|
on Labour Economics |
| By: | Andreas Lichter (DICE, Heinrich-Heine University Düsseldorf, IZA and CReAM); Amelie Schiprowski (University of Bonn, IZA and CESifo) |
| Abstract: | This paper studies how the potential duration of unemployment benefits affects early job search behavior and re-employment outcomes. We exploit an unexpected reform of the German unemployment insurance (UI) scheme in 2008, which increased the potential benefit duration from 12 to 15 months for benefit recipients of age 50 to 54. Based on detailed survey data and a difference-in-differences design, we estimate that one additional month of potential benefits reduces early job applications by around 10%. Using social security data, we further find that the extension of benefits increases the average nonemployment duration of individuals entering UI after the reform. Among individuals who got treated at later stages of their unemployment spell, the increased UI coverage does not appear to come at the cost of longer nonemployment. A cautious back-of-the-envelope calculation reveals substantial job funding returns to early search effort. |
| Keywords: | Unemployment Insurance, Job Search, Re-Employment Outcomes, Natural Experiment |
| JEL: | D83 I38 J64 J68 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:037&r=all |
| By: | Bachli, Mirjam (University of St.Gallen); Tsankova, Teodora (Tilburg University and CAGE) |
| Abstract: | We investigate how the introduction of free movement of workers affects enrolment of natives in tertiary education. In a difference-in-differences framework, we exploit a policy change that led to a significant increase in the share of cross-border commuters in local employment in border regions of Switzerland. Our results show a rise in enrolment at Universities of Applied Sciences in affected relative to non-affected regions in the post-reform period but no change in enrolment at traditional universities. Furthermore, we find that enrolment increases in non-STEM fields that build skills less transferable across national borders. This allows for complementarities with foreign workers who are more likely to hold occupations requiring STEM training. Individuals with a labor market oriented education such as vocationally trained respond to the increase in labor market competition because they have employment opportunities and access to tertiary education through Universities of Applied Sciences. |
| Keywords: | cross-border commuting, demand for tertiary education, study field choice, labor market conditions JEL Classification: F22, I26, J24, J61, R23 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:515&r=all |
| By: | Serdar Birinci; Kurt See |
| Abstract: | We study optimal unemployment insurance (UI) policy over the business cycle, using a heterogeneous agent job-search model with aggregate risk and incomplete markets. We validate the model-implied micro and macro labor market elasticities to changes in the generosity of UI benefits against existing estimates and we reconcile divergent empirical findings. We show that generating the observed demographic differences between UI recipients and non-recipients is critical for determining the magnitudes of these elasticities. We find that the optimal UI policy features countercyclical replacement rates with an average generosity that is close to current U.S. policy but that it adopts drastically longer payment durations reminiscent of European policies. |
| Keywords: | Business fluctuations and cycles; Fiscal policy; Labour markets |
| JEL: | E32 J65 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:20-47&r=all |
| By: | Deshpande, Ashwini (Ashoka University) |
| Abstract: | Examining high frequency national-level panel data from Centre for Monitoring Indian Economy (CMIE) on paid work (employment), unpaid work (time spent on domestic work) and incomes, this paper examines the effects of the Covid-19 pandemic on the gender gaps in paid and unpaid work through the lockdown and recovery phases. The first month of the national lockdown, April 2020, saw a large contraction in employment for both men and women, where more men lost jobs in absolute terms. Employment has recovered by August 2020 for men. However, for women, the likelihood of being employed is 9.5 percentage points lower than that for men, compared to the pre-pandemic period. Men spent more time on housework in April 2020, but by August the average male hours had declined, though not to the pre-pandemic levels. Time spent with friends fell sharply for both men and women in April, to recover in August, but not to the pre-pandemic levels. The paper also examines available income data to find the sharpest contraction of incomes in the rural sector for both men and women. |
| Keywords: | COVID-19, lockdown, employment, gender, time use, incomes, India |
| JEL: | J1 J6 O53 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13815&r=all |
| By: | Simiao Chen (Heidelberg Institute of Global Health, Heidelberg University); Zhangfeng Jin (College of Economics, Zhejiang University); Klaus Prettner (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | This study examines the causal impact of retirement on migration decisions. Using a regression discontinuity (RD) design approach, combined with a nationally representative sample of 228,855 Chinese older adults, we find that retirement increases the probability of migration by 12.9 p.p. (an 80% increase in migration). Approximately 38% of the total migration effects can be attributed to inter-temporal substitution. Retirement-induced migrants are lower-educated, have restricted access to social security, and come from origins with high living costs. Relying on old age support from adult children in migration is a likely mechanism. These findings are consistent with a simple theoretical model of migration for older adults. |
| Keywords: | Retirement, Internal migration, Old age support, China, Regression discontinuity design |
| JEL: | J14 J26 J61 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp303&r=all |
| By: | Filippo Belloc; Gabriel Burdin; Luca Cattani; William Ellis; Fabio Landini |
| Abstract: | In current debates about job automation, technology adoption is framed as a politics-neutral decision driven by the search for technical efficiency. Discussions about the nature of job design (i.e. the content and distribution of tasks within firms) and its associated automation risk are usually devoid of institutional context. However, job design may be affected by the way firms are governed. A critical feature of workplace governance is the extent to which decision making is shared by capital owners and workers via institutionalized forms of employee representation (ER). In this paper, we propose an evolutionary model to study the complementary fit and endogenous dynamics of job design and workplace governance. We show that two technological-political conventions are likely to emerge: in one of them workplace governance is based on ER and job designs have low automation risk; in the other, ER is absent and workers are involved in automation-prone production tasks. We explore the validity of the theory by using data from a large sample of European workers including detailed information on occupations, task environment, working conditions as well as presence of ER. Results are consistent with the theory: automation risk is negatively associated with the presence of ER. Our analysis can be useful to rationalize the historical experience of Nordic countries, where simultaneous experimentation with codetermination rights and job enrichment programs (supplemented by nationwide institutional reforms) seem to have had enduring consequences in the way these countries confront technological challenges. Policy debates about automation should avoid technological determinism and devote more attention to socio-institutional factors shaping the future of work. |
| Keywords: | Automation, Job Design, Employee Representation, Evolutionary Game. |
| JEL: | J24 J51 O33 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:841&r=all |
| By: | Julio G. Fournier Gabela; Luis Sarmiento |
| Abstract: | There is substantial evidence on the effectiveness of short-time work on reducing unemployment. However, no study looks at its role during natural disasters. This article exploits the exogenous nature of the 2013 European floods to assess if the impact depends on the quality of the short-time work mechanism across affected counties. We use regression discontinuity designs to show that unemployment does not increase in regions with robust programs while rising up to seventeen percent in areas with less robust mechanisms. Our results are relevant to the literature on how institutional quality influences recovery and suggests that short-time work programs are useful against unforeseeable productivity shocks besides financial crises. |
| Keywords: | Flooding, short-time work, regional unemployment, regression discontinuity in time, institutions |
| JEL: | J68 H84 Q54 C22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1909&r=all |
| By: | Landwehr, Jannik J. |
| Abstract: | As a bottom-up approach, a Job Guarantee policy can tackle the issue of unemployment on the macroeconomic, socioeconomic, and individual level in a unique way and promote the social inclusion of the unemployed. This paper aims at analysing the potential obstacles - namely inflationary pressure and financing - of a Job Guarantee policy implementation in the case of Germany. A Job Guarantee's impact on inflation depends on excess production capacities of economic sectors as well as collective wage bargaining structures. In this regard, this paper concludes that under a correct policy design inflationary pressure is no major obstacle. Strengthening workers' bargaining power in Germany through a Job Guarantee policy could even contribute to reaching the inflation target and prevent deflation. However, deficiencies of the European institutional setup and the analogous restrictive fiscal mantra at European and national level limit the political scope for financing a Job Guarantee policy. Notwithstanding, a small to medium size Job Guarantee programme - comprising up to all currently unemployed willing to work - is politically and legally feasible. |
| Keywords: | Job Guarantee,Employer-of-Last-Resort,Public Works,Unemployment,Underemployment,Full Employment,Inflation,Fiscal Policy,Debt Brake |
| JEL: | E24 E62 H63 J68 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1502020&r=all |
| By: | Cette, Gilbert (Banque de France, and Université d'Aix-Marseille); Lopez, Jimmy (LEDI, Université de Bourgogne-Franche-Comté, and Banque de France); Mairesse, Jacques (UNU-MERIT, Maastricht University, and CREST ENSEA); Nicoletti, Giuseppe (Economics Department, OECD) |
| Abstract: | This study investigates empirically how managerial practices have affected macroeconomic adjustment during the Great Recession after the 2008 economic crisis. We start by constructing a country*industry balanced panel data over the 2007-2015 period for eighteen industries in ten OECD countries, and complementing it by two indicators: an indicator of management quality at the country level based on the managerial practices categorical scores at firm level from Bloom et al. (2012); and an indicator at the industry level for the shocks stemming from the 2008 economic crisis. We then rely on the local projection method pioneered by Jordà (2005) to estimate the direct impacts of country management quality indicators and industry economic shocks as well as their joint impacts, on five variables of interest: value-added, employment, labour productivity, wage per employee and labour share during the Great Recession. We find that, in countries where management quality is higher, production and employment are more resilient during the Great Recession, with less production losses and employment damages, no effects on productivity, wage moderation and a slight increase in the labour shares. It appears, moreover, that this resilience is increasing with the size of industry shocks. |
| Keywords: | Economic adjustment, Employment, Wage, Management quality, Great Recession, Local projection cross-country analysis, Dynamic modelling |
| JEL: | E24 O15 O32 O47 M11 M54 |
| Date: | 2020–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2020048&r=all |
| By: | Mayr-Dorn, Karin |
| Abstract: | I develop a dynamic version of the competitive search model with adverse selection in Guerrieri, Shimer and Wright (2010). My model allows for an analysis of the effects of firm learning on labor market efficiency in the presence of search frictions. I find that firm learning increases relative expected earnings in high-ability jobs and, thereby, enhances imitation incentives of low-ability workers. The net effect on the aggregate expected match surplus and unemployment is indeterminate a priori. Numerical results show that firm learning does not increase labor market efficiency. |
| Keywords: | job search,on-the-job effort,asymmetric information,learning |
| JEL: | D82 D83 J64 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:700&r=all |
| By: | Heursen, Lea (Department of Economics, Humboldt University Berlin); Ranehill, Eva (Department of Economics, School of Business, Economics and Law, Göteborg University); Weber, Roberto A (Department of Economics, University of Zurich) |
| Abstract: | We study whether one reason behind female underrepresentation in leadership is that female leaders are less effective at coordinating action by followers. Two experiments using coordination games investigate whether female leaders are less successful than males in persuading followers to coordinate on efficient equilibria. Group performance hinges on higher-order beliefs about the leader’s capacity to convince followers to pursue desired actions, making beliefs that women are less effective leaders potentially self-confirming. We find no evidence that such bias impacts actual leadership performance, identifying a precisely-estimated null effect. We show that this absence of an effect is surprising given experts’ priors. |
| Keywords: | gender; coordination games; leadership; experiment |
| JEL: | C72 C92 D23 J10 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0796&r=all |
| By: | Lance Lochner; Youngmin Park |
| Abstract: | This paper develops and estimates a two-factor model of intergenerational skill transmission when earnings inequality reflects differences in individual skills and other non-skill shocks. We consider heterogeneity in both initial skills and skill growth rates, allowing variation in skill growth to change over the lifecycle. Using administrative tax data on two linked generations of Canadians covering 37 years, we exploit covariances in log earnings (at different ages) both across and within generations to identify and estimate the intergenerational correlation structure for initial skills and skill growth rates, lifecycle skill growth profiles, and the dynamics of non-skill earnings shocks. We estimate low intergenerational elasticities (IGEs) for earnings in Canada (less than 0.2, even when based on 5-year and 9-year average earnings); however, skill IGEs are typically 2–3 times larger due to considerable (and persistent) variation in earnings conditional on skills. Both earnings and skill IGEs decline substantially for more recent cohorts and are lower for children born to younger fathers. We estimate significant heterogeneity in both initial skills and skill growth rates, showing that intergenerational transmission of these factors explains up to 40% of children’s skill variation. Skills become a more important determinant of earnings over the first part of workers’ careers, while intergenerational transmission of skills becomes less important with age. Although “inherited†initial skills (compared with skill growth) are a more important determinant of children’s skills throughout their lives, parents’ initial skills and skill growth rates are equally important determinants of children’s skills, largely because both strongly influence children’s initial skills. Finally, we study intergenerational mobility for the 35 largest cities in Canada, determining the extent to which considerable differences in earnings and skill IGEs vary with the extent of local heterogeneity in parental skills vs. earnings instability. |
| Keywords: | Econometric and statistical methods; Labour markets; Potential output; Productivity |
| JEL: | C33 J62 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:20-46&r=all |
| By: | Hubbard, Glenn (Columbia University); Strain, Michael R. (American Enterprise Institute for Public Policy Research) |
| Abstract: | Enacted March 27, 2020, the Paycheck Protection Program (PPP) was the most ambitious and creative fiscal policy response to the Pandemic Recession in the United States. PPP offers forgivable loans — essentially grants — to businesses with 500 or fewer employees that meet certain requirements. In this paper, we present evidence that PPP has substantially increased the employment, financial health, and survival of small businesses, using data from the Dun & Bradstreet Corporation. We use event studies and standard difference-in-difference models to estimate the effect of a small business applying for larger PPP loans and of a small business being eligible for PPP based on size. While our findings are informative, we believe it is too early to issue conclusive judgment on PPP's success. We offer lessons for the future from the PPP experience thus far. |
| Keywords: | Paycheck Protection Program, PPP, Pandemic Recession, CARES Act, COVID-19 |
| JEL: | H20 H25 H32 J01 J08 J23 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13808&r=all |