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on Labour Economics |
| By: | Christian Merkl; Timo Sauerbier |
| Abstract: | Our paper analyzes the role of public employment agencies in job matching, in particular the effects of the restructuring of the Federal Employment Agency in Germany (Hartz III labor market reform) for aggregate matching and unemployment. Based on two microeconomic datasets, we show that the market share of the Federal Employment Agency as job intermediary declined after the Hartz reforms. We propose a macroeconomic model of the labor market with a private and a public search channel and fit the model to various dimensions of the data. We show that direct intermediation activities of the Federal Employment Agency did not contribute to the decline in unemployment in Germany. By contrast, improved activation of unemployed workers reduced unemployed by 0.8 percentage points. Through the lens of an aggregate matching function, more activation is associated with a larger matching efficiency. |
| Keywords: | Hartz reforms, search and matching, reform of employment agency |
| JEL: | E24 E00 E60 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10328&r=lab |
| By: | Almut Balleer; Georg Duernecker; Susanne Forstner; Johannes Goensch |
| Abstract: | Recent research documents mounting evidence for sizable and persistent biases in individual labor market expectations. This paper incorporates subjective expectations into a general equilibrium labor market model and studies the implications of biased expectations for wage bargaining, vacancy creation, worker flows and labor market policies. Importantly, we find that under the widely used period-by-period Nash bargaining protocol, the model generates a counterfactual relationship between workers’ job separation expectations and wages. Instead, a wage setting process with less frequent wage renegotiations is found to be empirically consistent. Moreover, we show that the presence of biased beliefs can qualitatively alter the equilibrium effects of labor market policies. Lastly, when allowing for biased firms’ beliefs, we establish that only the difference between firms’ and workers’ biases matters for the bargained wage but not the size of biases. |
| Keywords: | subjective expectations, labor markets, search and matching, bargaining, policy |
| JEL: | E24 J64 D84 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10341&r=lab |
| By: | Chadi, Adrian (University of Konstanz); Goerke, Laszlo (IAAEU, University of Trier) |
| Abstract: | Do trade unions benefit from economic crises by attracting new members among workers concerned about job security? To address this question, we provide a comprehensive empirical investigation based on panel data from Germany, where workers individually decide on their membership. We analyse whether exogenously manipulated perceptions of job insecurity encourage individuals to join a union. Firm-level workforce reductions serve as the first trigger of perceived job insecurity. Regional unemployment rates represent a second source of exogenous variation. Third, we propose a novel identification approach based on plant-closure-induced job losses of other workers in the same region. In each case, we exploit the longitudinal nature of the data to analyse the implications of changes in labour market conditions for changes in union membership using an instrumental-variable approach. We consistently find that perceived job insecurity, as triggered by labour market turmoil, increases the likelihood of individual union membership. Analysing data on media coverage about downsizing in a complementary investigation, we add further evidence to the notion of trade unions as beneficiaries of labour market crises. Finally, we consider workers who lose their jobs and find no evidence of adverse effects on union membership among those directly affected by the labour market situation. |
| Keywords: | job security, German Socio-Economic Panel, workforce reduction, trade union membership, regional labour markets, media coverage |
| JEL: | D84 J51 J63 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16035&r=lab |
| By: | Magda, Iga (Warsaw School of Economics); Cukrowska-Torzewska, Ewa (University of Warsaw); Palczyńska, Marta (Institute for Structural Research (IBS)) |
| Abstract: | Using data from "Generation and Gender Survey" for Poland, we study the relationship between women's relative income within the household, as measured by the female share of total household income, and women's involvement in housework. We find that households in which the woman contributes more to the total household income are more likely to share housework equally. We also find that individual gender norms matter both for women's involvement in unpaid work at home and for the observed link between the female share of income and inequality between the partners in the division of housework. Women from less traditional households are found to be more likely to share housework equally. However, this negative relationship between the female share of household income and female involvement in housework is not observed among more traditional couples. |
| Keywords: | household income, income inequality, housework, gender norms |
| JEL: | D10 D13 D31 J12 J16 J22 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16045&r=lab |
| By: | Gustafsson, Björn Anders (University of Gothenburg); Österberg, Torun (University of Gothenburg) |
| Abstract: | Moves into and out of privileged neighborhoods as well as moves into and out of disadvantaged neighborhoods in metropolitan Sweden are studied using register data on all moves by adults that took place between 2004 and 2006. Based on estimated multivariate models, we find that, for all four types of moves, age, education, household income, household composition and its changes, as well as labor market status and its changes, matter. However, in addition, where the person was born can matter, as, with some exceptions, foreign-born people are less likely than natives with the same characteristics to move into a privileged neighborhood. Furthermore, foreign-born are typically less likely than natives with the same characteristics to move out of the metropolitan regions. However, considerable heterogeneity in probabilities to move between those born in different categories of countries is found. Adults born in high-income countries are, in many cases, moving similarly to natives with the same characteristics, while this is typically not found among people born in low-income countries. The latter might be due to fewer assets, lesser social capital, discrimination in the housing market or in housing finance, or by choice. |
| Keywords: | residental mobility, neighbourhoods, immigrants, Sweden |
| JEL: | J15 J61 R23 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16044&r=lab |
| By: | Gregory Price; Angelino Viceisza |
| Abstract: | Historically Black colleges and universities are institutions that were established prior to 1964 with the principal mission of educating Black Americans. In this essay, we focus on two main issues. We start by examining how Black College students perform across HBCUs and non-HBCUs by looking at a relatively broad range of outcomes, including college and graduate school completion, job satisfaction, social mobility, civic engagement, and health. HBCUs punch significantly above their weight, especially considering their significant lack of resources. We then turn to the potential causes of these differences and provide a glimpse into the “secret sauce” of HBCUs. We conclude with potential implications for HBCU and non-HBCU policy. |
| JEL: | I21 J01 J15 Z13 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31131&r=lab |
| By: | David R. Agrawal; Kenneth Tester |
| Abstract: | Prior studies show that taxes matter for the residential locations of high-income earners. But, states raise a significant share of revenue from nonresidents. Using variation in state tax rates, we provide causal evidence on the effect of the net-of-tax rate on the location of labor supply for professional golfers. State taxes induce high-income earners to shift employment to low-tax states without a residence change. The elasticity of working in a state is 0.34, and consistent with superstar phenomenon, increases with earnings. Our results suggest a novel margin of mobility responses for top-earners: the spatial relocation of labor supply by nonresidents. |
| Keywords: | state taxes, superstars, taxing the rich, avoidance, mobility, high-frequency labor supply |
| JEL: | J22 J61 H26 H73 R50 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10353&r=lab |
| By: | Carlos Carrillo-Tudela; Ludo Visschers |
| Abstract: | This paper studies the extent to which the cyclicality of occupational mobility shapes that of aggregate unemployment and its duration distribution. We document the relation between workers' occupational mobility and unemployment duration over the long run and business cycle. To interpret this evidence, we develop a multi-sector business cycle model with heterogenous agents. The model is quantitatively consistent with several important features of the US labor market: procyclical gross and countercyclical net occupational mobility, the large volatility of unemployment and the cyclical properties of the unemployment duration distribution, among many others. Our analysis shows that occupational mobility due to workers; changing career prospects, and not occupation-wide differences, interacts with aggregate conditions to drive the fluctuations of the unemployment duration distribution and the aggregate unemployment rate. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2304.00544&r=lab |
| By: | Zuleika Ferre; Patricia Triunfo; Jos\'e-Ignacio Ant\'on |
| Abstract: | This paper examines the determinants of fertility among women at different stages of their reproductive lives in Uruguay. To this end, we employ time series analysis methods based on data from 1968 to 2021 and panel data techniques based on department-level statistical information from 1984 to 2019. The results of our first econometric exercise indicate a cointegration relationship between fertility and economic performance, education and infant mortality, with differences observed by reproductive stage. We find a negative relationship between income and fertility for women aged 20-29 that persists for women aged 30 and over. This result suggests that having children is perceived as an opportunity cost for women in this age group. We also observe a negative relationship between education and adolescent fertility, which has implications for the design of public policies. A panel data analysis with econometric techniques allowing us to control for unobserved heterogeneity confirms that income is a relevant factor for all groups of women and reinforces the crucial role of education in reducing teenage fertility. We also identify a negative correlation between fertility and employment rates for women aged 30 and above. We outline some possible explanations for these findings in the context of work-life balance issues and argue for the importance of implementing social policies to address them. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2304.00539&r=lab |
| By: | Vitellozzi, Sveva (University of Bologna); Giannelli, Gianna Claudia (University of Florence) |
| Abstract: | In low- and middle-income countries, differences between men and women in their time use patterns represent a major source of gender inequality. Among other factors, natural shocks can contribute to the widening of these differences. This paper examines the impact of the 2017 flood in Bangladesh on men's and women's time use patterns and women's empowerment. Using georeferenced and longitudinal data, we find that the flood decreased women's time spent on domestic work while increasing their engagement in paid activities and empowerment. In contrast, men spent less time at work and increased their participation in housework to substitute for women's domestic work. These responses to the shock are confirmed only for those individuals who were exposed to another flooding event that occurred in 2014. To better understand the underlying mechanisms, we look at the medium-term impact of the 2014 flood on women's empowerment and on their engagement in paid activities, and we find that the shock still positively affects both variables, suggesting that when endogenous, an increase in empowerment persists over time and influences reactions to the 2017 shock. |
| Keywords: | time allocation, time poverty, natural shocks, women's empowerment |
| JEL: | J16 J22 J43 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16030&r=lab |
| By: | Andrea Ariu; Tobias Müller; Tuan Nguyen |
| Abstract: | In this paper, we provide new explanations for the puzzling findings in the literature that migrants do not decrease natives’ wages, and that skilled immigration can actually increase them. We develop a model with regional labor markets and heterogeneous firms in which workers of different skill levels are imperfect substitutes, but for a given skill level, natives and migrants are perfect substitutes within a firm. In this setting, a skilled labor supply shock due to immigration has two consequences. First, it induces skill-intensive firms and skill-abundant regions to expand. These across-firm and across-region reallocations reduce the within-firm and within-region substitution between skilled and unskilled workers, thus limiting relative wage adjustments. Second, the average native’s wage can be partially sheltered from the negative effect of immigration depending on the geographical settlement patterns of immigrants. Both mechanisms make natives and migrants appear as imperfect substitutes at the aggregate level. Quantitatively, our simulations show that the negative impact of immigration on natives' wage is halved when the across-firm and across-region reallocation mechanisms are at work. Finally, both theory and simulations show that when these mechanisms are coupled with human-capital externalities that are skill-neutral at the firm level but skill-biased on aggregate, skilled immigration can increase absolute and relative skilled wages. Therefore, firm heterogeneity, local labor markets, and human-capital externalities are crucial for understanding the impact of immigration on natives’ wages. |
| Keywords: | immigration, firm heterogeneity, wages |
| JEL: | F22 J61 J31 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10344&r=lab |
| By: | David W. Berger; Kyle F. Herkenhoff; Andreas R. Kostøl; Simon Mongey |
| Abstract: | We contribute a theory in which three channels interact to determine the degree of monopsony power and therefore the wedge between a worker’s spot wage and her marginal product (henceforth, the wage markdown): (1) heterogeneity in worker-firm-specific preferences (nonwage amenities), (2) firm granularity, and (3) off- and on-the-job search frictions. We use Norwegian data to discipline each channel and then reproduce novel reduced-form empirical relationships between market concentration, job flows, wages and wage inequality. Our main exercise quantifies the contribution of each channel to income inequality and wage markdowns. The markdowns are 21 percent in our baseline estimation. Removing nonwage amenity dispersion narrows them by a third. Giving the next-lowest-ranked competitor a seat at the bargaining table narrows them by half. Removing search frictions narrows them by two-thirds. Each counterfactual shows decreased wage inequality and increased welfare. |
| JEL: | E02 J01 J42 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31149&r=lab |
| By: | David W. Berger; Thomas Hasenzagl; Kyle F. Herkenhoff; Simon Mongey; Eric A. Posner |
| Abstract: | While the labor market implications of mergers have been historically ignored as “out of market” effects, recent actions by the Department of Justice (DOJ) place buyer market power (i.e., monopsony) at the forefront of antitrust policy. We develop a theory of multi-plant ownership and monopsony to help guide this new policy focus. We estimate the model using U.S. Census data and demonstrate the model’s ability to replicate empirically documented paths of employment and wages following mergers. We then simulate a representative set of U.S. mergers in order to evaluate merger review thresholds. Our main exercise applies the DOJ and FTC’s product market concentration thresholds to local labor markets. Assuming mergers generate efficiency gains of 5 percent, our simulations suggest that workers are harmed, on average, under the enforcement of the more lenient 2010 merger guidelines and unharmed, on average, under enforcement of the more stringent 1982 merger guidelines. We also provide a framework for further research evaluating alternative concentration thresholds based on assumptions about the efficiency effects of mergers and the resource constraints of regulators. Finally, we provide guidance for using the Gross Downward Wage Pressure method for evaluating the impact of mergers on labor markets. |
| JEL: | D40 E20 H0 J0 K0 L0 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31147&r=lab |
| By: | Maria Bas (Université Paris 1 Panthéon-Sorbonne, Centre d'Economie de la Sorbonne); Pamela Bombarda (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: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:23007&r=lab |
| By: | Peter Q. Blair |
| Abstract: | When the fraction of minorities in a neighborhood exceeds the tipping point white flight accelerates. I develop a revealed-preference method to estimate the tipping points of 38, 000 census tracts and the preferences of households for minority neighbors in the 123 Metropolitan Statistical Areas (MSA) covered by these census tracts over 40 years (1970-2010). I find that the average tipping point in an MSA initially covaries more with the racial attitudes of households than the outside options that they face but that this relationship reverses overtime. Ignoring outside options would obscure the declining role that racial attitudes play in understanding segregation. |
| JEL: | J60 R21 R23 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31136&r=lab |