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on Labour Economics |
| By: | Christina Boll; Dana Müller; Simone Schüller |
| Abstract: | Using unique monthly panel data from the Institute for Employment Research (IAB) covering the immediate postlockdown period from June to August 2020, we investigate the opposing claims of widening/closing the gender gap in parental childcare during the COVID-19 pandemic in Germany. We contribute to the current literature by analyzing the medium-term dynamics of couples’ childcare division and by considering the prepandemic division rather than providing merely snapshots during lockdown. Our results suggest a slight shift toward a more egalitarian division in June that, however, faded out in subsequent months. Starting from a fairly “traditional” prepandemic childcare division, the lockdown stimulus was not nearly strong enough to level the playing field. A subgroup analysis differentiating between parents’ individual lockdown-specific work arrangements shows that the drivers of the observed shift were mothers who worked more than 20 hours a week and for whom remote work was not possible. Fathers’ work arrangement instead did not play a significant role. We conclude that the shift emerged out of necessity rather than opportunity, which makes it likely to fade once the necessity vanishes, thereby catapulting parents back to their initial childcare arrangements. |
| Keywords: | Covid-19, intracouple division of unpaid work, childcare, gender, working from home, IAB-HOPP |
| JEL: | D13 J13 J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9091&r= |
| By: | Boneva, Teodora (University of Zurich); Kaufmann, Katja Maria (University of Mannheim); Rauh, Christopher (University of Cambridge) |
| Abstract: | We design a new survey to elicit quantifiable, interpersonally comparable beliefs about pecuniary and non-pecuniary benefits and costs to maternal labor supply decisions, to study how beliefs vary across and within different groups in the population and to analyze how those beliefs relate to choices. In terms of pecuniary returns, mothers' (and fathers') later-life earnings are perceived to increase the more hours the mother works while her child is young. Similarly, respondents perceive higher non-pecuniary returns to children's cognitive and non-cognitive skills the more hours a mother works and the more time her child spends in childcare. Family outcomes on the other hand, such as the quality of the mother-child relationship and child satisfaction, are perceived to be the highest when the mother works part-time, which is also the option most respondents believe their friends and family would like them to choose. There is a large heterogeneity in the perceived availability of full-time childcare and relaxing constraints could substantially increase maternal labor supply. Importantly, it is perceptions about the non-pecuniary returns to maternal labor supply as well as beliefs about the opinions of friends and family that are found to be strong predictors of maternal labor supply decisions, while beliefs about labor market returns are not. |
| Keywords: | labor supply, childcare, beliefs, child penalties |
| JEL: | J22 J13 I26 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14348&r= |
| By: | Ariell Zimran |
| Abstract: | Immigrant distribution--the geographic dispersion of immigrants in the destination country--was a major issue in the United States in the late Age of Mass Migration. Policy debates were influenced by the widely held view that the new immigrants were generally less geographically mobile within the United States and specifically less likely to leave urban areas than were natives and earlier immigrants. I build new linked census datasets to investigate these claims by studying the rates of, selection into, and sorting of internal migration by US immigrants. I find that contemporary claims regarding immigrant distribution were either false, oversimplified, or the product of broader national trends that applied also to natives. Nonetheless, geographic assimilation--convergence in immigrants' and natives' county-of-residence distributions over time in the United States--was almost nonexistent. |
| JEL: | F22 J11 J15 J61 N31 N32 R23 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28812&r= |
| By: | Dengler, Thomas (Humboldt University Berlin); Gehrke, Britta (University of Rostock) |
| Abstract: | In the Covid-19 crisis, most OECD countries use short-time work schemes (subsidized working time reductions) to preserve employment relationships. This paper studies whether short-time work can save jobs through stabilizing aggregate demand in recessions. We build a New Keynesian model with incomplete asset markets and labor market frictions, featuring an endogenous firing as well as a short-time work decision. In recessions, short-time work reduces the unemployment risk of workers, which mitigates their precautionary savings motive and aggregate demand falls by less. Using a quantitative model analysis, we show that this channel can increase the stabilization potential of short-time work over the business cycle up to 55%, even more when monetary policy is constrained by the zero lower bound. Further, an increase of the short-time work replacement rate can be more effective compared to an increase of the unemployment benefit replacement rate. |
| Keywords: | short-time work, fiscal policy, incomplete asset markets, unemployment risk, matching frictions |
| JEL: | E21 E24 E32 E52 E62 J63 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14329&r= |
| By: | Stefani Milovanska-Farrington; Stephen Farrington |
| Abstract: | Happiness is strongly associated with goal attainment, productivity, mental health and suicidal risk. This paper examines the effect of satisfaction with areas of life on subjective well-being (SWB), the importance of relative perceptions compared to absolute measures in predicting overall life satisfaction, and differences in the domains of life which have the greatest impact on happiness of men and women. The findings suggest that relative perceptions have a large statistically significant effect on SWB. Satisfaction with family life and health have the largest while satisfaction with income has the lowest impact on overall SWB for both genders. Work satisfaction is more important for men than for women, whereas partner’s happiness is more valued by female respondents. Satisfaction with household compared to personal income has a larger effect on SWB in all subsamples except employed women. Understanding the perceived and factual determinants of happiness has urgent implications in the context of the detrimental impact of the Covid-19 outbreak on SWB. |
| Keywords: | subjective well-being, satisfaction with areas of life, perceptions, values, gender differences |
| JEL: | D60 I31 J16 D03 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1128&r= |
| By: | Adda, Jérôme (Bocconi University); Dustmann, Christian (University College London); Goerlach, Joseph-Simon (Bocconi University) |
| 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: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14333&r= |
| By: | Christina Boll; Simone Schüller |
| Abstract: | Based on panel data from 1997 to 2018, we investigate the socioeconomic preconditions and economic consequences of ‘shared parenting (SP)’ forms in Germany. Referring to the post-separation year, we build SP groups from information on child residence and fathers’ childcare hours during a regular weekday. We explore the short-term gender and SP group associations with economic well-being as well as, for mothers only, its medium-term associations in the five years after separation. Our findings indicate that around separation, intense SP is a superior strategy in terms of equivalized household income. This also holds true for mothers in the medium-term, but their earnings barely improve during that time. Mothers stay highly involved in childcare even in shared parenting settings and/or fail to redirect released childcare time to the labor market. Our data support the notion that even high resources do not shield mothers against remaining trapped in economic dependence post-separation. |
| Keywords: | union dissolution; shared parenting; childcare; child residence; household income; earnings; household composition; SOEP |
| JEL: | J12 J14 J22 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1131&r= |
| By: | Petri Bockerman (University of Jyvaskyla, Labour Institute for Economic Research, and IZA Institute of Labor Economics); Mika Haapanen (University of Jyvaskyla, School of Business and Economics); Christopher Jepsen (University College Dublin, School of Economics and Geary Institute, IZA Institute of Labor Economics, and CES-Ifo) |
| Abstract: | This paper studies the causal effect of parental death on children's mental health. Combining several nationwide register-based data for Finnish citizens born between 1971 and 1986, we use an event study methodology to analyze hospitalization for mental health-related reasons by the age of 30. We find that there is no clear evidence of increased hospitalization following the death of a parent of a different gender, but there are significant effects for boys losing their fathers and girls losing their mothers. Depression is the most common cause of hospitalization in the first three years following paternal death, whereas anxiety and, to a lesser extent, self-harm are the most common causes five to ten years after paternal death. We also provide descriptive evidence of an increase in the use of mental health-related medications and sickness absence, as well as substantial reductions in years of schooling, employment, and earnings in adulthood for the affected children. |
| Keywords: | parental death, mental health, hospitalization, depression, labor market |
| JEL: | I10 I12 |
| Date: | 2021–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:202107&r= |
| By: | John C. Haltiwanger; Henry R. Hyatt; Erika McEntarfer; Matthew Staiger |
| Abstract: | Do recessions speed up or impede productivity-enhancing reallocation? To investigate this question, we use U.S. linked employer-employee data to examine how worker flows contribute to productivity growth over the business cycle. We find that in expansions high-productivity firms grow faster primarily by hiring workers away from lower-productivity firms. The rate at which job-to-job flows move workers up the productivity ladder is highly procyclical. Productivity growth slows during recessions when this job ladder collapses. In contrast, flows into nonemployment from low productivity firms disproportionately increase in recessions, which leads to an increase in productivity growth. We thus find evidence of both sullying and cleansing effects of recessions, but the timing of these effects differs. The cleansing effect dominates early in downturns but the sullying effect lingers well into the economic recovery. |
| JEL: | E24 E32 J24 J63 J64 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28802&r= |
| By: | René Böheim; Michael Christl |
| Abstract: | During the last decade, the Austrian labour market experienced a substantial outward shift of the Beveridge curve. Using detailed administrative data on vacancies and registered unemployed by region and skill level, we test which factors caused this shift. We find that the Beveridge curve shifted primarily because mismatch increased substantially. Looking on the regional and skill dimension of mismatch unemployment, we find a substantial increase of mismatch unemployment for manual routine tasks as well as for the region of Vienna. |
| Keywords: | beveridge curve, unemployment, matching efficiency |
| JEL: | J21 J64 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9080&r= |
| By: | Priyanka Anand; Laura Dague; Kathryn L. Wagner |
| Abstract: | The onset of a disability or major health shock can affect the labor supply of not only those experiencing the event but also their family members. Potential caregivers face a tradeoff between time spent earning income for the family and providing care for their spouse, which could be affected by the availability of paid leave. We examine caregiving and labor supply decisions after a spouse’s disability or health shock and the role of paid leave laws implemented in California and New Jersey in the response using data from the Survey of Income and Program Participation (SIPP). We show that labor force participation of potential caregivers decreased after spousal work-limiting disability or chronic health condition and, to a lesser extent, work-limiting illness. We find that paid leave reduces the likelihood that potential caregivers decrease their work hours to provide caregiving to their spouse after a work-limiting disability or chronic health condition, but limited evidence of effects on other employment outcomes. Our findings demonstrate that spousal disability and health shocks have long-run effects on household labor supply and therefore could be mediated by paid leave; we conclude by discussing possible reasons for finding limited impact in this context. |
| JEL: | I12 I18 J12 J18 J32 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28808&r= |
| By: | Kalenkoski, Charlene Marie; Wulff Pabilonia, Sabrina |
| Abstract: | This study estimates random effects and difference-in-difference-in-differences models to examine the initial impacts of COVID-19 on the employment and hours of unincorporated selfemployed workers using monthly panel data from the Current Population Survey. For these workers, effects were visible in March as voluntary social distancing began, largest in April as complete shutdowns occurred, and slightly smaller in May as some restrictions were eased. We find differential effects by gender that favor men, by marital status and gender that favor married men over married women, and by gender, marital, and parental status that favor married fathers over married mothers. The evidence suggests that self-employed married mothers were forced out of the labor force to care for children as prescribed by gender norms and the division and specialization of labor within households. Remote work and working in an essential industry mitigated some of the negative effects on employment and hours. |
| Keywords: | COVID-19,hours worked,self-employment,entrepreneurship,gender,remote work |
| JEL: | D1 D13 J1 J16 J2 J23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:843&r= |
| By: | Cho, Yoon Y. (World Bank); Lee, Soohyung (Seoul National University) |
| Abstract: | This paper investigates the role of worker-firm matching algorithms in accounting for early job separation rates. For this purpose, we examine Korea’s temporary foreign worker program in which the government classifies firms by priority levels and matches them with foreign workers based on their stated preferences. Using administrative data, we examine predictors for the job separation rates and propose alternative matching methods using the serial dictatorship. Our simulation results show that alternative matching methods can substantially reduce job separation rates, suggesting a possible improvement of the Korean program. |
| Keywords: | market design, migration, temporary immigrants, job matching, employment permit system |
| JEL: | J4 J6 O15 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14328&r= |
| By: | Yu, Haiyue; Cao, Jin; Kang, Shulong |
| Abstract: | Female post-childbirth labor market participation and labor intensity are extraordinarily high in China, given that public childcare subsidies are limited and supportive policies for childbearing female employees are largely absent. Establishing a panel dataset that tracks female employment and childbirth, we find that such a paradox is well-explained by the intra-family childcare support provided by grandparents. Correcting the selection bias that stems from women’s fertility choices using the propensity score matching difference-in-difference model, we find that women without grandparental support suffer a substantial drop in post-childbirth employment, while women with grandparental support even experience a rise in employment after childbirth. It takes women without grandparental support twice as long to recover their employment after childbirth. Finally, we find that childbirth does not decrease women's labor intensity due to a lack of labor market flexibility, and that women face a stay-or-quit dilemma when grandparental childcare support is absent. |
| JEL: | C24 J13 J22 |
| Date: | 2021–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2021_007&r= |
| By: | Sebastian Heise; Tommaso Porzio |
| Abstract: | We develop a general equilibrium model of frictional labor reallocation across firms and regions, and use it to quantify the aggregate and distributional effects of spatial frictions that hinder worker mobility across regions in Germany. The model leverages matched employer-employee data to unpack spatial frictions into different types while isolating them from labor market frictions that operate also within region. The estimated model shows sizable spatial frictions between East and West Germany, especially due to the limited ability of workers to obtain job offers from more distant regions. Despite the large real wage gap between East and West of Germany, removing the spatial frictions leads, in equilibrium, to only a small increase in aggregate productivity and it mostly affects the within-region allocation of labor to firms rather than the between-region allocation. However, spatial frictions have large distributional consequences, as their removal drastically reduces the gap in lifetime earnings between East and West Germans. |
| JEL: | J6 O1 R1 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28792&r= |
| By: | Davide Cipullo |
| Abstract: | This paper investigates the impact of voter support on the representation of women in the political profession. The empirical analysis exploits two-stage elections in the United States and Italy to hold the selection of candidates constant. In two-stage elections, candidates are admitted to the second round of voting based on the outcome of the first round. I find that among candidates who marginally qualify for the final round, women are 20 percent less likely than men to be elected to the US House of Representatives and 40 percent less likely to be elected mayor in Italian municipalities. Using a difference-in-discontinuities design, I then show that the gender gap in the probability of being elected has long-lasting effects on career trajectories. Women are substantially less likely than men to win future elections and to climb the political hierarchy. My findings suggest that one of the reasons that few women reach the top in politics is that female candidates face hurdles at the beginning of their careers. |
| Keywords: | gender gaps, self-selection, political careers, voting |
| JEL: | C24 D02 D72 J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9075&r= |
| By: | Barbara Boelmann (Department of Economics, University College London, CReAM and University of Cologne, 30 Gordon Street, London WC1H 0AX, United Kingdom); Anna Raute (School of Economics and Finance, Queen Mary University of London, CReAM and CEPR, Mile End Road, London E1 4NS, United Kingdom); Uta Schönberg (Department of Economics, University College London, CReAM and IAB, 30 Gordon Street, London WC1H 0AX, United Kingdom) |
| Abstract: | Does the culture in which a woman grows up influence her labor market decisions once she has had a child? And to what extent can exposure to a different cultural group in adulthood shape maternal labor supply? To address these questions, we exploit the setting of the German reunification. A state socialist country, East Germany strongly encouraged mothers to participate in the labor market full-time, whereas West Germany propagated a more traditional male breadwinner-model. After reunification, these two cultures were suddenly thrown together, with consequent increased social interactions between East and West Germans through migration and commuting. Zooming in on East and West Germans who migrated across the former inner-German border, we document a strong asymmetry in the persistence of the culture in which women were raised. Whereas East German female migrants return to work earlier and work longer hours than their West German colleagues even after long exposure to the more traditional West German culture, West German migrants adjust their post-birth labor supply behavior nearly entirely to that of their East German colleagues. West German return migrants continue to be influenced by the more gender egalitarian East German norm even after their return to the West, pointing towards the importance of learning from peers. Finally, taking advantage of differential inflows of East German migrants across West German workplaces in the aftermath of reunification, we show that even a partial exposure to East German colleagues induces “native” West German mothers to accelerate their return to work after childbirth, suggesting that migration might be a catalyst for cultural change. |
| Keywords: | cultural transmission, social norms, maternal labor force participation, German reunification |
| JEL: | J1 J2 Z1 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:090&r= |
| By: | Michele Costa; Flavio Delbono; Francesco Linguiti |
| Abstract: | Our main objective is exploring the association between widespread prosperity and the presence of the cooperative movement at the regional level in Italy between 2010 and 2019. We summarize the widespread prosperity through an index originally proposed by Sen (1976) and we then perform a panel regression showing that there is a positive and significant association between such an index and the presence of the cooperative movement as captured by the relative size of cooperative employees. We also detect that the cooperative movement contributes to the regional prosperity more through its employment than in terms of the added value it generates. Moreover, the size of the cooperative presence significantly concurs to explain some large differentials among Italian regions. |
| JEL: | I31 J54 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1161&r= |
| By: | Puhani, Patrick A. (Leibniz University of Hannover); Sterrenberg, Margret K. (Leibniz University of Hannover) |
| 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:iza:izadps:dp14352&r= |
| By: | Eric Brunner; Shaun Dougherty; Stephen L. Ross |
| Abstract: | We examine the effect of attending stand-alone technical high schools on student short- and long-term outcomes using a regression discontinuity design. Male students are 10 percentage points more likely to graduate from high school and have half a semester less time enrolled in college, although effects on college fade-out. Male students have 32% higher quarterly earnings. Earnings effects may in part reflect general skills: male students have higher attendance rates and test scores, and industry fixed effects explain less than 1/3rd of earnings gains. We find little evidence that attending a technical high school affects the outcomes of female students. |
| JEL: | I21 I26 J16 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28790&r= |
| By: | Brixiova, Zuzana (University of Economics Prague); Imai, Susumu (University of Technology, Sydney); Kangoye, Thierry (African Development Bank); Yameogo, Nadege Desiree (World Bank) |
| Abstract: | Persistent gender gaps characterize labor markets in many African countries. Utilizing Eswatini's first three labor market surveys (conducted in 2007, 2010, and 2013), this paper provides first systematic evidence on the country's gender gaps in employment and earnings. We find that women have notably lower employment rates and earnings than men, even though the global financial crisis had a less negative impact on women than it had on men. Both unadjusted and unexplained gender earnings gaps are higher in self-employment than in wage employment. Tertiary education and urban location account for a large part of the gender earnings gap and mitigate high female propensity to self-employment. Our findings suggest that policies supporting female higher education and rural-urban mobility could reduce persistent inequalities in Eswatini's labor market outcomes as well as in other middle-income countries in southern Africa. |
| Keywords: | gender, employment, income, multivariate analysis, policies |
| JEL: | J16 J21 L26 O12 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14350&r= |
| By: | Chengsi Wang (Monash University); Makoto Watanabe (FEWEB VU University of Amsterdam/Tinbergen Institute) |
| Abstract: | This paper studies a directed search equilibrium in a platform setting with homo- geneous buyers and sellers.We show that a meeting technology, typically controlled by intermediaries, (e.g., advertisement, interview scheduling, or online search pro- tocol) determines the matching outcome as follows. First, a meeting technology that provides full information to market participants is not necessarily efficient. Second, the seller- and buyer-optimal meeting technologies do not require full market transparency either; rather, the latter may be achieved even with the min- imum information. Finally, the efficient matching outcome can be decentralized by a profi t-maximizing platform who adopts a simple fee-setting policy for its intermediation service. |
| Keywords: | meeting technology, directed search, platform, intermediation |
| JEL: | D83 J64 M37 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2021-02&r= |
| By: | Petar Soric (University of Zagreb); Oscar Claveria (AQR-IREA, University of Barcelona) |
| Abstract: | This paper examines the evolution of consumer uncertainty about unemployment one year after the irruption of the covid-19 pandemic in European countries. Since uncertainty is not directly observable, we use two alternative methods to directly approximate it. Both approaches are based on qualitative expectations elicited form the consumer survey conducted by the European Commission. On the one hand, following Dibiasi and Iselin (2019), we use the share of consumers unable to formalize expectations about unemployment (Knightian-type uncertainty). On the other hand, we use the geometric discrepancy indicator proposed by Claveria et al. (2019) to quantify the proportion of disagreement in business and consumer expectations. We have used information from 22 European countries. We find that both uncertainty measures covary. Although we observe marked differences across countries, in most cases the perception of employment uncertainty peaked before the outbreak of the crisis, plummeted during the first months of the lockdown, and started rising again since the past few months. When testing for cointegration with the unemployment rate, we find that the discrepancy indicator exhibits a long- term relationship with unemployment in most countries, while the Knightian uncertainty indicator shows a purely short-run relationship. The impact of both indicators on unemployment is characterised by considerable asymmetries, showing a more intense reaction to decreases in the level of uncertainty. While this finding may seem counterintuitive at first sight, it somehow reflects the fact that during recessive periods, the level of disagreement in the employment expectations of consumers drops considerably |
| Keywords: | COVID-19, Employment uncertainty, Unemployment expectations, Disagreement, Consumers, Cointegration. JEL classification: C14, C32, C82, C83, J01. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:202104&r= |
| By: | Hansen, Kerstin F. (University of Basel); Stutzer, Alois (University of Basel) |
| Abstract: | We analyze how the exposure to adverse macroeconomic conditions during the "impressionable years" (i.e., between the age of 18 and 25), in interaction with welfare state institutions, forms political attitudes in adulthood. Based on a large panel dataset of European countries, we find that individuals who experienced high unemployment under a regime of low unemployment benefits are more in favor of redistribution later in life and state an orientation more oriented towards the left. However, negative economic shocks in an environment with a very generous unemployment insurance are related to less support of redistribution and a more rightist political attitude later on. The development of the welfare state thus seems crucial for how economic shocks affect the evolution of preferences and norms in society and thus finally feedback on institutional change. |
| Keywords: | macroeconomic experiences, impressionable years, support for redistribution, unemployment, unemployment insurance |
| JEL: | E60 J65 P16 P48 Z13 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14327&r= |