, and a recovery began, the annual reduction in the unemployment rate was stable at around 0.55 percentage points per year. The economy seems to have had an irresistible force toward restoring full employment. There was high variation in monetary and fiscal policy, and in productivity and labor-force growth, but little variation in the rate of decline of unemployment. We explore models of the labor market's self-recovery that imply gradual working off of unemployment following a recession shock. These models explain why the recovery of market-wide unemployment is so much slower than the rate at which individual unemployed workers find new jobs. The reasons include the fact that the path that individual job-losers follow back to stable employment often includes several brief interim jobs, sometimes separated by time out of the labor force. We show that the evolution of the labor market involves more than the direct effect of persistent unemployment of job-losers from the recession shock---unemployment during the recovery is elevated for people who did not lose jobs during the recession. |
| JEL: | E32 J63 J64 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27234&r=all |
| By: | Arno Baurin (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | Differences of life expectancy across socioeconomic status are well-documented and many economists argue that they should be taken into account when designing pension systems. This paper analyses the relevance of using socioeconomic characteristics to differentiate retirement age. Using US mortality rate assembled by Chetty et al. (2016), we simulate the longevity distribution both across and within socioeconomic status. Then, we analyze the power of socioeconomic status to predict individuals' longevity. Results suggest that socioeconomic status has relatively limited predictive power, due to the huge within status longevity variance. |
| Keywords: | Pension policy, Pension progressivity, Longevity, Tagging |
| JEL: | D63 H55 J14 J18 |
| Date: | 2020–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2020019&r=all |
| By: | Victoria Maleeva (Department of Economics and Management, Université du Luxembourg); Majlinda Joxhe (Department of Economics and Management, Université du Luxembourg); Skerdilajda Zanaj (Department of Economics and Management, Université du Luxembourg) |
| Abstract: | Contrary to conventional thinking, this paper shows that divorced women exhibit lower levels of poverty than divorced men. We use data from the Russian Longitudinal Monitoring Survey (RLMS- HSE) for the period of 2010-2017. The result remains qualitatively invariant when considering assortative mating along education to alleviate possible endogeneity between divorce and poverty. Investigating an inter-related dynamic model of poverty and female labor market participation, we find that higher female labor participation partly explains why a divorce is harder on husbands than on wives. |
| Keywords: | Divorce; Gender; Russia; Labor Market; Dynamic Bivariate estimation; Longitudinal Survey. |
| JEL: | I31 I32 J12 J16 J60 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:20-16&r=all |
| By: | George J. Borjas; Hugh Cassidy |
| Abstract: | Employment rates in the United States fell dramatically between February 2020 and April 2020 as the initial repercussions of the COVID-19 pandemic reverberated through the labor market. This paper uses data from the CPS Basic Monthly Files to document that the employment decline was particularly severe for immigrants. Historically, immigrant men were more likely to be employed than native men. The COVID-related labor market disruptions eliminated the immigrant employment advantage. By April 2020, immigrant men had lower employment rates than native men. The reversal occurred both because the rate of job loss for at- work immigrant men rose relative to that of natives, and because the rate at which out-of-work immigrants could find jobs fell relative to the native job-finding rate. A small part of the relative increase in the immigrant rate of job loss arises because immigrants were less likely to work in jobs that could be performed remotely and suffered disparate employment consequences as the lockdown permitted workers with more “remotable” skills to continue their work from home. |
| JEL: | J01 J21 J61 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27243&r=all |
| By: | Faia, Ester (Goethe University Frankfurt); Laffitte, Sébastien (ENS Paris-Saclay); Mayer, Maximilian (Goethe University Frankfurt); Ottaviano, Gianmarco (Bocconi University) |
| Abstract: | We show, theoretically and empirically, that the effects of technological change associated with automation and offshoring on the labor market can substantially deviate from standard neoclassical conclusions when search frictions hinder efficient assortative matching between firms with heterogeneous tasks and workers with heterogeneous skills. Our key hypothesis is that better matches enjoy a comparative advantage in exploiting automation and a comparative disadvantage in exploiting offshoring. It implies that automation (offshoring) may reduce (raise) employment by lengthening (shortening) unemployment duration due to higher (lower) match selectivity. We find empirical support for this implication in a dataset covering 92 occupations and 16 sectors in 13 European countries from 1995 to 2010. |
| Keywords: | automation, offshoring, two-sided heterogeneity, positive assortativity, wage inequality, horizontal specialization, core-task-biased technological change |
| JEL: | O33 O47 F16 F66 J64 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13267&r=all |
| By: | Andrew E. Clark (Paris School of Economics - CNRS); Anthony Lepinteur (Université du 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 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:20-12&r=all |
| By: | Anelli, Massimo (Bocconi University); Basso, Gaetano (University of California, Davis); Ippedico, Giuseppe (University of California, Davis); Peri, Giovanni (University of California, Davis) |
| Abstract: | Emigration of young, motivated individuals may deprive countries-of-origin of entrepreneurs. We isolate exogenous variation in a large emigration wave from Italy between 2008 and 2015 by interacting diaspora networks with economic pull factors in destination countries, and find that larger emigration rates reduced firm creation and innovative start-ups. We estimate that for every 100 emigrants, 26 fewer firms were created. An accounting exercise shows that 37 percent of the effect was due to the disproportionate loss of young people. The remaining effect was due to selection into emigration of highly entrepreneurial individuals, as well as negative spillovers on firm creation. |
| Keywords: | emigration, demography, brain drain, entrepreneurship, innovation, EU integration |
| JEL: | J61 H7 O3 M13 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13390&r=all |
| By: | Kilman, Josefin (Department of Economics, Lund University) |
| Abstract: | There is a growing literature investigating if and how monetary policy impacts income inequality. Labor unions are generally found to mitigate income inequality and a recent literature highlight that changing labor market structures, such as deunionization, may be important for monetary policy. This paper tests whether labor unions influence the impact of monetary shocks on income inequality in the United States over the period 1970-2008, and the channels this effect runs through. It is the first paper to identify variation in unionization rates as a moderator to the impact of monetary policy on income inequality. I measure income inequality and unionization on the state level and can therefore exploit that unionization rates vary both within and across states while monetary shocks are common to all states. The main finding is that contractionary monetary shocks increase income inequality, but the impact is weaker with a higher union density. A one percentage point monetary shock increases the Gini coefficient with 5.4 % when union density is 5 %, while it increases Gini with 1.7 % when union density is 15 %. I find evidence that both wages and employment are two channels explaining how unions mitigate the monetary policy - income inequality relationship. The findings of the channels suggest that unions make the adjustment to monetary shocks more even across workers, rather than mitigating the aggregate effect of the shocks. This suggests that the structure of the labor market impacts the relationship between monetary policy and income inequality. |
| Keywords: | Monetary policy; income inequality; labor unions |
| JEL: | D31 E24 E52 J51 |
| Date: | 2020–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2020_010&r=all |
| By: | Andreas Irmen (Department of Economics and Management, Université du Luxembourg) |
| Abstract: | How does population aging affect economic growth and factor shares in times of increasingly automatable production processes? The present paper addresses this question in a new macroeconomic model of automation where competitive firms perform tasks to produce output. Tasks require labor and machines as inputs. New machines embody superior technological knowledge and substitute for labor in the performance of tasks. The incentive to automate is stronger if wages are higher. Automation is shown to boost the aggregate demand for labor if and only if the incentives to automate are strong enough and to reduce the labor share. These predictions obtain even though automation is labor-augmenting in the reduced-form production function. Population aging due to a higher longevity or a decline in fertility may strengthen or weaken the incentives to automate. Irrespective of its source, population aging is predicted to increase the growth rate of per-capita GDP in the short and in the long run. The short-run effect of higher longevity on the labor share is positive whereas the effect of a declining fertility is negative. In the long run, population aging reduces the labor share. |
| Keywords: | Population Aging, Automation, Factor Shares, Endogenous Technical Change, Endogenous Labor Supply. |
| JEL: | E22 J11 J22 J23 O33 O41 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:20-15&r=all |
| By: | Sumedha Gupta; Laura Montenovo; Thuy D. Nguyen; Felipe Lozano Rojas; Ian M. Schmutte; Kosali I. Simon; Bruce A. Weinberg; Coady Wing |
| Abstract: | This paper examines the impact of the social distancing policies states adopted between March and April of 2020 in response to the COVID-19 epidemic. These actions, together with voluntary social distancing, appear to have reduced the rate of new COVID-19 cases and deaths, but raised concerns about the costs experienced by workers and businesses. Estimates from difference-in-difference models that leverage cross-state variation in the timing of business closures and stay-at-home mandates suggest that the employment rate fell by about 1.7 percentage points for every extra 10 days that a state experienced a stay-at-home mandate during the period March 12-April 12, 2020; select business closure laws were associated with similar employment effects. Our estimates imply that about 40% of the 12 percentage point decline in employment rates between January and April 2020 was due to a nationwide shock while about 60% was driven by state social distancing policies. The negative employment effects of state policies were larger for workers in "non-essential" industries, workers without a college degree, and early-career workers. Policy caused relatively modest changes in hours worked and earnings among those who remain employed. We find no concerning evidence of pre-trends in the monthly (low-frequency) CPS data, but use high-frequency data on work-related mobility measured from cellphones, job-loss-related internet searches, and initial unemployment claims to investigate the possibility that the large employment effects experienced in April could have occurred after the March CPS but but before policy adoption. In those analyses, we find pre-trends for some outcomes but not others. Thus we cannot fully rule out that some employment effects shortly predated the policies. As states relax business closures, ensuring gains in labor market activities in ways that continue to mitigate COVID-19 "surges" and public health risks will be key considerations to monitor. |
| JEL: | I1 J08 J1 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27280&r=all |
| By: | Ananyev, Mikhail (IZA); Dohmen, Thomas (University of Bonn and IZA); Lehmann, Hartmut (University of Bologna) |
| Abstract: | Deferred payments, as implicit contracts, are predicted to bind workers to firms as long as workers believe that firms adhere to these implicit contracts. We employ a unique personnel data set from a Russian manufacturing firm to investigate whether wage arrears, delayed payments of wages, induce bonding effects. We find that workers' separation rates decrease dramatically when workers experience wage arrears, providing evidence for the bonding effects of deferred compensation schemes. After workers are repaid nominal wages, but have suffered real wage losses due to unexpectedly high inflation, we observe that workers affected by wage arrears again become much more likely to separate during and after the repayment period of a second episode of wage arrears, providing evidence for the weakening of the bonding effect after the firm's reputation for adequately compensating for deferred payments has been jeopardized. |
| Keywords: | deferred compensation, worker turnover, wage arrears, personnel data, Russia |
| JEL: | J30 J63 M52 P23 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13358&r=all |
| By: | Addison, John T. (University of South Carolina); Teixeira, Paulino (University of Coimbra) |
| Abstract: | Using multilevel mixed effects ordered logistic models, this paper conducts an original investigation of the new management as a technology approach for all EU nations in a framework that explicitly recognizes worker representation while incorporating the notion of affective commitment. It is reported that that low worker commitment is unlikely to be found in establishments with better management practices and that, controlling for management practices and worker representation, the hypothesis that financial and productivity performance is superior in establishments without worker representation is not rejected by the data. For establishments with worker representation, the works council-only variant is seemingly the most favorable regime for financial performance, although this does not carry over to the labor productivity outcome. On net, however, the evidence suggests that the selected management practices are likely to be favorable to performance in plants with and without formal workplace representation. Greater worker commitment is strongly associated with improved labor productivity. Moreover, in this case there is seemingly no difference between works council-only representation and no representation at all. Overall, although the results for workplace representation and the financial situation are mixed, it is the case that greater commitment trumps any negative influence of worker representation type. |
| Keywords: | management as a technology, human resource management, worker commitment, worker representation, labor productivity, financial performance |
| JEL: | D22 J53 J50 L20 M54 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13285&r=all |
| By: | Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)); Branka, Jiri (European Centre for the Development of Vocational Training (Cedefop)) |
| Abstract: | This paper employs a skills-based approach to identify individual and job factors most likely to be impacted by social distancing measures and practices due to the Covid-19 pandemic. Using data from the Cedefop European skills and jobs survey, a Covid-19 social distancing risk index (COV19R) is created based on skills descriptors that categorise jobs by their level of physical proximity to others and their digital intensity. It is conservatively estimated that about 45 million jobs in the EU-27 labour market (23% of total EU-27 employment) are faced with a very high risk of Covid-19 disruption and another 22% of the EU workforce – mostly medium- to lower-skilled service provision – is exposed to some significant risk. The burden of the Covid-19 social distancing risk falls disproportionately on vulnerable workforce groups, such as women, older employees, non-natives, the lower-educated, those working longer hours and employed in micro-sized workplaces. The findings call for immediate and targeted policy responses to prevent ongoing job losses and widening of labour market and social inequalities due to the pandemic. |
| Keywords: | COVID-19, social distancing, risk, skills, EU |
| JEL: | C21 J01 J24 J28 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13281&r=all |
| By: | Isilda Mara (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This study analyses recent trends in the mobility of health professionals in Europe. It first identifies the drivers of this mobility, then analysis its main push-and-pull factors, and finally shows how different European countries are affected by these recent movements of health professionals. Our analysis focuses specifically on the patterns of mobility among medical doctors and nurses between 2010 and 2017. A number of indicators have been collected that provide a comprehensive picture of how the pattern of supply and demand for health professionals has changed over the past decade, illustrating the role that the mobility of health professionals across European countries plays in these developments. We find that a number of European countries have benefited from the mobility of health professionals, but this has accentuated imbalances in a number of other countries. Furthermore, a gravity model is used to identify the push-and-pull factors of mobility in a sample of 32 European countries over 2000‑2017. Wage differentials in the health sector across the European countries certainly make some of the countries more successful at attracting health professionals than other countries that are failing to retain them. Consequently, the latter group of countries are facing huge challenges to provide health assistance to their own rapidly ageing populations. |
| Keywords: | Health professionals, mobility, gravity modelling, European countries |
| JEL: | F22 J61 I15 I11 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:wii:rpaper:rr:445&r=all |
| By: | Natalie Bau; Martin Rotemberg; Manisha Shah; Bryce Steinberg |
| Abstract: | Policies that improve early life human capital are a promising tool to alter disadvantaged children's lifelong trajectories. Yet, in many low-income countries, children and their parents face tradeoffs between schooling and productive work. If there are positive returns to human capital in child labor, then children who receive greater early life investments may attend less school. Exploiting early life rainfall shocks in India as a source of exogenous variation in early life investment, we show that increased early life investment reduces schooling in districts with high child labor, especially for girls and lower castes. These effects persist and are intergenerational, affecting fertility, per capita household consumption, and other measures of household poverty, and lead to a divergence in the next generations' educational outcomes. Our results are robust to the inclusion of rich controls for district-level characteristics and an IV strategy. We provide evidence that reductions in educational investment in response to positive early life shocks are inefficient. |
| JEL: | I2 J1 O12 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27241&r=all |
| By: | Robert W. Fairlie; Kenneth Couch; Huanan Xu |
| 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 from 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. |
| JEL: | J15 J6 J7 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27246&r=all |
| By: | Christophe Jalil Nordman (IRD, UMR LEDa, DIAL, PSL, Université Paris Dauphine, IFP (Pondicherry, India)); Smriti Sharma (Newcastle University Business School, Newcastle Upon Tyne); Naveen Sunder (Bentley University, Waltham, MA (USA)) |
| Abstract: | In predominantly agrarian economies with limited irrigation, rainfall plays a critical role in shaping households’ incomes and subsequently their spending decisions. This study uses household-level panel data from a nationally representative survey in India to estimate the effect of agricultural productivity shocks – as proxied by exogenous annual rainfall deviations from long-term average – on education expenditures and children’s work status in rural Indian households. Our results show that a transitory increase in rainfall significantly reduces education expenditures and increases the likelihood of child labor across a range of work activities. Additionally, we show that productivity-enhancing inputs such as land ownership and credit access do not mitigate these countercyclical effects of rainfall variations, indicating the importance of market imperfections (in labor and land markets). We also find that the effects of productivity shocks are reinforced for historically marginalized castes, and moderated for more educated households. These highlight that the average effects mask considerable heterogeneity based on household and regional characteristics. |
| Keywords: | Rainfall shocks, education expenditures, child work, market imperfections, India |
| JEL: | D13 I21 J16 O12 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt202005&r=all |
| By: | Béland, Louis-Philippe (Carleton University); Brodeur, Abel (University of Ottawa); Haddad, Joanne (University of Ottawa); Mikola, Derek (Carleton University) |
| Abstract: | We investigate the impacts of COVID-19 on domestic violence and family stress. Our empirical analysis relies on a unique online survey, Canadian Perspective Survey Series, that allow us to disentangle the mechanisms through which COVID-19 may affect family stress and domestic violence. We find no evidence that employment status and work arrangements are related to higher self-reported levels of family stress and violence in the home due to confinement, suggesting that remote working on a large scale does not lead to family violence. In contrast, we find that the inability to meet financial obligations and maintaining social ties significantly increase reported family stress and domestic violence. These findings are consistent with two alternative mechanisms: social isolation and decreased bargaining power for women. Last, we provide suggestive evidence that receiving financial relief does not mitigate the effect of financial worries on domestic violence and family stress. We conclude that targeted programs supporting victims of domestic violence may be more effective. |
| Keywords: | COVID-19, lockdown, domestic violence, family stress, isolation and remote work |
| JEL: | D03 I18 J12 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13332&r=all |
| By: | Kim, Seonghoon (Singapore Management University); Koh, Kanghyock (Korea University); Zhang, Xuan (Goethe University Frankfurt) |
| Abstract: | We examine the short-term impact of COVID-19 on consumption spending and labor market outcomes. Using monthly panel data of individuals mainly aged 50–70 in Singapore, we find that COVID-19 reduced consumption spending and labor market outcomes immediately after its outbreak, and its negative impact quickly evolved. At its peak, the pandemic reduced total household consumption spending by 22.8% and labor income by 5.9% in April. Probability of full-time work also went down by 1.2 pp and 6.0 pp in April and May, respectively, but employment and self-employment were only mildly affected. Our heterogeneity analysis indicates that the reduction in consumption spending was greater among those with higher net worth, while the decreases in labor market outcomes were greater among those with lower net worth. However, we find little evidence that those in worse health status experienced larger reductions in consumption spending and labor market outcomes. Reductions in consumption spending correlated with increased risk avoidance behavior, the nationwide partial lockdown, worsening economic outlook, and reduced income. |
| Keywords: | COVID-19, pandemic, consumption spending, labor market, monthly panel data |
| JEL: | E2 I12 H2 J01 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13354&r=all |
| By: | Neha Hui (Department of Economics, University of Reading); Uma Kambhampati (Department of Economics, University of Reading) |
| Abstract: | Abolition of slavery in British Colonies led to the facilitation of Indian indentured migration by the British Government. This form of migration came about when the discourse of economic freedom and individual liberty strongly resonated in British political-economy circles, following the work of Smith and Mill. We analyse how unfreedom in indentured labour was rationalised when the rhetoric of freedom was essential to the dominant intellectual milieu. We argue that indentured labour was a compromise between slavery and free labour because it facilitated free trade and some freedom of movement but was harder to justify in terms of individual liberty. |
| Keywords: | Classical political economy, Economic freedom, Individual liberty, Indentured labour, Slavery, Migration, Adam Smith, JS Mill |
| JEL: | B12 B13 J61 J70 N43 N36 |
| Date: | 2020–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2020-16&r=all |
| By: | Haruki Seitani; Ben Westmore |
| Abstract: | Technological change is transforming Ireland’s economic structures, leading to new jobs and innovative products that benefit consumers. Adoption of new technologies by businesses has been high relative to many other OECD economies, but it has been uneven across industries and the impact on productivity growth in most firms has been modest so far. |
| Keywords: | active labour market policies, competition policy, data security policies, future of work, gig economy, platform workers, product market regulations, productivity growth, residential mobility, skills, technological diffusion |
| JEL: | A11 J24 J61 J63 J83 I28 I31 O33 O38 O52 |
| Date: | 2020–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1610-en&r=all |
| By: | Freund, L. B; Rendahl, P. |
| 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: | COVID-19, Uncertainty, unemployment, inflation, search frictions |
| JEL: | J64 E21 E32 |
| Date: | 2020–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2035&r=all |
| By: | Britto, Diogo (Bocconi University); Pinotti, Paolo (Bocconi University); Sampaio, Breno (Universidade Federal de Pernambuco) |
| Abstract: | We investigate the effect of job loss and unemployment benefits on criminal behavior, exploiting individual-level data on the universe of workers and criminal cases in Brazil over the 2009-2017 period. We match workers displaced upon plausibly exogenous mass layoffs with observationally-equivalent control groups to identify dynamic treatment effects of job loss while allowing for treatment effect heterogeneity. In our preferred specification, the probability of criminal prosecution increases by 23% upon job loss and remains approximately constant during the following years. Our unusually large dataset allows us to precisely estimate increases in almost all types of crimes - including offenses with no economic motivation - as well as spillover effects on other household members. The estimated effects remain robust when restricting to arrests "in flagrante", which are less subject to differential reporting by employment status. We then evaluate the mitigating effect of unemployment benefits leveraging on discontinuous changes in eligibility. Regression discontinuity estimates suggest that unemployment benefits covering 3 to 5 months after displacement completely offset potential crime increases upon job loss, especially for liquidity-constrained individuals, although this effect completely vanishes upon benefit expiration. Our findings point at liquidity constraints and psychological stress as main drivers of criminal behavior upon job loss, while substitution between time on the job and leisure does not seem to play an important role. |
| Keywords: | unemployment, crime, unemployment insurance, registry data |
| JEL: | K42 J63 J65 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13280&r=all |
| By: | Andrej Angelovski; Jordi Brandts; Werner Güth |
| Abstract: | We model the competitive striving for high-level positions in firms by letting experimental participants compete in bidding for prizes of different sizes in a hierarchy. Our set-up includes both a flat hierarchy and a steep hierarchy. We mainly focus on whether men and women behave differently with respect to bidding for higher and lower positions, but also consider other possible sources of heterogeneity in behavior. On average, women bid higher than men, but not significantly so, except for the top position of the flat hierarchy. For lower positions, bids are generally close to optimal bidding whereas they are relatively lower for higher positions. Women do win the top positions significantly more often, but there are no significant gender differences in earnings, the difference between prizes and bids. Our results suggest that the strong gender differences in attitudes towards competition that were found in numerous previous studies based on competition in tournaments with real-effort tasks may be specific to that environment. An implication of our results thus is that a particular phenomenon should be studied using more than one experimental design. |
| Keywords: | experiments, gender differences, competition |
| JEL: | C91 J16 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1185&r=all |