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on Labour Economics |
| By: | Christoph Albert; Albrecht Glitz; Joan Llull |
| 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:upf:upfgen:1799&r= |
| By: | Christian Merkl; Heiko Stüber |
| Abstract: | We document substantial cross-sectional heterogeneity of German establishments’ real wage cyclicality over the business cycle. While wages of the median establishment are moderately procyclical, 36 percent of establishments have countercyclical wages. We estimate a negative connection between establishments’ wage cyclicality and their employment cyclicality, thereby providing a benchmark for quantitative macroeconomic models. We propose and calibrate a labor market flow model to match various empirical facts and to perform counterfactual exercises. If all establishments behaved as the most procyclical ones, labor market amplification would drop by one-third. If all followed Nash bargaining, it would drop by more than two-thirds. |
| Keywords: | wage cyclicality, employment cyclicality, labor market flow model, labor market dynamics, establishments, administrative data |
| JEL: | E32 E24 J64 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9283&r= |
| By: | Jeremy Greenwood (University of Pennsylvania); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros); Ricardo Marto (University of Pennsylvania) |
| Abstract: | The 20th century beheld a dramatic transformation of the family. Some Kuznets style facts regarding structural change in the family are presented. Over the course of the 20th century in the United States fertility declined, educational attainment waxed, housework fell, leisure increased, jobs shifted from blue to white collar, and marriage waned. These trends are also observed in the cross-country data. A model is developed, and then calibrated, to address the trends in the US data. The calibration procedure is closely connected to the underlying economic logic. Three drivers of the great transition are considered: neutral technological progress, skilled-biased technological change, and drops in the price of labor-saving household durables. |
| Keywords: | Average weekly hours, blue-collar jobs, calibration, college premium, education, family economics, fertility, housework, Kuznets, leisure, market work, marriage, neutral technological progress, price of labor-saving household durables, skilled-biased technological change, white-collar jobs. |
| JEL: | D10 E13 J10 O10 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2021_2105&r= |
| By: | Morando, Greta (University of Westminster) |
| Abstract: | It has been found that migrants and natives are affected differently by fluctuations in the business cycle. This paper analyses whether this is the case when considering the most recent economic downturn triggered by the Covid-19 pandemic. By using UK data, it finds that unemployment has increased for both natives and migrants as has, consequently, the benefits which are aimed to support non-employed households. The rise in these outcomes is particularly important for EU migrants. EU migrants have also been more likely to experience a decrease in pay during the pandemic. Natives, EU workers, and non-EU workers have all suffered similar decreases in hours worked. Since migrants are likely to adjust to negative shocks by return or re-migration, these findings suggest that the recent increase in emigration from the UK can be partly explained by the negative effects of the pandemic on migrants labour market outcomes. |
| Keywords: | COVID-19, migration, UK labour market |
| JEL: | F22 J01 J20 J61 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14699&r= |
| By: | Adam Levai (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Riccardo Turati (Universitat Autonoma de Barcelona) |
| Abstract: | Even though the existing literature investigating the labor market impact of immigration assumes, implicitly or explicitly, that labor market regulation is exogenous to immigration (in terms of both size and composition), this is not necessarily the case. This paper shows that labor market regulation responds to the composition of the immigrant population. We build a novel workers’ protection index based on 36 labor law variables over a sample of 70 developed and developing countries from 1970 to 2010. Exploiting a dynamic panel setting using both internal and external instruments, we find that workers’ protection in destination countries is influenced by the degree of workers’ protection that immigrants experience in their origin countries and is not affected by immigrant population size. The effects are particularly strong across two dimensions of workers’ protection: worker representation laws and employment forms laws. This paper provides suggestive evidence that immigrants’ participation in unions and its implications for political actors is one of the potential mechanisms. Finally, calculations based on the estimated coefficients suggest that immigration, on average, contributes to a reduction in workers’ protection, particularly in OECD high-income countries. |
| Keywords: | Migration, Labor Market Institutions, Labor Regulation, Workers’ Protection |
| JEL: | J61 K31 F22 |
| Date: | 2021–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2021021&r= |
| By: | Tim Kovalenko |
| Abstract: | Uncertainty shocks are found to adversely affect labor market outcomes. Most studies attribute labor adjustments costs for the propagation of macroeconomic uncertainty to the labor market. Given that large establishments in Germany face higher labor adjustments cost, they should be affected more strongly by these shocks. Therefore, this paper studies the effects of uncertainty shocks on employment adjustments in large and small establishments employing four structural vector auto-regressive models with quarterly data for Germany in the period 1991-2014. These four models estimate effects of uncertainty shocks on employment, worker flows, job flows as well as worker churn, both for establishments with less than 100 and with at least 100 employees. The results suggest that uncertainty shocks induce considerable employment fluctuations in large establishments, while they have barely an effect on small establishments. Furthermore, large establishments adjust their labor input in response to an uncertainty shock by delaying the replacement of workers who leave these establishments. |
| Keywords: | homeownership, housing subsidies, residential location choice, suburbanization |
| JEL: | H24 H30 H71 R23 R28 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:bav:wpaper:212_kovalenko&r= |
| By: | Josué Diwambuena; Raquel Fonseca; Stefan Schubert |
| Abstract: | This paper investigates how Italian labour market institutions influence business cycle fluctuations. We apply a DSGE model that features Italian labour market rigidities and we estimate the latter on Italian data using Bayesian techniques to assess the effects of demand, supply, and labour market shocks on the macroeconomy, and to measure their significance for economic fluctuations. Our results show: First, technology, time preference and wage bargaining shocks are key drivers of economic fluctuations across horizons. Second, matching efficiency and wage bargaining shocks are significant sources of unemployment and vacancies fluctuations but their role is limited for output fluctuations. Third, labour market relaxation policies have only marginally contributed to the reduction in unemployment. Last, accounting for wage rigidities influences labour market dynamics and helps the model to fit data well. We, therefore, urge policymakers to support additional changes in labour market institutions. |
| Keywords: | DSGE, Labour market frictions, Bayesian estimation, Italy. |
| JEL: | E24 E32 C51 C52 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:rsi:creeic:2105&r= |
| By: | Catia Batista; David McKenzie |
| Abstract: | We test the predictions of different classic migration theories by using incentivized laboratory experiments to investigate how potential migrants decide between working in different destinations. We test theories of income maximization, migrant skill-selection, and multidestination choice as we vary migration costs, liquidity constraints, risk, social benefits, and incomplete information. We show the standard income maximization model of migration with selection on observed and unobserved skills leads to a much higher migration rate and more negative skill-selection than is obtained when migration decisions take place under more realistic assumptions. Second, we investigate whether the independence of irrelevant alternatives (IIA) assumption holds. We find it holds for most people when decisions just involve wages, costs, and liquidity constraints. However, once we add a risk of unemployment and incomplete information, IIA no longer holds for about 20 percent of our sample. |
| Keywords: | Migrant selection, destination choice, lab experiment, IIA |
| JEL: | D12 C39 I15 I18 O18 Q53 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unl:novafr:wp2111&r= |
| By: | Traverso, Silvio; Vatiero, Massimiliano; Zaninotto, Enrico |
| Abstract: | This work discusses and empirically investigates the relationship between labor regulation and robotization. In particular, the empirical analysis focuses on the relationship between the discipline of workers' dismissal and the adoption of indus- trial robots in nineteen Western countries over the 2006{2016 period. We find that high levels of statutory employment protection have been negatively associated with robot adoption, suggesting that labor-friendly national legislations, by increasing adjustment costs (such as firing costs), and thus making investment riskier, provide less favorable environments for firms to invest in industrial robots. We also find, however, that the correlation is positively mediated by the sectoral levels of capital intensity, a hint that firms do resort to industrial robots as potential substitutes for workers to reduce employees' bargaining power and to limit their hold-up opportu- nities, which tend to be larger in sectors characterized by high levels of operating leverage. |
| Keywords: | Robot adoption,Labor regulation,Hold-up |
| JEL: | K31 O31 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:928&r= |
| By: | Forth, John (Cass Business School); Theodoropoulos, Nikolaos (University of Cyprus); Bryson, Alex (University College London) |
| Abstract: | Using matched employer-employee data for Britain, we examine ethnic wage differentials among full-time employees. We find substantial ethnic segregation across workplaces: around three-fifths of workplaces in Britain employ no ethnic minority workers. However, this workplace segregation does not contribute to the aggregate wage gap between ethnic minorities and white employees. Instead, most of the ethnic wage gap exists between observationally equivalent co-workers. Lower pay satisfaction and higher levels of skill mismatch among ethnic minority workers are consistent with discrimination in wage-setting on the part of employers. The use of job evaluation schemes within the workplace is shown to be associated with a smaller ethnic wage gap. |
| Keywords: | ethnic wage gap, workplace segregation, skill mismatch, pay satisfaction, job evaluation |
| JEL: | J16 J31 M52 M54 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14697&r= |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | The study examines whether adverse working conditions for immigrants in Greece bear an association with deteriorated physical health and increased levels of depression during 2018 and 2019. Findings indicate that workers with no written contract of employment, receiving hourly wages lower than the national hourly minimum wages, and experiencing insults and/or threats in their present job experience worse physical health and increased levels of depression. The study found that the inexistence of workplace contracts, underpayment, and verbal abuse in the workplace may coexist. An increased risk of underpayment and verbal abuse reveals itself when workers do not have a contract of employment and vice versa. Immigrant workers without a job contract might experience a high degree of workplace precariousness and exclusion from health benefits and insurance. Immigrant workers receiving a wage lower than the corresponding minimum potentially do not secure a living income, resulting in unmet needs and low investments in health. Workplace abuse might correspond with vulnerability related to humiliating treatment. These conditions can negatively impact workers' physical health and foster depression. Policies should promote written employment contracts and ensure a mechanism for workers to register violations of fair practices. |
| Keywords: | adverse working conditions, physical health, depression, immigrants, refugees, minimum wages, written contracts of employment, threats in job, workplace precariousness |
| JEL: | J81 O15 E24 I14 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14700&r= |
| By: | Anne Lauringson; Marius Lüske |
| Abstract: | This study provides a framework to compare and classify the institutional set-up of active labour market policy (ALMP) provision across countries, which is a key determinant of how well ALMP systems can respond to changing labour market needs, e.g. in response to the COVID-19 crisis. The paper builds on an OECD-EC questionnaire on “Active labour market policy measures to mitigate the rise in (long-term) unemployment” filled in by OECD and EU countries in the last quarter of 2020. The paper presents a dashboard of the institutional set-up of ALMP provision in 43 OECD and EU countries, which classifies the ALMP systems of different countries according to their organisational set-up (i.e. division of responsibilities between key stakeholders), their regulatory set-up (i.e. key legislation regulating ALMP provision) and their capacity to deliver employment support services (i.e. resources available). |
| Keywords: | activation, active labour market policies, labour market institutions |
| JEL: | J08 H11 H50 |
| Date: | 2021–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:262-en&r= |
| By: | Anne-Sophie Bruno (CHS - Centre d'histoire sociale des mondes contemporains - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Nathalie Greenan (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, CEET - Centre d'études de l'emploi et du travail - CNAM - Conservatoire National des Arts et Métiers [CNAM] - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé, LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM], CNAM - Conservatoire National des Arts et Métiers [CNAM]); Jeremy Tanguy (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc) |
| Abstract: | Gender equality at work has become in recent years a priority for governments. In France, collective bargaining is a main lever to achieve progress on gender equality issues. In a two-tier bargaining framework, industries and firms are required by law to negotiate on the reduction of gender inequalities. Using firm-level survey data on labor relations issues combined with administrative data, this paper seeks to better understand the dynamics of collective bargaining on gender equality at the firm level by questioning the role played by the gender mix. We find that gender diversity favors gender equality bargaining at the firm level. Under-representation and over-representation of women reduce the probability of firms negotiating an agreement on gender equality. The introduction of sanctions in the recent period has prompted low-feminized firms to negotiate more on gender equality but had little impact on highly feminized firms. |
| Keywords: | gender equality,collective bargaining,gender diversity |
| Date: | 2021–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03325842&r= |
| By: | Burdin, Gabriel (Leeds University Business School); Kato, Takao (Colgate University) |
| Abstract: | We describe the nature, scope and effects of various non-mandated participatory work practices in Japan, the U.S. and Europe through the lens of complementarity in organizations. Specifically, rather than treating each work practice in isolation, we consider it an element of HIWS (High Involvement Work System), an employment system comprised of clusters of complementary work practices. In so doing, we present a coherent and complete picture of non-mandatory participatory work practices. Furthermore, by applying the common framework of viewing participatory work practices as complementary elements of HIWS to seemingly disparate forms of work practices in different parts of the world, we shed light on how participatory work practices play out in diverse institutional, cultural and regulatory environments. |
| Keywords: | High Involvement Work System, High Performance Work System, employee participation |
| JEL: | M5 J5 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14694&r= |
| By: | Yamaguchi Shintaro (Shintaro Yamaguchi); Daiji Kawaguchi (Daiji Kawaguchi) |
| Abstract: | This paper examines how the COVID-19 pandemic affected female employment in Japan. Our estimates indicate that the employment rate of married women with children decreased by 4 percentage points, while that of those without children decreased by only 1 percentage point, implying that increased childcare responsibilities caused a sharp decline in mothers’ employment. Further, mothers who left or lost their jobs appear to have dropped out of the labor force even several months after school reopening. In contrast to women, the employment rate of married men with children was not affected, which hindered progress in narrowing the employment gender gap. |
| Keywords: | Labor Force Participation, Employment, Gender Gap, COVID-19, Childcare |
| JEL: | D13 J13 J16 J21 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2126&r= |
| By: | Schneider, Martin R. |
| Abstract: | The varieties-of-capitalism (VoC) approach distinguishes liberal market economies (LMEs) such as the USA and coordinated market economies (CMEs) such as Germany based on institutional differences in terms of corporate governance, industrial relations, company relations as well as education and training. According to the VoC approach, firms differ in the ways in which they combine market and non-market mechanisms to coordinate their activities. Firms in LMEs are considered to rely more on market or exit mechanisms than firms in CMEs, which more often complement market with non-market or voice mechanisms. This chapter summarizes what has been learned from the VoC approach on the linkages between the institutional environment and labor-management relations. Various important lessons can be drawn. Employment protection legislation is a productive element within the institutional setup of CMEs. LMEs tend to induce strong overall wage dispersion, whereas in some CMEs such as Germany the labor market performance varies markedly by skill type and gender. The recent literature also indicates that the institutional setup is more complex than the VoC approach suggests, calling for revisions to the approach. In particular, some countries are hybrid economies that combine elements of both types of capitalism. The CME-LME dichotomy does not appreciate the true variety of country-specific skill systems. Finally, multinational enterprises overcome institutional boundaries of different types of capitalism in ways that were not included in the original VoC approach. |
| Keywords: | varieties of capitalism,employment relationship,skill systems,employment protection |
| JEL: | J50 M12 P17 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:934&r= |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | In Greece, given the precarious nature of the sex work industry, sex workers health and wellbeing is of concern. However, relevant research remains limited. This study examined whether sex workers' self-reported physical and mental health deteriorated across time points during the economic recession in Athens, Greece. The study focused on 13 areas where off-street and street-based sex work occured. Cross-sectional data was collected from the same areas in 2009 (i.e. before the economic recession began) and in 2013 and 2019 (i.e. at time points during the recession). Self-reported physical and mental health decreased in 2013 and in 2019 compared to 2009. A positive association was found between the country's gross domestic product and sex workers' self-reported physical and mental health. The opposite was found for annual aggregate unemployment. The determinants of better self-reported physical and mental health were sex workers' economic condition, Greek nationality, off-street sex work, and registered sex work status. The opposite was found for more years' involvement in sex work and drug consumption. Findings indicate the need for more inclusive health strategies, especially during periods of economic downturn when sex workers' physical/mental health is likely to decline. This is the first study to investigate the association between economic recession and sex workers' self-reported physical and mental health. |
| Keywords: | sex work, physical health, mental health, economic recession, drug consumption |
| JEL: | J81 G01 I10 I12 I18 |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14704&r= |
| By: | Paul Fiedler |
| Abstract: | Literature encompassing economic insecurity and its relationship with mental health has increased significantly in recent years. While the association of job insecurity and mental health has been researched extensively, less is known about the general relationship between economic insecurity and mental health. This paper analyses the simultaneous influence of six different economic insecurity indicators on mental health focusing on private sector employees. Using German longitudinal micro-data and applying a fixed effects model, this paper finds a significant negative relationship between a broad range of economic insecurity factors and mental health. Specifically, the relationship stems from self-perceived risks such as economic anxiety and job insecurity as opposed to macro-economic anxiety or objective factors, such as workforce reductions or substantial income losses. This strongly suggests that subjective measures of economic insecurity matter more for mental health than objective ones. Furthermore, the empirical results are robust with respect to various model specifications. From a policy perspective, this paper calls for improved provision of mental health services and also an increased awareness of mental health problems combined with generally de-tabooing the discussion of mental health. |
| Keywords: | mental health, economic insecurity, fixed effects, private sector employees, SOEP |
| JEL: | I14 I31 J01 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1145&r= |
| By: | Codrina Rada, Marcio Santetti, Ansel Schiavone, Rudiger von Arnim |
| Abstract: | The stylized facts of neoliberalism include a decline in steady state rate of growth and labor share. Recent classical-Keynesian literature sees the latter as a cause for the former. A crucial element is the distinction between short and long run. The business cycle is profit-led and profit-squeeze, but the steady state features a wage led natural rate of growth. This paper presents simple macroeconomic models in this vein. Our starting point is to assume an adverse shock to real wage bargaining, which across all models depresses the labor share. We consider (i) a two-dimensional model in income-capital ratio and labor share, a (ii) three-dimensional model that adds the employment rate as state variable, and a (iii) four-dimensional model that furthermore endogenizes the savings propensity. Key results are that model (i) predicts an increase (decrease) in the warranted (natural) rate of growth, and thus does not generate balanced growth; (ii) resolves this problem and predicts stagnation in steady state, but implies a long run paradox of thrift; and (iii) allows for contextualization vis-a-vis ` the utilization controversy. |
| Keywords: | Goodwin theory; labor suppression; secular stagnation JEL Classification: E12, E25, E32, J50 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2021_05&r= |