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on Labour Economics |
| By: | Poschke, Markus (McGill University) |
| Abstract: | Poor countries have low wage employment and high self-employment. This paper shows that they also have high unemployment relative to wage employment, and that self-employment increases with this ratio. To understand the sources of these patterns, I build a search and matching model with choice between job search and self-employment and with learning about matches, and calibrate it to match all transition rates between wage employment, unemployment and self-employment as well as separation hazards by job duration, separately for all 37 countries with available data. Quantitative analysis of the model shows that labor market frictions affect self-employment as much as unemployment. Labor market frictions also reduce aggregate output, not only by raising unemployment, but also by worsening the average quality of both wage employment matches and active self-employment projects. |
| Keywords: | wage employment, unemployment, self-employment, labor market frictions, occupational choice, productivity |
| JEL: | O11 E24 J64 L26 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16271&r=lab |
| By: | Haeck, Catherine (University of Montreal); Laliberté, Jean-William (University of Calgary) |
| Abstract: | This paper uses Census microdata linked with tax records to quantify the contribution of career choices - occupations and fields of study - to intergenerational income mobility. We document substantial segregation into occupations by parental income. Yet, the occupations children pursue explain only a third of the intergenerational persistence of income. We further describe patterns of intergenerational occupational following and show they vary substantially across occupations, with low-paying occupations showing more persistence across generations on average. However, clustering into occupations based on parental income is mostly independent of parental occupations. Our results demonstrate that occupational persistence only weakly contributes to income immobility. |
| Keywords: | intergenerational mobility, occupational choice, income inequality |
| JEL: | J62 J24 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16273&r=lab |
| By: | Bertoni, Marco (University of Padova); Chattopadhyay, Debdeep; Gu, Yuanyuan (Macquarie University, Sydney) |
| Abstract: | We study physicians' migration intentions by undertaking a Discrete Choice Experiment with senior Italian medical students. Using the mixed logit models, we estimate how much income students are willing to forego for various job characteristics, including the job location. We find that future doctors are willing to sacrifice €13, 500/year on average to remain in their home country. Those with higher willingness to take risks, competitiveness, cognitive skills and altruism levels are more likely to migrate abroad, with implications for the quality of future doctors remaining in their home country. Furthermore, the valuations of several job characteristics differ substantially for jobs located in the home country or abroad, informing the design of job contracts that shall help retain young doctors. |
| Keywords: | brain drain, medical workforce, job design, personality traits, discrete choice experiments |
| JEL: | F66 I18 J08 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16243&r=lab |
| By: | Brainerd, Elizabeth (Brandeis University); Malkova, Olga (University of Kentucky) |
| Abstract: | Can a policy intervention in the stressful first year after a birth affect marital stability? We examine this question using a large expansion in maternity benefits in 1982 in the Baltic countries of Estonia, Latvia and Lithuania. The program provided partially paid leave until the child's first birthday and included a small cash payment at birth. We use individual-level panel data and compare the Baltics with similar East European countries using a difference-indifferences framework. Maternity benefits decrease divorce within the first year after birth. This decrease persists for at least a decade, indicating that couples avoided divorce altogether rather than simply delaying it. While mothers extended their leave by several months, they returned to full-time work afterwards, consistent with egalitarian gender norms in the labor market. |
| Keywords: | marriage, divorce, marital stability, maternity benefits, Baltics, Eastern Europe |
| JEL: | J12 J16 J18 P2 P3 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16238&r=lab |
| By: | Johannes Kunz (Monash University) |
| Abstract: | We study the effect of reducing welfare assistance on migrants’ long-term integration in Australia. The policy postponed a migrant’s eligibility for benefits during their first two years in the country. It mainly affected mothers and was announced after their arrival. Using a regression discontinuity design and 21 years of administrative welfare data, we find significant reductions in welfare receipt, where the gap widened over time, and stabilized in the long run. Benefit receipt amounts reduced by 28%, and time-on-benefits by 19%, particularly in the unemployment and disability categories. We observe larger treatment effects for mothers from disadvantaged backgrounds. |
| Keywords: | Welfare reform, labor market outcomes, migration, job quality |
| JEL: | E64 I30 J60 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:mhe:chemon:2023-05&r=lab |
| By: | Bütikofer, Aline (Dept. of Economics, Norwegian School of Economics and Business Administration); Dalla-Zuanna, Antonio (Bank of Italy); Salvanes, Kjell Gunnar (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | This paper studies the consequences of the buildup of a new economic sector—the Norwegian petroleum industry—on investment in human capital. We assess both short-term and long-term effects for a broad set of educational margins, by comparing individuals in regions exposed to the new sector with individuals in unexposed regions. Importantly, we analyze how the effects and the mechanisms change as the sector develops. Our results indicate that an initial increase in the high school dropout rate is short-lived both because dropouts get their degrees later as adults, and because later-born cohorts adapt to the new needs of the industry by enrolling more in vocational secondary education. We also observe a decrease in academic high school and college enrollment except for engineering degrees. Financial incentives to both completing high school and field of study, are the most likely channels driving these effects. |
| Keywords: | Natural Resources; Education; Petroleum |
| JEL: | I20 J10 |
| Date: | 2023–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2023_015&r=lab |
| By: | Antonela Miho; Martin Borowiecki; Jens Høj |
| Abstract: | This paper provides evidence on the effects of digitalisation on the labour market in Slovenia using a unique dataset of Slovenian workers and firms for the years 2016 to 2020. Results show that at the firm level, digitalisation – measured in terms of ICT investment, is associated with positive and statistically significant effects on employment. However, job growth is not evenly distributed: High-skilled workers and younger workers benefit the most from employment gains, whereas there is little to no employment increases for low- and medium-skilled workers and older workers aged 50 or more. Furthermore, employment effects from digitalisation are strongest for private manufacturing firms. In contrast, ICT investment by state-owned firms is not associated with employment gains. |
| Keywords: | employment, ICT investment, labour reallocation, wages |
| JEL: | E22 E24 J62 O33 |
| Date: | 2023–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1767-en&r=lab |
| By: | Yoshitaka Ogisu (Graduate School of Economics, Kobe University and Junir Research Fellow, Research Institute for Economics & Business Administration (RIEB), Kobe University, JAPAN) |
| Abstract: | Social networks certainly play an important role in labor market outcomes. In particular, the structures affect inter-group inequality via referral hiring. Through the network effects, while workers surely get premiums from the group to which they belong, they may get premiums or penalties from other groups than their own. Young workers do not obtain sufficient network premiums since referrals cannot be used well due to the higher unemployment rates of their friends. As time goes by, the network structure of each generation of course changes. In other words, not only premiums from their own network group but also those from the other network groups, or the spillovers from other generations, change over time. However, these changes in intra- and inter-group network effects have been rather overlooked so far. In this paper, we compute the network premiums for each generation in a search and matching model, and clarify which generation benefits the most from time-varying networks called temporal networks. New connections are generated proportional to the number of friends of each worker over time, while the existing connections are broken at a constant rate. Under this setting, workers get premiums or penalties depending on their network structures. On average, workers receive premiums from the overall network effects although they incur penalties from their network structures in wage and unemployment rates. |
| Keywords: | Referral hiring; Temporal network; Network structure; Intergenerational inequality |
| JEL: | E24 J31 J64 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2023-13&r=lab |
| By: | Mark Keese; Luca Marcolin |
| Abstract: | This study sets out a conceptual framework to analyse the impact of climate change and greenhouse gases mitigation efforts on the labour market, migration flows and people’s health, as well as the most important policy levers that can cushion potential negative impacts and maximise opportunities from the climate transition. |
| JEL: | I18 J08 J2 Q52 Q54 F22 |
| Date: | 2023–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:295-en&r=lab |
| By: | Michael Kuhn (International Institute for Applied Systems Analysis (IIASA)); Antonio Minniti (Department of Economics, University of Bologna); Klaus Prettner (Department of Economics, Vienna University of Economics and Business); Francesco Venturini (Department of Economics, University of Perugia) |
| Abstract: | Despite an increasing recognition of the importance of health for economic growth, there is still a lack of understanding of the role of medical innovation in this process. Specifically, what are the causal effects of medical innovation on economic growth and which non-linearities matter in this context? To answer these questions, we propose an R\&D-based economic growth model with overlapping generations in which life expectancy depends on health care utilization per capita and on medical innovation and test the model's implications empirically. We show that a causal pathway from medical innovation to economic growth prevails with life expectancy being an important transmission mechanism. Non-linearities matter in the following way: in early stages of development, medical innovation does not have a positive effect on economic growth, whereas in intermediate stages, a positive and significant effect emerges. In late stages of development, when life expectancy is already very high, the effect becomes weaker and potentially negative because health improvements are increasingly difficult to achieve and become ever more resource intensive. |
| Keywords: | Medical innovation, industrial innovation, life expectancy, health, economic growth |
| JEL: | I15 J11 O41 O47 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp342&r=lab |
| By: | Vitor Costa |
| Abstract: | I use matched employer-employee records merged with corporate tax information from 2003 to 2017 to estimate labor market-wide effects of mergers and acquisitions in Brazil. Labor markets are defined by pairs of commuting zone and industry sector. In the following year of a merger, market size falls by 10.8%. The employment adjustment is concentrated in merging firms. For the firms not involved in M&As, I estimate a 1.07% decline in workers earnings and a positive, although not significant, increase in their size. Most mergers have a predicted impact of zero points in concentration, measured by the Herfindahl-Hirschman Index (HHI). I spillover firms, earnings decline similarly for mergers with high and low predicted changes in HHI. Contrary to the recent literature on market concentration in developed economies, I find no evidence of oligopsonistic behavior in Brazilian labor markets. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.08797&r=lab |
| By: | Pignatti, Clemente (ILO International Labour Organization); Parolin, Zachary (Bocconi University) |
| Abstract: | Mental health conditions have worsened in many countries in recent decades. The provision of unconditional cash transfers may be one effective policy strategy for improving mental health, but causal evidence on their efficacy is rare in high-income countries. This study investigates the mental health consequences of the 2021 Child Tax Credit (CTC) expansion, which temporarily provided unconditional and monthly cash support to most families with children in the United States (US). Using data from the Behavioral Risk Factor Surveillance System, the largest health-related survey in the US, we exploit differences in CTC benefit levels for households with younger versus older children. More generous CTC transfers are associated with a decrease in the number of reported bad mental health days. The effect materializes after the third monthly payment and disappears when the benefits are withdrawn. The CTC's improvement of mental health is larger for more credit-constrained individuals, including low-income households, women, and younger respondents. |
| Keywords: | child tax credit, mental health, public policy |
| JEL: | H51 I18 J18 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16237&r=lab |
| By: | Michael Wyrwich (University of Groningen, and Friedrich Schiller University Jena); Michael Fritsch (Friedrich Schiller University Jena) |
| Abstract: | Mounting empirical evidence shows that regional differences of entrepreneurship are persistent over long periods of time that may reflect the prevalence of an entrepreneurial culture. We explore three important mechanisms behind the transmission of such an entrepreneurial culture. First, we analyze the role model effects at the household level. We hypothesize that the larger the households of self-employed, the greater the opportunities for role model effects such as an intergenerational transfer of entrepreneurial values and attitudes, and hence the higher the regional start-up rate in later periods. Second, we investigate how the economic success of regional entrepreneurs fuels the role model effects. Third, we analyze if and to what extent the economic success in of regional entrepreneurship stimulates a collective memory of historical entrepreneurship that spurs self-employment in later periods. The analysis of entrepreneurship in German regions over a period of more than 90 years provides support for the significance of all three transfer channels. |
| Keywords: | Entrepreneurship, intertemporal transfer, regional trajectories |
| JEL: | L26 R11 O15 J1 |
| Date: | 2023–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2023-006&r=lab |
| By: | Doyle, Matthew; Skuterud, Mikal; Worswick, Christopher |
| Abstract: | In the hope of addressing chronic labour shortages and sluggish economic growth, the Canadian government plans to increase immigration in the coming years to per capita levels not reached since the 1920s. We argue that economic immigration in the Canadian context should aim to boost GDP per capita in the full population including the newcomers. We then examine the potential for increases in Canadian immigration levels to achieve this objective. Our analysis suggests that Canada is not well-positioned to leverage heightened immigration to boost GDP per capita owing primarily to weak capital investment and quantity-quality tradeoffs in immigrant selection. We conclude by providing a framework for identifying the optimal level of economic immigration. |
| Keywords: | Immigration, economic growth, human capital |
| JEL: | J61 F22 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:clefwp:58&r=lab |