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on Labour Economics |
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Issue of 2024‒05‒13
twenty papers chosen by |
| By: | Claudio Deiana; Ludovica Giua; Roberto Nisticò |
| Abstract: | This paper establishes a new fact about immigration policies: legalization has long-term effects on formal employment of undocumented immigrants and their assimilation. We exploit the broad amnesty enacted in Italy in 2002 together with rich survey data collected in 2011 on a representative sample of immigrant households to estimate the effect of regularization in the long run. Immigrants who were not eligible for the amnesty have a 14% lower probability of working in the formal sector a decade later, are subject to more severe ethnic segregation on the job and display less linguistic assimilation than their regularized counterparts. |
| Keywords: | undocumented immigrants, amnesty program, formal employment, discrimination, segregation |
| JEL: | J15 J61 K37 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11026&r=lab |
| By: | Christian Holzner; Makoto Watanabe |
| Abstract: | The Public Employment Agency (PEA) helps unemployed to find work and mediates PEA-registered job vacancies to job seekers via vacancy referrals. Using the spatial and temporal variation resulting from the regional roll-out of the Hartz 3 reform we are able to show that Hartz 3, which changed the counseling process of unemployed, decreased the fraction of unemployed that received vacancy referrals, increased the job-finding probability of unemployed without vacancy referrals, left the job-finding probability of unemployed with vacancy referrals unaffected, and increased average wages of newly hired, previously unemployed. Since the existing literature is not able to explain this set of findings, we develop a simple theoretical directed search model, which does. It does so by considering the interaction between the private market and the intermediation provided by the PEA. |
| Keywords: | public employment agency, natural experiment, job-finding probability, wages |
| JEL: | J08 J30 J60 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11032&r=lab |
| By: | Barrela, Rodrigo (Nova School of Business and Economics); Costa, Eduardo (Centre for Management Studies at Instituto Superior Técnico); Portugal, Pedro (Banco de Portugal) |
| Abstract: | We provide evidence showing, for the first time, that the sensitivity of real wages to the business cycle is much stronger for higher-wage workers than for lower-wage workers. Using matched employer-employee data for Portugal covering the period 1986-2021, we show that a one percentage point increase in the unemployment rate is associated with a decrease in real hourly wages of workers in the 90th percentile of the conditional wage distribution of around 1.3%, contrasted with 0.8% for those in the 10th percentile. This gap is even larger for newly hired workers – the estimates for the 90th percentile workers are double of those in the bottom decile. This pattern also holds for bargained wages and the wage cushion. These results can be explained by composition effects and heterogeneous sensitivities of firms and collective bargaining agreements (CBAs) to the cycle. First, the considerable gap in new hires' cyclicality arises mostly from match quality fluctuations over the business cycle and is sharply attenuated after we account for job match composition. Second, by estimating cyclicality coefficients for each firm/CBA, we find that firms and CBAs tend to provide a lower degree of insurance against aggregate cyclical fluctuations to higher paid individuals. These findings provide strong empirical evidence on the role of business cycles as amplifiers of inequality trends. |
| Keywords: | wage cyclicality, quantile regressions, match quality, collective bargaining agreements |
| JEL: | E24 E32 J64 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16911&r=lab |
| By: | Mahajan, Parag (University of Delaware); Morales, Nicolas (Richmond Fed); Shih, Kevin Y. (Queens College, CUNY); Chen, Mingyu (IZA); Brinatti, Agostina (University of Michigan) |
| Abstract: | We study how random variation in the availability of highly educated, foreign-born workers impacts firm performance and recruitment behavior. We combine two rich data sources: 1) administrative employer-employee matched data from the US Census Bureau; and 2) firmlevel information on the first large-scale H-1B visa lottery in 2007. Using an event-study approach, we find that lottery wins lead to increases in firm hiring of college-educated, immigrant labor along with increases in scale and survival. These effects are stronger for small, skill-intensive, and high-productivity firms that participate in the lottery. We do not find evidence for displacement of native-born, college-educated workers at the firm level, on net. However, this result masks dynamics among more specific subgroups of incumbents that we further elucidate. |
| Keywords: | immigration, firm dynamics, productivity, H-1B visa, high-skilled migration |
| JEL: | F22 J61 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16917&r=lab |
| By: | Hermes, Henning; Krauß, Marina; Lergetporer, Philipp; Peter, Frauke; Wiederhold, Simon |
| Abstract: | We provide experimental evidence that enabling access to universal early child care increases maternal labor supply and promotes gender equality among families with lower socioeconomic status (SES). Our intervention offers information and customized help with child care applications, leading to a boost in child care enrollment among lower-SES families. 18 months after the intervention, we find substantial increases in maternal full-time employment (+160%), maternal earnings (+22%), and household income (+10%). Intriguingly, the positive employment effects are not only driven by extended hours at child care centers, but also by an increase in care hours by fathers. Gender equality also benefits more broadly from better access to child care: The treatment improves a gender equality index that combines information on intra-household division of working hours, care hours, and earnings by 40% of a standard deviation, with significant increases in each dimension. For higher-SES families, we consistently observe negligible, insignificant treatment effects. |
| Keywords: | child care, gender equality, maternal employment, randomized controlled trial |
| JEL: | C93 J13 J18 J22 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:289799&r=lab |
| By: | Knutsson, Daniel (Orebro University School of Business); Tyrefors, Björn (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We evaluate a non-targeted summer youth employment program (SYEP) for high school students aged 16–19 in Stockholm, Sweden, where public sector job offers were as good as randomly assigned. In contrast to previous studies evaluating SYEP that targeted groups with lower socioeconomic status, we find substantial labor market effects but no effects on education, crime, or health outcomes. However, income is negatively affected except during the program year. The penalty increases in absolute terms but does not change much in relative terms over time. The penalty is consistently statistically significant and large just after high school graduation, but there are indications that the penalty attenuates at ages 24. The adverse effects are the largest for applicants not enrolled in an academic track, who are males, and with less educated mothers. Interestingly, the extensive margin (having a job) is not the critical factor. Instead, a SYEP job offer affects the probability of obtaining more qualified and full-time employment after high school graduation. We argue that receiving a program job leads to less private-sector labor market experience, provides a negative signal, and disrupts (private) labor market connections, which is vital for those seeking a job just after high school. |
| Keywords: | Labor market programs; Youth unemployment; Summer employment; Random list; SYEP |
| JEL: | J13 J21 J38 J45 |
| Date: | 2024–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1485&r=lab |
| By: | Davis, Steven J. (Hoover Institution); Samaniego de la Parra, Brenda (University of California, Santa Cruz) |
| Abstract: | We build and analyze a new U.S. database that links 125 million applications to job vacancies and employer-side clients on Dice.com, an online platform for jobs and workers in software design, computer systems, engineering, financial analysis, management consulting, and other occupations that require technical skills. We find, first, that posting durations are quite short, often only two or three days, with a median of seven days. Second, labor market tightness has tiny effects on posting durations. Third, job seekers display a striking propensity to target new postings, with almost half of applications flowing to openings posted in the past 48 hours. Fourth, applications per posting are much too uneven to reflect random search, even within narrow market segments and job categories. Moreover, posted offer wages play no role in explaining the deviations from a random-search benchmark. Fifth, intermediaries play a huge role on both sides of the platform: Recruitment and staffing firms account for two-thirds of all postings and attract most of the applications. We relate these and other findings to theories of labor market search. |
| Keywords: | worker applications, job vacancies, intermediaries, tightness, vacancy durations, non-sequential search, staffing firms, recruitment firms |
| JEL: | J6 M5 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16903&r=lab |
| By: | Fukai, Taiyo (University of Tsukuba); Kondo, Ayako (University of Tokyo) |
| Abstract: | This study examines the effect of availability of accredited childcare centers, the most popular category of publicly licensed childcare centers in Japan, on mothers' employment and earnings. We focus on mothers with children less than two years old, most of whom are returning from parental leave to full-time work under excess demand for center-based childcare. We construct an instrument from the first-round assignment process of April enrollment and find that the enrollment to an accredited childcare center increases the employment rate of mothers of zero- and one-year-old children by 40.3 and 18.8 percentage points, respectively. The effect of such enrollment on mothers' annual salary is mostly explained by the extensive margin. |
| Keywords: | childcare demand, childcare cost, maternal labor supply |
| JEL: | J13 J22 H40 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16880&r=lab |
| By: | Alexander Karaivanov; Benoit Mojon; Luiz Awazu Pereira da Silva; Albert Pierres Tejada; Robert M Townsend |
| Abstract: | We model a reinsurance mechanism for the national unemployment insurance programs of euro area member states. The proposed risk-sharing scheme is designed to smooth country-level unemployment risk and expenditures around each country's median level, so that participation and contributions remain incentive-compatible at all times and there are no redistributionary transfers across countries. We show that, relative to the status quo, such scheme would have provided nearly perfect insurance of the euro area member states' unemployment expenditures risk in the aftermath of the 2009 sovereign debt crisis if allowed to borrow up to 2 percent of the euro area GDP. Limiting, or not allowing borrowing by the scheme would have still provided significant smoothing of surpluses and deficits in the national unemployment insurance programs over the period 2000-2019. |
| Keywords: | unemployment insurance, risk sharing, reinsurance, euro area, fiscal policy, mechanism design, limited commitment |
| JEL: | E62 J65 F32 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1180&r=lab |
| By: | Mariano Kulish; James Morley; Nadine Yamout; Francesco Zanetti |
| Abstract: | We examine the relevance of Dutch Disease through the lens of an open-economy multisector model that features unemployment due to labor market frictions. Bayesian estimates for the model quantify the effects of both business cycle shocks and structural changes on the unemployment rate. Applying our model to the Australian economy, we find that the persistent rise in commodity prices in the 2000s led to an appreciation of the exchange rate and fall in net exports, resulting in upward pressure on unemployment due to sectoral shifts. However, this Dutch Disease effect is estimated to be quantitatively small and offset by an ongoing secular decline in the unemployment rate related to decreasing relative disutility of working in the non-tradable sector versus the tradable sector. The changes in labor supply preferences, along with shifts in household preferences towards non-tradable consumption that are akin to a process of structural transformation, makes the tradable sector more sensitive to commodity price shocks but a smaller fraction of the overall economy. We conclude that changes in commodity prices are not as relevant as other shocks or structural changes in accounting for unemployment even in a commodity-rich economy like Australia. |
| Date: | 2024–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:1045&r=lab |
| By: | Kabir Dasgupta; Linda Kirkpatrick; Alexander Plum |
| Abstract: | The COVID-19 pandemic had disproportionate impacts on women's employment, especially for mothers with school-age and younger children.However, the impacts likely varied depending on the type of policy response adopted by various governments. New Zealand presents a unique policy setting in which one of the strictest lockdown restrictions was combined with a generous wage subsidy scheme to secure employment. We utilize tax records to compare employment patterns of parents from the pandemic period (treatment group) to similar parents from a recent pre-pandemic period (control group). For mothers whose youngest child is aged between one and 12, we find a 1-2-percentage point decline in the likelihood of being employed in the first six months of the pandemic; for fathers, we hardly see any significant changes in employment. Additionally, the decline in mothers' employment rates is mainly driven by those not employed in the month before the lockdown. We also find similar employment patterns for future parents who had no children during the evaluation period. This indicates that the adverse labour market impacts are not uniquely experienced by mothers, but by women in general. |
| Keywords: | Pandemic; Employment; Parental gap; Administrative data |
| JEL: | D10 D13 E24 |
| Date: | 2024–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2024-12&r=lab |
| By: | Baker, Michael; Halberstam, Yosh; Kroft, Kory; Mas, Alexandre; Messacar, Derek |
| Abstract: | We study the effects of the unionization of faculty at Canadian universities from 1970-2022 using an event-study design. Using administrative data which covers the full universe of faculty salaries, we find strong evidence that unionization leads to both average salary gains and compression of the distribution of salaries. Our estimates indicate that salaries increase on average by 2 to over 5 percent over the first 6 years post unionization. These effects are driven largely by gains in the bottom half of the wage distribution with little evidence of any impact at the top end. Our evidence indicates that the wage effects are primarily concentrated in the first half of our sample period. We do not find any evidence of an impact on employment. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:clefwp:289600&r=lab |
| By: | Schoppengerd, Stefan |
| Abstract: | Industrial trade unions in Europe and North America often struggle to develop a coherent strategy on climate change and overcoming fossil fuel production patterns. Trade union policy in the German steel industry is an interesting example of this: the "green" restructuring is firmly in favour, as it is easily compatible with positions on maintaining production sites. However, the hydrogen technology required for this brings with it new contradictions. At the same time, the IG Metall trade union recently held a collective bargaining round on reducing working hours in the socio-ecological transformation. This working paper analyses this situation by reconstructing the fundamental structures of industrial relations, the coming hydrogen economy and working time policy. |
| Keywords: | Steel, Hydrogen, Working Time Policy, Just Transition, Socio-Ecological Transformation |
| JEL: | J51 J59 L50 L61 O14 Q55 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:290386&r=lab |
| By: | Aldén, Lina (Linnaeus University); Hammarstedt, Mats (Linnaeus University); Skedinger, Per (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Our use of longitudinal register data combined with a unique survey allows us to offer a more comprehensive picture of rural self-employment than in previous studies. We find that self-employed in rural settings are more likely than those in metropolitan regions to employ others, but self-employment rates in rural areas are lower. There is substantial heterogeneity among the rural self-employed; in-movers are quite different from stayers in terms of their perceptions of the conditions necessary for business success and their employment practices. Policy initiatives aimed at fostering development in rural areas should consider these distinctions. |
| Keywords: | Self-Employment; Labor Mobility; Regional Development; Rural Economics |
| JEL: | J24 J61 R11 |
| Date: | 2024–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1487&r=lab |
| By: | Charles Gottlieb (Aix-Marseille Univ., CNRS, AMSE, Marseille, France) |
| Abstract: | Across countries, women and men allocate time differently between market work, domestic services, and care work. In this paper, we document the gender division of work, drawing on a new harmonized data set that provides us with high-quality time use data for 50 countries spanning the global income distribution. A striking feature of the data is the wide dispersion across countries at similar income levels. We use these data to motivate a macroeconomic model of household time use in which country-level allocations are shaped by wages and a set of “wedges” that resemble productivity, preferences, and disutilities. Taking the model to country-level observations, we find that a wedge related to the disutility of market work for women plays a crucial role in generating the observed dispersion of outcomes, particularly for middle-income countries. Variation in the division of non-market work is principally shaped by a wedge indicating greater disutility for men, which is especially large in some low- and middle-income countries. |
| Keywords: | labor supply, home production, care work, time use, gender inequality, gender norms |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:2411&r=lab |
| By: | Audoly, Richard; McGee, Rory; Ocampo Díaz, Sergio; Paz Pardo, Gonzalo |
| Abstract: | We use 25 years of tax records for the Norwegian population to study the mobility of wealth over people's lifetimes. We find considerable wealth mobility over the life cycle. To understand the underlying mobility patterns, we group individuals with similar wealth rank histories using agglomerative hierarchical clustering, a tool from statistical learning. The mobility patterns we elicit provide evidence of segmented mobility. Over 60 percent of the population remains at the top or bottom of the wealth distribution throughout their lives. Mobility is driven by the remaining 40 percent, who move only within the middle of the distribution. Movements are tied to differential income trajectories and business activities across groups. We show parental wealth is the key predictor of who is persistently rich or poor, while human capital is the main predictor of those who rise and fall through the middle of the distribution. |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:clefwp:290389&r=lab |
| By: | Stansbury, Anna (MIT) |
| Abstract: | There is substantial evidence of minimum wage noncompliance in the US and the UK. In this paper, I compile new, comprehensive data on the costs minimum wage violators incur when detected. In both countries, the costs violators face upon detection are often little more than the money they saved by underpaying. To have an incentive to comply under existing penalty regimes, typical US firms would thus have to expect a 47%-83% probability of detection by the DOL, or a 25% probability of a successful FLSA suit. In the UK, typical firms would have to expect a 44%-56% probability of detection. Actual probabilities of detection are substantially lower than this for many firms, and would likely remain so even with realistic increases in enforcement capacity. Improved enforcement alone is thus insufficient: expected penalties must also substantially increase to ensure that most firms have an incentive to comply. |
| Keywords: | minimum wage, labor standards, compliance and enforcement, industrial relations |
| JEL: | J38 J58 K31 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16882&r=lab |
| By: | Alessia Lo Turco (Università Politecnica delle Marche); Daniela Maggioni (Università Cattolica del Sacro Cuore); Federico Trionfetti (Aix-Marseille Univ., CNRS, AMSE, Marseille, France) |
| Abstract: | Data on EU economies show no correlation between low-skilled immigration and the skill premium. We rationalise this evidence in a model where firms face search and screening costs. Low-skilled immigration diminishes the relative benefit of screening skilled workers, leading to a decline in their relative ability within the firm and an undetermined impact on the skill premium. On region-sector and firm level data from 2008 to 2013, we find that low-skilled immigration in Italian regions has reduced skill intensity without affecting the skill premium. Using proxies for workers’ ability and screening activity, we provide supporting evidence for the theorised mechanisms. |
| Keywords: | matching, screening, skill-intensity, factor relative ability |
| JEL: | F22 J61 F16 D24 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:2414&r=lab |
| By: | Feriga, Moustafa (World Bank); Lozano Gracia, Nancy (World Bank); Serneels, Pieter (University of East Anglia) |
| Abstract: | This paper identifies five areas where climate change may impact work and draws lessons for developing countries by reviewing the evidence. Firstly, demand for labor is unevenly affected, with agriculture, heat-exposed manufacturing, and the brown energy sector experiencing downturns, while other sectors may see a rise, resulting in an uncertain overall impact. Secondly, climate change impacts labor supply through absenteeism, shirking, and altering work-time patterns, depending on the activity and sector. Thirdly, productivity may decline, especially in heat-exposed industries, primarily due to health reasons. Fourthly, heightened earnings variability likely increases vulnerability among the self-employed. Fifthly, climate change can influence labor allocation and catalyze sectoral reallocation. Higher temperatures are also linked to increased migration. But caution is needed in interpreting these findings, as studies across these topics predominantly use fixed effect estimation and concentrate on short-term impacts, neglecting adaptation. Emerging research on adaptation indicates that workplace cooling is unappealing for firms with narrow profit margins, while coping strategies of farms and households have unclear optimality due to adoption barriers. Government responses remain understudied, with six potential areas identified: green jobs, green skills, labor-oriented adaptation, flexible work regulation, labor market integration, and social protection. The paper concludes by outlining future research directions. |
| Keywords: | climate change, labor, development |
| JEL: | Q54 J01 O1 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16914&r=lab |
| By: | Moens, Eline (Ghent University); Lippens, Louis (Ghent University); D'hert, Liam (Ghent University); Baert, Stijn (Ghent University) |
| Abstract: | This letter adds to the literature on the importance of telework experience in employee evaluation by leveraging the telework experience accumulated during the COVID-19 crisis. We conducted a follow-up survey on the evaluation of telework exactly three years after our initial data collection in 2020. We find evidence of a learning curve regarding self-reported i) efficiency in performing tasks, ii) work-life balance, and iii) concentration during work, characterised by a more positive evaluation as telework experience increased. Migration background, feedback on the job, and compatibility of the job with telework moderate the effect of telework experience on the evaluation of telework over time. |
| Keywords: | telework, learning curve, time evolution |
| JEL: | J24 J28 J32 J81 I31 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16900&r=lab |