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on Labour Economics |
| By: | Moritz Kuhn (University of Bonn, Department of Economics); Iourii Manovskii (University of Pennsylvania, Department of Economics); Xincheng Qiu (University of Pennsylvania, Department of Economics) |
| Abstract: | Spatial differences in labor market performance are large and highly persistent. Using data from the United States, Germany, and the United Kingdom, we document striking similarities in spatial differences in unemployment, vacancies, job finding, and job filling within each country. This robust set of facts guides and disciplines the development of a theory of local labor market performance. We find that a spatial version of a Diamond-Mortensen-Pissarides model with endogenous separations and on-the-job search quantitatively accounts for all the documented empirical regularities. The model also quantitatively rationalizes why differences in job-separation rates have primary importance in inducing differences in unemployment across space while changes in the job-finding rate are the main driver in unemployment fluctuations over the business cycle. |
| Keywords: | Local Labor Markets, Unemployment, Vacancies, Search and Matching |
| JEL: | J63 J64 E24 E32 R13 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:122&r= |
| By: | Serdar Birinci; Kurt See; Shu Lin Wee |
| Abstract: | Job applications have risen over time, yet job-finding rates have remained unchanged. Meanwhile, job separations have declined. We argue that an increase in the number of applications raises the probability of finding a good match rather than the probability of finding a job. Using a search model with multiple applications and costly information, we show that when applications increase, firms invest in identifying good matches, thereby reducing separations. Concurrently, increased congestion and selectivity over which offer to accept temper increases in job-finding rates. Our framework contains testable implications for changes in offers, acceptances, reservation wages, applicants per vacancy, and tenure, factors that enable us to generate the trends in unemployment flows. |
| Keywords: | Labour markets; Productivity |
| JEL: | E24 J64 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-49&r= |
| By: | David Card; Fabrizio Colella; Rafael Lalive |
| Abstract: | In spring 2005, Austria launched a campaign to inform employers and newspapers that gender preferences in job advertisements were illegal. At the time over 40% of openings on the nation’s largest job-board specified a preferred gender. Over the next year the fraction fell to under 5%. We merge data on filled vacancies to linked employer-employee data to study how the elimination of gender preferences affected hiring and job outcomes. Prior to the campaign, most stated preferences were concordant with the firm’s existing gender composition, but a minority targeted the opposite gender - a subset we call non-stereotypical vacancies. Vacancies with a gender preference were very likely (>90%) to be filled by someone of that gender. We use pre-campaign vacancies to predict the probabilities of specifying preferences for females, males, or neither gender. We then conduct event studies of the effect of the campaign on the predicted preference groups. We find that the elimination of gender preferences led to a rise in the fraction of women hired for jobs that were likely to be targeted to men (and vice versa), increasing the diversity of hiring workplaces. Partially offsetting this effect, we find a reduction in the success of non-stereotypical vacancies in hiring the targeted gender, and indications of a decline in the efficiency of matching. For the much larger set of stereotypical vacancies, however, vacancy filling times, wages, and job durations were largely unaffected by the campaign, suggesting that the elimination of stated preferences had at most small consequences on overall job match efficiency. |
| JEL: | J16 J63 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29350&r= |
| By: | David Blanchflower; Alex Bryson |
| Abstract: | We examine the start date of the Great Recession across OECD countries based on two successive quarters of negative GDP growth recession. For most OECD countries this establishes the start of recession in Q22008 or Q32008. We find that the Sahm Rule identifies the start of recession in the US to the beginning of 2008 but in other OECD countries it identifies the start in almost every case, after that identified by GDP. But the GDP and labor market data are subject to major revisions, so the turn is not apparent in most countries for some time. We establish our own rule for predicting recession using the fear of unemployment series to predict the Great Recession. It involves looking for a ten-point rise in the series compared to its previous twelve month low. These surveys are timely and have the major advantage they are not subject to revision. Across the OECD we confirm this finding with other types of qualitative data and especially so in the UK. Qualitative surveys, we show, in the US in 2006 and 2007 predicted the subsequent recession and they did the same in Europe at the end of 2007 and in the early part of 2008. |
| Keywords: | Great Recession, business cycles, turning points, Sahm Rule, fear of unemployment |
| JEL: | E24 E32 E65 J64 J68 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:532&r= |
| By: | Christian Dudel (Max Planck Institute for Demographic Research, Rostock, Germany); Elke Loichinger (Max Planck Institute for Demographic Research, Rostock, Germany); Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany); Harun Sulak; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | The extension of late working life has been proposed as a potential remedy for the challenges of aging societies. For Germany, surprisingly little is known about trends and social inequalities in the length of late working life. Here, we use data from the German Microcensus to estimate working life expectancy from age 55 onwards for the 1941-1955 birth cohorts. We adjust our calculations of working life expectancy for working hours, and present results for western and eastern Germany by gender, education, and occupation. While working life expectancy has increased across cohorts, we find strong regional and socioeconomic disparities. Decomposition analyses show that among males, socioeconomic differences are predominantly driven by variation in employment rates; whereas among women, variation in working hours is also highly relevant. Older eastern German women have longer working lives than older western German women, which is likely attributable to the GDR legacy of high female employment. |
| JEL: | J1 Z0 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2021-018&r= |
| By: | David G. Blanchflower (Bruce V. Rauner ’78 Professor of Economics, Dartmouth College, Hanover, NH 03755-3514. Adam Smith School of Business, University of Glasgow and NBER); Alex Bryson (Professor of Quantitative Social Science, UCL Social Research Institute, University College London, 20 Bedford Way, London WC1H 0AL) |
| Abstract: | Economic shocks are notoriously difficult to predict but recent research suggests qualitative metrics about economic actors’ expectations are predictive of downturns. We show consumer expectations indices from both the Conference Board and the University of Michigan predict economic downturns up to 18 months in advance in the United States, both at national and at state-level. All the recessions since the 1980s have been predicted by at least 10 and sometimes many more point drops in these expectations indices. A single monthly rise of at least 0.3 percentage points in the unemployment rate also predicts recession, as does two consecutive months of employment rate declines. The economic situation in 2021 is exceptional, however, since unprecedented direct government intervention in the labor market through furlough-type arrangements has enabled employment rates to recover quickly from the huge downturn in 2020. However, downward movements in consumer expectations in the last six months suggest the economy in the United States is entering recession now (Autumn 2021) even though employment and wage growth figures suggest otherwise. |
| Keywords: | Great unemployment, recession, consumer expectations |
| JEL: | J60 J64 J68 |
| Date: | 2021–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:2131&r= |
| By: | Niina Metsä-Simola; Anna Baranowska-Rataj; Hanna Remes; Mine Kühn (Max Planck Institute for Demographic Research, Rostock, Germany); Pekka Martikainen (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Objective. This study examined mothers’ depression trajectories around the time of separation by potential availability of support from their youngest child’s grandparents. Background. Separation and single motherhood are both associated with an increased risk of depression. Grandparents are often the most important source of support to families with children, and their support may moderate separating mothers’ depression trajectories. Method. Using longitudinal Finnish register data on 118,006 separating mothers whose youngest child was age 12 or less, we examined the mothers’ depression trajectories, based on antidepressant use 4 years before and 4 years after separation. The trajectories were examined by grandparental characteristics – age, employment, health, geographical distance to the mother, and union stability – using logistic panel regression. Results. Grandparent’s availability for providing support, as proxied by younger age, employment, and lack of severe health problems all predicted a lower probability of maternal depression both before and after separation. The level of depression was also lower if grandparents lived close to the mother, and if the maternal grandparents’ union was intact. Overall, the maternal grandmothers appeared to matter the most. Conclusion. The availability of support from grandparents may partially compensate for the resource losses related to separation, and it is associated with lower maternal depression both before and after separation. Keywords. Separation, depression, mothers, grandparents, social support |
| Keywords: | Finland |
| JEL: | J1 Z0 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2021-020&r= |
| By: | Salland, Jan (Helmut Schmidt University, Hamburg) |
| Abstract: | This paper applies the German Socio-Economic Panel to analyse the effect of within household income comparison on individual life satisfaction. Our estimates indicate, a primary breadwinner wife decreases spousal individual happiness by roughly nine per cent. To state the economic significance, a €70,000 increase in external, peer reference income corresponds to a similar individual happiness decrease. The estimates suggest envy effects among couples and provide mixed evidence for gender roles to influence subjective well-being. Based on subsample estimations, our results are driven by younger birth year quartiles, lower education and total income households, East German couples and households with greater fulltime employment share. The paper adds to within household interdependence of subjective well-being and indicates negative consequences of couple income comparison for individual happiness. Wives (barely) outearning their husbands seem to signal ’competition’. |
| Keywords: | Life Satisfaction; Well-being; Happiness; Income Comparison; Gender Identity |
| JEL: | D10 I31 J16 |
| Date: | 2021–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:vhsuwp:2021_191&r= |
| By: | Jean-François Fagnart; Marc Germain; Bruno Van der Linden |
| Abstract: | We study the consequences of a working time reduction (WTR hereafter) in a growth model with efficiency wages and an essential natural resource (natural capital). Considering that technical progress cannot reduce the resource content of final production to zero, we show that the effects of a WTR on (un)employment depend on the abundance of natural capital. If it is unlimited, the economy converges toward a balanced growth path and a WTR lowers output, employment and wage levels along this path. With finite natural capital, the economy converges toward a stationary state. A WTR then increases the hourly wage and employment if natural capital is scarce enough, which is necessarily the case if technical progress on produced capital and labour is unbounded. The long-term elasticity of employment (resp., of the hourly wage) to the cut in hours is larger (resp., smaller) when natural capital is scarcer. A numerical analysis of the transitory impacts of a WTR confirms that when natural capital is scarcer, it increases employment more and the hourly wage less, with a less negative initial impact on output. |
| Keywords: | unemployment, fair wage, work sharing, (limits to) growth, natural capital |
| JEL: | J68 O44 Q57 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9351&r= |
| By: | Amanda M. Grittner (Abt Associates); Matthew S. Johnson (Duke University) |
| Abstract: | Regulatory agencies overseeing the labor market often rely on worker complaints to direct their enforcement. However, if workers face differential barriers to complain, this system could result in ineffective targeting and create disparities in working conditions. To investigate these implications, we examine how the onset of Secure Communities—a localized immigration enforcement program—affected occupational safety and health. Counties’ participation in Secure Communities substantially reduced complaints to government safety regulators, but increased injuries, at workplaces with Hispanic workers. We show that these effects are most consistent with employers reducing safety inputs in response to workers’ decreased willingness to complain. |
| Keywords: | labor regulations; workplace safety; immigration enforcement |
| JEL: | J28 J81 I18 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:21-353&r= |
| By: | Peter Andre (University of Bonn); Carlo Pizzinelli (IMF); Christopher Roth (University of Cologne, ECONtribute); Johannes Wohlfart (Department of Economics, University of Copenhagen, CEBI, CESifo, Danish Finance Institute) |
| Abstract: | We study people’s subjective models of the macroeconomy and shed light on their at-tentional foundations. To do so, we measure beliefs about the effects of macroeconomic shocks on unemployment and inflation, providing respondents with identical information about the parameters of the shocks and previous realizations of macroeconomic vari-ables. Within samples of both 6,500 US households and 1,500 experts, beliefs are widely dispersed, even about the directional effects of shocks, and there are large differences in average beliefs between households and experts. Part of this disagreement seems to arise from selective retrieval of different propagation channels of macroeconomic shocks. We confirm this mechanism causally by exogenously shifting households’ attention to ei-ther supply-side or demand-side channels. Moreover, households with different personal experiences recall different propagation channels of the shocks, while experts tend to re-call textbook models. Our findings offer a new perspective on the widely documented disagreement in macroeconomic expectations. |
| Keywords: | Expectation Formation, Subjective Models, Associations, Thoughts, Attention, Experiences, Macroeconomic Shocks, Monetary Policy, Fiscal Policy. |
| JEL: | D83 D84 E31 E52 E71 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:119&r= |
| By: | Bräuer, Richard; Hungerland, Wolf-Fabian; Kersting, Felix |
| Abstract: | This paper studies the economic and political effects of a large trade shock in agriculture - the grain invasion from the Americas - in Prussia during the first globalisation (1871-1913). We show that this shock accelerated the structural change in the Prussian economy through migration of workers to booming cities. In contrast to studies using today's data, we do not observe declining per capita income and political polarisation in counties affected by foreign competition. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian trade data to isolate exogenous variation. |
| Keywords: | agriculture,elections,Germany,globalisation,import competition,labour market,migration,Prussia,trade shock |
| JEL: | F14 F16 F66 F68 N13 R12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhcom:42021&r= |
| By: | Sabrina T. Howell; Theresa Kuchler; David Snitkof; Johannes Stroebel; Jun Wong |
| Abstract: | We explore the sources of racial disparities in small business lending by studying the $806 billion Paycheck Protection Program (PPP), which was designed to support small business jobs during the COVID-19 pandemic. PPP loans were administered by private lenders but federally guaranteed, largely eliminating unobservable credit risk as a factor in explaining differential lending by race. We document that even after controlling for a firm’s zip code, industry, loan size, PPP approval date, and other characteristics, Black-owned businesses were 12.1 percentage points (70% of the mean) more likely to obtain their PPP loan from a fintech lender than a traditional bank. Among conventional lenders, smaller banks were much less likely to lend to Black-owned firms, while the Top-4 banks exhibited little to no disparity after including controls. We use novel data to show that the disparity is not primarily explained by differences in pre-existing bank or credit relationships, firm financial positions, fintech affinity, or borrower application behavior. In contrast, we document that Black-owned businesses’ higher rate of borrowing from fintechs compared to smaller banks is particularly large in places with high racial animus, pointing to a potential role for discrimination in explaining some of the racial disparities in small business lending. We find evidence that when small banks automate their lending processes, and thus reduce human involvement in the loan origination process, their rate of PPP lending to Black-owned businesses increases, with larger effects in places with more racial animus. |
| JEL: | G21 G23 G28 G41 J15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9345&r= |
| By: | Cyprien Batut (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, DGTPE - Direction Générale du Trésor et de la Politique Economique - Ministère de l'Economie, des Finances et de l'Industrie); Ulysse Lojkine (UPN - Université Paris Nanterre, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Paolo Santini (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | In this paper, we look at the long term evolution of the composition of union membershipin the four largest European countries: France, West Germany, Italy, and the United King-dom. Using unexploited micro data coming from post electoral, labor, and household surveys,we first revisit commonly accepted unionization levels from the past 60 years. We find that,for France and Italy, union density was at time under- and over- estimated respectively. Sec-ond, we present long run evidence on the evolution of the composition of unions in terms ofthe socio-economic characteristics (occupation, length of education, public or private sector,gender) of their members. Two types of unionisation emerge from this analysis. In Franceand Italy, the composition of unions has been primarily determined by structural changesin the composition of the workforce with no notable changes in the selection of the differentgroups into unions when aggregate density varied. In the UK and West Germany, instead,selection into unions has changed dramatically: Blue collars and less educated worker wereover-represented in the '60s, but this has declined over time. We argue that these two typesof unionization are related to the institutional characteristics of each country and show thatthe evolution of selection into union is linked to the public-sectorization of unions: as uniondensity fall, the share of public workers in unions increases. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-03364022&r= |
| By: | Maria C. Lo Bue; Tu Thi Ngoc Le; Manuel Santos Silva; Kunal Sen |
| Abstract: | This paper investigates gender inequality in vulnerable employment: forms of employment typically featuring high precariousness, inadequate earnings, and lack of decent working conditions. Using a large collection of harmonized household surveys from developing countries, we measure long-term trends, describe geographical patterns, and estimate correlates of gender inequalities in vulnerable employment. Conditional on individual and household characteristics, women are 7 percentage points more likely to be in vulnerable employment than men. |
| Keywords: | Vulnerable employment, Gender gap, Developing countries |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2021-154&r= |
| By: | Pierre Brochue (University of Ottawa); Jonathan Créchet (Department of Economics, University of Ottawa) |
| Abstract: | With the advent of the Covid-19 pandemic, labour-force survey non-response rates have surged in many countries. We show that in the case of Canada, the bulk of this increase can be explained by the suspension of in-person interviews following the adoption of telework in Federal agencies, including Statistics Canada. Individuals with vulnerabilities to the Covid-19 economic shock—i.e., the young, low-educated, low-salary, low job-tenure individuals, and those working in occupations with low telework potential—have been harder to reach and have been gradually less and less represented in the Canadian Labour Force Survey (LFS) during the pandemic. Using exogenous variation in the assignment of individuals to the different LFS rotations, we present evidence suggesting that the decline in employment and labour-force participation have been underestimated over the March-July 2020 period. We believe, however, that these non-response biases have been moderate when contrasted with the unprecedented severity of the Covid-19 disruption. Furthermore, since attrition only represents a minor part of the non-response increase, we argue that one should not expect additional difficulties when using panels as compared to cross-sectional samples, and when using public-use LFS files instead of restricted-access files. All in all, the LFS remains a reliable data source for analyzing the economic impact of Covid-19 in a timely manner. |
| Keywords: | COVID-19, Non-response, Survey data, Employment, Unemployment. |
| JEL: | C81 C83 E24 J60 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:2109e&r= |
| By: | Sallin, Aurelién |
| Abstract: | While the number of students with identified special needs is increasing in developed countries, there is little evidence on academic outcomes and labor market integration returns to special education. I present results from the first ever study to examine short- and longterm returns to special education programs using recent methods in causal machine learning and computational text analysis. I find that special education programs in inclusive settings have positive returns on academic performance in math and language as well as on employment and wages. Moreover, I uncover a positive effect of inclusive special education programs in comparison to segregated programs. However, I find that segregation has benefits for some students: students with emotional or behavioral problems, and nonnative students. Finally, using shallow decision trees, I deliver optimal placement rules that increase overall returns for students with special needs and lower special education costs. These placement rules would reallocate most students with special needs from segregation to inclusion, which reinforces the conclusion that inclusion is beneficial to students with special needs. |
| Keywords: | returns to education, special education, inclusion, segregation, causal machine learning, computational text analysis |
| JEL: | H52 I21 I26 J14 C31 Z13 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2021:09&r= |
| By: | Committee, Nobel Prize (Nobel Prize Committee) |
| Abstract: | Most applied science is concerned with uncovering causal relationships. In many fields, randomized controlled trials (RCTs) are considered the gold standard for achieving this. The systematic use of RCTs to study causal relationships — assessing the efficacy of a medical treatment for example — has resulted in tremendous welfare gains in society. However, due to financial, ethical, or practical constraints, many important questions — particularly in the social sciences — cannot be studied using a controlled randomized experiment. For example, what is the impact of school closures on student learning and the spread of the COVID-19 virus? What is the impact of low-skilled immigration on employment and wages? How do institutions affect economic development? How does the imposition of a minimum wage affect employment? In answering these types of questions, researchers must rely on observational data, i.e., data generated without controlled experimental variation. But with observational data, a fundamental identification problem arises: the underlying cause of any correlation remains unclear. If we observe that minimum wages and unemployment correlate, is this because a minimum wage causes unemployment? Or because unemployment and lower wage growth at the bottom of the wage distribution leads to the introduction of a minimum wage? Or because of a myriad of other factors that affect both unemployment and the decision to introduce a minimum wage? Moreover, in many settings, randomized variation by itself is not sufficient for identification of an average treatment effect. |
| Keywords: | Labor markets; natural experiments |
| JEL: | J00 |
| Date: | 2021–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nobelp:2021_002&r= |