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on Labour Economics |
| By: | Ben Artz (University of Wisconsin, Oshkosh); David G. Blanchflower (Bruce V. Rauner Professor of Economics, Dartmouth College, Adam Smith Business School, University of Glasgow, NBER and Bloomberg); Alex Bryson (University College London. IZA, Bonn. NIESR, London) |
| Abstract: | In this paper we revisit the well-known negative association between union coverage and individuals’ job satisfaction in the United States, first identified over forty years ago. We find the association has flipped since the Great Recession such that union workers are now more satisfied than their non-union counterparts. We show this to be the case for younger and older workers in the National Longitudinal Surveys of 1979 and 1997. The change is apparent when we use the panel data to account for fixed differences in those who are and are not unionized, suggesting changes in worker sorting into union status are not the reason for the change. The absence of substantial change in the union wage gap, and the stability of results when conditioning on wages, both suggest the change is not associated with changes in unions’ wage bargaining. Instead, we find some diminution in unions’ ability to lower quit rates – albeit confined to older workers - which is suggestive of a decline in their effectiveness in operating as a ‘voice’ mechanism for unionized workers. We also present evidence suggestive of unions’ ability to minimize covered workers’ exposure to underemployment, a phenomenon that has negatively impacted non-union workers. |
| Keywords: | job satisfaction; union coverage; union wage gap; quits; underemployment; panel; NLSY |
| JEL: | J28 J50 J51 |
| Date: | 2021–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:2113&r= |
| By: | Addison, John T. (University of South Carolina); Teixeira, Paulino (University of Coimbra) |
| Abstract: | Using a cross section of matched data from the employee and management questionnaires of the European Company Survey, this paper investigates the determinants of worker commitment and the potential contribution of commitment to establishment performance. An index of worker commitment is constructed from employer perceptions of the motivation of workers and their retention and absenteeism propensities, while the determinants of commitment are fashioned from observations taken from the worker representation side ordered along dimensions such as perceived organizational trust and involvement. The commitment index is then linked to establishment performance outcomes. Key findings from the commitment equation are the positive role of trust in management, the quality of information exchanged, and the degree of worker representation influence in respect of major decisions taken by management. In turn, commitment emerges as a key correlate of establishment financial performance and labor productivity growth. Our supplemental sensitivity analysis is supportive of the interpretation of commitment as a driver of performance. |
| Keywords: | commitment, type of workplace representation, financial performance, labor productivity growth, European Company Survey |
| JEL: | J20 J50 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14290&r= |
| By: | Gérman Feierherd; Patricio Larroulet; Wei Long; Nora Lustig (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQ).) |
| Abstract: | Latin American countries experienced a significant reduction in income inequality at the turn of the 21st century. From the early 2000s to around 2012, the average Gini coefficient fell from 0.514 to 0.476. The period of falling inequality coincided with leftist presidential candidates achieving electoral victories across the region: by 2009, ten of the seventeen countries had a leftist president – the so-called Pink Tide. We investigate whether there was a “leftist premium” on the decline in inequality and, if there was one, through which mechanisms. Using a range of econometric models, inequality measurements, and samples, we find evidence that leftist governments lowered income inequality faster than non-leftist regimes, increasing the income share captured by the first seven deciles at the expense of the top ten percent. Our analysis suggests that this reduction was achieved by increasing social pensions, minimum wages, and tax revenue. |
| Keywords: | income inequality, government ideology, Latin America, redistribution, direct transfers, minimum wage, taxation |
| JEL: | O1 D72 D63 I38 N36 H20 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:tul:ceqwps:105&r= |
| By: | Caria, Stefano (University of Warwick and CAGE); Gordon, Grant (International Rescue Committee); Kasy, Maximilian (University of Oxford); Quinn, Simon (University of Oxford); Shami, Soha (Danish Refugee Council); Teytelboym, Alexander (University of Oxford) |
| Abstract: | We introduce an adaptive targeted treatment assignment methodology for field experiments. Our Tempered Thompson Algorithm balances the goals of maximizing the precision of treatment effect estimates and maximizing the welfare of experimental participants. A hierarchical Bayesian model allows us to adaptively target treatments. We implement our methodology in Jordan, testing policies to help Syrian refugees and local jobseekers to find work. The immediate employment impacts of a small cash grant, information and psychological support are small, but targeting raises employment by 1 percentage-point (20%). After four months, cash has a sizable effect on employment and earnings of Syrians. |
| Keywords: | JEL Classification: C93, J6, O15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:547&r= |
| By: | John J. Horton |
| Abstract: | The sharp devaluation of the ruble in 2014 increased the real returns to Russians from working in a global online labor marketplace, as contracts in this market are dollar-denominated. Russians clearly noticed the opportunity, with Russian hours-worked increasing substantially, primarily on the extensive margin—incumbent Russians already active were fairly inelastic. Contrary to the predictions of bargaining models, there was little to no pass-through of the ruble price changes in to wages. There was also no evidence of a demand-side response, with buyers not posting more "Russian friendly" jobs, suggesting limited cross-side externalities. The key findings—a high extensive margin elasticity but low intensive margin elasticity; little pass-through into wages; and little evidence of a cross-side externality—have implications for market designers with respect to pricing and supply acquisition. |
| JEL: | J01 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28702&r= |
| By: | Jérôme Adda; Christian Dustmann; Joseph-Simon Görlach |
| Abstract: | This paper develops and estimates a dynamic model where individuals differ in ability and location preference to evaluate the mechanisms that affect the evolution of immigrants’ careers in conjunction with their re-migration plans. Our analysis highlights a novel form of selective return migration where those who plan to stay longer invest more into skill acquisition, with important implications for the assessment of immigrants’ career paths and the estimation of their earnings profiles. Our study also explains the willingness of immigrants to accept jobs at wages that seem unacceptable to natives. Finally, our model provides important insight for the design of migration policies, showing that policies which initially restrict residence or condition residence on achievement shape not only immigrants’ career profiles through their impact on human capital investment but also determine the selection of arrivals and leavers. |
| Keywords: | international migration, human capital, expectations |
| JEL: | F22 J24 J61 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9051&r= |
| By: | Gustafsson, Björn Anders (University of Gothenburg); Nivorozhkina, Ludmila (Rostov State Economic University); Wan, Haiyuan (Beijing Normal University) |
| Abstract: | The incidence of working for earnings beyond the normal pension age of 55 for females and 60 for males in urban China and Russia is investigated using micro-data for 2002, 2013, and 2018. Estimated logit models show that, in both countries, the probability of working after normal retirement age is positively related to living with a spouse only, being healthy, and having a higher education level but is negatively associated with age, the scale of pension and, in urban China, being female. We find that seniors in urban Russia are more likely to work for earnings than their counterparts in China. Two possible reasons for this difference are ruled out: cross-country differences in health status and the age distribution among elderly people. We also show that working beyond the normal retirement age has a much stronger negative association with earnings in urban China than in urban Russia. This is consistent with the facts that the normal retirement age is strictly enforced in urban China and seniors attempting to work face intensive competition from younger migrant workers. We conclude that China can learn from Russia that it has a substantial potential for increasing employment among healthy people under 70. |
| Keywords: | retirement, older people, employment, China, Russia, labour market |
| JEL: | E24 J14 J J3 P52 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14294&r= |
| By: | Bonacini, Luca; Gallo, Giovanni; Scicchitano, Sergio |
| Abstract: | In this paper, we explore channels by which household background determines an individual's educational and social opportunities in Italy. Our analysis relies on a rich dataset that contains data both on individuals and their real parents, as well as information on individuals' non-cognitive skills. This paper also represents the first attempt to evaluate if and to what extent personality traits affect educational and occupational opportunities in Italy and how they interact with household background. The results highlight that the level of parental education is more relevant than the level of parental occupational skill in individuals' educational and social opportunities. The inclusion of 'Big-5' variables in the model helps control for omitted variables and reduces the unobserved heterogeneity in intergenerational social mobility among individuals with the same level of education and skills. Our results depict a dual and unequal labour market. |
| Keywords: | intergenerational mobility,equality of opportunity,household background,regional studies,personality traits,big five |
| JEL: | I24 J62 R23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:832&r= |
| By: | Valeria Rueda (University of Nottingham and CEPR); Galeria Rueda (University of Leicester) |
| Abstract: | We develop a model of joint job search and occupational choice in which job opportunities can be incompatible inside the couple. Typically, incompatibilities may arise because jobs are not in the same location. We show that the existence of incompatible jobs pushes some couples to sacrifice the career of one partner. The model predicts occupational switches throughout the career and at the time of couple formation. Gendered equilibria, whereby all women (or men) choose the accommodating occupation, may arise. Any element of ex-ante unfavorable gender gaps—for instance, due to discrimination or norms—is amplified and can generate large systemic differences in gender composition between occupations. |
| Keywords: | two-body problem, occupational specialization, career path |
| JEL: | C78 D13 D83 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:21-346&r= |
| By: | Matteo BOBBA; Gianmarco LEON; Christopher A. NEILSON; Marco NIEDDU; Camila ALVA |
| Abstract: | This paper studies the effects of a large unconditional increase in the salary of public sector teachers in Peru. Population-based rules that determine the level of teacher compensation generate locally exogenous discrete changes in wage posting across rural locations. School vacancies offering 25 percent higher wages attract better teachers, as measured by standardized evaluation tests that are used to determine priorities in national recruitment drives. Students in primary schools offering higher wages have better performance on standardized test scores, with effect sizes of 0.6 of a standard deviation in math and 0.5 of a standard deviation in Spanish three years after the salary increase. These results are entirely driven by schools that had multiple open vacancies over time, suggesting that the re-allocation of contract (and hence mobile) teachers is the main mechanism at work. Overall, our results suggest that unconditional pay increases targeted at less desirable locations can help reduce spatial inequalities in the quality of public good provision. |
| Keywords: | Pérou |
| JEL: | Q |
| Date: | 2021–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:avg:wpaper:en12457&r= |
| By: | Audinga Baltrunaite (Bank of Italy); Giulia Bovini (Bank of Italy); Sauro Mocetti (Bank of Italy) |
| Abstract: | We examine the role of managerial talent and its interaction with managerial practices in determining firm performance. We build a matched firm-director panel dataset for the universe of limited liability companies in Italy, tracking individuals across different firms over time. We define managerial talent as management's capacity to boost firms' total factor productivity, estimated using a two-way fixed effects model. Combining the data with survey information on a representative sample of firms, we then document that our measure of talent correlates with ex-ante and ex-post indicators of ability, i.e. managers' educational attainment and their forecast precision with respect to the firm's future performance. Most important, we leverage information on the adoption of managerial practices within the firm to examine potential synergies between managerial talent and structured managerial practices, thus bridging two separate strands of the literature. While talent and structured practices do boost firm productivity on their own, there is evidence of complementarities between the two. These findings hold both in a cross-sectional setting and in a panel analysis that accounts for time-invariant firm heterogeneity. Overall, our results indicate that the effectiveness of managerial practices depends on managers' ability to implement them. |
| Keywords: | Board of directors, managers, corporate governance, productivity, managerial practices |
| JEL: | G34 M10 D24 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1335_21&r= |
| By: | Javier Quintana (Banco de España) |
| Abstract: | This paper analyzes the contribution of import competition to the regional divergence among US metropolitan areas over recent decades. I document that the sharp rise in imports of Chinese manufacturing goods had a significant effect on the spatial skill polarization and the divergence of college wage premium among local labor markets. The effects of the China trade shock were systematically different depending on the skill intensity of local services. Among regions with skill-intensive services, a higher exposure to import competition in manufacturing increased the number and wages of college-educated workers. The negative effects of the China shock concentrated in exposed regions with a low density of college-educated workers. The heterogeneous effects of import competition explain one third of the spatial skill polarization and one fourth of the divergence in college wage premium. I show that the contribution of the trade shock operates through the reallocation of workers across sectors and regions. Using a novel measure of “labor market exposure to the China shock”, I document that service industries expand when local manufacturers face import competition. High human capital regions exposed to the China shock undergo a faster transition from manufacturing to skill-intensive service industries and attract college-educated workers from other locations. |
| Keywords: | international trade, import competition, regional inequality, skill sorting, factor mobility |
| JEL: | F14 F16 F66 I24 J24 J61 R12 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:2115&r= |
| By: | George A. Alessandria; Robert C. Johnson; Kei-Mu Yi |
| Abstract: | This paper surveys macroeconomic and microeconomic perspectives on the role of international trade in structural transformation. We start by describing canonical frameworks that have been used to quantify how trade influences sectoral shares of employment and value added. We then pivot to survey micro-empirical evidence on the impact of changes in trade on the allocation of labor across sectors and productivity at the firm level. In this, we put special emphasis on the role of participation in global value chains and inward foreign direct investment in mediating these effects. Next, we evaluate evidence on the barriers to trade faced by low-income countries, with special attention to recent work that measures these costs taking firm dynamics into account. We conclude by discussing how these micro-perspectives can be integrated into macro-models to advance our understanding of structural change. |
| JEL: | F1 F43 O11 O4 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28720&r= |
| By: | Haaland, Ingar (University of Bergen and CESifo); Roth, Christopher (University of Warwick, briq, CESifo, CEPR, and CAGE) |
| Abstract: | This paper provides representative evidence on beliefs about racial discrimination and examines whether information causally affects support for pro-black policies. Eliciting quantitative beliefs about the extent of hiring discrimination against blacks, we uncover large disagreement about the extent of racial discrimination with particularly pronounced partisan differences. An information treatment leads to a convergence in beliefs about racial discrimination but does not lead to a similar convergence in support of pro-black policies. The results demonstrate that while providing information can substantially reduce disagreement about the extent of racial discrimination, it is not sufficient to reduce disagreement about pro-black policies. |
| Keywords: | Racial Discrimination, Beliefs, Pro-Black Policies, Policy Preferences JEL Classification: C91, D83, J71, J15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:554&r= |
| By: | Sara Heller |
| Abstract: | Because successful human capital interventions often fail to scale or replicate, public investment decisions require understanding how program size, context, and implementation shape program effects. This paper uses two new randomized controlled trials of summer youth employment programs in Chicago and Philadelphia to demonstrate how multiple experiments can help explain replicability and inform the expansion of promising approaches. Even when these programs grow or change models across contexts, participation consistently reduces criminal justice involvement. It may also decrease the need for child protective services and behavioral health treatment. Experimental variation in program model and local provider generates no detectable heterogeneity, suggesting that effects replicate partly because variability in implementation does not matter. There is, however, individual-level heterogeneity that explains differences in effect magnitudes across populations and informs optimal targeting; youth at higher risk of socially costly outcomes experience larger benefits. Identifying more interventions that combine this pattern of treatment heterogeneity with robust replicability could aid efforts to reduce social inequality efficiently. |
| JEL: | I38 J08 K42 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28705&r= |
| By: | Palviainen Heikki (Faculty of Management and Business, Tampere University) |
| Abstract: | In 2002, the Finnish government introduced an earnings disregard experiment aimed at improving the incentives of low-income individuals who receive last-resort social as- sistance. The aim of the experiment was to reduce unemployment by providing social assistance clients better incentives to receive at least temporary or part-time work. This paper evaluates the employment effects of the experiment using a quasi-experimental design. The experiment allowed for some social assistance client groups to earn a small temporary income to supplement their disposable income. There are small positive ef- fects on earnings for women and single-person households. |
| Keywords: | Difference-in-differences, making work pay, earnings disregard, welfare |
| JEL: | C93 H53 I38 J68 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:tam:wpaper:2132&r= |
| By: | Bernardus Van Doornik; Armando Gomes; David Schoenherr; Janis Skrastins |
| Abstract: | We assess the employment and income effects of access to credit dedicated to investment in individual mobility (a motorcycle). For identification, we exploit random time-series variation in access to credit through random lotteries for participants in a group-lending mechanism in Brazil. We find that access to credit for investment in individual mobility permanently increases formal employment rates and salaries, yielding an annual real rate of return of 16.94 percent over a ten-year horizon. Consistent with a geographically broader job search, we find that individuals transition to jobs further away from home and public transportation. Our results suggest that credit constraints prevent individuals from accessing parts of the labor market. As a consequence, extending credit for investment in mobility enables individuals to access geographically distant labor market opportunities, yielding high and persistent returns. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bcb:wpaper:547&r= |
| By: | Mark Borgschulte (University of Illinois Urbana-Champaign); Gabrielle Pepin (W.E. Upjohn Institute for Employment Research) |
| Abstract: | This paper studies the impact of the COVID-19 pandemic on youth disconnection—i.e., the share of young people who were neither in school nor at work. Youth disconnection offers important advantages, relative to unemployment or participation rates, as a measure of the labor market for the most marginal and disadvantaged youth. Before the pandemic, approximately one out of eight young people between the ages of 18 and 24 were disconnected. The disconnection rate increased dramatically in April 2020 because of the pandemic; however, it has decreased quickly since that time. The increase in the disconnection rate at the beginning of the pandemic was mostly driven by a reduction in full-time work, but toward the end of 2020, the school enrollment rate also fell. Within-individual transition analysis reveals that the pandemic drove some individuals to disconnection, regardless of whether those persons were in school, at work, or already disconnected. Full-time workers saw the largest increase in transition to disconnection. Compared to the 2007 recession, the full-time-work to full-time-work transition decreased more and the full-time-work to disconnection transition increased more during this pandemic. |
| Keywords: | COVID-19, youth labor market, youth disconnection |
| JEL: | J13 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:21-348&r= |
| By: | Palma, Nuno (University of Manchester; ICS, Universidade de Lisboa; CEPR & CAGE); Reis, Jaime (ICS, Universidade de Lisboa); Rodrigues, Lisbeth (ISEG, Universidade de Lisboa) |
| Abstract: | Gender discrimination has been pointed out as a determining factor behind the long-run divergence in incomes of Southern vis-Ã -vis Northwestern Europe. In this paper, we show that there is no evidence that women in Portugal were historically more discriminated against than those of other parts of Western Europe, including England and the Netherlands. We rely on a new dataset of thousands of observations from archival sources which cover six centuries, and we complement it with a qualitative discussion of comparative social norms. Compared with Northwestern Europe, women in Portugal faced similar gender wage gaps, married at similar ages, and did not face more restrictions to labor market participation. Consequently, other factors must be responsible for the Little Divergence of Western European incomes. |
| Keywords: | Historical gender discrimination, gender wage gap, culture, social norms, comparative development, the Little Divergence, European Marriage Pattern. JEL Classification: N13, N33, J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:551&r= |
| By: | Ainhoa Aparicio Fenoll; Sarah Zaccagni |
| Abstract: | We conduct a randomized controlled trial to study the effect of gender composition of teams on performance, self-concept, working style, and individual satisfaction in endogenously and exogenously formed teams. We randomly divide a sample of high school students into two groups: we assign students in one group to teams of varying gender composition using random assignment and we allow the students in the other group to form teams freely. We find that students form disproportionately more male-predominant teams that those that would be formed under random assignment and that students in endogenously-formed gender-biased teams prefer even more gender-biased teams ex-post. Our results also show that female-predominant teams under-perform other types of teams but these differences disappear when teams are endogenously-formed. |
| Keywords: | team composition, gender, team formation, team dynamics, team performance, field experiment, decision-making. |
| JEL: | J16 I21 I24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:646&r= |
| By: | Thomas Høgholm Jørgensen (CEBI, Department of Economics, University of Copenhagen); Jakob Egholt Søgaard (CEBI, Department of Economics, University of Copenhagen) |
| Abstract: | We study the design of parental leave systems through the lens of an estimated model of parents’ joint willingness to pay for parental leave. We estimate the model using Danish register data on almost 200,000 births combined with sharp variation in economic incentives created by the parental leave benefit system. The estimated model reproduces the empirical distribution of leave, including bunching at kinks in household budget sets and a large share of fathers taking little or no leave at all. We provide a menu of counterfactual policy simulations showing substantial interaction effects between earmarked leave, replacement rates and the duration of leave benefits. For example, introducing 9 weeks earmarked parental leave, as stipulated by a recent EU directive, with a low replacement rate increases the leave of fathers only slightly, while it reduces the leave of mothers significantly in our model. Finally, we discuss the efficiency costs of different policies aimed at increasing the parental leave of fathers. |
| Keywords: | parental leave, welfare reforms, intrahousehold allocation |
| JEL: | J13 J22 H31 C54 |
| Date: | 2021–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2109&r= |