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on Labour Economics |
| By: | Goerke, Laszlo (IAAEU, University of Trier); Huang, Yue (University of Trier) |
| Abstract: | Using panel data from 1985 to 2019, we provide the first comprehensive investigation of the relationship between trade union membership and job satisfaction in Germany. Cross-sectional analyses reveal a negative correlation, while fixed effects estimates indicate an insignificant relationship. This is also true if we incorporate information on collective bargaining coverage or the existence of works councils in subsamples for which this data is available. To address the endogeneity of union membership, we generate information on the union density individuals faced in their industry and region. This time-variant IV suggests no causal impact of individual union membership on job satisfaction. Finally, using different estimation models, we investigate whether the effects vary by gender, age, birth year, and employment status. |
| Keywords: | sorting, job satisfaction, instrumental variable, German socio-economic panel, exit-voice framework, trade union membership |
| JEL: | I31 J28 J51 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15459&r= |
| By: | Thomas Dengler; Britta Gehrke |
| Abstract: | In the Covid-19 crisis, most OECD countries have used short-time work (subsidized working time reductions) to preserve employment relationships. This paper studies whether short-time work can save jobs through stabilizing aggregate demand in recessions. First, we show that the consumption risk of short-time work is considerably smaller compared to unemployment using household survey data from Germany. Second, we build a New Keynesian model with incomplete asset markets and labor market frictions featuring an endogenous firing and short-time work decision. In recessions, short-time work reduces the unemployment risk of workers, which mitigates their precautionary savings motive. Using a quantitative model analysis, we show that this channel increases the stabilization potential of short-time work over the business cycle. |
| Keywords: | short-time work, fiscal policy, incomplete asset markets, unemployment risk, matching frictions |
| JEL: | E21 E24 E32 E52 E62 J63 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9873&r= |
| By: | Alessandra Casarico; Elena Del Rey; Jose I. Silva |
| Abstract: | We develop a model to study the impact on gender gaps in participation and wages of a liquidity constraint that prevents some households from paying child care. We show that this liquidity constraint generates an inefficiency and amplifies gender gaps in the labour market. In this framework, an extension of paid maternity leave duration has ambiguous effects on gender inequality. In contrast, child care subsidies, which require higher taxes, and loans, which do not, unambiguously reduce gender inequality. We illustrate the mechanisms at play in a numerical example using Spanish data. |
| Keywords: | liquidity constraints, gender wage and participation gaps, statistical discrimination, numerical example |
| JEL: | J16 J18 J13 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9827&r= |
| By: | Kekezi, Orsa (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | This paper studies how labor market pooling, calculated as regional concentrations of employment in related industries and related occupations, affects the job outcomes of displaced workers. Using matched employer-employee data for displaced workers between 2003-2009 in Sweden, the results show that all workers experience a drop in earnings after displacement. However, the earning losses of workers who lose their jobs in markets with higher labor market pooling are lower. Two mechanisms are highlighted to why this is the case - (1) better job match and (2) higher probability of getting a better job than the pre-displacement one. |
| Keywords: | job matching; labor market pooling; displaced workers; occupational upgrade |
| JEL: | J24 J62 J65 |
| Date: | 2022–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2022_002&r= |
| By: | Serdar Birinci; Fatih Karahan; Yusuf Mercan; Kurt See |
| Abstract: | We develop a heterogeneous-agent New Keynesian model featuring a frictional labor market with on-the-job search to quantitatively study the role of worker flows in inflation dynamics and monetary policy. Motivated by our empirical finding that the historical negative correlation between the unemployment rate and the employer-to-employer (EE) transition rate up to the Great Recession disappeared during the recovery, we use the model to quantify the effect of EE transitions on inflation in this period. We find that the four-quarter inflation rate would have been 0.6 percentage points higher between 2016 and 2019 if the EE rate increased commensurately with the decline in unemployment. We then decompose the channels through which a change in EE transitions affects inflation. We show that an increase in the EE rate leads to an increase in the real marginal cost, but the direct effect is partially mitigated by the equilibrium decline in market tightness through aggregate demand that exerts downward pressure on the marginal cost. Finally, we study the normative implications of job mobility for monetary policy responding to inflation and labor market variables according to a Taylor rule, and find that the welfare cost of ignoring the EE rate in setting the nominal interest rate is 0.2 percent in additional lifetime consumption. |
| Keywords: | job mobility; monetary policy; Heterogeneous-agent New Keynesian (HANK) model; job search |
| JEL: | E12 E24 E52 J31 J62 J64 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:94640&r= |
| By: | Belot, Michèle (Cornell University); Kircher, Philipp (Cornell University); Muller, Paul (Vrije Universiteit Amsterdam) |
| Abstract: | In a randomized field experiment, we provide personalized suggestions about suitable alternative occupations to long-term unemployed job seekers in the UK. The suggestions are automatically generated, integrated in an online job search platform, and fed into actual search queries. Effects on the primary pre-registered outcomes of “finding a stable job” and “reaching a cumulative earnings threshold” are positive, are significant among those who searched at least once, and are more pronounced for those who are longer unemployed. Treated individuals include more occupations in their search and find more jobs in recommended occupations. |
| Keywords: | online advice, job search, long-term unemployment, occupational mobility, field experiment |
| JEL: | D83 J62 C93 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15452&r= |
| By: | Molina, Teresa (University of Hawaii at Manoa); Usui, Emiko (Hitotsubashi University) |
| Abstract: | Aspirations and plans for the future can influence investments made today. Gender gaps in these views can perpetuate gender gaps in outcomes. In this paper, we explore how gender gaps in aspirations and expectations are affected by the local labor market. Using a national longitudinal survey from Japan, we begin by documenting large gender differences in adolescents’ own thoughts about their future educational attainment, occupation, marriage, and fertility, as well as parental aspirations for their child’s future. We then show that these gender gaps – specifically, boys planning for higher educational attainment as well as later marriage and fertility – are significantly smaller in municipalities with higher female labor force participation. Consistent with this, we also find that female labor force participation increases parental investments in girls relative to boys. We detect similar patterns when examining realized outcomes at age 19. |
| Keywords: | aspirations, gender differences, female employment |
| JEL: | J16 I24 J13 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15453&r= |
| By: | Henrik Kleven |
| Abstract: | This paper develops a new approach to estimating child penalties based on crosssectional data and pseudo-event studies around child birth. The approach is applied to US data and validated against the state-of-the-art panel data approach. Child penalties can be accurately estimated using cross-sectional data, which are widely available and give more statistical power than typical panel datasets. Five main empirical findings are presented. First, US child penalties have declined significantly over the last five decades, but almost all of this decline occurred during the earlier part of the period. Child penalties have been virtually constant since the 1990s, explaining the slowdown of gender convergence during this period. Second, child penalties vary enormously over space. The employment penalty ranges from 12% in the Dakotas to 38% in Utah, while the earnings penalty ranges from 21% in Vermont to 61% in Utah. Third, child penalties correlate strongly with measures of gender norms. The evolution of child penalties mirrors the evolution of gender progressivity over time, with a greater fall in child penalties in states where gender progressivity has increased more. Fourth, an epidemiological study of gender norms using US-born movers and foreign-born immigrants is presented. The child penalty for US movers is strongly related to the child penalty in their state of birth, adjusting for selection in their state of residence. Parents born in high-penalty states (such as Utah or Idaho) have much larger child penalties than those born in low-penalty states (such as the Dakotas or Rhode Island), conditional on where they live. Similarly, the child penalty for foreign immigrants is strongly related to the child penalty in their country of birth. Immigrants born in high-penalty countries (such as Mexico or Iran) have much larger child penalties than immigrants born in low-penalty countries (such as China or Sweden). Evidence is presented to show that these effects are not driven by selection. Finally, immigrants assimilate to US culture over time: A comparison of child penalties among first-generation and later-generation immigrants shows that differences by country of origin eventually disappear. |
| JEL: | J13 J16 J21 J22 J61 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30176&r= |
| By: | Jirjahn, Uwe (University of Trier); Le, Thi Xuan Thu (University of Trier) |
| Abstract: | While works councils provide a highly developed mechanism to promote workplace democracy, research on their consequences has been dominated by economic aspects. This study brings a new perspective to the understanding of works councils by examining their influence on workers’ political behavior. Political spillover theory suggests that participation in the firm’s decision making has the potential to foster workers’ political participation in civic society. Our study for Germany indeed finds a positive association between the presence of a works council and workers’ interest in politics. This holds in panel data estimations including a large set of controls and accounting for unobserved individual-specific factors. However, separate estimations by gender show a positive association between works councils and political interest only for men, but not for women. Traditional gender roles and disproportionate responsibility for family may make it difficult for women to be politically engaged even when a works council is present. |
| Keywords: | works council, works councilor, union member, gender, political interest |
| JEL: | J51 J52 J53 J58 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15444&r= |
| By: | Parag Mahajan |
| Abstract: | Prior literature on the economic impact of immigration has largely ignored changes to the composition of labor demand. In contrast, this paper uses a comprehensive collection of survey and administrative data to show that heterogeneous establishment entry and exit drive immigrant-induced job creation and a rightward shift of the productivity distribution in U.S. local industries. High-productivity establishments are more likely to enter and less likely to exit in high immigration environments, whereas low-productivity establishments are more likely to exit. These dynamics result in productivity growth. A general equilibrium model proposes a mechanism that ties immigrant workers to high-productivity firms and shows how accounting for changes to the employer distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand. |
| Keywords: | immigration, business dynamics, productivity, firm heterogeneity |
| JEL: | J23 J61 L11 F22 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9874&r= |
| By: | Lochner, Benjamin; Merkl, Christian |
| Abstract: | This paper opens up the black box of gender-specific application and hiring behavior and its implications for the residual gender earnings gap. To understand the underlying mechanisms, we propose a two-stage matching model with testable implications. Using the German IAB Job Vacancy Survey, we show that the patterns in the data are in line with linear and nonlinear production functions at different jobs. Women's application probability at high-wage firms is much lower than at low-wage firms. By contrast, women have the same probability of being hired as men when they apply at high-wage firms. These patterns are not in line with taste-based discrimination, but they can be rationalized by high-wage firms that ask for more employer-sided flexibility. We show that the share of male applicants increases in various dimensions of employer-sided flexibility requirements. Adding the share of male applicants as a proxy for flexibility requirements to Mincer wage regressions reduces the residual earnings gap by around 50 to 60 percent. Women who match at jobs with a high share of male applicants earn substantially more than women at comparable jobs with only females in the application pool (due to compensating differentials). By contrast, when women with children match at these jobs, they face large earnings discounts relative to men. |
| Keywords: | Job Search,Application Behavior,Gender Earnings Gap |
| JEL: | E24 J16 J31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:042022&r= |
| By: | Gregorič, Aleksandra |
| Abstract: | This chapter reviews the literature on board-level worker representation (BLWR). BLWR refers to workers' legally sanctioned rights to take part in the decisions of their employers' board of directors as full or consultative members, regardless of their underlying equity investments. It provides information about the incidence of BLWR across countries, and the factors that likely contributed to the establishment of this mechanism of employee voice. It reviews theory on the positive and negative impacts of BLWR for workers and firms, summarizes the related empirical evidence, and concludes by pointing to the open gaps as avenues for future research. |
| Keywords: | board-level worker representation,theoretical and empirical review,cross-country evidence,firm performance,boardroom |
| JEL: | J53 J54 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1136&r= |
| By: | Asenjo, Antonia,; Escudero, Verónica,; Liepmann, Hannah., |
| Abstract: | The integration of active labour market policies within income support schemes – such as unemployment insurance and social assistance – has been a key component of social protection in high-income countries since the 1990s, with a rich literature reviewing its effects and implementation characteristics. More recently, this approach has spread beyond high-income economies, and is prominent today in many middle-income economies. Yet, despite the increasing adoption of integrated approaches, their conceptual and practical applications have not been studied in detail outside of high-income countries. This paper conceptualizes, for the first time, the implementation of integrated approaches, focusing on low- and middle-income countries (LMIC). We first develop a conceptual framework to understand how integrated policies can address labour market challenges, exploring the theoretical effects they exert on selected labour market and social dimensions. We then contrast these theoretical expectations with findings from the empirical literature on the effectiveness of integrated approaches. While many empirical studies find positive effects across different labour market dimensions, this is evidently not always the case. To reconcile this discrepancy, we investigate the design and implementation of integrated approaches across LMIC and identify factors which contribute to their effectiveness. |
| Keywords: | economic integration, labour market, low income, social protection |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:995195493302676&r= |
| By: | Halvarsson, Daniel (The Ratio Institute); Lark, Olga (Department of Economics, Lund University); Tingvall, Patrik (The National Board of Trade Sweden, Södertörn University); Videnord, Josefin (Uppsala University) |
| Abstract: | In this paper we study the link between globalization of firms and gender inequality. Specifically, we examine how the need for interpersonal contacts in trade and gender-specific differences in negotiations are related to the gender wage gap. Our key finding is that export of goods that are intensive in interpersonal contacts widens the gender wage gap. The effect is robust across various specifications and is most pronounced for domestic exporting firms, which do not trade within multinational corporations but with external foreign partners, where the contracting problem is most distinct. We ascribe this result to a male comparative advantage in bargaining. |
| Keywords: | Export; Gender wage gap; Gender inequality; Contract intensity; Interpersonal contacts; International trade |
| JEL: | F16 F66 J16 J31 |
| Date: | 2022–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2022_013&r= |
| By: | Serena Canaan (Simon Fraser University and IZA); Stefanie Fischer (Monash University and IZA); Pierre Mouganie (Simon Fraser University and IZA); Geoffrey C. Schnorr (California Policy Lab at UCLA and California Employment Development Department) |
| Abstract: | To boost college graduation rates, policymakers often advocate for academic supports such as coaching or mentoring. Proactive and intensive coaching interventions are effective, but are costly and difficult to scale. We evaluate a relatively lower-cost group coaching program targeted at first-year college students placed on academic probation. Participants attend a workshop where coaches aim to normalize failure and improve self-confidence. Coaches also facilitate a process whereby participants reflect on their academic difficulties, devise solutions to address their challenges, and create an action plan. Participants then hold a one-time follow-up meeting with their coach or visit a campus resource. Using a difference-in-discontinuity design, we show that the program raises students’ first-year GPA by 14.6 percent of a standard deviation, and decreases the probability of first-year dropout by 8.5 percentage points. Effects are concentrated among lower-income students who also experience a significant increase in the probability of graduating. Finally, using administrative data, we provide the first evidence that coaching/mentoring may have substantial long-run effects, as we document significant gains in lower-income students’ earnings seven to nine years following entry to the university. Our findings indicate that targeted, group coaching can be an effective way to improve marginal students’ academic and early career outcomes. |
| Keywords: | College graduation, mentoring, college advising, academic coaching |
| JEL: | I23 I24 J16 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:22-370&r= |
| By: | Fairlie, Robert W. (University of California, Santa Cruz); Fossen, Frank M. (University of Nevada, Reno); Johnsen, Reid (California Department of Tax and Finance Administration); Droboniku, Gentian (California Department of Tax and Finance Administration) |
| Abstract: | Previous estimates indicate that COVID-19 led to a large drop in the number of operating businesses operating early in the pandemic, but surprisingly little is known on whether these shutdowns turned into permanent closures and whether small businesses were disproportionately hit. This paper provides the first analysis of permanent business closures using confidential administrative firm-level panel data covering the universe of businesses filing sales taxes from the California Department of Tax and Fee Administration. We find large increases in closures rates in the first two quarters of 2020, but a strong reversal of this trend in the third quarter of 2020. The increase in closures rates in the first two quarters of the pandemic was substantially larger for small businesses than large businesses, but the rebound in the third quarter was also larger. The disproportionate closing of small businesses led to a sharp concentration of market share among larger businesses as indicated by the Herfindahl-Hirschman Index with only a partial reversal after the initial increase. The findings highlight the fragility of small businesses during a large adverse shock and the consequences for the competitiveness of markets. |
| Keywords: | small business, entrepreneurship, survival, closures, self-employment, COVID-19, coronavirus, pandemic, shelter-in-place restrictions, social distancing restrictions |
| JEL: | L26 H25 I18 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15445&r= |
| By: | Jonas Dovern; Lena Sophia Müller; Klaus Wohlrabe |
| Abstract: | Using new survey data on quantitative growth expectations of firms in Germany, we show that firms resort to local information when forming expectations about aggregate growth. Firms extrapolate from the economic situation in their county, industry growth and their individual business situation. The effect is particularly strong for small firms and explains part of the high expectation dispersion across firms. Furthermore, we show that growth expectations are correlated with employment and investment decisions of firms, highlighting that differences in expectations do indeed seem to lead to differences in actual firm decisions. Our results confirm predictions of theoretical models with rational inattention. |
| Keywords: | GDP expectations, expectation heterogeneity, disagreement, rational inattention, ifo business tendency survey |
| JEL: | D84 E20 E32 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9826&r= |
| By: | Jason Sockin |
| Abstract: | Do firms that pay more offer better amenities, or does the greater pay compensate for worse amenities? Using matched U.S. employee-employer data, this paper estimates the joint distribution of wages, amenities, and job satisfaction across firms. Fifty amenities are captured applying topic modeling to workers’ free-response descriptions of their jobs. Three main findings emerge. First, higher-paying firms offer better amenities. Second, employees value amenities: one-third have a more pronounced effect on satisfaction than pay. Third, since workers are willing to pay for satisfaction and because the covariance between amenities and wages is sufficiently high, amenities widen compensation dispersion across firms. |
| Keywords: | job amenities, job satisfaction, inequality |
| JEL: | J01 J32 M50 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9842&r= |
| By: | Asli Ebru Şanlıtürk (Max Planck Institute for Demographic Research, Rostock, Germany); Samin Aref (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany); Francesco C. Billari (Max Planck Institute for Demographic Research, Rostock, Germany) |
| JEL: | J1 Z0 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2022-019&r= |
| By: | C. Justin Cook; Jason Fletcher |
| Abstract: | We hypothesize that the impact of antibiotics is moderated by a population’s inherent (genetic) resistance to infectious disease. Using the introduction of sulfa drugs in 1937, we show that US states that are more genetically susceptible to infectious disease saw larger declines in their bacterial mortality rates following the introduction of sulfa drugs in 1937. This suggests area-level genetic endowments of disease resistance and the discovery of medical technologies have acted as substitutes in determining levels of health across the US. We also document immediate effects of sulfa drug exposure to the age of the workforce and cumulative effects on educational attainment for cohorts exposed to sulfa drugs in early life. |
| JEL: | I1 I14 I15 J1 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30269&r= |
| By: | Raj Chetty; Matthew O. Jackson; Theresa Kuchler; Johannes Stroebel; Nathaniel Hendren; Robert B. Fluegge; Sara Gong; Federico Gonzalez; Armelle Grondin; Matthew Jacob; Drew Johnston; Martin Koenen; Eduardo Laguna-Muggenburg; Florian Mudekereza; Tom Rutter; Nicolaj Thor; Wilbur Townsend; Ruby Zhang; Mike Bailey; Pablo Barberá; Monica Bhole; Nils Wernerfelt |
| Abstract: | Low levels of social interaction across class lines have generated widespread concern and are associated with worse outcomes, such as lower rates of upward income mobility. Here, we analyze the determinants of cross-class interaction using data from Facebook, building upon the analysis in the first paper in this series. We show that about half of the social disconnection across socioeconomic lines—measured as the difference in the share of high-socioeconomic status (SES) friends between low- and high-SES people—is explained by differences in exposure to high- SES people in groups such as schools and religious organizations. The other half is explained by friending bias—the tendency for low-SES people to befriend high-SES people at lower rates even conditional on exposure. Friending bias is shaped by the structure of the groups in which people interact. For example, friending bias is higher in larger and more diverse groups and lower in religious organizations than in schools and workplaces. Distinguishing exposure from friending bias is helpful for identifying interventions to increase cross-SES friendships (economic connectedness). Using fluctuations in the share of high-SES students across high school cohorts, we show that increases in high-SES exposure lead low-SES people to form more friendships with high-SES people in schools that exhibit low levels of friending bias. Hence, socioeconomic integration can increase economic connectedness in communities where friending bias is low. In contrast, when friending bias is high, increasing cross-SES interaction among existing members may be necessary to increase economic connectedness. To support such efforts, we release privacy-protected statistics on economic connectedness, exposure, and friending bias for each ZIP code, high school, and college in the U.S. at www.socialcapital.org. |
| JEL: | J0 R0 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30314&r= |