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on Labour Economics |
| By: | Toman Barsbai (Toman Barsbai); Andreas Steinmayr (Andreas Steinmayr); Christoph Winter (Christoph Winter) |
| Abstract: | We analyze how economic conditions at the time of arrival affect the economic integration of family-sponsored migrants in the U.S. Our identification strategy exploits long waiting times for family-sponsored immigration visas that decouple the migration decision from economic conditions at the time of arrival. A one pp higher unemployment rate at arrival decreases annual wage income by four percent in the short run and two percent in the longer run. The loss in wage income is the result of substantial occupational downgrading, lower hourly wages, and a reduction in working hours. Family migrants who immigrate into a recession draw on migrant and family networks to mitigate the negative labor market effects. As a result, they take up occupations with higher concentrations of fellow countrypeople. They are also more likely to reside with family members, potentially reducing their geographical mobility. |
| Keywords: | Immigrant integration, family reunification, migrant networks, labor market, business cycle |
| JEL: | E32 F22 J31 J61 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2201&r= |
| By: | Aslund, Olof (Uppsala University); Engdahl, Mattias (IFAU); Rosenqvist, Olof (IFAU) |
| Abstract: | We study the impact of asylum waiting, exploiting a rapid increase in processing times for asylum seekers to Sweden. Longer waiting slows down integration. Accumulated earnings during the first four years after application are 2.3 percent lower per added month of waiting. The impact is due to delay rather than negative effects of waiting per se. There is no evidence of detrimental effects on psychiatric or other forms of health. From the date of asylum, those who have waited longer perform better in the labor market and are more likely to start advanced language training and labor market programs. |
| Keywords: | asylum waiting, labor market, health |
| JEL: | F22 J15 J68 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15063&r= |
| By: | Benjamin G. Hyman |
| Abstract: | The extent to which workers adjust to labor market disruptions in light of increasing pressure from trade and automation commands widespread concern. Yet little is known about efforts that deliberately target the adjustment process. This project studies 20 years of worker-level earnings and re-employment responses to Trade Adjustment Assistance (TAA)—a large social insurance program that couples retraining incentives with extended unemployment insurance (UI) for displaced workers. I estimate causal effects from the quasi-random assignment of TAA cases to investigators of varying approval leniencies. Using employer-employee matched Census data on 300,000 workers, I find TAA approved workers have $50,000 greater cumulative earnings ten years out—driven by both higher incomes and greater labor force participation. Yet annual returns fully depreciate over the same period. In the most disrupted regions, workers are more likely to switch industries and move to labor markets with better opportunities in response to TAA. Combined with evidence that sustained returns are delivered by training rather than UI transfers, the results imply a potentially important role for human capital in overcoming adjustment frictions. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:22-05&r= |
| By: | Haapanala, Henri (University of Antwerp); Marx, Ive (University of Antwerp); Parolin, Zachary (Bocconi University) |
| Abstract: | We analyse the moderating effect of trade unions on industrial employment and unemployment in countries facing exposure to industrial robots. Applying random effects within-between regression to a pseudo-panel of observations from 28 advanced democracies over 1998-2019, we find that stronger trade unions in a country are associated with a greater decline in the industry sector employment of young and low-educated workers. We also show that the unemployment rates for low-educated workers remain constant in strongly unionised countries with increasing exposure to robots, whereas in weakly unionised countries, low-educated unemployment declines with robot exposure but from a higher starting point. Our results point to unions exacerbating the insider-outsider effects of technological change within the industrial sector, which however is not fully passed on to unemployment. |
| Keywords: | trade unions, technological change, outsiders/insiders, dual labour market, unemployment, labour economics |
| JEL: | J5 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15080&r= |
| By: | Belloc, Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of La Rioja) |
| Abstract: | This paper examines whether workers living in rural areas are more likely to be self-employed, compared with those in urban areas. We provide evidence for 35 European countries, using the European Working Conditions Survey for the year 2015. We also study the time devoted to market work, and monthly earnings, of self-employed workers in rural and urban areas. Results show that workers in rural areas are more likely to be self-employed than workers in urban areas, although engaging in self-employment in rural areas is associated with significantly lower monthly incomes. We also report differences by welfare state regime. Self-employment is considered a key mechanism to compensate for the difficulty of developing in rural areas, and this paper shows that workers in rural areas in Europe are more likely to be self-employed, despite more challenging working conditions. |
| Keywords: | rural areas, self-employment, europe, earnings, work hour |
| JEL: | E24 L26 O18 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15059&r= |
| By: | Potter, Tristan (Drexel University); Hobijn, Bart (Arizona State University & Federal Reserve Bank of San Francisco); Kurmann, Andre (Drexel University) |
| 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: | E24 J62 J63 |
| Date: | 2022–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:drxlwp:2022_002&r= |
| By: | Hyunjeong Hwang; Oliver Roehn |
| Abstract: | Slovakia’s population is ageing rapidly, with the share of the working-age population expected to shrink by about a fifth in the next 30 years. Ageing-related costs are projected to increase much more strongly than in other EU countries and ageing will put pressure on potential growth and living standards. To prepare for an ageing society, pension, health and long-term care, as well as labour market reforms are needed to extend working lives, improve the health of the ageing population, and enhance the efficiency of public spending. Linking the retirement age to life expectancy and tightening early retirement pathways notably for mothers and disability pensioners is important to extend working lives and improve pension sustainability. Health outcome are lagging behind other OECD countries largely due to high preventable mortality, especially among disadvantaged groups, highlighting the importance of a national strategy to reduce preventable mortality, as well as targeted approaches. Measures are also needed to improve the efficiency of health and long-term care spending, notably through reforming the network of hospitals, expanding central procurement of pharmaceuticals, and expanding the supply of in-home long-term care services. Higher employment of older workers is hampered by a range of labour market barriers, including fewer training opportunities, higher job strain, and a lack of flexible working arrangements. Labour participation of mothers with young children is also low, reflecting excessively long parental leave, low financial work incentives, and a lack of childcare facilities. |
| Keywords: | fiscal sustainability, health care system, labour supply, long-term care system, pensions, population ageing |
| JEL: | J11 J26 J08 O52 H55 I11 |
| Date: | 2022–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1701-en&r= |
| By: | Ana Aguilar; Carlo Alcaraz; Claudia Ramírez; Cid Alonso Rodríguez-Pérez |
| Abstract: | The non-accelerating inflation rate of unemployment (NAIRU) is not directly observable, and the presence of informal workers imposes an additional challenge in its estimation. In this paper, we present an estimation of the traditional NAIRU for Mexico and an alternative measure that includes informality as an indicator of labor underutilization. We find that both measures of NAIRU and the associated labor market slack indicators follow similar patterns over time. However, the slack estimated with the indicator that includes informality seems to predict inflationary pressures more accurately when the unemployment gap is close to zero. |
| Keywords: | unemployment, informality, NAIRU, business cycle. |
| JEL: | E26 E32 E52 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1005&r= |
| By: | Jaimovich, Nir (University of Zurich); Saporta-Eksten, Itay (Tel Aviv University); Setty, Ofer (Tel Aviv University); Yedid-Levi, Yaniv (Interdisciplinary Center (IDC) Herzliya) |
| Abstract: | We consider the aggregate and distributional impact of Universal Basic Income (UBI). We develop a model to study a wide range of UBI programs and financing schemes and to highlight the key mechanisms behind their impact. The most crucial channel is the rise in distortionary taxation (required to fund UBI) on labor force participation. Second in importance is the decline in self-insurance due to the insurance UBI provides, resulting in lower aggregate capital. Third, UBI creates a positive income effect lowering labor force participation. Alternative tax-transfer schemes mitigate the impact on labor force participation and the cost of UBI. |
| Keywords: | universal basic income, labor force participation, inequality |
| JEL: | E2 E6 J08 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15058&r= |
| By: | Yusuf Emre Akgündüz (Yusuf Emre Akgündüz); Yusuf Kenan Bağır (Yusuf Kenan Bağır); Seyit Mümin Cılasun (Seyit Mümin Cılasun); Murat Güray Kırdar (Murat Güray Kırdar) |
| Abstract: | This study combines an administrative dataset of the full population of Turkish firms and the setting of the sudden mass migration of Syrian refugees to Turkey to identify the effect of migrants on firm performance and market structure. We find that economic activity increases in hosting regions, but negative implications exist for long-term productivity. As a result of the migrant shock, exiting firms expand and new firms are established; however, the resulting market structure shows less concentration. Quantitatively, a 10 percentage-point rise in the migrant-to-native ratio increases firm sales by 3.8% and the number of active firms by 5.8%, but reduces firms’ average market share by 4.1%. We further document an increase in the export volume and variety of exported products to the Middle East and North Africa (MENA) region. In addition, a decline in export prices is observed, implying a rise in the competitiveness of exporting firms. We also uncover evidence for an effect of migrants’ skills and networks on exports, as the export value and variety of products to the MENA region increase more than those to the EU region while the prices of products exported to the two regions show similar changes. |
| Keywords: | refugees, firm performance, market structure, sales, informality, exports, migrant business networks. |
| JEL: | J15 J61 F16 L11 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2203&r= |
| By: | Natalie Nitsche (Max Planck Institute for Demographic Research, Rostock, Germany); Ansgar Hudde |
| Abstract: | The Covid-19-pandemic-related closure of schools has affected the majority of the world’s students and remains a contentious issue. Using data from the UNESCO school database, the ISSP 2012, and country-level panel regressions, we leverage simultaneous school closures during the first wave of Covid-19 lockdowns to estimate the effect of gender ideology on school reopening schedules. We show that societal gender ideology has likely influenced school reopening policies: i.e., that societies with more supportive attitudes toward maternal employment reopened schools significantly sooner, and at higher intensities, than societies with less supportive attitudes toward maternal employment, relative to other reopening measures, and net of infection rates. Our findings suggest a causal effect of gender ideological beliefs regarding pandemic-related school closure policies. We test and exclude a variety of potential confounders, such as a country’s maternal employment rate, GDP, social spending, and cultural values toward children. We argue that school closures may be perceived as less problematic in countries where more people support the ideal of a stay-at-home mother. Gender attitudes may thus represent a set of ideas that affect policy-makers’ decision-making via gender ideology normative framing or a potential gender ideology bias. However, the specific underlying mechanisms through which the gender ideology effect operates at the policy-maker level remain untested in our study, and should be investigated by future research. |
| JEL: | J1 Z0 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2022-008&r= |
| By: | Siew Ling Yew; Shuyun May Li; Solmaz Mosleh |
| Abstract: | In a life-cycle dynastic family model with endogenous fertility, labor-leisure, and accumulations of human and physical capital, this study examines the growth and welfare effects of parental leave subsidization when there is human capital externality. Compared with the social optimum, such externality causes higher fertility and less parental time and expenditure inputs in child human capital development, and thus lower growth and welfare in the laissez-faire equilibrium. Parental leave subsidization financed by a lump-sum tax (PLS_LS) promotes economic growth and welfare by improving the quantity-quality trade-off of children. There exists an optimal rate of parental leave subsidy but it cannot achieve the social optimum. Parental leave subsidization financed by a labor income tax (PLS_LI) increases the parental time input in child human capital and economic growth. It may improve welfare despite the distortionary effects of labor income taxes in exacerbating the problems of excessive fertility and under-investment of parental expenditure in child human capital. By calibrating the laissez-faire model economy to the U.S. data, our quantitative results show that for an empirically plausible degree of human capital externalities, the optimal parental leave subsidy under PLS_LI implies a fully-covered leave duration of 8.7 weeks per parent, which increases the annual growth rate of output per worker by 0.3 percentage points and welfare by 0.02 percent from the laissez-faire equilibrium. |
| Keywords: | Parental leave, Labor income tax, Fertility, Human capital, Welfare, Growth |
| JEL: | H2 J1 J22 O4 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-05&r= |