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on Labour Economics |
| By: | Elias Ilin; Samantha Shampine; Ellyn Terry |
| Abstract: | We evaluate the effects of free pre-kindergarten (Pre-K) programs on the labor force participation of mothers. We use variation in Pre-K rules across all U.S. states, including income eligibility requirements in some states. To estimate the causal effects of access to Pre-K on labor supply, we exploit the panel aspect of the monthly Current Population Survey between 2002 and 2019. Specifically, we look at the change in labor market behavior of women when their child becomes age-eligible for Pre-K, controlling for individual factors. We find that access to free Pre-K programs increases overall maternal labor force participation by 2.3 percentage points. In particular, we find that mothers with the following demographic characteristics significantly increase their labor force participation with access to free Pre-K: married, college educated, white non-Hispanic, residents of metropolitan areas, and those with income either below 200 percent or above 400 percent of the Federal Poverty Level. Our results are robust across a series of placebo tests, alternative specifications, and sample restrictions. |
| Keywords: | Maternal labor force participation; Child care; Universal pre-K; Gender equality; Early education |
| JEL: | G50 H21 I31 J01 J15 J16 J18 J21 |
| Date: | 2021–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:93595&r= |
| By: | Pastore, Francesco; Pompili, Marco |
| Abstract: | This paper evaluates the impact on employment probabilities of two training programs funded by the European Social Fund in the province of Bolzano, Italy. The programs were addressed to particularly vulnerable groups which were much less skilled and educated than the control group from the public employment agency registers. A large share of the benefit recipients are indeed recent migrants, refugees, and women. By using different matching algorithms, this group was made as similar as possible to the control group, at least in terms of observed characteristics, including the employment status up to two years before entering the programme. We find that the short-term impact of the training programs is negative, highlighting the presence of a lock-in effect. However, from the start of the programs, up to the 13th month, this effect reduced to nihil. The effect is particularly sizeable and statistically significant for women, migrants, and the highly educated; age does not seem to matter. However, our findings suggest that the programs were especially significant in empowering women and migrants. By providing them with basic skills, including linguistic and technical professional skills, increased their integration by making them seek jobs more actively. |
| Keywords: | Active labour market policies,European Social Fund,Training,Impact evaluation,Matching |
| JEL: | D04 J08 J13 J18 J48 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1042&r= |
| By: | Bhalotra, Sonia R. (University of Warwick); Clarke, Damian (University of Chile); Mühlrad, Hanna (IFN - Research Institute of Industrial Economics); Palme, Mårten (Stockholm University) |
| Abstract: | IVF allows women to delay birth and pursue careers, but IVF massively increases the risk of twin birth. There is limited evidence of how having twins influences women's post-birth careers. We investigate this, leveraging a single embryo transfer (SET) mandate implemented in Sweden in 2003, following which the share of twin births showed a precipitous drop of 70%. Linking birth registers to hospitalization and earnings registers, we identify substantial improvements in maternal and child health and women's earnings following IVF birth, along-side an increase in subsequent fertility. We provide the first comprehensive evaluation of SET, relevant given the secular rise in IVF births and growing concerns over twin birth risk. We contribute new estimates of the child penalty imposed by twin as opposed to singleton birth, relevant to the secular rise in the global twin birth rate. |
| Keywords: | twins, IVF, single embryo transfer, career costs of children, child penalty, gender wage gap, fertility, maternal health, neonatal health, gender |
| JEL: | J13 I11 I12 I38 J24 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14990&r= |
| By: | Emanuele Dicarlo (Bank of Italy) |
| Abstract: | This paper studies adjustments of Italian firms to negative labor supply shocks in the context of workers’ outflows from Italy to Switzerland. My diff-in-diff leverages a policy in which Switzerland granted free labor market mobility to EU citizens and different treatment intensity of Italian firms based on their distance to the Swiss border. Using detailed social security data on the universe of Italian firms and workers, I document large (12 percentage points higher) outflows of workers and fewer (2.5 percentage points) surviving firms in the treatment group relative to control. Despite replacing workers and becoming more capital intensive, treated firms are less productive and pay lower wages. In line with the brain drain literature, I show how adverse effects of large outflows of workers operate through firms that workers leave. I provide suggestive evidence that highskill intensive firms are the main driver of the negative results on wages and productivity. Low skill intensive firms instead suffer less from losing workers and provide new job opportunities for the workers who do not migrate. |
| Keywords: | migration, labor supply, skills, firms |
| JEL: | F22 J22 J24 J61 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1361_22&r= |
| By: | Sterkens, Philippe (Ghent University); Baert, Stijn (Ghent University); Moens, Eline (Ghent University); Derous, Eva (Ghent University); Wuyts, Joey (Ghent University) |
| Abstract: | The existing burnout literature has predominantly focussed on the determinants of burnout, whereas its consequences for individual careers have received little attention. In this study, we investigate whether recently burned-out individuals and persons with a very high risk of clinical burnout differ in job preferences from non-burned-out workers. Moreover, we link these differences in preferences with (1) diverging perceptions of job demands and resources in a job, as well as (2) distinct weighting of such perceptions. To this end, a high-quality sample of 582 employees varying in their history and current risk of burnout judged fictitious job offers with experimentally manipulated characteristics in terms of their willingness to apply as well as perceived job demands and resources. We find that recently burned-out employees appreciate possibilities to telework and fixed feedback relatively more, while being relatively less attracted to opportunities for learning on the job. Moreover, employees with a very high risk of burnout are more attracted to part-time jobs. These findings can be partially explained by differences in the perceived resources offered by jobs. |
| Keywords: | burnout, labour market, job search, job preference, factorial survey experiment |
| JEL: | J62 I12 C91 C83 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15044&r= |
| By: | Liangjie Wu (EIEF) |
| Abstract: | I study the labor market implications of limited information inherent in the job search process. Workers pay a cost to direct job search that is proportional to the divergence between the chosen search strategy and a benchmark random search strategy. With this cost, workers apply to every job with a positive probability, but apply to high-payoff jobs with higher probabilities. In a wage posting model with partially directed search, employers have monopsony power: firms extract a markdown due to the cost of directing search. Efficiency of the market equilibrium depends on whether the markdowns are equally distributed across firms. Inefficiency arises when search cost is intermediate, which has new implications on policy remedies to monopsony. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:eie:wpaper:2117&r= |
| By: | Lehner, Lukas; Ramskogler, Paul; Riedl, Aleksandra |
| Abstract: | Does the structure of labor markets – and the possibility to employ temporary workers – a↵ect aggregate wage growth? After the global financial crisis (GFC) a rich debate had ensued about the reasons for the delayed pick up of wage growth. However, structural labor market aspects remained strangely absent from this discussion. We contribute by incorporating labor market dualization into the standard Phillips curve model to explain wage growth in 30 European countries in the period 2004-2017. We find that the presence of workers with temporary contracts in Europe's labor markets slows down aggregate wage growth due to the competition that temporary workers exert on permanent workers. This competition e↵ect is most pronounced in countries, where trade union density is low. Moreover, we establish that labor market dualization has been at least as important in slowing wage growth since the GFC as unemployment, i.e. the observed flattening of the Phillips curve. |
| Keywords: | Wage Growth, Labor Market Dualization, Involuntary Temporary Work, Phillips Curve, Competition effect |
| JEL: | J31 J42 J82 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:amz:wpaper:2022-04&r= |
| By: | Luis Ayala (UNED); Javier Martín-Román (UNED); Carolina Navarro (UNED) |
| Abstract: | This paper analyzes how material deprivation responds to drastic changes in unemployment levels. We explore unemployment shocks registered in some European Union countries during the so-called Great Recession. To do so, we apply the synthetic control methodology, which has been rarely used in the field of distributive analyses. We use this approach to identify the impact of unemployment shocks on material deprivation and conduct different sensitivity analyses to test the results. We find that contrary to the traditional assumption of the low sensitivity of material deprivation measures to changes in the economic cycle, unemployment shocks have a significant and rapid impact on material deprivation. This conclusion holds even when extending the period of analysis, changing the indicator of material deprivation, or modifying the definition of unemployment shock. |
| Keywords: | material deprivation, unemployment shocks, synthetic control method, EUSILC |
| JEL: | I32 J64 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2022-603&r= |
| By: | Dyotona Dasgupta (O.P. Jindal Global University); Anuradha Saha (Ashoka University) |
| Abstract: | In a novel framework, this paper captures the effects of perceived self-efficacy beliefs, built on the basis of the socio-economic background, on human capital investments and skill distribution. Ex-ante children are homogeneous, but depending on parental education and job status, parents form different beliefs on the returns to their children's education. An unskilled (poor) parent underestimates the probability of her child getting a skilled job upon getting education and overestimates the corresponding income. The skilled (rich) parents do the opposite. We find that the steady-state mass of educated adults, skilled workers, and income inequality depend on the degree of bias and the degree of a affinity for the well-being of the child. In economies with low child affinity, irrespective of the degree of bias, there is always a poverty trap. For moderate child affinity, behavioral biases may give rise to multiple equilibria as well as lower the steady-state inequality. For huge child affinity, even a small bias induces poor adults to invest with a higher probability than the rich. |
| Keywords: | Human Capital Investment; Behavioral Inequality; Behavioral Bias; Behavioral Trap |
| Date: | 2021–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:72&r= |
| By: | McNeil, Andrew; Lee, Neil; Luca, Davide |
| Abstract: | Does growing up in a high-unemployment area matter for individual economic and political outcomes? Despite a significant focus upon the links between place of residence, life outcomes and political attitudes of individuals, there is less evidence on how local economic conditions at birth shape individual wages and political attitudes over the longterm. This paper links the British Household Panel Survey (BHPS) micro data from English and Welsh respondents with historic localised information on unemployment. Our results, which control for composition effects, family background, and sorting of people across places, show that being born into a high-unemployment Local Authority has a significant, long-term impact on individual’s economic outcomes, decreasing earnings in adulthood. Even accounting for individual economic outcomes, being born into a local authority of high unemployment makes individuals more economically left-wing, with a greater belief in an obligation for the government to provide jobs, but also less culturally tolerant. These results contribute to the debate on the nature and rationales of placebased policy solutions. |
| Keywords: | place of birth; unemployment; territorial inequality; lifetime mobility; political attitutes; place-based policies |
| JEL: | J31 J38 J62 R11 R23 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113681&r= |
| By: | Joanne Haddad |
| Abstract: | The distinctive traits of early settlers at initial stages of institutional development may be crucial for cultural formation. In 1973, the cultural geographer Wilbur Zelinsky postulated this in his doctrine of “first effective settlement”. There is however little empirical evidence supporting the role of early settlers in shaping culture over the long run. This paper tests this hypothesis by relating early settlers’ culture to within state variation in gender norms in the United States. I capture settlers’ culture using past female labor force participation, women’s suffrage, and financial rights at their place of origin. I document the distinctive characteristics of settlers’ populations and provide suggestive evidence in support of the transmission of gender norms across space and time. My results show that women’s labor supply is higher, in both the short and long run, in U.S. counties that historically hosted a larger settler population originating from places with favorable gender attitudes. My findings shed new light on the importance of the characteristics of immigrants and their place of origin for cultural formation in hosting societies. |
| Keywords: | female labor force participation, settlers, gender norms, cultural formation |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/338088&r= |
| By: | Federico Cingano; Filippo Palomba; Paolo Pinotti; Enrico Rettore |
| Abstract: | We estimate the effects of a large program of public investment subsidies granted to Italian firms in disadvantaged areas. Projects were given numerical scores according to objective criteria and local politicians’ preferences, and funded in rank order until the funds were fully allocated. We estimate that subsidies increased investment by marginal firms near the cutoff by 39 percent, and employment by 17 percent over a 6-year period. Building on recent advancements in the econometrics of regression discontinuity designs, we characterize heterogeneity of treatment effects and cost-per-new-job across inframarginal firms away from the cutoff. Employment grows more in smaller firms, but larger firms generated more jobs-per-euro of subsidy. Younger firms did better than older firms. Firms ranking high on objective criteria and firms preferred by local politicians generated larger employment growth on average, but the latter did so at a higher cost per job. Under a policy invariance assumption, we estimate that eliminating political discretion and relying only on objective criteria would reduce the cost per job by 9 percent, while relying only on political discretion would increase the cost by 55 percent. The effect of political discretion is larger in the south, which received the largest share of funds and exhibited the highest cost-per-job under the actual allocation criteria. |
| Keywords: | Public subsidies, investment, employment, political discretion, regression discontinuity |
| JEL: | H25 J08 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp22174&r= |
| By: | Valentin Jouvanceau (Bank of Lithuania); Julien Albertini (GATE, University of Lyon); Stéphane Moyen (Deutsche Bundesbank) |
| Abstract: | This paper proposes a new strategy for modeling and solving state-dependent forward guidance policies (SCFG). We study its transmission channels using a DSGE model with search and matching frictions in which agents account for the fact that the SCFG is an endogenous regime-switching system. A fully credible SCFG causes a boom in inflation and output but no rapid exit from the ZLB. Thus, the transmission of its effects is primarily through the realization of additional ZLB periods more than through changes in expectations. We next consider the implications of imperfect credibility. In this case of uncertainty, an SCFG is less impactful. Finally, using counterfactual experiments on the December 2012 FOMC statement, we find that it led to about 1.5 pp gain in unemployment and 0.5 pp in inflation. |
| Keywords: | New Keynesian model, Search and matching, ZLB, Forward guidance. |
| JEL: | E30 J60 |
| Date: | 2022–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:lie:wpaper:100&r= |
| By: | Bart Hobijn; Andre Kurmann; Tristan Potter |
| Abstract: | We study the efficiency of non-compete agreements (NCAs) in an equilibrium model of labor turnover. The model is consistent with empirical studies showing that NCAs reduce turnover, average wages, and wage dispersion for low-wage workers. But the model also predicts that NCAs, by reducing turnover, raise recruitment and employment. We show that optimal NCA policy: (i) is characterized by a Hosios like condition that balances the benefits of higher employment against the costs of inefficient congestion and poaching; (ii) depends critically on the minimum wage, such that enforcing NCAs can be efficient with a sufficiently high minimum wage; and (iii) alone cannot always achieve efficiency, also true of a minimum wage-yet with both instruments efficiency is always attainable. To guide policy makers, we derive a sufficient statistic in the form of an easily computed employment threshold above which NCAs are necessarily inefficiently restrictive, and show that employment levels in current low-wage U.S. labor markets are typically above this threshold. Finally, we calibrate the model to show that Oregon's 2008 ban of NCAs for low-wage workers increased welfare, albeit modestly (by roughly 0.1%), and that if policy makers had also raised the minimum wage to its optimal level (a 30% increase), welfare would have increased more substantially-by over 1%. |
| Keywords: | Non-compete agreements; low-wage labor markets; minimum wage |
| JEL: | J62 J63 E24 |
| Date: | 2022–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:93658&r= |
| By: | José Alves; Sandro Morgado |
| Abstract: | In our article we review the secular stagnation hypothesis, firstly postulated by Hansen (1939), to describe the current macroeconomic dynamics faced by developed economies. Based in the existing literature, we elaborate on a workable definition of secular stagnation founded on four pillars: diminished long run growth potential, increasing aggregate demand shortages, lowering of nominal short term interest rates and increasingly immovable unemployment. This four-pillar definition reveals a fundamental problematic faced by these economies; while a diminished long run growth potential, increasing aggregate demand shortages and an increasingly immovable unemployment stress the need for full employment policy measures, the lowering of nominal short term interest rates makes the mostly resorted to full employment policy measure, in the form of expansionary monetary policy, ineffective. This problematic implies an imperative rethinking of the policy framework in times of secular stagnation. For that, we consider one of the most evoked factors causing secular stagnation, demographics in the form of an aging population and a declining working age population, hence highlighting the pertinence of immigration as a possible solution. We do so by empirically observing the pillars of secular stagnation and testing the impact of demographic factors on those features, resorting to panel data analysis. Focusing on the EU15 and US economies, with data ranging from 1965 to 2020, we conclude that the four pillars we based our definition of secular stagnation upon can be empirically observed and that demographic factors play a statistically significant role for those determining features thus highlighting the pertinence of immigration as a possible solution. |
| Keywords: | Economic stagnation; secular stagnation; financial crisis; immigration; monetary policy. |
| JEL: | E52 G01 J11 O47 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02122022&r= |
| By: | Leonardo Becchetti (CEIS & DEF, University of Rome "Tor Vergata"); Sara Mancini (University of Rome "Tor Vergata"); Nazaria Solferino (Università della Calabria) |
| Abstract: | Based on results of the different fields of the game theoretic literature on strategic interactions and social dilemmas, gift exchange and procedural utility, we argue that corporate social responsibility and relational skills i) with other firms; ii) between employers and workers iii) among workers and iv) with stakeholders are associated to positive effects on productivity. We test our research hypothesis on a large representative sample of Italian firms including the universe of medium and large companies and accounting for 91.3 percent of domestic employees. We find that companies with higher relational skills report significantly higher value added per worker after controlling for relevant concurring factors. More specifically, the identified significant skill related components are: i) corporate policies considering strategic workers’ wellbeing; ii) team working attitudes considered as priority soft skills when hiring workers; iii) initiatives in favour of the productive network operating in the same local area and iv) involvement of stakeholders in CSR projects. |
| Keywords: | relational skills, corporate productivity, gift exchange, team working |
| JEL: | L22 L25 L14 J53 |
| Date: | 2022–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:530&r= |