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on Labour Economics |
| By: | Evan K. Rose; Yotam Shem-Tov |
| Abstract: | We study the long-run consequences of losing a low-wage job using linked employer-employee wage records and household surveys. For full-time workers earning $15 per hour or less, job loss due to an idiosyncratic, firm-wide contraction generates a 13% reduction in earnings six years later and over $40, 000 cumulative lost earnings. Most of the long-run decrease stems from reductions in employment and hours as opposed to wage rates: job losers are twice as likely to report being unemployed and looking for work. By contrast, workers initially earning $15-$30 per hour see comparable long-run earnings losses driven primarily by reductions in hourly wages. Calibrating a dynamic job ladder model to the estimates implies that the rents from holding a full-time $15 per hour job relative to unemployment are worth about $20, 000, more than seven times monthly earnings. |
| JEL: | J01 J64 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31447&r=lab |
| By: | Ahammer, Alexander (University of Linz); Packham, Analisa (Vanderbilt University) |
| Abstract: | We estimate the returns to more targeted disability insurance (DI) programs in terms of labor force participation, program spillovers, and worker health. To do so, we analyze workers after a workplace injury that experience differential levels of application screening. We find that when workers face stricter screening requirements, they are less likely to receive DI benefits and are more likely to remain in the labor force. We observe no differences in any physical or mental health outcomes. Our findings imply that imposing stricter DI screening has large fiscal benefits but does not yield any detectable health costs, on the margin. |
| Keywords: | disability insurance, retirement, health |
| JEL: | I38 I18 J18 J16 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16235&r=lab |
| By: | Kunz, Johannes S. (Monash University); Zhu, Anna (RMIT 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: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16285&r=lab |
| By: | Drozd, Mark (Johns Hopkins University); Moffitt, Robert A. (Johns Hopkins University); Zhao, Xinyu (Johns Hopkins University) |
| Abstract: | The recession induced by the COVID-19 pandemic resulted in major declines in employment of women, both from the demand side as firms reduced employment and from the supply side resulting from school closures and the closing of many child care facilities. We provide projections of possible impacts of this reduction on less-educated women's future human capital framed within the traditional Mincerian model that implies that wage growth falls if a recession reduces the growth of work experience. We develop a new and modified form of the Mincerian log wage equation which we argue captures the effect of women's work experience on their human capital in a way superior to the traditional form of that equation. Using that modified form, we estimate the impact of recession-induced loss of work experience on wages. Our model, estimated on pre-COVID data, incorporates special features anticipated to be of importance in the pandemic, including the degree to which negative aggregate shocks occur to pandemic-specific industries, whether the impact of shocks varies by telecommuting occupation, and how the impact varies with the presence of preschool and school-age children who are affected by school and child-care facility closures. We find that wage losses one year out from 2020 are relatively modest on average, generally less than one percent, with the largest for married women without children in the home. But losses are greater for married women at young ages, mothers with very young children, and for those working in COVID-impacted industries. School and child care closures increase projected negative wage impacts for married mothers by an additional 50 percent. |
| Keywords: | COVID-19, human capital, unemployment, female labor supply |
| JEL: | J16 J22 J24 J64 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16277&r=lab |
| By: | Stefano Piasenti (HU Berlin); Marica Valente (University of Innsbruck); Roel van Veldhuizen (Lund University); Gregor Pfeifer (University of Sydney) |
| Abstract: | How do men and women differ in their persistence after experiencing failure in a competitive environment? We tackle this question by combining a large online experiment (N=2, 086) with machine learning. We find that when losing is unequivocally due to merit, both men and women exhibit a significant decrease in subsequent tournament entry. However, when the prior tournament is unfair, i.e., a loss is no longer necessarily based on merit, women are more discouraged than men. These results suggest that transparent meritocratic criteria may play a key role in preventing women from falling behind after experiencing a loss. |
| Keywords: | competitiveness; gender; fairness; machine learning; online experiment; |
| JEL: | C90 D91 J16 C14 |
| Date: | 2023–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:410&r=lab |
| By: | Bütikofer, Aline (Norwegian School of Economics); Dalla-Zuanna, Antonio (Bank of Italy); Salvanes, Kjell G. (Norwegian School of Economics) |
| 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: | human capital, labor markets and school enrollment, education, skill-biased technical change |
| JEL: | I J |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16286&r=lab |
| By: | Ran Abramitzky; Leah Platt Boustan; Elisa Jácome; Santiago Pérez; Juan David Torres |
| Abstract: | We combine full-count Census data (1850–1940) with Census/ACS samples (1950–2020) to provide the first nationally representative long-run series (1850–2020) of incarceration rates for immigrants and the US-born. As a group, immigrants had higher incarceration rates than US-born white men before 1870, similar rates between 1880-1950, and lower rates since 1960. Although there are substantial differences in incarceration by origin country, the relative decline in incarceration since 1960 occurred among immigrants from all sending regions. This decline cannot be explained by changes in immigrants’ observable characteristics or immigration policy, but may reflect immigrants’ resilience to economic shocks. |
| JEL: | K4 N31 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31440&r=lab |
| By: | Brian Burgoon; Gregorio Buzzelli; Francesco Nicoli; Stefano Sacchi |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:node_9253&r=lab |
| By: | Clark, Andrew E. (Paris School of Economics); Cotofan, Maria (King's College London) |
| Abstract: | It is well-known that the wealthier are more likely to have Right-leaning political preferences. We here in addition consider the role of the individual's starting position, and in particular their upward social mobility relative to their parents. In 18 waves of UK panel data, both own and parental social status are independently positively associated with Rightleaning voting and political preferences: given their own social status, the upwardly-mobile are therefore more Left-wing. We investigate a number of potential mediators: these results do not reflect the relationship between well-being and own and parents' social status, but are rather linked to the individual's beliefs about how fair society is. |
| Keywords: | social mobility, voting, redistribution, satisfaction, fairness |
| JEL: | A14 C25 D31 D63 J28 J62 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16290&r=lab |
| By: | George Liontos (Athens University of Economics and Business); Konstantinos Mavrigiannakis (Athens University of Economics and Business); Eugenia Vella |
| Abstract: | Employment in mismatch (low-skill) jobs is a potential factor in the emigration of highly qualified workers. At the same time, high-skilled emigration and emigration of mismatch workers can free up positions for stayers. In bad times, it could also amplify demand losses and the unemployment spell, which in turn affects the mismatch rate. In this paper, we investigate the link between vertical skills mismatch and emigration of both non-mismatch and mismatch workers in a DSGE model. The model features also skill and wealth heterogeneous households, capital-skill complementarity (CSC) and labor frictions. We find that an adverse productivity shock reduces investment and primarily hurts the high-skilled who react by turning to both jobs abroad and mismatch jobs in the domestic labor market. A negative shock to government spending crowds-in investment and primarily hurts the low-skilled who thus turn to jobs abroad. Following the fiscal cut, the high-skilled instead reduce their search for mismatch employment and later they also reduce their search for jobs abroad. |
| Keywords: | vertical skills mismatch, under-employment, emigration, capital-skill complementarity, RBC model |
| Date: | 2023–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2314&r=lab |
| By: | Dewey, Matías (University of St. Gallen); Ronconi, Lucas (University of Buenos Aires) |
| Abstract: | Most workers in the developing world do not receive the benefits they are legally entitled to. Why, then, is there so little public enforcement? This paper argues that this is partly because of a lack of an autonomous and professional bureaucracy. Using a novel dataset with objective measures of labor inspections and fines across countries, we show that Weberian bureaucracies are more likely to enforce labor standards. We provide OLS and 2SLS estimates that address endogeneity concerns and use ethnographic evidence collected in Latin America to understand the mechanisms better. The case study suggests that politicized bureaucracies underinvest in labor inspection because elected officials have short-term horizons and do not internalize the social benefits of enforcement (such as formal job creation and enhancement of the rule of law) because they take time to materialize. |
| Keywords: | enforcement, autonomy, compliance, state-capture, labor |
| JEL: | J88 K42 O17 P50 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16295&r=lab |
| By: | Joao Guerreiro; Sergio Rebelo; Pedro Teles |
| Abstract: | As remote work opportunities expand, more people are seeking residence in foreign destinations. The resulting surge in foreign residents generates capital gains for property owners but negatively impacts renters and creates potentially important production, congestion, and amenities externalities. We study the optimal policy toward foreign residents in a model with key features emphasized in policy discussions. Using this model, we provide sufficient statistics to evaluate the impact of an influx of foreign residents and to calculate the tax/transfer policies required to implement the optimal policy. This policy involves implementing transfers to internalize agglomeration, congestion, and other potential externalities. Importantly, we find that it is not optimal to restrict, tax, or subsidize home purchases by foreign residents. |
| JEL: | H00 J61 R3 R58 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31402&r=lab |
| By: | Eliza-Jane Pearsall; Daniele Pacifico; Edoardo Magalini |
| Abstract: | This paper analyses the impact of Pandemic Unemployment Assistance (PUA) extensions on jobseeker households in selected US states and examines how these extensions compare to the pre-pandemic policies. The analysis finds that PUA extensions increase benefit duration for all jobseekers, but due to interactions between other government benefits, this translates to significant increases in benefit generosity only for jobseekers without children. This has an impact on the financial incentives to take up employment, although incentives are still above the OECD average. PUA extensions have little impact for people who have been unemployed for a very long time, and jobseekers with no recent contribution history. PUA extensions also have minimal impact on jobless families with children who continue to receive less support compared to other OECD countries. |
| JEL: | C63 I38 J65 H55 |
| Date: | 2023–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:296-en&r=lab |
| By: | Wieser, Luisa; Abraham, Martin; Schnabel, Claus; Niessen, Cornelia; Wolff, Mauren |
| Abstract: | This paper examines supervisors' considerations about (not) using monitoring technologies to keep track of subordinates and their work performance. We conduct a factorial survey experiment. The hypothetical descriptions of workplace situations - so-called vignettes - create a situation where the surveyed supervisor is faced with a new team of subordinates and a given technology that can be used to track employees at work. Several components of the situation are randomly varied across vignettes and respondents. We find that supervisors are less interested in using monitoring technologies if the monitoring technology targets people rather than tasks and if the time effort for the supervisor is high. Supervisors' monitoring interest increases if their subordinates interact with sensitive firm data and the data evaluation is AI supported. Thus, our results confirm that supervisors take the costs and benefits of electronic performance monitoring into consideration regarding their attitude towards monitoring technologies at work. |
| Keywords: | employee performance monitoring, workplace technology, factorial survey experiment, Germany |
| JEL: | M50 D22 J01 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:127&r=lab |
| By: | Anikó Bíró (Centre for Economic and Regional Studies); Cecília Hornok (KIEL Institute for the World Economy); Judit Krekó (Centre for Economic and Regional Studies, Budapest Institute for Policy Analysis); Dániel Prinz (World Bank); Ágota Scharle (Budapest Institute for Policy Analysis) |
| Abstract: | Disability benefits are costly and tend to reduce labor supply. While costs can be reduced by careful targeting, correcting past eligibility rules or assessment procedures may entail welfare costs. We study a major reform in Hungary that reassessed the health and working capacity of a large share of beneficiaries. Leveraging age and health cutoffs in the reassessment, we estimate employment responses to loss or reduction of benefits. We find that among those who left disability insurance due to the reform, 57% were employed in the primary labor market and 38% had neither employment nor benefit income. The consequences of leaving disability insurance sharply differed by pre-reform employment status. 62% of those without pre-reform employment did not work after exiting disability insurance, whereas this ratio was only 14% for those who had some employment in the pre-reform year. The gains of the reform in activating beneficiaries were small and strongly driven by pre-reform employment status. This points to the importance of combining financial incentives with broader labor market programs that increase employability. |
| Keywords: | Keywords: disability benefit, reactivation, employment policy |
| JEL: | H53 H55 J08 J14 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2319&r=lab |
| By: | Chambers, Thomas; Grover, Shalini |
| Abstract: | This article focuses on male domestic-care workers (MDCWs) in India. It explores how constructed notions of masculinity interplay with labour market structures, enable forms of labour discipline and shape labour subjectivities. The article details performative and embodied gendered practices engaged in by MDCWs, illuminates the interplay of spatial and temporal aspects of paid domestic-care work with gendered skill sets and labour roles, and connects the differentiated masculinities performed by MDCWs to the broader political economy of domestic-care labour. It also highlights how MDCWs utilise their gender to express degrees of agency vis-à-vis employers and others. The article argues that MDCWs perform masculinities in variegated ways in the face of stigma, marginalisation, and relations of servitude. These performances are not devoid of agency, but are commoditised within the political economy of the domesticcare sector and are framed within patriarchal gender norms as ‘protective care’ or as work requiring other masculine attributes. |
| Keywords: | paid domestic labour; care work; gender; masculinities; India |
| JEL: | J1 R14 J01 |
| Date: | 2023–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:119708&r=lab |