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on Labour Economics |
| By: | Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Poutvaara, Panu (University of Munich); Schikora, Felicitas (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: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13914&r=all |
| By: | Li, Jiang (Statistics Canada); Dostie, Benoit (HEC Montreal); Simard-Duplain, Gaëlle (University of British Columbia) |
| Abstract: | Using data from the Canadian Employer-Employee Dynamics Database between 2001 and 2015, we examine the impact of firms' hiring and pay-setting policies on the gender earnings gap in Canada. Consistent with the existing literature and following Card, Cardoso, and Kline (2016), we find that firm-specific premiums explain nearly one quarter of the 26.8% average earnings gap between female and male workers. On average, firms' hiring practices – due to difference in the relative proportion of women hired at high-wage firms, or sorting – and pay-setting policies – due to differences in pay by gender within similar firms – each explain about one half of this firm effect. The compositional difference between the two channels varies substantially over the life-cycle, by parental and marital status, and across provinces. |
| Keywords: | gender wage gap, firm effects, marital status, linked employer-employee data, pay-setting, sorting |
| JEL: | J16 J31 J51 J71 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13907&r=all |
| By: | Nyström, Kristina (The Ratio Institute) |
| Abstract: | This paper studies the perceived difficulty of recruiting scarce competences to rural regions. Furthermore, the role of policy in facilitating and enhancing recruitment to and better skills matching in rural regions is discussed. Based on a survey targeted to the business sections in Swedish municipalities, the results show that recruitment is perceived to be difficult in both rural and non-rural regions. However, recruitment problems in the public sector are more pronounced in rural municipalities. Nevertheless, recruitment to the public and business sectors are perceived to be equally difficult in rural regions. Both rural municipalities and non-rural municipalities state that the difficulty of recruiting the right skills results in a lack of skills matching and constitutes an obstacle to growth. Which policies can help remedy recruitment problems in rural regions? The pecuniary incentive of writing off student debt is perceived to be the most promising policy, but respondents also believe that non-pecuniary support such as relocation support for accompanying persons and tandem recruitment should be implemented to a greater extent. Finally, the need for flexibility and policies that can be adapted to the regional demand for labour are stressed. This regards for example the adaption of education programmes to local needs and rules and regulations. |
| Keywords: | Recruitment; skills matching; rural development; regional policy |
| JEL: | R23 R58 |
| Date: | 2020–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0341&r=all |
| By: | Henrik Kleven; Camille Landais; Johanna Posch; Andreas Steinhauer; Josef Zweimüller |
| Abstract: | Do family policies reduce gender inequality in the labor market? We contribute to this debate by investigating the joint impact of parental leave and child care, using administrative data covering the labor market and birth histories of Austrian workers over more than half a century. We start by quasi-experimentally identifying the causal effects of all family policy reforms since the 1950s on the full dynamics of male and female earnings. We then map these causal estimates into a decomposition framework a la Kleven, Landais and Søgaard (2019) to compute counterfactual gender gaps. Our results show that the enormous expansions of parental leave and child care subsidies have had virtually no impact on gender convergence. |
| JEL: | H31 H42 J08 J13 J16 J18 J22 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28082&r=all |
| By: | Ryan Decker; Robert J. Kurtzman; Byron F. Lutz; Christopher J. Nekarda |
| Abstract: | Using data from 14 government sources, we develop comprehensive estimates of U.S. economic activity by sector, legal form of organization, and firm size to characterize how four government direct lending programs—the Paycheck Protection Program, the Main Street Lending Program, the Corporate Credit Facilities, and the Municipal Lending Facilities—relate to these classes of economic activity in the United States. The classes targeted by these programs are vast—accounting for 97 percent of total U.S. employment—though entityspecific financial criteria limit coverage within specific programs. These programs notionally cover a far larger universe than what was targeted by analogous Great Recession-era lending policies. We relate our estimates to those from timely alternative data sources, which do not typically cover the majority of the economic universe. |
| Keywords: | Employment; Activity estimates; Direct lending programs; Paycheck Protection Program; PPP; Main Street; Corporate Credit Facilities; Alternative data |
| JEL: | C83 E20 E58 |
| Date: | 2020–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2020-99&r=all |
| By: | Robert E. Hall; Marianna Kudlyak |
| Abstract: | Unemployment recoveries in the US have been inexorable. It is a remarkable fact that, prior to 2020, after unemployment reached its peak in a recession, and a recovery began, the annual reduction in the unemployment rate was stable at around 0.1 log points per year. The economy seems to have an irresistible force toward restoring full employment. Unless another crisis intervenes, unemployment continues to glide down to its minimum level of approximately 3.5 percentage points. The observed behavior of unemployment casts doubt on the common assumption that there is a constant natural rate of unemployment around which unemployment oscillates. Instead, the natural rate of unemployment during recoveries tracks actual unemployment on its downward path. |
| JEL: | E32 J64 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28111&r=all |
| By: | Marcella Alsan; Katherine Eriksson; Gregory Niemesh |
| Abstract: | We study the contribution of economic conditions to the success of the first avowedly nativist political party in the United States. The Know-Nothing Party gained control of a number of state governments in the 1854-1856 elections running on a staunchly anti-Catholic and anti-Irish platform. Our analysis focuses on the case of Massachusetts, which had experienced a wave of Irish Famine immigration and was at the forefront of industrialization in the United States. Voters in towns with more exposure to Irish labor market crowdout and deskilling in manufacturing were more likely to vote for Know-Nothing candidates in state elections. These two forces played a decisive role in 1855, but not the other years of the Know Nothings’ success. We find evidence of reduced wealth accumulation for native workers most exposed to labor market crowdout and deskilling, though this was tempered by occupational upgrading. |
| JEL: | J01 J1 J15 J71 N12 N32 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28078&r=all |
| By: | Nancy Reichman; Hope Corman; Dhaval M. Dave; Ariel Kalil; Ofira Schwartz-Soicher |
| Abstract: | This study investigated the effects of welfare reform in the 1990s, which represented a major policy shift that substantially and permanently retracted cash assistance to poor mothers in the U.S., on parenting. Using data on women from the 1979 cohort of the National Longitudinal Survey of Youth linked with information on their 10- to 14-year-old children from the Child Self-Administered and Self-Report surveys, we exploited variation in the implementation of welfare reform across states, over time, and across treatment and comparison groups to estimate the effects of welfare reform on parent-child activities and closeness of the mother-child relationship. We found that welfare reform had adverse effects on engagement in parent-child activities, children feeling close to their mothers, and mothers knowing their children’s whereabouts, with the effects generally concentrated among boys. These findings have implications for children’s development and contribute to a virtually non-existent literature on the effects of welfare reform on parenting and the small but growing economic literature on parenting. We found no evidence that the effects of welfare reform on parenting operated through the mother working more than full time, having multiple jobs, working in a service job, or having a non-standard work schedule. |
| JEL: | I3 J13 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28077&r=all |
| By: | Dahlberg, Matz (Institute for Dialectology, Onomastics and Folklore Research); Egebark, Johan (Research Institute of Industrial Economics (IFN)); Vikman, Ullrika (Institute for Evaluation of Labour Market and Education Policy); Özcan, Gülay (Swedish Public Employment Service) |
| Abstract: | This paper evaluates an ambitious and newly designed program for increased integration in Sweden. The purpose of the program is to help newly arrived, low-educated refugees into employment. The program includes four main components: (1) intensive initial language training, (2) work practice under close supervision, (3) job search assistance, and (4) extended cooperation between the local public sector and firms. An important feature of the program is that the demand side of the labor market, represented by the largest real estate company in Gothenburg, is involved in designing the program. Our evaluation is based on a randomized controlled trial, where potential participants in one of the first waves were randomly assigned to treatment and control groups. The paper presents results from the first two years after randomization. Using inference based on Fisher's exact test, we show that the program has positive effects on employment: around 30% of the individuals in the treatment group are employed each month during the first year following the end of the program, compared to an average of approximately 15% in the control group. |
| Keywords: | Refugee immigration; Integration; Randomized experiment; Labor market program |
| JEL: | C93 J08 J15 J23 J61 |
| Date: | 2020–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1372&r=all |
| By: | Cem Özgüzel (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | This paper provides the first direct evidence on how the geographical mobility of immigrants cushions natives during a labor demand shock. Spain was one of the hardest-hit economies during the Great Recession. Faced with a drop in the local labor demand, immigrant workers moved within Spain or left the country, generating significant decreases in local labor supply. Focusing on this episode, I use microdata from municipal registers and longitudinal Spanish administrative data to study the effects of outflow of the immigrant population from provinces on the wages and employment of the natives. I build a shift-share instrument based on the past settlements of the immigrant population across Spain to instrument outflows and argue for a causal relationship. I find that outflow of immigrants slowed down the decline in employment and wage of natives, especially of those with higher substitutability with immigrants. Moreover, I find that increased transitions from unemployment and inactivity to employment drive the positive employment effects, while wage effects are limited to those who were already employed. These findings reveal that the higher geographical mobility of immigrants cushions the natives during a demand shock. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03000365&r=all |
| By: | Alessandro Maravalle; Łukasz Rawdanowicz |
| Abstract: | Building on the automatic fiscal stabilisers literature, this paper assesses how automatic stabilisers have evolved over the past two decades by analysing changes in the personal income tax and social benefit systems. In three-quarters of the 35 OECD countries analysed, indicators of the strength of automatic stabilisers (aggregate elasticities of household income after tax with respect to the cycle and aggregate net replacement rates) changed little or moderately over the past two decades, suggesting broadly stable automatic stabilisers of household disposable income. The paper discusses pros and cons of several policy options to strengthen automatic stabilisers in the current environment. The effectiveness and possible side effects, particularly related to disincentives to work, vary across policy options. Consequently, policy reform proposals should be carefully assessed in a country-specific context and take into account other important policy objectives of tax and benefit systems. |
| Keywords: | automatic fiscal stabilisers, business cycles, fiscal policy |
| JEL: | H31 H6 E6 E32 |
| Date: | 2020–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1636-en&r=all |
| By: | Erling Barth; James C. Davis; Richard B. Freeman; Kristina McElheran |
| Abstract: | This paper uses U.S. Census Bureau panel data that link firm software investment to worker earnings. We regress the log of earnings of workers by age group on the software investment by their employing firm. To unpack the potential causal factors for differential software effects by age group we extend the AKM framework by including job-spell fixed effects that allow for a correlation between the worker-firm match and age and by including time-varying firm effects that allow for a correlation between wage-enhancing productivity shocks and software investments. Within job-spell, software capital raises earnings at a rate that declines post age 50 to about zero after age 65. By contrast, the effects of non-IT equipment investment on earnings increase for workers post age 50. The difference between the software and non-IT equipment effects suggests that our results are attributable to the technology rather than to age-related bargaining power. Our data further show that software capital increases the earnings of high-wage workers relative to low-wage workers and the earnings in high-wage firms relative to low-wage firms, and may thus widen earnings inequality within and across firms. |
| JEL: | J0 J01 J11 J2 O0 O32 O33 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28094&r=all |
| By: | Doruk, Ömer Tuğsal (Adana Alpaslan Türkeş Science and Technology University); Pastore, Francesco (Università della Campania Luigi Vanvitelli) |
| 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: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13921&r=all |
| By: | Diana Chise; Margherita Fort; Chiara Monfardini |
| Abstract: | We provide novel evidence on the existence and the extent of intergenerational transmission of STEM (Science, Technology, Engineering and Mathematics) education using a recent large administrative dataset of Italian graduates obtained from the Almalaurea data. Parental influence on two STEM educational outcomes (high school and university degree completion) is strong and, net of student's time-invariant unobserved heterogeneity, proves to be stronger at the stage of the educational career closer to labour market entry. At this stage, the influence of fathers outweighs the one of mothers and is larger for sons than for daughters. The documented STEM intergenerational transmission is not driven by liberal profession of parents for most of STEM fields, while it is for some non-STEM fields (economic and legal studies), consistently with the presence of entry barriers in some professions. |
| Keywords: | Gender, Intergenerational transmission, Parents, STEM |
| JEL: | J16 J24 I24 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:fbk:wpaper:2020-01&r=all |
| By: | Anthony EDO (CEPII.); Jacques MELITZ (CREST, CEPII and Heriot-Watt University.) |
| Abstract: | The scale of the rise in personal wealth following the Black Death calls the life-cycle hypothesis of consumption into consideration. This paper shows for the first time that the wealth effect of the Black Death on the price level continued in England for generations, up to 1450. Indeed, in absence of consideration of the wealth effect, other influences on the price level do not even appear in the econometric analysis. The separate roles of coinage, population, trade, wages and annual number of days worked for wages all also receive attention and new results follow for adjustment in the labor market. |
| Keywords: | Black Death, fourteenth-century England, price level, Great Famine. |
| JEL: | N13 J11 F33 J46 |
| Date: | 2020–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2020-30&r=all |
| By: | D'Exelle, Ben (University of East Anglia); Gutekunst, Christine (University of East Anglia); Riedl, Arno (Maastricht University) |
| Abstract: | Men and women negotiate differently, which might create gender inequality in access to resources as well as efficiency losses due to disagreement. We study the role of gender and gender pairing in bilateral bargaining, using a lab-in-the-field experiment in which pairs of participants bargain over the division of a fixed amount of resources. We vary the gender composition of the bargaining pairs as well as the disclosure of the participants' identities. We find gender differences in earnings, agreement and demands, but only when the identities are disclosed. Women in same-gender pairs obtain higher earnings than men and women in mixed-gender pairs. This is the result of the lower likelihood of disagreement among women-only pairs. Women leave more on the bargaining table, conditional on their beliefs, which contributes to the lower disagreement and higher earnings among women-only pairs. |
| Keywords: | bargaining, gender, gender pairing, beliefs, experiment |
| JEL: | C9 J16 O12 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13916&r=all |
| By: | Le, Kien; Nguyen, My |
| Abstract: | This paper evaluates the impacts of education on women’s relational empowerment, within a context of 70 developing countries across the world. Exploiting the variation in educational attainment between biological sisters, we find that education is positively associated with women’s intra-household decision making authority in both financial and non-financial domains. Moreover, education reduces relational friction, especially women’s exposure to psychological abuse. Our mechanism analyses provide suggestive evidence that these improvements could be attributed to increased access to information, assortative matching, and better labor market outcome. |
| Keywords: | Education, women’s empowerment, developing countries |
| JEL: | I2 J1 O1 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:104481&r=all |
| By: | Johanna Catherine Maclean; Justine Mallatt; Christopher J. Ruhm; Kosali Simon |
| Abstract: | The United States has experienced an unprecedented crisis related to the misuse of and addiction to opioids. As of 2018, 128 Americans die each day of an opioid overdose, and total economic costs associated with opioid misuse are estimated to be more than $500 billion annually. The crisis has evolved in three phases, starting in the 1990s and continuing through 2010 with a massive increase in use of prescribed opioids associated with lax prescribing regulations and aggressive marketing efforts by the pharmaceutical industry. A second phase included tightening restrictions on prescribed opioids, reformulation of some commonly misused prescription medications, and a shift to heroin consumption over the period 2010 to 2013. Since 2013, the third phase of the crisis has included a movement towards synthetic opioids, especially fentanyl, and a continued tightening of opioid prescribing regulations, along with the growth of both harm reduction and addiction treatment access policies. Economic research, using innovative frameworks, causal methods, and rich data, has added to our understanding of the causes and consequences of the crisis. This body of research also identifies intended and unintended impacts of policies designed to address the crisis. Although there is general agreement that the causes of the crisis include a combination of supply- and demand-side factors, and interactions between them, there is less consensus regarding the relative importance of each. Studies show that regulations can reduce opioid prescribing but may have less impact on root causes of the crisis and, in some cases, have spillover effects resulting in greater use of more harmful substances obtained in illicit markets, where regulation is less possible. There are effective opioid use disorder treatments available, but access, stigma, and cost hurdles have stifled utilization, resulting in a large degree of under-treatment in the U.S. How challenges brought about by the COVID-19 pandemic may intersect with the opioid crisis is unclear. Emerging areas for future research include understanding how societal and healthcare systems disruptions affect opioid use, as well as which regulations and policies most effectively reduce potentially inappropriate prescription opioid use and illicit opioid sources without unintended negative consequences. |
| JEL: | I1 J01 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28067&r=all |
| By: | Sehnbruch, Kirsten; Carranza, Rafael; Contreras, Dante |
| Abstract: | One of the most complex social policy issues that developing countries commonly face is the question of how they can protect the unemployed. However, the analysis of unemployment insurance (UI) in developing economies with large informal sectors is in its infancy, with few papers providing solid empirical evidence. This paper makes several contributions to the development literature: first, it applies Chetty’s 2008 landmark work on UI to a developing country (Chile) and shows that the moral hazard effects expected by policy makers, who designed the system are minimal, while liquidity effects were entirely neglected. By means of an RDD, it analyses the Chilean UI system using a large sample of administrative data, which allows for an extremely precise analysis of how the system is working, thus providing invaluable empirical lessons for other developing countries. Second, this paper shows that it is not enough merely to quantify an effect such as moral hazard, but to understand its causes and implications. An extended unemployment period stemming from moral hazard has extremely different welfare implications than one stemming from a liquidity effect and should therefore result in different policy recommendations. Third, our results also highlight that the Chilean UI system is regressive overall, as it protects workers with higher income levels and more stable jobs much more than it protects vulnerable workers, who are also much more likely to become unemployed. Fourth, this paper shows that it is essential that developing countries should take into account the specific labour market and macroeconomic context when designing social policies as the incentives embedded in such a policy may not be enough to compensate for the limitations that arise from the structure of a labour market. This research thus has implications for many developing countries, which may also be considering the implementation of some form of UI and/or the partial or complete replacement of existing severance pay legislation with continuous contributions to individual savings accounts, as recommended by the international development institutions. Furthermore, even high-income developing countries, such as Chile, cannot rely on unemployment insurance alone when it comes to protecting workers from the fallout of an economic crisis or rapid changes in the labour market that generate unemployment. Any UI system must also be linked to other social protection mechanisms to provide complimentary benefits to workers with precarious jobs. |
| Keywords: | unemployment insurance; Latin America; social policy in developing countries; welfare systems; moral hazard vs liquidity; inequality; GP1\100170 |
| JEL: | R14 J01 |
| Date: | 2020–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:107824&r=all |