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on Labour Economics |
| By: | Drydakis, Nick (Anglia Ruskin University) |
| Abstract: | During the Great Recession, the increase in Greece's unemployment rate was the highest in the European Union. However, there exists no multivariate study which has assessed the association between parental unemployment and adolescents' grades. The study utilised panel data from the same upper high schools in the periods 2011–2013 and 2017–2019 to assess whether the grades of adolescents were associated with parental unemployment. The exogeneity of parental unemployment with respect to adolescents' grade was confirmed. The analysis revealed that parental unemployment was associated with a decline in adolescents' grades. Periods of economic decline, i.e. in 2011–2013, were found to be associated with deterioration in adolescents' grades. Moreover, during periods of economic decline, parental unemployment was associated with a deterioration in adolescents' grades. Furthermore, parental unemployment was associated with lower adolescents' grades for those households that were not homeowners and whose schools were located in working-class areas. The outcomes were found to be robust, even after including information for government expenditure on education and social protection. The potential long-lasting effects of parental unemployment on children's human capital should be considered by policymakers, as should educational interventions to support households experiencing adverse economic conditions. |
| Keywords: | economic recession, parental unemployment, grades, adolescents, academic performance |
| JEL: | E24 J6 I24 J13 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15927&r=lab |
| By: | Illing, Hannah (University of Bonn) |
| Abstract: | This paper studies the labor market effects of out- and in-migration in the context of cross-border commuting. It investigates an EU policy reform that granted Czech citizens full access to the German labor market, resulting in a Czech commuter outflow across the border to Germany. Exploiting the fact that the reform specifically impacted the Czech and German border regions, I use a matched difference-in-differences design to estimate its effects on local labor markets in both countries. Using a novel dataset on Czech regions, I show that municipalities in the Czech border region experienced a decrease in unemployment rates due to the worker outflow, and a corresponding increase in vacancies. For German border municipalities, I find evidence for slower employment growth (long-term) and slower wage growth (short-term), but no displacement effects for incumbent native workers. |
| Keywords: | out-migration, in-migration, local labor markets |
| JEL: | J61 J15 R23 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15930&r=lab |
| By: | Foliano, Francesca (UCL Institute of Education); Bryson, Alex (University College London); Joshi, Heather (University College London); Wielgoszewska, Bożena (University College London); Wilkinson, David (University College London) |
| Abstract: | We study the evolution of the gender wage gap among young adults in Britain between 1972 and 2015 using data from four British cohorts born in 1946, 1958, 1970 and 1989/90 on early life factors, human capital, family formation and job characteristics. We account for non-random selection of men and women into the labour market and compare the gender wage gap among graduates and non-graduates. The raw and covariate adjusted gender wage gaps at the mean decline over the period among nongraduates, but they rise among young graduates. The gender wage gap across the wage distribution narrows over time for lower wages. Adjusting for positive selection into employment increases the size of the gender wage gap in earlier cohorts, but selection is not apparent in the two most recent cohorts. Thus the rate of convergence in the wages of young men and women is understated when estimates do not adjust for positive selection in earlier cohorts. Differences in traditional human capital variables explain only a very small component of the gender wage gaps among young people in all four cohorts, but occupational gender segregation plays an important role in the later cohorts. |
| Keywords: | gender wage gap, birth cohorts, employment selection, graduates, occupational segregation |
| JEL: | J16 J2 J3 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15973&r=lab |
| By: | Rendon, Silvio (Inter-American Development Bank) |
| Abstract: | I propose a model in which agents decide on job search intensity for each possible wage, unlike the usual setup of constant search intensity over wage draws. The proposed framework entails efficiency gains in that agents do not waste effort to searching for low paying unacceptable jobs or less offered high paying jobs. The proposed framework generates accepted wages distributions that differ substantially from the truncated distributions stemming from the usual setup. These different empirical implications are exploited for building two nonparametric tests, which reject constant search intensity over wages, using NLSY97 data. I further estimate the identifiable structural parameters of the two models resulting in better fit for the wage-specific setup. I quantify the increased effectiveness of wage-specific search in more total search intensity, faster transitions to the upper tail of the wage distribution, and higher wages, in particular, more than 25% increase in accepted wages after unemployment. |
| Keywords: | job search, search intensity, unemployment |
| JEL: | J64 E24 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15971&r=lab |
| By: | Xuwen Gao; Wenquan Liang; Ahmed Mushfiq Mobarak; Ran Song |
| Abstract: | About 11% of the Chinese population are rural-urban migrants with a rural hukou that severely restricts their children's access to urban schools. As a result, 69 million children are left behind in rural areas. We use two regression-discontinuity designs - based on school enrollment age cutoffs and a 2014 policy change that more severely restricted migrants' access to schooling - to document that migrants become discontinuously more likely to leave middle-school-aged daughters (but not sons) behind in poor rural areas without either parent present exactly when schooling becomes expensive and restricted. The effect is larger when the daughter has a male sibling. Migrant parents send significantly less remittances back to daughters than sons. Although China's hukou mobility restrictions are not gender-specific in intent, they have larger adverse effects on girls. Rural residents adjacent to cities that experience shocks to labor demand after China's accession to the WTO are more likely to separate from children to take advantage of new opportunities in cities. Those workers earn much more and advance economically, but longitudinal data reveals that their children complete fewer years of schooling, remain poor, and have worse mental and physical health later in life. |
| JEL: | J13 J16 R23 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30990&r=lab |
| By: | Jacopo Bassetto; Giuseppe Ippedico |
| Abstract: | Brain drain is a growing concern for many countries experiencing large emigration rates of their highly educated citizens. While several European countries have designed preferential tax schemes to attract high-skilled individuals, there is limited empirical evidence on the effectiveness of fiscal incentives in a context of brain drain, and on migration responses beyond top earners. In this paper we investigate the effects of the Italian 2010 tax scheme “Controesodo”, which granted a generous income tax exemption to young high-skilled expatriates who relocate to Italy. Eligibility requires a college degree as well as being born in 1969 or later, which creates suitable quasi-experimental conditions to identify the effect of tax incentives. Using a Triple Difference design and administrative data on return migration, we find that eligible individuals are 27% more likely to move back to Italy post-reform. Additionally, using social security data from the main origin country of Italian returnees (Germany), we uncover significant effects throughout the wage distribution, suggesting that mobility in response to tax incentives is a broad phenomenon not limited to top earners. A cost-benefit analysis reveals that the direct fiscal impact of the reform – a lower bound of the total effect in the presence of human capital externalities – is marginally positive, by virtue of the tax scheme targeting young high-skilled individuals. |
| JEL: | J60 H20 F22 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10271&r=lab |
| By: | Renato Faccini; Leonardo Melosi |
| Abstract: | The low rate of inflation observed in the U.S. over the past decade is hard to reconcile with traditional measures of labor market slack. We develop a theory-based indicator of interfirm wage competition that can explain the missing inflation. Key to this result is a drop in the rate of on-the-job search, which lowers the intensity of interfirm wage competition to retain or hire workers. We estimate the on-the-job search rate from aggregate labor-market flows and show that its recent drop is corroborated by survey data. During "the great resignation", the indicator of interfirm wage competition rose, raising inflation by around 1 percentage point during most of 2021. |
| Keywords: | Missing inflation; labor market slack; Phillips curve; employment-to-employment rate; micro data |
| JEL: | E31 E37 C32 |
| Date: | 2023–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:95629&r=lab |
| By: | Frederik Almar; Benjamin Friedrich; Ana Reynoso; Bastian Schulz; Rune Vejlin |
| Abstract: | This paper revisits the link between education-based marriage market sorting and income inequality. Leveraging Danish administrative data, we develop a novel categorization of marriage market types based on the starting wages and wage growth trajectories associated with educational programs: ambition types. We find a substantial increase in sorting by educational ambition over time, which explains more than 40% of increasing inequality since 1980. In contrast, sorting trends are flat with the commonly used level of education. Hence, the mapping between education and marriage-market types matters crucially for conclusions about the role of marital sorting in rising income inequality. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10265&r=lab |
| By: | Xavier Ramos (Universitat Autònoma de Barcelona); Timo Verlaat (Utrecht University); Federico Todeschini (Universitat Pompeu Fabra) |
| Abstract: | While unconditional cash transfers have been studied extensively in developingcountries, little is known about their effects in a wealthier context. Through arandomized controlled trial, we study the employment effects of a generous andunconditional transfer targeting low-income families in Spain. Two years into theprogram, subjects assigned to treatment are 20 percent less likely to work thansubjects assigned to a control group. Assignment to an activation plan does notattenuate adverse effects; a more lenient transfer withdrawal rate does. It appearsthat effects are driven by subjects with children, suggesting substitution of labourfor care tasks. |
| Keywords: | welfare reform, cash transfer, basic income, policy evaluation, RCT |
| JEL: | C93 H53 I38 J64 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2023-638&r=lab |
| By: | Jonathan V. Hall; John J. Horton; Daniel T. Knoepfle |
| Abstract: | Following Uber-initiated fare increases, drivers make more money per trip and, initially, more per hour-worked. Drivers begin to work more hours. However, this increase in hours-worked—combined with a reduction in demand from a higher fare—has a business stealing effect, with drivers spending a smaller fraction of working hours transporting passengers. This market adjustment brings the hourly earnings rate back to about the rate that prevailed before the fare increase, in roughly two months. Passengers are partially compensated for higher prices by shorter wait times, but during the period covered by our data, fare increases likely reduced passenger welfare. |
| JEL: | J01 R4 R41 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30883&r=lab |
| By: | Anthony Krakah (Ghana Statistical Service); Gonzague Vannoorenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | We analyze how the spatial concentration of economic activity affects innovation among firms in Ghana. We use the 2014 census of all establishments to map economic activity at a precise geographic level and the responses to a detailed survey of more than 5000 firms to capture measures of innovation and firm-level characteristics. We find a strong positive effect of the overall density of economic activity on innovation (urbanization economies) but a negative effect of the density of employment in an establishment’s sector (localization economies). Several questions in the survey allow us to address the issue of endogeneity and shed some light on the mechanisms. We control for many firm characteristics and confirm our results on a subsample of establishments declaring that their location is that of their founder’s origin, i.e. firms with a plausibly exogenous geographic location. We find that firms in regions with denser economic activity report less problems to access funding and knowledge, while the presence of firms in the same sector is associated with more uncertainty about the gains from innovating. |
| Keywords: | innovation, development, localization, urbanization, externalities, Ghana |
| JEL: | R10 R11 R12 O14 O18 |
| Date: | 2023–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2023005&r=lab |
| By: | Remo Nitschke; Felix Roesel |
| Abstract: | Why do public policies change little over time in individual places, sometimes for centuries? We investigate different mechanisms for policy persistence. Several city mayors serving in democratic Weimar Germany were expelled by the Nazis in 1933, but re-installed by the Allies after World War II. We find that pre-Nazi patterns in public debt re-appear in cities with a re-installed mayor, albeit all city debt defaulted after the war. We do not find such correlations in a matched sample of cities where the Weimar mayor did not return to office. Historical public debt does also not predict debt today in East Germany and in former German cities in present-day Poland—places where political elites or most of the population changed. We conclude that elite persistence dominates place-based features such as geography or population preferences in explaining persistent policies. |
| Keywords: | elite persistence, public debt, fiscal policy, Weimar Germany |
| JEL: | H63 H74 N44 N94 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10251&r=lab |
| By: | Markus Eberhardt; Giovanni Facchini; Valeria Rueda |
| Abstract: | Academia, and economics in particular, faces increased scrutiny because of gender imbalance. This paper studies the job market for entry-level faculty positions. We employ machine learning methods to analyze gendered patterns in the text of 12, 000 reference letters written in support of over 3, 700 candidates. Using both supervised and unsupervised techniques, we document widespread differences in the attributes emphasized. Women are systematically more likely to be described using ‘grindstone’ terms and at times less likely to be praised for their ability. Using information on initial placement we highlight the mplications of these gendered descriptors for the quality of academic placement. |
| Keywords: | gender; natural language processing; diversity |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2023-02&r=lab |
| By: | Giovanna Apicella (University of Udine; University of St. Gallen); Enrico G. De Giorgi (University of St. Gallen - SEPS: Economics and Political Sciences; Swiss Finance Institute); Emilia Di Lorenzo (CSEF - University of Naples Federico II - Faculty of Economics); Marilena Sibillo (Università degli Studi di Salerno) |
| Abstract: | Longevity crucially affects demand for pensions, insurance products and annuities. Consistent empirical evidence shows that women have historically experienced lower mortality rates than men. In this paper, we study a measure of the gender gap in mortality rates, we call “Gender Gap Ratio”, across a wide range of ages and for four countries: France, Italy, Sweden and USA. We show the stylized facts that characterize the trend of the Gender Gap Ratio, both in its historical evolution and future projection. Focusing on an example temporary life annuity contract, we give a monetary consistency to the Gender Gap Ratio. The evidence we provide about a Gender Gap Ratio that ranges between 1.5 and 2.5, depending on age and country, translate into a significant reduction of up to 25% in the benefits from a temporary life annuity contract for women with respect to men, against the same amount invested in the annuity. The empirical evidence discussed in this paper documents the crucial importance of working towards a more widespread demographic literacy, e.g., a range of tools and strategies to raise longevity consciousness among individuals and policy makers, in the framework of gender equality policies. |
| Keywords: | Gender gap in mortality, financial well-being, demographic literacy |
| JEL: | G53 J11 J16 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2302&r=lab |
| By: | Fabio Manca |
| Abstract: | This study responds to six key questions about the impact that the demand for Artificial Intelligence (AI) skills is having on labour markets. What are the occupations where AI skills are most relevant? How do different AI-relevant skills combine in job requirements? How quickly is the demand for AI-related skills diffusing across labour markets and what is the relationship between AI skill demands and the demand for cognitive skills across jobs? Finally, are AI skills leading to a wage premium and how different are the wage returns associated with AI and routine skills? To shed light on these aspects, this study leverages Natural Language Processing (NLP) algorithms to analyse the information contained in millions of job postings collected from the internet. |
| Keywords: | artificial intelligence, education, labour market, skills, technology |
| JEL: | I26 J01 O14 O33 |
| Date: | 2023–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:286-en&r=lab |
| By: | Fakih, Ali (Lebanese American University); El Baba, Malak (Lebanese American University) |
| Abstract: | This paper studies the determinants of emigration from six Middle East and North Africa (MENA) countries in light of the Arab Spring of 2011. The aim is to determine if the economically depressing events which occurred as a result of the Arab Spring, resulted in brain drain for many countries. The paper's analysis is conducted using the Arab Transformation Project dataset of the year 2014 by employing an ordered probit model. The main conclusion of the paper is that sentiments of unhappiness appear to be the main determinant of the decision to emigrate. Other post-revolutionary feelings include lack of trust and political and democratic discontent, which highly encourage emigration decisions. In addition, socio-economic factors, such as being young, being male, and being highly educated are all contributing factors to the willingness to emigrate. However, married individuals are less likely to consider emigration. |
| Keywords: | Arab Spring, emigration, unhappiness, attitude |
| JEL: | C25 J60 O15 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15933&r=lab |
| By: | Thomas Ferguson (Institute for New Economic Thinking); Servaas Storm (Delft University of Technology) |
| Abstract: | This paper critically evaluates debates over the causes of U.S. inflation. We first show that claims that the Biden stimulus was the major cause of inflation are mistaken: the key data series - stimulus spending and inflation - move dramatically out of phase. While the first ebbs quickly, the second persistently surges. We then look at alternative explanations of the price rises. We assess four supply side factors: imports, energy prices, rises in corporate profit margins, and COVID. We argue that discussions of COVID's impact have thus far only tangentially acknowledged the pandemic's far-reaching effects on labor markets. We conclude that while all four factors played roles in bringing on and sustaining inflation, they cannot explain all of it. There really is an aggregate demand problem. But the surprise surge in demand did not arise from government spending. It came from the unprecedented gains in household wealth, particularly for the richest 10% of households, which we show powered the recovery of aggregate US consumption expenditure especially from July 2021. The final cause of the inflationary surge in the U.S., therefore, was in large measure the unequal (wealth) effects of ultra-loose monetary policy during 2020-2021. This conclusion is important because inflationary pressures are unlikely to subside soon. Going forward, COVID, war, climate change, and the drift to a belligerently multipolar world system are all likely to strain global supply chains. Our conclusion outlines how policy has to change to deal with the reality of steady, but irregular supply shocks. This type of inflation responds only at enormous cost to monetary policies, because it arises mostly from supply-side difficulties that require targeted solutions. But when supply plummets or becomes more variable, fiscal policy also has to adapt: existing explorations of ways to steady demand over the business cycle have to embrace much bolder macroeconomic measures to control over-spending when supply is temporarily constrained. |
| Keywords: | Monetary policy; fiscal policy; inflation; wealth effect; global supply chains; COVID-19; supply shocks; multipolar world economy, care economy, labor markets |
| JEL: | E0 E5 E6 E62 O23 I12 J08 |
| Date: | 2023–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp196&r=lab |
| By: | Joel Waldfogel |
| Abstract: | Women have traditionally participated in intellectual property creation at depressed rates relative to men. Book authorship is now an exception. In 1970, women published a third as many books as men. By 2020, women produced the majority of books. Adding new products can have significant welfare benefits, particularly when product quality is unpredictable. Using data on sales of 8.9 million individual titles at Amazon, 2018-2021, along with information on 200 million ratings of 1.8 million books by 800, 000 Goodreads users, I develop measures of both the supply of new books by male and female authors, as well as their usage by heterogeneous consumers. I show that growth in female-authored books has delivered a roughly equal proportionate increase in the female-authored shares of consumption, book awards, and other measures of success, indicating both that the additional female-authored books are useful to consumers and that product quality is unpredictable. I calibrate a simple structural model of demand with unpredictable product quality to quantify the welfare benefit from the additional female-authored books. While revenue gains to female authors come partly at the expense of male authors, gains to consumers from inclusive innovation are experienced by a wide range of consumers. |
| JEL: | J16 L82 O3 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30987&r=lab |