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on Labour Economics |
| By: | Rishi Sharma (Rishi Sharma); Chad Sparber (Chad Sparber) |
| Abstract: | The H-1B program allows firms in the United States to temporarily hire high skilled foreign citizens. The government restricts foreign labor inflows and therefore generates potential rents typical of a quota. However, the US allocates H-1B status by random lottery. We develop a theoretical model demonstrating that this lottery creates a negative externality by incentivizing firms to search for more workers than can actually be hired and, in so doing, completely destroys quota rents. Moreover, some firms specialize in hiring foreign labor and contracting out those workers’ services to third-party sites, and this outsourcing behavior both exacerbates lost quota rents and leads to an increased concentration of H-1B workers among a small number of firms. Simple numerical exercises suggest that the H-1B lottery and outsourcing result in an annual economic loss exceeding $10,000 per new H-1B worker hired relative to what would occur under a quota alone. |
| Keywords: | Skilled Workers, H-1B, Quota Rents, Outsourcing |
| JEL: | J61 J68 F22 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2221&r= |
| By: | Hyejin Kim; Jongkwan Lee; Giovanni Peri |
| Abstract: | In this study, we first evaluate the effect of a significant increase in low-skilled immigration in Korean municipalities from 2010-2015 on the internal migration of natives. Using Korean survey data we are able to distinguish between natives moving for work-related and non-work-related reasons. Using a change in immigration policy and the pre-existing networks of immigrants to construct an instrument for immigration across Korean municipalities, we find that locations experiencing significant low-skilled immigration attracted natives who moved for working purposes. However, these locations saw outflows of natives that moved for non-work-related reasons, such as due to housing and local amenities. We then estimate that immigration had positive effects on local firm creation and on native wages but reduced the quality of local amenities. It had small to no impact on local housing prices. These facts together suggest that immigration attracted natives who value labor income over local amenities but pushed out those who place a higher value on local amenities. Thus, immigration, while generating little net native migration, changed the composition of natives in Korean municipalities. |
| JEL: | J21 J61 R12 R31 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30464&r= |
| By: | Sébastien Willis |
| Abstract: | Immigrants are more likely to have conationals as colleagues, however the consequences of such workplace segregation is an open question. I study the effect of the conational share in an immigrant’s first job on subsequent labour market outcomes using register data from Germany. I instrument for the conational share using hiring trends in the local labour market and find that a ten-percentage-point increase in the initial conational share lowers employment rates by 3.1 percentage points six or more years after the start of the first job, an effect not observed for non-conational immigrants, with no effect on wages conditional on employment. The employment effect appears to be due to the effect of differences in the composition of social networks induced by differences in the initial workplace on subsequent job search behaviour, although differential Germany-specific human capital acquisition cannot be entirely ruled out. |
| Keywords: | employment, segregation, coworker networks, immigrant earnings dynamics |
| JEL: | J61 J64 J31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9895&r= |
| By: | Paolo Pinotti (Bocconi University); Diogo G. C. Britto (Bocconi University); Alexandre Fonseca (Federal Revenue of Brazil); Breno Sampaio (Universidade Federal de Pernambuco); Lucas Warwar (Universidade Federal de Pernambuco) |
| Abstract: | We provide the first estimates of intergenerational income mobility for a developing country, namely Brazil. We measure formal income from tax and employment registries, and we train machine learning models on census and survey data to predict informal income. The data reveal a much higher degree of persistence than previous estimates available for developed economies: a 10 percentile increase in parental income rank is associated with a 5.5 percentile increase in child income rank, and persistence is even higher in the top 5%. Children born to parents in the first income quintile face a 46% chance of remaining at the bottom when adults. We validate these estimates using two novel mobility measures that rank children and parents without the need to impute informal income. We document substantial heterogeneity in mobility across individual characteristics - notably gender and race - and across Brazilian regions. Leveraging children who migrate at different ages, we estimate that causal place effects explain 57% of the large spatial variation in mobility. Finally, assortative mating plays a strong role in household income persistence, and parental income is also strongly associated with several key long-term outcomes such as education, teenage pregnancy, occupation, mortality, and victimization. |
| Keywords: | Intergenerational Mobility, Inequality, Brazil, Migration, Place Effects |
| JEL: | J62 D31 I31 R23 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2322&r= |
| By: | Kerstin Grosch; Simone Haeckl; Martin G. Kocher |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9907&r= |
| By: | Ivan Luzardo-Luna (University of Pennsylvania) |
| Abstract: | This article aims to identify the impact of regional employment polarization on labor frictions in a time of crisis and structural change by examining the case of interwar Britain. Using an original dataset from the regional returns of unemployment insurance administration, this article estimates the aggregate and regional Beveridge curve shifts, which allows the breakdown of labor frictions into spatial mismatching (interregional frictions) and frictions within regions (intraregional frictions). The latter were the main source of labor frictions during the interwar period, but the former significantly contributed to the mass unemployment observed in the Great Depression. |
| Keywords: | Unemployment, Spatial Mismatching, Beveridge Curve, Great Depression |
| JEL: | N12 J60 R11 |
| Date: | 2022–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:22-025&r= |
| By: | Moberg, Ylva (Swedish Institute for Social Research (SOFI), Stockholm University.); van der Vleuten , Maaike (Swedish Institute for Social Research (SOFI), Stockholm University.) |
| Abstract: | Mothers’ longer time on parental leave after having children has been proposed as one reason for remaining gender inequalities in the labor market. This paper investigates the determinants of the unequal division of parental leave, specifically the argument that mothers take more parental leave as a consequence of pregnancy and breastfeeding. We compare the division of parental leave of biological parents (where the mother gave birth) to adoptive parents (where she did not), to assess to what extend the unequal division of childcare responsibilities can be explained by the physiological aspects of biological motherhood. We analyze Swedish register data on couples who had their first biological or adopted child in 1994 – 2009, and families that had both adopted and biological children. We find that the mother’s share of parental leave is lower if the child is adopted. The difference is small, 80% versus 82%, although statistically significant. We thus conclude that going through a pregnancy increases the mothers initial parental leave, but the impact is minor. Instead, our results indicate that gender norms of mothers as caregivers and fathers as breadwinners is more likely to explain (at least part of) couples’ division of parental leave. |
| Keywords: | parental leave; gender norms; motherhood; division of labor; |
| JEL: | D13 J13 J16 J22 |
| Date: | 2022–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_018&r= |
| By: | Patrick Dylong; Silke Uebelmesser |
| Abstract: | We investigate the link between biased beliefs about immigrants, economic concerns and policy preferences. Conducting representative survey experiments with more than 8000 respondents, we first document substantial biases in respondents’ beliefs about the immigrant population in various domains. Exposure to different types of signals about immigrants reduces concerns about adverse effects of immigration on the welfare state. On the contrary, different types of signals offset their effects on concerns about increasing labor market competition. Employing a data-driven approach to uncover systematic effect heterogeneity, we find that prior beliefs about immigration explain conditional average treatment effects. While attitudinal change is thus more pronounced among individuals with pre-intervention biases about immigrants, education and attitudes towards cultural diversity are additional drivers of heterogeneity. Treatment effects on welfare state concerns persist in a five to eight week follow-up. |
| Keywords: | immigration attitudes, biased perceptions, belief updating, welfare state, labor market, causal forest |
| JEL: | C90 D83 F22 H20 J15 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9918&r= |
| By: | Felix Ehrenfried; Thomas A. Fackler; Valentin Lindlacher; Thomas Fackler; Thomas Fackler |
| Abstract: | The extensive literature on university graduates’ regional mobility highlights the importance of early mobility but is primarily descriptive. We contribute the identification of the effect of mobility upon high-school graduation on subsequent mobility across labour market regions. The data permit a novel identification strategy that uses the distance to university as an instrument. To ensure comparability, we select high-school graduates from only the suburban region of a large German agglomeration in a university graduate survey. We find that early mobility leads to a sizable increase in later labour mobility, which has implications for labour market efficiency and distributional policy concerns. |
| Keywords: | regional mobility, job mobility, distance to university, students, spatial, instrumental variables estimation |
| JEL: | J61 R23 I23 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9922&r= |
| By: | Akee, Randall K. Q. (University of California, Los Angeles); Feir, Donn. L. (University of Victoria); Gorzig, Marina Mileo (Mathematica); Myers Jr, Samuel (University of Minnesota) |
| Abstract: | Non-Hispanic whites who do not have a college degree have experienced an increase in "deaths of despair" – deaths caused by suicide, drug use, and alcohol use. Yet, deaths of despair are proportionally largest among Native Americans and the rate of increase of these deaths matches that of non-Hispanic white Americans. Native American women and girls face the largest differentials: deaths of despair comprise over 10% of all deaths among Native American women and girls – almost four times as high as the proportion of deaths for non-Hispanic white women and girls. However, the factors related to these patterns are very different for Native Americans than they are for non-Hispanic white Americans. Improvements in economic conditions are associated with decreased deaths from drug use, alcohol use, and suicide for non-Hispanic white Americans. On the other hand, in counties with higher labor force participation rates, lower unemployment, and higher ratios of employees to residents, there are significantly higher Native American deaths attributed to suicide and drug use. These results suggest that general improvements in local labor market conditions may not be associated with a reduction in deaths of despair for all groups. |
| Keywords: | Native American, public health, deaths of despair, economic conditions |
| JEL: | I14 J15 J16 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15546&r= |
| By: | Freund, L. B.; Lee, H.; Rendahl, P. |
| Abstract: | This paper studies the role of macroeconomic uncertainty in a search-and-matching framework with risk-averse households. Heightened uncertainty about future productivity reduces current economic activity even in the absence of nominal rigidities. A risk-premium mechanism accounts for this result. As future asset prices become more volatile and covary more positively with aggregate consumption, the risk premium rises in the present. The associated downward pressure on current asset values lowers firm entry, making it harder for workers to find jobs and reduces supply. With nominal rigidities the recession is exacerbated, as a more uncertain future reinforces households’ precautionary behavior, which causes demand to contract. Counterfactual analyses using a calibrated model imply that unemployment would rise by less than half as much absent the risk-premium channel. The presence of this mechanism implies that uncertainty shocks are less deflationary than regular demand shocks, nor can they be fully neutralized by monetary policy. |
| Keywords: | inflation, search frictions, Uncertainty, Unemployment |
| JEL: | J64 E21 E32 |
| Date: | 2022–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2251&r= |
| By: | Norlander, Peter; Erickson, Christopher |
| Abstract: | The teleworkability of jobs - whether they can and will be performed remotely - has been increasingly contested in the aftermath of the COVID-19 pandemic. To explain which jobs are teleworkable and why, we emphasize the institutional context of a job, including differences among firms, union representation, professional licensing requirements, sector, and employment models. Using a novel dataset of job characteristics extracted from the text of a large sample of online job advertisements from 2010-2021, we examine various explanations for change in the availability of remote job opportunities. Prior to the pandemic, private sector, non-union, and unlicensed jobs lagged federal government, union, and licensed jobs in the growth of telework. Firms are the largest source of variance in remote job offerings relative to other obvious alternatives (technological feasibility, occupation, sector, geography). After March 2020, between-firm differences increased, and institutions influenced the rate of telework adoption. |
| Keywords: | flexible work,technology,institutions,institutional change,remote work |
| JEL: | J60 J50 J44 J22 O30 R12 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1172&r= |
| By: | Sevrin Waights |
| Abstract: | I use the universe of tax returns in Germany and a regression kink design to estimate the impact of the benefit amount available to high-earning women after their first childbirth on subsequent within-couple earnings inequality. Lower benefit amounts result in a reduced earnings gap that persists beyond the benefit period for at least nine years after the birth. The longer-term impacts are driven by couples where the mother earned more than the father pre-birth. Simulations suggest it would take a 50% reduction in the benefit amount to completely eliminate long-run child penalties for sample couples. Lower benefits also reduce take-up of paid leave by mothers, lower the chances of having further children, and have no impact on marital stability. |
| Keywords: | Child penalties, gender inequality in earnings, social norms, parental leave policy, regression kink design |
| JEL: | D63 H31 J13 J16 K31 M52 Z13 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2016&r= |
| By: | Lisa Marie Timm (University of Amsterdam); Massimo Giuliodori (University of Amsterdam); Paul Muller (Vrije Universiteit Amsterdam) |
| Abstract: | This paper examines to what extent an income tax exemption affects international mobility and wages of skilled immigrants. We study a preferential tax scheme for foreigners in the Netherlands, which introduced an income threshold for eligibility in 2012 and covers a large share of the migrant income distribution. By using detailed administrative data ina difference-in-differences setup, we find that the number of migrants in the income range closely above the threshold more than doubles, whereas there is little empirical support for a decrease of migration below the threshold. Our results indicate that these effects are driven mainly by additional migration, while wage bargaining responses are fairly limited. We conclude that the preferential tax scheme is highly effective in attracting more skilled migrants |
| Keywords: | international migration, income tax benefits, wage bargaining, bunching. |
| JEL: | F22 J61 H24 H31 |
| Date: | 2022–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20220068&r= |
| By: | Lundin, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy); Häggblom, Josefin (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | When prioritising among clients, street-level bureaucrats may partly base their decisions on an assessment of the extent to which clients are deserving of help. We examine the impact of two “deservingness cues” on street-level decisions: the extent to which clients seem to need help and the extent to which clients appear to have responsibility for their neediness. The analysis is based on survey experiments with Swedish employment officers. We find that caseworkers devote more working time to jobseekers in greater need, but jobseekers in greater need have no increased likelihood of receiving a training program. In contrast, clients with greater responsibility for their neediness have a lower probability of receiving training, but caseworkers allocate just as much work time to these clients as they do to others. Thus, we confirm that client deservingness is important but qualify this conclusion along two dimensions. First, different cues of deservingness have different impacts for one and the same decision. Se cond, all types of decisions are not affected in the same way |
| Keywords: | Street-level bureaucracy; Client deservingness; Survey experiment; Labor market policy |
| JEL: | H00 J00 |
| Date: | 2022–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_017&r= |
| By: | Clara Krämer; Sandrine Cazes |
| Abstract: | Rapid advances in the development and adoption of artificial intelligence (AI) technologies provide new opportunities but also raise fears about disruptive labour market and workplace transitions. This working paper examines how social dialogue can shape the AI transition in beneficial ways for both workers and firms. It highlights that social dialogue can generally help foster inclusive labour markets and ease technological transitions, and presents new descriptive evidence together with ongoing initiatives from social partners showing that social dialogue has an important role to play in the AI transition as well. The paper also discusses how AI adoption may affect social dialogue itself, e.g. by adding new pressures on weakening labour relations systems and posing practical challenges to social partners, such as insufficient AI-related expertise and resources to respond to the AI transition. Based on these insights, the paper suggests a few measures for policy makers who would like to support social partners’ efforts in shaping the AI transition. |
| JEL: | J01 J08 J51 O3 |
| Date: | 2022–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:279-en&r= |
| By: | Katarzyna Bech (Group for Research in Applied Economics (GRAPE); Warsaw School Economics); Magdalena Smyk (Group for Research in Applied Economics (GRAPE)); Lucas van der Velde (Group for Research in Applied Economics (GRAPE); Warsaw School Economics); Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institute of Labor Economics (IZA)) |
| Abstract: | We leverage the flexibility enactment theory to study the link between working arrangements and job satisfaction. We propose that this link is moderated by individual inclination to non-standard working arrangements. Thus, we provide novel insights on the (mis)match between preferred and actual working arrangements. We apply this approach to data from the European Working Conditions Survey and empirically characterize the extent of mismatch in working arrangements across European countries. We shed new light on several phenomena. First, the extent of mismatch is substantial and reallocating workers between jobs could substantially boost overall job satisfaction in European countries. Second, the mismatch more frequently affects women and parents. Finally, we demonstrate that the extent of mismatch differs across European countries, which hints that one-size-fits-all policies, whether they deregulate or curb non-standard arrangements, are not likely to maximize the happiness of workers. |
| Keywords: | non-standard working arrangements, job satisfaction, gender |
| JEL: | J32 J71 J16 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:fme:wpaper:72&r= |
| By: | Valerio Dotti (Department of Economics, University Of Venice CÃ Foscari) |
| Abstract: | We investigate the effects of (1) population ageing and (2) rising income inequality on immigration policies using a citizen-candidate model of elections. In each period, young people work and pay taxes while old people receive social security payments. Immigrants are all young, meaning they contribute significantly to financing the cost of public services and social security. Among natives, the elderly and the poor benefit the most from public spending. However, because these two types of voters do not internalise the positive fiscal effects of immigration, they have a common interest in supporting candidates who seek to curb immigration and increase the tax burden on high-income individuals. Population ageing and rising income inequality increase the size and, in turn, the political power of such sociodemographic groups, resulting in more restrictive immigration policies, a larger public sector, higher tax rates, and lower societal well-being. Calibrating the model to UK data suggests that the magnitude of these effects is large. The implications of this model are shown to be consistent with patterns observed in UK attitudinal data. |
| Keywords: | Immigration, Ageing, Policy, Voting |
| JEL: | D72 J61 J14 H55 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2022:14&r= |
| By: | Agrawal, David R.; Bütikofer, Aline |
| Abstract: | The COVID-19 crisis poses new policy challenges and has spurred new research agendas in public economics. In this article, we selectively reflect on how the field of public economics has been shaped by the COVID-19 pandemic and discuss several areas where more research is necessary. We highlight major changes and inequalities in the labor market and K-12 education, in addition to discussing how technological change creates new challenges for the taxation of income and consumption. We discuss various policy responses to these challenges and the role of fiscal federalism in the context of worldwide crises. Finally, we summarize the key issues discussed at the 2021 International Institute of Public Finance Congress and the papers published in this special issue. |
| Keywords: | public economics,labor economics,education,tax,expenditure,COVID-19,inequality,fiscal federalism |
| JEL: | H0 J0 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1176&r= |