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on Labour Economics |
| By: | Yakymovych, Yaroslav (Department of Economics, Uppsala University) |
| Abstract: | Routine-biased technological change has led to the worsening of labour market prospects for workers in exposed occupations as their work has increasingly been done by machines. Routine workers who have lost their jobs in mass displacement events are likely to have been a particularly affected group, due to potential difficulties in finding new employment that matches their skills and experience. In this study, the annual earnings, employment, monthly wages and days of unemployment of displaced routine workers are compared to those of displaced non-routine workers using Swedish matched employer-employee data. The results show substantial routine-occupation penalties among displaced workers, which persist in the medium to long term. Compared to displaced non-routine workers, displaced routine workers lose an additional year’s worth of pre-displacement earnings and spend 180 more days in unemployment. A possible channel for this effect is the loss of occupation- and industry-specific human capital, as routine workers are unable to find jobs similar to those they had before becoming displaced. I do not find evidence that switching to a non-routine occupation reduces routine workers’ losses, but rather there are indications that switchers do worse in the short-to-medium run. The findings suggest that the effects of labour-replacing technological change on the most exposed individuals can be severe and difficult to ameliorate. |
| Keywords: | Routine-biased technological change; Mass layoffs |
| JEL: | J63 O33 |
| Date: | 2022–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_015&r= |
| By: | Rania Gihleb; Osea Giuntella; Luca Stella; Tianyi Wang |
| Abstract: | This study explores the relationship between the adoption of industrial robots and workplace injuries. Using establishment-level data on injuries, we find that a one standard deviation increase in our commuting zone-level measure of robot exposure reduces work-related annual injury rates by approximately 1.2 cases per 100 workers. US commuting zones more exposed to robot penetration experience a significant increase in drug- or alcohol-related deaths and mental health problems. Employing longitudinal data from Germany, we exploit within-individual changes in robot exposure and document that a one standard deviation change in robot exposure led to a 4% decline in physical job intensity and a 5% decline in disability, but no evidence of significant effects on mental health and work and life satisfaction. |
| JEL: | I10 J0 J28 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30180&r= |
| By: | Halvarsson, Daniel (The Ratio Institute); Lark, Olga (Lund University); Gustavsson Tingvall, Patrik (The National Board of Trade) |
| Abstract: | In this paper, we study foreign ownership as a vehicle for transferring gender norms across international borders. Specifically, we analyze how the wage differential between men and women in Swedish firms is affected by the degree of gender inequality in the home country of foreign investors. The results suggest that gender norms of the home country matter—the gender wage gap in foreign-owned subsidiaries appears to increase with the degree of gender inequality prevailing in the investors’ home market. This finding is identified from within job-spell variation in wages and proves robust across a series of specifications. |
| Keywords: | Foreign ownership; Gender inequality; Gender wage gap; Internationalization; Gender norms |
| JEL: | F66 J16 J31 |
| Date: | 2022–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1433&r= |
| By: | Rafael Dix-Carneiro; Sharon Traiberman |
| Abstract: | We investigate the role of trade imbalances for the distributional consequences of globalization. We do so through the lens of a quantitative, general equilibrium, multi-country, multi-sector model of trade with four key ingredients: (a) workers with different levels of skills are organized into separate representative households; (b) endogenous trade imbalances arise from households' consumption and saving decisions; (c) production exhibits capital-skill complementarity; (d) labor market frictions across sectors and non-employment. We conduct a series of counterfactual experiments that illustrate the quantitative importance of both trade imbalances and capital-skill complementarity for the dynamics of the skill premium. We show that modelling trade imbalances can lead to stark differences between short- and long-run consequences of globalization shocks for the skill premium. |
| JEL: | F1 F16 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30188&r= |
| By: | Stanislav Rabinovich; Ronald Wolthoff |
| Abstract: | We identify a misallocation inefficiency in search models, which is distinct from the aggregate entry distortion emphasized in the previous literature, and arises instead from partially directed search. We consider a framework in which workers differ in whether they can direct their search, and firms are heterogeneous in productivity. The main result is that too many workers apply to high-productivity firms, relative to the social optimum. This occurs because too many firms attract only random searchers, in order to extract more surplus from them. Because it is the low-productivity firms that do so, this induces all the directed searchers to concentrate at the high-productivity firms. A minimum wage can increase employment and welfare by reallocating workers across firms. With endogenous entry by either workers or firms, the misallocation inefficiency coexists with a standard entry externality; in this case, a proper combination of a tax or subsidy and a minimum wage can restore the efficient allocation. |
| Keywords: | Directed search; random search; labor markets; minimum wage; misallocation; market power |
| JEL: | E24 D83 J64 |
| Date: | 2022–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-728&r= |
| By: | Eichhorst, Werner (IZA); Marx, Paul (University of Duisburg-Essen); Rinne, Ulf (IZA); Brunner, Johannes (IZA) |
| Abstract: | This policy brief provides an update on job retention policies in a sample of 20 countries representing the main world regions as well as the diverse types of job retention schemes, in particular short-time work, furlough and wage subsidy schemes as they have been implemented in response to the COVID-19 pandemic. We show the diversity of these policies as well as the available information about their (re-)design as the pandemic evolved up to the most recent period. The policy brief raises main issues regarding the implementation and adaptation of job retention policies and illustrated this with four case studies. |
| Keywords: | survey, COVID-19, youth, gender equality, economic sectors, economic recovery, rapid assessment, skills, education, employment policy, decent work, work |
| JEL: | E24 H12 J22 J08 J65 J68 O57 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp187&r= |
| By: | Sébastien Fontenay |
| Abstract: | Albanesi (2016) defines social insurance schemes as government transfer programs whereby individuals who claim a condition or state that reduces their labor income obtain a transfer from the government. Which "conditions'' and "states'' should be covered by social insurance, as well as the optimal level of coverage, has been the source of debates among policy-makers and economists for more than a century.Early on, working women fought for protection against income loss resulting from childbirth. Back in October 1919, delegates of the first International Congress of Working Women gathered in Washington D.C. and successfully convinced the International Labour Organization to adopt a maternity protection convention, which mandated that maternity leave must come with benefits "sufficient for the full and healthy maintenance'' of mother and child. Several decades later, in the 1970's, Scandinavian countries adopted gender-neutral parental leave policies, which opened government paid leaves to fathers. They have since been followed by more than 90 countries which offer paid leave mandates to both parents. Probably the largest outlier among non-adopters of parental leave policies is the United States, whose 46th president Joe Biden failed during the first year of his mandate to fulfill his campaign promise to put in place a nation-wide parental leave program. The century-long reforms across the world, as well as the ongoing debate in the USA, one of the largest labor markets, motivates a deeper understanding of the consequences of parental leave policies for work and family decisions.The first two chapters of this thesis find their origin in previous work, which studies the labor market trajectory of Belgian women around childbirth. This earlier study demonstrates that Belgian mothers lose about 30 percent of their labor earnings relative to fathers, up to eight years after the birth of their first child (Fontenay et al. 2021). Figure I at the end of the introduction illustrates this dynamic and has been the common thread of the first two chapters. Several questions can be traced back to this figure: Why do women already experience an income loss when they are pregnant with their first child? How do women react to the income loss resulting from the incomplete wage replacement offered by the maternity allowance after childbirth? What are the drivers of the persistent drop in wage income up to eight years after the birth of their first child? This thesis tries to offer an answer to all of these questions using empirical methods in the context of Belgium.From a conceptual point of view, this thesis also makes the case that social insurance programs should not be considered in isolation because they can have important spillover effects. After reading this thesis, the reader should find that social insurance programs shape work and family decisions, but also that changes to one program might have unintended consequences for other branches of social security. From a methodological point of view, the three chapters rely on modern econometric methods for policy evaluation. This work uses both natural experiments and a randomized controlled trial to evaluate the effects of policies and their consequences for workers.The first chapter originates from the observation that the level of compensation during maternity leave varies significantly across countries, but previous research on the topic provides only limited insights on the consequences of this important design choice. More particularly, the first chapter assesses how the generosity of maternity leave allowance affects first-time mothers' career trajectory and subsequent fertility decisions. It exploits the fact that the allowance is capped in Belgium, so that women with pre-leave earnings above the maximum threshold face drastically lower replacement rates. Using a regression kink design, as well as a rich set of administrative data on mothers from 2002 to 2015, this chapter highlights the consequences for their career and show that mothers who receive higher benefits are more likely to leave salaried employment for self-employment. The study also reveals that mothers who receive a more generous allowance have more children and it provides suggestive evidence connecting this fertility effect to the transition to self-employment.The second chapter, co-authored with Ilan Tojerow, explores the short-run and long-run determinants of the income loss suffered by young mothers. The study shows that a woman’s likelihood of claiming disability insurance increases after the birth of her first child, but also reveals that the provision of paternity leave can ease this effect. Using Belgian administrative data, the findings are twofold: the incidence rate of disability is constant across gender up until a woman becomes a mother for the first time, and the provision of paternity leave, even in short intervals, significantly reduces the number of days that mothers spend in disability. Specifically, the regression discontinuity difference-in-differences design shows that mothers with partners eligible for two-week-long paternity leave spend on average 21% fewer days in disability over twelve years. The fiscal consequences of the research suggest that spending on paternity leave would be more than compensated by the savings in mothers’ disability benefits.The second chapter also highlights the increasing number of workers who rely on another social insurance program, called Disability Insurance (DI), as they find themselves unable to work because of a medical condition. A large share of these beneficiaries enters DI because of mental health conditions, which generally start at a young age and too often translate into a lifetime of claiming benefits.The third chapter, also co-authored with Ilan Tojerow, evaluates the effects of a Supported Employment (SE) program aimed at helping DI recipients with mental conditions to return to work. The program is characterized by a "work first'' approach with intensive job counselling and follow-along support. Using a Randomized Control Trial with more than 660 participants over a follow-up period of 18 months, the study compares the benefits of this newly introduced program to regular vocational rehabilitation services traditionally used in Belgium. The results show that SE increases the probability of DI recipients with mental conditions to work while on claim and reduces their reliance on DI benefits. Specifically, the estimates reveal that, 18 months after the start of their return-to-work program, participants in the SE group are 9.6 percentage points more likely to be working and receive 6.5% less in DI benefits than those in the control group. The effects of SE remain substantial even for those participants who were impacted by the COVID-19 pandemic. Cost-benefit analysis suggests that spending on SE could be compensated within less than two years by the savings in DI benefits.Some important policy implications can be drawn from these studies regarding the career of women and the effects of public policies. First, providing young mothers with more generous maternity leave allowance would help reducing the gender gap in entrepreneurship, while having positive spillover effects on fertility. Second, paternity leave policies, by increasing the involvement of fathers and co-parents, may improve the long-term health of mothers and prevents career breaks due to sickness or disability. Third, for those who are already on disability insurance, supported employment policies may help them return to work and avoid a lifetime of claiming benefits. All these findings are also of particular importance for the economy as a whole since previous research has revealed that a better allocation of women's talent would boost productivity and growth (Andrew, Bandiera, Costa-Dias, & Landais, 2021; Hsieh, Hurst, Jones, & Klenow, 2019). |
| Keywords: | Maternity leave; Paternity leave; Self-employment; Fertility; Disability insurance; Child penalty; Employment Support; Mental Health |
| Date: | 2022–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/344600&r= |
| By: | Perrotta Berlin, Maria (Stockholm Institute of Transition Economics); Gerrell, Manne (Malmo University) |
| Abstract: | We document an increase in intimate partner violence (IPV) against women in Sweden during the first wave of the Covid-19 pandemic, notwithstanding the famously lasseiz-faire approach taken by the country. We investigate the role of different mediating factors, affected by the pandemic, by the containment policies, or by their economic consequences, and spilling over to violence incidence, connecting to established theories of violence. We find support for the importance of time spent at home and female unemployment. We also find a positive correlation with alcohol sales. |
| Keywords: | COVID-19; domestic violence; unemployment; self-incapacitation |
| JEL: | J12 J16 K14 |
| Date: | 2022–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hasite:0060&r= |
| By: | Lisa Beck-Werz (Paderborn University); Thomas Fritz (FH Aachen University of Applied Sciences) |
| Keywords: | competition; gender differences; negative feedback; reaction to failure; career decisions; gender gap |
| JEL: | J16 D91 M50 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:97&r= |
| By: | Andersen, Carsten (Aarhus University); Houmark, Mikkel Aagaard (Aarhus University); Nielsen, Helena Skyt (Aarhus University); Svarer, Michael (Aarhus University) |
| Abstract: | In this paper we study effects of mass layoffs on parents and their children in the aftermath of the Great Recession using staggered difference-in-differences (DiD). We exploit quasi-experimental variation in announcements of mass layoffs in Danish firms in 2008-2019. We document that parents exposed to a mass layoff during and immediately after the Great Recession are negatively affected 6 years after the event; more so and for a longer period of time for parents at high risk of long term unemployment. Perhaps surprisingly, we find no overall significant negative effects of parental mass layoffs on children; neither academic achievement, absenteeism nor well-being are affected. We even find some positive effects for the children of parents who were more adversely affected by the layoff, consistent with an increase in parental time investment following unemployment. This last finding would not have appeared using a traditional two-way fixed effects approach, which appears to be biased towards zero in our setting. |
| Keywords: | mass layoff, unemployment, school outcomes, academic achievement, wellbeing |
| JEL: | I20 J63 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15389&r= |
| By: | Shamsuddin, Mrittika (Dalhousie University); Acosta, Pablo A. (World Bank); Schwengber, Rovane Battaglin (World Bank); Fix, Jedediah (UNHCR); Pirani, Nikolas (UNHCR) |
| Abstract: | As more and more Venezuelans leave their country, fleeing the economic and social crisis, the number of Venezuelans in Brazil has risen steadily since 2016, constituting about 18.6 percent of Brazil's 1.4 million refugee and migrant population as of October 2020. Past research finds that the impacts of forced displacement on the labor market outcomes of host community are mixed and tend to depend on country characteristics. This paper extends the previous literature by exploring the economic impact of Venezuelan influx on Roraima, the state bordering the República Bolivariana de Venezuela at the north and the main gateway of the Venezuelan refugees and migrants entering Brazil, and focusing on the formal sector employment of the host community. Using survey and administrative data and regression discontinuity frameworks, this paper finds that in the short-run, the Venezuelan influx led to an overall increase in unemployment and a decrease in informal sector employment, specially among the female workers in Roraima. Focusing on the host community, the findings suggest that Venezuelan influx led to increase in formal sector employment among the Brazilians, while the effect on both overall and native wages are heterogenous, suggesting distribution impacts and need for gender targeted policies. |
| Keywords: | labor market impacts, Venezuelan refugees and migrants, host community, forced displacement |
| JEL: | J21 J31 J61 F22 F15 O15 R23 H20 H50 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15384&r= |
| By: | Bart Cockx; Koen Declercq; Muriel Dejemeppe (-) |
| Abstract: | Providing income support to unemployed education-leavers reduces the returns to investments in education because it makes the consequences of unemployment less severe. We evaluate a two-part policy reform in Belgium to study whether conditioning the prospective entitlement to unemployment benefits for education-leavers on age or schooling attainment can affect educational achievements. The results show that the prospect of financial loss in case of unemployment can significantly raise degree completion and reduce dropout in higher education, but not in high school. We argue that the higher prevalence of behavioral biases among lower educated and younger students could explain these contrasting findings. |
| Keywords: | Unemployment insurance, conditionality, degree completion, school dropout, behavioral biases |
| JEL: | H52 I21 I26 I28 J08 J18 J24 J65 J68 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:22/1049&r= |
| By: | Xu, Tao; Zhu, Weiwei |
| Abstract: | The traditional way of the "troika" cannot support sustainable development for China, and future economic growth should be pushed by entrepreneurship, which can be the key to innovation. The paper analyses the importance and necessity of entrepreneurship in the context of China and its current situation systematically, and methodically studies whether it is entrepreneurs or employees that social attitudes encourage citizens to become. Using Chinese General Social Survey data, the paper explores the essentiality of social attitudes from three perspectives: social equity, social happiness and social trust that can reflect the social atmosphere, and examines the influential factors in terms of personal characteristics through an empirical approach. The paper finds that citizens' feelings and perceptions of social equity and social happiness have a significant positive impact on encouraging them to be entrepreneurs, with positive factors such as income, social security and children, and negative factors such as education, political identity and hukou. The effect can be more significant for urban citizens than rural ones; men and women are affected differently by the same factors in their choice to become employees or entrepreneurs. |
| Keywords: | Entrepreneurship; Social Attitude; Equity; Happiness; Social Atmosphere; Chinese General Social Survey |
| JEL: | J1 J12 J13 J16 M1 M13 M14 M2 O1 O3 O4 |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113212&r= |
| By: | Lisa Beck-Werz (Paderborn University) |
| Keywords: | overestimation; gender gap; age; experience; distance running |
| JEL: | D9 J16 Z2 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:96&r= |
| By: | Pascal Michaillat; Emmanuel Saez |
| Abstract: | Most governments are mandated to maintain their economies at full employment. We propose that the best marker of full employment is the efficient unemployment rate, $u^*$. We define $u^*$ as the unemployment rate that minimizes the nonproductive use of labor -- both jobseeking and recruiting. The nonproductive use of labor is well measured by the number of jobseekers and vacancies, $u + v$. Through the Beveridge curve, the number of vacancies is inversely related to the number of jobseekers. With such symmetry, the labor market is efficient when there are as many jobseekers as vacancies ($u = v$), too tight when there are more vacancies than jobseekers ($v > u$), and too slack when there are more jobseekers than vacancies ($u > v$). Accordingly, the efficient unemployment rate is the geometric average of the unemployment and vacancy rates: $u^* = \sqrt{uv}$. We compute $u^*$ for the United States between 1930 and 2022. We find for instance that the US labor market has been over full employment ($u |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2206.13012&r= |
| By: | Luiz Brotherhood (Universitat de Barcelona, BEAT, FGV); Bernard Herskovic (UCLA Anderson, NBER); Joao Ramos (University of Southern California) |
| Abstract: | We study whether college admissions should implement quotas for lower-income applicants. We develop an overlapping-generations model and calibrate it to data from Brazil, where such a policy is widely implemented. In our model, parents choose how much to investin their child’s education, thereby increasing both human capital and likelihood of college admission. We find that, in the long run, the optimal income-based affirmative action increases welfare and aggregate output. It improves the pool of admitted students but distorts pre-college educational investments. The welfare-maximizing policy benefits lower- to middle-income applicants with income-based quotas, while higher-income applicants face fiercer competition in college admissions. The optimal policy reduces intergenerational persistence of earnings by 5.7% and makes nearly 80% of households better off. |
| Keywords: | Affirmative action, intergenerational mobility, educational investment |
| JEL: | I2 E24 J62 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:425web&r= |
| By: | Eichhorst, Werner (IZA); Marx, Paul (University of Duisburg-Essen); Rinne, Ulf (IZA); Brunner, Johannes (IZA) |
| Abstract: | Economic and social disruptions caused by the COVID-19 crisis have particularly affected younger people, and therefore policy should respond with measures, programmes and initiatives targeted at this population group. Next to broader labour market and economic measures, which ultimately also benefit younger people, youth-targeted measures are needed given the specific impacts of the pandemic and resulting challenges. Against this background, this policy brief gives an overview on actual policy responses in the area of youth employment during the COVID-19 crisis in 20 selected countries. If such measures are implemented, they share the common goals of reducing the negative impacts of the COVID-19 crisis on younger workers and avoiding long-term scarring effects. However, the precise nature, extent and scope of such measures substantially differ across countries. Given the fragility and large uncertainty of economic recovery that is still present in early 2022, broader policy support continues to be needed, including specific policy measures targeting youth. |
| Keywords: | survey, COVID-19, youth, gender equality, economic sectors, economic recovery, rapid assessment, skills, education, employment policy, decent work, work |
| JEL: | E24 H12 J08 J13 J68 O57 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp188&r= |
| By: | Angelica Salvi del Pero (OECD); Peter Wyckoff (OECD); Ann Vourc'h |
| Abstract: | Artificial Intelligence (AI) systems are changing workplaces. AI systems have the potential to improve workplaces, but ensuring trustworthy use of AI in the workplace means addressing the ethical risks it can raise. This paper reviews possible risks in terms of human rights (privacy, fairness, agency and dignity); transparency and explainability; robustness, safety and security; and accountability. The paper also reviews ongoing policy action to promote trustworthy use of AI in the workplace. Existing legislation to ensure ethical workplaces must be enforced effectively, and serve as the foundation for new policy. Economy- and society-wide initiatives on AI, such as the EU AI Act and standard-setting, can also play a role. New workplace-specific measures and collective agreements can help fill remaining gaps. |
| JEL: | J01 J08 J2 J7 O3 |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:273-en&r= |