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on Labour Economics |
| By: | Adams-Prassl, Abi (University of Oxford); Jensen, Mathias Fjællegaard (University of Oxford); Petrongolo, Barbara (University of Oxford) |
| Abstract: | We develop new facts on relationships between the timing and spacing of births, parental leave take-up, and labor market outcomes using Danish administrative data. We document substantial heterogeneity in age at first birth across maternal skill levels. Average spacing of pregnancies is also tighter for highly skilled mothers, resulting in higher fertility levels and time on parental leave soon after first birth. We estimate event studies by skill level and find that much of child penalties in earnings and participation after first birth can be explained by incapacitation effects from parental leave around subsequent births, especially for the highly educated. |
| Keywords: | fertility, child penalty, skill |
| JEL: | J13 J16 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17438 |
| By: | Joseph Altonji; Daniel Giraldo Páez; Disa M. Hynsjö; Ivan Vidangos |
| Abstract: | For birth cohorts 1935–44, 1945–62, and 1964–74, we estimate the contribution of education; permanent heterogeneity in wage rates, employment, and hours; labor market shocks; spouse characteristics and shocks; nonlabor income shocks; and marital histories to the age profiles of the variance of family income per adult equivalent. The decompositions are based upon PSID data and Altonji, Giraldo-Páez, Hynsjö, and Vidangos’ (2024) statistical model of earnings, marriage, marital sorting, fertility, and nonlabor income. We find that education and employment heterogeneity are key sources of the rise in the variance with age and across birth cohorts. Hours shocks have grown in importance for women, and employment shocks have grown in importance, especially for men after age 30. The variance contribution of wage heterogeneity is substantial at all ages and has risen across cohorts for women. Own characteristics and shocks matter more for men than women, while spouse characteristics and shocks matter more for women. Gender differences have declined across cohorts. |
| JEL: | D10 D31 J16 J31 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33122 |
| By: | Christina Brinkmann (University of Bonn); Simon Jäger (Massachusetts Institute of Technology (MIT), NBER & CEPR); Moritz Kuhn (University of Mannheim & CEPR); Farzad Saidi (University of Bonn & CEPR); Stefanie Wolter (IAB Nuremberg) |
| Abstract: | Governments use short-time work (STW) schemes to subsidize job preservation during crises. We study the take-up of STW and its effects on worker outcomes and firm behavior using German administrative data from 2009 to 2021. Establishments utilizing STW tend to have higher wages, be larger, and have falling employment even before STW take-up. More adverse selection occurred during the COVID-19 pandemic. Within firms, STW is targeted towards workers likely to stay even in the absence of STW. To study the effects of STW, we examine two dimensions of policy variation: STW eligibility and extensions of potential benefit duration (PBD). Workers above retirement age, ineligible for STW, have identical employment trajectories compared to their slightly younger, eligible peers when their establishment takes up STW. A 2012 reform doubling PBD from 6 to 12 months did not secure employment at treated firms 12 months after take-up, with minimal heterogeneity across worker characteristics. However, treated and control firms experienced substantial and persistent differences in their wage trajectories, with control firms without extensions lowering wages compared to treated firms. Across cells, larger wage effects corresponded with smaller employment effects, consistent with downward wage flexibility preventing layoffs and substituting for the employment protection effects of STW. Our research designs reveal that STW extensions in Germany did not significantly improve short- or long-term employment outcomes. |
| Keywords: | Stabilization policies, short-time work, wage rigidity, labor market institutions, intra-firm insurance |
| JEL: | J01 J08 J30 J41 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:340 |
| By: | Carlo Medici |
| Abstract: | This paper shows that immigration fostered the emergence of organized labor in the United States. I digitize archival data to construct the first county-level dataset on historical U.S. union membership and use a shift-share instrument to isolate a plausibly exogenous shock to the labor supply induced by immigration, between 1900 and 1920. Counties with higher immigration experienced an increase in the probability of having labor unions, the number of union branches, the share of unionized workers, and the number of union members per branch. This increase occurred more prominently among skilled workers, particularly in counties more exposed to labor competition from immigrants, and in areas with less favorable attitudes towards immigration. Taken together, these results are consistent with existing workers forming and joining labor unions for economic as well as social motivations. The findings highlight a novel driver of unionization in the early 20th-century United States: in the absence of immigration, the average share of unionized workers during this period would have been 22% lower. The results also identify an unexplored consequence of immigration: the development of institutions aimed at protecting workers’ status in the labor market, with effects that continue into the present. |
| Keywords: | labor unions, immigration, labor market competition, discrimination |
| JEL: | J15 J50 J70 N31 N32 P10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11437 |
| By: | Hannah Illing (University of Bonn, Institute for Employment Research (IAB) & Institute of Labor Economics (IZA)); Hanna Schwank (University of Bonn & Institute of Labor Economics (IZA)); Linh T. Tô (Boston University) |
| Abstract: | We investigate how the same hiring opportunity leads to different labor market outcomes for male and female full-time workers. To study firms’ wage-setting behavior following exogenous vacancies, we analyze the wages of new hires after sudden worker deaths between 1981 and 2016. Using admin- istrative data from Germany, we apply a novel technique to identify external replacement workers, and we use machine learning to compare replacements hired for comparable positions by similar firms. We find that female replacement workers’ starting wages are, on average, 10 log points lower than those of replacing men of the same productivity. Differences in labor supply, within-firm ad- justments, or outside options do not explain this gap; instead, we attribute it to gender differences in bargaining. We conclude that a significant portion of the gender wage gap emerges within firms at the hiring stage. |
| Keywords: | Gender Wage Gap, Hiring, Labor Supply |
| JEL: | J2 J31 J63 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:339 |
| By: | Jonas Jessen (WZB, IAB, IZA, Berlin School of Economics); Lavinia Kinne (DIW Berlin, Berlin School of Economics, University of Potsdam); Michele Battisti (University of Glasgow) |
| Abstract: | Child penalties in labour market outcomes are well-documented: after childbirth, mothers’ employment and earnings drop persistently compared to fathers. Beyond gender norms, a potential driver could be the loss in labour market skills due to mothers’ longer employment interruptions. This paper estimates child penalties in adult cognitive skills by adapting the pseudo-panel approach to a single cross-section of 29 countries in the PIAAC dataset. We find a persistent drop in numeracy skills after childbirth for both parents between 0.13 (short-run) and 0.16 standard deviations (long-run), but no statistically significant difference between mothers and fathers. Estimates of child penalties in skills strongly depend on controlling for pre-determined characteristics, especially education. Additionally, there is no evidence for worse occupational skill matches for mothers after childbirth. Our findings suggest that changes in general labour market skills cannot explain child penalties in labour market outcomes, and that a cross-sectional estimation of child penalties can be sensitive to characteristics of the outcome variable. |
| Keywords: | child penalty, cognitive skills, gender inequality, PIAAC |
| JEL: | I20 J13 J16 J24 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:81 |
| By: | Julia Schmieder (DIW Berlin); Doris Weichselbaumer (University of Linz, IZA); Clara Welteke (DIW Berlin); Katharina Wrohlich (DIW Berlin, University of Potsdam, Berlin School of Economics, IZA, CEPA) |
| Abstract: | Promoting fathers to take parental leave is seen as a promising way to advance gender equality. However, there is still a very limited understanding of its impact on fathers’ labor market outcomes. We conducted a correspondence study to analyze whether fathers who take parental leave face discrimination during the hiring process in three different occupations. Fathers who took parental leave in a female-dominated or gender-neutral occupation are not less likely to be invited to a job interview compared to fathers who did not take leave. However, in the male-dominated occupation, fathers who have taken long parental leave are penalized. Regardless of leave-taking, fathers are treated less favorably than mothers in the female-dominated and the gender-neutral occupation, while the opposite is true for the male-dominated occupation. This suggests the presence of strong gender norms concerning the perception of ideal employees in different occupations. |
| Keywords: | discrimination, parental leave, gender, hiring, experiment |
| JEL: | C93 J13 J71 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:83 |
| By: | Rashmi Ahuja; Shrimoyee Ganguly; Rajat Acharyya; Sugata Marjit |
| Abstract: | This paper highlights the critical role that demand-shock and policy-shock induced finite changes play for the unconventional employment consequences of such shocks at a general equilibrium of a multi-sector competitive economy. A labour market reform that lowers the institutional costs of hiring workers for the firms in traditional import-competing sectors, and a secular rise in world-demand for non-traditional skill-based exports that raises its world price, are the two specific and pertinent shocks that we consider. We show a small or minor labour market reform can paradoxically result in a larger unemployment of unskilled labour due to one of the import-competing sectors shutting down as it fails to cope up with the import competition. Subsequent reforms however raises aggregate employment. Thus, we may have a J-curve like employment response to gradual and sequential labour market reforms. A big-bang approach to policy reform may work better by avoiding such an initial adverse employment effect. Our findings add to the growing body of literature that challenges conventional wisdom about labour market flexibility having favourable impact on employment. These also emphasize the need for policymakers to carefully consider the broader economic context and potential sectoral shifts when designing labour market reforms. On the other hand, contrary to apprehensions, we show that global-demand-driven hike in the world price of the skill-based export goods may initially raise aggregate employment of unskilled workers due to a similar finite change. |
| Keywords: | labour market reforms, finite change, skilled-based exports, employment |
| JEL: | D50 F16 J32 J64 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11455 |
| By: | Vasiliki Fouka; Theo Serlin |
| Abstract: | How does economic modernization affect group identity? Modernization theory emphasizes how labor migration led to the adoption of common identities. Yet economic development may reduce incentives to emigrate, preserving local cultures. We study England and Wales during the Second Industrial Revolution, a period characterized by the development of new industries and declines in transportation and communication costs. Using microdata on individuals’ names and migration decisions, we quantify identity change and its variation across space. We develop and estimate a quantitative spatial model in which migration and cultural identities are inter-dependent. Different components of economic modernization had different effects on identity change. Falling migration costs homogenized peripheral regions. In contrast, industrial development led to heterogeneity, increasing the overall prevalence of the culture of London, while also creating local identity holdouts by reducing out-migration from industrializing peripheries. Modernization promotes both national identities and persistent local identities in peripheral regions that industrialize. |
| Keywords: | migration, identity, industrialization |
| JEL: | J61 N33 N63 Z10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11441 |
| By: | Francois de Soyres; Simon Fuchs; Illenin O. Kondo; Helene Maghin |
| Abstract: | We show how local worker flow adjustment margins yield a theory-consistent sufficient statistic approximating the welfare effects of local shocks. Furthermore, we isolate a city’s insurance value as this approximation’s second-order term. Leveraging rich labor flows data across occupations, industries, and cities in France, we estimate spatial and non-spatial flows responses to local labor demand shocks. Less economically diverse French cities experience deeper contractions in gross outflows following negative shocks. In contrast, more economic concentration begets a modestly larger increase in gross worker flows following positive shocks. Altogether, we uncover a sizable welfare insurance gains from local economic diversity. |
| Keywords: | Sufficient statistics; Welfare; Concentration; Economic diversity; Labor flows |
| JEL: | J61 J62 J21 |
| Date: | 2024–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedmoi:99165 |
| By: | Hersch, Joni (Vanderbilt University) |
| Abstract: | Using data from the Current Populations Survey 2015-2024 matched to skin color data in the New Immigrant Survey, this article shows that immigrants from countries with darker skin color face a substantial earnings penalty. The penalty is similar to that found using 2003 data on individual immigrants. Controls for extensive labor market characteristics and race and ethnicity does not eliminate the negative effect of darker skin tone on wages. Color discrimination lawsuits in light of the addition of a Middle Eastern and North African (MENA) reporting category for US government surveys may become more viable. |
| Keywords: | colorism, race, skin tone discrimination, immigrant, earnings, Current Population Survey, New Immigrant Survey, MENA |
| JEL: | J15 J61 J71 J78 K31 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17397 |
| By: | Nordin, Martin (Lund University); Stanfors, Maria (Lund University) |
| Abstract: | Women have made substantial gains in education and outperform men regarding educational attainment across the OECD, but the consequences of this reversal of the gender gap in education (RGE) have not been well researched. We address the association between the RGE and partnering, employment, and support for a right-wing populist party in Sweden. We explore the differential impacts of women's educational advancements versus men's lagging by using cross-sectional register data and within-areal age variation in RGE. Results show that RGE is negatively associated with partnering and employment prospects among individuals with a low level of education. Results suggest that men's educational disadvantage may contribute to growing support for right-wing populist parties and that shifting gender gaps in education may foster frustration in various areas of life and anti-egalitarian values. |
| Keywords: | gender gap in education, partnership, employment, political opinion |
| JEL: | J12 I24 Z13 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17437 |
| By: | Grönqvist, Hans (Research Institute of Industrial Economics (IFN)); Niknami, Susan (Stockholm University); Palme, Mårten (Department of Economics, Stockholm University); Priks, Mikael (Department of Economics, Stockholm University) |
| Abstract: | We estimate the causal effects of parental incarceration on children’s short- and long-run outcomes using administrative data from Sweden. Our empirical strategy exploits exogenous variation in parental incarceration from the random assignment of criminal defendants to judges with different incarceration tendencies. We find that the incarceration of a parent in childhood leads to a significant increase in teen criminal convictions, a decrease in high school graduation, and worse labor market outcomes in adulthood. The effects are concentrated among children from disadvantaged families, in particular families where the remaining non-convicted parent is disadvantaged. These results suggest that the incarceration of parents with young children may significantly increase the intergenerational persistence of poverty and criminal behavior in affluent countries with extensive social safety nets and progressive criminal justice systems. |
| Keywords: | Crime; Parental incarceration; Childrens outcomes; School graduation; Labor market |
| JEL: | K42 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1509 |
| By: | Vladimir Kozlov (Leibniz-Institute for East and Southeast European Studies (IOS)); Ekaterina Sokolova (Eurasian Technological University Kazakhstan); Olga Veselovskaya (Eurasian Technological Universit Kazakhstan); Daria Saitova (Eurasian Technological Universit Kazakhstan) |
| Abstract: | A significant part of Russian migrants, who fled the country after February 2022, are qualified professionals, and almost half have moved with their partners and children. For them, the social capital required for integration in the host country is closely linked to family issues and daily routines. Defining social capital as a combination of relationships and attitudes, this study examines the role of employment, children, and gender in its development after migration. Empirical data were obtained from online surveys conducted among Russian migrants around the world, as well as among those who stayed in Russia. Quantitative analysis of the data shows that employment, children, and gender are related to the formation of migrants' social capital. In addition to the role of employment, we show that in migration women are more sociable and open to interaction, and having children widens their social circle and increases the number of acquaintances, which in turn contributes to the formation of social capital. Based on the above, it can be concluded that migrant families with children have a great potential for integration into the host society. |
| Keywords: | Migration, social capital, integration, families, gender |
| JEL: | F22 J12 J13 J15 I31 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ost:wpaper:405 |
| By: | Sebastian K. Doerr; Thomas Drechsel; Donggyu Lee |
| Abstract: | We propose a novel channel through which rising income inequality affects job creation and macroeconomic outcomes. High-income households save relatively more in stocks and bonds but less in bank deposits. A rising top income share thereby increases the relative financing cost for bank-dependent firms, which in turn create fewer jobs. Exploiting variation in top income shares across US states and an instrumental variable strategy, we provide evidence for this channel. We then build a general equilibrium macro model with heterogeneous households and heterogeneous firms and calibrate it to our empirical estimates. The model shows that the secular rise in top incomes accounts for 13% of the decline in the employment share of small firms since 1980. Through the new channel, rising inequality also reduces the labor share and aggregate output. Model experiments show that ignoring the link between inequality and job creation understates welfare effects of income redistribution. |
| JEL: | D22 D31 E44 E60 L25 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33137 |
| By: | Guy Lacroix; Pierre-Carl Michaud |
| Abstract: | We provide empirical evidence on the effectiveness of a tax measure aimed at increasing the employment rates of older workers in Quebec, Canada. We use several data sources and various identification strategies. First, we use a Quebec-Ontario difference-in-differences design and do not detect robust effects on employment for most age groups except for those aged 60 to 64, but the common trend assumption is found not to hold. For this last group, we use an alternative identification strategy that exploits the variation in treatment intensity over time using longitudinal administrative tax data for Quebec only. Doing so, we do not find any effect on transitions in or out of the labour force. We do find a small positive effect on earnings (intensive margin) but a negative one on the affected workers’ net tax liability. Finally, addressing the invalid comparison with Ontario, we investigate the impact of the credit using a staggered adoption design exploiting differences across cohorts within Quebec. The results are consistent with the alternative approach. We conclude that the tax measure does not appear to be a cost-effective way of raising public revenues nor of increasing the employment rates of older workers. Nous fournissons des preuves empiriques sur l'efficacité d'une mesure fiscale visant à augmenter les taux d'emploi des travailleurs plus âgés au Québec, Canada. Nous utilisons plusieurs sources de données et différentes stratégies d'identification. Tout d'abord, en appliquant la méthode des différences-en-différences entre le Québec et l'Ontario nous ne trouvons pas d'effets robustes sur l'emploi pour la plupart des groupes d'âge, à l'exception de ceux âgés de 60 à 64 ans, mais l'hypothèse de tendance commune ne semble pas être vérifiée. Pour ce dernier groupe, nous utilisons une stratégie d'identification alternative qui exploite la variation de l'intensité du traitement au fil du temps en utilisant les données administratives longitudinales sur les impôts pour le Québec seulement. Ce faisant, nous ne trouvons aucun effet sur les transitions ni d'entrée dans la population active ni de sortie de la population active. Nous constatons néanmoins un léger effet positif sur les revenus (marge intensive) mais un effet négatif sur la charge fiscale nette des travailleurs affectés. Enfin, pour remédier à la comparaison invalide avec l'Ontario, nous étudions l'impact du crédit en utilisant une modélisation «d'adoption échelonnée» (staggered adoption design), exploitant les différences entre les cohortes au sein du Québec. Les résultats sont cohérents avec l'approche alternative. Nous concluons que la mesure fiscale ne semble pas être approche efficiente d'augmenter les revenus de l'État ni d'augmenter les taux d'emploi des travailleurs plus âgés. |
| Keywords: | older workers, labour market participation, tax incentives, travailleurs plus âgés, participation au marché du travail, incitations fiscales |
| JEL: | J14 J16 H31 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2024s-06 |
| By: | Thomas Licht; Klaus Wohlrabe |
| Abstract: | This paper examines the adoption of Artificial Intelligence (AI) among German firms, leveraging firm-level data from the ifo Business Survey. We analyze the diffusion of AI across sectors and firm sizes, showing a significant increase in AI usage from 2023 to 2024, particularly in manufacturing and services. The survey data allows us to explore not only sectoral patterns of adoption but also the drivers and barriers that firms face, including firm-specific characteristics and industry dynamics. Additionally, we investigate the role of managerial traits, such as risk tolerance and patience, in shaping AI adoption decisions. Finally, we assess the potential pro-ductivity impacts of AI at the firm level, with a focus on the expected long-term benefits of AI for different sectors of the German economy. Our findings contribute to the growing body of research on AI adoption by providing new evidence from a non-US context, offering valuable insights for both academia and politics. |
| Keywords: | artificial intelligence, AI, ifo business survey, productivity |
| JEL: | M15 O30 C83 L20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11459 |
| By: | Grenet, Julien (Paris School of Economics and CNRS); Grönqvist, Hans (Linnaeus University and); Niknami, Susan (Stockholm University) |
| Abstract: | Electronic monitoring (EM) has emerged as a popular tool for curbing the growth of large prison populations. Evidence on the causal effects of EM on criminal recidivism is, however, limited and it is unclear how this alternative to incarceration affects the labor supply of offenders and the outcomes of their family members. We study the countrywide expansion of EM in Sweden in 1997 wherein offenders sentenced to up to three months in prison were granted the option to substitute incarceration with EM. Our difference-in-differences estimates, which compare the change in the prison inflow rate of treated offenders to that of non-treated offenders with slightly longer sentences, show that the reform significantly decreased the number of incarcerations. Our main finding is that EM not only lowers crimi nal recidivism but also increases labor supply. Additionally, EM improves the educational attainment and early-life earnings of the children whose parents were exposed to the reform. The primary mechanisms through which EM operates appear to involve the preservation of offenders’ ties to the labor market, by reducing the barriers to both finding a job and changing employers. Our calculations suggest that the social benefits stemming from EM are about seven times larger than the fiscal savings associated with reduced prison expenditures, implying that the welfare gains from EM could be much greater than previously acknowledged. |
| Keywords: | Electronic monitoring; Incarceration; Labor supply; Crime; Spillovers |
| JEL: | K42 |
| Date: | 2024–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:iuiwop:1508 |
| By: | TORREJON PEREZ Sergio (European Commission - JRC); FERNANDEZ MACIAS Enrique (European Commission - JRC); GONZALEZ VAZQUEZ Ignacio (European Commission - JRC); MARQUÉS PERALES Ildefonso |
| Abstract: | The time Europeans devote to paid work has been consistently reduced since the Industrial Revolution. However, since the 1980s, the pace of this trend has slowed. The aim of this article is twofold: first, we develop a theoretical framework to account for the main factors determining the evolution and distribution of working hours in Europe; second, we exploit the EU-LFS data (1992-2022) to analyze the main factors explaining recent developments in working time. The results indicate: 1) that reductions in working time are primarily attributable to an increased prevalence of non-standard forms of work, mainly part-time work; 2) that part-time work has expanded mainly due to the feminization of employment and tertiarisation; 3) that full-time workers continue to work more or less the same hours as in the 1980s, given that there are countervailing effects pushing up (occupational upgrading and tertiarization) and down (the expansion of public services, the shrinking of the goods-producing sector, and self-employment becoming less time-intensive) the time they devote to work; and 4) that the self-employed work less because part-time self-employment has become more prevalent, although the self-employed continue doing the longest workweeks. Theoretical and empirical implications arising from these findings are discussed, as well as potential avenues for future research. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:laedte:202404 |