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on Labour Economics |
| By: | Anna Aizer; Shari Eli; Adriana Lleras-Muney; Keyoung Lee |
| Abstract: | We study the Civilian Conservation Corps (CCC) – the first and largest youth training program in the U.S. in operation between 1933 and 1942 – to provide the first comprehensive assessment of the short- and long-term effects of means-tested youth employment programs. We use digitized enrollee records from the CCC program in Colorado and New Mexico and matched these records to the 1940 Census, WWII enlistment records, Social Security Administration records, and death certificates. We find that enrollees who spent more time in CCC training grew taller, lived longer lives and had higher lifetime earnings as a result of their participation in the program. We also find modest increases in the educational attainment of the participants and increases in short term geographic mobility. In contrast, we find no evidence that their labor force participation or wages increased in the short run. To assess the internal and external validity of the results, we compare our estimates to those derived from a randomized evaluation of Job Corps, the modern version of the CCC, conducted in the 1990s. The RCT’s results show that our empirical strategy delivers estimates that are in line with the experimental estimates. Overall, we find significant long-term benefits in both longevity and earnings, suggesting short and medium-term evaluations underestimate the returns of training programs, as do those that fail to consider effects on longevity. |
| JEL: | J01 J08 J38 J68 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27103&r=all |
| By: | Morris M. Kleiner; Ming Xu |
| Abstract: | We show that occupational licensing has significant negative effects on labor market fluidity defined as cross-occupation mobility. Using a balanced panel of workers constructed from the CPS and SIPP data, we analyze the link between occupational licensing and labor market outcomes. We find that workers with a government-issued occupational license experience churn rates significantly lower than those of non-licensed workers. Specifically, licensed workers are 24% less likely to switch occupations and 3% less likely to become unemployed in the following year. Moreover, occupational licensing represents barriers to entry for both non-employed workers and employed ones. The effect is more prominent for employed workers relative to those entering from non-employment, because the opportunity cost of acquiring a license is much higher for employed individuals. Lastly, we find that average wage growth is higher for licensed workers than non-licensed workers, whether they stay in the same occupation in the next year or switch occupations. We find significant heterogeneity in the licensing effect across different occupation groups. These results hold across various data sources, time spans, and indicators of being licensed. Overall, licensing could account for almost 8% of the total decline in monthly occupational mobility over the past two decades |
| Keywords: | Occupational licensing; Regulation; Labor markets |
| JEL: | H10 J01 J18 J38 J40 J44 J62 J80 J88 K0 K20 K31 |
| Date: | 2020–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:88385&r=all |
| By: | Pyle, William |
| Abstract: | This article links Russians’ individual experiences during the late-Gorbachev and early-Yeltsin years to the beliefs those same individuals espoused in the Putin era, over a decade later. Drawing on questions, some of which are retrospective, from the first wave of the Life in Transition Survey, I show that a range of attitudes – including diminished support for markets and democracy and stronger support for reducing inequality – can be explained by whether an individual suffered labor market hardships (wage cuts, arrears, and/or unemployment) in the half decade from 1989 to 1994. More recent labor market disruptions, surprisingly, bear no such relationship to beliefs in 2006. Relative to the rest of the former Soviet Union, this pattern is unique. Though an explanation is difficult to pin down, one speculative hypothesis is that Russians were uniquely impressionable during this exit-from-communism period. Individual economic hardship, in conjunction with the dissolution of the Soviet Union, may have been particularly disorienting for those living in the country in which communism first took root. Life experiences during these years of instability, uncertainty, and diminished status may have left a uniquely deep and enduring impression. |
| JEL: | A13 J60 P23 P26 P52 |
| Date: | 2020–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2020_017&r=all |
| By: | Alex Armand (Nova School of Business and Economics, NOVAFRICA, IFS); Pedro Carneiro (University College London, IFS, CeMMAP, FAIR-NHH); Federico Tagliati (Banco de España); Yiming Xia (University College London) |
| Abstract: | This paper examines the impact of an experiment in North Macedonia in which vulnerable unemployed individuals applying to a subsidized employment program were randomly selected to attend job interviews. Employers hiring a new employee from the target population receive a subsidy covering the wage cost of the worker for the first six months. Using administrative employment data, we find that attending the job interview led to an increase of 15 percentage points in the likelihood of being employed 3.5 years after the start of the intervention. We also find positive and statistically significant effects on individuals’ non-cognitive and work-related skills. |
| Keywords: | active labor market policy, unemployment, wage subsidies, job search |
| JEL: | O15 J08 J68 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2022&r=all |
| By: | Julia Schmieder |
| Abstract: | Based on findings from high-income countries, typically economists hypothesize that having more children unambiguously decreases the time mothers spend in the labor mar- ket. Few studies on lower-income countries, in which low household wealth, informal child care, and informal employment opportunities prevail, find mixed results. Using Mexican census data, I find a positive effect of an instrument-induced increase in fertility on maternal employment driven by an increase in informal work. The presence of grandparents and low wealth appear to be important. Econometric approaches that allow extrapolating from this complier-specific effect indicate that the response in informal employment is non-negative for the entire sample. |
| Keywords: | Fertility, Female Labor Supply, Middle-Income Countries, Informality |
| JEL: | J13 J16 J22 J46 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1882&r=all |
| By: | Stéphane Bonhomme; Kerstin Holzheu; Thibaut Lamadon; Elena Manresa; Magne Mogstad; Bradley Setzler |
| Abstract: | Many studies use matched employer-employee data to estimate a statistical model of earnings determination where log-earnings are expressed as the sum of worker effects, firm effects, covariates, and idiosyncratic error terms. Estimates based on this model have produced two influential yet controversial conclusions. First, firm effects typically explain around 20% of the variance of log-earnings, pointing to the importance of firm-specific wage-setting for earnings inequality. Second, the correlation between firm and worker effects is often small and sometimes negative, indicating little if any sorting of high-wage workers to high-paying firms. The objective of this paper is to assess the sensitivity of these conclusions to the biases that arise because of limited mobility of workers across firms. We use employer-employee data from the US and several European countries while taking advantage of both fixed-effects and random-effects methods for bias-correction. We find that limited mobility bias is severe and that bias-correction is important. Once one corrects for limited mobility bias, firm effects matter less for earnings inequality and worker sorting becomes always positive and typically strong. |
| JEL: | C23 J31 J62 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27368&r=all |
| By: | Lidia Farré; Yarine Fawaz; Libertad González Luna; Jennifer Graves |
| Abstract: | The covid-19 pandemic led many countries to close schools and declare lockdowns during the Spring of 2020, with important impacts on the labor market. We document the effects of the covid-19 lockdown in Spain, which was hit early and hard by the pandemic and suffered one of the strictest lockdowns in Europe. We collected rich household survey data in early May of 2020. We document large employment losses during the lockdown, especially in "quarantined" sectors and non-essential sectors that do not allow for remote work. Employment losses were mostly temporary, and hit lower-educated workers particularly hard. Women were slightly more likely to lose their job than men, and those who remained employed were more likely to work from home. The lockdown led to a large increase in childcare and housework, given the closing of schools and the inability to outsource. We find that men increased their participation in housework and childcare slightly, but most of the burden fell on women, who were already doing most of the housework before the lockdown. Overall, we find that the covid-19 crisis appears to have increased gender inequalities in both paid and unpaid work in the short-term. |
| Keywords: | COVID-19, gender roles, labor market, household work, childcare |
| JEL: | D13 J13 J16 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1728&r=all |
| By: | Jordi Galí |
| Abstract: | I develop a version of the New Keynesian model with insider-outsider labor markets and hysteresis that can account for the high persistence of European unemployment. I study the implications of that environment for the design of monetary policy. The optimal policy calls for strong emphasis on (un)employment stabilization which a standard interest rate rule fails to deliver, with the gap between the two increasing in the degree of hysteresis. Two simple targetiing rules are shown to approximate well the optimal policy. The properties of the model and effects of different policies are analyzed through the lens of the labor wedge and its components. |
| JEL: | E24 E31 E32 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27385&r=all |
| By: | László Lõrincz (Centre for Economic- and Regional Studies, Institute of Economics, Budapest and Networks, Technology and Innovation Lab, Corvinus University of Budapest); Guilherme Kenji Chihaya (Department of Geography, Umea University;); Anikó Hannák (Department of Information Science, University of Zurich); Dávid Takács (Department of Geography, Umea University); Balázs Lengyel (Centre for Economic- and Regional Studies, Institute of Economics, Budapest; Networks, Technology and Innovation Lab, Corvinus University of Budapest;Agglomeration and Social Networks Lendület Research Group, Hungarian Academy of Sciences); Rikard Eriksson (Department of Geography, Umea University; Center for Regional Science, Umea University) |
| Abstract: | Social connections that reach distant places are advantageous for individuals and firms by providing access to new skills and knowledge. However, systematic evidence on how firms work up global knowledge access is still missing. In this paper, we analyse how global work connections relate to differences in the skill composition of employees within companies. We gather survey data from 10% of workers in a local industry in Sweden and complement this with digital trace data to map co-worker networks and skill composition. This unique combination of data and features allows us to quantify global connections of employees and measure the degree of skill-similarity and skill-relatedness to co-workers. We find that the workers with extensive local networks typically have related skills to others in the region and to their co-workers. Workers with more global ties typically bring in less related skills to the region. These results provide new insights to the composition of skills within knowledge intensive irms by connecting the geography of networks contacts to the diversity of skills accessible through them. |
| Keywords: | Co-worker networks, skills, relatedness, global connections, survey, online social network |
| JEL: | D85 J24 J61 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2034&r=all |
| By: | Armin Falk (briq and the University of Bonn); Fabian Kosse (LMU Munich); Pia Pinger (University of Cologne and briq) |
| Abstract: | Inequality of opportunity strikes when two children with the same academic performance are sent to different quality schools because their parents differ in socio-economic status. Based on a novel dataset for Germany, we demonstrate that children are significantly less likely to enter the academic track if they come from low socio-economic status (SES) families, even after conditioning on prior measures of school performance. We then provide causal evidence that a low-intensity mentoring program can improve long-run education outcomes of low SES children and reduce inequality of opportunity. Low SES children, who were randomly assigned to a mentor for one year are 20 percent more likely to enter a high track program. The mentoring relationship affects both parents and children and has positive long-term implications for children's educational trajectories. |
| Keywords: | mentoring, childhood intervention programs, education, human capital investment, inequality of opportunity, socioeconomic status |
| JEL: | C90 I24 J24 J62 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2020-046&r=all |
| By: | John T. Addison; Paulino Teixeira |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8329&r=all |
| By: | Ran Abramitzky; Leah Platt Boustan; Dylan Connor |
| Abstract: | We study a program that funded 39,000 Jewish households in New York City to leave enclave neighborhoods circa 1910. Compared to their neighbors with the same occupation and income score at baseline, program participants earned 4 percent more ten years after removal, and these gains persisted to the next generation. Men who left enclaves also married spouses with less Jewish names, but they did not choose less Jewish names for their children. Gains were largest for men who spent more years outside of an enclave. Our results suggest that leaving ethnic neighborhoods could facilitate economic advancement and assimilation into the broader society, but might make it more difficult to retain cultural identity. |
| JEL: | J15 N12 R23 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27372&r=all |
| By: | Jo Mhairi Hale (Max Planck Institute for Demographic Research, Rostock, Germany); Christian Dudel (Max Planck Institute for Demographic Research, Rostock, Germany); Angelo Lorenti (Max Planck Institute for Demographic Research, Rostock, Germany) |
| JEL: | J1 Z0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2020-028&r=all |
| By: | Alfonso Expósito (University of Seville, Spain); Amparo Sanchis-Llopis (University of Valencia and ERICES, Spain); Juan A. Sanchis-Llopis (University of Valencia and ERICES, Spain) |
| Abstract: | This paper analyses the role of the manager’s gender on the propensity to introduce innovations using a sample of Spanish small- and medium-sized enterprises (SMEs). We examine whether there are significant differences between female- and male-led businesses in terms of their propensity to innovate, and whether these differences may be explained by factors related to the attributes of the manager concerning risk tolerance, self-confidence, education level and cooperative behaviour. In particular, this study tests if the linkages between these managerial attributes and the propensity to innovate are moderated by the gender of the manager. Using a multivariate probit model (triprobit), we further investigate the role of gender on the managerial decision to simultaneously introduce product, process and organisational innovations. Our main results indicate that there are not significant gender differences in the propensity to introduce innovations between male- and female-run businesses when considering innovation at an aggregated level, that is, innovating in any of the three types of innovations considered. However, we obtain a higher propensity of male managers to introduce process innovations, as compared to their female counterparts. No significant differences by gender are found for product and organisational innovations. Additionally, results of the multivariate probit model indicate that the three innovation decisions are interdependent and should be jointly analysed. This study contributes to the scant literature regarding gender impact on firm’s innovativeness with novel empirical evidence for SMEs. |
| Keywords: | manager’s gender; SMEs; product innovation; process innovation; organizational innovations; triprobit model |
| JEL: | C35 J16 O30 M21 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2002&r=all |
| By: | Domenico Moramarco; Flaviana Palmisano; Vito Peragine |
| Abstract: | We propose an axiomatic approach to characterize normative criteria for the evaluation of lifetime income distributions according to the opportunity egalitarian perspective (Roemer, 1998). In a setting in which both individual incomes and predetermined circumstances are variable over time, we adopt a norm-based approach to the measurement of inequality, and propose two different benchmark distributions, referring respectively to the ex ante and the ex post versions of equality of opportunity. We first aggregate over time, thereby characterizing measures of interetemporal individual inequality of opportunity, and then aggregate the individual measures into a societal measure. Our individual measure results to be a weighted average of individuals' opportunity gap experienced in each period. Our aggregate measure is an average of a concave transformation of the individual intertemporal opportunity gap and can be interpreted as an intertemporal inequality of opportunity index. We apply our framework to evaluate the Korean distribution of income from an intertemporal and opportunity egalitarian perspective. |
| Keywords: | lifetime income inequality; intertemporal distributions; equality of opportunity; opportunity gap; Korea |
| JEL: | D31 D63 I32 J62 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/309659&r=all |
| By: | Burkhard Heer; Mark Trede |
| Abstract: | We present new empirical evidence on the distribution of earnings, income and wealth among entrepreneurs in Germany. We document that both earnings and income are more concentrated among entrepreneurs than among workers and describe a large-scale overlapping-generations model that can replicate these findings. As an application, we compute the equilibrium effects of a reform of the German pay-as-you-go pension system in which entrepreneurs must also contribute and receive a pension. We show that in the presence of mobility between workers and entrepreneurs, the expected lifetime utility of all newborn households unanimously declines due to the general equilibrium effects of lower aggregate savings, and welfare losses amount to approximately 5% of total consumption. In addition, the integration of self-employed workers into the social security system in Germany does not help to improve its fiscal sustainability, and only an increase in the retirement age to 70 years will help to finance pensions at the present level beyond the year 2050. |
| Keywords: | Entrepreneurship, aging, income distribution, overlapping |
| JEL: | H55 D31 J11 L26 C68 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cqe:wpaper:9120&r=all |
| By: | John McLaren |
| Abstract: | This note seeks the socioeconomic roots of racial disparities in COVID-19 mortality, using county-level mortality, economic, and demographic data from 3,140 counties. For all minorities, the minority's population share is strongly correlated with total COVID-19 deaths. For Hispanic/Latino and Asian minorities those correlations are fragile, and largely disappear when we control for education, occupation, and commuting patterns. For African Americans and First Nations populations, the correlations are very robust. Surprisingly, for these two groups the racial disparity does not seem to be due to differences in income, poverty rates, education, occupational mix, or even access to healthcare insurance. A significant portion of the disparity can, however, be sourced to the use of public transit. |
| JEL: | I14 J15 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27407&r=all |
| By: | James J. Heckman (The University of Chicago); Bei Liu (China Development Research Foundation); LU Mai (China Development Research Foundation); Jin Zhou (Columbia University) |
| Abstract: | This paper evaluates the causal impacts of an early childhood home visiting program for which treatment is randomly assigned. We estimate multivariate latent skill profiles for individual children and compare treatments and controls. We identify average treatment effects of skills on performance in a variety of tasks. The program substantially improves child language and cognitive, fine motor, and social-emotional skills development. Impacts are especially strong in the most disadvantaged communities. We go beyond reporting treatment effects as unweighted sums of item scores. Instead, we examine how the program affects the latent skills generating item scores and how the program affects the mapping between skills and item scores. We find that enhancements in latent skills explain at least 90% of conventional unweighted treatment effects on language and cognitive tasks. The program enhances some components of the function mapping latent skills into item scores. This can be interpreted as a measure of enhanced productivity in using given bundles of skills to perform tasks. This source explains at most 10% of the average estimated treatment effects. |
| Keywords: | experiment, scaling, mechanisms, home visiting, measurement |
| JEL: | J13 Z18 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2020-047&r=all |
| By: | Aquilante, Tommaso (Bank of England); Livio, Luca (ECARES-ULB); Potoms, Tom (University of Sussex) |
| Abstract: | This paper shows that marital status and gender crucially impact whether individuals receive certain types of on-the-job training. Using data from the British Household Panel Survey, we show robust evidence that when training is self-financed, married workers have significantly lower participation rates, whereas women have higher rates. The correlation between demographic characteristics and the likelihood of receiving employer-sponsored training is instead much weaker. We rationalize the relationship between training incidence and marital status with a simple two-period collective model of the household with limited commitment, where contemporaneous training decisions affect future bargaining power within the household. The core prediction of the model is confirmed empirically: the likelihood to participate in self-financed on-the-job training is negatively affected by higher levels of (a proxy for) intra-household bargaining power of the spouse of the individual. The results suggest there is scope for policy to increase workers’ training participation rates by targeting individuals with weaker bargaining power within the household. |
| Keywords: | Self-financed on-the-job training; intra-household bargaining; human capital formation; Nash bargaining |
| JEL: | J12 J16 J24 |
| Date: | 2020–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0873&r=all |