|
on Labour Economics |
| By: | David G. Blanchflower; Alex Bryson; Jackson Spurling |
| Abstract: | Most economists maintain that the labor market in the United States is ‘tight’ because unemployment rates are low. They infer from this that there is potential for wage-push inflation. However, real wages are falling rapidly at present and, prior to that, real wages had been stagnant for some time. We show that unemployment is not key to understanding wage formation in the USA and hasn’t been since the Great Recession. Instead, we show rates of under-employment (the percentage of workers with part-time hours who would prefer more hours) and the rate of non-employment which includes both the unemployed and those out of the labor force who are not working significantly reduce wage pressures in the United States. This finding holds in panel data with state and year fixed effects and is supportive of a wage curve which fits the data much better than a Phillips Curve. We find no role for vacancies; the V:U ratio is negatively not positively associated with wage growth since 2020. The implication is that the reserve army of labor which acts as a brake on wage growth extends beyond the unemployed and operates from within and outside the firm. |
| JEL: | E24 J20 J30 J60 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30322&r= |
| By: | Sonia R. Bhalotra; Atheendar Venkataramani; Selma Walther |
| Abstract: | We investigate women’s fertility, labor and marriage market responses to a health innovation that led to reductions in mortality from treatable causes, and especially large declines in child mortality. We find delayed childbearing, with lower intensive and extensive margin fertility, a decline in the chances of ever having married, increased labor force participation and an improvement in occupational status. Our results provide the first evidence that improvements in child survival allow women to start fertility later and invest more in the labor market. We present a new theory of fertility that incorporates dynamic choices and reconciles our findings with existing models of behavior. |
| JEL: | I18 J13 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30316&r= |
| By: | Gaetano Basso (Bank of Italy); Domenico Depalo (Bank of Italy); Salvatore Lattanzio (Bank of Italy) |
| Abstract: | Exploiting very rich administrative data covering the period from January 2018 until December 2021, this study analyses the individual employment trajectories of a large sample of Italian workers during the pandemic and the subsequent recovery, comparing them with those of similar individuals in previous years. To understand the heterogeneous impact of the crisis on the workforce, we split the sample into three groups based on workers’ labour market status in the first four months of 2020: (i) those continuously employed, (ii) those who lost their job, and (iii) those not employed (either new entrants or individuals with previous work experience). While workers in the first group were more likely to keep their job during the pandemic than they would have been in the past, those in the other groups faced scarce employment prospects. The probability of finding a job decreased sharply for labour market entrants, amplifying pre-existing differences. Finally, we did not find evidence of significant cross-firm or cross-sector reallocation. |
| Keywords: | employment, job mobility, turnover, Covid-19 pandemic |
| JEL: | J21 J62 J63 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_704_22&r= |
| By: | Bart Cockx (Department of Economics, Ghent University, UCLouvain (IRES/LIDAM), IZA, CESifo, and ROA, Maastricht); Koen Declercq (CEREC, UCLouvain – Saint-Louis Bruxelles); Muriel Dejemeppe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| 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: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2022015&r= |
| By: | Duan, Yige; Jost, Oskar; Jost, Ramona |
| Abstract: | We study the long-term impact of job displacement on workers' commuting behavior. Our measures of commuting exploit geo-coordinates of workers' places of residence and places of work, from which we calculate the door-to-door commuting distance and commuting time. Using German employee-employer matched data and an event study design, we identify the causal effect of job loss on workers displaced during a mass layoff. Conditional on finding a new job, workers' commuting distance and commuting time rise sharply after displacement and gradually decline in subsequent years. The recovery is due to employer changes rather than migration, and a larger increase in commuting would mitigate the wage loss due to job displacement. To rationalize our findings, we build an on-the-job search model with heterogeneous firm productivity and commuting distances. Our model predicts a joint recovery of wages and commuting despite a static tradeoff between the two attributes. |
| Keywords: | commuting,mobility,displacement,job search |
| JEL: | J3 J6 R23 R41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:clefwp:44&r= |
| By: | Sebastian Heise; Tommaso Porzio |
| Abstract: | We develop a frictional labor market model with multiple regions and heterogeneous firms to study how frictions impeding labor mobility across space affect the joint allocation of labor across firms and regions. Bringing the model to matched employer-employee data from Germany, we find that spatial frictions generate large misallocation of labor across firms within regions. By shielding firms from competition for workers from other regions, spatial frictions allow low productivity firms to expand, reducing aggregate productivity. Overall, we show that taking into account the characteristics of the local labor market is important to quantify the aggregate losses from spatial frictions. |
| JEL: | J6 O1 R1 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30298&r= |
| By: | Consolo, Agostino; Petroulakis, Filippos |
| Abstract: | Recent research has argued that the COVID-19 shock has also brought about a reallocation shock. We examine the evidence for such an occurrence in the United States, taking a broad perspective. We first consider micro data from CPS and JOLTS; there is no noticeable uptick in occupation or sector switches, nor churn, either at the aggregate level or the cross-section, or when broken down by firms’ size. We then examine whether mismatch unemployment has risen as a result of the pandemic; using an off-the-shelf multisector search and matching model, there is little evidence for an important role for mismatch in driving the elevated unemployment rate. Finally, we employ a novel Bayesian SVAR framework with sign restrictions to identify a reallocation shock; we find that it has played a relatively minor role in explaining labor market patterns in the pandemic, at least relative to its importance in earlier episodes. JEL Classification: E24, J63 |
| Keywords: | COVID-19, mismatch, reallocation |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222703&r= |
| By: | Claudia Goldin; Sari Pekkala Kerr; Claudia Olivetti |
| Abstract: | Women earn less than men, and that is especially true of mothers relative to fathers. Much of the widening occurs after family formation when mothers reduce their hours of work. But what happens when the kids grow up? To answer that question, we estimate three earning gaps: the “motherhood penalty,” the “price of being female,” and the “fatherhood premium.” When added together these three produce the “parental gender gap,” defined as the difference in income between mothers and fathers. We estimate earnings gaps for two education groups (college graduates and high school graduates who did not complete college) using longitudinal data from the NLSY79 that tracks respondents from their twenties to their fifties. As the children grow up and as women work more hours, the motherhood penalty is greatly reduced, especially for the less-educated group. But fathers manage to expand their relative gains, particularly among college graduates. The parental gender gap in earnings remains substantial for both education groups. |
| JEL: | J01 J16 J31 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30323&r= |
| By: | Uguccioni, James |
| Abstract: | Parental job loss is a large, negative shock to the household that can affect children in both the short- and long-run. Little is known, however, about how the long-run impacts of job loss on children vary with the child's age at the time of displacement. This paper provides the first empirical evidence of the long-run effects of parental unemployment on children exposed before age 10 (and as young as 2), a period thought to be critical for child development. Using administrative tax data covering the universe of children born in Canada between 1972 and 1985 and random forest proximity matching, I estimate the causal effects of parental job loss experienced at different points in childhood on a child's income attainment. I find that children exposed to parental unemployment at ages 2 to 10 experience losses of 3 to 4 rank points in average earnings attainment in adulthood (approximately $2,500 per year). These children are also 36% more likely to receive welfare as adults and 4% less likely to pursue post-secondary education. Consistent with critical periods of child development, children who experience parental job loss before age 10 experience larger reductions in income attainment than children exposed at older ages. Decomposing these estimates, I show that the majority of my treatment effects are attributable to the timing of income losses experienced during childhood, as well as unemployment-induced moves to neighourhoods with less opportunity. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:clefwp:45&r= |
| By: | Mr. Christoffer Koch; Andrew Fieldhouse; Sean Howard; David Munro |
| Abstract: | Using newly digitized unemployment insurance claims data we construct a historical monthly unemployment series for U.S. states going back to January 1947. The constructed series are highly correlated with the Bureau of Labor Statics' state-level unemployment data, which are only available from January 1976 onwards, and capture consistent patterns in the business cycle. We use our claims-based unemployment series to examine the evolving pace of post-war unemployment recoveries at the state level. We find that faster recoveries are associated with greater heterogeneity in the recovery rate of unemployment and slower recoveries tend to be more uniformly paced across states. In addition, we find that the pace of unemployment recoveries is strongly correlated with a states' manufacturing share of output. |
| Keywords: | State-Level Unemployment Rates; Unemployment Insurance; Economic Recoveries; Regional Business Cycles; unemployment recovery; unemployment series; unemployment dataset; recession date; unemployment rate series; Unemployment rate; Economic recession; Unemployment; Business cycles; Labor markets |
| Date: | 2022–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/117&r= |
| By: | Marta Lachowska (W.E. Upjohn Institute for Employment Research); Isaac Sorkin (Stanford University and NBER); Stephen A. Woodbury (Michigan State University and W.E. Upjohn Institute for Employment Research) |
| Abstract: | We use administrative data to quantify the firm role in unemployment insurance (UI) take-up. First, there are firm effects in both claiming and appeals, and, consistent with deterrence effects, these are negatively correlated. Second, low-wage workers are less likely to claim and more likely to have their claims appealed than median-wage workers, and firm effects explain a large share of these income gradients. Third, high-claiming and low-appealing firms are desirable firms: they are higher-paying and have lower separation rates. Finally, the dominant source of targeting error in the UI system is that eligible workers do not apply. Our findings emphasize a novel dimension of the role of firms in the labor market, and have implications for the financing of UI. |
| Keywords: | Unemployment insurance, take-up rates, UI claims, appeals, firm effects |
| JEL: | H25 J63 J65 L20 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:22-369&r= |
| By: | Min Fang; Libin Han; Zibin Huang; Ming Lu; Li Zhang |
| Abstract: | Place-based land policies may create spatial misallocation. We investigate a major policy in China that aims to reduce regional development gaps by distributing more urban construction land quotas to underdeveloped inland regions. We first show causal evidence that this policy decreased firm-level TFP in more developed eastern regions relative to inland regions. We then build a spatial equilibrium model with migration, land constraints, and agglomeration. The model reveals that this policy led to substantial losses in national TFP and output. It shrinks regional output gap but lowers incomes of workers from underdeveloped regions by hindering their migration to developed regions. |
| Keywords: | Place-based Policy; Land Policy; Spatial Misallocation; Regional Inequality; China; |
| JEL: | O18 R58 E24 J61 R52 |
| Date: | 2022–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-729&r= |
| By: | Daniela Del Boca; Chiara Monfardini; Sarah Grace See |
| Abstract: | The importance of investment in early childhood education (ECE) has been widely documented in the literature. Among the benefits, particularly for children from disadvantaged backgrounds, is its potential to mitigate educational inequality. However, some evidence also suggests that the positive effects of ECE on later outcomes tend to dissipate over time, leaving children who attended such programmes no better off academically than those who did not. This paper studies the relationship between students’ years spent in ECE and the results of their educational assessment outcomes at age 15.Using PISA survey data for fourteen European countries from 2015 and 2018, we conduct a cross-country comparison of student performance in reading, mathematics, and science, correlating the results to early childcare and pre-primary school attendance. Our findings show that participation in early childcare is associated with better assessments at age 15, but that the benefit is nonlinear and peaks at 3-4 years of childcare attendance. Examination of gender heterogeneity patterns reveals differences in girls’ and boys’ performance on the assessments; however, there are no gender differences in the relationship between childcare participation and test outcomes. We also explore differences related to the type of educational system attended and find distinct results for the unitary and separate settings. |
| Keywords: | early childhood education, pre-primary, early investments, human capital, assessments, gender, institution, unitary, separate, PISA |
| JEL: | I20 J13 J16 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9866&r= |
| By: | Lambert, Thomas |
| Abstract: | During 2021 and 2022 many news media outlets have been reporting that millions of workers in the US have been quitting their jobs in record numbers. In a global economy rebounding from the economic downturn caused by the Covid-19 outbreak and demanding more workers, a high rate of resignations has exacerbated labor shortages and may be aggravating underemployment rates if many workers are choosing not to be part of the labor force or only to work part time. Many reasons have been offered to explain this “Great Resignation” including high day care costs for working parents which may in turn be causing the trend of lower female labor force participation; the liberating experience of not working at all or to work from home instead of having to work from one’s usual work place during the Covid-19 quarantine/lockdown periods; stagnant/low wages and greater job tenure uncertainty which make working less attractive and more stressful; and the feeling by many of not wanting to work further for bad bosses or management who create bad work environments so that resignation becomes a means of escape from such conditions. This paper does data analysis on US labor trends since 2003 and during and after the Great Recession of 2008-2009 and demonstrates that resignations have been trending upward in the US aggregate economy and that quit rates mostly have been trending higher within many US industries. These phenomena can best be explained by the concept of labor market segmentation, high unemployment and underemployment rates that exist even in good economic times among certain industries, minority group composition, wage stagnation, and type of managerial supervision. Some of these same factors help to explain labor under-utilization greater than national/aggregate rates within these industries as well. |
| Keywords: | Great Resignation, Great Recession, labor market segmentation, managers |
| JEL: | B50 B51 J1 J21 J24 J31 J42 J53 J63 L21 M54 |
| Date: | 2022–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114067&r= |
| By: | Kerstin Mitterbacher (Institute of Banking and Finance, University of Graz); Jürgen Fleiß (Business Analytics and Data Science-Center, University of Graz); Stefan Palan (Institute of Banking and Finance, University of Graz) |
| Abstract: | We experimentally study economic migrants' willingness to relocate to, and take up work in, the destination country, and, in turn, destination country citizens' willingness to allow economic migrants to relocate to and pursue formal work in their country. In doing so, we focus on economic migrants coming from less developed countries and citizens of more developed destination countries. We find clear evidence for a reciprocal relationship between the individuals in these roles. The labor market participation of economic migrants co-moves with destination countries' openness to welcoming them. However, open migration polices without the threat of facing restrictive policies reduce migrants' willingness to work. At the same time, while the existence of such a threat gets migrants to work, the actual implementation of restrictive policies has the same effects as open migration policies. We conclude that supporting economic migrants in early labor market attachment is crucial to support mutually beneficial co-existence in society. |
| Date: | 2022–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpsses:2022-02&r= |
| By: | Winters, John V. (Iowa State University) |
| Abstract: | Place-based attachments are important but often overlooked. Place-based attachments can be beneficial but often harm individuals tied to struggling areas. In this address, I discuss my own education and migration experiences and then more generally discuss sense of belonging as a friction to migration. I also present descriptive statistics related to place-based attachments. Most persons born in the U.S. live in their birth state as adults. Birth-state residence has increased over time, especially among the highly educated. I also present evidence that college graduates who reside in their birth state experience a wage penalty that is increasing over time. |
| Keywords: | location, place, regions, migration frictions, policy |
| JEL: | R10 R23 J61 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15451&r= |
| By: | Grosch, Kerstin (WU Vienna University of Economics); Haeckl, Simone (University of Stavanger); Kocher , Martin G. (University of Vienna & University of Gothenburg) |
| Abstract: | We examine individual-level determinants of interest in STEM and analyze whether a digital web application for elementary-school children can increase children’s interest in STEM with a specific focus on narrowing the gender gap. Coupling a randomized-controlled trial with experimental lab and survey data, we analyze the effect of the digital intervention and shed light on the mechanisms. We confirm the hypothesis that girls demonstrate a lower overall interest in STEM than boys. Moreover, girls are less competitive and exhibit less pronounced math confidence than boys at the baseline. Our treatment increases girls’ interest in STEM and decreases the gender gap via an increase in STEM confidence. Our findings suggest that an easy-to-implement digital intervention has the potential to foster gender equality for young children and can potentially contribute to a reduction of gender inequalities in the labor market such as occupational sorting and the gender wage gap later in life. |
| Keywords: | STEM; digital intervention; gender equality; field experiment |
| JEL: | C93 D91 I24 J16 J24 |
| Date: | 2022–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2022_004&r= |
| By: | Kari Hämäläinen; Jouko Verho |
| Abstract: | The Finnish basic income experiment was an ambitious effort to study basic income in a Nordic welfare state. This paper describes the planning, implementation and scientific evaluation of the experiment. The randomized treatment group was paid a guaranteed monthly income, which had no impact on disposable income while a person was unemployed but provided a substantial increase in work incentives. We extend previous evaluations by examining the heterogeneity of incentive changes and employment responses across households. Our results reveal improvements in employment only for couples with children, providing an interesting contrast to other in-work credit programs. |
| Keywords: | employment, field experiment, social insurance, unemployment benefits |
| JEL: | C93 H55 I38 J65 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9875&r= |
| By: | Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Department of Economics, School of Business, Economics and Law, Göteborg University); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Using an online experiment, we investigate the influence of sexual objectification in media on economic decision making. In the experiment, subjects are asked to evaluate advertisements in women’s magazines. In the treatment groups, the ads portray women in sexually objectifying poses, while the poses are neutral in the control group. The main research hypothesis is that sexual objectification tends to make women self-objectify, i.e., they internalize the view of the objectifying images, and as a result, they lower their reservation wage. We find that women in the treatment groups do self-objectify: Women who were exposed to the objectifying images described themselves with words related to body shape or size significantly more often than women in the control group. Adding a warning text about the fact that photoshopped images can create unrealistic body ideals did not mitigate the self-objectification. However, we do not find any effect of the sexual objectification on women’s reservation wages. If we take the results at face value, they do suggest that the objectification of women in media, while having important psychological and emotional effects, does not seem to affect women’s economic behavior, at least not directly. |
| Keywords: | online experiment; sexual objectification; media; economic decision making |
| JEL: | C91 J16 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0824&r= |
| By: | Sean Dougherty; Pietrangelo de Biase; Luca Lorenzoni |
| Abstract: | Government revenues may be affected by economic growth and changes in demographics over time. The effect of economic growth can be captured by long-run buoyancy – responsiveness of government revenues to GDP growth – while the demographic effect can be captured by changes in labour income, asset income and consumption patterns over the life cycle, as well as population growth. This paper attempts to quantify the effect of population ageing on OECD tax revenues across different levels of government, by estimating error correction models of revenue buoyancies over the 1990 to 2018 period, by type of revenue, country and level of government. Multiple scenarios are used for the projections to 2040, which are combined with scenarios for the evolution of revenue bases using newly harmonized EU and UN National Transfer Accounts data as well as OECD Population Projections. |
| Keywords: | demographics, fiscal federalism, intergovernmental relations, revenue buoyancy, tax policy |
| JEL: | H20 H71 J11 |
| Date: | 2022–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaab:39-en&r= |
| By: | ASTARITA, Caterina; ALCIDI, Cinzia |
| Abstract: | This analysis aims to explore how employee income distribution performed during the first year of the COVID-19 pandemic; it further aims to compare it with a pre-pandemic scenario (2019) and with the financial and the sovereign debt crisis. By referring to the EU Labour Force Survey (LFS) database for six EU Member States (Denmark, Estonia, Greece, Ireland, Italy, and Portugal), and by using transition matrices and a selection of mobility indices as empirical tools, the direction and the magnitude of the movement across quantiles experienced by employees are explored. For each of the years under scrutiny, the transition across quintiles is computed between two very close periods (e.g. from one quarter to another). Sudden changes in the structure of the transition matrices and the value of the respective mobility indicators, when observed in comparison with a ‘benchmark’ year, may be interpreted either as a shock to the economic system, or the (counter) effect of automatic stabilisers and discretionary public policy measures (and as a combination of the two). The direction and the magnitude of the change may depend on different factors, including the kind of crisis, labour market and market income response, along with the design and timing of public policy discretionary cushioning measures. This conclusion emerges from the comparison of results collected for the COVID-19 crisis with those of the Great Recession: Two different kinds of crisis, two different sets of transmission mechanisms from the origin of the crisis to the real economy, two different responses of the labour market and of the public policy intervention. During the COVID-19 crisis, the overall level of income mobility increased, while during the financial crisis and sovereign debt crisis it decreased. The reason lies both in the different magnitude of flows from employment to unemployment and in the type and timing of the measures taken. As for the COVID-19 pandemic vs a pre-pandemic scenario, in-depth observation of the transition matrices and of the relative mobility indices suggests an increase of the overall mobility that is explained by specific movements of the ‘upward’ and ‘downward’ movers, as well as from the patterns followed by the proportion of individuals belonging to the single quantiles. When the figures for different indicators are broken down, it seems that there is a general worsening condition of females compared to males, of the youngest (16-29-year-olds) and of employees without tertiary education (ISCED 6-8). |
| Keywords: | COVID-19 pandemic, labour income, income distribution, income mobility, transition matrices, income mobility index, quantile analysis. |
| JEL: | D3 D31 D6 D63 H1 H12 H2 H23 H24 J3 J6 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113851&r= |
| By: | Popov, Alexander |
| Abstract: | Between 2000 and 2007, the gender gap in earnings in the US real estate sector increased, especially in local markets where house prices appreciated relatively more. Firm frictions and the presence of small children in the household do not explain the widening of the gender gap, while sorting on entry and gender identity in relative income do. First, the industry attracted relatively more females with no prior experience, especially in booming local housing markets. Second, labor supply increased relatively more for experienced males with at least some college education who earn less than their spouses. JEL Classification: J16, L85, O18 |
| Keywords: | gender earnings gap, housing booms, real estate |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222709&r= |