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on Labour Economics |
| By: | Carlos Carrillo-Tudela; Ludo Visschers; David Wiczer |
| Abstract: | This paper studies the cyclical behaviour of earnings risk and career changes. We document that the procyclical skewness of the earnings growth distribution arises mostly from the earnings changes of employer and occupation switchers. To uncover their relative importance in driving cyclical earnings changes and whether this arises from changes in the returns to mobility or mobility shocks, we propose a multi-sector business cycle model with on-the-job search and endogenous occupational mobility. Idiosyncratic occupational mobility is the main driver of cyclical earnings risk, mainly due to cyclical shifts in the returns to this mobility. This is the main reason why the sullying effects of recessions are long-lasting. These effects manifest themselves through a collapse of the job ladder and forgone lifetime earnings gains, especially for low-paid workers, and through large lifetime earnings losses among high-paid workers who experience forced occupational mobility and poor re-employment outcomes. |
| Keywords: | earnings, unemployment, business cycle, search, occupational mobility |
| JEL: | E24 E30 J62 J63 J64 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9990&r=lab |
| By: | Boeri, Tito (Bocconi University); Cahuc, Pierre (Sciences Po, Paris) |
| Abstract: | The recovery from the Covid-19 crisis will force governments to accelerate transformation in their menu of labor market policy tools. The crisis was a stress test for unemployment insurance schemes as it involved a sudden and unexpected shutdown of a very large set of activities. This forced countries to introduce, often from scratch, income support schemes for workers under new forms of employment, and the self-employed. There was also a considerable expansion of short-time work schemes notably towards the small business. The challenge ahead of us is perhaps even harder as post-Covid19 labor markets are likely to be characterized by substantial labor reallocation. Major innovations in labor market policy are required to smooth consumption of workers involved in this reallocation. We survey the large body of research on schemes reducing the costs of reallocation complementary to unemployment insurance. Our attention is on short-time work (preventing layoffs by subsidizing hors reductions), partial unemployment insurance (enabling workers to combine unemployment benefits with low income jobs), and wage insurance (offering a temporary wage subsidy to workers changing jobs). The properties of these new schemes are first presented and compared to those of standard unemployment benefits. Next the main results of the empirical literature on the effects of wage insurance, partial unemployment insurance and short-time work are presented. A final section is devoted to discussing directions for further research. |
| Keywords: | partial unemployment insurance, wage insurance, short-time work, COVID-19 |
| JEL: | H5 J6 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15601&r=lab |
| By: | Rud, Juan Pablo (Royal Holloway, University of London); Simmons, Michael (Umeå University); Toews, Gerhard (University of Orléans); Aragon, Fernando (Simon Fraser University) |
| Abstract: | The reduction of carbon emissions will require a rapid phasing out of coal and the displacement of millions of coal miners. How much could this energy transition cost mining workers? We use the dramatic collapse of the UK coal industry to estimate the long-term impact on displaced miners. We find evidence of substantial losses: wages fell by 40% and earnings fell by 80% to 90% one year after job loss. These losses are persistent and remain significantly depressed fifteen years later, amounting to present discounted value earnings losses of between four and six times the miners pre-displacement earnings. |
| Keywords: | labor displacement, energy transition, coal mines |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15581&r=lab |
| By: | Bhalotra, Sonia R. (University of Warwick); Clarke, Damian (University of Chile) |
| Abstract: | The occurrence of twin births has been widely used as a natural experiment. With a focus upon the use of twin births for identification of causal effects in economics, this chapter provides a critical review of methods and results. |
| Keywords: | twins, identification, fertility, birth spacing, child development, women's labour market outcomes, child penalty |
| JEL: | D10 I26 J13 J24 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15609&r=lab |
| By: | Mello, Ursula (Pontifical Catholic University of Rio de Janeiro); Nybom, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy); Stuhler, Jan (Universidad Carlos III de Madrid) |
| Abstract: | The estimation of intergenerational mobility ideally requires full income histories to determine lifetime incomes. However, as applications are typically based on shorter snapshots, estimates are subject to lifecycle bias. Using long income series from Sweden and the US, we illustrate that standard correction methods struggle to account for one important property of income processes: children from more affluent families tend to experience faster income growth, even conditional on their own characteristics. We propose a lifecycle estimator that captures this pattern and that performs well across different settings. We then apply this estimator to study mobility trends in Sweden and in the US, including for more recent cohorts that could not be considered in prior work. Despite rising income inequality, intergenerational income mobility remained largely stable over cohorts born 1950-1989 in both countries. |
| Keywords: | Intergenerational mobility; lifecycle bias; income processes; |
| JEL: | J62 |
| Date: | 2022–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_021&r=lab |
| By: | Cindy Biesenbeek |
| Abstract: | Using administrative data between 2006 and 2020, I analyze interregional migration in the Netherlands. In theory, individuals move out of regions with high unemployment rates, but most empirical research does not strongly support this prediction. Likewise, I only ï¬ nd a small effect of regional unemployment on interregional migration. Furthermore, I ï¬ nd that the unemployed are more mobile during the ï¬ rst three months of unemployment. In addition, my results suggest that renters in the private sector are much more mobile than homeowners or renters in the social housing sector. Finally, I ï¬ nd that commuters are much more likely to migrate, despite good infrastructure and relative short distances in The Netherlands. |
| Keywords: | Migration; Regional Labor Markets; Unemployment; Commuting; Duration; Cox; Nether-lands |
| JEL: | J61 R23 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:753&r=lab |
| By: | Lisauskaite, Elena (University of Portsmouth) |
| Abstract: | The matching efficiency of the standard matching function is known to follow a pro-cyclical pattern. An observed rightward shift in the UK's Beveridge Curve after the Great Recession, suggests a decrease in the matching efficiency between vacancies and unemployed workers. This paper studies the changes in the labour market's efficiency over the period between 2001 and 2015 in the UK, and decomposes various factors behind it, such as industrial labour market segmentation and characteristics of unemployed, using the standard aggregate matching function. Consistent with the findings for the US (Barnichon and Figura (2015), Hall and Schulhofer-Wohl (2018)), I find that the UK labour market experienced a decrease in the matching efficiency during the Great Recession. However, contrary to what Barnichon & Figura (2015) observed in the US, composition of the labour market did not account for much of this decrease, leaving labour market tightness as the main factor for the decline in efficiency in matching unemployed workers and available vacancies. Accounting for labour market segmentation and worker heterogeneity, can explain 24% of movements in the matching efficiency over the period between 2001Q3 and 2014Q3. |
| Keywords: | unemployment, mismatch, matching efficiency |
| JEL: | J6 J41 J42 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15610&r=lab |
| By: | Tommaso Giommoni; Gabriel Loumeau |
| Abstract: | This paper studies the long-term effect of taxation on economic geography and development. We rely on a unique natural experiment in place during France’s ancien régime: the salt tax. Introduced in the late 13th century and abrogated by the French Revolution in 1789, the salt tax was not uniformly levied across the French kingdom as its rate varied discontinuously in space. Using a series of rich and original historical data at regular time intervals and very fine spatial resolution since the fifteen century, we estimate a Spatial RDD model. We find that these exogenous tax rate differentials have had large effects on economic geography and development. These effects are, then, confirmed in a DiD analysis, that studies a very large time span (1400-1900 using regular intervals of 25 years) and documents the absence of pre-trends. Most of the effects can still be observed today in population density, firm density, and local average income. |
| Keywords: | taxation, long-term, economic georgraphy, development, spatial discontinuity, salt tax |
| JEL: | H20 N33 O23 J61 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9997&r=lab |
| By: | Creina Day |
| Abstract: | This paper examines the link between political support for basic income funded by linear income taxation and income inequality by household and gender. We develop a model with an increasingly right-skewed distribution of skill across households and a gender wage gap within households. Household preference for basic income decreases as skill level increases and female labour supply decreases with time spent rearing children. Majority voting supports the basic income scheme as mean relative to median household skill increases. Household fertility and skill level are inversely related under the scheme. An increase in the marginal tax rate to fund required government revenue could excacerbate gender inequality by reducing female labour supply. Quantitative illustrations suggest that the recent peak in the mean to median wage gap would provide voting support for basic income from the majority of households in the United States. Basic income of $12,000 conditional on below-median wages would increase government spending by 10.8% which, if funded by progressive income taxation, could reduce the adverse effects on gender inequality. |
| Keywords: | Basic income, Taxation, Gender inequality, Fertility |
| JEL: | C60 H24 H53 J13 J16 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-54&r=lab |
| By: | Timothy Watson; Juha Tervala |
| Abstract: | This paper estimates the causal impact of the Great Recession-era Building the Education Revolution (BER) school infrastructure stimulus program on labour market outcomes in Australia. The evidence suggests that the program provided value for money, with costs per job-year saved most likely below $8,500 ($US 8,000) on average between 2009 and 2012. In 2009, the main year of program impact, roughly one third of employment benefits related to lowering unemployment, and two-thirds reduced labour force exit. Unemployment reductions were concentrated amongst men, while program effects on employment appear more equally distributed by gender than would be anticipated based on the gender composition of the construction industry. Employment benefits were highly concentrated amongst 25 to 34 year olds, were not greater in regions experiencing higher unemployment at the outset of the program, and geographic demand spillovers may have grown as the program progressed. |
| Keywords: | employment, fiscal policy, macroeconomic stimulus |
| JEL: | E24 E62 E65 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-58&r=lab |
| By: | Jorge Luis García; James J. Heckman |
| Abstract: | This paper compares early childhood enrichment programs that promote social mobility for disadvantaged children within and across generations. Instead of conducting a standard meta-analysis, we present a harmonized primary data analysis of programs that shape current policy. Our analysis is a template for rigorous syntheses and comparisons across programs. We analyze new long-run life-cycle data collected for iconic programs when participants are middle-aged and their children are in their twenties. The iconic programs are omnibus in nature and offer many services to children and their parents. We compare them with relatively low-cost more focused home-visiting programs. Successful interventions target both children and their caregivers. They engage caregivers and improve the home lives of children. They permanently boost cognitive and non-cognitive skills. Participants in programs that enrich home environments grow up with better skills, jobs, earnings, marital stability, and health, as well as reduced participation in crime. Long-run monetized gains are substantially greater than program costs for iconic programs. We investigate the mechanisms promoting successful family lives for participants and find intergenerational effects on their children. A study of focused home-visiting programs that target parents enables us to isolate a crucial component of successful programs: they activate and promote parenting skills of child caregivers. The home-visiting programs we analyze produce outcomes comparable to those of the iconic omnibus programs. National implementation of the programs with long-run follow up that we analyze would substantially shrink the overall US Black-White earnings gap. |
| JEL: | D13 J13 J18 J24 J31 |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30610&r=lab |
| By: | Zaiceva, A. |
| Abstract: | This paper reviews economic studies on multitasking in household production. Whereas multitasking or task juggling in the workplace has been analyzed more widely, economic literature on multitasking in a household is relatively scarce. The chapter first provides relevant measures of such multitasking activities, discusses time diary data, and presents some empirical facts employing Harmonized European Time Use Survey data. It then reviews theoretical and empirical contributions to this topic, focusing on childcare, food consumption, and remote work. It also reviews the determinants of multitasking and identifies the factors that are more likely to affect these activities. In addition, it discusses multitasking by certain groups, such as ethnic minorities and children. Finally, it offers policy implications and suggestions for future research. |
| JEL: | D13 J16 D22 |
| Date: | 2022–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2022031&r=lab |
| By: | Barış Alpaslan; Brendan Burchell |
| Abstract: | Although sociologists have already recognised the gender aspect of social capital, to date it has not yet been systematically investigated in an endogenous growth model. In pursuing this objective theoretically, we draw on Agénor and Canuto (2015) that has offered a three-period (childhood, adulthood, and old age) gender-based Overlapping Generations (OLG) framework, but we explore a different mechanism through which social capital may explain gender equality and prospects for economic growth in Turkey. This paper contributes in several ways to understanding the pivotal role of social capital in the process of economic development. First, social capital gives individuals a great sense of community and feelings of pleasure, and therefore we consider social capital as a possible driving factor of labour productivity. Second, in our model setting, survival rate for adults is determined by the average social capital level of men and women because individuals who are less socially integrated are more likely to have high mortality rates than people with strong ties to their community. Third, we elucidate an important, but understudied, trade-off between time allocated by women to market work and social capital-enhancing activities, and show that these two components of time allocation have opposite effects on intra-household bargaining power. |
| Keywords: | social capital, three-period gender-based OLG model, Turkey |
| JEL: | J16 O41 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2022-57&r=lab |
| By: | Jinno, Masatoshi; Yasuoka, Masaya |
| Abstract: | This paper investigates the effects of admitting immigrants to Japan on the welfare of native Japanese residents. The paper considers the imperfect substitutability between native and immigrant laborers in line with the pension and education systems. It is argued that immigration may have indirect negative effects, for example, imposing the additional burden of educating immigrant children who require additional support to master the Japanese culture, customs, and language. This research uses numerical data analysis of Japan. The findings indicate that admitting immigrants, even when they are not perfectly complementary, might increase the wage level and the utility of the natives. There are also direct implications on the type of pension system that is available for natives and immigrants. This study recommends that the defined replacement rate pension system is preferable for natives when there is a relatively substitutable relationship between natives and immigrants. |
| Keywords: | Immigrants, Burden of schooling, Pension, Substitutability, Complementarity. |
| JEL: | H52 H55 J61 |
| Date: | 2022–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:115182&r=lab |
| By: | OECD |
| Abstract: | Young people increasingly prioritise pursuing careers with positive social and environmental impacts. Social enterprises can help them fulfil this ambition. Youth-led social enterprises can address pressing social and environmental issues while providing young people with opportunities in the labour market. Despite these benefits, these entities often struggle due to the age of their founders and the specificities of their businesses. This paper analyses the drivers and potential benefits of youth-led social enterprises (section 1), assesses the challenges they face (section 2) and provides policy guidance to address them through tailored support programmes based on best practice examples and experiences from OECD countries and beyond (section 3). |
| Keywords: | Employment, Skills, Social and Solidarity Economy, Social enterprises, Youth |
| JEL: | J62 L31 L38 O35 |
| Date: | 2022–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2022/11-en&r=lab |