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on Labour Economics |
| By: | Yiwen Chen; Thomas Y. Mathä; Giuseppe Pulina; Michael Ziegelmeyer |
| Abstract: | This report presents the methodology and main descriptive results from the third wave of the Cross-border Household Finance and Consumption Survey (XB-HFCS) conducted in 2018. This is a household survey of employees in Luxembourg who live abroad and regularly commute across the border. We analyse the composition and level of household assets and liabilities, net wealth and income, and compare them to those of similar households (including at least one employee) whether resident in Luxembourg or in one of the bordering countries. Compared to households employed in their country of residence, cross-border commuters reported higher median gross income, homeownership rates and wealth. Around 10% of cross-border commuters lived in Luxembourg before they moved to Belgium, France or Germany (usually their country of birth). |
| Keywords: | Cross-border commuters, households, survey, assets, liabilities, wealth, income. |
| JEL: | G51 D31 D14 C81 C83 J61 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:bclwp154&r=all |
| By: | Britta Gehrke (Universitat Rostock & IAB); Jacob Wong (School of Economics, University of Adelaide) |
| Abstract: | This paper documents observations about the duration of jobs created by establishments at various points along an establishment age curve. Using an employer-employee matched dataset from Germany, we observe a checkmark-shaped relationship between expected job duration and establishment age at the time of job creation. A simple frictional labour market model with two-sided heterogeneity featuring on-the-job search, a simple learning mechanism about worker ability and a life cycle productivity profile for firms is built to frame a discussion around the empirical finding. The model's mechanical job-ladder is shown to be able to produce such stylized correlations. |
| Keywords: | job duration,firm age, frictional labour markets |
| JEL: | E24 J63 J64 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2021-01&r=all |
| By: | Sophia Schmitz; C. Katharina Spieß |
| Abstract: | Social norms have been put forward as prominent explanations for the changing labour supply decisions of women. This paper studies the intergenerational formation of these norms, examining how they affect subsequent female labour supply decisions, taking into account not only the early socialization of women but also that of their partner. Using large representative panel data sets from West Germany, results suggest that women with partners who grew up with a working mother are more likely to participate in the labour force, work longer hours, and earn higher labour income. Our study can assess a variety of potential mechanisms for this intergenerational link. It cannot be explained by other confounding patterns. We find no evidence that this finding reflects assortative mating; rather, analysis suggests that the partner’s preferences play a decisive role for the labour supply decision of partnered women. Our results suggest that policy measures supporting the labour force participation of today’s mothers will increase the female labour force participation of the next generation |
| Keywords: | social norms, labour supply, gender, Germany |
| JEL: | J22 Z13 J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1932&r=all |
| By: | Esteban García-Miralles (CEBI, Department of Economics, University of Copenhagen); Jonathan M. Leganza (University of California, San Diego) |
| Abstract: | We study how social security influences joint retirement of couples. We exploit three decades of administrative data from Denmark to explore joint retirement in two complementary settings. In the first setting, we exploit the discontinuous increase in retirement observed when individuals become eligible for public pension benefits to identify the causal effects on their spouses. We find that spouses are more likely to retire right when their partners reach pension eligibility age, with a spillover effect across spouses of 7.5%. We further unpack this result by studying additional margins of adjustment such as benefit claiming and earnings, and by documenting meaningful response heterogeneity. We find age differences within couples to be a crucial determinant of joint retirement, which is primarily driven by older spouses who continue to work until their younger partners reach pension eligibility. Controlling for these age differences uncovers a gender gap where female spouses are more likely to adjust their behavior to retire jointly, and this gap remains after controlling for earnings shares within couples. In the second setting, we study to what extent couples adapt their behavior to retire jointly after a reform increases pension eligibility ages. We find spillover effects across spouses comparable to those from the first setting, in which eligibility ages were stable and known by couples well in advance. This suggests that spouses do not face adjustment costs limiting their capacity to retire together after the reform. |
| Keywords: | joint retirement, pension eligibility age, couples labor supply |
| JEL: | J14 J26 D10 H55 |
| Date: | 2021–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2101&r=all |
| By: | Mette Foged (University of Copenhagen, CReAM and IZA); Linea Hasager (University of Copenhagen); Vasil Yasenov (Immigration Policy Lab, Stanford University, and IZA) |
| Abstract: | We study the role of institutions in affecting the labor market impacts of immigration using a cross-country meta-analysis approach. To accomplish this, we gather information on 1,030 previously estimated wage effects and 432 employment effects of immigration from 61 academic studies covering 18 developed countries. The mean and median impact on the relative wage of directly exposed native workers are negative and significantly different from the small positive mean and median impact on the average wage level. This pattern is reversed for employment effects where the magnitudes are smaller. We combine this database with country-level data on labor market institutions from the OECD. The results suggest that institutions may shield native workers from distributional (relative) wage consequences of immigration but exacerbate the impacts on average wages in the economy. We do not detect a significant and robust association for the employment effects of foreign workers. |
| Keywords: | immigration, wages, employment, labor market institutions, meta-analysis |
| JEL: | D02 J08 J15 J31 J61 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2107&r=all |
| By: | Jesús Fernández-Villaverde; Federico Mandelman; Yu Yang; Francesco Zanetti |
| Abstract: | This paper develops a dynamic general equilibrium model with heterogeneous firms that face search complementarities in the formation of vendor contracts. Search complementarities amplify small differences in productivity among firms. Market concentration fosters monopsony power in the labor market, magnifying profits and further enhancing high-productivity firms’ output share. Firms want to get bigger and hire more workers, in stark contrast with the classic monopsony model, where a firm aims to reduce the amount of labor it hires. The combination of search complementarities and monopsony power induces a strong “Matthew effect” that endogenously generates superstar firms out of uniform idiosyncratic productivity distributions. Reductions in search costs increase market concentration, lower the labor income share, and increase wage inequality. |
| Keywords: | market concentration, superstar firms, search complementarities, monopsony power in the labor market |
| JEL: | C63 C68 E32 E37 E44 G12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8897&r=all |
| By: | Laszlo Goerke; Markus Pannenberg |
| Abstract: | The German law on co-determination at the plant level (Betriebsverfassungsgesetz) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. This regulation contrasts with publicized instances of excessive payments. The divergence has sparked a debate about the need to reform the law. This paper provides representative evidence on wage payments to works councilors for the period 2001 to 2015. We find wage premia of 2% to 6% in OLS-specifications, which are more pronounced for long-term works councilors. Moreover, we observe no wage premia in linear fixed-effects panel data specifications, suggesting that the OLS-results capture the effect of selection into works councillorship. We obtain no evidence for a delayed compensation or a special treatment of works councilors released from work. Hence, our results indicate that payments to works councilors are broadly in line with legal regulations. |
| Keywords: | Labor Law, Wages, Works Councils, Socio-Economic Panel (SOEP) |
| JEL: | J30 J51 J53 J83 K31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1122&r=all |
| By: | Forsythe, Eliza (University of Illinois at Urbana-Champaign); Weinstein, Russell (University of Illinois at Urbana-Champaign) |
| Abstract: | We investigate employer recruiting behavior, using detailed firm-level data from a national survey of employers hiring recent college graduates. We show employers adjust recruiting effort, hiring standards, and compensation with the business cycle, beliefs about tightness, and their own hiring plans. We then show that firms expending greater recruiting effort hire more individuals per vacancy. The results suggest that when firms want to increase hires they adjust vacancies and recruiting intensity per vacancy, which may help explain the breakdown in the standard matching function during the Great Recession. Our measure of recruiting effort explains roughly 16% of the residual elasticity of the vacancy yield with respect to hires. |
| Keywords: | recruiting intensity, vacancy yield, labor market search and matching, recent college graduates |
| JEL: | J63 D20 E24 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14138&r=all |
| By: | Gaurav Chiplunkar; Pinelopi K. Goldberg |
| Abstract: | We develop a framework for identifying and quantifying barriers to entry and operation faced by female entrepreneurs in developing countries, and apply it to the Indian economy. We find that despite considerable progress over time, female entrepreneurs still face substantial entry and business registration costs (almost twice their male counterparts’). The costs of expanding a business, conditional on entry, are also substantially higher for women. However, there is one area in which female entrepreneurs have an advantage: hiring female workers is easier for them. We show that this pattern is not driven by the sectoral composition of female employment. Counterfactual simulations indicate that removing all excess barriers faced by women entrepreneurs would: (a) increase the fraction of female-owned firms significantly (nine times); (b) increase the real wages of female relative to male workers; and (c) generate substantial aggregate productivity and welfare gains (ca. 7% and 18% respectively). These large gains are due to reallocation: low productivity male-owned firms previously sheltered from female competition are replaced by higher productivity female-owned firms previously excluded from the economy. |
| JEL: | J16 J70 O17 O40 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28486&r=all |
| By: | Christopher T. Stanton; Pratyush Tiwari |
| Abstract: | This paper estimates housing choice differences between households with and without remote workers. Prior to the pandemic, the expenditure share on housing was more than seven percent higher for remote households compared to similar non-remote households in the same commuting zone. Remote households’ higher housing expenditures arise from larger dwellings (more rooms) and a higher price per room. Pre-COVID, households with remote workers were actually located in areas with above-average housing costs, and sorting within-commuting zone to suburban or rural areas was not economically meaningful. Using the pre-COVID distribution of locations, we estimate how much additional pre-tax income would be necessary to compensate non-remote households for extra housing expenses arising from remote work in the absence of geographic mobility, and we compare this compensation to commercial office rents in major metro areas. |
| JEL: | J32 J81 J82 R21 R3 R40 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28483&r=all |
| By: | Karbownik, Krzysztof (Emory University); Wray, Anthony (University of Southern Denmark) |
| Abstract: | Does childhood health capital affect long-run labor market success? We address this question using inpatient hospital admission records linked to population census records. Sibling fixed effects estimates indicate that in comparison to their brothers, boys with health deficiencies were more likely to experience downward occupational mobility relative to their father's occupational rank. This decline in occupational success across generations can be decomposed into a lower likelihood of attaining white collar status and a higher likelihood of working in unskilled jobs, which translated into lower occupational wages on average. Evidence indicates that a lower school attendance rate and higher rates of disability in both childhood and adulthood are plausible mechanisms for our findings. |
| Keywords: | childhood health capital, intergenerational inequality, occupational success |
| JEL: | I14 J62 N33 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14127&r=all |
| By: | Bonsang, Eric (LISER (CEPS/INSTEAD)); Caroli, Eve (Université Paris-Dauphine) |
| Abstract: | We investigate the relationship between cognitive load and occupational injuries. Cognitive load is defined in the literature as a tax on bandwidth which reduces cognitive resources. We proxy cognitive load with the number of non-professional tasks that individuals perform during weekdays. The underlying assumption is that when individuals perform many of those tasks, this requires mental organization which reduces available cognitive resources. We show that being cognitively loaded is associated with an increase in the risk of occupational injury for both males and females. The effect is stronger for individuals in high-risk occupations and, among those, for low-educated workers. |
| Keywords: | work injury, cognitive load, time-use data |
| JEL: | J28 J81 D91 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14137&r=all |
| By: | Lee Elliot Major; Andrew Eyles; Stephen Machin |
| Abstract: | The unequal learning and labour market losses arising in the UK due to the Covid-19 pandemic are used to assess the consequences for social mobility. Labour market and learning losses have been more pronounced for people from poorer families and this is incorporated into a generalisation of the standard, canonical social mobility model. A calibration shows a significantly higher intergenerational elasticity - reflecting lower social mobility - because of the uneven nature of losses by family income, and from dynamic scarring. Results from a randomised information experiment incorporated in a bespoke Social Mobility Survey corroborate this, as participants become more sceptical about the social mobility prospects of the Covid generation when given information about the losses that have occurred in the crisis. |
| Keywords: | learning loss, labour market loss, crisis, social mobility, Covid-19 |
| JEL: | I24 J63 J21 J62 I24 J63 J21 J62 I24 J63 J21 J62 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1748&r=all |
| By: | Isao KAMATA |
| Abstract: | Are inward FDI and its increase related to the domestic labor market conditions in the host economy? This is still an open question, as literature to date has provided mixed evidence. This paper empirically addresses this question by testing the debated relationship in both possible “causal” directions—i.e., testing (i) whether the host’s labor market flexibility—or strictness—leads an increase in inward FDI and (ii) whether it follows inward FDI, using publicly accessible macro-level data. The first set of estimation shows that a host country with relaxed employment protection tends to attract more inward FDI, which is consistent with the findings in some recent studies. The analysis also indicates that this relationship should chiefly be the case in the “traditional” OECD members but may not apply to other countries. On the other hand, the second set of estimation indicates that increased inward FDI could result in loosened employment protection. This impact may not be immediately apparent but could be more significant in a longer time horizon. |
| Keywords: | Foreign direct investment, Labor market flexibility, Labor conditions,Employment protection |
| JEL: | F16 F21 F66 J80 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-20-007&r=all |
| By: | Oscar Becerra; José-Alberto Guerra |
| Abstract: | Are there gender differences in the willingness to pay (WTP) for safer jobs? Using a laboratory experiment, we elicit participants’ WTP for an early (perceived ‘safer’) on-site shift. We find that women forego larger earnings in order to secure an early shift more than men do, with a safety concern about the late shift being a key driver, explaining up to 20% of the estimated gender gap. We do not observe a gender gap if the job can be completed remotely. Results are robust to controlling for morning-types, household and demographic characteristics, attitudes toward risk and uncertainty, victimization, and information provision about crime. Controlling for crime exposure reduces the estimated gender gap. Thus, our results suggest that policies that reduce gender disparities in safety concerns may affect women’s labor supply. |
| Keywords: | Safety concerns, willingness to pay, gender gaps, experiment |
| JEL: | J16 C92 D03 |
| Date: | 2021–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:018900&r=all |
| By: | Linea Hasager (CEBI, Department of Economics, University of Copenhagen); Mia Jørgensen (Danmarks Nationalbank) |
| Abstract: | Does living in a low-income neighborhood have negative health consequences? We document causal neighborhood effects on health by exploiting a Spatial Dispersal Policy that quasi-randomly resettled refugees across neighborhoods from 1986-1998. The risk of developing a lifestyle related disease before 2018 increased by 5.1 percent for those allocated to the poorest third of neighborhoods compared with those in the richest third of neighborhoods. Our results suggest that interaction with neighbors and the characteristics of the immediate environment are important determinants for health outcomes. Differences in health care access, ethnic networks, and individual labor market outcomes cannot explain our findings. |
| Keywords: | health inequality, refugee dispersal policy, lifestyle related diseases, neighborhood effects |
| JEL: | J15 I12 I14 I31 |
| Date: | 2021–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2102&r=all |