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on Labour Economics |
| By: | Baskaran, Thushyanthan (Ruhr University Bochum); Hessami, Zohal (Ruhr University Bochum) |
| Abstract: | We investigate how female representation impacts policymaking using the example of child care and new hand-collected data on local council elections in Bavaria. RDD estimations (mixed-gender races for last party-specific council seats) show that an additional female councilor accelerates the expansion of public child care by 40%. We also document an important nonlinearity: an additional woman accelerates the expansion of child care only in councils with few women. Council meeting minutes reveal that women can be effective in councils despite being a non-pivotal minority because they change "the conversation". |
| Keywords: | gender composition, political selection, local councils, child care |
| JEL: | D72 D78 H70 J13 J16 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15983&r=lab |
| By: | Hannah Illing (Institute for Applied Microeconomics, Department of Economics) |
| 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: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:221&r=lab |
| By: | Higashi, Yudai (Okayama University); Sasaki, Masaru (Osaka University) |
| Abstract: | This study explores how the COVID-19 pandemic deteriorated the mismatch in the Japanese labor market. We first focus on differences in job flows and reservation wages by occupation and employment type, which differ according to the risk of infection. We next estimate the mismatch indices for local labor markets clustered in by occupations vulnerable and not vulnerable to COVID-19 using the method developed by Şahin et al. (2014). We find that the pandemic induced an overall mismatch, regardless of whether the occupations were vulnerable to infection. The mismatch for high-risk occupations was gradually eliminated in 2021, suggesting that the Japanese labor market adapted gradually but successfully to the new normal. However, the mismatch for low-risk occupations increased in 2021, indicating that labor mobility had been discouraged. |
| Keywords: | mismatch, O-NET data, COVID-19, labor market tightness, desired wage |
| JEL: | J61 J62 J63 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15917&r=lab |
| By: | Lisa J. Dettling; Melissa Schettini Kearney |
| Abstract: | We revisit the cyclical nature of birth rates and infant health and investigate to what extent the relationship between aggregate labor market conditions and birth outcomes is mitigated by the consumption smoothing income assistance delivered through unemployment insurance (UI). We introduce a novel empirical test of standard neoclassical models of fertility that directly tests the prediction of opposite-signed income and intertemporal substitution effects of business cycles by examining the interaction of the aggregate unemployment rate with a measure of potential income replacement from UI. Our results show that as UI benefit generosity reaches 100 percent income replacement, there is no effect of the unemployment rate on fertility rates. This implies that the well-documented cyclical nature of fertility rates is about access to liquidity. We also provide novel evidence that infant health is countercyclical based on timing of conception, but procyclical based on time in utero. The negative relationship between the in utero aggregate unemployment rate and infant health also disappears when potential UI replacement rates reach 100 percent. Our results indicate that the social insurance provided by UI has a pro-natalist effect and improves babies’ health. |
| JEL: | H51 I18 J11 J13 J18 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30937&r=lab |
| By: | Addison, John T. (Durham University Business School); Portugal, Pedro (Banco de Portugal); Raposo, Pedro (Universidade Catolica Portuguesa, Lisbon) |
| Abstract: | Using a unique Portuguese linked employer-employee dataset, this paper offers an extension of the standard Mincerian model of wage determination by allowing for different returns to experience and tenure over the sequence of jobs that constitute a career. We also consider the possibility of distinct wage hikes each time workers change jobs, where such uplifts reflect the returns to job search investments over the life cycle and shape the curvature of the earnings profile. We further investigate how worker, firm, and job match heterogeneity influence the returns to mobility, experience, and tenure. The returns to job mobility are found to reflect sorting into better job matches. Moreover, the estimated returns to experience are upwardly biased because more productive workers tend to be more experienced. |
| Keywords: | returns to tenure, returns to experience, job mobility, high-dimensional fixed effects, job match fixed effect, job match quality effect |
| JEL: | J31 J63 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15977&r=lab |
| By: | Hershbein, Brad J. (Upjohn Institute for Employment Research); Stuart, Bryan (Federal Reserve Bank of Philadelphia) |
| Abstract: | This paper studies how U.S. local labor markets respond to employment losses that occur during recessions. Following recessions from 1973 through 2009, we find that areas that lose more jobs during the recession experience persistent relative declines in employment and population. Most importantly, these local labor markets also experience persistent decreases in the employment-population ratio, earnings per capita, and earnings per worker. Our results imply that limited population responses result in longer-lasting consequences for local labor markets than previously thought, and that recessions are followed by persistent reallocation of employment across space. |
| Keywords: | local labor markets, recessions, employment rates, migration |
| JEL: | J21 J61 R23 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15984&r=lab |
| By: | Andreas I. Mueller; Johannes Spinnewijn |
| Abstract: | This paper studies the predictability of long-term unemployment (LTU) and analyzes its main determinants using rich administrative data in Sweden. Compared to using standard socio-demographic variables, the predictive power more than doubles when leveraging the rich data environment. The largest gains come from adding job seekers' employment history prior to becoming unemployed. Applying our prediction algorithm over the unemployment spell, we show that dynamic selection into LTU explains at least half of the observed decline in job finding. While the within-individual declines are small on average, we find substantial heterogeneity in the individual-level declines and thus reject the commonly used proportional hazard assumption. Applying our prediction algorithm over the business cycle, we find that the cyclicality in average LTU risk is not driven by composition but rather by within-individual cyclicality and that individual rankings are relatively persistent across years. Finally, we evaluate the implications of our findings for the value of targeting unemployment policies and how these change over the unemployment spell and the business cycle. |
| JEL: | E24 J64 J68 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30979&r=lab |
| By: | Grund, Christian (RWTH Aachen University); Sliwka, Dirk (University of Cologne); Titz, Krystina (RWTH Aachen University) |
| Abstract: | This paper analyzes the role of works councils as gatekeepers safeguarding employee's interests in the adoption of monitoring practices. We first introduce a formal model predicting that (i) the introduction of monitoring practices leads to a stronger increase (or weaker decrease) in job satisfaction when a works council is in place, (ii) that this effect should be larger the lower the prior level of employee participation and (iii) that works councils increase the likelihood of the implementation of monitoring practices at the level of individual employees. We provide evidence in line with these hypotheses using linked-employer-employee panel data from Germany. We indeed find that the adoption of formal performance appraisals and feedback interviews is associated with a significantly larger increase in job satisfaction when there is a works council. This pattern is driven by establishments without collective bargaining agreements. The evidence also suggests that works councils indeed facilitate the implementation of monitoring practices, as codetermined firms have a higher likelihood that a practice implemented on the firm level is actually applied by middle management. |
| Keywords: | works councils, codetermination, performance appraisal, feedback interview, job satisfaction, linked employer-employee data |
| JEL: | M5 J83 J28 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15956&r=lab |
| By: | David C. Grabowski; Jonathan Gruber; Brian McGarry |
| Abstract: | Although debates over immigration remain contentious, one important sector served heavily by immigrants faces a critical labor shortage: nursing homes. We merge a variety of data sets on immigration and nursing homes and use a shift-share instrumental variables analysis to assess the impact of increased immigration on nursing home staffing and care quality. We show that increased immigration significantly raises the staffing levels of nursing homes in the U.S., particularly in full time positions. We then show that this has an associated very positive effect on patient outcomes, particularly for those who are short stayers at nursing homes, and particularly for immigration of Hispanic staff. |
| JEL: | I11 I18 J61 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30960&r=lab |
| By: | Verlaat, Timo (Utrecht School of Economics); Todeschini, Federico (Pompeu Fabra University); Ramos, Xavier (Universitat Autònoma de Barcelona) |
| Abstract: | While unconditional cash transfers have been studied extensively in developing countries, little is known about their effects in a wealthier context. Through a randomized controlled trial, we study the employment effects of a generous and unconditional transfer targeting low-income families in Spain. Two years into the program, subjects assigned to treatment are 20 percent less likely to work than subjects assigned to a control group. Assignment to an activation plan does not attenuate adverse effects; a more lenient transfer withdrawal rate does. It appears that effects are driven by subjects with children, suggesting substitution of labour for care tasks. |
| Keywords: | welfare reform, cash transfer, basic income, policy evaluation, RCT |
| JEL: | C93 H53 I38 J64 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15976&r=lab |
| By: | Ulrika Ahrsj\"o; Ren\'e Karadakic; Joachim Kahr Rasmussen |
| Abstract: | Using harmonized administrative data from Scandinavia, we find that intergenerational rank associations in income have increased uniformly across Sweden, Denmark, and Norway for cohorts born between 1951 and 1979. Splitting these trends by gender, we find that father-son mobility has been stable, while family correlations for mothers and daughters trend upwards. Similar patterns appear in US survey data, albeit with slightly different timing. Finally, based on evidence from records on occupations and educational attainments, we argue that the observed decline in intergenerational mobility is consistent with female skills becoming increasingly valued in the labor market. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2302.14440&r=lab |
| By: | Park, Donghyun (Asian Development Bank); Shin, Kwanho (Korea University) |
| Abstract: | While there are growing concerns about population aging, some studies explore the possibility that population aging can give rise to a silver dividend that contributes to economic growth (ADB 2019). While the demographic dividend refers to the increase of the working-age population, the silver dividend points to increased longevity and longer working life as potential sources of growth in an aging society. Extending Lee and Shin (2021) to include developing countries, we examine the potential for a silver dividend by investigating the channels through which population aging affects economic growth. We find that lower total factor productivity growth is the main mechanism through which population aging harms economic growth. Labor shortage caused by population aging is mostly offset by higher labor force participation rates of males, females, and older workers. In particular, the labor force participation rate of the older people increases the most. |
| Keywords: | aging; growth; labor force participation; total factor productivity; silver dividend |
| JEL: | E20 J10 J21 O40 O47 |
| Date: | 2023–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0678&r=lab |
| By: | Boyan Zheng; Qiongshi Lu; Jason Fletcher |
| Abstract: | The causal effects of fertility are a central focus in the social sciences, but the analysis is challenged by the endogeneity of fertility choices. Earlier work has proposed several “natural experiments” from twin births or gender composition of earlier births to assess whether having more children affects adults’ outcomes, though there are limitations to using rare (twins) and weak (gender composition) instrumental variables for fertility. This paper proposes a new “natural experiment” approach to assessing the causal effects of fertility by measuring the combination of couples’ genetics in predicting fertility—a dyadic genetic instrumental variable, where the key idea (exclusion restriction) is that the interactions of the couple’s genetics that shift the likelihood of fertility is unknown to the couples. We use a nationally representative sample of couples to examine the long-lasting effects of fertility on older adults’ life outcomes, including labor market outcomes, personality traits, and subjective wellbeing. We find that fertility reduces females’ extraversion and years of working and some evidence indicates that fertility reduces both males’ and females’ lifetime number of jobs worked. |
| JEL: | J10 J13 J22 J29 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30955&r=lab |
| By: | Marius Klein; Ferdinand Rauch |
| Abstract: | We revisit the natural experiments of division and unification of Germany now that more time has passed and more data have become available. We show that local market access shocks are not symmetric in time. The negative shock to local market access following the division of Germany lead to a fast and strong downward adjustment of the size of West-German cities near the new border. In contrast, the positive shock of reunification did not lead to any change in their relative size, even three decades after the German reunification. |
| Keywords: | market access, iron curtain |
| JEL: | F15 J61 N94 R12 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10279&r=lab |
| By: | Emma van Inwegen; Zanele T. Munyikwa; John J. Horton |
| Abstract: | There is a strong association between the quality of the writing in a resume for new labor market entrants and whether those entrants are ultimately hired. We show that this relationship is, at least partially, causal: a field experiment in an online labor market was conducted with nearly half a million jobseekers in which a treated group received algorithmic writing assistance. Treated jobseekers experienced an 8% increase in the probability of getting hired. Contrary to concerns that the assistance is taking away a valuable signal, we find no evidence that employers were less satisfied. We present a model in which better writing is not a signal of ability but helps employers ascertain ability, which rationalizes our findings. |
| JEL: | M5 J0 J64 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30886&r=lab |
| By: | William N. Evans; Shawna Kolka; James X. Sullivan; Patrick S. Turner |
| Abstract: | Families in poverty face numerous barriers to establishing stable economic footing. This paper examines the effect of a holistic, individualized wrap-around service intervention on outcomes for low-income individuals. The intervention includes a detailed assessment, an individualized service plan, intensive case management administered by a two-person team with small caseloads, and temporary financial assistance used to overcome obstacles to self-sufficiency and incentivize behavior. We evaluate the intervention through a randomized controlled trial among participants seeking assistance at a local social service provider. Results indicate that the program improved labor market and housing outcomes two years after enrollment. Given the customized nature of the services, overall program effects might mask important heterogeneity. Exploratory analysis suggests the program helped employ participants who lacked employment but had stable housing, and that those without stable housing were helped in securing it. |
| JEL: | I30 I39 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30992&r=lab |
| By: | Danzer, Natalia (Free University of Berlin); Garcia-Torres, Sebastian (Freie Universität Berlin); Steinhardt, Max F. (Free University of Berlin); Stella, Luca (Free University of Berlin) |
| Abstract: | This study explores the relationship between women's representation in political power and school closures during the COVID-19 pandemic. Using a cross-country dataset in Europe, we document a striking negative relationship between the share of female members in national governments and school closures. We show that a one standard deviation increase in female members of national governments is associated with a reduction in the likelihood of school lockdowns by 24% relative to the average share of school closures. This result is robust to an extensive set of sensitivity checks. We attribute this pattern to a higher awareness of female politicians about the potential costs that school closures imply for families. |
| Keywords: | school closures, COVID-19, gender, political economy |
| JEL: | H52 I18 I20 J13 J16 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15975&r=lab |
| By: | Jonathan Gruber; Tuomas Kosonen; Kristiina Huttunen |
| Abstract: | We study the impacts of a policy designed to reward mothers who stay at home rather than join the labor force when their children are under age three. We use regional and over time variation to show that the Finnish Home Care Allowance (HCA) decreases maternal employment in both the short and long term. The effects are large enough for the existence of home care benefit system to explain the higher short-term child penalty in Finland than comparable nations. Home care benefits also negatively affect the early childhood cognitive test results of children, decrease the likelihood of choosing academic high school, and increase youth crimes. We confirm that the mechanism of action is changing work/home care arrangements by studying a day care fee reform that had the opposite effect of raising incentives to work – with corresponding opposite effects on mothers and children compared to HCA. Our findings suggest that shifting child care from the home to the market increases labor force participation and improves child outcomes. |
| JEL: | H31 J13 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30931&r=lab |
| By: | Abhay Aneja; Michael Luca; Oren Reshef |
| Abstract: | Is there consumer demand to support Black-owned businesses? To explore, we investigate the impact of a new feature on a large online platform that made the race of a set of Black business owners salient to customers. We find that this feature substantially increased demand for Black-owned businesses - in the form of more calls to the restaurant, more delivery orders, and - using cell phone data from a different platform - more in person visits to the restaurant. New customers to Black-owned businesses were more likely to be White customers - suggesting demand among White restaurant goers for Black-owned businesses. The gains for Black-owned businesses vary across geographically fine-grained measures of racial prejudice: we observe larger gains in areas with less anti-Black bias, as measured by implicit association tests. We also find suggestive evidence that the effects are stronger in predominately White, Democratic-leaning areas. |
| JEL: | J0 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30932&r=lab |
| By: | Hema Shah; Lisa A. Gennetian |
| Abstract: | Children represent the largest indirect beneficiaries of the U.S. social welfare system. Yet, many questions remain about the direct benefits of cash aid to children. The current understanding of the impacts of cash aid in the U.S. is drawn primarily from studies of in-kind benefits, tax credits, and conditional cash aid programs. A corresponding economics literature focuses on the labor supply responses of parents and the role of income, parenting skills, and early education as family investment mechanisms that reduce socioeconomic inequality in children’s well-being. In contrast to the U.S., dozens of low- to middle-income nations use direct cash aid—conditional or unconditional—as a central policy strategy, with demonstrated positive effects across a host of economic and health measures and selected aspects of children’s health and schooling. This paper reviews the economic research on U.S. safety net programs and cash aid to families with children and what existing studies reveal about its impacts on family investment mechanisms and children’s outcomes. We specifically highlight gaps in understanding the impacts of unconditional cash aid on children. We then review nine contemporary unconditional cash transfer programs and discuss their promise and limitations in filling the U.S.-based economic evidence gap about the impact of cash aid on children’s development. |
| JEL: | H31 H53 H75 I3 I38 J13 J18 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30965&r=lab |