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on Labour Economics |
| By: | Albert, Christoph (CEMFI, Madrid); Glitz, Albrecht (Universitat Pompeu Fabra); Llull, Joan (MOVE, Barcelona) |
| Abstract: | In this paper, we show that the wage assimilation of immigrants is the result of the intricate interplay between individual skill accumulation and dynamic equilibrium effects in the labor market. When immigrants and natives are imperfect substitutes, increasing immigrant inflows widen the wage gap between them. Using a simple production function framework, we show that this labor market competition channel can explain about one quarter of the large increase in the average immigrant-native wage gap in the United States between the 1960s and 1990s arrival cohorts. Once competition effects and compositional changes in education and region of origin are accounted for, we find that the unobservable skills of newly arriving immigrants increased over time rather than decreased as traditionally argued in the literature. We corroborate this finding by documenting closely matching patterns for immigrants' English language proficiency. |
| Keywords: | immigrant assimilation, labor market competition, cohort sizes, imperfect substitution, general and specific skills |
| JEL: | J21 J22 J31 J61 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14641&r= |
| By: | Amuedo-Dorantes, Catalina (University of California, Merced); Antman, Francisca M. (University of Colorado, Boulder) |
| Abstract: | We explore whether fear of apprehension affects immigrants' labor market engagement by examining how ICE removals due to immigration violations and increased awareness of immigration raids impact their labor market outcomes. We find that ICE deportations are associated with reductions in the labor force participation and employment of likely undocumented immigrants when compared to similarly skilled foreign-born U.S.citizens. Effects are particularly strong among women, especially those with children, as well as in industries likely targeted by ICE raids. Controlling for perceived threats and de jure immigration policies has little impact on these results. |
| Keywords: | undocumented immigrants, immigration raids, labor supply |
| JEL: | J15 J61 J2 J3 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14646&r= |
| By: | Maczulskij, Terhi (ETLA - The Research Institute of the Finnish Economy); Haapanen, Mika (Jyväskylä University School of Business and Economics); Kauhanen, Antti (ETLA - The Research Institute of the Finnish Economy); Riukula, Krista (ETLA - The Research Institute of the Finnish Economy) |
| Abstract: | Using information on collective agreements and administrative data on mental ill-health, sickness absence, and job separations, we study the effect of decentralization on well-being at work in Finland. Our regression results with individual-and firm-level fixed effects show that decentralized wage bargaining leads to distinct outcomes for different employee groups. For example, white-collar employees in white-collar intensive firms show increased well-being at work. In contrast, all employees in blue-collar intensive firms show quite strong and negative responses to decentralization. Decentralization affects mostly job-separation behavior and mental ill-health, whereas no consistent effects for sickness absence are observed. Whether the mechanisms between decentralization and worker's well-being is explained by pay dispersion, wage level, or different preferences toward wage policy needs to be explored further. |
| Keywords: | decentralization, collective agreements, mental health disorder, sickness absence, job separation, blue-collar, white-collar |
| JEL: | J31 J51 J52 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14654&r= |
| By: | Cem Özgüzel |
| Abstract: | During the Great Recession, immigrants reacted to the drop in labour demand in Spain through internal migration or leaving the country. Consequently, provinces lost 13.5% of their immigrants or - 3% of the total labour supply, on average. Using municipal registers and longitudinal administrative data, I find that immigrant outflows slowed the decline in employment and wage of natives. I use a modified shift-share instrument based on past settlements to claim causality. Employment effects were driven by increased entries to employment, while wage effects were limited to natives that were already employed. These effects also persisted in the medium-term. |
| Keywords: | immigrant mobility, wages, employment, local labour market, Great Recession, Spain |
| JEL: | F22 J31 J61 R23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9268&r= |
| By: | David G. Blanchflower; Alex Bryson |
| Abstract: | Unemployment is notoriously difficult to predict. In previous studies, once country fixed effects are added to panel estimates, few variables predict changes in unemployment rates. Using panel data for 29 European countries over 439 months between 1985 and 2021 in an unbalanced country*month panel of just over 10000 observations, we predict changes in the unemployment rate 12 months in advance based on individuals’ fears of unemployment, their perceptions of the economic situation and their own household financial situation. Fear of unemployment predicts subsequent changes in unemployment 12 months later in the presence of country fixed effects and lagged unemployment. Individuals’ perceptions of the economic situation in the country and their own household finances also predict unemployment 12 months later. Business sentiment (industry fear of unemployment) is also predictive of unemployment 12 months later. The findings underscore the importance of the “economics of walking about”. The implication is that these social survey data are informative in predicting economic downturns and should be used more extensively in forecasting. We also generate a 29 country-level annual panel on life satisfaction from 1985-2020 from the World Database of Happiness and show that the consumer level fear of unemployment variable lowers well-being over and above the negative impact of the unemployment rate itself. Qualitative survey metrics were able to predict the Great Recession and the economic slowdown in Europe just prior to the COVID19 pandemic. |
| JEL: | J60 J64 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29172&r= |
| By: | Bechlioulis, Alexandros; Chletsos, Michael |
| Abstract: | The paper studies the relative effect between two groups, a treatment group of low-wage workers and a control group of high-wage workers, when a minimum wage reform is introduced. The empirical analysis uses a rich dataset from the Greek labor market over the period between 2010 and 2020. The study examines whether the employees’ responses and the potential effects of two different minimum wage reforms on unemployment were heterogenous. Our results are straightforward: among the two groups, the relative possibility of job loss is associated with an increase in the minimum wage, while the relative possibility of job search difficulty is strongly affected by a minimum wage cut. The former result is getting worse for employees who engaged in a minimum wage-intensive sector in the previous year and are now inactive. The latter result is reinforced for very young workers. |
| Keywords: | minimum wage; minimum wage reforms; job loss; job search difficulty; labor market |
| JEL: | C31 J08 J21 J23 |
| Date: | 2021–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:109327&r= |
| By: | Bhalotra, Sonia (University of Warwick, CEPR, IZA, IEA); Britto, Diogo G. C. (Bocconi University, BAFFI-CAREFIN, CLEAN Center for the Economic Analysis of Crime, GAPPE/UFPE, IZA); Pinotti, Paolo (Bocconi University, BAFFI-CAREFIN, CLEAN Center for the Economic Analysis of Crime, CEPR); Sampaio, Breno (Universidade Federal de Pernambuco, BAFFI-CAREFIN, CLEAN Center for the Economic Analysis of Crime, GAPPE/UFPE, IZA) |
| Abstract: | We estimate impacts of male job loss, female job loss, and male unemployment benefits on domestic violence in Brazil. We merge employer-employee and social welfare registers with administrative data on domestic violence cases brought to criminal courts, use of public shelters by victims and mandatory notifications of domestic violence by health providers. Leveraging mass layoffs for identification, we find that both male and female job loss, independently, lead to large and pervasive increases in domestic violence. Exploiting a discontinuity in unemployment insurance eligibility, we find that eligible men are not less likely to commit domestic violence while benefits are being paid, and more likely to commit it once benefits expire. Our findings are consistent with job loss increasing domestic violence on account of a negative income shock and an increase in exposure of victims to perpetrators, with unemployment benefits partially offsetting the income shock while reinforcing the exposure shock. |
| Keywords: | domestic violence, unemployment, mass layoffs, unemployment insurance, income shock, exposure, Brazil JEL Classification: |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:573&r= |
| By: | Samuel Lüthi; Stefan C. Wolter |
| Abstract: | In this study, we examine the influence of competitiveness on the stability of labour relations using the example of premature employment and training contract termination in the apprenticeship education sector. The paper extends the small but growing evidence on the external relevance of competitiveness by analysing gender differences in the correlation between competitiveness and labour market success and whether these effects depend on how the students’ propensity to compete is measured. By matching a large experimental dataset with administrative data identifying contract terminations, we find that both gender and test specification matter. While competitive men assigned to a difficult competitiveness task are less likely to drop out of the contract than non competitive men, there is no such effect observable for those assigned to the easier task. On the other hand, competitive women are more likely to drop out than non competitive women, irrespective of how competitiveness is measured. |
| Keywords: | competitiveness, non-cognitive skills, gender, apprenticeship |
| JEL: | C90 J16 J24 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9264&r= |
| By: | Olivia Jin; William Pyle |
| Abstract: | A growing literature connects labor market hardships to stronger preferences for government welfare and redistribution programs. Potential preference shifts with respect to other types of state involvement in the economy, however, have gone unexplored. We draw on both longitudinal and pseudo-panel data from Russia to explore how labor market hardships relate to preferences for public sector employment and employers. In fixed effects specifications, we demonstrate that feelings of job insecurity, experiences with wage arrears, and spells of unemployment all increase the attractiveness of work in the public sector. Pseudo-panel data provide only mixed evidence as to whether such effects endure over the longer run. |
| Keywords: | economic shocks, personal experience, public employment, political preferences |
| JEL: | H10 J45 J60 P35 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9229&r= |
| By: | Parag Mahajan |
| Abstract: | This paper finds that establishment entry and exit—particularly the prevention of establishment exit—drive immigrant absorption and immigrant-induced productivity increases in U.S. local industries. Using a comprehensive collection of confidential survey and administrative data from the Census Bureau, it shows that inflows of immigrantworkers lead to more establishment entry and less establishment exit in local industries. These relationships are responsible for nearly all of long-run immigrant-induced job creation, with 78 percent accounted for by exit prevention alone, leaving a minimal role for continuing establishment expansion. Furthermore, exit prevention is not uniform: immigrant inflows increase the probability of exit by establishments from low productivity firms and decrease the probability of exit by establishments from high productivity firms. As a result, the increase in establishment count is concentrated at the top of the productivity distribution. A general equilibrium model proposes a mechanism that ties immigrantworkers to high productivity firms and shows how accounting for changes to the firm productivity distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand. |
| Keywords: | Immigration, Business Dynamics, Job Creation, Productivity, Firm Heterogeneity |
| JEL: | J23 J61 L11 F22 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:21-18&r= |
| By: | Arjan Non (Erasmus University Rotterdam, Erasmus School of Economics); Ingrid Rohde (Open University Netherlands and University of Bonn, Institute for Applied Microeconomics); Andries de Grip (Maastricht University, Research Centre for Education and the Labor Market); Thomas Dohmen (University of Bonn, Institute for Applied Microeconomics; Maastricht University; IZA) |
| Abstract: | We conduct a discrete choice experiment to investigate how the mission of high-tech companies affects job attractiveness and contributes to self-selection of science and engineering graduates who differ in prosocial attitudes. We characterize mission by whether or not the company combines its profit motive with a mission on innovation or corporate social responsibility (CSR). Furthermore, we vary job design (e.g. autonomy) and contractible job attributes (e.g. job security). We find that companies with a mission on innovation or CSR are considered more attractive. Women and individuals who are more altruistic and less competitive feel particularly attracted to such companies. |
| Keywords: | Mission of the company, sorting, discrete choice experiment, job characteristics, social preferences |
| JEL: | J81 J82 M52 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:113&r= |
| By: | Dain Jung (Liaoning University); Do Won Kwak (Korea University); Kam Ki Tang (School of Economics, University of Queensland, Brisbane, Australia); Myra Yazbeck (University of Ottawa) |
| Abstract: | Although there is a large literature on the direct effects of job conditions such as unemployment or job insecurity on mental health, little is known about how the job conditions of individuals may amplify the impact of mental health shocks originated from sources unrelated to the labour market. This paper aims to fill this gap. Using the panel data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, we first establish that negative life events unrelated to the labour market have significant adverse impact on individuals’ mental health, and then demonstrate that both job insecurity and job stress exacerbate the impact. We also find gender heterogeneity in the results that job insecurity and job stress affect mostly female workers. |
| Date: | 2021–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:647&r= |
| By: | Westhoff, Leonie; Bukodi, Erzsébet; H. Goldthorpe, John |
| Abstract: | In this paper, we seek to contribute to ongoing discussions of the relationship between income and class in analyses of social inequality and mobility. We argue that while class has sometimes been taken as a proxy for long-term earning levels, it is of greater importance, at least when treated in terms of the EGP schema or the European Socio-Economic Classification (ESEC), in capturing differences in the trajectories that employees' earnings follow over the course of their working lives. Moving beyond previous single country studies, we examine how far the theory that underlies ESEC is reflected in men's age-earnings trajectories across 14 European countries, while also taking into account any effects of their educational qualifications. Modelling data from the 2017 EU-SILC survey and focussing on men's full year/full-time equivalent gross annual earnings, we find that although the age-earnings trajectories that are estimated for different classes do reveal some cross-national variation, there are major features, of a theoretically expected kind, that are evident with our pooled sample and that regularly recur in individual countries. Class differences in earnings are at their narrowest for men in the youngest age group but then widen across older age groups. This occurs primarily because the earnings of men in the professional and managerial salariat, and especially in the higher salariat, show a marked rise with age, while the earnings of men in other classes rise far less sharply or remain flat. We also find evidence that these diverging trajectories are primarily shaped by individuals' class positions independently of their level of qualifications - however important the latter is in determining the class positions that they hold. What can be regarded as the logic of different forms of employment relations, as captured by ESEC, leads to a large degree of cross-national commonality in the association that exists between class and the trajectories of earnings over working life. |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:amz:wpaper:2021-17&r= |
| By: | Gabrielle Penrose (Reserve Bank of Australia); Gianni La Cava (Reserve Bank of Australia) |
| Abstract: | Workers are partly able to predict when they will lose their jobs. However, they typically overpredict the probability of job loss, particularly during economic downturns. The unemployed typically underestimate how long they will be unemployed for. We link these insights on worker expectations of future job prospects to household spending decisions at unemployment. At unemployment, households reduce total spending by around 9 per cent on average. Workhorse consumption models, such as those based on the permanent income hypothesis, predict that households should reduce spending by more in response to unexpected job loss events than to expected ones. Contrary to this, we find that households reduce spending by similar amounts regardless of whether they expect job loss or not. We also find some evidence that the spending response is larger for households that are liquidity constrained, and for households that have been unemployed for longer. |
| Keywords: | expenditure; food consumption; unemployment; job uncertainty; subjective expectations; consumption |
| JEL: | D12 D84 J64 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2021-08&r= |
| By: | Bozena Wielgoszewska (University College London, England); Alex Bryson (University College London, England); Monica Costa-Dias (University of Bristol and Institute for Fiscal Studies, England); Francesca Foliano (University College London, England); David Wilkinson (University College London, England) |
| Abstract: | The Covid-19 pandemic has caused unexpected disruptions to Western countries which affected women more adversely than men. Previous studies suggest that these gender differences are attributable to two main causes: women being over-represented in the most affected sectors of the economy and women, especially mothers, taking a bigger share of housework and childcare responsibilities following school closures. Using the data from four British nationally representative cohort studies, we test these two propositions. Our findings confirm that the adverse labour market effects of the covid-19 pandemic were still experienced by women a year into the covid-19 pandemic and that these effects were the most severe for women who lived with a partner and children. We show that adjusting for pre-pandemic job characteristics substantially attenuates the gaps, suggesting that women were over-represented in jobs disproportionately affected by covid-19 pandemic. However, the remaining gaps are not further attenuated by adjusting for the partner’s job characteristics or the number and age of children in the household, suggesting that the adversities experienced by women were not driven by their relative labour market position, as compared to their partners. The residual gender differences observed in the rates of active, paid work and furlough for those who live with partner and children point to the importance of unobserved factors such as social norms, preferences, or discrimination. These effects may be long lasting and jeopardise women’s longer-term position through the loss of experience, leading to reinforcement of gender inequalities or even reversal of the progress towards gender equality. |
| Keywords: | Covid-19; Pandemic; Gender; Employment; Furlough |
| JEL: | J16 J22 |
| Date: | 2021–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:2123&r= |
| By: | Rafael Fearne; Ian Borg |
| Abstract: | The evolution of the Maltese labour market in recent years is likely to have a lasting effect on the Maltese economy. Record high growth in combination with active labour market policies pushed unemployment down and labour participation up. This policy note seeks to dissect the unemployed population, highlighting the differences and similarities between the short-term and long-term unemployed. The study approaches this by first investigating what brought about the reduction in the unemployment rate and what policies have been effective in helping reduce the number of unemployed. Then, utilising data from the Labour Force Survey, context is given to the unemployed population in Malta as the short-term and long-term are grouped according to several characteristics. Finally, the paper concludes by reflecting upon the Maltese labour market’s strengths and weaknesses and possible ways to address these going forward. |
| JEL: | J64 E24 J24 |
| URL: | http://d.repec.org/n?u=RePEc:mlt:ppaper:0621&r= |
| By: | Steven J. Davis (University of Chicago, and NBER); John C. Haltiwanger (University of Maryland, and NBER); Kyle Handley (University of Michigan, and NBER); Ben Lipsius (University of Michigan); Josh Lerner (Harvard Business School, and NBER); Javier Miranda (Friedrich-Schiller University Jena and Halle Institute for Economic Research (IWH)) |
| Abstract: | We examine thousands of U.S. private equity (PE) buyouts from 1980 to 2013, a period that saw huge swings in credit market tightness and GDP growth. Our results show striking, syste matic differences in the real-side effects of PE buyouts, depending on buyout type and external conditions. Employment at target firms shrinks 13% over two years in buyouts of publicly listed firms but expands 13% in buyouts of privately held firms, both relative to contemporaneous outcomes at control firms. Labor productivity rises 8% at targets over two years post buyout (again, relative to controls), with large gains for both public-to-private and private-to-private buyouts. Target productivity gains are larger yet for deals executed amidst tight credit conditions. A post-buyout widening of credit spreads or slowdown in GDP growth lowers employment growth at targets and sharply curtails productivity gains in public-to-private and divisional buyouts. Average earnings per worker fall by 1.7% at target firms after buyouts, largely erasing a pre-buyout wage premium relative to controls. Wage effects are also heterogeneous. In these and other respects, the economic effects of private equity vary greatly by buyout type and with external conditions. |
| Keywords: | Private equity buyouts, business cycle, business dynamics, real effects, job creation, productivity, wages, administrative data, large matched sample |
| JEL: | D22 D24 G24 G34 J63 L25 |
| Date: | 2021–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2021-013&r= |
| By: | Bachelet, Marion (Mercator Research Institute on Global Commons and Climate Change (MCC)); Kalkuhl, Matthias (Mercator Research Institute on Global Commons and Climate Change (MCC)); Koch, Nicolas (Mercator Research Institute on Global Commons and Climate Change (MCC)) |
| Abstract: | The COVID-19 pandemic created the largest experiment in working from home. We study how persistent telework may change energy and transport consumption and costs in Germany to assess the distributional and environmental implications when working from home will stick. Based on data from the German Microcensus and available classifications of working-from-home feasibility for different occupations, we calculate the change in energy consumption and travel to work when 15% of employees work full time from home. Our findings suggest that telework translates into an annual increase in heating energy expenditure of 110 euros per worker and a decrease in transport expenditure of 840 euros per worker. All income groups would gain from telework but high-income workers gain twice as much as low-income workers. The value of time saving is between 1.3 and 6 times greater than the savings from reduced travel costs and almost 9 times higher for high-income workers than low-income workers. The direct effects on CO2 emissions due to reduced car commuting amount to 4.5 millions tons of CO2, representing around 3 percent of carbon emissions in the transport sector. |
| Keywords: | working from home, COVID-19, distributional effect, climate impact |
| JEL: | D13 J22 J61 Q40 R11 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14642&r= |
| By: | Kartik B. Athreya; Grey Gordon; John Bailey Jones; Urvi Neelakantan |
| Keywords: | earnings dynamics; incarceration; racial inequality |
| JEL: | C23 D31 J15 |
| Date: | 2021–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:92994&r= |
| By: | Lynn Riggs (Motu Economic and Public Policy Research); Livvy Mitchell (Motu Economic and Public Policy Research) |
| Abstract: | Efforts to reduce emissions to counter climate change are expected to have both costs and benefits, and these effects are likely to be unevenly distributed across the population. We examined the potential distributional impacts on employment in New Zealand from using different mitigation options (“pathways”) designed to achieve net zero emissions of long-lived gases and to reduce biogenic methane emissions by 24-47% by 2050. For the analysis, we developed the Distributional Impacts Microsimulation for Employment (DIM-E). DIM-E uses results from a computable general equilibrium (CGE) model, C-PLAN, to estimate which industries, workers and jobs are expected to be most affected by different options to achieve these reductions. Overall, our results are similar to those from previous research in that the net employment effects are predicted to be relatively small, though some industries will be more affected than others. Moreover, the top net negative and top net positive industries ranked fairly consistently across the four time periods and across the different pathways that were analysed. On the net positive side, transport industries tended to dominate the industry rankings, and in later periods, some agriculture industries also tended to rank highly (e.g., Dairy Cattle Farming and Sheep/Beef Farming). On the net negative side, various manufacturing industries tended to dominate the top ranks, though oil and gas extraction was also consistently ranked. We also found that very few groups of workers were negatively affected (in terms of the number of worker-jobs) by any of the proposed pathways especially over the long term. |
| Keywords: | Environmental Economics, Climate Change Mitigation, Distributional Impacts of Employment |
| JEL: | J01 Q52 R11 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:21_07&r= |