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on Labour Economics |
| By: | Wongkot Rujiwattanapong (Faculty of Political Science and Economics, Waseda University) |
| Abstract: | Standard search theory suggests that (1) job search intensity increases with the relative gain from searching, and that (2) job search intensity increases the job finding probability. Firstly, this paper presents new empirical findings that are at odds with these theoretical predictions when workers are categorised by their unemployment insurance (UI) history. Unemployed workers who either are currently receiving or used to receive UI search harder than those who never take up UI during their unemployment spells. Moreover, despite their higher search intensity, those with a UI history have a lower job finding probability. Subsequently, I incorporate unproductive and inefficient job search, consistent with these empirical findings, into an otherwise standard stochastic equilibrium search-and-matching model with endogenous search intensity. Three key results emerge from these job search imperfections: (1) Aggregate search intensity becomes acyclical leading to an underestimated matching efficiency; (2) the general equilibrium effects of UI extensions and the labour market fluctuations are dampened; and (3) unemployment and its duration are more persistent. |
| Keywords: | Business cycles; job search intensity; matching efficiency; unemployment insurance; unemployment dynamics |
| JEL: | E24 E32 J24 J64 J65 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2417 |
| By: | Jirjahn, Uwe |
| Abstract: | A series of studies show that unions and works councils have an influence on workers' political activities and attitudes. However, at issue are the transmission channels through which worker representation impacts workers' political activities and attitudes. This article discusses from a theoretical and empirical viewpoint whether the influence of worker representation reflects increased workplace democracy. The article also discusses possible policy implications. |
| Keywords: | Trade Unions, Works Councils, Political Engagement, Party Preferences, Democratic Leadership, Autocratic Leadership |
| JEL: | D70 J51 J53 K31 O35 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1568 |
| By: | Wongkot Rujiwattanapong (Faculty of Political Science and Economics, Waseda University) |
| Abstract: | This paper studies the effects of shocks to the flow hazards into and out of unemployment on the aggregate household saving rate, and attempts to explain the spike in the US saving rate during the Great Recession with these shocks. The results are obtained from a Dynamic Stochastic General Equilibrium model under incomplete markets and borrowing constraints similar to Krusell and Smith (1998) using extended path algorithm, perturbation method and approximate aggregation. It is found that a negative job-finding shock and a positive job-separation shock simultaneously and separately contribute to an increase in the saving rate. Shocks to the job-finding probability create a more drastic and persistent impact on the saving rate than do shocks to the job-separation probability. The baseline model generates the saving rate that exhibits strikingly similar dynamics to the US saving rate; however, the magnitude of the model-generated responses is somewhat smaller than what can be observed in the US. Job-finding shocks alone explain almost all the dynamics of the saving rate during the Great Recession whilst both job-finding and job-separation shocks are important in explaining the saving dynamics during normal times. The same analysis under the complete market assumption yields results completely opposite to the US data. |
| Keywords: | Business cycles; job finding; job separation; private savings |
| JEL: | E21 E22 E23 E32 J62 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2418 |
| By: | Ramírez Martínez, Gabriela (Universidad de los Andes) |
| Abstract: | The study of the effect of integrative care policies—as those that target the needs of caregivers and multiple care recipients—on time allocation for both women and men, is an empirical exercise not widely covered in the existing Care Economy literature, specially in diverse developing settings. I focus on the impact of the District Care System implemented by Bogot´a’s local government in 2020 through the study of Manzanas del Cuidado (MCs), as they offer well-being and human capital formation services to unpaid caregivers. For the period between 2019 and 2021, I estimate the Intention to treat (ITT) effect on time allocation in paid and unpaid labor, as well as labor market outcomes for women and men using an Event Study approach. Results indicate that women do not change their patterns of unpaid and paid time use, and while men exhibit a reduction in time allocated to paid work, estimates do not remain robust across various specifications, and identification issues may arise, limiting a conclusive causal interpretation attributable to the program. Labor market participation do not change for both women and men. Mechanisms such as the rigidity of gender social norms, the frequency of service usage, and methodological constraints may help unravel the reasons behind the observed effects. |
| Keywords: | Time allocation; Labor supply; Caregivers; Manzanas del Cuidado; Social norms |
| JEL: | D13 H41 J16 J22 |
| Date: | 2025–02–26 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021341 |
| By: | Seula Kim |
| Abstract: | This paper investigates how worker beliefs and job prospects impact the wages and growth of young firms, as well as the aggregate economy. Building a heterogeneous-firm directed search model where workers gradually learn about firm types, I find that learning generates endogenous wage differentials for young firms. High-performing young firms must pay higher wages than equally high-performing old firms, while low-performing young firms offer lower wages than equally low-performing old firms. Reduced uncertainty or labor market frictions lower the wage differentials, thereby enhancing young firm dynamics and aggregate productivity. The results are consistent with U.S. administrative employee-employer matched data. |
| Keywords: | wage differentials, firm dynamics, learning, search frictions, uncertainty |
| JEL: | E20 E24 J31 J41 J64 L25 L26 M13 M52 M55 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-09 |
| By: | Coen van de Kraats (Erasmus University Rotterdam and Tinbergen Institute); Titus Galama (University of Southern California, Center for Economic and Social Research and Department of Economics, Vrije Universiteit Amsterdam, Erasmus University Rotterdam and Tinbergen Institute); Maarten Lindeboom (Vrije Universiteit Amsterdam, Centre for Health Economics, Monash University, Tinbergen Institute and IZA); Zichen Deng (School of Economics, University of Amsterdam; FAIR Centre) |
| Abstract: | We provide evidence that the social norm (expectation) that adults work has a substantial detrimental causal effect on the mental well-being of unemployed men in mid-life, as substantial as, e.g., the detriment of being widowed. As their peers in age retire and the social norm weakens, the mental well-being of the unemployed improves. Using data on individuals aged 50+ from 10 European countries, we identify the social norm of work effect using exogenous variation in the earliest eligibility age for old-age public pensions across countries and birth cohorts. |
| Keywords: | mental well-being, social norm of work, retirement institutions |
| JEL: | I10 I31 J60 D63 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:mhe:chemon:2025-04 |
| By: | Rishabh Tyagi (Max Planck Institute for Demographic Research, Rostock, Germany); Anna Baranowska-Rataj; Alexi Gugushvili |
| Abstract: | This study explores the relationship between adult children's unemployment and parental mental health. Given India's vast inequalities in social capital and income, we examine their moderating effects on this relationship. We use data from the Longitudinal Ageing Survey of India, including 73, 396 individuals aged 45 and above. We consider exposure to the unemployment of adult children as a treatment and measure parental risk of depression using the CES-D score, with respondents reporting four or more symptoms out of 10 considered “depressed”. We employ inverse probability weighting based on the logistic regression model to form a pseudo-control group, accounting for the confounding demographic and socio-economic factors. Our findings show a 3.11 percentage point (ppt) increase in absolute terms (and a 12.30% relative increase) in the probability of parental depression associated with adult children's unemployment. Moderation analyses reveal that among older adults with high social participation, there is no increase in their risk of depression following their children's unemployment. Similarly, among older adults residing in low and medium-income inequality states, the negative consequences of their children's unemployment are weaker. Overall, this research concludes that while adult children’s unemployment is associated with an increased risk of parental depression, higher social participation and residing in low or medium-income inequality states have protective effects on older adults’ mental health following their children's unemployment. Governments may consider expanding labour market policies supporting youth labour market entry as a means to improve not only the employability of younger individuals, but also the well-being of older generations. |
| Keywords: | India, inequality, mental health, social capital, unemployment |
| JEL: | J1 Z0 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2025-005 |
| By: | Kureishi, Wataru; Paule-Paludkiewicz, Hannah; Tsujiyama, Hitoshi; Wakabayashi, Midori |
| Abstract: | Families play an important role in providing insurance against adverse shocks, but little is known about how shocks affect the family structure itself. We study the impact of a labor market shock on divorce and intra-household allocation of resources, exploiting a naturalexperimental earthquake shock and large-scale panel data. We provide novel evidence that the earthquake reduces the probability of divorce, especially for dual-earner couples. We show that the key driver is the gender-specific labor market shock associated with the earthquake, with female workers experiencing much worse labor market conditions than male workers after the earthquake. The probability of divorce declines because the value of divorce for wives decreases due to the labor market shock, while the value of marriage remains high because of the family insurance provided by the husband to compensate for the wife's loss of income. We show that these results are consistent with a collective household model with limited commitment, and further derive a novel theoretical prediction for the intra-household reallocation of household resources from the wife to the husband. We provide direct evidence for this prediction, using unique panel data with comprehensive information on personal consumption and time use within households. |
| Keywords: | Marital dissolution, intra-household allocation, family insurance, earthquake, gender-specific labor market shock |
| JEL: | D13 J12 J16 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:311838 |
| By: | Jessen, Jonas; Jessen, Robin; Johnston, Andrew; Gałecka-Burdziak, Ewa |
| Abstract: | We exploit policy discontinuities in Poland's unemployment insurance to examine the causal effect of changes to both benefit durations and levels. Using a regression discontinuity approach, we uncover three findings: (1) Higher benefit levels distort employment more than benefit extensions. (2) Benefit durations and levels interact: Longer durations substantially increase the distortionary effect of more generous payments. (3) Higher payments increase the transition of employed workers into unemployment. We develop a model of optimal unemployment insurance that accounts for moral hazard among both employed and unemployed workers. Notably, for level increases, distortionary costs are larger among the employed than unemployed. |
| Abstract: | Wir nutzen politische Diskontinuitäten in der polnischen Arbeitslosenversicherung, um die kausale Wirkung von Änderungen der Leistungsdauer und -höhe zu untersuchen. Unter Verwendung eines Regressionsdiskontinuitätsansatzes kommen wir zu drei Ergebnissen: (1) Höhere Leistungsniveaus verzerren die Beschäftigung stärker als Leistungsverlängerungen. (2) Die Dauer der Leistungsgewährung und Niveaus interagieren: Längere Laufzeiten erhöhen die verzerrende Wirkung großzügigerer Zahlungen. (3) Höhere Zahlungen erhöhen den Übergang von Erwerbstätigen in die Arbeitslosigkeit. Wir entwickeln ein Modell für eine optimale Arbeitslosenversicherung, das das moralische Risiko sowohl bei Beschäftigten als auch bei Arbeitslosen und arbeitslosen Arbeitnehmern berücksichtigt. Bei einer Erhöhung des Niveaus sind die verzerrenden Kosten bei den Beschäftigten größer als bei Arbeitslosen. |
| Keywords: | Unemployment insurance, spell duration, regression discontinuity, endogenous separations |
| JEL: | H55 J20 J65 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:312428 |
| By: | Sander de Vries (Vrije Universiteit Amsterdam); Nadine Ketel (Vrije Universiteit Amsterdam, CEPR, IZA, and Tinbergen Institute); Maarten Lindeboom (Vrije Universiteit Amsterdam, Centre for Health Economics, Monash University, IZA, and Tinbergen Institute) |
| Abstract: | There is a clear consensus that childhood experiences shape adult success, yet there is limited understanding of their impact on future generations. We proxy parental investments during childhood with birth order and study whether disadvantages due to lower investments are transmitted to future generations. Birth order effects on the first generation are large, apply to 80% of the population, and can be identified with relatively mild assumptions. Using cousin comparisons in Dutch administrative data, we find that around 20 percent of the income disadvantages are transmitted. Additionally, we find sizeable decreases in children’s education and increases in boys’ criminal behavior. |
| Keywords: | intergenerational mobility, birth order, extended family, education, crime |
| JEL: | D19 I24 J13 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:mhe:chemon:2025-05 |
| By: | Mirjam Bächli; Albrecht Glitz |
| Abstract: | Gender gaps in labor supply and household responsibilities persist. Using representative survey data from 24, 000 respondents across six countries, this paper explores the actual and perceived preferences of men for couple equity. We document that in all six countries the majority of men state they prefer an equitable division of tasks within the household. At the same time, the actual share of men preferring couple equity is systematically underestimated in all six countries. The perceived shares vary substantially across the population, and they are positively associated with respondents’ own preferences for couple equity. Providing respondents with truthful information about the actual share of men preferring couple equity in their country shifts individual beliefs, own stated preferences for couple equity, as well as the willingness to pay for it. The estimated treatment effects are mainly driven by respondents who initially underestimated the actual share. |
| Keywords: | earnings inequality, immigration, income taxes |
| JEL: | H23 H24 H71 J31 J61 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1470 |
| By: | Brian Greaney; Andrii Parkhomenko; Stijn Van Nieuwerburgh |
| Abstract: | We develop a dynamic urban model combining features of quantitative spatial and macro-housing models. It includes multiple locations, forward-looking households, commuting, costly migration, uninsurable income risk, housing tenure choice, and housing frictions. The model operates in continuous time, with shocks and choices occurring at discrete intervals. This ``mixed time'' approach enables efficient computation of steady-state equilibria and transition dynamics, even with thousands of location pairs. Using a model of the San Francisco Bay Area, we show how forward-looking behavior, spatial frictions, and transition dynamics reshape estimated effects of spatially heterogeneous shocks and policies, traditionally studied with static models. |
| JEL: | C63 G11 J61 R10 R21 R23 R31 R52 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33512 |