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on Labour Economics |
| By: | Ahammer, Alexander (University of Linz); Glogowsky, Ulrich (Johannes Kepler University Linz); Halla, Martin (University of Linz); Hener, Timo (Aarhus University) |
| Abstract: | Using Austrian and Danish administrative data, we examine the impacts of parenthood on mental health. Parenthood imposes a greater mental health burden on mothers than on fathers. It creates a long-run gender gap in antidepressant prescriptions of about 93.2% (Austria) and 64.8% (Denmark). These parenthood penalties in mental health are unlikely to reflect differential help-seeking behavior across the sexes or postpartum depression. Instead, they are related to mothers' higher investments in childcare: Mothers who take extended maternity leave in quasi-experimental settings are more likely to face mental health problems. |
| Keywords: | gender equality, fertility, parenthood, motherhood, mental health, parental leave |
| JEL: | D63 J13 I10 J16 J22 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16459&r=lab |
| By: | Escamilla-Guerrero, David (University of St Andrews); Lepistö, Miko (Paris School of Economics); Minns, Chris (London School of Economics) |
| Abstract: | Using newly digitized Canada-Vermont border crossing records from the early twentieth century, this paper identifies key factors that may explain differences in how female and male migrants sort by human capital across destinations. Earnings maximization largely explains sorting patterns among males, while gender discrimination has a large effect on the sorting of female migrants. Everything else equal, destinations with institutional and social environments that limited the participation of women in the labor market attracted a lower-skilled mix of both single females and couples. Although married women were typically tied to a spouse whose labor market opportunities determined the joint destination, we find evidence suggesting that their degree of agency in the destination choice increased with human capital. |
| Keywords: | migration, sorting, gender, Canada, United States |
| JEL: | J61 N31 N32 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16461&r=lab |
| By: | Adnan, Wifag (New York University, Abu Dhabi); Zhang, Jonathan (McMaster University); Zheng, Angela (McMaster University) |
| Abstract: | A large literature shows that the children of immigrants have high upward mobility. However, immigrants vary vastly in how they are selected: while economic immigrants are chosen based on skill and education, refugees migrate at times of conflict and war. In this paper, we study on the mobility of immigrants by admission class. Using administrative data linking the universe of immigrant landing documents with tax records in Canada, we estimate intergenerational mobility outcomes by refugee status. We find that for immigrant parents at the 25th percentile of the income distribution, refugee children have an expected rank of 47 percentiles, while the corresponding estimate for non-refugee children is 51 percentiles. Approximately 60% of this gap can be explained by differences in parental attributes upon arrival, indicating that selection contributes to higher mobility. Finally, we show that when correcting for the underplacement of immigrant parents, the absolute upward mobility of refugees at p25 is largely unaffected while that of non-refugees falls by around 2 percentiles. |
| Keywords: | intergenerational mobility, refugees, immigration |
| JEL: | J61 J62 J15 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16471&r=lab |
| By: | Theresa Geißler (IAAEU-Trier University); Laszlo Goerke (IAAEU-Trier University, IZA, CESifo) |
| Abstract: | Using the German Socio-Economic Panel data, we investigate the correlation between trade union membership and educational mismatch. Employing panel tobit and probit regressions, we find that union membership is negatively associated with overeducation, primarily among males. This finding remains consistent across subgroups of full-time or private sector male workers, as well as for males of all ages or residing in either East or West Germany. The same negative correlation is observed for females younger than the median age and residing in East Germany. Our results indicate that collective wage agreements and works councils do not drive this relationship. Conversely, no significant correlation is found between union membership and undereducation. |
| Keywords: | Educational mismatch, gender, German Socio-Economic-Panel, trade union membership |
| JEL: | I J |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2023.14&r=lab |
| By: | Poinas, François; Méango, Romuald |
| Abstract: | The paper is structured around three main contributions. First, it takes advan-tage of a unique survey on Afghan asylum seekers in Germany to provide novel descriptive insights into asylum seekers’ beliefs about their outcomes and the as-sociated intention to overstay. Second, it estimates asylum seekers’ perceived ex ante returns on overstaying, and option values of regularisation, deportation, and experimentation. Third, it assesses and rejects the cost-effectiveness argument for assisted voluntary return policies. Instead, it estimates a sizeable willingness-to-pay of asylum seekers for investments that would guarantee their regularisation. |
| Keywords: | Subjective expectations; Intention to overstay; Asylum seekers; Germany;; Afghanistan |
| JEL: | C20 D84 F22 J15 J18 J61 O15 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128601&r=lab |
| By: | Góes, Carlos (University of San Diego); Segnana, Juan (Tilburg University); Robertson, Raymond (Texas A&M University); Lopez-Acevedo, Gladys (World Bank) |
| Abstract: | We study the dynamic effects of export exposure over local labor markets in Indonesia. We develop an empirical strategy to instrument exposure to exports using exposure to foreign demand shocks and validate it showing that the labor market responses are consistent with those expected from demand shocks in a spatial model. Export shocks unambiguously increase employment in Indonesia. While effects on average income per employee are ambiguous due to industry- and sectoral-compositional effects, our estimates of district-level welfare suggest that export shocks induce an increase in welfare. |
| Keywords: | international trade, labor markets, inequality, poverty, jobs |
| JEL: | F16 J16 O19 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16473&r=lab |
| By: | Isabel Cairó; Avi Lipton |
| Abstract: | Black workers experience a higher unemployment rate, as well as more volatile employment dynamics, than white workers, and the racial unemployment rate gap is largely unexplained by observable characteristics. We develop a New Keynesian model with search and matching frictions in the labor market, endogenous separations, and employer discrimination against Black workers to explain these outcomes. The model is consistent with key features of the aggregate economy and is able to explain key labor market disparities across racial groups. We then use this model to assess the effects of the Federal Reserve’s new monetary policy framework---interest rates respond to shortfalls of employment from its maximum level rather than deviations---on racial inequality in the labor market. We find that shifting from a Deviations interest rate rule to a Shortfalls rule reduces the racial unemployment rate gap and the model-based measures of labor market discrimination but increases the average inflation rate. From a welfare perspective, we find that the Shortfalls approach does not do much to reduce racial inequality in our model economy. |
| Keywords: | Unemployment; Monetary policy; Racial inequality; Discrimination |
| JEL: | E24 E52 J15 J70 |
| Date: | 2023–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2023-65&r=lab |
| By: | Arabzadeh, Hamzeh (RWTH Aachen University); Balleer, Almut (RWTH Aachen University); Gehrke, Britta (Freie Universität Berlin); Taskin, Ahmet Ali (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | This paper studies how minimum wages affect the wage distribution if firms face financial constraints. Using German employer-employee data and firm balance sheets, we document that the within-firm wage dispersion decreases more with higher minimum wages when firms are financially constrained. We introduce financial frictions into a search and matching labor market model with stochastic job matching, imperfect information, and endogenous effort. In line with the empirical literature, the model predicts that a higher minimum wage reduces hirings and separations. Firms become more selective such that their employment and wage dispersion fall. If effort increases strongly, firms may increase employment at the expense of higher wage dispersion. Financially constrained firms are more selective and reward effort less. As a result, within-firm wage dispersion and employment in these firms fall more with the minimum wage. |
| Keywords: | minimum wage, wage dispersion, financial frictions, search and matching, unemployment |
| JEL: | J31 J38 J63 J64 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16455&r=lab |
| By: | Clifton-Sprigg, Joanna (University of Bath); Homburg, Ines (University of Antwerp); James, Jonathan (University of Bath); Vujic, Suncica (University of Antwerp) |
| Abstract: | By voting to leave the European Union (EU) in 2016, the United Kingdom (UK) set off a long period of uncertainty and signalled its support for the Leave campaigns, which centred around restricting migration. This paper researches how this decision affected EU-UK migration patterns. We exploit the Brexit referendum as a natural experiment and employ a (synthetic) difference-in-differences estimator to compare EU migration (treated) to non-EU migration (untreated) in the UK. We find a significant decrease in the inflow of EU migrants, although the reduction seems too small to have any impact on the migrant stock. We further find a significant persistent rise in British citizenship applications and grants. Our results reveal that the referendum made the UK a less attractive destination and that the EU migrants already in the UK were encouraged to obtain British citizenship. The Brexit-induced policy uncertainty was the key driver affecting migrants' decision-making. |
| Keywords: | Brexit referendum, international migration, European Union, uncertainty, anti-immigration |
| JEL: | F22 J61 J48 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16468&r=lab |
| By: | Shisham Adhikari; Athanasios Geromichalos; Ioannis Kospentaris (Department of Economics, University of California Davis) |
| Abstract: | The first step in a worker’s career is often particularly hard. Many firms seeking workers require experience in a related field, so a vicious circle is created, whereby an entry level job is required in order to get an entry level job. Consequently, entrant workers have lower job-finding rates and longer unemployment durations than the unemployed who have looked for a job in the past. To study the welfare implications of these observations, we consider a version of the DMP model where firms who match with entrant workers have to incur training costs. As a result, firms are biased against entrant workers, who, in turn, stay unemployed for a prolonged period of time, exposing themselves to a persistent skill loss shock. In this environment, an obvious market failure arises. Firms who hire entrant workers provide a benefit to society by helping these workers stay unemployed for a shorter period of time, thus reducing the probability of skill loss. But since firms cannot internalize this societal contribution, they choose to discriminate against entrant workers causing a welfare loss. We use a calibrated version of the model to quantitatively assess the effectiveness of three government interventions, whose common goal is to reduce bias against entrant workers. We find that the most effective intervention takes the form of an “internship”, where firms can hire entrant workers at an (exogenous) lower wage. |
| Keywords: | search and matching, unemployment, labor market entrants, training, skills |
| JEL: | E24 E60 J24 J64 |
| Date: | 2023–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:357&r=lab |
| By: | Meghana Gaur; John R. Grigsby; Jonathon Hazell; Abdoulaye Ndiaye |
| Abstract: | We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first-order equivalent in an economy with flexible incentive pay and without bargaining, vis-á-vis an economy with rigid wages. Second, wage cyclicality from bargaining dampens unemployment dynamics through the standard mechanism. Third, our calibrated model suggests 46% of wage cyclicality in the data arises from incentives. A standard model without incentives calibrated to weakly procyclical wages, matches unemployment dynamics in our incentive pay model calibrated to strongly procyclical wages. |
| JEL: | E24 E32 J33 J41 J64 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31722&r=lab |
| By: | Agar Brugiavini (Department of Economics, University Of Venice CÃ Foscari; Institute for Fiscal Studies); Petru Crudu (Department of Economics, University Of Venice CÃ Foscari) |
| Abstract: | This work documents the role played by disability insurance, typically part of a wider public pension provision package, on the labour market trajectories and retirement decisions. We will first employ a machine learning approach to estimate a Transition Probability Model able to uncover the most likely labour market histories and then evaluate the effects of policy reforms, including reforms to the eligibility for disability insurance benefits. The main contribution is the introduction of disability insurance programs within a framework, which models the entire life course of older Europeans. This requires the detailed administrative eligibility criteria prevailing in each of the 11 countries from 1970 to 2017. Results show that the disability route and early retirement are substitutes. In addition, tightening eligibility rules of disability programs crowd out disabled workers, whose reductions in working capacities are correctly assessed, towards other compensatory schemes (e.g., unemployment benefits or early pension) in which working is not expected. On the contrary, individuals with over-assessed reductions in working capacities are the most reactive to disability policy restrictions. In conclusion, efficient disability assessment procedures are crucial for incentivising labour market participation without hurting individuals most in need. |
| Keywords: | Retirement, Disability, Path Dependence, Simulation |
| JEL: | J14 J26 I38 H55 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2023:20&r=lab |
| By: | Blanchflower, David G. (Dartmouth College); Bryson, Alex (University College London) |
| Abstract: | Using four cross-sectional data files for the United States and Europe we show that Adverse Childhood Experiences (ACE) have a significant impact on subjective wellbeing (SWB) in adulthood. Death of a parent, parental separation or divorce, financial difficulties, the prolonged absence of a parent, quarreling between parents, parental unemployment, sexual assault, experiencing long-term health problems, being bullied at school and being beaten or punched as a child all have long-term impacts on wellbeing. These experiences impact a wide range of wellbeing measures in adulthood including satisfaction with many aspects of everyday life, happiness and life satisfaction, self-assessed health, and are positively linked to measures of negative affect including the GHQ6. The evidence linking ACEs to lower SWB in adulthood is consistent across fifty different measures including sixteen positive affect and twenty-six negative affect measures relating to assessments of one's one life, and eight variables capturing how the individual feels about the area she lives in, including unemployment, drugs, violence and vandalism plus democracy in their country. Trauma in childhood is long lasting. |
| Keywords: | childhood, neglect, abuse, family circumstances, bullying, subjective wellbeing |
| JEL: | I31 I10 J12 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16479&r=lab |
| By: | Justine Herve (Stevens Institute of Technology); Helene Purcell (University of Pennsylvania); Subha Mani (Fordham University, Department of Economics) |
| Abstract: | Personality traits play an important role in shaping labor market outcomes, but the associated behaviors that lead to these differences are understudied. In this paper, we examine the returns to the Big Five personality traits as well as the mechanisms through which personality affects employment and earnings. We find conscientiousness to be a significant predictor of both employment and earnings. We further show that the association between conscientiousness and earnings operates primarily through one specific behavior, namely, individual effort. Additionally, we can eliminate job characteristics and collective bargaining as potential channels for the positive relationship between conscientiousness and earnings. |
| Keywords: | Big Five personality traits, Conscientiousness, Labor market returns, Effort |
| JEL: | F63 D91 I25 J01 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:frd:wpaper:dp2023-05er:dp2023-05&r=lab |
| By: | Avdeev, Stanislav (University of Amsterdam); Ketel, Nadine (Vrije Universiteit Amsterdam); Oosterbeek, Hessel (University of Amsterdam); van der Klaauw, Bas (Vrije Universiteit Amsterdam) |
| Abstract: | We use admission lotteries for higher education studies in the Netherlands to investigate whether someone's field of study influences the study choices of their younger peers. We find that younger siblings and cousins are strongly affected. Also younger neighbors are affected but to a smaller extent. These findings indicate that a substantial part of the correlations in study choices between family members can be attributed to spillover effects and are not due to shared environments. Our findings contrast with those of recent studies based on admission thresholds, which find no sibling spillovers on field of study (major) choices. Because we also find spillovers from lottery participants at the lower end of the ability distribution, the contrasting findings cannot be attributed to the different research designs (leveraging admission lotteries versus admission thresholds). We believe that the different findings are due to the small differences in quality between universities in the Netherlands, making differences in the prestige of fields of study more prominent. |
| Keywords: | major choice, higher education, peer effects, admission lotteries |
| JEL: | I23 I24 J10 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16453&r=lab |
| By: | Ran Abramitzky; Leah Platt Boustan; Peter Catron; Dylan Connor; Rob Voigt |
| Abstract: | The United States has admitted more than 3 million refugees since 1980 through official refugee resettlement programs. Scholars attribute the success of refugee groups to governmental programs on assimilation and integration. Before 1948, however, refugees arrived without formal selection processes or federal support. We examine the integration of historical refugees using a large archive of recorded oral history interviews to understand linguistic attainment of migrants who arrived in the early twentieth century. Using fine-grained measures of vocabulary, syntax and accented speech, we find that refugee migrants achieved a greater depth of English vocabulary than did economic/family migrants, a finding that holds even when comparing migrants from the same country of origin or religious group. This study improves on previous research on immigrant language acquisition and refugee incorporation, which typically rely on self-reported measures of fluency. Our findings are consistent with the hypothesis that refugees had greater exposure to English or more incentive to learn, due to the conditions of their arrival and their inability to immediately return to their origin country. |
| JEL: | J15 N32 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31730&r=lab |
| By: | Castro, Juan Francisco (Universidad del Pacifico); Yamada, Gustavo (Universidad del Pacifico); Medina, Santiago (Harvard University); Armas, Joaquin (Stanford University) |
| Abstract: | Periods of rapid economic growth in developing countries have been well studied in terms of poverty and income inequality reduction, but much less is known about the performance of these countries in terms of economic mobility. We study intragenerational mobility in Peru using an asset-based measure of wealth and longitudinal data from the Young Lives project (2002 - 2016). We find that Peruvian households enjoyed a moderately large degree of mobility in this period. Averages, however, mask significant differences between Spanish-speaking households and those that speak an indigenous language. We estimate a positive mobility gap in favor of Spanish-speaking households of 12.7 percentiles, and find that half of this gap persists after controlling for a comprehensive set of household characteristics that impact their ability to accumulate wealth. We propose a new measure of individual mobility and use it to assess the degree of inequality of opportunity for mobility, that is, to what extent is mobility caused by circumstances outside of households' control. We find that this fraction is at least 17.4% for the most disadvantaged half of the population, but only 1.9% for the more advantaged half. |
| Keywords: | economic mobility, inequality of opportunity, development, wealth |
| JEL: | D63 D31 J60 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16465&r=lab |