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on Labour Economics |
| By: | Kaas, Leo; Lalé, Etienne; Siassi, Nawid |
| Abstract: | This paper develops a macroeconomic model that combines an incomplete-markets overlapping-generations economy with a job ladder featuring sequential wage bargaining, endogenous search effort of employed and non-employed workers, and differences in match quality. The calibrated model offers a good fit to the empirical age profiles of search activity, job-finding rates, wages and savings, so that we use the model to examine the role of age and wealth for worker flows and for the consequences of job loss. We further analyze the impact of unemployment insurance and progressive taxation for labor market dynamics and aggregate economic activity via capital, employment and labor efficiency channels. Lower unemployment benefits or a less progressive tax schedule bring about welfare losses for a newborn worker household. |
| Keywords: | Search and matching, ob-to-job transitions, Incomplete markets, Overlapping generations, Wealth accumulation |
| JEL: | E21 E24 H24 J64 J65 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:280694&r=lab |
| By: | Chen, Shuai (University of Leicester) |
| Abstract: | This paper examines how unemployment and cultural anxiety have triggered different dimensions of the current populism in the United States. Specifically, I exploit the Great Recession (GR) and the 2014 Northern Triangle immigrant influx (IM) to investigate the effects of recent unemployment and unauthorized immigration on attitudes related to populism. I find that recent unemployment during GR, rather than existing unemployment from before GR, increased the probability of attitudes against wealthy elites by 15 percentage points (PP). Such attitudes are connected with left-wing populism. I identify perceived economic unfairness as a mechanism through which recent unemployment drove left-wing populism. However, cultural anxiety rather than economic distress more likely led to the over 10 PP rise in the probability of anti-immigration attitudes during IM. These attitudes are related to right-wing populism. This study intentionally links distinct economic and cultural driving forces, respectively, to different types of populism, while still accounting for their potential interaction effects. This strategy facilitates disentangling the economic and cultural triggers of the currently surging populism. |
| Keywords: | populism, unemployment, immigration, Great Recession |
| JEL: | A13 D31 J01 J64 P16 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16642&r=lab |
| By: | Jonathan Créchet (Department of Economics, University of Ottawa, Ottawa, ON); Étienne Lalé (Department of Economics, York University); Linas Tarasonis (CEFER, Bank of Lithuania) |
| Abstract: | We propose new data moments to measure the role of life-cycle worker flows between employment, unemployment and out of the labor force in shaping cross-country differences in aggregate employment. We then show that a suitably extended version of the Diamond-Mortensen-Pissarides model can capture well these data moments. Two features of the model are crucial for this result: heterogeneity in match quality and endogenous search intensity. We examine the implications of this model for the sources of employment dispersion across Europe's largest countries, assessing the contribution of factors related to (i) the production technology, (ii) search, and (iii) policies. The sources of cross-country employment dispersion differ substantially across ages. Technology factors account for most of the employment variance of youths and prime-age workers, whereas search and policies are the main drivers of employment differences for older individuals. |
| Keywords: | Employment, Unemployment, Labor Force Participation, Life cycle, Worker Flows, Labor Market Institutions |
| JEL: | E02 E24 J21 J64 J82 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:2306e&r=lab |
| By: | Fasani, Francesco (University of Milan); Frattini, Tommaso (University of Milan); Pirot, Maxime (University of Milan) |
| Abstract: | Is naturalization an effective tool to boost refugees' labor market integration? We address this novel empirical question by exploring survey data from 21 European countries and leveraging variation in citizenship laws across countries, time, and migrant groups as a source of exogenous variation in the probability of naturalization. We find that obtaining citizen status allows refugees to close their gaps in labor market outcomes relative to non-refugee migrants while having non-significant effects on the latter group. We then further explore the heterogeneity of returns to citizenship in a Marginal Treatment Effect framework, showing that migrants with the lowest propensity to naturalize would benefit the most if they did. This reverse selection on gains can be explained by policy features that make it harder for more vulnerable migrant groups to obtain citizenship, suggesting that a relaxation of eligibility constraints would yield benefits for both migrants and host societies. |
| Keywords: | forced migration, citizenship, asylum policy |
| JEL: | J15 J61 F22 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16651&r=lab |
| By: | Neuber-Pohl, Caroline (BIBB); Pregaldini, Damiano (University of Zurich); Backes-Gellner, Uschi (University of Zurich); Dummert, Sandra (Institute for Employment Research (IAB), Nuremberg); Pfeifer, Harald (BIBB) |
| Abstract: | By exploiting a labor market reform causing an outflow of German workers to Switzerland, we examine the effect of negative labor supply shocks on training in firms using the market for apprenticeships as an example. Analysis of administrative data reveals that the reform led to more apprentices in German firms despite a decrease in apprentice wages. This can be explained by a standard two-factor production model where firms substitute outflowing skilled workers with more apprentices; setting lower wages is possible because of a rising supply of apprentices owing to substantially improved employment prospects after border openings. |
| Keywords: | negative labor supply shock, training effects after worker outflow, wage effects, training incentives, apprenticeship training supply and demand |
| JEL: | J21 J22 J61 R23 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16652&r=lab |
| By: | Feichtmayer, Jennifer (University of Erlangen-Nuremberg); Riphahn, Regina T. (University of Erlangen-Nuremberg) |
| Abstract: | We study the intergenerational transmission of welfare benefit receipt in Germany. We first describe the correlation between welfare receipt experienced in the parental household and subsequent own welfare receipt of young adults. In a second step, we investigate whether the observed correlations reflect causal effects of past welfare experience. We use family fixed effects estimations and Gottschalk's (1996) approach and take advantage of the long-running German Socio-Economic Panel Survey to contribute to a sparse literature. We find strong positive correlations between parental and own welfare receipt. These patterns do, however, not persist after controlling for unobserved heterogeneities. Therefore, our results suggest that the strong intergenerational correlation of welfare benefit receipt is determined by family background rather than by the experience of parental welfare benefit receipt. |
| Keywords: | welfare, social assistance, intergenerational mobility, causal effect, family fixed effects, Gottschalk estimator |
| JEL: | I32 I38 J62 C36 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16660&r=lab |
| By: | Naoki Aizawa; Corina Mommaerts; Stephanie L. Rennane |
| Abstract: | This paper studies the labor market impacts of firm accommodation decisions and assesses implications for the design of social insurance for workplace disability. We leverage a unique workers’ compensation (WC) program in Oregon that provides wage subsidies to firms for accommodating injured workers. Exploiting rich administrative data and a policy change to the wage subsidy, we show that accommodation rates respond to the subsidy rate and that receipt of accommodation leads to a significant increase in employment and earnings a year later. To explore welfare implications, we develop and estimate a frictional labor market model of accommodation as a form of human capital investment. Worker turnover and imperfect experience rating in WC lead to under-accommodation and inefficient labor market outcomes after workplace disability. Counterfactual simulations show that subsidizing accommodation not only improves long-run labor market outcomes of workers experiencing work-related disability but also leads to welfare gains for most workers. |
| JEL: | G22 H0 J14 J24 J28 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31978&r=lab |
| By: | Holzer, Harry J. (Georgetown University) |
| Abstract: | In this paper, I review the potential of workforce development programs to help the US get closer to "full employment." First, I provide some background on workforce development in the US, and also on the aggregate employment/labor force issues that workforce programs may or may not address. Then I review the empirical evidence on job training and other forms of workforce development, in terms of impacts on employment (as opposed to earnings). I briefly consider how the US experience in this regard compares and contrasts with that of other countries in the EU or OECD, and what we might learn from them. I conclude that more and better workforce development could help somewhat to achieve lower unemployment and higher labor force participation in the US, though we also need a range of other policies to achieve these goals. |
| Keywords: | workforce development, job training, full employment, labor force participation |
| JEL: | J6 J3 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16624&r=lab |
| By: | Zvi Eckstein; Michael P. Keane; Osnat Lifshitz |
| Abstract: | In the 1960 cohort, American men and women graduated from college at the same rate, and this was true for Whites, Blacks and Hispanics. But in more recent cohorts, women graduate at much higher rates than men. To understand the emerging gender education gap, we formulate and estimate a model of individual and family decision-making where education, labor supply, marriage and fertility are all endogenous. Assuming preferences that are common across ethnic groups and fixed over cohorts, our model explains differences in all endogenous variables by gender/ethnicity for the ‘60-‘80 cohorts based on three exogenous factors: family background, labor market and marriage market constraints. Changes in parental background are a key factor driving the growing gender education gap: Women with college educated mothers get greater utility from college, and are much more likely to graduate themselves. The marriage market also contributes: Women’s chance of getting marriage offers at older ages has increased, enabling them to defer marriage. The labor market is the largest factor: Improvement in women’s labor market return to college in recent cohorts accounts for 50% of the increase in their graduation rate. But the labor market returns to college are still greater for men. Women go to college more because their overall return is greater, after factoring in marriage market returns and their greater utility from college attendance. We predict the recent large increases in women’s graduation rates will cause their children’s graduation rates to increase further. But growth in the aggregate graduation rate will slow substantially, due to significant increases in the share of Hispanics – a group with a low graduation rate – in recent birth cohorts. |
| Keywords: | Labor supply; College graduation; Marriage; Parental background; Education; Fertility; Gender wage gap; Assortative mating; Returns to college |
| JEL: | I20 J22 D10 J10 J24 |
| Date: | 2023–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:97511&r=lab |
| By: | Chantal Pezold; Simon Jäger; Patrick Nüss |
| Abstract: | We study how labor market conditions affect unionization decisions. Tight labor markets might spur unionization, e.g., by reducing the threat of unemployment after management opposition or employer retaliation in response to a unionization attempt. Tightness might also weaken unionization by providing attractive outside alternatives to engaging in costly unionization. Drawing on a large-scale, representative survey experiment among U.S. workers, we show that an increase in worker beliefs about labor market tightness moderately raises support for union activity. Effect sizes are small as they imply that moving from trough to peak of the business cycle increases workers’ probability of voting for a union by one percentage point. To study equilibrium effects, we draw on three quasi-experimental research designs using data from across U.S. states and counties over several decades. We find no systematic effect of changes in aggregate labor market tightness on union membership, union elections, and strikes. Overall, our results challenge the notion that labor market tightness significantly drives U.S. unionization. |
| JEL: | D83 E32 J21 J23 J51 J52 J53 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31988&r=lab |
| By: | Jena, Anupam B. (NBER); Slusky, David (University of Kansas); Springer, Lilly (University of Kansas) |
| Abstract: | Training to become a physician involves long work hours that can be physically demanding, particularly for surgeons. Are birth outcomes of physician mothers affected as a result? Using Texas birth data from 2007-2014, we compared birth outcomes between physicians and another highly educated group, lawyers, and between surgeons and non-surgeon physicians. Further, using a difference-in-differences framework, we examine whether the Accreditation Council for Graduate Medical Education 2011 duty hour reform, which lowered trainee work hours, impacted the birth outcomes of babies born to physicians compared with lawyers. We find that physicians have lower birth weights and shorter pregnancies than lawyers with the results driven by physicians in surgical specialties. However, the duty hour reform appears to not have impacted birth outcomes. Thus, we find that physicians tend to have worse birth outcomes than lawyers and, in this case, the work reform did little to address the difference. |
| Keywords: | physicians, surgeons, birth outcomes, birthweight, pregnancy length, duty hour reform |
| JEL: | I12 J13 J44 K32 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16655&r=lab |
| By: | Axel Gottfries; Gregor Jarosch |
| Abstract: | How do noncompete agreements between workers and firms affect wages and employment in equilibrium? We build a tractable framework of wage posting with on-the-job search and large employers that provides a natural laboratory to assess anti-competitive practices in the labor market. We characterize the impact of market structure and show that noncompetes can sharply suppress wages. We validate the quantitative model with empirical evidence on the impact of mergers and noncompetes on employment and wages. Banning noncompetes in the US would raise wages by 4%. Wage gains are large when demand is inelastic, training costs are high, and when noncompetes are widespread. |
| JEL: | E0 J0 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31965&r=lab |
| By: | Jonathan Créchet (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | In OECD countries, the labor market features a coexistence of open-ended, permanent jobs subject to strict employment protection and fixed-term, temporary contracts. This paper introduces a search-and-matching model of a dual labor market - divided between permanent and temporary jobs - with risk aversion and dynamic employment contracts. Optimal contracting entails a trade-off between commitment and the flexibility of separation, a novel rationale for the coexistence of permanent and temporary jobs. The paper shows that this coexistence emerges when (i) firms find it optimal to provide insurance to workers, (ii) the firms' commitment ability is limited, and (iii) the match-quality distribution has enough dispersion. In this setup, firing costs are potentially associated with welfare gains for both employed and unemployed workers. |
| Keywords: | Search frictions, Dynamic contracts, Limited commitment, Employment protection legislation |
| JEL: | E24 J41 J58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:2307e&r=lab |
| By: | MA, Xinxin; CHENG, Jie |
| Abstract: | Using national longitudinal survey data from the China Family Panel Studies from 2010 to 2020, this study explores union effects on the gender wage gap in China. The results demonstrate that the union wage premium is greater for women than men; the union wage premium beneficial for women in the public sector is greater than that in the private sector. The gender gap in the probability of obtaining union membership is insignificant for both the public and private sectors. Discrimination against women among the non-union group is the main factor generating the gender wage gap for both the public and private sectors, and the effect in the public sector is greater than that in the private sector. Additionally, the gender gap in unionism reduces the gender wage gap in the public sector while it widens the wage gap in the private sector, and the endowment differences reduce the gender wage gap in both the public and private sectors. |
| Keywords: | union membership, gender wage gap, discrimination, public and private sector, China |
| JEL: | J51 J52 J16 J31 J71 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:752&r=lab |
| By: | Müge Süer (HU Berlin) |
| Abstract: | The gender wage gap is to a significant extent driven by gender-based job segregation. One of the potential culprits can be found in supply-side behavioral differences in promotion applications. In this study, using a controlled lab experiment, we disentangle the roles of gender, field of study, and task difficulty in promotion application decisions. Our study pro- vides three crucial findings. First, gender differences in self-limiting promotion application behavior are only present in STEM field students when exposed to a male task. Specifi- cally, when an easier alternative is available, women are less willing to apply for promotions concerning harder tasks than men. Second, there exists no significant difference between men’s and women’s willingness to apply for promotion concerning female jobs in STEM or non-STEM fields. Third, we find that previously reported gender differences in confidence are present only between STEM field students. The results also suggest that self-sorting into positions does not cause a decrease in overall welfare, however, it causes fewer promotions for women in STEM. We finally propose an easy-to-implement policy intervention to close the gender gap in STEM students when applying for a promotion. |
| Keywords: | gender differences; promotion application; self-limiting behavior; hierarchical segregation; STEM; male task; experiment; |
| JEL: | D91 J16 J62 C91 |
| Date: | 2023–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:483&r=lab |
| By: | Emma Duchini; Victor Lavy; Stephen Machin; Shqiponja Telhaj |
| Abstract: | Low-performing, high-poverty, public schools notoriously struggle to attract and retain good teachers. This paper studies a setting where independent organizations, including charities and businesses, take over the management of under-performing schools, while funding remains public. Exploiting the staggered expansion of English Sponsor-led academies since the early 2000s, we show that the Sponsor-led takeover leads to substantial changes in the teaching body and the school personnel policy. The probability that the Sponsor appoints a new headteacher doubles upon the takeover, with the new headteacher being, on average, better paid, and more likely to come from outstanding schools. The takeover also induces teacher sorting, with older and lower-achieving teachers leaving the school, and new teachers joining the Sponsor-led school from outstanding schools. Lastly, Sponsors substantially restructure teachers’ rewarding scheme and abandon a pay scale entirely based on seniority, leading to a 10 percent increase in pay dispersion across equally experienced teachers. |
| JEL: | I28 J13 J18 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31994&r=lab |
| By: | AlAzzawi, Shireen (Santa Clara University); Dang, Hai-Anh (World Bank); Hlasny, Vladimir (UN ESCWA); Abanokova, Kseniya (World Bank); Behrman, Jere R. (University of Pennsylvania) |
| Abstract: | Various challenges are thought to render female-headed households (FHHs) vulnerable to poverty in the Arab region. Yet, previous studies have mixed results and despite the availability of cross-sectional data, the absence of household panel survey data hinders analysis of poverty dynamics. We address these challenges by proposing a novel typology of FHHs and analyze synthetic panels that we constructed from 20 rounds of repeated cross-sectional surveys spanning the past two decades from Egypt, Iraq, Jordan, Mauritania, Palestine, and Tunisia. We find that the definition of FHHs matters for measuring poverty levels and dynamics. Most types of FHHs are less poor, but FHHs with a major share of female adults are generally poorer. FHHs are more likely to escape poverty than households on average, but FHHs without children are most likely to do so. While more children are generally associated with more poverty for FHHs, there is heterogeneity across countries is addition to heterogeneity across FHH measures. Our findings provide useful inputs for social protection and employment programs aiming at reducing gender inequalities and poverty in the Arab region. |
| Keywords: | poverty, feminization, female-headedness typology, synthetic panels, Arab region, household surveys |
| JEL: | I3 J16 N35 O1 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16641&r=lab |
| By: | Lucy McMillan; Pinghui Wu |
| Abstract: | This study assesses the impact of involuntary job loss on college persistence by leveraging different job-loss timings relative to a student’s college enrollment decision. We find that job loss increases the probability that a working college student leaves college before attaining a degree, but access to short-term credit through credit card loans buffers this liquidity effect. By restricting credit supply to college students, the CARD Act of 2009 has inadvertently inhibited the ability of liquidity-constrained students to remain in college when their earnings unexpectedly fall, resulting in a stronger liquidity effect of job loss on college persistence over the last decade. |
| Keywords: | credit card loans; unemployment; college persistence |
| JEL: | I22 I23 J64 |
| Date: | 2023–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:97524&r=lab |
| By: | Averett, Susan; Bansak, Cynthia; Condon, Grace; Dziadula, Eva |
| Abstract: | Since 2001, about half of U.S. states have extended in-state college tuition benefits to undocumented immigrants. Some states have also offered financial aid, while others became more restrictive. Building on previous research, we exploit these additional policies, control for Deferred Action for Childhood Arrivals (DACA), and estimate the impact of in-state tuition on college enrollment, college graduation, employment, and self-employment. In our pooled sample of likely undocumented Hispanic youth, we corroborate the most recent work by also finding no effect of in-state tuition policies on enrollment. However, unlike previous studies, we allow for heterogeneity by gender and marital status and we demonstrate that there are gendered impacts. Women do not respond to in-state tuition. In contrast, men do enroll in college at higher rates regardless of financial aid opportunities. In-state tuition access results in higher graduation rates for women, driven by single women, but not for men. In terms of labor market attachment for undocumented youth, we find single women are more likely to work and single men to be self-employed when eligible for in-state tuition. Thus, the in-state policy motivates single women to complete their degrees and work. If policymakers intend to have a broader impact and target a more inclusive group of undocumented youth, including men, they should consider enhancing their opportunities in formal labor markets after college graduation. In support of this argument, we document a higher graduation and employment rates, along with lower self-employment rates, among DACA-eligible youth who have legal access to formal employment. |
| Keywords: | in-state tuition, undocumented immigrants |
| JEL: | J15 I22 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1359&r=lab |
| By: | Lucy McMillan; Pinghui Wu |
| Abstract: | This study assesses the effects of involuntary job loss and access to credit card loans on working college students’ decision to either remain in school (college persistence) or drop out. The authors conducted the underlying analysis using national data, but their findings are especially relevant to New England, where higher education employs 4 percent of the region’s workforce—more than twice the national average. College persistence therefore carries implications not only for the individual students, but also for the vitality of the region’s labor market. |
| Keywords: | New England; NEPPC; credit card loans; unemployment; college persistence |
| JEL: | I22 I23 J64 |
| Date: | 2023–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbcr:97523&r=lab |
| By: | János Köllő (HUN-REN Centre for Economic and Regional Studies, IZA); Anna Sebők (HUN-REN Centre for Economic and Regional Studies) |
| Abstract: | In 2013, the Hungarian government cut the school leaving age from 18 to 16. We study the impact of this unique reform on the country's sizeable Roma minority using census data on the universe of 17-year-olds in 2011 and a 10 percent random sample in 2016. School attendance fell by more than 20 percentage points among Roma youth as opposed to less than 6 points with their non-Roma counterparts. Roma's post-reform drawbacks in school enrolment were predominantly explained by their family background, neighborhood characteristics, and, much less importantly, below-average school performance. Changes in local employment prospects had no remarkable impact on the post-reform ethnic gap. More stringent selection and self-selection by social status and school performance (rather than ethnicity) nevertheless affected the Roma minority disproportionally, with close to 30 percent of their 17-year-old children being out of education, training, and employment three years after the reform. |
| Keywords: | Keywords: school leaving age, Roma, Hungary |
| JEL: | I24 J15 J48 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2331&r=lab |
| By: | Pascaline Dupas; Camille Falezan; Marie Christelle Mabeu; Pauline Rossi |
| Abstract: | Is the persistently high fertility in West Africa today rooted in the decades of forced labor migration under colonial rule? We study the case of Burkina Faso, considered the largest labor reservoir in West Africa by the French colonial authorities. Hundreds of thousands of young men were forcibly recruited and sent to work in neighboring colonies for multiple years. The practice started in the late 1910s and lasted until the late 1940s, when forced labor was replaced with voluntary wage employment. We digitize historical maps, combine data from multiple surveys, and exploit the historical, temporary partition of colonial Burkina Faso (and, more specifically, the historical land of the Mossi ethnic group) into three zones with different needs for labor to implement a spatial regression discontinuity design analysis. We find that, on the side where Mossi villages were more exposed to forced labor historically, there is more temporary male migration to Côte d'Ivoire up to today, and lower realized and desired fertility today. We show evidence suggesting that the inherited pattern of low-skill circular migration for adult men reduced the reliance on subsistence farming and the accompanying need for child labor. We can rule out women's empowerment or improvements in human and physical capital as pathways for the fertility decline. These findings contribute to the debate on the origins of family institutions and preferences, often mentioned to explain West Africa's exceptional fertility trends, showing that fertility choices respond to changes in modes of production. |
| JEL: | J13 N37 O15 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31993&r=lab |