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on Labour Economics |
| By: | Dohmen, Thomas (University of Bonn and IZA); Shvartsman, Elena (WHU Vallendar) |
| Abstract: | Working time autonomy is often accompanied by output-based incentives to counterbalance the loss of monitoring that comes with granting autonomy. However, in such settings, overprovision of effort could arise if workers are uncertain whether their performance suffices to secure the output-based rewards. Performance feedback can reduce or eliminate such uncertainty. We develop an experiment to show that overprovision of costly effort is more likely to occur in work environments with working time autonomy in the absence of feedback. A key feature of our design is that it allows for a clean measurement of effort overprovision by keeping performance per unit of time fixed, which we achieve by calibrating subjects' productivity on a real effort task ex ante. This novel design can serve as a workhorse for various experiments as it allows for exogenous variation of perfor-mance certainty (i.e., by providing feedback), working time autonomy, productivity, effort costs, and the general incentive structure. We find that subjects provide significantly more costly effort beyond a level necessary to meet their performance targets in the presence of uncertainty, i.e., the absence of feedback, which suggests that feedback shields workers from overprovision of costly effort. |
| Keywords: | working time autonomy, performance uncertainty, feedback provision, incentives, effort, subjective stress |
| JEL: | C91 D90 I10 J81 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16028&r=lab |
| By: | Humlum, Anders (University of Chicago Booth School of Business); Munch, Jakob R. (University of Copenhagen); Rasmussen, Mette (University of Copenhagen) |
| Abstract: | This paper examines if active labor market programs help unemployed job seekers find jobs using a novel random caseworker instrumental variable (IV) design. Leveraging administrative data from Denmark, our identification strategy exploits that (i) job seekers are quasi-randomly assigned to caseworkers, and (ii) caseworkers differ in their tendencies to assign similar job seekers to different programs. Using our IV strategy, we find assignment to classroom training increases employment rates by 25% two years after initial job loss. This finding contrasts with the conclusion reached by ordinary least squares (OLS), which suffers from a negative bias due to selection on unobservables. The employment effects are driven by job seekers who complete the programs (post-program effects) rather than job seekers who exit unemployment upon assignment (threat effects), and the programs help job seekers change occupations. We show that job seekers exposed to offshoring – who tend to experience larger and more persistent employment losses – also have higher employment gains from classroom training. By estimating marginal treatment effects, we conclude that total employment may be increased by targeting training toward job seekers exposed to offshoring. |
| Keywords: | unemployed workers, active labor market policy, classroom training, caseworker instrumental variable |
| JEL: | J08 J64 I21 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16033&r=lab |
| By: | Samuel Bazzi; Abel Brodeur; Martin Fiszbein; Joanne Haddad |
| Abstract: | This paper explores how historical gender roles become entrenched as norms over the long run. In the historical United States, gender roles on the frontier looked starkly different from those in settled areas. Male-biased sex ratios led to higher marriage rates for women and lower for men. Land abundance favored higher fertility. The demands of childcare, compounded with isolation from extended family as well as a lack of social and market infrastructure, constrained female opportunities outside the home. Frontier women were less likely to report “gainful employment, ” but among those who did, relatively more had high-status occupations. Together, these findings integrate contrasting narratives about frontier women—some emphasizing their entrepreneurial independence, others their prevailing domesticity. The distinctive frontier gender roles, in turn, shaped norms over the long run. Counties with greater historical frontier exposure exhibit lower female labor force participation through the 21st century. Time use data suggests this does not come with additional leisure but rather with more household work. These gender inequalities are accompanied by weaker political participation among women. While the historical frontier may have been empowering for some women, its predominant domesticity reinforced inegalitarian gender norms over the long run. |
| JEL: | J12 J13 J22 N31 N91 O15 P16 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31079&r=lab |
| By: | Honorata Bogusz (University of Warsaw, Faculty of Economic Sciences); Anna Matysiak (University of Warsaw, Faculty of Economic Sciences); Michaela Kreyenfeld (Hertie School) |
| Abstract: | Technological change and globalisation have been transforming the structure of labour demand in favour of workers performing cognitive tasks. Even though past research has found that labour force participation is an important determinant of fertility behaviour, few studies have addressed the fertility effects of the long-term structural changes of labour market. To fill this gap, we measure the cognitive task content of work at the occupation level using data from the Employment Survey of the German Federal Institute for Vocational Education and Training (BiBB). We link this contextual information with employment and fertility histories of women and men from the German Socio-Economic Panel 1984-2018 (GSOEP). With event history models, we find that fertility transitions of men working in occupations characterised by high cognitive task intensity are accelerated. We also observe elevated birth risks among women in occupations requiring cognitive labour. However, this pattern is more ambiguous, as we find that non-working women also experience elevated birth rates. |
| Keywords: | structural labour market change, cognitive work, task content of work, fertility, Germany |
| JEL: | J01 J11 J13 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2023-08&r=lab |
| By: | Konstantins Benkovskis (Latvijas Banka); Olegs Tkacevs (Latvijas Banka); Karlis Vilerts (Latvijas Banka) |
| Abstract: | This paper studies the employment effect of the job retention scheme implemented during the Covid-19 pandemic. Using firm-level data from Latvia, we investigate whether a change in the number of employees in firms that received support from the job retention programme has been different from that of similar firms which did not receive such support, and whether these differences have disappeared over time. We find strong evidence that job retention scheme participants in Latvia were less likely to cut employment and that this effect persisted for several months after receiving support. Participation in the job retention scheme affected both the likelihood of a firm’s survival and the rate at which employees were laid off. Our results also suggest that the participation effect was not uniform across firms, with the effect being less pronounced in service sectors with a higher level of contact intensity and more pronounced in sectors with a higher proportion of highly skilled employees. |
| Keywords: | Job retention schemes, idle-time allowance, Covid-19, employment |
| JEL: | E24 H12 J62 J68 |
| Date: | 2023–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:ltv:wpaper:202303&r=lab |
| By: | Bils, Mark (University of Rochester); Kudlyak, Marianna (Federal Reserve Bank of San Francisco); Lins, Paulo (University of Rochester) |
| Abstract: | Typical measures of wages, such as average hourly earnings, fail to capture cyclicality in the effective cost of labor in the presence of (i) cyclical fluctuations in the quality of worker-firm matches, or (ii) wages being smoothed within employment matches. To address both concerns, we estimate cyclicality in labor's user cost exploiting the long-run wage in a match to control for match quality. Using NLSY data for 1980 to 2019, we identify three channels by which hiring in a recession affects user cost: It lowers the new-hire wage; it lowers wages going forward in the match; but it also results in higher subsequent separations. All totaled, we find that labor's user cost is highly procyclical, increasing by more than 4% for a 1 pp decline in the unemployment rate. For large recessions, like the Great Recession, that implies a decline in the price of labor of about 15%. |
| Keywords: | wages, cyclicality, wage rigidity |
| JEL: | E24 E32 J30 J41 J63 J64 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16024&r=lab |
| By: | Marco Ceccarelli (Maastricht University - Department of Finance); Christoph Herpfer (Emory University - Goizueta Business School); Steven Ongena (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)) |
| Abstract: | Using data from the US syndicated loan market, we find women to be underrepresented among senior commercial bankers. This gap persists due to unequal promotion rates for men and women at the same institution in the same year, and cannot be explained by different individual or managerial performance. The gap is influenced more by individuals than by institutions, with senior bankers showing assortative matching when changing jobs, and perpetuating the gender gap from their previous workplace. Our findings suggest that the gender gap may be partially attributable to women taking on more family care responsibilities. Hard credentials or female leadership at the top of banks do not alleviate the gender gap, but targeted gender discrimination lawsuits and female leadership on the local level result in increased promotion of women. |
| JEL: | D22 G21 G32 J01 J71 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2323&r=lab |
| By: | Irastorza-Fadrique, Aitor (University of Essex); Levell, Peter (Institute for Fiscal Studies, London); Parey, Matthias (University of Surrey) |
| Abstract: | We use large-scale panel data from linked decadal censuses in England and Wales to study the responses of both individuals and their partners to rising Chinese import competition in the 2000s. We test whether partners provide insurance against lost household earnings by increasing labour supply. We find that both own and partner responses to the shock vary significantly by gender. Men in households exposed to import competition respond by increasing labour force participation at older ages, and by moving into solo self-employment. This is true both in response to their own trade exposure, and as an 'added worker effect' when their partner is exposed to the shock. By contrast, we find no such response for women, who do not increase labour supply if their male partners were initially employed in exposed industries. In general, self-employment appears to act as an employment buffer for men but not women. The impacts of import competition on partnering and family dissolution also differ according to the gender of those affected: for women below 45, but not men, exposure to the trade shock reduces the likelihood of divorce and of living with a new partner. Overall, our findings underscore the importance of investigating household responses, and the self-employment margin, to fully understand the effects of trade shocks. |
| Keywords: | import competition, families, labour supply, added-worker effects |
| JEL: | D10 F14 F16 F61 J12 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16032&r=lab |
| By: | Haroon BHORAT; Timothy KÖHLER; David de VILLIERS |
| Abstract: | Persistently high unemployment has plagued South Africa over the last few decades, while concurrently there has been a dearth of state-provided income support to the working-age economically active population. In response to the pandemic the government introduced the COVID-19 Social Relief of Distress grant – the country’s first unconditional cash transfer targeted at the unemployed. At the time of writing, however, no causal evidence of the grant’s effects exist. We adopt a doubly robust, semi-parametric Difference-in-Differences approach on representative panel labour force data to estimate the contemporaneous and cumulative causal effects of the grant on labour market outcomes. We find robust evidence that the grant increased average employment probabilities by approximately 3 percentage points, an effect largely driven by wage and formal sector employment. Employment effects vary by duration of receipt, with larger effects estimated for the short-term which reduce to zero with additional periods of receipt. We additionally find marginally significant effects on the probability of trying to start a business, but no evidence of any effects on job search. These findings suggest that the grant has performed a multi-purpose role in providing income relief while also enabling a path towards more favourable labour market outcomes. |
| Keywords: | Afrique du Sud |
| JEL: | Q |
| Date: | 2023–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:avg:wpaper:en15283&r=lab |
| By: | Conceição, Otavio; Oliveira, Rodrigo; Souza, André Portela |
| Abstract: | This paper investigates the impact of the Science without Borders (Ciência sem Fronteiras - CSF) program on participants’ post-graduation enrollment, employment, and entrepreneurship. The program was launched in 2011 to increase students’ human capital and interest in science and postgraduate education studies through a substan tial increase in scholarships for Brazilians to carry out part of their undergraduate studies abroad. We exploit variation in the approval rate across CSF selection calls for the same destination country and year and combine seventeen public and private administrative records to track CSF candidates’ outcomes up to eight years after the call. The main results suggest that the program did not achieve its goals of in creasing approved student enrollment in postgraduate education programs in Brazil. Even though the program could have improved student skills and acted as a market signaling, we do not find effects on the probability of working in the formal labor market, or as formal entrepreneurs. Using detailed data from one top university, we show that approved students graduate more often, but take longer to graduate, which may have negative impacts on their labor market outcomes. Finally, although we cannot rule out that students moved to a foreign country after the program, we show that the likelihood of this event may have decreased over time. |
| Date: | 2023–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:562&r=lab |
| By: | Wookun Kim (Southern Methodist University) |
| Abstract: | What are the aggregate welfare consequences of fiscal transfers across local governments that finance their spending? Answering these questions requires understanding of how much people value local public spending. I develop a spatial equilibrium framework in which people's simultaneous migration and commuting choices reveal preferences. I combine this framework with unique data from South Korea and tax reforms as a source of exogenous variation. The estimated mobility responses imply that workers value an additional dollar of per-capita local government spending by 75 cents of their after-tax income. The general-equilibrium counterfactuals imply that a fiscal arrangement with lower redistribution would result in aggregate gains. A key aspect of my analysis is that bilateral migration and commuting decisions are made jointly. Ignoring any of these margins biases the estimates of preferences for public goods, and of distance elasticities of migration or commuting which play a central role in quantitative spatial models. |
| Keywords: | local public finance, redistribution, gravity equation, migration, commuting, quan-titative spatial model |
| JEL: | H3 H77 J61 R12 R13 R5 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:2305&r=lab |
| By: | Pamela Bombarda; Maria Bas (Université de Cergy-Pontoise, THEMA) |
| Abstract: | This work investigates the role of input-trade liberalization on labor allocation between informal and formal employment in Mexico. Using individual household data for Mexico (1993-2001), we exploit exogenous input tariff changes applied to United States (U.S.) products when Mexico enters the North American Free Trade Agreement (NAFTA) in 1994. The theoretical mechanisms considered are the foreign input cost reduction that increases revenues in the formal sector and the foreign input-skilled biased channel, such that input-trade liberalization induces the reallocation of workers from informal to formal firms. Our findings confirm these mechanisms: individuals working in manufacturing industries experiencing the average reduction in input tariffs (12 percentage points) are almost 4 percent more likely to work in formal rather than informal occupations. This effect is concentrated on high-skilled workers which reinforces the input-skilled biased complementarity channel. |
| Keywords: | informal and formal employment, trade liberalization, household data |
| JEL: | F12 F16 O14 J16 O17 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2023-02&r=lab |
| By: | Whelan, Adele (ESRI, Dublin); Devlin, Anne (ESRI, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin) |
| Abstract: | Are individuals living in distinct urban or rural settings more likely to experience barriers to social inclusion? If so, what are the nature of the barriers that they face? Using a unique administrative dataset for Ireland's dominant social inclusion programme, this paper examines the effect of location on the incidence of barriers to social inclusion. We find that some forms of social exclusion, particularly those which are related to economic exclusion, are more prevalent for those in independent urban towns compared to cities, commuter towns or rural areas, even after controlling for area-level deprivation. The results suggest that existing policy, which has traditionally focused on tackling social disadvantage in the most urban or rural areas, is not well targeted and would benefit from having a wider spatial focus. |
| Keywords: | social inclusion, urban disadvantage, community economic development, jobless household, lone parents, disability, homelessness, ethnic minority |
| JEL: | R10 R58 P25 J15 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16052&r=lab |
| By: | Purva Khera (International Monetary Fund); Ratna Sahay (International Monetary Fund); Sumiko Ogawa (International Monetary Fund); Mahima Vasishth (University of California); Ratna Sahay (International Monetary Fund) |
| Abstract: | While digital financial services have made access to finance easier, faster, and less costly, helping to broaden digital financial inclusion, its impact on gender gaps varies across countries. Moreover, women leaders in the fintech industry, although growing, remain scarce. This paper explores the interaction between ‘women’ and ‘fintech’ by examining: (i) the role of women leaders on firm-level performance in the fintech industry; and (ii) the determinants of gender gaps in the usage of digital services to better understand the crosscountry differences. Results indicate that greater gender diversity in the executive board is associated with better performance of fintech firms. With regard to determinants of the gender gaps in the usage of digital financial services, we find that higher financial and digital literacy of women is associated with lower gender gaps in digital financial inclusion, and that socio-cultural factors also play a key role. |
| Keywords: | Firm performance, Women leaders, Digital financial inclusion, Financial literacy, Digital literacy |
| JEL: | J16 L25 G53 |
| Date: | 2023–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:nca:ncaerw:146&r=lab |