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on Labour Economics |
| By: | Laroche, Patrice |
| Abstract: | The impact of unions on firm performance has been the subject of debate and controversy in most industrialized countries, particularly in the United States and the United Kingdom. The purpose of this chapter is to review and assess the scope and limitations of the economic analysis of unions as well as the controversies surrounding the conclusions of existing empirical research. Although it is difficult to draw firm and general conclusions on the effects of unions on firm performance, the existing results lead us to consider unions not solely in terms of their costs for the company. Empirical results suggest that unionism is often associated with higher productivity but this relationship might vary across industries, institutional contexts and over time. Estimates of the causal mechanisms through which unions affect productivity allow a better understanding of the effects of unions. The literature on the effect of unions on productivity recognizes that part of this effect may work through reducing employee turnover and other mechanisms, such as technological and organizational innovations, which are essential factors of productivity growth. Recent studies dealing with the effects of unions on firm profits support Freeman and Medoff's (1984) conclusion that unionization is associated with lower profitability. Finally, union activities, especially collective bargaining, trade off some economic efficiency for greater justice in workplaces and reduced inequalities. |
| Keywords: | unions,collective bargaining,productivity,innovation,high-performance work practices,performance |
| JEL: | J5 J51 J53 M54 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:728&r=all |
| By: | Piriu, Andreea A. |
| Abstract: | This paper studies the effects of import competition from China and Eastern Europe (EE) on the fertility decisions of individuals in German manufacturing. Through the lens of gender, the paper uniquely contributes to the literature by linking import competition to longitudinal individual data to examine individual fertility. Two separate measures of import exposure are computed for competition from China and EE (amassing five countries), whose trade volumes with Germany have increased remarkably during the panel years. Fixed-effects instrumental variable (FEIV) estimation results show that individual fertility decreases by 1.6 p.p. and by 2.0 p.p. with rising competition from China and EE, respectively. The effects are robust and consistent across different subgroups of individuals. Effects of import competition are then inspected by gender, alongside potential mechanisms underlying fertility decisions. Both male and female workers' fertility is affected via reduced earnings, though differently. The effect on male fertility is negative, with shortened employment duration. Conversely, the effect on female workers' fertility is positive, with worsened working conditions. Furthermore, in line with family economics theory, these results suggest that there is a substitution effect in the labour supply of women, here prevalently concentrated in low-technology sectors: as female earnings fall and their opportunity cost of work is lower, the prospect of having children possibly becomes a more rewarding alternative. |
| Keywords: | trade-induced shocks,labour market conditions,import competition,individual fertility,female labour supply,FEIV estimation,Germany |
| JEL: | F14 F16 J11 J13 J16 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:713&r=all |
| By: | Lee, Tae Hoon (Graduate Institute of International and Development Studies, Geneva); Peri, Giovanni (University of California, Davis); Viarengo, Martina (Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | The labor market performance of immigrants relative to natives has been widely studied but its gender dimension has been relatively neglected. Our paper aims at revisiting labor market convergence between immigrants and natives and examining this under-studied dimension in a comprehensive study of the EU-15 countries and Switzerland over the period 1999-2018. We measure convergence of labor market outcomes for male and female migrants to similar natives before and after the Great Recession and across countries of destination. Our results show that in most countries female migrants start with a larger employment gap but converge more rapidly than male migrants do. We also provide a broad overview of the role of potential factors such as economic conditions, labor markets structure, institutions and attitudes towards immigrants and women and their association with employment convergence of all immigrants and female immigrants specifically. While the analysis provides an interesting insight, we do not identify very significant factors at the national level. We find a very strong correlation between attitudes towards immigrants and their employment convergence across sub-national regions. |
| Keywords: | international migration, labor market integration, gender gaps |
| JEL: | J61 J00 J16 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13922&r=all |
| By: | Camarero Garcia, Sebastian; Hansch, Michelle |
| Abstract: | Although a relevant share of firms is created out of unemployment and current active labor market policies in Europe often subsidize unemployed individuals to start their own businesses, little is known about the role of unemployment insurance (UI) generosity for self-employment. By using Spanish administrative data including so far inaccessible information on self-employment, we exploit a reform-driven exogenous cut in UI benefits to identify its causal effect on general employment and decompose it into the effects on self-employment and re-employment. Exploiting a discontinuity in the UI benefit schedule which changed as a result of the 2012 Spanish labor market reform, we estimate the causal reform effects on the extensive margin of (self-)employment and on unemployment duration. We find heterogeneous effects on the extensive margin: while the job-finding rate increases, the startup rate decreases. Over different time horizons, the negative effect on self- employment (35-50%) outweighs the positive effect on employment (5-33%). Therefore, omitting self-employment as a counterfactual outcome might lead to overestimate general employment effects. Our UI benefit duration elasticity estimates indicate that reduced UI benefits extend unemployment duration for individuals transitioning into self-employment but shorten unemployment for individuals finding re-employment. These results might be relevant for the (optimal) design of UI systems. |
| Keywords: | Social Insurance,Self-Employment,Spain,Unemployment Insurance |
| JEL: | H75 J64 J65 J68 L26 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20062&r=all |
| By: | Cevat Giray Aksoy (King’s College London); Panu Poutvaara (University of Munich and Ifo); Felicitas Schikora (Freie Universität Berlin and DIW Berlin) |
| Abstract: | We study the causal effect of local labor market conditions and attitudes towards immigrants at the time of arrival on refugees’ multi-dimensional integration outcomes (economic, linguistic, navigational, political, psychological, and social). Using a unique dataset on refugees, we leverage a centralized allocation policy in Germany where refugees were exogenously assigned to live in specific counties. We find that high initial local unemployment negatively affects refugees’ economic and social integration: they are less likely to be in education or employment and they earn less. We also show that favorable attitudes towards immigrants promote refugees’ economic and social integration. The results suggest that attitudes toward immigrants are as important as local unemployment rates in shaping refugees’ integration outcomes. Using a machine learning classifier algorithm, we find that our results are driven by older people and those with secondary or tertiary education. Our findings highlight the importance of both initial economic and social conditions for facilitating refugee integration, and have implications for the design of centralized allocation policies. |
| Keywords: | International migration, refugees, integration, allocation policy |
| JEL: | F22 J15 J24 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2024&r=all |
| By: | Ignaszak, Marek (Goethe University Frankfurt); Jung, Philip (TU Dortmund); Kuester, Keith (University of Bonn) |
| Abstract: | Consider a union of atomistic member states, each faced with idiosyncratic business-cycle shocks. Private cross-border risk-sharing is limited, giving a role to a federal unemployment-based transfer scheme. Member states control local labor-market policies, giving rise to a trade-off between moral hazard and insurance. Calibrating the economy to a stylized European Monetary Union, we find notable welfare gains if the federal scheme's payouts take the member states' past unemployment level as a reference point. Member states' control over policies other than unemployment benefits can limit generosity during the transition phase. |
| Keywords: | unemployment reinsurance, labor-market policy, fiscal federalism, search and matching |
| JEL: | E32 E24 E62 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13886&r=all |
| By: | Laszlo Goerke (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University) |
| Abstract: | If individuals join a trade union their utility should increase. Therefore, union members can be expected to exhibit higher job satisfaction than comparable non-members. This expectation is not consistent with empirical findings. The evidence sometimes indicates that union members have lower job satisfaction, but overall suggests the absence of a robust correlation. This survey discusses empirically relevant determinants of the relationship between trade union membership and job satisfaction. It distinguishes settings in which a trade union provides public goods from those in which it restricts the provision of benefits to its members. Furthermore, the survey summarizes the empirical evidence and indicates possible future research issues. |
| Keywords: | Collective Bargaining Coverage, Job Satisfaction, Life Satisfaction, Trade Union Membership |
| JEL: | I31 J28 J51 J52 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:202008&r=all |
| By: | Matías Ciaschi (CEDLAS-IIE-FCE-UNLP) |
| Abstract: | Using longitudinal data for Argentina, this paper measures the labor supply reaction of different household members to a breadwinner’s job loss. Firm events and local unemployment shocks are exploited as exogenous sources of variation to estimate the causal effect. Our main findings show that job loss by the male household head has a significant and substantial effect on the labor supply response of other household members, both at the extensive and intensive margin. While we do not find any effect on daughters, female partners and sons increase their labor market participation. The latter are also more likely to drop out from the educational system. These results are stronger among economically vulnerable households |
| JEL: | J16 J21 J22 J65 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0271&r=all |
| By: | Dan Andrews; Nathan Deutscher; Jonathan Hambur; David Hansell |
| Abstract: | This paper explores the effects of labour market conditions at graduation on an individual’s work-life over the following decade. Australians graduating into a state and year with a 5 percentage point higher youth unemployment rate can expect to earn roughly 8 per cent less in their first year of work and 3½ per cent less after five years, with the effect gradually fading to around zero ten years on. The magnitude of this effect varies according to the characteristics of the individual and the tertiary institution they attend. We then explore the mechanisms behind this scarring. Scarring partly reflects the subsequent evolution of the unemployment rate — the fact that unemployment shocks tend to persist — highlighting the potential for timely and effective macroeconomic stabilisation policies to ameliorate these scarring effects. More generally, job switching to more productive firms emerges as a key channel through which workers recover from adverse shocks that initially disrupt (worker-firm) match quality. We find some evidence that the speed of recovery has slowed since 2000, which is consistent with the decline in labour market dynamism observed in Australia over that period. |
| Keywords: | job mobility, job search, Wages |
| JEL: | E24 J62 J64 |
| Date: | 2020–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:20-en&r=all |
| By: | Sharma, Rishi (Colgate University); Sparber, Chad (Colgate University) |
| Abstract: | The H-1B program allows firms in the United States to temporarily hire high-skilled foreign citizens. H-1B workers are highly concentrated among a small number of firms. We develop a theoretical model demonstrating that this phenomenon is an artifact of policy design: When the government restricts foreign labor inflows and allocates H- 1B status by random lottery, it creates a negative externality by incentivizing firms to search for more workers than can actually be hired. Some firms rationally move toward specializing in hiring foreign labor and contracting out those workers' services to third- party sites. This outsourcing behavior further exacerbates total search costs and lottery externalities, resulting in an annual economic loss in the hundreds of millions of dollars. |
| Keywords: | skilled workers, H-1B, outsourcing |
| JEL: | J61 J68 F22 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13892&r=all |
| By: | Francesco D'Acunto; Michael Weber; Shuyao Yang; Michael Weber |
| Abstract: | Manpower constraints are the pervasive lack of specialized high- and low-skill workers, irrespective of the wage firms might offer. For a panel of German firms, we show manpower-constrained firms have higher capacity utilization and longer backlog of orders (measured in months). They are more willing to increase their capital expenditures, and more willing to grow their employment in the following year. Manpower constraints vary substantially over time and across industries, being higher on average in traditional manufacturing industries and lower in high-tech industries. For identification, we exploit the fall of the Berlin Wall in 1989, and the subsequent differential fluxes of Eastern immigrants across Western states, which followed the pre-existing patterns of Eastern German immigration immediately after WWII. We construct a Manpower Constraint (MPC) Index calibrating the loadings on firm-level financials that are also available in commonly used data set for US, European, and Asian firms. Our results help inform relevant debates such as the reform of immigration policies and the investment in public and private education for low-skilled workers. |
| Keywords: | investment, skilled workers, immigration policies, education policies, economic growth |
| JEL: | J21 J31 J61 G31 G32 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8698&r=all |
| By: | Moritz Kuhn; Gašper Ploj |
| Abstract: | Labor markets are characterized by large heterogeneity in job stability. Some workers hold lifetime jobs, whereas others cycle repeatedly in and out of employment. This paper explores the economic consequences of such heterogeneity. Using Survey of Consumer Finances (SCF) data, we document a systematic positive relationship between job stability and wealth accumulation. Per dollar of income, workers with more stable careers hold more wealth. We also develop a life-cycle consumption-saving model with heterogeneity in job stability that is jointly consistent with empirical labor market mobility, earnings, consumption, and wealth dynamics. Using the structural model, we explore the consequences of heterogeneity in job stability at the individual and macroeconomic level. At the individual level, we find that a bad start to the labor market leaves long-lasting scars. The income and consumption level for a worker who starts working life from an unstable job is, even 25 years later, 5 percent lower than that of a worker who starts with a stable job. For the macroeconomy, we find welfare gains of 1.6 percent of lifetime consumption for labor market entrants from a secular decline in U.S. labor market dynamism. |
| Keywords: | employment risk, job stability, consumption-saving behavior |
| JEL: | J64 E21 E24 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8710&r=all |
| By: | Schoukens, Paul; Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "With the COVID-19 crisis as background, the underlying paper elaborates on setting up an unemployment insurance for self-employed. While a comprehensive approach would have clear advantages, it is crucial to adapt the rules of existing insurances for wage earners appropriately addressing the specific needs of self-employed. Therefore, we discuss key rules and conditions with regard to self-employed and derive conclusions on how unemployment insurance for them should be designed. In this, we investigate the key elements of such an insurance. When it comes to financing the unemployment scheme, we discuss how an income related contribution levied on the running income of the self-employed person could be organised. With regard to entitlement, we argue for a detailed conditioning and monitoring of the closing down of the business rather than focusing upon the involuntary character. Before the background of surging short-time work in the COVID-19 crisis, we reason that a short-time work parallel for self-employed is possible to organise in order to handle exceptional events but would have to be designed with sufficient restrictions. In order to avoid false incentives for excessive repeated use of unemployment benefits, we propose a certain experience rating that is less abrupt than existing re-eligibility criteria and thus still provides continuous protection. Regarding labour market availability, we recommend to balance swift labour market integration and productive matching of entrepreneurial persons into self-employment by criteria giving leeway to self-employed activities as far as possible, but over time also guaranteeing an effective labour market integration. For dealing with the combination of multiple jobs and activities, we provide some guiding principles how to organise an unemployment insurance including entitlement and contributions in an integrated manner around activities, based on total work-related income." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | J65 J21 |
| Date: | 2020–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:202032&r=all |
| By: | Fagnart, Jean-François (Universite Saint-Louis Bruxelles); Germain, Marc (Universite de Lille); Van der Linden, Bruno (IRES, Université catholique de Louvain) |
| Abstract: | We study the consequences of a working time reduction (WTR hereafter) in an exogenous growth model with unemployment (due to efficiency wage considerations) and a renewable natural resource. The resource is an essential input whose marginal productivity is bounded by physical laws. In the laissez-faire equilibrium, firms set headcount employment, working time and a wage level which affects workers' effort. We show that if a WTR always decreases the total number of worked hours, its impact on the number of (un)employed crucially depends on the relative scarcity of the resource. If the ressource inflow is unlimited, the economy converges toward a balanced growth path and a WTR lowers the levels of output, employment and wages along this path, without affecting their growth rate. When the resource inflow is finite, the economy converges toward a stationary state. In this case, a WTR increases the stationary level of hourly wages and employment if the resource is scarce enough (which is for instance the case if the labour and capital saving technical progress is unbounded). Furthermore, the long-term elasticity of employment (resp., of the hourly wage) to the cut in hours is larger (resp., smaller) when the resource is scarcer. The transitory dynamics toward the stationary state is studied numerically. As far as the impact of a WTR on employment and wage are concerned, this analysis confirms the results put forward for the stationary state. |
| Keywords: | unemployment, fair wage, work sharing, (limits to) growth, resource constraints |
| JEL: | J68 O44 Q57 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13880&r=all |
| By: | Doruk, Ömer Tuğsal; Pastore, Francesco |
| Abstract: | In emerging market economies, young people feel like little boats in the ocean, due to the low and uncertain macroeconomic context. In the present study, we examine the school-to-work transition in Turkey over the period 2014-2017 by using a monthly dataset. As most emerging market economies, the Turkish one faces a set of different macroeconomic conditions which make it a very hard task for many young graduates to find a job . We use panel logit models which allow studying the determinants of the probability of school-to-work transition completion with a time variant model. We look at such macroeconomic factors as GDP growth, industrial production index, real sector confidence index, real exchange rate and interest rate. In addition, we use some classifications for estimating the wage model for the new graduates and estimate by panel logit models the probability for young graduates of getting a white-collar job. Besides, the estimates are repeated for boom and bust periods, and in credit expansion periods. |
| Keywords: | School to work transition,Macroeconomic conditions,Developing economy,Turkish economy |
| JEL: | J64 O57 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:730&r=all |
| By: | Budd, John W.; Lamare, J. Ryan |
| Abstract: | Worker voice can relate to political and civic participation in numerous ways. Individual and collective voice can equip individuals with skills and attitudes that increase political engagement, and unions also explicitly encourage members to be politically aware, vote, and run for office. Labor unions and union federations are also often direct participants in the political and policy-making process. This chapter outlines the key theoretical channels by which worker voice can affect political and civic participation, highlights important methodological challenges in identifying causal relationships and mechanisms, and summarizes the major research findings pertaining to nonunion and union voice. In summarizing the major theoretical alternatives, a distinction is made between (a) experiential spillovers in which political and civic participation is facilitated by workers' experience with voice, and (b) intentional efforts by voice institutions, especially labor unions, to increase political and civic participation. In practice, however, the experiential versus intentional transmission mechanisms can be hard to distinguish, so the review of the empirical record is structured around individual-level voice versus collective voice, especially labor unions. Attention is also devoted to the aggregate effects of and participation in the political arena by labor unions. Overall, a broad approach is taken which includes not only classic issues such higher voting rates among union members, but also emerging issues such as whether union members are less likely to vote for extremist parties and the conditions under which labor unions are likely to be influential in the political sphere. |
| Keywords: | worker voice,employee voice,political participation,civic participation,voter turnout |
| JEL: | J51 J54 M54 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:725&r=all |
| By: | Nora Lustig (Tulane University and Commitment to Equity Institute); Guido Neidhöfer (ZEW Mannheim); Mariano Tommasi (Universidad de San Andrés) |
| Abstract: | We simulate the short- and long-term distributional consequences of COVID-19 in the four largest Latin American economies: Argentina, Brazil, Colombia and Mexico. We show that the short-term impact on income inequality and poverty can be very significant, but that additional spending on social assistance has a large offsetting effect in Brazil and Argentina. The effect is much smaller in Colombia and nil in Mexico, where there has been no such expansion. To project the long- term consequences, we estimate the impact of the pandemic on human capital and its intergenerational persistence. Hereby, we use information on school lockdowns, educational mitigation policies, and account for educational losses related to health shocks and parental job loss. Our findings show that in all four countries the impact is strongly asymmetric and affects particularly the human capital of children from disadvantaged families. Consequently, inequality of opportunity is expected to increase substantially, in spite of the mitigation policies. |
| Keywords: | COVID-19; Lockdowns; Inequality; Poverty; Human capital; School closures; Social spending; Intergenerational persistence; Latin America; Argentina; Brazil; Colombia; Mexico. |
| JEL: | C63 D31 I24 I32 I38 J62 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:2013&r=all |