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on Labour Economics |
| By: | Desiere, Sam (Ghent University); Cockx, Bart (Ghent University) |
| 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: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14767&r= |
| By: | Kuhn, Moritz (University of Bonn); Manovskii, Iourii (University of Pennsylvania); Qiu, Xincheng (University of Pennsylvania) |
| 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:iza:izadps:dp14791&r= |
| By: | Belloc, Filippo (University of Siena); Burdin, Gabriel (Leeds University Business School); Cattani, Luca (University of Bologna); Ellis, William; Landini, Fabio (University of Parma) |
| Abstract: | This paper analyzes the interplay between the allocation of authority within firms and workers' exposure to automation risk. We propose an evolutionary model to study the complementary fit of job design and workplace governance as resulting from the adoption of worker voice institutions, in particular employee representation (ER). Two organisational conventions are likely to emerge in our framework: in one, workplace governance is based on ER and job designs have low automation risk; in the other, ER is absent and workers are involved in automation-prone production tasks. Using data from a large sample of European workers, we document that automation risk is negatively associated with the presence of ER, consistently with our theoretical framework. Our analysis helps to rationalize the historical experience of Nordic countries, where simultaneous experimentation with codetermination rights and job enrichment programs has taken place. Policy debates about the consequences of automation on labour organization should avoid technological determinism and devote more attention to socio-institutional factors shaping the future of work. |
| Keywords: | automation risk, job design, employee representation, evolutionary game |
| JEL: | O33 J51 C73 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14788&r= |
| By: | Madoń, Karol (Institute for Structural Research (IBS)); Magda, Iga (Warsaw School of Economics); Palczyńska, Marta (Institute for Structural Research (IBS)); Smoter, Mateusz (Institute for Structural Research (IBS)) |
| Abstract: | This paper compares the relative effectiveness of selected active labour market policies available to young unemployed people in Poland over the 2015-2016 period. We use rich administrative data and propensity score matching techniques to control for the non-random selection of unemployed individuals into alternative interventions. We find large negative employment effects of participating in public works programmes, particularly among disadvantaged individuals. The differences in effectiveness between other interventions are rather small, and most become insignificant over time. We also show that vouchers that allow unemployed individuals find on-the-job training providers themselves are more effective than on-the-job training schemes in which the unemployed individuals are directed to the training providers by the public employment services (PES). |
| Keywords: | youth unemployment, ALMP, Youth Guarantee, wage subsidies, public works, training vouchers |
| JEL: | J08 J64 J68 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14793&r= |
| By: | Kerwin Kofi Charles; Matthew S. Johnson; Nagisa Tadjfar |
| Abstract: | We assess whether and why trade competition partly explains the sharp decline in U.S. workers’ attempts to organize labor unions in recent decades. We find that between 1990-2007, import competition due to the “China Shock” lowered union certification elections by 4.5% among workers in manufacturing industries directly exposed to it, and by 8.8% among workers indirectly exposed through its effect on their local labor market. Consistent with a simple model of workers’ decision to seek union representa- tion, we show that direct exposure lowered the expected wage gain from unionization, whereas indirect exposure increased the cost of job loss, both of which discourage worker organizing. |
| JEL: | F16 J41 J50 J51 J52 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29464&r= |
| By: | Robert W. Fairlie; Kenneth Couch; Huanan Xu |
| Abstract: | We explore whether COVID-19 disproportionately affected women in the labor market using CPS data through the end of 2020. We find that male-female gaps in the employment-to-population ratio and hours worked for women with school-age children have widened but not for those with younger children. Triple-difference estimates are consistent with most of the reductions observed for women with school-age children being attributable to additional child care responsibilities (the “COVID motherhood penalty”). Conducting decompositions, we find women had a greater likelihood to telework, higher education levels and a less-impacted occupational distribution, which all contributed to lessening negative impacts relative to men. |
| JEL: | J16 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29426&r= |
| By: | Dang, Hai-Anh (World Bank); Trinh, Trong-Anh (World Bank); Verme, Paolo (World Bank) |
| 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: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14766&r= |
| By: | John J. Horton; Ramesh Johari; Philipp Kircher |
| Abstract: | In a model with cheap talk, employers can send messages about their willingness to pay for higher ability workers, which job-seekers can use to direct their search and tailor their wage bid. Introducing such messages leads—under certain conditions—to an informative separating equilibrium which affects the number of applications, types of applications, and wage bids across firms. This model is used to interpret an experiment conducted in a large online labor market: employers were given the opportunity to state their relative willingness to pay for more experienced workers, and workers can easily condition their search on this information. Preferences were collected for all employers, but only treated employers had their signal revealed to job-seekers. In response to revelation of the cheap talk signal, job-seekers targeted their applications to employers of the right “type” and they tailored their wage bids, affecting who was matched to whom and at what wage. The treatment increased measures of match quality through better sorting, illustrating the power of cheap talk to improve market outcomes. |
| JEL: | J01 J64 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29445&r= |
| By: | Britta Glennon; Francisco Morales; Seth Carnahan; Exequiel Hernandez |
| Abstract: | We investigate the effect of hiring skilled immigrant employees on the performance of organizations. This relationship has been difficult to establish in prior work due to theoretical ambiguity, limited data, and inherent endogeneity. We overcome these difficulties by studying European football (soccer) clubs during 1990-2020. Detailed microdata from this setting offers unusual transparency on the migration and hiring of talent and their contribution to collective performance. Further, the industry is characterized by country-level rule changes that govern the number of immigrant players clubs can hire. Using these rule changes as the basis for instrumental variables, we find a positive local average treatment effect of the number of immigrant players on the club’s in-game performance. To examine the theoretical mechanisms, we explore whether immigrants cause superior performance because they are more talented than natives or because they enhance the national diversity of their clubs. We find strong evidence for the talent mechanism. We find contingent evidence for the national diversity mechanism: national diversity has a positive relationship with club performance only when the club employs an immigrant manager (coach). The presence of an immigrant manager also strengthens the positive relationship between the number of immigrant players and club performance. |
| JEL: | F16 F22 F23 J61 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29446&r= |
| By: | Boneva, Teodora (University of Bonn); Buser, Thomas (University of Amsterdam); Falk, Armin (briq, University of Bonn); Kosse, Fabian (Ludwig-Maximilians-Universität München) |
| Abstract: | We present evidence on the role of the social environment for the development of gender differences in competitiveness and earnings expectations. First, we document that the gender gap in competitiveness and earnings expectations is more pronounced among adolescents with low socioeconomic status (SES). We further document that there is a positive association between the competitiveness of mothers and their daughters, but not between the competitiveness of mothers and their sons. Second, we show that a randomized mentoring intervention that exposes low-SES children to predominantly female role models causally affects girls' willingness to compete and narrows both the gender gap in competitiveness as well as the gender gap in earnings expectations. Together, the results highlight the importance of the social environment in shaping willingness to compete and earnings expectations at a young age. |
| Keywords: | competitiveness, gender, socioeconomic status, inequality, earnings expectations |
| JEL: | I24 J16 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14800&r= |
| By: | Carneiro, Anabela (University of Porto); Portugal, Pedro (Banco de Portugal); Raposo, Pedro (Universidade Catolica Portuguesa, Lisbon); Rodrigues, Paulo M. M. (Banco de Portugal) |
| Abstract: | This paper provides comprehensive and detailed empirical regression analyses of the sources of wage persistence. Exploring a rich matched employer-employee data set and the estimation of a dynamic panel wage equation with high-dimensional fixed effects, our empirical results show that permanent unobserved heterogeneity plays a key role in driving wage dynamics. The decomposition of the omitted variable bias indicates that the most important source of bias is the persistence of worker characteristics, followed by the heterogeneity of firms' wage policy and last by the job-match quality. We highlight the importance of the incidental parameter problem, which induces a severe downward bias in the autoregressive parameter estimate, through both an in-depth Monte Carlo study and an empirical analysis. Using three alternative bias correction methods (the split-panel Jackknife (Dhaene and Jochmans, 2015), an analytical expression (Hahn and Kuersteiner, 2002), and a residual based bootstrap approach (Everaert and Pozzi, 2007, Gonçalves and Kaffo, 2015)), we observe that up to one-third of the reduction of the autoregressive parameter estimates induced by the control of permanent heterogeneity (high dimensional fixed effects) may not be justified. |
| Keywords: | wage persistence, high-dimensional fixed effects, match effects, incidental parameter problem |
| JEL: | J31 J63 J65 E24 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14798&r= |
| By: | Barschkett, Mara (DIW Berlin); Spieß, C. Katharina (Bundesinstitut für Bevölkerungsforschung (BiB)); Ziege, Elena (DIW Berlin) |
| Abstract: | Grandparents act as the third largest caregiver after parental care and daycare in Germany, as in many Western societies. Adopting a double-generation perspective, we investigate the causal impact of this care mode on children's health, socio-emotional behavior, and school outcomes, as well as parental well-being. Based on representative German panel data sets, and exploiting arguably exogenous variations in geographical distance to grandparents, we analyze age-specific effects, taking into account counterfactual care modes. Our results suggest null or negative effects on children's outcomes: If children three years and older are in full-time daycare or school and, in addition, cared for by grandparents, they have more health and socio-emotional problems, in particular conduct problems. In contrast, our results point to positive effects on parental satisfaction with the childcare situation and leisure. The effects for mothers correspond to an increase of 11 percent in satisfaction with the childcare situation and 14 percent in satisfaction with leisure, compared to the mean, although the results differ by child age. While the increase in paternal satisfaction with the childcare situation is, at 21 percent, even higher, we do not find an effect on paternal satisfaction with leisure. |
| Keywords: | grandparental childcare, socio-emotional outcomes, cognitive outcomes, parental well-being, instrumental variable |
| JEL: | D1 I21 I31 J13 J14 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14795&r= |
| By: | Pedro Bento (Texas A&M University, Department of Economics); Sunju Hwang (Texas A&M University, Department of Economics) |
| Abstract: | The number of black-owned businesses in the U.S. has increased dramatically since the 1980s, even compared to the number of non-black-owned businesses and the rise in black labor-market participation. In 1982 less than 4 percent of black labor-market participants owned businesses, compared to over 14 percent of other participants. By 2012 more than 16 percent of black participants owned businesses while the analogous rate for non-black participants increased to only 19 percent. Combined with other evidence, this suggests black entrepreneurs have faced significant barriers to starting and running businesses and these barriers have declined over time. We examine the impact of these trends on aggregate output and welfare. Interpreted through a model of entrepreneurship, declining barriers from 1982 to 2012 led to a permanent 2 percent increase in (consumption-equivalent) black welfare, a 0.7 percent increase in output per worker (a small fraction of the observed 70 percent increase), and a 0.7 percent decrease in the welfare of other labor-market participants. These impacts are in addition to any gains from declining labor-market barriers. |
| Keywords: | black, minority, distortions, entrepreneurship, business dynamism, misallocation, aggregate productivity, economic growth. |
| JEL: | E02 E1 J7 J15 O1 O4 |
| Date: | 2021–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:txm:wpaper:20211108-002&r= |
| By: | Garcia-Brazales, Javier |
| Abstract: | There is increasing evidence in favor of non-unitary models of the household. Moreover, gender norms and values have been shown to be transmitted across generations and to affect intra-household allocations. I lever a unique opportunity to observe each spouse’s contributions to income, market, and home hours of parents and children (after forming their own household) in China and Australia to uncover a strong positive correlation between the female spouse’s relative contributions across two generations in the absence of reverse causality. This is robust to the inclusion of a rich vector of controls and provincial fixed effects. Exploiting large exogenous changes in education brought along by the Chinese 1986 Compulsory Education Law, I find that the degree of intergenerational transmission was disrupted by the reform, and that this happened heterogeneously across groups with different parental relative contributions. I further show that this was driven by a change in the attitudes towards gender norms, which suggests that transmission occurs at least partly through socialization and that policies can have a multiplier effect both within and across generations. |
| Keywords: | Intrahousehold Inequalities,Relative Spousal Contributions,Intergenerational Transmission,China,Australia |
| JEL: | D10 I24 J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:246592&r= |
| By: | Fabio Montobbio; Jacopo Staccioli; Maria Enrica Virgillito; Marco Vivarelli |
| Abstract: | This paper represents one of the first attempts at building a direct measure of occupational exposure to robotic labour-saving technologies. After identifying robotic and labour-saving robotic patents retrieved by Montobbio et al., (2022), the underlying 4-digit CPC definitions are employed in order to detect functions and operations performed by technological artefacts which are more directed to substitute the labour input. This measure allows to obtain fine-grained information on tasks and occupations according to their similarity ranking. Occupational exposure by wage and employment dynamics in the United States is then studied, complemented by investigating industry and geographical penetration rates. |
| Keywords: | Labour-Saving Technology; Natural Language Processes; Labour Markets; Technological Unemployment. |
| Date: | 2021–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/43&r= |
| By: | Giuseppe Fiori (Board of Governors of the Federal Reserve System); Filippo Scoccianti (Bank of Italy) |
| Abstract: | We study how the timing of technology adoption through capital accumulation shapes firm-level productivity dynamics and quantify its aggregate implications in a model of heterogeneous firms. Using data on the census of incorporated Italian firms and exploiting the lumpiness of capital accumulation, we document that large investment episodes lead to productivity gains at the firm and sectoral level due to vintage effects. In a general equilibrium model of firm heterogeneity, we find that the presence of vintage technology constitutes a powerful microeconomic-based amplification mechanism of aggregate shocks relative to a benchmark real business cycle model. |
| Keywords: | business cycles, (S,s) policies, vintage effects, firm heterogeneity. |
| JEL: | D24 E22 E32 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_651_21&r= |
| By: | Axel Anderson (Department of Economics, Georgetown University) |
| Abstract: | Kremer and Maskin (1996) explore optimal pairwise matching when production involves defined roles. Despite underlying Cobb-Douglas production functions, the induced maximum production function is no longer supermodular, and positive sorting does not arise. This paper introduces and solves a general class of role-assignment matching models with a continuum of types and general underlying supermodular production functions. The unique equilibrium entails a novel blend of positive sorting in the large, and locally negative sorting that I call positive clustering. I show how the equilibrium matching changes as the production function changes. In a dynamic extension with CES production, I show that sorting, mobility, and wage inequality positively covary with changes in production across matching markets (or over time). Classification- D31, D51, D71, J24, J31, J6 |
| Keywords: | Matching, Sorting, Inequality, Mobility |
| Date: | 2021–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~21-21-20&r= |
| By: | OECD |
| Abstract: | Public policy can play an important role in steering the large-scale diffusion of teleworking. Various communities around the world are experimenting with innovative solutions. In Italy, the Autonomous Province of Trento has plans to design a comprehensive plan for teleworking as a way to foster local economic and social development. Opportunities and challenges for a smooth transition to an ever more hybrid work environment are explored in view of a number of societal objectives, including an improvement in living standards, territorial cohesion and competitiveness. The paper identifies six policy areas for recommendations, reflecting the conditions needed to achieve these objectives. |
| Keywords: | Italy, local development, place-based policy, remote work, teleworking, Trentino |
| JEL: | J58 J68 O33 R12 R23 R58 |
| Date: | 2021–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2021/07-en&r= |
| By: | Goedhuys, Micheline (UNU-MERIT); Grimm, Michael (University of Passau); Meysonnat, Aline (UNU-MERIT); Nillesen, Eleonora (UNU-MERIT); Reitmann, Ann-Kristin (University of Passau) |
| Abstract: | Youth empowerment, i.e., the ability of young people to take control over key aspects of their lives, has become a growing concern to achieving sustainable development worldwide. An increasing number of policy interventions is targeting the youth, but to monitor the progress a better understanding on what constitutes youth empowerment is needed. However, in contrast to the area of women's empowerment, little progress has been made on determining which domains of empowerment are important for youth and how they can be operationalized with indicators for measurement. We propose four domains of youth empowerment with corresponding indicators and use a well-established methodology for constructing a composite index. Using data from a household survey in Tunisia including a sample of young adults (18 to 30 years old), we assess youth empowerment in the proposed domains, explore correlates to empowerment and assess the link between youth empowerment and youth well-being. The proposed approach can help to monitor youth empowerment in various contexts and to evaluate the effectiveness of youth interventions. |
| Keywords: | youth empowerment, measurement, multidimensional index, well-being, Middle East and North Africa region |
| JEL: | C43 D91 D39 J13 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14760&r= |