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on Labour Economics |
| By: | Filomena, Mattia (Masaryk University); Picchio, Matteo (Marche Polytechnic University) |
| Abstract: | We analyse how unemployment affects individuals' social networks, leisure activities, and the related satisfaction measures. Using the LISS panel, a representative longitudinal survey of the Dutch population, we estimate the effects by inverse propensity score weighting in a difference-in-differences design in order to deal with unobserved heterogeneity and unbalanced covariate distribution between treated and control units potentially associated with the dynamics of the outcome variables. We find that, after job loss, individuals increase their network size by strengthening their closest contacts within the family, spending more time with neighbors, and making more use of social media. Although they devote their extra leisure time mostly to private activities, our results do not support the hypothesis of social exclusion following unemployment. |
| Keywords: | unemployment, job loss, social exclusion, leisure, social satisfaction, doubly robust difference-in-differences |
| JEL: | I31 J01 J64 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16579&r=lab |
| By: | Carlos Carrillo-Tudela; Leo Kaas; Benjamin Lochner |
| Abstract: | Firms and workers predominately match via job postings, networks of personal contacts or the public employment agency, all of which help to ameliorate labor market frictions. In this paper we investigate the extent to which these search channels have differential effects on labor market outcomes. Using novel linked survey-administrative data we document that (i) low-wage firms and low-wage workers are more likely to match via networks or the public agency, while high-wage firms and high-wage workers succeed more often via job postings; (ii) job postings help firms the most in poaching and attracting high-wage workers and help workers the most in climbing the job ladder. To evaluate the implications of these findings for employment, wages and labor market sorting, we structurally estimate an equilibrium job ladder model featuring two-sided heterogeneity, multiple search channels and endogenous recruitment effort. The estimation reveals that networks are the most cost-effective channel, allowing firms to hire quickly, yet attracting workers of lower average ability. Job postings are the most costly channel, facilitate hiring workers of higher ability, and matter most for worker-firm sorting. Although the public employment agency provides the lowest hiring probability, its removal has sizeable consequences, with aggregate employment declining by at least 1.4 percent and rising bottom wage inequality. |
| Keywords: | search channels, on-the-job search, recruitment effort, sorting wage dispersion |
| JEL: | E24 J23 J31 J63 J64 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10761&r=lab |
| By: | Akcigit, Ufuk; Alp, Harun; Diegmann, André; Serrano-Velarde, Nicolas |
| Abstract: | This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term. |
| Keywords: | industrial policy, privatizations, productivity, size-dependent regulations |
| JEL: | D22 D24 J08 L25 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:279550&r=lab |
| By: | McGee, Andrew (University of Alberta); McGee, Peter (University of Arkansas, Fayetteville) |
| Abstract: | Women report setting lower reservation wages than men in survey data. We show that women set reservation wages that are 14 to 18 percent lower than men's in laboratory search experiments that control for factors not fully observed in surveys such as offer distributions and outside options. This gender gap—which exists even controlling for overconfidence, preferences, personality, and intelligence—leads women to spend less time searching than men while accepting lower wages. Women—but not men—set reservation wages that are too low relative to theoretically optimal values given their risk preferences early in search, reducing their earnings. |
| Keywords: | reservation wages, gender wage gaps, search experiments |
| JEL: | J16 J64 C91 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16577&r=lab |
| By: | Bredtmann, Julia; Otten, Sebastian |
| Abstract: | Using data from the European Social Survey 2002-2020 covering immigrants in 25 European countries, this paper investigates the role of natives' gender norms in the labor market integration of female immigrants. To analyze the role of natives' gender norms, we exploit intertemporal, interregional, and age-specific variation in female-to-male labor force participation ratios. We find a positive and robust association between immigrant women's labor supply and the femaleto-male labor force participation ratio in their region of residence. No similar association is found among immigrant men. We provide evidence that our finding is due to the cultural assimilation of female immigrants to native women's gender norms, and not the result of exposure to similar institutions and economic conditions. Based on a gravity model of female immigrants' regional location choice, we further provide supportive evidence that the association between natives' gender norms and immigrant women's labor supply is not driven by a selective location choice of female immigrants. |
| Keywords: | Female labor force participation, immigration, gender norms |
| JEL: | J16 J22 J61 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:279542&r=lab |
| By: | Peltonen, Juho |
| Abstract: | This paper evaluates the social optimality of labor markets with search frictions and a job retention policy, named short-time work (STW), which has been applied in developed economies during the Covid-19 crisis. In a general equilibrium model, costs related to the STW cannot be internalized in wages, creating a systematic inefficiency through which job creation is too low. Government transfers to redistribute output to correct the inefficiency are proposed in the model. Furthermore, a calibration exercise matching the German economy over the period 2000-2021 suggests that transfers required for the social optimality are 1.9% of output. In addition, the unemployment rate is 1.8 percentage points lower in the presence of optimal transfers. |
| Keywords: | Search and matching; Short-time work policies; Constraint efficiency; Endogenous separations |
| JEL: | E24 J64 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119165&r=lab |
| By: | Bates, Lillian (Williams College); Hall, Oliver (Brookings Institution); Jakiela, Pamela (Williams College) |
| Abstract: | All OECD countries except the United States offer at least four months of paid maternity leave, and the average duration of mandated paid maternity leave has increased steadily from 1970 to the present. There is some evidence that paid leave policies above a certain duration negatively impact women's labor market outcomes. In order to estimate the effects of paid leave, we link data on 40 years of paid leave policy across 24 European countries to survey data using a birth-cohort panel. Following previous work, we show that conventional fixed effects estimation suggests a non-monotonic relationship between leave length and women's labor force attachment, with leaves of three months or less increasing women's labor force attachment while longer leaves reduce it. However, in our context, the putative positive impacts of short-duration maternity leaves on women's employment appear to be driven by negative weighting in fixed effects estimation, which is explained by the fact that all countries in our sample eventually adopt short-duration leave policies. Using a robust imputation-based estimator, we find that maternity leaves longer than three months negatively affect female employment and increase women's domestic work burden. Leaves longer than six months also reduce women's educational attainment and their propensity to raise children. |
| Keywords: | European social policy, women's labor force participation, parental leave, gender, fertility, two-way fixed effects |
| JEL: | D13 J16 J22 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16565&r=lab |
| By: | Caue Dobbin; Tom Zohar |
| Abstract: | We investigate the role of firms in intergenerational mobility by decomposing the intergenerational elasticity of earnings (IGE) into firm-IGE and individual-IGE using a two-way fixed effects framework. Using data from Israel, we find that the firm component is responsible for 22% of the overall IGE. We then explore potential mechanisms and find that education differences explain a large share of the individual-IGE, while place of residence and demographics are more important for the firm-IGE. Guided by these empirical patterns, we develop a novel method to estimate the role of skill-based sorting and find that it accounts for approximately half of the firm-IGE. Our results provide evidence that the intergenerational transmission of earnings encompasses more than just human capital, and highlight the importance of promoting equal access to high-paying firms and reducing labor market segregation in efforts to enhance equality of opportunity. |
| Keywords: | intergenerational mobility, firm wage premium, assortative matching, skill-based sorting |
| JEL: | J62 J31 J60 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10758&r=lab |
| By: | Graeber, Daniel (DIW Berlin) |
| Abstract: | We describe the joint permanent health distribution of parents and children in Germany using 25 years of data from the Socio-Economic Panel. We derive three main results: First, a ten percentile increase in parental permanent health is associated with a 2.3 percentile increase in their child's health. Second, employing our anchoring method, we find that a percentile point increase in permanent health ranks is associated with a 0.8% to 1.4% increase in permanent earnings. Additionally, we conclude that health is particularly important for earnings at lower levels of health.We argue that our anchoring method has great potential to enhance the comparability of the literature across data sets and countries. Third, a more favorable socioeconomic status of the parents is predominantly associated with higher upward mobility in health. |
| Keywords: | intergenerational health mobility, health measurement, inequality |
| JEL: | I14 I12 J62 J13 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16567&r=lab |
| By: | Isabel Cairó; Hess T. Chung; Francesco Ferrante; Cristina Fuentes-Albero; Camilo Morales-Jimenez; Damjan Pfajfar |
| Abstract: | The deep deterioration in the labor market during the Great Recession, the subsequent slow recovery, and the missing disinflation are hard to reconcile for standard macroeconomic models. We develop and estimate a New-Keynesian model with financial frictions, search and matching frictions in the labor market, and endogenous intensive and extensive labor supply decisions. We conclude that the estimated combination of the low degree of nominal wage rigidities and high degree of real wage rigidities, together with the small role of pre-match costs relative to post-match costs, are key in successfully forecasting the slow recovery in unemployment and the missing disinflation in the aftermath of the Great Recession. We find that endogenous labor supply data are very informative about the relative degree of nominal and real wage rigidities and the slope of the Phillips curve. We also find that none of the model-based labor market gaps are a sufficient statistic of labor market slack, but all contain relevant information about the state of the economy summarized in a new indicator for labor market slack we put forward. |
| Keywords: | Search and matching; Labor supply; Labor force participation; Missing disinflation; Great recession |
| JEL: | E32 J64 J20 E37 |
| Date: | 2023–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2023-69&r=lab |
| By: | César, Andrés; Ciaschi, Matías; Falcone, Guillermo; Neidhöfer, Guido |
| Abstract: | This paper investigates whether the impact of trade shocks on employment and wages persists across generations. Using survey data with retrospective information on parental employment, we study the causal effect of increased Chinese import competition in Brazilian industries on individuals with differently exposed fathers. Results show that several years after the shock, children of more exposed fathers have lower education and earnings, lower chances of formal jobs, and are more likely to rely on social assistance. These effects are substantially stronger for children from disadvantaged background, indicating that the shock had a negative impact on intergenerational mobility. |
| Keywords: | Import competition, Education, Social Mobility, Incomes, Brazil |
| JEL: | I24 J62 F14 F16 J23 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:279786&r=lab |
| By: | Meisiek, Anne (Institute for Employment Research (IAB), Nuremberg, Germany); Meister, Moritz (Institute for Employment Research (IAB), Nuremberg, Germany); Niebuhr, Annekatrin (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Kiel); Rudolph, Meike (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "This study investigates the importance of global value chain (GVC) integration for local labor market outcomes in Germany during the COVID-19 pandemic. Although COVID-19 can be considered as a global crisis, there are at the same time strong geographical differences in its impact. We observe pronounced spatial variation in infection rates, policy responses, and behavioral changes. A rapidly growing number of studies provide evidence of heterogeneous effects of the COVID-19 pandemic on local labor markets, most of them focusing on the initial shock and often on the effects of lockdowns and economic policy measures. This paper takes a different perspective on the regional economic effects of the pandemic. We focus on the impact of disrupted GVC during the COVID-19 crisis on local labor markets and investigate whether GVC integration influenced the magnitude of the initial shock and the subsequent recovery process of regions in Germany until December 2021. Our analysis of the regional effects of GVC disruptions in Germany focuses on the bilateral GVC relationship between China and Germany because the two countries are important agents in GVC. Moreover, China was hit early and severely by the pandemic which led to a sizeable decline in the country's production and exports at the beginning of 2020. To measure regional and sectoral GVC integration, we use the 2021 edition of the OECD's Inter-Country Input-Output tables, which provide detailed information on trade in intermediate goods between 45 industries and 66 countries up to the year 2018. Using this data on international trade in intermediate products, we apply different indicators to measure the GVC integration of German sectors via imports and exports of intermediate inputs. To measure the integration of local labor markets in GVC, we quantify the regional variation in trade in intermediate goods using the variation in sectoral specialization across labor market regions. Our main outcome variable is the regional employment share of workers receiving a short-time work allowance. The extensive use of short-time work (STW) was one reason why the unemployment rate showed a relatively moderate increase during the COVID-19 pandemic in Germany. Therefore, we apply STW rather than regional unemployment rates to measure the labor market effects of GVC disruptions caused by the COVID-19 crisis. As a second outcome variable, we consider regional employment. Our descriptive results point to a clustering of highly integrated regions in southern Germany that appears to be slightly more pronounced for GVC trade with China than for GVC trade with the rest of the world. In contrast, many regions in the Northeast of Germany show a below average GVC integration. A decomposition GVC-related trade into imports and exports shows that the export component is almost twice as large as GVC-related imports in Germany. However, the export and import measures are highly correlated, indicating that when a region is strongly integrated into GVC-related trade, it is usually through both imports and exports. Regression results show that short-time work increased more strongly in 2020 in local labor markets which are characterized by an above average GVC integration with China. We detect significant effects of both an integration through exports and imports of intermediate goods, with the impact of GVC-related imports from China being somewhat stronger. The effects that we find for GVC integration with China are, however, only temporary and decline quickly during the second half of 2020. Regions that are highly integrated with the rest of the world, in contrast, do not stand out from other local labor markets in Germany when it comes to the effects of GVC disruptions. There are different potential reasons behind the swift recovery of those regions that show a high GVC integration with China. First of all, China does not differ that much from other important trade partners of Germany in 2021 when it comes to trade disruptions. Moreover, there is some first evidence on firms adjusting their production process and the procurement of inputs in response to value chain disruptions." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; China ; Pandemie ; IAB-Open-Access-Publikation ; Außenhandel ; Auswirkungen ; Beschäftigungseffekte ; Betriebsunterbrechung ; Globalisierung ; internationale Arbeitsteilung ; Kurzarbeit ; Produktionsorganisation ; regionaler Arbeitsmarkt ; Wertschöpfung ; Wirtschaftszweige ; Zulieferer ; 2021-2021 |
| Date: | 2023–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabfob:202310&r=lab |
| By: | Kosyakova, Yuliya (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg); Salikutluk, Zerrin (Humboldt-Universität zu Berlin) |
| Abstract: | "In the last years, the labor market integration of immigrant women has received much attention in the migration literature. We examine gender differences in labor market integration among refugees and other new immigrants who came to Germany during a similar period from a dynamic perspective. We compare their pathways throughout the early period after arrival and study a range of conditions suggested to be relevant for gendered labor market outcomes. Using two panel data sources, which include recently arrived refugees (the IAB-BAMF-SOEP Sample of Refugees) and other immigrants (the IAB-SOEP Migration Sample) in Germany, we compare the dynamics and sources of employment gender gap among refugees and other immigrants. The results uncover narrow initial gender differences among refugees that grow over time and a reversed pattern among other immigrants. However, female refugees’ initial disadvantaged starting position maintains five years after arrival. Furthermore, our findings indicate that the explanations offered in the literature cannot fully explain the hurdles female refugees and other immigrants face when entering the labor market." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation ; IAB-SOEP-Migrationsstichprobe ; IAB-BAMF-SOEP-Befragung von Geflüchteten |
| Date: | 2023–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:202311&r=lab |
| By: | Ellora Derenoncourt (Princeton University); Chi Hyun Kim (University of Bonn); Moritz Kuhn (University of Mannheim); Moritz Schularick (Kiel Institute for the World Economy and Sciences Po) |
| Abstract: | Black Americans face higher cyclical unemployment risk than white Americans: job-finding rates during recessions are lower and the risk of becoming long-term unemployed is higher. Differences in unemployment risk across Black and white Americans imply that Black Americans optimally invest less in risky assets. We show that differences in unemployment risk can explain up to 90% of the gap in the stock market shares of Black and white portfolios, resulting in lower returns on wealth for Black Americans. Through this portfolio channel, adverse labor market conditions for Black Americans translate into lower wealth returns and exacerbate racial wealth inequality. |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:265&r=lab |
| By: | Ran Abramitzky (Stanford University); Leah Platt Boustan (Princeton University); Peter Catron (University of Washington); Dylan Connor (Arizona State University); Rob Voigt (Northwestern University) |
| 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. 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. |
| Keywords: | Refugees, Early 20th Century, Linguistic Attainment |
| JEL: | J15 N32 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2023-04&r=lab |
| By: | Meghana Gaur (Princeton University); John Grigsby (Princeton University); Jonathon Hazell (London School of Economics and Political Science); Abdoulaye Ndiaye (New York University Stern) |
| 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-Ã -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. |
| Keywords: | Dynamic Incentive Pay, Unemployment Dynamics |
| JEL: | J64 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2023-05&r=lab |
| By: | Wu, Derek (University of Virginia); Zhang, Jonathan (McMaster University) |
| Abstract: | Recipients of government transfers are economically disadvantaged, yet little is known about how their circumstances evolve leading up to program receipt. Using twenty-five years of survey data as well as administrative health records, we establish three new stylized facts around enrollment in the largest safety net programs in the United States. While our focus is on SNAP, Medicaid, and Unemployment Insurance, the patterns generalize to nine major programs. First, market incomes decline around enrollment in almost all studied programs. Second, employment rates decline around program receipt and remain lower after receipt, with these patterns coinciding in part with increased disability and worse health. Third, spousal separations begin to increase prior to program enrollment, even for programs without mechanically related eligibility requirements. Taken together, these analyses provide a comprehensive and identically measured look across programs to demonstrate that households "slide" into safety net participation through multiple pathways. |
| Keywords: | social insurance, means-tested transfers, welfare, program receipt |
| JEL: | H53 I38 I18 |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16564&r=lab |
| By: | Quoc-Anh Do; Roberto Galbiati; Benjamin Marx; Miguel A. Ortiz-Serrano |
| Abstract: | We study the stock market performance of firms with Jewish board members during the “Dreyfus Affair” in 19th century France. In a context of widespread latent antisemitism, initial accusations made against the Jewish officer Alfred Dreyfus led to short-lived abnormal negative returns for Jewish-connected firms. However, investors betting on these firms earned higher returns during the period corresponding to Dreyfus’ rehabilitation, starting with the publication of the famous op-ed J’Accuse! in 1898. Our conceptual framework illustrates how diminishing antisemitic biases among investors might plausibly explain these effects. Our paper provides novel insights on how antisemitism can increase and decrease over short periods of time at the highest socio-economic levels in response to certain events, which in turn can affect firm value in financial markets. |
| Keywords: | antisemitism, financial markets, discrimination |
| JEL: | J15 J71 N23 G14 G41 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10748&r=lab |
| By: | Breithaupt, Patrick; Hottenrott, Hanna; Rammer, Christian; Römer, Konstantin |
| Abstract: | The availability of social media data is growing and represents a new data source for economic research. This paper presents a detailed study on the use of data from a careeroriented social networking platform for measuring employee flows and employer networks. The employment data are exported from user profiles and linked to the Mannheim Enterprise Panel (MUP). The linked employer-employee (LEE) data consists of 14 million employments for 1.5 million employers. The platform-based LEE data is used to create annual employer networks comprised of data from 9 million employee flows. Plausibility checks confirm that career-oriented social networking data contain valuable data about employment, employee flows, and employer networks. Using such data provides opportunities for research on employee mobility, networks, and local ecosystems' role in economic performance at the employer and the regional level. |
| Keywords: | social networks, platform data, lee data, labour mobility, network analysis |
| JEL: | C81 J60 L14 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:279575&r=lab |
| By: | Arnaud Mertens; Philippe Van Kerm |
| Abstract: | This paper investigates the effect of commuting time on absenteeism using a natural experiment. This relationship is notoriously difficult to assess without exogenous shocks to commuting and with the survey data typically exploited. The study uses detailed administrative data for Luxembourg to measure the impact on work absences of a temporary shock to commuting time caused by large-scale roadworks at the border between Belgium and Luxembourg. The roadworks affected the commuting time of cross-border workers from Belgium, leaving cross-border commuters from France as a natural control group in a difference-in-difference setup. The findings reveal a positive -- but quantitatively relatively small -- effect of commuting time on absenteeism, driven mainly by increased absences due to reported illness or family reasons. Male workers appear to respond more than female workers to the shock in commuting time. |
| Keywords: | Absenteeism; Health; Commuting; Cross-border workers; Luxembourg |
| JEL: | J62 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2023-08&r=lab |