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on Labour Economics |
| By: | Hall, Robert E.; Kudlyak, Marianna |
| Abstract: | A remarkable fact about the historical US business cycle is that, after unemployment reached its peak in a recession, and a recovery begins, the annual reduction in the unemployment rate is stable at around one tenth of the current level of unemployment. For example, when the unemployment rate was 7 percent at the beginning of a year, the unemployment rate fell by 0.7 percentage points during the year. The economy seems to have an irresistible force toward restoring full employment. There was high variation in monetary and fiscal policy, and in productivity and labor-force growth during the recoveries, but little variation in the rate of decline of unemployment. We show that the evolution of the labor market involves more than the direct effect of persistent unemployment of job-losers from the recession shock---unemployment during the recovery is elevated for people who did not lose jobs during the recession. We explore models of the labor market's self-recovery that imply gradual working off of unemployment following a recession shock. We emphasize the feedback from high unemployment to the forces driving job creation. These models also explain why the recovery of market-wide unemployment is so much slower than the rate at which individual unemployed workers find new jobs. The reasons include the fact that the path that individual job-losers follow back to stable employment often includes several brief interim jobs. |
| Keywords: | Business cycle; Recession; recovery; unemployment |
| JEL: | E32 J63 J64 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15954&r= |
| By: | Palma, Nuno Pedro G.; Reis, Jaime Brown; Rodrigues, Lisbeth |
| Abstract: | Gender discrimination has been pointed out as a determining factor behind the long-run divergence in incomes of Southern vis-a-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: | Comparative development; Culture; European Marriage Pattern; gender wage gap; Historical gender discrimination; Social norms; the Little Divergence |
| JEL: | J16 N13 N33 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15922&r= |
| By: | Melissa S. Kearney; Brendan M. Price; Riley Wilson |
| Abstract: | Previous research has documented that Social Security Disability Insurance (SSDI) applications and awards increase during economic downturns and that expanded access to SSDI leads to a reduction in employment. We build on these insights and investigate to what extent differential access to SSDI during economic downturns leads to differential changes in SSDI enrollment and employment during the subsequent recovery. We exploit plausibly exogenous variation in SSDI appeals processing time (a measure of hassle or access) facing individuals living in ZIP codes that straddle Social Security Administration hearing office catchment borders. During the Great Recession, ZIP codes assigned to hearing offices with faster appellate processes saw a larger increase in SSDI enrollment than their cross-border neighbors. These enrollment effects are concentrated among ZIP code pairs that experienced more severe labor market downturns, and they persist as late as 2015. In the full sample, there is no clear effect of longer processing times on subsequent employment rates. However, we find some limited evidence that faster appellate processes may have weighed on the employment recovery in hard-hit ZIP codes that had high pre-recession rates of SSDI enrollment. Our findings highlight the importance of considering interaction effects between economic shocks and ease of access to the safety net. |
| JEL: | H53 I38 J08 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28725&r= |
| By: | Björn Brügemann (Vrije Universiteit Amsterdam) |
| Abstract: | This paper show analytically that introducing diminishing returns to labor at the firm level into the Diamond-Mortensen-Pissarides model, followed by recalibration, does not change aggregate dynamics of unemployment and vacancies. This invariance result holds for several standard calibration strategies developed for the model with constant returns, alternative bargaining solutions for the setting with diminishing returns, and different sources of diminishing returns. Invariance makes precise in which sense the common practice of abstracting from diminishing returns is innocuous. It provides an analytical benchmark for quantitative findings obtained in models that do combine a Diamond-Mortensen-Pissarides labor market with diminishing returns at the firm level. |
| Keywords: | Diminishing returns, Diamond-Mortensen-Pissarides model, Aggregate unemployment dynamics, Calibration, Bargaining |
| JEL: | E24 E32 J64 |
| Date: | 2021–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20210034&r= |
| By: | Benghalem, Hélène; Cahuc, Pierre; Villedieu, Pierre |
| Abstract: | We ran a large randomized controlled experiment among about 150,000 recipients of unemployment benefits insurance in France in order to evaluate the impact of part-time unemployment benefits. We took advantage of the lack of knowledge of job seekers regarding this program and sent emails presenting the program. The information provision had a significant positive impact on the propensity to work while on claim, but reduced the unemployment exit rate, showing important lock-in effects into unemployment associated with part-time unemployment benefits. The importance of these lock-in effects implies that decreasing the marginal tax rate on earnings from work while on claim in the neighborhood of its current level does not increase labor supply and increases the expenditure net of taxes of the unemployment insurance agency. |
| Keywords: | Lock-in effects; Part-time unemployment benefits; Unemployment Duration; Unemployment insurance |
| JEL: | H5 J64 J65 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15921&r= |
| By: | Duleep, Harriet Orcutt; Jaeger, David A.; McHenry, Peter |
| Abstract: | We present a novel theory that immigrants facilitate innovation and entrepreneurship by being willing and able to invest in new skills. Immigrants whose human capital is not immediately transferable to the host country face lower opportunity costs of investing in new skills or methods and will be more flexible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants may therefore lead to more entrepreneurship and innovation, even among natives. We provide empirical evidence from the United States that is consistent with the theory's predictions. |
| Keywords: | entrepreneurship; Human Capital; Immigration; Innovation |
| JEL: | J15 J24 J39 J61 L26 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15920&r= |
| By: | ; Laura Choi; Mary C. Daly; Lily Seitelman |
| Abstract: | How much is inequity costing us? Using a simple growth accounting framework we apply standard shift-share techniques to data from the Current Population Survey (1990-2019) to compute the aggregate economic costs of persistent educational and labor market disparities by gender and race. We find significant economic losses associated with these gaps. Building on this finding, we consider which disparities generate the largest costs, paying specific attention to differences in employment, hours worked, educational attainment, educational utilization, and occupational allocation. We also examine gaps in the returns on these variables. Our findings suggest that differences in employment opportunities and educational attainment make the largest contributions by race; differences in returns on these variables also contribute materially to the total costs. Differences by gender are primarily driven by gaps in employment and hours. Given the disproportionate impact of COVID-19 on the labor market outcomes of women and people of color, as well as the fact that the U.S. population is increasingly racially diverse, these costs will only increase in the future. |
| Keywords: | Economic growth; productivity; labor market gaps; misallocation; equity; covid-19 |
| JEL: | E24 J7 J15 O4 |
| Date: | 2021–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:91221&r= |
| By: | Moshe Justman (Ben Gurion University); Hadas Stiassnie (Ben Gurion University) |
| Abstract: | We estimate yearly inequality in anticipated lifetime earnings—a lower bound on “true†inequality that would apply if earnings could be transferred freely over time—using a two-stage approach that first estimates the lifetime earnings of males born between 1942-87, from PSID data to 2018; and then measures inequality in these lifetime earnings estimates among males aged 25-59 in each year between 1986 and 2012. Comparing it to conventionally measured inequality in annual earnings, we find that yearly variances of log lifetime earnings are, on average, less than half the variances of log annual earnings, and much more stable, rising by only 11 percent throughout the period, where inequality in annual earnings increased by 46 percent after 1998, indicating a corresponding increase in intertemporal mobility. This dynamic pattern varies markedly from inequality in lifetime earnings measured within ten-year cohort-groups, which first rose by 40 percent from the earliest, 1942-51 cohort-group to the 1958-67 cohort-group, then declined by 26 percent for the youngest, 1978-87 cohort-group. |
| Keywords: | Earnings inequality, lifetime earnings, earnings volatility, PSID |
| JEL: | D31 I32 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2021-579&r= |
| By: | Gabriele Ciminelli; Cyrille Schwellnus; Balazs Stadler |
| Abstract: | Despite changes in social norms and policies, on average across 25 European countries, there remains a gap of around 15% in hourly earnings between similarly-qualified men and women. This raises inequality and limits growth by preventing women from reaching their full labour market potential. Using individual-level data, this paper quantifies the main drivers of gender wage gaps with a view to devising effective policies to reduce them. The findings suggest that, on average, “sticky floors” related to social norms, gender stereotyping and discrimination account for 40% of the gender wage gap, while the “glass ceiling” related to the motherhood penalty accounts for around 60%. The importance of the “glass ceiling” is especially large in most Northern and Western European countries, while “sticky floors” explain the major part of the gap in most Central and Eastern European countries. These results imply that most Northern and Western European countries need to prioritise policies to address the motherhood penalty, such as further promoting flexitime and telework and supporting early childcare. Most Central and Eastern European as well as Southern European countries, where “sticky floors” are more important, additionally need to prioritise equal pay and pay transparency laws, measures to address gender stereotyping, competition in product markets, as well as higher wage floors where they are currently low. |
| Keywords: | discrimination, gender wage gap, motherhood penalty |
| JEL: | J16 J24 J78 |
| Date: | 2021–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1668-en&r= |
| By: | Ufuk Akcigit; Unal Seven; Ibrahim Yarba; Fatih Yilmaz |
| Abstract: | This paper studies the firm-level short-term impact of one of the largest credit guarantee programs in the world recently implemented in Turkey. Using a combination of firm-level administrative databases of tax registry, credit registry, and the credit guarantee fund (CGF) registry, we analyze the characteristics of the CGF supported firms and the program’s impact on their employment, sales, and credit default probability. We find that the CGF program on average had a positive impact on the performance of treated firms, where the CGF supported firms were able to increase their employment by 17 percent, sales by 70 percent and reduce their credit default probability by 0.6 percentage point relative to their matched-control group. Evaluating our estimation results at variable averages shows that every 1 million TL credit generated via the CGF program preserved 2.7 extra employment and stimulated about 3 million TL in sales. We also observe an overall increase in firm indebtedness, which may adversely affect firms’ financial health in the long-run. Moreover, our findings reveal that the program impact is heterogeneous across firm size and sector groups. We use this heterogeneity to perform counter-factual policy exercises indicating that redesigning the program with such priorities can bring substantial efficiency gains. |
| Keywords: | Credit guarantee schemes, SME lending, Impact analysis |
| JEL: | G21 G3 L25 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:2110&r= |
| By: | Emilio Gutierrez (Department of Economics, ITAM); David Jaume (Financial Stability Department, Bank of Mexico); Martín Tobal (Financial Stability Department, Bank of Mexico) |
| Abstract: | This paper studies the extent to which increases in bank credit supply available for small and medium firms can foster formal employment in Mexico. We use a detailed dataset containing loan-level information for all loans extended by commercial banks to private firms in Mexico during the 2010-2016 period, when the economy was relatively stable. To obtain exogenous variation in credit supply, we exploit differences in the regional presence of Mexican banks across local labor markets by combining pre-existing market shares with national-level changes in banks’ credit supply, after accounting for local credit demand shocks. Then, we use employment registry data to compare changes in the number of formal workers registered by small and medium firms in local labor markets differently exposed to these shocks. We find that credit supply shocks have a large impact on formal employment: a positive credit shock of one standard deviation increases yearly employment growth by 0.45 percentage points (13 percent of the mean). Our results differ from the null to small effects identified by previous literature for developed countries, suggesting that credit supply shocks play a more prominent role for employment creation (and destruction) in low and middle-income countries. |
| JEL: | D22 D53 G01 G1 G21 J01 J23 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0277&r= |
| By: | Ueno, Yuko; Usui, Emiko |
| Abstract: | In this paper, we examine the relationship between childcare given by a grandmother and her employment and mental health, using the 2005–2009 waves of the Longitudinal Survey of Middle-Aged and Older Adults, a large and nationally representative panel survey of those aged 50-59 in 2005. We find that when a grandmother provides childcare to grandchildren under the age of 6, the probability of her being employed is reduced by 3.8 percentage points, after we control for time-invariant individual heterogeneity. For those working grandmothers, caring for small grandchildren reduces hours worked per week by just 0.79, and days per week by just 0.069, reductions that are small in magnitude. We also observe that caregiving for small grandchildren is insignificantly related to any psychological distress of grandmothers., 本稿では、2005－2009年の厚生労働省「中高年者縦断調査」結果を用いて、孫の 育児と祖母の就業やメンタルヘルスとの関係を検証した。同調査は、2005年時点で5 0代であった人々を対象とした全国を対象とする大規模調査である。時点間で不変の個人 属性をコントロールした分析の結果、祖母が6歳未満の孫の育児を行うと、その就業確率 は3.8パーセントポイント低下することが明らかになった。就業している祖母について は、6歳未満の孫の育児の週当たり就業時間への影響は0.79時間の減少、週当たり就 業日数への影響は0.069日の減少にとどまり、ごくわずかであった。加えて、6歳未 満の孫の育児と精神的な負担との関係は有意にはみられなかった。 |
| Keywords: | Childcare, Grandmothers, Employment, Work hours, Labor supply, Mental health, 育児, 祖母, 就業, 就業時間, 労働供給, メンタルヘルス |
| JEL: | J22 J14 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cisdps:691&r= |
| By: | Sara Stevano (Department of Economics, SOAS University of London); Rosimina Ali (Institute of Social and Economic Studies (IESE)); Merle Jamieson (Department of Economics, SOAS University of London) |
| Abstract: | COVID-19 has shaken a foundational pillar of global capitalism: the organisation of work. Whilst workers have commonly been categorised based on skills, during the pandemic the ‘essential worker’ categorisation has taken prominence. This paper explores the concept of essential work from a global feminist social reproduction perspective. The global perspective is complemented by a zoom-in on Mozambique as a low-income country in the Global South, occupying a peripheral position in global and regional economies and with a large share of vulnerable and essential workers. We show that the meaning of essential work is more ambiguous and politicised than it may appear and, although it can be used as a basis to reclaim the value of socially reproductive work, its transformative potential hinges on the possibility to encompass the most precarious and transnational dimensions of (re)production. |
| Keywords: | COVID-19; essential work; social reproduction; dependence; Mozambique |
| JEL: | B54 F66 J46 J60 K31 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:soa:wpaper:241&r= |
| By: | Martini, Christina; Urueña, Viviana |
| Abstract: | In this paper we experimentally test the effect of an intervention aimed at encouraging females to enter the labor market in Madagascar. We randomly assigned students in their last year of secondary education to watch a role model or a placebo video. In the role model videos, a female or a male narrate how they succeeded in achieving a goal they set for themselves. After video exposure, we gave female and male students the opportunity to apply for one of two types of jobs in our research team - assistant or coordinator. We find that the female role model encourages both females and males to apply for the advertised positions, compared to the placebo video. This positive treatment effect can partly be explained by participants' aspirations and current level of achievements. Moreover, we find that female students apply more often to the coordinator position compared to the control in the male role model treatment. Our results suggest that not only individuals from the in-group (females), but also males can serve as role models for females and foster behavioral changes. |
| Keywords: | Aspirations,Role models,Performance,Competition,Gender |
| JEL: | J16 C9 I25 N37 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:420&r= |
| By: | Alon, Titan; Coskun, Sena; Doepke, Matthias; Koll, David; Tertilt, Michèle |
| Abstract: | We examine the impact of the global recession triggered by the Covid-19 pandemic on women's versus men's employment. Whereas recent recessions in advanced economies usually had a disproportionate impact on men's employment, giving rise to the moniker "mancessions," we show that the pandemic recession of 2020 was a "shecession" in most countries with larger employment declines among women. We examine the causes behind this pattern using micro data from several national labor force surveys, and show that both the composition of women's employment across industries and occupations as well as increased childcare needs during closures of schools and daycare centers made important contributions. While many countries exhibit similar patterns, we also emphasize how policy choices such as furloughing policies and the extent of school closures shape the pandemic's impact on the labor market. Another notable finding is the central role of telecommuting: gender gaps in the employment impact of the pandemic arise almost entirely among workers who are unable to work from home. Nevertheless, among telecommuters a different kind of gender gap arises: women working from home during the pandemic spent more work time also doing childcare and experienced greater productivity reductions than men. We discuss what our findings imply for gender equality in a post-pandemic labor market that will likely continue to be characterized by pervasive telecommuting. |
| Keywords: | Business cycle; COVID-19; Gender equality; gender wage gap; Pandemics; Recessions; School Closures |
| JEL: | D13 E32 J16 J20 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15962&r= |
| By: | Puhani, Patrick A.; Sterrenberg, Margret K. |
| Abstract: | In this paper, we estimate the effects of mandatory military service by exploiting the post-cold war decrease in the need for soldiers causing a substantial number of potential conscripts not to be drafted into the German military. Specifically, using previously unavailable information on degree of fitness in the military’s medical exam as a control variable, we test for the effects of mandatory military service on wages; employment; marriage/partnership status; and satisfaction with work, financial situation, health, family life, friends, and life in general. We find almost no statistically significant effects of this 6 to 9 month career interruption for young German men, with the exception of hourly wage, which shows a negative point estimate of -15 percent with a large confidence interval of between -30 and -0.2 percent. This interval estimate is consistent with previous findings for the United States, Denmark, and the Netherlands. |
| Keywords: | career breaks; conscription; wages; employment; life satisfaction; natural experiment |
| JEL: | J12 J24 J47 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-684&r= |
| By: | Casper A.P. Burik (Vrije Universiteit Amsterdam); Hyeokmoon Kweon (Vrije Universiteit Amsterdam); Philipp D. Koellinger (University of Wisconsin-Madison) |
| Abstract: | Two family-specific lotteries take place during conception— a social lottery that determines who our parents are and which environment we grow up in, and a genetic lottery that determines which part of their genomes our parents pass on to us. The outcomes of these lotteries create inequalities of opportunity that can translate into disparities in health and socioeconomic status. Here, we estimate a lower bound for the relevance of these two lotteries for differences in education, income and body mass index in a sample of 38,698 siblings in the UK who were born between 1937 and 1970. Our estimates are based on models that combine family-specific effects with gene-by-environment interactions. We find that the random differences between siblings in their genetic endowments clearly contribute towards inequalities in the outcomes we study. Our rough proxy of the environment people grew up in, which we derived from their place of birth, are also predictive of the studied outcomes, but not beyond the relevance of family environment. Our estimates suggest that at least 13 to 17 percent of the inequalities in education, wages and BMI in the UK are due to inequalities in opportunity that arise from the outcomes of the social and the genetic lottery. |
| Keywords: | inequality, income, education, BMI, genetics, polygenic index |
| JEL: | I24 I14 J00 |
| Date: | 2021–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20210035&r= |
| By: | Vodopivec, Matija (University of Primorska); Laporsek, Suzana (University of Primorska); Stare, Janez (University of Ljubljana); Vodopivec, Milan (University of Primorska) |
| Abstract: | Linking health to the employment history of the whole Slovenia's workforce, this paper employs three innovative features. First, it utilizes a novel "double proof" approach of addressing the reverse causality that tracks only healthy individuals, making sure that any unemployment spell that individual may undergo precedes the occurrence of a disease, and relies on mass-layoffs to provide an additional layer of exogeneity to unemployment. Second, it is one of the first papers using data on drug prescriptions to infer information about the health status of individuals and link it labor market outcomes. And third, it treats the health effects of unemployment as part of a dose-response relationship, with the share of time spent in unemployment (as opposed to other labor market states) reflecting the "unemployment dose". The paper finds that, in comparison to employed persons with permanent contracts, persons experiencing unemployment face increased hazard of all three studied groups of diseases - cardiovascular diseases, diabetes, and mental disorders - as well as of hospitalizations caused by these diseases, with the effects stretching over a 15-year horizon. Moreover, the results also show that unemployment significantly increases the probability of death due to cardiovascular diseases and mental disorders, as well as death of any cause. |
| Keywords: | unemployment, health, hospitalization, mortality, cardiovascular diseases, diabetes, mental disorders, prescriptions, duration analysis |
| JEL: | J64 I12 C23 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14318&r= |
| By: | Walter Paternesi Meloni (Department of Economics, Roma Tre University); Davide Romaniello (Department of Economic and Social Sciences, University Cattolica del Sacro Cuore); Antonella Stirati (Department of Economics, Roma Tre University) |
| Abstract: | The paper critically examines the New Keynesian explanation of hysteresis based on the role of long-term unemployment. We first examine its analytical foundations, according to which rehiring long-term unemployed individuals would not be possible without accelerating inflation. Then we empirically assess its validity along two lines of inquiry. First, we investigate the reversibility of long-term unemployment. Then we focus on episodes of sustained long-term unemployment reductions to check for inflationary effects. Specifically, in a panel of 25 OECD countries (from 1983 to 2016), we verify by means of local projections whether they are associated with inflationary pressures in a subsequent five-year window. Two main results emerge: i) the evolution of the long-term unemployment rate is almost completely synchronous with the dynamics of the total unemployment rate, both during downswings and upswings; ii) we do not find indications of accelerating or persistently higher inflation during and after episodes of strong declines in the long-term unemployment rate, even when they occur in country-years in which the actual unemployment rate was estimated to be below a conventionally estimated Non-Accelerating Inflation Rate of Unemployment (NAIRU). Our results call into question the role of long-term unemployment in causing hysteresis and provide support to policy implications that are at variance with the conventional wisdom that regards the NAIRU as an inflationary barrier. |
| Keywords: | Hysteresis; Long-term Unemployment; NAIRU; Inflation; Labor Market. |
| JEL: | E12 E24 J64 |
| Date: | 2021–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp156&r= |