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on Labour Economics |
| By: | Kyyrä, Tomi (VATT, Helsinki); Verho, Jouko Kullervo (VATT, Helsinki) |
| Abstract: | In 2005, displaced workers in Finland with at least three years of work history were given the option to enroll in a Re-employment Program. Participants met with a caseworker at the beginning of their unemployment and drafted an employment plan. In return, they became eligible for higher benefits for four weeks, as well as for the duration of individually targeted training programs specified in their plan. The program aimed to provide early counseling, encourage participation in labor market training, and improve matches between training programs and job seekers. Using a difference-in-differences approach, we show that the program increased caseworker meetings and participation in training programs but had no effect on unemployment duration in the short run or employment in the longer run. The effect on training participation was particularly strong for men, older workers and low-skilled workers, yet unemployment and employment effects were equally disappointing across all subgroups. |
| Keywords: | active labor market policy, re-employment, caseworkers, unemployment benefits, labor market training |
| JEL: | C21 J64 J68 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17881 |
| By: | Zvi Eckstein; Michael P. Keane; Osnat Lifshitz |
| Abstract: | In the 1960 cohort, American men and women graduated from college at similar rates, and this was true for Whites, Blacks and Hispanics. But in more recent cohorts, women graduate at much higher rates than men. Gaps between race/ethnic groups have also widened. To understand these patterns, we develop a model of individual and family decision-making where education, labor supply, marriage and fertility are all endogenous. Assuming stable preferences, our model explains changes in education for the ‘60-‘80 cohorts based on three exogenous factors: family background, labor market and marriage market constraints. We find changes in parental background account for 1/4 of the growth in women’s college graduation from the ’60 to ’80 cohort. The marriage market accounts for 1/5 and the labor market explains the rest. Thus, parent education plays an important role in generating social mobility, enabling us to predict future evolution of college graduation rates due to this factor. We predict White women’s graduation rate will plateau, while that of Hispanic and Black women will grow rapidly. But the aggregate graduation rate will grow very slowly due to the increasing Hispanic share of the population. |
| JEL: | D15 J11 J13 J15 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33869 |
| By: | Corekcioglu, Gozde (Ozyegin University); Francesconi, Marco (University of Essex); Kunze, Astrid (Norwegian School of Economics) |
| Abstract: | This study investigates the firm’s response to parental leave induced worker absence. Combining a 20-week maternal leave expansion in Norway and detailed matched employer-employee data between 1983 and 2013, we identify the causal impact of absence on outcomes using a shift-share design. Employers with greater exposure to absence hire more women aged 40 or less and face more employment turnover. These adjustments do not affect profits, but lead to greater investments and sales and to a lower value added and a lower wage bill. One important channel behind such changes is a significant growth of young female part-time employment. |
| Keywords: | employer-employee matched data, part-time employment, corporate outcomes, firm-level gender employment dynamics, workforce composition, shift-share research design |
| JEL: | L23 L25 J16 J21 J23 J81 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17893 |
| By: | Hanushek, Eric A. (Stanford University); Janssen, Simon (Institute for Employment Research (IAB), Nuremberg); Light, Jacob D. (Hoover Institution); Simon, Lisa (Revelio Labs) |
| Abstract: | We analyze the full distribution of displaced workers’ earnings losses using a new method that combines matching and synthetic control group approaches at the individual level. We find that the distribution of earnings losses is highly skewed. Average losses, as estimated by conventional event studies, are driven by a small number of workers who suffer catastrophic losses, while most recover quickly. Observable worker characteristics explain only a small fraction of the variance in earnings losses. Instead, we find substantial heterogeneity in earnings losses even among workers displaced by the same firm who have identical observed characteristics such as education, age, and gender. Workers with minimal earnings losses adjust quickly by switching industries, occupations, and especially regions, while comparable workers with catastrophic losses adjust slowly, even though they are forced to make comparable numbers of switches in the long run. |
| Keywords: | distributions of treatment effects, synthetic control groups, displacement losses |
| JEL: | J24 J64 O30 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17889 |
| By: | Garlick, Robert (Duke University); Field, Erica (Duke University); Vyborny, Kate (World Bank) |
| Abstract: | We study whether commuting barriers constrain women’s labor supply in urban Pakistan. We randomize offers of gender-segregated or mixed-gender commuting services at varying prices. Women-only transport more than doubles job application rates, while mixed-gender transport has minimal effects on men’s and women’s application rates. Women value the women-only service more than large price discounts for the mixed-gender service. Results are similar for baseline labor force participants and non-participants, suggesting there are many “latent jobseekers” close to the margin of participation. These findings highlight the importance of safety and propriety concerns in women’s labor decisions. |
| Keywords: | gender, mobility, transport, female labor force participation |
| JEL: | J16 J22 J28 L91 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17883 |
| By: | Philipp Grunau; Florian Hoffmann; Thomas Lemieux; Mirko Titze |
| Abstract: | We study the granular wage and employment effects of a German place-based policy using a research design that leverages EU-wide rules governing program parameters at the regional level. The program subsidizes investments to create jobs with a subsidy rate that varies across labor market regions. We use matched data on the universe of establishments and their employees, establishment-level panel data on program participation, and regional scores that generate spatial discontinuities in program eligibility and generosity. Spatial spillovers of the program linked to changing commuting patterns can be assessed using information on place of work and place of residence, a unique feature of the data. We find that the program helps establishments create jobs that disproportionately benefit younger and less-educated workers. Funded establishments increase their wages, but, unlike employment, wage gains do not persist in the long run. Employment effects estimated at the local level are slightly larger than establishment-level estimates, suggesting limited economic spillover effect. Spatial spillovers are large as over half of the employment increase comes from commuters. Using subsidy rates as an instrumental variable for actual subsidies indicates that it costs approximately EUR 25, 000 to create a new job in the economically disadvantaged areas targeted by the program. |
| JEL: | H71 J21 J31 J63 R12 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33785 |
| By: | Hannah Illing; Hanna Schwank; Linh Tô |
| Abstract: | We investigate how the same hiring opportunity leads to different labor market outcomes for male and female full-time workers. Using administrative data from Germany spanning 1981 to 2016, we analyze firms’ wage-setting behavior in response to exogenous vacancies caused by sudden worker deaths. By identifying external replacement workers, we compare positions that, ex-ante, are equally likely to hire a male or female worker. Our analysis shows that female replacement workers’ starting wages are, on average, 11 log points lower than those of equally productive male counterparts. This gap is unlikely to be explained by differences in hours, within-firm adjustments, or outside options. Instead, the results suggest that firms may statistically discriminate by gender and that differences in worker bargaining play an important role. The gender hiring opportunity gap is lower in contexts where gender equality norms are stronger. These findings suggest that a significant portion of the gender wage gap originates within firms at the hiring stage, contributing to our understanding of the mechanisms behind persistent gender disparities in wages. |
| Keywords: | Economics of Gender, Wage Differentials, Vacancies |
| JEL: | J16 J31 J63 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_689 |
| By: | Randi Hjalmarsson; Matthew J. Lindquist; Louis-Pierre Lepage; Conrad Miller |
| Abstract: | We examine the effects of a criminal record on labor market outcomes and the mediating role of job sorting using Swedish register data. Prime-age adults with criminal records earn about 30% less than observably similar adults without records and are concentrated in specific employers and occupations. To estimate the causal effect of a criminal record, we use an event study design that compares outcomes for adults charged with an offense for the first time to matched adults who were suspected of a similar offense but not charged. Acquiring a criminal record reduces months employed by 2% and annual earnings by 5%. These negative effects are: twice as large for more serious or subsequent charges, not driven by job displacement or incapacitation, and not mitigated by automatic record expungement, which typically occurs 5 or 10 years after case disposition. We classify firms by their propensity to hire workers with criminal records, holding suspected offense history fixed. A criminal record reduces employment at firms classified as less likely to hire workers with criminal records, increases employment at other firms, and decreases monthly wages across all firm types. Firm propensity to hire workers with criminal records varies substantially---even within industries---and is linked to firm size and managers' prior exposure to people with records. Leveraging manager moves across small firms, we find that when a firm hires a new manager with greater prior exposure to people with criminal records, it hires more people with records, with no detectable effect on productivity. |
| JEL: | J30 J6 J71 K42 M51 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33865 |
| By: | Yuya Sasaki; Ariell Zimran |
| Abstract: | We propose a method to correct estimates from historical linked data for bias arising from type-I error—"false matches." We estimate the rate of false matching from the disagreement rate in characteristics that should agree across the two linked datasets. Combined with an understanding of the empirical patterns arising from false matches, knowledge of this rate enables us to correct for bias from false matches. Our method enables correction of estimates of both population moments and regression coefficients with valid inference. We illustrate the properties of our method via simulation and demonstrate them using linked US census data. |
| JEL: | C10 C23 C49 C55 C81 C83 J61 J62 N30 N31 N32 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33881 |
| By: | Si, Yafei (University of Melbourne); Chen, Gang (University of Melbourne); Zhou, Zhongliang (Xi’an Jiaotong University); Yip, Winnie (Harvard University); Chen, Xi (Yale University) |
| Abstract: | There is a lack of understanding of what may drive gender disparities in healthcare utilization and outcomes. We present novel evidence on the impact of physician-patient gender match on healthcare quality using standardized patients (SPs) in an experiment, and collected interactions between SPs and physicians in a primary care setting. We find that, compared with female physicians treating female SPs, female physicians treating male SPs had a 23.4 pp increase in correct diagnosis and a 19.0 pp increase in correct drug prescriptions. Despite substantial gains in healthcare quality, there was no significant rise in medical costs or time investment. The gains in care quality were partly attributed to better physician-patient communications, not the presence of more clinical information. More importantly, female physicians treating male SPs prescribed more unnecessary tests but fewer unnecessary drugs to balance their time commitment and costs. The results suggest the role of gender norms and physician defensive behavior when female physicians treat male SPs. Our findings imply that improving patient centeredness may lead to significant gains in the quality of healthcare with modest costs, while reducing gender gaps in care quality. |
| Keywords: | standardized patient, healthcare quality, gender disparities, experiment, China |
| JEL: | I11 I12 I14 J16 J22 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17894 |
| By: | Jorge Luis García; Patrick L. Warren; L. Reed Watson |
| Abstract: | Why and when could basic income inhibit employment? We randomize 200 dollars of basic income per month for two years within a non-urban disadvantaged sample tracked using high-frequency administrative data. The amount provided is 21% of average all-source income. In the short term (0.5 years after baseline), relative to the control group, treatment-group employment decreases by 58%, average all-source income remains constant, and health-investment rates increase. In the longer term (1.25 years after baseline), employment and health-investment rates revert to their control-group counterparts. Treatment participants receive basic income, take time off work, address health needs, and, subsequently, reintegrate into employment. |
| JEL: | H20 I12 J01 J08 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33891 |
| By: | Muñoz, Ercio; Saavedra, Melanie; Sansone, Dario |
| Abstract: | This paper reports socioeconomic and health outcomes for individuals born with sex variations (i.e., intersex individuals) in Mexico based on large nationally representative survey data collected between 2021 and 2022 (N44, 189). The sample includes 608 intersex respondents, corresponding to a weighted estimate of approximately 1.6% of individuals aged 1564 years, i.e., almost 1.3 million intersex people. The main empirical analysis documents substantial negative outcomes for intersex individuals. There are significant disparities in mental, physical, and sexual health between intersex respondents and the endosex population, including higher rates of bullying during childhood (26% vs. 15% for endosex male and female individuals), harassment and violence in adulthood (20% vs. 10% for endosex male individuals), and mental health issues (46% vs. 34% for endosex male individuals). Additionally, intersex individuals have lower educational levels and are more likely to experience workplace rejection, exclusion, and discrimination and to face substantial barriers in healthcare environments. |
| Keywords: | Intersex;Stigma;Suicide;Mexico;LGBTQ+ |
| JEL: | I14 J15 J16 J71 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14091 |
| By: | Stefano Eusepi; Ayşegül Şahin |
| Abstract: | The Federal Reserve’s dual mandate, to achieve maximum employment and stable prices, requires monitoring a broad range of indicators and carefully evaluating the trade-offs between these goals. We propose a flow-based framework to evaluate real-time shortfalls from maximum employment, focusing on unemployment and participation cycles. This approach highlights that employment stability—driven by improved job-finding and reduced job-loss rates—is the primary factor behind procyclicality of participation, rather than labor force entry. Moreover, we show that cyclical recoveries in participation are bound to lag those in unemployment—even during fast recoveries. We link unemployment dynamics to price stability by estimating a New Keynesian Phillips curve (NKPC) using data on labor market flows, prices, wages, and inflation expectations. Our findings suggest that the natural rate of unemployment, u*, rose significantly following the pandemic, reflecting declines in job-filling rates, reduced matching efficiency, and a persistent increase in workers' real reservation wages. The model interprets the recent disinflation episode as a soft landing through rising expectations of a weaker labor market coinciding with the FOMC's tightening cycle. This observation emphasizes the forward-looking nature of inflation dynamics. |
| JEL: | E3 J20 J6 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33878 |
| By: | Aydemir, Abdurrahman B. (Sabanci University); Öztek, Abdullah Selim (Ankara University) |
| Abstract: | This paper studies the causal effect of immigration on crime in the context of the massive influx of Syrians to Türkiye, using comprehensive data that spans all stages of the judicial process—from prosecution to incarceration—and includes information on the nativity status of both perpetrators and victims. To isolate causal effects, we employ a two-stage least squares (2SLS) estimation technique, exploiting substantial exogenous variation in the migrant-to-native ratio that arises from the geographical proximity of Turkish provinces to Syrian governorates. The findings reveal a slight increase in total crime at the prosecution stage, while no significant effects are detected for criminal court cases or convictions. Moreover, natives experience increased victimization at the prosecution stage, while their involvement in criminal activities remains unchanged. In contrast, both the likelihood of committing a crime and being a victim of crime increase among immigrants. The analysis further suggests that immigrants may be crowding out natives in specific crime categories, such as smuggling. |
| Keywords: | suspects, crime, immigration, victimization |
| JEL: | F22 J15 J61 J68 K42 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17885 |
| By: | Kabir Dasgupta; Andrew C. Johnston; Linda Kirkpatrick; Maxim N. Massenkoff; Alexander Plum |
| Abstract: | How does family breakdown and divorce affect spouses and their children? We provide new evidence using a matched difference-in-differences design in rich administrative data from New Zealand. While most outcomes remain stable prior to separation, parents' mental health deteriorates in the lead-up. At separation, men's employment falls while women's rises, and women become much more likely to receive government benefits. Men temporarily double their criminal offending; about a third of the increase is domestic disputes. Both parents become more likely to be the victim of non-domestic crime as well. As for mental health, parents become more anxious and depressed at separation, and these remain elevated well after the couple has parted. Their children, too, face increased risks after separation: anxiety, depression, school absenteeism, and crime victimization all rise. |
| JEL: | I31 J12 J13 J21 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33873 |
| By: | Cevat Giray Aksoy; Nicholas Bloom; Steven J. Davis; Victoria Marino; Cem Ozguzel |
| Abstract: | We study the shift to fully remote work at a large call center in Turkey, highlighting three findings. First, fully remote work increased the share of women, including married women, rural and smaller-town residents. By accessing groups with traditionally lower labor-force participation the firm was able to increase its share of graduate employees by 14% without raising wages. Second, workforce productivity rose by 10%, reflecting shorter call durations for remote employees. This was facilitated by a quieter home working environment, avoiding the background noise in the office. Third, fully remote employees with initial in-person training saw higher long-run remote productivity and lower attrition rates. This underscores the advantages of initial in-person onboarding for fully remote employees. |
| JEL: | J0 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33851 |
| By: | Andrew C. Johnston; Maggie R. Jones; Nolan G. Pope |
| Abstract: | Nearly a third of American children experience parental divorce before adulthood. To understand its consequences, we use linked tax and Census records for over 5 million children to examine how divorce affects family arrangements and children's long-term outcomes. Following divorce, parents move apart, household income falls, parents work longer hours, families move more frequently, and households relocate to poorer neighborhoods with less economic opportunity. This bundle of changes in family circumstances suggests multiple channels through which divorce may affect children's development and outcomes. In the years following divorce, we observe sharp increases in teen births and child mortality. To examine long-run effects on children, we compare siblings with different lengths of exposure to the same divorce. We find that parental divorce reduces children's adult earnings and college residence while increasing incarceration, mortality, and teen births. Changes in household income, neighborhood quality, and parent proximity account for 25 to 60 percent of these divorce effects. |
| JEL: | D1 I31 J12 J13 R23 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33776 |
| By: | Marchand, Katrin (RS: GSBE MORSE, RS: GSBE MGSoG, Maastricht Graduate School of Governance, RS: UNU-MERIT - MACIMIDE); Liagkas, Pavlos (RS: GSBE other - not theme-related research, EdIn); Smith, Dani; Wojnar, Aleksandra |
| Abstract: | This paper addresses a critical gap in migration literature by quantifying the opportunity cost of labour emigration for countries of origin within the European Union, using Greece and Poland as case studies from 2004 to 2019. Despite the growing policy and academic interest in the effects of emigration, existing research has largely overlooked its economic cost for sending countries. Building upon the model developed by Radonji? & Bobi? (2020), this study develops a framework to estimate the total opportunity cost of emigration, including direct costs of education, the opportunity cost of foregone productivity during education, fixed costs of emigration, loss of GDP contribution, and offsetting factors such as remittances and foregone social benefits. The findings reveal substantial economic costs: approximately €305 billion for Greece and €175 billion for Poland over the 16-year period, translating to annual per capita costs of €23, 268 and €7, 047, respectively. Despite a higher volume of Polish emigrants, Greece experiences a higher economic burden, primarily due to the higher emigration rates among highly educated individuals. The paper concludes with policy recommendations aimed at reducing emigration outflows, facilitating return migration, and aligning education with labour market needs. The presented model offers a replicable and adaptable tool for policymakers and researchers to assess and address the cost of emigration in emerging and developed economies. |
| JEL: | F22 J61 O15 O57 |
| Date: | 2025–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025015 |
| By: | Gideon Bornstein |
| Abstract: | Over the past four decades, the U.S. economy has seen a decline in the share of young firms alongside a rise in the profit share of GDP. This paper explores how population aging contributes to these twin trends through a demand-side channel. The core hypothesis is that younger households exhibit lower consumer inertia—a tendency to stick with previously chosen products—than older households. As demand shifts toward more inertial consumers, entry becomes harder, incumbents raise markups, and market share tilts toward larger firms. To quantify this mechanism, I develop and calibrate a firm dynamics model with overlapping generations of consumers who differ in their degree of inertia. Using detailed micro data, I show that younger households are significantly less inertial. The model implies that population aging accounts for 20%–30% of the observed decline in young firms and rise in profits. Reduced-form evidence across U.S. states and product categories supports the model’s predictions. |
| JEL: | D40 E20 J10 L10 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33820 |
| By: | Margherita Borella; Mariacristina De Nardi; Fang Yang; Johanna P. Torres Chain |
| Abstract: | This paper develops and estimates a dynamic life-cycle model to quantify why households save and work. The model incorporates multiple sources of risk—health, marital status, wages, medical expenses, and mortality—as well as endogenous labor supply and human capital accumulation, retirement, and bequest motives at the death of the first and last household member. We estimate it using PSID and HRS data for the 1941–1945 cohort via the Method of Simulated Moments. Eliminating bequest motives reduces aggregate wealth by 23.8% and labor earnings by 1.2%; removing medical expenses lowers them by 13.1% and 0.7%. Wage risk is crucial for early-life saving: its removal reduces wealth by 10.4% but raises earnings by 2.3%. Eliminating marriage and divorce dynamics leads couples—numerous and wealthier—to save and work slightly less, and singles—fewer and poorer—to save and work considerably more. These effects largely offset in the aggregate. Removing all saving motives beyond retirement needs and lifespan uncertainty lowers wealth by 56.9% and earnings by 2.7%. These findings show that capturing multiple risks and behavioral margins jointly is essential to understanding household saving and labor supply. |
| JEL: | E20 I1 J0 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33874 |
| By: | Vikesh Amin (Central Michigan University); Jere R. Behrman (University of Pennsylvania); Jason M. Fletcher (University of Wisconsin-Madison, IZA, and NBER); Carlos A. Flores (California Polytechnic State University); Alfonso Flores-Lagunes (W.E. Upjohn Institute for Employment Research, IZA, and GLO); Hans-Peter Kohler (University of Pennsylvania) |
| Abstract: | We revisit much-investigated relationships between schooling and health, focusing on schooling impacts on cognitive abilities at older ages using the Harmonized Cognition Assessment Protocol in the Health & Retirement Study (HRS) and a bounding approach that requires relatively weak assumptions. Our estimated upper bounds on the population average effects indicate potentially large causal effects of increasing schooling from primary to secondary; yet, these upper bounds are smaller than many estimates from the literature on causal schooling impacts on cognition using compulsory-schooling laws. We also cannot rule out small and null effects at this margin. We do, however, find evidence for positive causal effects on cognition of increasing schooling from secondary to tertiary. We replicate findings from the HRS using older adults from the Midlife in United States Development Study Cognitive Project. We further explore possible mechanisms through which schooling may be working—such as health, SES, occupation and spousal schooling—finding suggestive evidence of effects through such mechanisms. |
| Keywords: | Schooling, Cognition, Bounds, Aging, Partial-Identification |
| JEL: | I10 I26 J14 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:25-417 |
| By: | Katarina Zigova; Thomas Zwick |
| Abstract: | We find a positive effect of minimum wages on continuing professional training. Several Swiss cantons introduced high and strongly binding minimum wages in the period 2018-2022. We apply a stacked diff-in-diff estimation model to identify the dynamic policy effect on training. Drawing on several surveys with extensive details on employees' training, we find robust evidence of an increase in training incidence and intensity. The positive effect is mainly driven by firm-financed formal training during working hours that covers contents beyond current professional activities. There are substantial ripple effects and most workers experience extra training, irrespective of their tenure and wage level. We argue that the strong minimum wage bite and our ability to measure the full dynamic training effects on all employees in treated cantons explain the difference between our findings and those in the previous theoretical and empirical literature. |
| Keywords: | minimum wages, adult training, staggered policy introduction |
| JEL: | J08 J51 M53 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0242 |