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on Labour Economics |
| By: | Joshua Bernstein; Alexander W. Richter; Nathaniel A. Throckmorton |
| Abstract: | The Cobb-Douglas matching function is ubiquitous in search and matching models, even though it imposes a constant matching elasticity that is unlikely to hold empirically. Using a general constant returns to scale matching function, this paper first derives analytical conditions that determine how the cyclicality of the matching elasticity amplifies or dampens the nonlinear dynamics of the job finding and unemployment rates. It then demonstrates that these effects are quantitatively significant and driven by plausible variation in the matching elasticity. |
| Keywords: | Matching Function; Matching Elasticity; Nonlinear; Finding Rate; Unemployment |
| JEL: | E24 E32 E37 J63 J64 |
| Date: | 2022–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:93702&r= |
| By: | Pastore, Francesco (Università della Campania Luigi Vanvitelli); Pompili, Marco (Ismeri-Europa) |
| 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 zero. 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: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15066&r= |
| By: | Julian Teichgräber; Simon Žužek; Jannik Hensel |
| Abstract: | Short-time work - a wage subsidy conditional on hour reductions - has become an important tool of labor market policy in many European countries. As the scope of these policies expanded, concerns about side effects due to adverse selection increased. We develop a model of job retention policies in the presence of asymmetric information to study selection into these programs. The social planner wants to prevent excessive job destruction but cannot observe which jobs are truly at risk. We do not restrict the social planner to use hour reductions a priori. Instead, we show that hour reductions of short-time work policies act as a screening mechanism to mitigate the adverse selection problem. This perspective of short-time work as a policy response to an underlying adverse selection problem provides an entirely new rationale for these policies. Our approach can be used to revisit recent empirical findings which rely on employment effects to evaluate existing short-time work schemes. In our model, however, average employment effects across groups are not sufficient to determine whether the policy is efficient. Indeed, we show that an optimal short-time work policy cannot avoid a small degree of adverse selection. This is particularly important in light of recent evidence that firms with small revenue shocks and no discernible employment effects have participated in short-time work programs at large costs to the public. In our model, these costs are information rents which are required to screen for jobs at risk. We calibrate our model to German data before the financial crisis and find that the optimal short-time work policy would have reduced separations by 1.2 - 2.4 percentage points. |
| Keywords: | Short-time work, employment subsidies, job retention, asymmetric information, screening |
| JEL: | D82 J65 J68 H20 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:402&r= |
| By: | Stephan Whitaker |
| Abstract: | This paper documents several facts about internal migrants in the US that underlie substantial areas of economic research and policy making, but are rarely directly published. Using a large-sample, 23-year panel, the Federal Reserve Bank of New York/Equifax Consumer Credit Panel, I estimate the distribution of changes in local labor market conditions experienced by people who move to a different labor market. Net migration favors local labor markets with lower unemployment and faster job growth, but gross flows toward weaker labor markets are almost as large as the flows toward stronger labor markets. During recessions, net flows temporarily favor weaker labor markets. Migrants frequently choose destinations with similar labor market conditions rather than moving to the markets with the highest growth or lowest unemployment at the time of their move. A hypothesis that personal financial health improves for people moving to tight local labor markets (or deteriorates for migrants to slack labor markets) is only partially supported in the data. Migrants to low-unemployment and high-employment growth regions have higher homeownership rates after they move. However, there are not clear advantages or disadvantages for migrants to strong or weak labor market regions as measured by credit scores, consumption, bankruptcy, or foreclosure. |
| Keywords: | Internal migration; local labor market conditions; unemployment; employment growth; consumer credit; financial health |
| JEL: | J61 E24 R11 D14 |
| Date: | 2022–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:93758&r= |
| By: | Martin Gonzalez-Rozada; Hernan Ruffo |
| Abstract: | Unemployment insurance transfers should balance the provision of consumption to the unemployed with the disincentive effects on the search behavior. Developing countries face the additional challenge of informality. Workers can choose to hide their employment state and labor income in informal jobs, an additional form of moral hazard. To provide evidence about the effects of this policy in a country affected by informality we exploit kinks in the schedule of transfers in Argentina. Our results suggest that higher benefits induce moderate behavioral responses in job-finding rates and increase re-employment wages. We use a sufficient statistics formula from a model with random wage offers and we calibrate it with our estimates. We show that welfare could rise substantially if benefits were increased in Argentina. Importantly, our conclusion is relevant for the median eligible worker that is strongly affected by informality. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.01844&r= |
| By: | Glaubitz, Rick; Harnack-Eber, Astrid; Wetter, Miriam |
| Abstract: | To obtain a more complete understanding of the persisting gender earnings gap in Germany, this paper investigates both the cross-sectional and biographical dimension of gender inequalities. Using an Oaxaca Blinder decomposition, we show that the gender gap in annual earnings is largely driven by women's lower work experience and intensive margin of labor supply. Based on a dynamic microsimulation model, we then estimate how gender differences accumulate over work lives to account for the biographical dimension of the gender gap. We observe an average gender lifetime earnings gap of 51.5 percent for birth cohorts 1964-1972. We show that this unadjusted gender lifetime earnings gap increases strongly with the number of children, ranging from 17.8 percent for childless women to 68.0 percent for women with three or more children. However, using a counterfactual analysis we find that the adjusted gender lifetime earnings gap of 10 percent differs only slightly by women's family background. |
| Keywords: | Lifetime Earnings,Gender Inequality,Parenthood,Dynamic Microsimulation |
| JEL: | D31 J13 J16 J31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:20223&r= |
| By: | Viollaz, Mariana (CEDLAS-UNLP); Salazar-Saenz, Mauricio (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Flabbi, Luca (University of North Carolina, Chapel Hill); Bustelo, Monserrat (Inter-American Development Bank); Bosch, Mariano (Inter-American Development Bank) |
| Abstract: | We study the labor supply impact of the COVID-19 pandemic by gender in four Latin American and Caribbean (LAC) countries: Brazil, Chile, Dominican Republic, and Mexico. To identify the impact, we compare labor market stocks and labor market flows over four quarters for a set of balanced panel samples of comparable workers before and after the pandemic. We find that the pandemic has negatively affected the labor market status of both men and women, but that the effect is significantly stronger for women, magnifying the already large gender gaps that characterize LAC countries. The main channel through which this stronger impact is taking place is the increase in child care work affecting women with school-age children. |
| Keywords: | labor supply, labor market transitions, COVID-19, gender differentials, Latin American and Caribbean countries |
| JEL: | J6 J16 J46 O10 O17 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15091&r= |
| By: | Kairon Shayne D. Garcia; Benjamin W. Cowan |
| Abstract: | A substantial fraction of schools and childcare facilities in the United States closed their in-person operations during the COVID-19 pandemic. These closures may carry substantial costs to the families of affected children. In this paper, we examine the impact of school and childcare closures on parental labor market outcomes during the COVID-19 pandemic. In particular, we test whether COVID-19 school closures have a disproportionate impact on parents of school-age children (age 5-17 years old) and whether childcare closures affect parents of young children (age |
| JEL: | I18 J16 J22 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29641&r= |
| By: | Di Novi, C.; Paruolo, P.; Verzillo, S. |
| Abstract: | This study exploits individual data from the 8th wave of the Survey of Health, Ageing and Retirement in Europe (SHARE) and the SHARE Corona Survey to investigate the mental health consequences of COVID-19 job disruption across different European countries. It focuses on older workers (aged 50 and over) who were exposed to a higher risk of infection from COVID-19 and were also more vulnerable to the risk of long-term unemployment and permanent labour market exits during economic downturns. The relationship between job disruption in times of COVID-19 and older workers' mental health is investigated using differences in country-level employment legislation regimes. European countries are clustered into three macro-regions with high, intermediate and low employment regulatory protection regulations, using the Employment Protection Legislation (EPL) aggregate score proposed by the OECD. Results reveal a clear EPL gradient: job disruption has a positive and significant impact on older workers’ psychological distress especially in those countries where EPL is more binding. The present findings suggest possible mitigating measures for older unemployed in the European countries with higher Employment Protection legislation. |
| Keywords: | european countries; covid-19 pandemic; job disruption; mental health; older workers; EPL; |
| JEL: | I14 I18 J08 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:22/03&r= |
| By: | Martha J. Bailey; Lea J. Bart; Vanessa Wanner Lang |
| Abstract: | Multiple episodes in U.S. history demonstrate that birth rates fall in response to recessions. However, the 2020 COVID-19 recession differed from earlier periods in that employment and access to contraception and abortion fell, as reproductive health centers across the country temporarily closed or reduced their capacity. This paper exploits novel survey and administrative data to examine how reductions in access to reproductive health care during 2020 affected contraceptive efficacy among low-income women. Accounting for 2020’s reductions in access to contraception and the economic slowdown, our results predict a modest decline in births of 1.1 percent in 2021 for low-income women. Further accounting for reductions in access to abortion implies that birth rates may even rise for low-income women. These results also suggest that already economically disadvantaged families disproportionately affected by the COVID-19 economy will experience a large increase in unplanned births. |
| JEL: | J1 J11 J13 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29722&r= |
| By: | Cody Cook; Lindsey Currier; Edward L. Glaeser |
| Abstract: | Do urban children live more segregated lives than urban adults? Using cellphone location data and following the ‘experienced isolation’ methodology of Athey et al. (2021), we compare the isolation of students over the age of 16—who we identify based on their time spent at a high school—and adults. We find that students in cities experience significantly less integration in their day-to-day lives than adults. The average student experiences 27% more isolation outside of the home than the average adult. Even when comparing students and adults living in the same neighborhood, exposure to devices associated with a different race is 20% lower for students. Looking at more broad measures of urban mobility, we find that students spend more time at home, more time closer to home when they do leave the house, and less time at school than adults spend at work. Finally, we find correlational evidence that neighborhoods with more geographic mobility today also had more intergenerational income mobility in the past. We hope future work will more rigorously test the hypothesis that different geographic mobility patterns for children and adults can explain why urban density appears to boost adult wages but reduce intergenerational income mobility. |
| JEL: | C55 I30 J13 R30 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29645&r= |
| By: | Donal Smith; Przemyslaw Kowalski; Frank van Tongeren |
| Abstract: | COVID-19 has drawn renewed attention to the economic importance of cross border mobility. Frictions in cross border mobility of labour can substantially impact the economy and international trade, by causing a long-term decrease in net migration that would alter the labour supply in many economies. To capture these macro-economic and trade effects, a global macroeconomic model (NiGEM) and a general equilibrium trade model (METRO) were used to simulate a stylised scenario equivalent to a 20% reduction in net-migration accumulated over the past ten years for all economies and regions. In OECD countries, this would translate into a reduction of the overall labour supply, and this shock would shift some economic activity towards non-OECD countries. At the sectoral level, exports of labour intensive manufacturing activities in OECD countries would contract, with electronics (13% of the total reduction of exports in the long term), automobiles (12%) and pharmaceuticals (9%) among the most affected. |
| Keywords: | Computable general equilibrium model, International labour mobility, International trade, METRO model, NIGEM macroeconometric model, Sectoral economic effects |
| JEL: | F22 F47 C63 E10 N10 |
| Date: | 2022–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:259-en&r= |
| By: | Henri Haapanala; Ive Marx; Zachary Parolin |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:hdl:wpaper:2110&r= |
| By: | Kristian Behrens; Manassé Drabo; Florian Mayneris |
| Abstract: | We combine census and establishment-level data for 2001–2017 to study the impact of mass layoffs of big manufacturing plants on city-level population and its composition in Canada. We find that manufacturing plant closures and downsizing lead to a decline in subsequent population growth, especially among the young, those of working age, migrants, and the less skilled. There are also sizable negative effects on the local employment in other industries, which can explain why such negative local labor demand shocks affect population dynamics. Public services (health and education) and cultural and recreational amenities are shown to make cities more resilient and help them retain population following negative local labor demand shocks. Nous combinons des données de recensement et des données au niveau des établissements pour la période 2001-2017 afin d'étudier l'impact des licenciements massifs dans les grandes entreprises manufacturières sur la taille et la composition des villes canadiennes. Nous constatons que les fermetures d'usines et les licenciements massifs affectent négativement la croissance démographique ultérieure, en particulier parmi les jeunes, les personnes en âge de travailler, les migrants et les personnes moins qualifiées. Il existe également des effets négatifs importants sur l'emploi local dans d'autres secteurs que l’industrie manufacturière, ce qui peut expliquer pourquoi de tels chocs négatifs de demande de main-d'oeuvre affectent la dynamique démographique. Les services publics (en santé et en éducation) et les aménités culturelles et récréatives rendent les villes plus résilientes et les aident à conserver leur population après des chocs négatifs de demande de main-d'oeuvre. |
| Keywords: | Socio-demographic change,plant closures,downsizing,manufacturing,city resilience, Changements sociodémographiques,fermetures d'usines,licenciements massifs,industrie manufacturière,résilience des villes |
| JEL: | J10 R11 R12 R23 |
| Date: | 2021–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2021s-41&r= |
| By: | Melike Kökkizil (Free University of Bozen-Bolzano, Italy) |
| Abstract: | Does parents' religiosity affect their female offspring's education and other life-long outcomes? I address this question by focusing on Turkey and exploiting Ramadan as a quasi-natural experiment for increased active religiosity. I find that the occurrence of Ramadan at the enrollment time in primary schools reduces girls' chance to access primary education. This result arises from the salience of traditional gender norms that religiosity engenders. I further show that parental religiosity at the primary school enrollment has persistent effects on females' labor market outcomes. They become less likely to participate in the labor market, less likely to be income-earners, and less likely to work in professional jobs. Instead, increased religiosity at the critical age of schooling increases fertility and the probability of women being out of the labor force due to household responsibilities. These results are robust to di erent specifications and an alternative empirical strategy that uses average daylight hours during Ramadan in the year of primary school enrollment as a shock to religiosity. |
| Keywords: | Islam, Gender Equality, Ramadan, Social Norms, Illegal Behavior. |
| JEL: | Z12 J16 I24 I25 J12 J13 D91 J12 J13 K38 K42 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:bzn:wpaper:bemps91&r= |
| By: | Nicholas Bloom; Leonardo Iacovone; Mariana Pereira-Lopez; John Van Reenen |
| Abstract: | We argue that greater misallocation is a key driver of the worse management practices in Mexico compared to the US. These management practices are strongly associated with higher productivity, growth, trade, and innovation. One indicator of greater misallocation in Mexico is the weaker size-management relationship compared to the US, particularly in the highly distorted Mexican service sector. Second, the size-management relationship is weaker in smaller markets, measured by distance to the US for manufacturing firms and population density for service firms. Third, municipalities with weaker institutions, measured by contract enforcement, crime, and corruption, have a weaker size-management relation. These results are consistent with frictions lowering aggregate management quality and productivity. |
| JEL: | J0 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29717&r= |
| By: | Fenwick, Clare (Studio Europe Maastricht, RS: Studio Europa Maastricht, Research Centre for Educ and Labour Mark) |
| Abstract: | Freedom of movement is a fundamental principle of the European Union (EU) and yet this key pillar of European integration has become a topic of controversy as member states find their labour markets under pressure. This article examines key trends in intra-EU labour migration and explores what existing migration data has to offer researchers studying EU migration related research questions. |
| JEL: | J61 |
| Date: | 2022–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2022003&r= |
| By: | Lincove, Jane Arnold (University of Maryland, Baltimore County); Mata, Catherine (University of Maryland); Cortes, Kalena E. (Texas A&M University) |
| Abstract: | High school exit exams are meant to standardize the quality of public high schools and to ensure that students graduate with a set of basic skills and knowledge. Evidence suggests that a common perverse effect of exit exams is an increase in dropout for students who have difficulty passing tests, with a larger effect on minority students. To mitigate this, some states offer alternative, non-tested pathways to graduation for students who have failed their exit exams. This study investigates the post-secondary effects of an alternative high school graduation program. Among students who initially fail an exit exam, those who eventually graduate through an alternative project-based pathway have lower college enrollment, but similar employment outcomes to students who graduate by retaking and passing their exit exams. Compared to similar students who fail to complete high school, those students who take the alternative pathway have better post-secondary outcomes in both education and employment. |
| Keywords: | high school exit exams, high school graduation, post-secondary education, labor market outcomes, employment, earnings |
| JEL: | I21 I24 J18 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15067&r= |
| By: | Hoch, Felix; Rudsinske, Jonas |
| Abstract: | We show that firm internationalization is affected by the interaction between the board of directors' female share and gender-related institutions in foreign countries. The combination of a high share of female directors and gender-discriminating institutions in a destination reduces sales in that foreign country relative to less discriminatory destinations. We deal with potential endogeneity due to omitted variable bias by including firm-year and origin-destination-year fixed effects, while an event study exploiting the appointments of new female board members addresses endogeneity due to reverse causality. This firm-level relationship transfers to the country-level when using countries' aggregate share of female directors and bilateral exports in a structural gravity framework including origin-year, destination-year and origin-destination fixed effects. Our findings suggest that institutionalized discrimination against female managers is a barrier to firm internationalization on the micro level and international trade on the macro level. This might give rise to disadvantages for female managers even in non-discriminatory countries. |
| JEL: | F14 F23 J16 M16 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:umiodp:12022&r= |