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on Labour Economics |
| By: | Thomas Le Barbanchon; Johannes F. Schmieder; Andrea Weber |
| Abstract: | This chapter, prepared for the Handbook of Labor Economics, presents a comprehensive overview of how labor economists understand job search among the unemployed and how job search is shaped by unemployment insurance (UI) and active labor market policies (ALMP). It focuses on synthesizing key lessons from the empirical research of the last decade and presents recent novel theoretical developments. |
| JEL: | H0 J0 J6 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32720 |
| By: | Thibaut Lamadon; Jeremy Lise; Costas Meghir; Jean-Marc Robin |
| Abstract: | This paper develops the nonparametric identification of models with production complementarities, worker-firm specific disutility of labor and search frictions. Mobility in the model is subject to preference shocks, and we assume that firms can write wage contracts. We develop a constructive proof for the nonparametric identification of the model primitives from matched employer-employee data. We use the estimated model to decompose the sources of wage dispersion into worker heterogeneity, compensating differentials, and search frictions that generate between-firm and within-firm dispersion. We find that compensating differentials are substantial on average, but the contribution differs greatly between the lowest and highest types of workers. Finally, we use the model to provide an economic interpretation of several empirical regularities. |
| JEL: | J0 J01 J20 J31 J41 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32687 |
| By: | Parolin, Zachary (Bocconi University); Pignatti, Clemente (ILO International Labour Organization) |
| Abstract: | We study the interaction between unemployment insurance (UI) and other social transfers exploiting state-level changes to UI generosity and data from the Survey of Income and Program Participation (1990-2013). We find that more generous UI leads to a reduction in the receipt of other public transfers. This results from a short-term decrease in the probability of receiving means-tested programs, like the Supplemental Nutrition Assistance Program, and a long-term reduction in the probability of receiving Social Security benefits. Accounting for these interactions, the optimal UI replacement rate may be 17 percentage points higher than the current rate in the US. |
| Keywords: | unemployment insurance, social security, welfare analysis |
| JEL: | J01 J08 J65 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17095 |
| By: | Vojtĕch Bartŏs; Silvia Castro; Kristina Czura; Timm Opitz; Vojtech Bartos |
| Abstract: | We analyze gender bias in entrepreneurship finance. Access to finance is crucial for entrepreneurial success, yet women are particularly constrained. We structurally unpack whether loan officers evaluate business ideas and implementation constraints differently for male and female entrepreneurs, for both individual entrepreneurs and for entrepreneurial teams. In a lab-in-the-field experiment with Ugandan loan officers, we document gender bias against individual female entrepreneurs, but no bias for entrepreneurial teams. The bias is not driven by animus but by differential beliefs about women’s implementation constraints in running a business. Policies aimed at team formation and alleviating family-related constraints may help to promote equal access to finance, ultimately stimulating growth. |
| Keywords: | gender bias, access to finance, entrepreneurship finance, business evaluations, teams, lab-in-the-field experiment |
| JEL: | C90 D91 G21 J16 L25 L26 O16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11205 |
| By: | Jessen, Jonas (IZA); Schweighofer-Kodritsch, Sebastian (Humboldt University Berlin); Weinhardt, Felix (European University Viadrina, Frankfurt / Oder); Berkes, Jan (Federal Ministry of Labour and Social Affairs) |
| Abstract: | Using novel time-use data from Germany before and after reunification, we document two facts: First, spouses who both work full-time exhibit similar housework patterns whether they do so voluntarily or due to a full-time mandate, as in the GDR. Second, men's amount of housework is independent of their spouse's labour supply. We theoretically explain this pattern by the presence of two household goods and socially learned gender-specific comparative advantage in their home production. We label this gender specialisation as separate housework spheres. Empirical evidence strongly confirms separate housework spheres in the GDR, West Germany, subsequent years post-reunification, and in international time-use data across 17 countries since the 1970s. We consider several implications, such as those for child penalties, where separate housework spheres provide a novel explanation for why it is the mothers whose labour market outcomes strongly deteriorate upon the arrival of children. |
| Keywords: | gender, household allocation of time, norms |
| JEL: | D13 J16 J22 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17134 |
| By: | Serdar Birinci; Fatih Karahan; Yusuf Mercan; Kurt See |
| Abstract: | We study the positive and normative implications for inflation of employer-to-employer (EE) worker transitions by developing a heterogeneous agent New Keynesian model featuring a frictional labor market with on-the-job search. We find that EE dynamics played an important role in shaping the differential inflation dynamics observed during the Great Recession and COVID-19 recoveries. Despite both recoveries sharing similar unemployment dynamics, the recovery from the Great Recession exhibited subdued EE transitions and inflation dynamics. In our model, the optimal monetary policy involves a strong positive response to EE fluctuations, suggesting that central banks should distinguish between recovery episodes with different EE dynamics even if they have similar unemployment rates. |
| Keywords: | job mobility; monetary policy; HANK model; job search |
| JEL: | E12 E24 E52 J31 J62 J64 |
| Date: | 2024–05–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedkrw:98509 |
| By: | Consolo, Agostino; Hänsel, Matthias |
| Abstract: | Since the advent of Heterogeneous Agent New Keynesian (HANK) models, countercyclical unemployment risk has been deemed an important amplification mechanism for business cycles shocks. Yet, the aggregate effects of such “unemployment fears” are hard to pin down. We thus revisit this issue in the context of a rich two-asset HANK model, proposing new ways to isolate their general equilibrium effects and tackle the long-standing challenge of modelling wage bargaining in this class of model. While unemployment fears can exert noticeable aggregate effects, we find their magnitude to depend importantly on the distribution of firm profits. Households’ ability to borrow stabilizes the economy. Our framework has also implications for policy: in the aftermath of an adverse energy price shock, fiscal policy can help reducing the hysteresis effects on unemployment and most households gain if the central bank accommodates an employment recovery at the cost of higher inflation. JEL Classification: D52, E24, E52, J64 |
| Keywords: | alternating offer bargaining, heterogeneous models, monetary and fiscal policy, search and matching models |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242953 |
| By: | Jensen, Mathias Fjællegaard (University of Oxford); Zhang, Ning (Chinese University of Hong Kong) |
| Abstract: | Nearly everyone experiences the death of a parent in adulthood, but little is known about the effects of parental death on adult children's labor market outcomes and the underlying mechanisms. In this paper, we use Danish administrative data to examine the effects of losing a parent on individual labor market outcomes and its contribution to gender earnings inequalities. Our empirical design leverages the timing of sudden, first parental deaths, allowing us to focus on the health and family support channels. Our findings reveal enduring negative effects on the earnings of both adult sons and daughters: sons' earnings drop by 2% in the fifth year after parental death, while daughters' earnings drop by 3% during the same period. Exploring the underlying mechanisms, we observe that both women and men experience increased mental health issues after parental loss, albeit manifesting differently: women tend to seek psychological assistance more frequently, while men receive more mental health-related and opioid prescriptions. Furthermore, we find that women with young children experience a comparatively larger drop (around 4%) in earnings after parental death due to the loss of informal childcare, a factor that significantly contributes to the gender pay gap. Lastly, we show that women experience a greater decline in earnings if their surviving parent requires higher levels of eldercare. These findings collectively underscore a substantial labor market penalty for individuals who experience parental death and emphasize the role of informal care in contributing to gender pay disparities. |
| Keywords: | parental death, earnings, gender inequalities, mental health, family support |
| JEL: | D64 J10 J16 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17127 |
| By: | Julian Budde; Thomas Dohmen; Simon Jäger; Simon Trenkle |
| Abstract: | We study the descriptive and substantive representation of workers through worker representatives, focusing on the selection of German works council representatives and their impact on worker outcomes. Becoming a professional representative leads to substantial wage gains for the elected, concentrated among blue-collar workers. Representatives are positively selected in terms of pre-election earnings and person fixed effects. They are more likely to have undergone vocational training, show greater interest in politics, and lean left politically compared to the employees they represent; blue-collar workers are close to proportionally represented among works councilors. Drawing on a retirement-IV strategy and event-study designs around council elections, we find that blue-collar representatives reduce involuntary separations, consistent with blue-collar workers placing stronger emphasis on job security |
| JEL: | J5 J51 J54 J63 P12 P13 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32740 |
| By: | Görg, Holger (Kiel Institute for the World Economy); Jäkel, Ina C. (Aarhus University) |
| Abstract: | In this paper, we investigate whether gender norms and institutions act as a constraint to the performance of female businesses. We exploit novel and unique micro data on start-ups in Denmark, which we combine with information on individual-level characteristics of the entrepreneur as main decision maker of the firm. We overcome the challenge of disentangling norms and institutional biases against women from other constraints and hurdles that female businesses might face by exploiting detailed trade data. In this trade context, we study the relative performance of firms across markets with varying institutions, while controlling for other factors that affect female businesses uniformly across all markets. We provide evidence that gender inequality and institutional biases against women in trade partner countries play an important role in explaining gender differences in export and import behaviour. We also perform an event study of a concrete policy change in a destination market – the introduction of quotas for the share of females on the boards of directors in Norway – and how it has affected the gender gap in trade participation. |
| Keywords: | gender inequality, firm internationalization, start-up performance |
| JEL: | F14 J16 M13 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17123 |
| By: | Davide Malacrino; Samuel Nocito; Raffaele Saggio |
| Abstract: | This paper examines the impact of a reform aimed at expediting graduation times in Italian universities by reducing the number of exams students must pass to obtain a fixed number of credits. Using event-study estimates that leverage the reform's staggered implementation, we find that this policy change led to an increase in on-time graduation rates. However, it also resulted in a decreased probability of employment one-year post-graduation. This negative effect vanishes in the medium run, suggesting that the reform's compliers—students who managed to graduate on time under the new regime but would have been delayed in the pre-reform regime—might have engaged in less intensive job search efforts immediately after graduation. |
| JEL: | I24 I26 I29 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32659 |
| By: | Catalina Amuedo-Dorantes; Monica Deza; Genti Kostandini; Tianyuan Luo |
| Abstract: | We estimate the effect of granting access to driver licenses to undocumented immigrants on their offspring’s access to early childhood education (ECE). Using individual-level data from the ACS, we find that granting driving privileges to undocumented immigrants leads to a 6% increase in ECE attendance among Hispanic children with likely undocumented parents. We explore potential mechanisms and find that these laws enhance mobility, driving autonomy, and English proficiency among likely undocumented immigrants. These laws also increase hourly wages among likely undocumented mothers, which may increase their bargaining power and financial resources. The findings highlight the positive externalities of extending driving privileges to undocumented immigrants. |
| JEL: | I24 J15 J6 J68 K37 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32723 |
| By: | Eva Vivalt; Elizabeth Rhodes; Alexander W. Bartik; David E. Broockman; Sarah Miller |
| Abstract: | We study the causal impacts of income on a rich array of employment outcomes, leveraging an experiment in which 1, 000 low-income individuals were randomized into receiving $1, 000 per month unconditionally for three years, with a control group of 2, 000 participants receiving $50/month. We gather detailed survey data, administrative records, and data from a custom mobile phone app. The transfer caused total individual income to fall by about $1, 500/year relative to the control group, excluding the transfers. The program resulted in a 2.0 percentage point decrease in labor market participation for participants and a 1.3-1.4 hour per week reduction in labor hours, with participants’ partners reducing their hours worked by a comparable amount. The transfer generated the largest increases in time spent on leisure, as well as smaller increases in time spent in other activities such as transportation and finances. Despite asking detailed questions about amenities, we find no impact on quality of employment, and our confidence intervals can rule out even small improvements. We observe no significant effects on investments in human capital, though younger participants may pursue more formal education. Overall, our results suggest a moderate labor supply effect that does not appear offset by other productive activities. |
| JEL: | H0 J01 J08 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32719 |
| By: | Matti Hovi (Tampere University and Finnish Center of Excellence in Tax Systems Research FIT); Sami Remes (Tampere University and Finnish Center of Excellence in Tax Systems Research FIT) |
| Abstract: | This study investigates how labor market conditions at graduation affect individual’s labor market outcomes when facing employment shocks in later career, specifcally due to plant closures. We focus on university graduates and vocational school graduates as two distinct groups. Our findings reveal that the long-term earnings loss following a plant closure is 175% higher for those university graduates who entered the labor market during periods of high regional unemployment. Additionally, these unlucky university graduates are more likely to work in lower quality firms. Among vocational school graduates, we do not find a similar additional negative effect on earnings or employment quality for unlucky graduates. Instead, our results suggest higher labor market activity compared to the luckiest graduates. |
| Keywords: | Displacement, Plant closure, Business cycle, Recession, Graduation |
| JEL: | J21 J24 J65 E32 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:24 |
| By: | Gulati, Kajal; Saha, Koustuv; Lybbert, Travis J. |
| Abstract: | Most studies on gender gaps in agricultural productivity leverage within-household differences between plots managed by women and men. Such a gender-based division of plot management simplifies empirical tests for productivity differences, but it is not a common arrangement for agricultural households outside some locations in sub-Saharan Africa. In most rural households, women and men jointly participate in production, which complicates identification of gender- based productivity differences. This study proposes a broader empirical test of productivity gaps that applies to such systems, and that is rooted not explicitly in gender but in gender-based inequities. Specifically, we explore productivity gaps in rice-cultivating Indian households, where women and men perform specific and distinct cultivation tasks. We measure productivity gaps based on the differential use of family and hired female labor across households, then compare them with gaps based on the differential use of family and hired male labor. Using plot-level data, we identify significant gender-based productivity gaps after controlling for input use, plot- and household-level characteristics, and using village fixed effects and machine learning estimators to address selection and model misspecification concerns. Based on this identification strategy, households using family female labor have lower agricultural productivity, on average, than those also hiring female workers, such that foregone production value is greater than the cost of hiring women. We find suggestive evidence that this gap stems from skill differences between hired and family female workers. In contrast, we find no evidence of a similar gap based on the differential use of family and hired male labor. Overall, household welfare is lower because of gender inequities that shape women's work opportunities. These findings highlight the potential productivity implications of expanding women's labor choices, including both on- and off-farm job opportunities. |
| Keywords: | Consumer/Household Economics, Farm Management, International Development |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344301 |
| By: | Chloe R. Gibbs; Jocelyn Wikle; Riley Wilson |
| Abstract: | As women increasingly entered the labor force throughout the late 20th century, the challenges of balancing work and family came to the forefront. We leverage pronounced changes in the availability of public schooling for young children—through duration expansions to the kindergarten day—to better understand mothers’ and families’ constraints. We first show that mothers of children in full-day kindergarten spend significantly more time at work, less time with their children, less time performing household duties, and less time commuting with their children in the middle of the day relative to mothers with half-day kindergarteners. Exploiting full-day kindergarten variation across place and time from 1992 through 2022, combined with the narrow age targeting of kindergarten, we document the impact of full-day kindergarten access on parental labor supply, family childcare costs, and children’s subsequent academic outcomes. Our estimates of the maternal employment effects imply that full-day kindergarten expansions were responsible for as much as 24 percent of the growth in employment of mothers with kindergarten-aged children in this time frame. |
| Keywords: | public schooling, kindergarten, maternal labor supply |
| JEL: | H75 I28 J13 J22 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11200 |
| By: | Illenin O. Kondo; Kevin Rinz; Natalie Gubbay; Brandon Hawkins; John L. Voorheis; Abigail K. Wozniak |
| Abstract: | We explore the evolution of income inequality and mobility in the U.S. for a large number of subnational groups defined by race and ethnicity, using granular statistics describing income distributions, income mobility, and conditional income growth derived from the universe of tax filers and W-2 recipients that we observe over a two-decade period (1998–2019). We find that income inequality and income growth patterns identified from administrative tax records differ in important ways from those that one might identify in public survey sources. The full set of statistics that we construct is available publicly alongside this paper as the Income Distributions and Dynamics in America, or IDDA, dataset. Using two applications, we illustrate IDDA’s relevance for understanding income inequality trends. First, we extend Bayer and Charles (2018) beyond earnings gaps between Black and White men and document that, unlike those for other groups, earnings for both Black men and Black women fell behind earnings for White men following the Great Recession. This trend lasted through 2019, the end of the data period. Second, we document a significant reversal in the convergence of earnings for Native earners in Native areas. |
| JEL: | D1 D31 J15 J16 J31 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32709 |
| By: | Ailbhe Brioscú; Anne Lauringson; Anne Saint-Martin; Theodora Xenogiani |
| Abstract: | As part of broader digitalisation efforts, half of public employment services (PES) in OECD countries are employing Artificial Intelligence (AI) to enhance their services. AI is being adopted across all key tasks of PES, including most commonly to match jobseekers with vacancies. While several PES have been using such tools for a decade, adoption of AI has been increasing in recent years as these become more accessible. New AI use cases have emerged to assist employers in designing vacancy postings and jobseekers in their career management and job-search strategies. AI initiatives have significant impact on PES clients, changing how they interact with the PES and receive support, and PES staff, altering their day-to-day work. As PES seek to maximise the opportunities brought by AI, proactive steps should be taken to mitigate associated risks. Key considerations for PES include prioritising transparency of AI algorithms and explainability of results, establishing governance frameworks, ensuring end-users (staff and clients) are included and supported in the development and adoption process, and committing to rigorous monitoring and evaluation to increase the positive and manage any negative impact of AI solutions. |
| Keywords: | activation, artificial intelligence, digitalisation, job matching, profiling, public employment services, unemployment |
| JEL: | J24 J63 J64 J68 O33 |
| Date: | 2024–06–13 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:19-en |
| By: | Christopher S. Carpenter; Lucas Goodman; Maxine J. Lee |
| Abstract: | We provide the first evidence on transgender earnings in the US using administrative data on over 55, 000 individuals who changed their gender marker with the Social Security Administration and had gender-congruent first name changes on tax records. We validate and describe this sample which exhibits positive selection likely associated with the ability to legally affirm gender. To address selection we estimate transgender earnings gaps using timing variation within-person and variation across siblings and coworkers. All three approaches return evidence of robust transgender earnings penalties of 6-13 log points driven by extensive and intensive margin differences. |
| JEL: | J0 J10 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32691 |
| By: | Andrew Garin; Dmitri K. Koustas; Carl McPherson; Samuel Norris; Matthew Pecenco; Evan K. Rose; Yotam Shem-Tov; Jeffrey Weaver |
| Abstract: | We study the effect of incarceration on wages, self-employment, and taxes and transfers in North Carolina and Ohio using two quasi-experimental research designs: discontinuities in sentencing guidelines and random assignment to judges. Across both states, incarceration generates short-term drops in economic activity while individuals remain in prison. As a result, a year-long sentence decreases cumulative earnings over five years by 13%. Beyond five years, however, there is no evidence of lower employment, wage earnings, or self-employment in either state, as well as among defendants with no prior incarceration history. These results suggest that upstream factors, such as other types of criminal justice interactions or pre-existing labor market detachment, are more likely to be the cause of low earnings among the previously incarcerated, who we estimate would earn just $5, 000 per year on average if spared a prison sentence. |
| JEL: | H2 J01 J20 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32747 |
| By: | Michel Beine; Michel Bierlaire; Evangelos Paschalidis; Silvia Varotto; Andreas B. Vortisch |
| Abstract: | We address the question of the impact of a possible Trump reelection on the location choices of potential Mexican migrants. We use migration aspiration data from the Gallup World Poll Surveys which provide the preferred location choices of Mexican respondents before, during and after the Trump Presidency. We show that Trump presidency led to an increase in disapproval rates about the US leadership among Mexican respondents, which in turn led to a reduced level of attractiveness of the US location. Using a Cross-Nested Logit model that allows to account for the heterogeneity in the substitution patterns between alternative locations to the US, we simulate the impact of a possible reelection of Donald Trump based on different scenarios about these dis-approval rates. We find that such a reelection would lead to an increase in the number of stayers in Mexico but would also create heterogeneous immigration pressures from Mexico across potential foreign locations. In particular, countries such as Canada, the UK, Germany, Spain, and France would face significantly higher increases in Mexican immigration pressures. We also show that the reelection of Donald Trump would lower the skill content of Mexican potential immigrants in the US and would induce an opposite effect in destinations that are perceived as close substitutes. |
| Keywords: | location choice models, migration aspirations, Mexican immigrants, substitution effects |
| JEL: | C25 F22 J61 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11195 |
| By: | Joanna Tyrowicz (Group for Research in Applied Economics (GRAPE); University of Warsaw; Institute of Labor Economics (IZA); University of Warsaw; Group for Research in Applied Economics (GRAPE)); Katarzyna Bech - Wysocka (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics) |
| Abstract: | We study the effects of gender board diversity on firm performance. We use novel and rich firm-level data covering over seven million private and public firms spanning the years 1995- 2020 in Europe. We augment a standard TFP estimation with firm fixed effects to explore the role of gender board diversity. We construct a shift-share instrument for gender board diversity and find that increasing the share of women on boards is conducive to better economic performance. The results prove robust to a variety of sensitivity analysis. This outcome is driven primarily by firms from the service sector and by smaller firms. The impact was stronger during the early years of our sample. |
| Keywords: | firm performance, gender board diversity |
| JEL: | J16 J88 D22 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fme:wpaper:95 |
| By: | Raj Chetty; Will S. Dobbie; Benjamin Goldman; Sonya Porter; Crystal Yang |
| Abstract: | We show that intergenerational mobility changed rapidly by race and class in recent decades and use these trends to study the causal mechanisms underlying changes in economic mobility. For white children in the U.S. born between 1978 and 1992, earnings increased for children from high-income families but decreased for children from low-income families, increasing earnings gaps by parental income (“class”) by 30%. Earnings increased for Black children at all parental income levels, reducing white- Black earnings gaps for children from low-income families by 30%. Class gaps grew and race gaps shrank similarly for non-monetary outcomes such as educational attainment, standardized test scores, and mortality rates. Using a quasi-experimental design, we show that the divergent trends in economic mobility were caused by differential changes in childhood environments, as proxied by parental employment rates, within local communities defined by race, class, and childhood county. Outcomes improve across birth cohorts for children who grow up in communities with increasing parental employment rates, with larger effects for children who move to such communities at younger ages. Children’s outcomes are most strongly related to the parental employment rates of peers they are more likely to interact with, such as those in their own birth cohort, suggesting that the relationship between children’s outcomes and parental employment rates is mediated by social interaction. Our findings imply that community-level changes in one generation can propagate to the next generation and thereby generate rapid changes in economic mobility. |
| JEL: | H0 J0 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32697 |
| By: | Laura Kawano; Bruce Sacerdote; William L. Skimmyhorn; Michael Stevens |
| Abstract: | Using the quasi-random assignment of 760, 000 children in U.S. military families, we show that neighborhood attributes experienced during childhood have powerful impacts on SAT scores, college-going and earnings. For earnings and college going outcomes, location during high school is twice as important as location during elementary school, and for SAT scores, location during middle school has the strongest impact. There is little evidence of positive interactions in neighborhood quality across ages groups. Importantly, the same locations benefi t children with equal potency across race or sex. Twenty years of exposure in a 1 standard deviation "better" county raises SAT composite scores by 10 points (1.8 percentiles), raises college attendance by 1.7 percentage points, earnings by 2.2 percentile points, and lowers EITC receipt by 10%. Impacts are three times more potent when we measure neighborhood quality at the zip code level: twenty years of exposure to a one (county level) standard deviation better zip code raises college going by 6.7 percentage points, SAT composite by 38 points and income percentile at age 25 by 6.1 points. By equalizing average neighborhood quality for Black and White families, we estimate that the Army's quasi-random assignment reduces Black-white earnings gaps among the children of Army personnel by 23%. |
| JEL: | I0 I24 J0 J01 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32674 |
| By: | Kohaut, Susanne; Schnabel, Claus |
| Abstract: | This paper documents and analyses the demise of works councils in Germany in the period 2007-2022. Using representative panel data, we show that the share of plants with a works council has fallen substantially in the private sector but not in the public sector. Almost two-thirds of workers in the private sector in Germany are not covered by worker co-determination anymore. We present first evidence that firm dynamics (i.e. entries and exits of firms) seem to be one contributory factor to the reduction in works council coverage over time. Multivariate analyses indicate that three variables play an important role in explaining the (non-)existence and the dissolution of works councils. These are plants' decreasing coverage by collective bargaining agreements, the growing relevance of alternative, non-statutory forms of worker representation, and the owner-management of a plant. As our results paint a bleak picture for the future of plant-level co-determination in Germany, we critically discuss a number of policy measures to stabilize works council prevalence. |
| Abstract: | Diese Studie dokumentiert und analysiert den Niedergang von Betriebsräten in Deutschland im Zeitraum von 2007 bis 2022. Mit repräsentativen Paneldaten zeigen wir, dass der Anteil der Betriebe mit einem Betriebsrat im privaten (nicht aber im öffentlichen) Sektor deutlich zurückgegangen ist. Fast drei Drittel der Beschäftigten im privaten Sektor werden nicht mehr von der betrieblichen Mitbestimmung erfasst. Wir präsentieren erstmals empirische Evidenz, dass Firmendynamiken (d.h. Einund Austritte von Firmen) zum Rückgang der Verbreitung von Betriebsräten beizutragen scheinen. Multivariate Analysen deuten darauf hin, dass drei Variablen eine wichtige Rolle bei der Erklärung der (Nicht-)Existenz und Auflösung von Betriebsräten spielen. Diese sind die abnehmende Tarifbindung der Betriebe, die zunehmende Bedeutung von alternativen, nicht gesetzlich festgelegten Formen der Arbeitnehmermitbestimmung sowie eigentümergeführte Betriebe. Da unsere Ergebnisse ein düsteres Bild der künftigen betrieblichen Mitbestimmung in Deutschland zeichnen, diskutieren wir kritisch verschiedene Politikmaßnahmen zur Stabilisierung der Verbreitung von Betriebsräten. |
| Keywords: | works council, co-determination, worker participation, Germany |
| JEL: | J53 M50 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:faulre:300661 |
| By: | Philipp Ager (University of Mannheim, CEPR); Viktor Malein (Lund University) |
| Abstract: | The paper evaluates the long-run impact of charity nurseries for disadvantaged children in early 20th-century New York. Access to charity nurseries with kindergarten instruction raised children’s years of education and reduced their likelihood of working in low-skilled jobs later in life. Instead, exposed children were more likely to work in jobs requiring higher cognitive and language skills. The effects were strongest for children from the most disadvantaged immigrant groups at that time. Our findings suggest that kindergarten instruction in charity nurseries helped immigrant children better understand teachers’ instructions and learning materials which improved their economic outcomes in adulthood. |
| Keywords: | Age of Mass Migration, Charity Nurseries, Child Care, Disadvantaged Children, Kindergarten Instruction, New York City |
| JEL: | I21 I26 J13 J15 N31 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0263 |
| By: | Ham Gonzalez, Andres (Universidad de los Andes); Ruiz, Juanita (Inter-American Development Bank) |
| Abstract: | We estimate the effects of drug-related violence on individual labor market outcomes in a transit country. Transit countries do not have enough market power to determine the global supply or demand of drugs yet must deal with the consequences from drug trafficking activities. We implement a Bartik-type instrumental variables strategy which assumes that violence in Honduran municipalities located along drug transport routes changes when coca production in Colombia grows or contracts. Our results show that drug-related violence has negative effects on extensive and intensive margin labor market outcomes for transit country workers and has greater effects on women than men. |
| Keywords: | drug markets, violence, labor market outcomes, gender inequality, instrumental variables |
| JEL: | C26 O17 J01 J16 J40 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17126 |
| By: | Price V. Fishback; Jessamyn Schaller; Evan J. Taylor |
| Abstract: | We examine racial discrimination in the New Deal by examining access to work relief. The Federal Government prohibited racial discrimination in work relief programs. However, eligibility was determined by local and state administrators. We estimate Black-white gaps in work relief access separately by county. The results show that about 40 percent of Blacks resided in counties with equal or better access than similar whites. Access for Black men was much worse in the South. We find that Black access was better in areas where Black and white workers were complementary and where more public and private resources were available. |
| JEL: | J08 J45 J78 N32 N42 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32681 |
| By: | Maria Petrova; Gregor Schubert; Bledi Taska; Pinar Yildirim |
| Abstract: | Career opportunities and expectations shape people’s decisions and can diminish over time. In this paper, we study the career implications of automation and robotization using a novel data set of resumes from approximately 16 million individuals from the United States. We calculate the lifetime "career value" of various occupations, combining (1) the likelihood of future transitions to other occupations, and (2) the earning potential of these occupations. We first document a downward trend in the growth of career values in the U.S. between 2000 and 2016. While wage growth slows down over this time period, the decline in the average career value growth is mainly due to reduced upward occupational mobility. We find that robotization contributes to the decline of average local labor market career values. One additional robot per 1000 workers decreased the average local market career value by $3.9K between 2004 and 2008 and by $2.48K between 2008 and 2016, corresponding to 1.7% and 1.1% of the average career values from the year 2000. In commuting zones that have been more exposed to robots, the average career value has declined further between 2000 and 2016. This decline was more pronounced for low-skilled individuals, with a substantial part of the decline coming from their reduced upward mobility. We document that other sources of mobility mitigate the negative effects of automation on career values. We also show that the changes in career values are predictive of investment in long-term outcomes, such as investment into schooling and housing, and voting for a populist candidate, as proxied by the vote share of Trump in 2016. We also find further evidence that automation affected both the demand side and supply side of politics. |
| JEL: | J01 L6 M0 M20 M29 M55 O14 O3 P0 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32655 |
| By: | Lakdawala, Leah (Wake Forest University, Economics Department); Martinez, Diana (UC San Diego); Vera-Cossio, Diego (Inter-American Development Bank) |
| Abstract: | One out of two working children worldwide works in hazardous conditions. We study the effects of a law that introduced benefits and protections for child workers and temporarily lowered the de facto legal working age from 14 to 10 in Bolivia. We employ a difference-in-discontinuity approach that exploits the variation in the law's application to different age groups. Work decreased for children under 14, whose work was newly legalized and regulated under the law, particularly in areas with a higher threat of inspections. The effects disappear after the law is reversed. We do not find evidence of improvements in work safety. Thus, the effects do not appear to be driven by increased hiring costs to ensure worker safety. Instead, the effects appear to be driven by a reduction in the most visible forms of child work, suggesting that firms and parents (households) may have reduced employment of young children to minimize the risk of being subject to legal and social sanctions. |
| Keywords: | child labor; labor policy; labor regulation; education |
| JEL: | J08 O12 |
| Date: | 2024–07–29 |
| URL: | https://d.repec.org/n?u=RePEc:ris:wfuewp:0109 |
| By: | Pedro Dal Bó; Carolina Lopez |
| Abstract: | This study uses individual-level census data from Argentina to examine the socioeconomic disparities between Native and non-Native people. Native people fare worse across a variety of indicators, including housing, education, employment, and health. On average, the observed disparities amount to 12 percent of the standard deviation and persist even after controlling for factors such as geographic location. Furthermore, there are differences in the intergenerational transmission of education between Natives and non-Natives: for each level of education of the parents, the children of Natives have, on average, fewer years of education than the children of non-Natives. Finally, the study also reveals large differences between Native groups: while some achieve average outcomes that surpass those of the non-Native population, others significantly lag behind. Notably, these differences are correlated with a characteristic of their pre-Columbian economy: the practice of agriculture. |
| JEL: | I3 J15 O15 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32704 |
| By: | Lisa A. Gennetian; Anna Gassman-Pines |
| Abstract: | Although improving psychological well-being was not the explicit focus of the 2021 expanded Child Tax Credit (CTC), psychological health outcomes may have been affected by the positive income shocks generated by the credit. In this chapter we ask: How did the 2021 expanded CTC affect parents’ psychological well-being? Some studies have found that the CTC led to reductions in parental reports of clinical levels of depression and anxiety and in subclinical depressive and anxiety symptoms. Using similar methods, other studies have found no effect on these same outcomes. Importantly, however, the evidence does not point to the CTC worsening psychological well-being. We conclude that the evidence so far is thin, narrow, and mixed, even when our review is expanded to comparable studies on the impact of income support. Alignment of policy objectives with a broader range of measurement approaches will be important in building a more conclusive evidence base. |
| JEL: | H31 I3 J18 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32662 |
| By: | López Bóo, Florencia (Inter-American Development Bank); de la Paz Ferro, Maria (Inter-American Development Bank); Carneiro, Pedro (University College London) |
| Abstract: | Delivering early childhood programs at scale is a major policy challenge. One way to do so is by using existing public infrastructure. This paper experimentally assesses the short-term impacts of a new government home visiting program integrated into health care services. The program changed the allocation of time for community health workers, asking them to carry out early childhood development-related tasks. We find that access to the program has a positive but modest impact on home environment quality and no impact on child development nor on children's health status. Our results point to the importance of workload, supervision and buy-in from delivery actors to enhance fidelity of interventions. |
| Keywords: | early childhood, parenting |
| JEL: | J10 I10 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17130 |
| By: | Guerrazzi, Marco |
| Abstract: | In this paper, I explore the relationship between wage bargaining and capital accumulation by developing a differential game in which a monopolistic union sets the wage of its members by taking as given the optimal employment strategy of a representative firm and the way in which capital is evaluated over time. Under the assumption that investment amounts to a constant share of produced output, I show that a meaningful open-loop Stackelberg equilibrium requires the union to be more patient than the firm. Moreover, relying on some numerical simulations, I show that although adjustments towards the steady-state equilibrium occur through damped oscillations, after an initial period of decline the model predicts a stable union wage premium. |
| Keywords: | Monopoly union model; Capital accumulation; Binding wage contracts; Differential games; Open-loop Stackelberg equilibrium |
| JEL: | J31 J51 J52 |
| Date: | 2024–07–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121433 |
| By: | Orley C. Ashenfelter; Štěpán Jurajda |
| Abstract: | Thanks to standardized work protocol and technology of McDonald’s restaurants, the hourly wage of McDonald’s Basic Crew enables wage comparisons under near-identical skill inputs and hedonic job conditions. McWages capture labor costs in entry-level jobs, while the Big Macs (earned) Per Hour (BMPH) index measures corresponding purchasing power of wages. We document large and growing geographical wage differences in standardized jobs using data covering most U.S. counties during 2016-2023. Before the Covid-19 pandemic, there was no BMPH growth where minimum wages stayed constant, but the pandemic wage increase, which diminished the importance of minimum wages, was stronger in these areas. |
| JEL: | J0 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32708 |
| By: | Charles Yuji Horioka; Emin Gahramanov; Xueli Tang |
| Abstract: | The purpose of this paper is to conduct a theoretical and empirical analysis of the nexus between long-term care insurance (LTCI), formal care, informal (family) care, and bequests. In our empirical analysis, we use micro data from the Japan Household Panel Survey on Consumer Preferences and Satisfaction (JHPS-CPS), formerly known as the Preference Parameter Study, conducted by Osaka University. Japan is an interesting case to analyze because a public LTCI system was introduced there in 2000. Our analysis shows that, in the case of Japan, if parents are eligible for public LTCI benefits, their children will be less likely to be their primary caregiver and that this, in turn, will reduce their children’s perceived likelihood of receiving a bequest from them. This result implies that bequests are selfishly or strategically motivated (i.e., that parents leave bequests to their children in order to elicit care from them) and that the introduction of a public LTCI system will reduce the likelihood of children providing care to their parents and through this channel reduce their perceived likelihood of receiving a bequest from them. |
| JEL: | D11 D12 D15 D64 E21 I13 J14 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32744 |
| By: | Annelore Verhagen |
| Abstract: | While means-tested benefits such as minimum income benefits (MIB) and unemployment assistance (UA) are an essential safety net for low-income people and the unemployed, incomplete take-up is the rule rather than the exception. Building on desk research, open-ended surveys and semi-structured interviews, this paper investigates the opportunities and risks of using artificial intelligence (AI) for managing these means-tested benefits. This ranges from providing information to individuals, through determining eligibility based on pre-determined statutory criteria and identifying undue payments, to notifying individuals about their eligibility status. One of the key opportunities of using AI for these purposes is that this may improve the timeliness and take-up of MIB and UA. However, it may also lead to systematically biased eligibility assessments or increase inequalities, amongst others. Finally, the paper explores potential policy directions to help countries seize AI’s opportunities while addressing its risks, when using it for MIB or UA management. |
| Keywords: | Artificial Intelligence, Means-Tested Benefits, Minimum Income Benefits, Social Protection, Unemployment Assistance |
| JEL: | C8 H53 I3 J68 O3 |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:21-en |