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on Labour Economics |
| By: | Sam Desiere; Bart Cockx |
| Abstract: | Hiring subsidies are widely used to create (stable) employment for the long-term unemployed. This paper exploits the abolition of a hiring subsidy targeted at long-term unemployed jobseekers over 45 years of age in Belgium to evaluate its effectiveness in the short and medium run. Based on a triple difference methodology the hiring subsidy is shown to increase the job finding rate by 13% without any evidence of spill-over effects. This effect is driven by a positive effect on individuals with at least a bachelor’s degree. However, the hiring subsidy mainly created temporary short-lived employment: eligible jobseekers were not more likely to find employment that lasted at least twelve consecutive months than ineligible jobseekers. |
| Keywords: | hiring subsidies, long-term unemployment, prime-aged jobseekers, triple difference, temporary help agencies |
| JEL: | H22 J08 J18 J23 J38 J64 J65 J68 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9325&r= |
| By: | Hugo Castro-Silva (Universidade de Lisboa); Francisco Lima (Universidade de Lisboa) |
| Abstract: | In the knowledge economy, skilled workers play an important role in innovation and economic growth. However, small firms may not be able to keep these workers. We study how the knowledge-skill complementarity relates to job duration in small and large firms, using a Portuguese linked employer-employee data set. We select workers displaced by firm closure and estimate a discrete-time hazard model with unobserved heterogeneity on the subsequent job relationship. To account for the initial sorting of displaced workers to firms, we introduce weights in the model according to the individual propensity of employment in a small firm. Our results show a lower premium on skills in terms of job duration for small firms. Furthermore, we find evidence of a strong knowledge-skill complementarity in large firms, where the accumulation of firm-specific human capital also plays a more important role in determining the hazard of job separation. For small firms, the complementarity does not translate into longer job duration, even for those with pay policies above the market. Overall, small knowledge-intensive firms struggle to retain high skill workers and find it harder to leverage the knowledge-skill complementarity. |
| Keywords: | knowledge intensity, technology, firm size, small firms, job duration, skills |
| JEL: | A1 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2021.08&r= |
| By: | Elisabeth M. Caucutt (University of Western Ontario); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros); Christopher Rauh (University of Cambridge) |
| Abstract: | The difference in marriage rates between black and white Americans is striking. Wilson (1987) suggests that a skewed sex ratio and higher rates of incarceration and unemployment are responsible for lower marriage rates among the black population. In this paper, we take a dynamic look at the Wilson Hypothesis. Incarceration rates and labor market prospects of black men make them riskier spouses than white men. We develop an equilibrium search model of marriage, divorce, and labor supply in which transitions between employment, unemployment, and prison differ by race, education, and gender. The model also allows for racial differences in how individuals value marriage and divorce. We estimate the model and investigate how much of the racial divide in marriage is due to the Wilson Hypothesis and how much is due to differences in preferences for marriage. We find that the Wilson Hypothesis accounts for more than three quarters of the model´s racial-marriage gap. This suggests policies that improve employment opportunities and/or reduce incarceration for black men could shrink the racial-marriage gap. |
| Keywords: | Marriage, race, incarceration, inequality, unemployment. |
| JEL: | J12 J J64 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2021_2106&r= |
| By: | Feridoon Koohi-Kamali; Aida Farmand; Jose Pedro Bastos Neves (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | We develop models of duration of unemployment, for the United States and apply them to the U.S. 1996-2020 biennial Displaced Worker Survey (DWS). Our approach has several notable features relevant to an analysis of unemployment during a deep, persistent recession. We estimate single-spell proportional hazard exponential and Weibull models of transitional probability to full employment, and we test the outcome for robustness to functional forms by distributional free estimation. We test for the impact of unobserved heterogeneity by modeling recession as a Gamma distributed unobservable frailty function commonly employed in biostatistics. We also estimate a non/semi-parametric proportional hazard Cox model of competing risks with three destinations out of unemployment: transition to full-time employment, part-time employment, and inactive job-search status. Our single-destination estimates demonstrate significant differences in the covariate estimates as a result of different base hazards defined for those during the Great Recession and those outside that period. The estimates show gender is the single most important determinant of the duration of unemployment with men’s hazard rate of (re)employment to full-time jobs 7% to 15% lower. When interacted with Unemployment Insurance, being female also accounts for a 10% higher hazard of transition to full-time employment. Our competing risks regression results indicate that Black workers have 28% and 27% lower rates of exit to a full-time and part-time employment respectively following job displacement. |
| Keywords: | unemployment, duration of unemployment, Great Recession, hazard function, multiple transitions |
| JEL: | C1 C41 J2 J6 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2021-03&r= |
| By: | Dang, Hai-Anh H.; Trinh, Trong-Anh; Verme, Paolo |
| Abstract: | Hardly any evidence currently exists on the causal effects of mental illness on refugee labor market outcomes. We offer the first study on this topic in the context of Australia, one of the host countries with the largest number of refugees per capita in the world. Analyzing the Building a New Life in Australia longitudinal survey, we exploit the variations in traumatic experiences of refugees interacted with time as an instrument for refugee mental health. We find that worse mental health, as measured by a one standard deviation increase in the Kessler mental health score, reduces the probability of employment by 14.1% and labor income by 26.8%. We also find some evidence of adverse impacts of refugees' mental illness on their children's mental health and education performance. These effects appear more pronounced for refugees that newly arrive or are without social networks, but they may be ameliorated with government support. Our findings suggest that policies that target refugees' mental health may offer a new channel to improve their labor market outcomes. |
| Keywords: | refugees,mental health,labor outcomes,instrumental variable,BNLA longitudinal survey,Australia |
| JEL: | I15 J15 J21 J61 O15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:949&r= |
| By: | Jay Hyun; Ziho Park; Vladimir Smirnyagin |
| Abstract: | Using administrative data on U.S. multisector firms, we document a cross-sectoral propagation of the import competition from China (“China shock”) through firms’ internal networks: Employment of an establishment in a given industry is negatively affected by China shock that hits establishments in other industries within the same firm. This indirect propagation channel impacts both manufacturing and non-manufacturing establishments, and it operates primarily through the establishment exit. We explore a range of explanations for our findings, highlighting the role of within-firm trade across sectors, scope of production, and establishment size. At the sectoral aggregate level, China shock that propagates through firms’ internal networks has a sizable impact on industry-level employment dynamics. |
| Keywords: | China shock, import competition, multisector firms, multiproduct firms, network propagation, trade |
| JEL: | D22 F14 F40 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:21-28&r= |
| By: | Rünstler, Gerhard |
| Abstract: | Using new quarterly narrative evidence, this paper examines the macroeconomic impact of reforms of unemployment benefits (UB) and employment protection legislation (EPL) in the euro area from a Bayesian narrative panel VAR. The approach complements existing micro-econometric evidence by aligning short- and mediumterm effects in a unified framework and assessing state dependencies. Liberalising reforms result in temporary wage declines and highly persistent increases in economic activity and employment. In contrast to UB reforms, the effects of EPL reforms on employment emerge only gradually. JEL Classification: E32, J08, O43 |
| Keywords: | discriminant regression, employment protection legislation, narrative identification, unemployment benefits |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20212592&r= |
| By: | Daniel I. Rees; Joseph J. Sabia; Rebecca Margolit |
| Abstract: | The minimum wage is increasingly viewed as an important tool for improving public health outcomes, including reducing childbearing among teenagers. Taken at face value, recently reported estimates suggest that raising the federal minimum wage to $15 per hour could reduce the number of teenage births by 35,000 per year. Using an event study framework that accounts for dynamic and heterogeneous treatment effects, we find little evidence that minimum wages are causally related to teenage childbearing. Moreover, the estimated effects of minimum wages on teenage sexual behaviors, including contraception use, abstinence, and number of partners are consistently small and statistically insignificant. |
| JEL: | J13 J18 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29334&r= |