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on Labour Economics |
| By: | Murat Demirci (Department of Economics, Koç University); Murat Guray Kirdar (Department of Economics, Boğaziçi University) |
| Abstract: | Turkey hosts the largest population of refugees globally; however, we know little about their labor market outcomes at the national level. We use the 2018 round of the Turkey Demographic and Health Survey, which includes a representative sample of Syrian refugees in Turkey for the first time, to examine a rich set of labor market outcomes. We find that the native-refugee gap in men’s employment in Turkey (in favor of natives) is much smaller than that reported for most developed countries. Moreover, men’s employment peaks quite early (one year) after arrival and remains there, whereas women’s employment is lower to begin with and changes little over time. Once we account for demographic and educational differences, the native-refugee gap in men’s (women’s) paid employment reduces to 4.7 (4.0) percentage points (pp). These small gaps conceal the fact that refugees’ formal employment is much lower. Even after accounting for the covariates, refugee men’s formal employment rate is 58 pp lower. In addition, the native-refugee gap is the smallest in manufacturing for men and in agriculture for women, and the gap is also much smaller in wage-employment than self-employment and unpaid family work for both genders. Young refugees are more likely to work than natives, whereas the gap favors natives among the prime-age working people. Moreover, the native-refugee gap in employment widens for more educated refugees. Finally, accounting for the differences in covariates, the native-refugee gap in men’s employment vanishes for Turkish-speaking refugees but persists for Arabic- and Kurdish-speaking refugees. |
| Keywords: | Syrian refugees, labor market integration, employment, Turkey. |
| JEL: | J61 F22 J21 O15 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:2124&r= |
| By: | Nathan Lachapelle (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Francesco Pascucci (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | In this paper we build a quantitative spatial general equilibrium model to study the geographical variation in unemployment rates in the presence of wage rigidities and when workers are allowed to commute from residence to workplace. Calibrating the model on Belgian district data, we find that, were workers' location choice driven only by preferences for amenities, workers would relocate away from the center of the country, generating a less concentrated spatial distribution of economic activity. We also explore the role of unemployment insurance in determining the location choices of workers. We find that when the risk of unemployment is fully insured, workers relocate to districts with initially high unemployment rates, therefore accentuating the spatial misallocation of labor. Removing unemployment insurance would instead not generate significant changes in the spatial distribution of workers. To gauge the magnitude of wage distortions, we compare the observed gross wage levels with the counterfactual market-clearing wages. Removing wage rigidities would generate significant gains in local and total GDP (+3%) and modest gains in the average real net labor income per resident (+1%). Lastly, we determine the level of the employers' social contribution rate that would allow to achieve full employment in all districts. We find that the optimal social contribution rate should be 24%, 12 percentage points lower than the observed rate, while at the same time it would increase fiscal revenue by 1.5%. |
| Keywords: | wage regulation, spatial equilibrium, labor mobility, commuting, local unemployment. |
| JEL: | J3 J5 J61 R12 R23 |
| Date: | 2021–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2021027&r= |
| By: | Gustave Kenedi (Institut d'Études Politiques [IEP] - Paris); Louis Sirugue (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: | We provide new estimates of intergenerational income mobility in France for children born in the 1970s using rich administrative data. Since parents' incomes are not observed, we employ a two-sample two-stage least squares estimation procedure. At the national level, every measure of intergenerational income persistence (intergenerational elasticities, rank-rank correlations, and transition matrices) suggests that France is characterized by relatively strong persistence relative to other developed countries. Children born to parents in the bottom 20% of their income distribution have a 10.1% probability of reaching the top 20% as adults. This probability is of 39.1% for children born to parents in the top 20%. At the local level, we find substantial spatial variations in intergenerational mobility. It is higher in the West of France and particularly low in the North and in the South. We uncover significant relationships between absolute upward mobility and characteristics of the environment an individual grew up in, such as the unemployment rate, population density, and income inequality. |
| Keywords: | Intergenerational mobility,measurement,spatial variations,France |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03455282&r= |
| By: | Olof Åslund (Olof Åslund); Cristina Bratu (Cristina Bratu); Stefano Lombardi (Stefano Lombardi); Anna Thoresson (Anna Thoresson) |
| Abstract: | We study the role of firm productivity in explaining earnings disparities between immigrants and natives using population-wide matched employer-employee data from Sweden. We find substantial earnings returns to working in firms with higher persistent productivity, with greater gains for immigrants from non-Western countries. Moreover, the pass-through of within-firm productivity variation to earnings is stronger for immigrants in low-productive, immigrant-dense firms. But immi grant workers are underrepresented in high-productive firms and less likely to move up the productivity distribution. Thus, sorting into less productive firms decreases earnings in poor-performing immigrant groups that would gain the most from working in high-productive firms |
| Keywords: | Firm productivity; Immigrant-native earnings gaps; Wage inequality |
| JEL: | J15 J31 J62 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2137&r= |
| By: | Libertad González; Hosny Zoabi |
| Abstract: | We consider a non-cooperative model of the household, in which the husband and wife decide on parental leave and the allocation of time between child rearing and the labor market. They can choose the non-cooperative outside option or cooperate by reaching an agreement of specialization in which the wife specializes in raising kids (home production) while the husband works and transfers consumption to his wife. The model identifies three distinct groups of couples: Egalitarian couples (with a sufficiently low gender wage gap), Intermediate-gap couples (with an intermediate gender wage gap) and high-gap couples (with a sufficiently high gender wage gap). Our model predicts that while egalitarian couples never specialize and always share home production, those with intermediate and high gaps do have such an agreement. An expansion in paternity leave reduces the net benefits from the agreement and moves the intermediate-gap couples to their outside option where women work more and men do more home production. As a result, the cost of raising children increases and fertility declines. Assuming a loss of utility from children in the case of divorce, lower fertility increases the probability of divorce. Using Spanish data and RDD analysis, we confirm our model’s predictions. Specifically, while we don’t find systematic effects of paternity leave expansion on egalitarian and high-gap couples, we find that, among intermediate-gap couples, the two-week paternity leave introduced in 2007 resulted in a reduction in fertility by up to 60%, an increase in the probability to divorce by 37%, and an increase in father’s childcare and housework time as much as 2-3 hours per day. |
| Keywords: | gender equality, specialization, fertility, divorce, time allocation |
| JEL: | D13 J12 J13 J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9430&r= |
| By: | Rohan Kekre |
| Abstract: | I study unemployment insurance (UI) in general equilibrium with incomplete markets, search frictions, and nominal rigidities. An increase in generosity raises the aggregate demand for consumption if the unemployed have a higher marginal propensity to consume (MPC) than the employed or if agents precautionary save in light of future income risk. This raises output and employment unless monetary policy raises the nominal interest rate. In an analysis of the U.S. economy over 2008-2014, UI benefit extensions had a contemporaneous output multiplier around 1 or higher. The unemployment rate would have been as much as 0.4pp higher absent these extensions. |
| JEL: | D52 E21 E62 J64 J65 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29505&r= |
| By: | Fanny Dellinger |
| Abstract: | Housing support is an important lever for promoting integration objectives with huge potential to improve refugees' early employment outcomes. This mixed-methods study is based on Austrian register data and interviews with NGO and government representatives. In Austria, asylum seekers are quasi-randomly assigned to federal states (Bundesländer). There, monetary assistance is similar for asylees but only some states offer further support with the housing search process. This study assesses the impact of housing support on refugees' location choice and early employment outcomes by comparing two groups of refugee men: singles and those with families. If housing support is limited, scarce resources are directed to the most vulnerable and single men are often left out. This makes them more likely to leave an assigned state and find shelter with the ethnic community. Whereas in states with strong housing support single men and families show roughly equal propensities to out-migrate, if support is low 63% of single men but only 35% of families leave. In the first year, employment rates of single men assigned to low housing support states are estimated to be 6 percentage points lower due to a lack of housing support. |
| Keywords: | Labor Market Integration of Refugees, Housing entry pathways, host country institutions, Austria |
| JEL: | J61 J68 I38 H73 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2021-32&r= |
| By: | Popp, Martin (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "Economists increasingly refer to monopsony power to reconcile the absence of negative employment effects of minimum wages with theory. However, systematic evidence for the monopsony argument is scarce. In this paper, I perform a comprehensive test of monopsony theory by using labor market concentration as a proxy for monopsony power. Labor market concentration turns out substantial in Germany. Absent wage floors, a 10 percent increase in labor market concentration makes firms reduce wages by 0.5 percent and employment by 1.6 percent, reflecting monopsonistic exploitation. In line with perfect competition, sectoral minimumwages lead to negative employment effects in slightly concentrated labor markets. This effect weakens with increasing concentration and, ultimately, becomespositive in highly concentrated or monopsonistic markets. Overall, the results lend empirical support to the monopsony argument, implying that conventional minimum wage effects on employment conceal heterogeneity across market forms." (Author's abstract, IAB-Doku) ((en)) |
| Date: | 2021–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:202121&r= |
| By: | Eibich, Peter; Kanabar, Ricky; Plum, Alexander; Schmied, Julian |
| Abstract: | Biological processes have provided new insights into diverging labour market trajectories. This paper uses population variation in testosterone levels to explain transition probabilities into and out of unemployment. We examine labour market transitions for 2,004 initially employed and 111 initially unemployed British men from the UK Household Longitudinal Study (“Understanding Society†) between 2009 and 2015. We address the endogeneity of testosterone levels by using genetic variation as instrumental variables (Mendelian Randomization). We find that for both initially unemployed men as well as initially employed men, higher testosterone levels reduce the risk of unemployment. Based on previous studies and descriptive evidence, we argue that these effects are likely driven by differences in cognitive and non-cognitive skills as well as job search behaviour of men with higher testosterone levels. Our findings suggest that latent biological processes can affect job search behaviour and labour market outcomes without necessarily relating to illness and disability. |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2021-10&r= |
| By: | Domenico Ferraro; Giuseppe Fiori |
| Abstract: | We study the non-linear propagation mechanism of tax policy in a heterogeneous agent equilibrium business cycle model with search frictions in the labor market and an extensive margin of employment adjustment. The model exhibits endogenous job destruction and endogenous hiring standards in the form of occasionally-binding zero-surplus constraints. After parameterizing the model using U.S. data, we find that the dynamic response of employment to a temporary change in the labor income tax is highly non-linear, displaying sizable asymmetries and state-dependence. Notably, the response to a tax rate cut is at least twice as large in a recession as in an expansion. |
| Keywords: | Search frictions; Job destruction; Heterogeneity; Aggregation; Tax policy |
| JEL: | E12 E24 E32 E62 |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1333&r= |
| By: | Pedro Molina Ogeda; Emanuel Ornelas; Rodrigo R. Soares |
| Abstract: | We show that the Brazilian trade liberalization in the early 1990s led to a permanent relative decline in the vote share of left-wing presidential candidates in the regions more affected by the tariff cuts. This happened even though the shock, implemented by a right-wing party, induced a contraction in manufacturing and formal employment in the more affected regions, and despite the left’s identification with protectionist policies. To rationalize this response, we consider a new institutional channel for the political effects of trade shocks: the weakening of labor unions. We provide support for this mechanism in two steps. First, we show that union presence—proxied by the number of workers directly employed by unions, by union density, and by the number of union establishments—declined in regions that became more exposed to foreign competition. Second, we show that the negative effect of tariff reductions on the votes for the left was driven exclusively by political parties with historical links to unions. Furthermore, the impact of the trade liberalization on the vote share of these parties was significant only in regions that had unions operating before the reform. These findings are consistent with the hypothesis that tariff cuts reduced the vote share of the left partly through the weakening of labor unions. This institutional channel is fundamentally different from the individual-level responses, motivated by economic or identity concerns, that have been considered in the literature. |
| Keywords: | trade shocks, elections, unions, Brazil |
| JEL: | F13 D72 J51 F16 F14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9418&r= |
| By: | Mika Akesaka; Nobuyoshi Kikuchi |
| Abstract: | We examine the effects of local labor market conditions during early pregnancy on birth and later outcomes. Using a longitudinal survey of newborns in Japan, we find that improvements in employment opportunities increase the probability of low birth weight, attributable to shortened gestation. This negative effect is mainly driven by the impact of economic shocks on the female labor market. However, we do not find a lasting effect of economic shocks during early pregnancy on severe health conditions or developmental delays in early childhood. Using prefecture-level panel data, we confirm that improvements in female employment opportunities are significantly negatively associated with infant birth weight, but not with the fertility and infant mortality rate. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1153&r= |
| By: | Jaschke Philipp (Philipp Jaschke); Sulin Sardoschau (Sulin Sardoschau); Marco Tabellini (Marco Tabellini) |
| Abstract: | This paper studies the effects of threat on convergence to local culture and on economic assimilation of refugees, exploiting plausibly exogenous variation in their allocation across German regions between 2013 and 2016. We combine novel survey data on cultural preferences and economic outcomes of refugees with corresponding information on locals, and construct a threat index that integrates contemporaneous and historical variables. On average, refugees assimilate both culturally and economically. However, while refugees assigned to more hostile regions converge to local culture more quickly, they do not exhibit faster economic assimilation. We provide evidence consistent with the hypothesis that refugees exert more assimilation effort in response to local threat, but fail to successfully integrate because of higher discrimination by locals in more hostile regions. |
| Keywords: | Migration, refugees, culture, assimilation, identity |
| JEL: | F22 J15 Z10 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2136&r= |
| By: | Colin Davis; Ken-ichi Hashimoto; Ken Tabata |
| Abstract: | This paper examines how unionization affects economic growth through its impact on industry concentration in a two-country model of international trade and endogenous productivity growth. Knowledge spillovers link firm-level productivity in innovation with geographic patterns of industry ensuring a faster rate of output when industry is relatively concentrated in the country with the greater labor supply. We show that stronger bargaining power in the relatively large country increases the rate of output growth when labor unions are employment-oriented, but decreases the rate of growth when unions are wage-oriented. We then calibrate the model using labor market data for the United States and the United Kingdom and study the effects of falling union bargaining power on industry location patterns, output growth, and national welfare. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1154&r= |
| By: | Eiji Goto (University of Missouri-St. Louis); Jan P.A.M. Jacobs (University of Groningen, CAMA and CIRANO); Tara M. Sinclair (The George Washington University and CAMA); Simon van Norden (HEC Montreal, CIRANO and CIREQ) |
| Abstract: | The monthly release of employment data for the U.S. includes two different estimates from two different surveys. One is based on a survey of establishments (payroll) and the other is based on a survey of households. The presence of two different sources of information on broadly the same theoretical concept leads to an obvious question: can we combine the information to obtain an improved estimate of employment? In this paper we build on the research on combining different measures of output to instead combine different measures of employment. We construct a latent employment estimate which reconciles the information from the two separate surveys as well as incorporating the preliminary data revision process of the payroll data. We find that our reconciled latent employment series looks different than the initial release of payroll employment and is closer to the fully-revised data (benchmarked to a near census of employment), particularly during the Great Recession. Once we move to a real-time exercise, however, our findings suggest that the reconciled employment estimate is remarkably similar to the initial release of payroll employment with near zero weight on the household survey information. |
| Keywords: | employment, United States, real-time data, news, noise |
| JEL: | C22 C53 C82 E24 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:gwc:wpaper:2021-007&r= |
| By: | Sonia Bhalotra, Sonia (University of Warwick, CEPR, IEA,CAGE,IZA); Venkataramani, Atheendar (University of Pennsylvania); Walther, Selma (University of Sussex, IZA and CERGE-EI) |
| Abstract: | We investigate women’s fertility, labor and marriage market responses to large declines in child mortality. We find delayed childbearing, with lower intensive and extensive margin fertility, a decline in the chances of ever having married, increased labor force participation and an improvement in occupational status. This constitutes the first evidence that improvements in child survival allow women to start fertility later and invest more in the labor market. We present a new theory of fertility that incorporates dynamic choices and reconciles our findings with existing models of behavior. |
| Keywords: | women’s labor force participation ; fertility timing ; childlessness ; child mortality ; medical innovation JEL Classification: J13 ; I18 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1388&r= |