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on Labour Economics |
| By: | Eichhorst, Werner (IZA); Krause-Pilatus, Annabelle (IZA); Marx, Paul (University of Bonn); Dolls, Mathias (Ifo Institute for Economic Research); Lay, Max (Ifo Institute for Economic Research) |
| Abstract: | This paper studies the role of social policies in different European welfare states regarding minimum income protection and active inclusion. The core focus lies on crisis resilience, i.e. the capacity of social policy arrangements to contain poverty and inequality and avoid exclusion before, during and after periods of economic shocks. To achieve this goal, the papier expands its analytical focus to include other tiers of social protection, in particular upstream systems such as unemployment insurance, job retention and employment protection, as they play an additional and potentially prominent role in providing income and job protection in situations of crisis. A mixed-method approach is used that combines quantitative and qualitative research, such as descriptive and multivariate quantitative analyses, microsimulation methods and in-depth case studies. We find consistent differences in terms of crisis resilience across countries and welfare state types. In general, Nordic and Continental European welfare states with strong upstream systems and minimum income support (MIS) show better outcomes in core socio-economic outcomes such as poverty and exclusion risks. However, labour market integration shows some dualisms in Continental Europe. The study shows that MIS holds particular importance if there are gaps in upstream systems or cases of severe and lasting crises. |
| Keywords: | minimum income support, crisis resilience, unemployment insurance, job retention, welfare states |
| JEL: | J64 J65 J68 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16066&r=lab |
| By: | Dalle, Axana (Ghent University); Sterkens, Philippe (Ghent University); Baert, Stijn (Ghent University) |
| Abstract: | Many OECD countries invest heavily in labour-market programs to prolong careers. Although active labour-market programs designed for this purpose have frequently been evaluated, less is known about the employment impact of more passive regimes that make labour-market participation later in life feasible. This study focuses on the latter by investigating the hiring opportunities of senior job candidates who partake in a system that ensures older labour-market participants a company supplement in addition to unemployment benefits when they are dismissed. Therefore, we conduct a state-of-the-art scenario experiment in which 360 genuine recruiters evaluate fictitious job candidates who have spent varying durations unemployed in regimes with and without the company supplement. Because they evaluate candidates with respect to both hireability and productivity perceptions, we can identify the mechanisms at play. Overall, we find no evidence of employer-side stigma hindering the re-employment of older unemployed in the program. On the contrary, the longer-term unemployed even benefit – in terms of hiring chances – from partaking in this regime because it seemingly mitigates the regular stigmatisation of long-term unemployment, especially for men. More concretely, recruiters judge the long-term unemployed more mildly, especially with respect to perceived flexibility, when they receive the company supplement and still apply. |
| Keywords: | hiring discrimination, signalling effect, income support, labour market program, vignettes |
| JEL: | J71 J32 J14 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16057&r=lab |
| By: | Audrey Guo |
| Abstract: | Economic models assume that payroll tax burdens fall fully on workers, but where does tax incidence fall when taxes are firm-specific and time-varying? Unemployment insurance in the United States has the key feature of varying both across employers and over time, creating the potential for labor demand responses if tax costs cannot be fully passed on to worker wages. Using state policy changes and matched employer-employee job spells from the LEHD, I study how employment and earnings respond to payroll tax increases for highly exposed employers. I find significant drops in employment growth driven by lower hiring, and minimal evidence of pass-through to earnings. The negative employment effects are strongest for young and low-earning workers. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2304.05605&r=lab |
| By: | Alonso Alfaro-Urena; Benjamin Faber; Cecile Gaubert; Isabela Manelici; Jose P Vasquez |
| Abstract: | Multinational enterprises (MNEs) increasingly impose "Responsible Sourcing" (RS) standards on their suppliers worldwide, including requirements on worker compensation, benefits and working conditions. Are these policies just "hot air" or do they impact exposed suppliers and their workers? What is the welfare incidence of RS in sourcing countries? To answer these questions, we develop a quantitative general equilibrium (GE) model of RS and combine it with a unique new database. In the theory, we show that the welfare implications of RS are ambiguous, depending on an interplay between what is akin to an export tax (+) and a labor market distortion (-). Empirically, we combine the near-universe of RS rollouts by MNE subsidiaries in Costa Rica since 2009 with firm-to-firm transactions and matched employer-employee microdata. We find that RS rollouts lead to significant reductions in firm sales and employment at exposed suppliers, an increase in their salaries to initially low-wage workers and a reduction in their low-wage employment share. We then use the estimated effects and the microdata to calibrate the model and quantify GE counterfactuals. We find that while MNE RS policies have led to significant gains among the roughly one third of low-wage workers employed at exposed suppliers ex ante, the majority of low-wage workers lose due to adverse indirect effects on their wages and the domestic price index. |
| Keywords: | multinational enterprises, supply chains, low-wage workers, Costa Rica |
| Date: | 2023–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1909&r=lab |
| By: | Iga Magda (Institute for Structural Research, SGH Warsaw School of Economics, and IZA); Ewa Cukrowska-Torzewska (Faculty of Economic Sciences, University of Warsaw); Marta Palczyńska (Institute for Structural Research) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2023-10&r=lab |
| By: | Di Iasio, Valentina (University of Southampton); Wahba, Jackline (University of Southampton) |
| Abstract: | The recent so called Mediterranean refugee crisis has ignited concerns about the magnitude of the flows of asylum seekers to Europe. This paper examines the determinants of the destination choice of first time non-EU asylum applicants to the EU, between 2008-2020. It investigates the role played by policies related to employment rights, processing of asylum applications, attractiveness of the welfare system, economic factors and networks on the destination of asylum seekers within the EU. We find that the strongest pull factor for asylum seekers to a destination is social networks both in terms of previous asylum applicants as well as stock of previous migrants. Our findings also suggest that employment bans are not a strong deterrence for asylum seekers given their modest association to asylum flows. |
| Keywords: | asylum seekers, refugees, EU migration, employment ban |
| JEL: | F22 J61 J15 O52 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16085&r=lab |
| By: | Marie Connolly (Department of Economics, University of Quebec in Montreal); Marie Melanie (Department of Economics, University of Quebec in Montreal); Catherine Haeck (Department of Economics, University of Quebec in Montreal) |
| Abstract: | Having children has a sizeable impact on women’s labour outcomes, but not on men’s. The differential effects of children by gender are referred to as child penalties, and are now documented in many countries. In this paper, we exploit the Longitudinal and International Study of Adults to estimate Canadian child penalties in both earnings and employment for a period going from five years before the birth of the first child to 10 years after. Using an event study methodology (Kleven et al., 2019a), we find large and persistent negative effects of parenthood for mothers, but not fathers. Mothers’ earnings decrease by 49% the year of birth, with a penalty still at 34.3% 10 years after; the corresponding penalty in employment down 14.2%. We also document larger negative impacts of parenthood for women who had multiple children or those with a lower education level. We finally provide suggestive evidence that family policies such as parental leave and subsidized childcare may help reduce child penalties. |
| Keywords: | child penalties, family gap, Canada, family policies, subsidized childcare |
| JEL: | J13 J31 J38 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:grc:wpaper:23-02&r=lab |
| By: | Mathias Fjællegaard Jensen; Alan Manning |
| Abstract: | In Europe, the children of migrants often have worse economic outcomes than those with local-born parents. This paper shows that children born in Denmark with immigrant parents (first-generation locals) have lower earnings, higher unemployment, less education, more welfare transfers, and more criminal convictions than children with local-born parents. However, when we condition on parental socio-economic characteristics, first-generation locals generally perform as well or slightly better than the children of locals. Our results suggest that there is little distinctive about being a child of immigrants, other than the fact that they are more likely to come from deprived backgrounds. |
| Date: | 2023–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:1003&r=lab |
| By: | Rania Gihleb; Osea Giuntella; Jakub Lonsky |
| Abstract: | This study investigates the effects of the Deferred Action for Childhood Arrivals (DACA) on the living arrangements and housing behavior of undocumented immigrants in the U.S. Using an event-study approach and difference-in-differences (DID) estimates, we compared immigrants above and below eligibility cutoffs and demonstrated that, after the adoption of the policy in June 2012, DACA-eligible immigrants were less likely to live with their parents or in multigenerational households (-12.5%) and more likely to live independently (+15.5%). We also revealed that DACA-eligible immigrants were less likely to live in the same house (-2%) and more likely to quit ethnic enclaves (+8%). Notably, these patterns are not explained by the known effects of DACA on income and employment outcomes. Lower rental costs (-3%) may have facilitated this transition into adulthood and the observed trends in living arrangements. The DACA also led to a decline in marriage rates among DACA-eligible individuals, although we found no evidence of significant effects on cohabitation, divorce, and intermarriage. We also found no evidence of a clear impact on fertility. |
| JEL: | J13 J15 R20 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31117&r=lab |
| By: | Luis R. Diaz Pavez (Unversity of Goettingen); Inmaculada Martinez-Zarzoso (Unievrsity of Goettingen and Universidad Jaume 1) |
| Abstract: | In the XXI century, the labor market effects of automation have gained significant attention from scholars and policymakers alike. Concerns about potential negative effects are particularly relevant in emerging countries, where a rapid acceleration of robot adoption and an increasing involvement in global value chains have been observed in recent years, with the subsequent increase in exposure to foreign competition. This paper estimates the effect of local and foreign robots on labor market outcomes and labor shares using a panel dataset composed of 16 sectors and ten emerging countries from 2008 to 2014. The endogeneity of robots’ adoption is addressed with an instrumental variables approach and using a shift-share index of exposure to foreign robots. The main results for all sectors show that only foreign robot adoption, but not local, has affected employment, whereas no effects on the labor share are found. When exploring sectoral heterogeneity, we find that the foreign robots’ negative effect on employment has occurred in many sectors, being more prominent in those with higher exposure to foreign robots. Moreover, we found small and negative spillover effects of robots in other sectors on employment and wages in the newly industrialized countries examined. Finally, the results obtained when examining the sectoral heterogeneity of the effects show that the labor share is also affected in some sectors by both the use of robots in developed and emerging countries. |
| Keywords: | Automation, Robots, Labor markets, Inequality, Emerging countries |
| JEL: | F |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2023.01&r=lab |
| By: | Cipriani, Giam Pietro (University of Verona); Fioroni, Tamara (University of Verona) |
| Abstract: | We study an OLG model with child policies and a PAYG pension with endogenous retirement and fertility. The result of the planned economy is compared to the decentralized competitive equilibrium deriving optimal policies. We show that in the presence of a PAYG pension system, the optimal policy mix includes an education subsidy and a subsidy for the supply of labor in old age. Fertility should be taxed or incentivized depending on whether there is full or partial retirement, and on the parameters. We focus on the parameter reflecting the deterioration of human capital and show that a child tax may be required. |
| Keywords: | PAYG pensions, endogenous fertility, endogenous retirement, social security, education subsidies, human capital |
| JEL: | J13 H2 H8 H55 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16029&r=lab |
| By: | Domenico Buccella; Luciano Fanti; Luca Gori |
| Abstract: | In a Cournot duopoly with indirect taxes evasion, this paper counter-intuitively shows that, in the presence of unions, a higher indirect taxation may increase profits because taxes reduce wage claims. This result is likely to occur if the market size is adequately large and the detection probability is not too high. Moreover, unionisation 1) leaves unaltered the absolute while reduces the relative tax evasion; and 2) increases tax revenue. As consumer and social welfare are unaffected by taxation, the policy implication is that higher taxes (which are always revenue-enhancing) ultimately lead to a redistribution from wages to profits. |
| Keywords: | Tax Evasion, Sales Tax, Cournot duopoly, Unions |
| JEL: | H20 H25 H26 J5 |
| Date: | 2023–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2023/293&r=lab |
| By: | Christian Dustmann (University College London); Mikkel Mertz (Queen Mary University of London); Anna Okatenko (University College London) |
| Abstract: | Using an identification strategy based on random assignment of refugees to different municipalities in Denmark between 1986 and 1998, we find strong evidence that gang crime rates in the neighbourhood at assignment increase the probability of boys to commit crimes before the age of 19, and that gang crime (but not other crime) increases the likelihood of teenage motherhood for girls. Higher levels of gang crime also have detrimental and long-lasting effects, with men experiencing significantly higher levels of inactivity and women experiencing lower earnings and higher levels of welfare benefit claims at ages 19 to 28. |
| Keywords: | Crime spillovers, gang crime, teenage motherhood |
| JEL: | J1 K4 I3 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2304&r=lab |
| By: | Ricarda Duerst (Max Planck Institute for Demographic Research, Rostock, Germany); Jonas Schöley (Max Planck Institute for Demographic Research, Rostock, Germany); Christina Bohk-Ewald (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Accurate mortality forecasts are essential for decision makers to plan for changing needs of pension and other social security systems. Researchers have developed a variety of methods with increasing methodological complexity to forecast mortality developments. We introduce a method validation workflow designed for mortality forecasts. The aim of our workflow is to assess the suitability of forecast method depending on the prevailing mortality regime in the country of interest. For our analysis, we apply our workflow to short-term Lee-Carter forecasts for 24 countries to showcase different mortality regimes. We assess Lee-Carter's forecast performance on the life expectancy and lifespan disparity at birth. We show that the mortality regime in the country of interest plays a crucial role for the performance of a forecast method. Thus, our method validation workflow helps researchers to choose an appropriate mortality forecast method. |
| Keywords: | forecasts, mortality |
| JEL: | J1 Z0 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2023-020&r=lab |