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on Labour Economics |
| By: | D'hert, Liam (Ghent University); El Haj, Morien (Ghent University); Baert, Stijn (Ghent University) |
| Abstract: | Surging demands for the care of dependent relatives increasingly pull workers out of paid employment. However, upon returning to the labour market, former caregivers often face hiring discrimination. Still, it remains unclear which caregiving engagements trigger this care penalty, what mechanisms sustain it, and how it can be countered. Conducting a factorial survey experiment with professional recruiters, this study compares hiring evaluations across multiple care- and non-care-related career breaks and identifies the mechanisms that anchor them. The findings show that the scarring effects of care-related breaks are less pronounced than those of long-term unemployment spells, but still substantial. Perceptions of skill loss, reduced commitment, and limited future availability fuel the care penalty. These negative perceptions are most evident following childcare-related breaks. Nonetheless, recruiters prove responsive to targeted counter-stereotypical cues: signalling flexibility or adaptability increases caregivers’ hireability, but not for the long-term unemployed. |
| Keywords: | career break, caregiving, care penalty, unemployment, inactivity, hiring, experiment |
| JEL: | C91 E24 J22 J64 J71 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18292 |
| By: | Moroni, Gloria (Ca’ Foscari University Venice); Nicoletti, Cheti (University of York); Salvanes, Kjell G. (Norwegian School of Economics); Tominey, Emma (University of York) |
| Abstract: | We revisit the economic effects of marriage, analysing its heterogeneous impact on the intra-household labour division following childbirth. Can marriage promote coordination of work and child activities between parents and a gender egalitarian division of labour? Using a marginal treatment effect framework, we find the average effect of marriage is to increase parental specialization and worsen the mother’s child penalty. However, we find differences across couples with varying resistance to marriage. While traditional couples (low-resistance) exhibit increased specialization; in modern couples (high-resistance) fathers have an earnings penalty and take more paternity leave, suggesting more coordination and gender equality. |
| Keywords: | cooperation, specialization, marriage, cohabitation, child human capital |
| JEL: | J11 J12 J13 J18 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18288 |
| By: | Olympia Bover (CEMFI); Nezih Guner (BANCO DE ESPAÑA AND CEMFI); Yuliya Kulikova (OIST AND IIASA); Alessandro Ruggieri (CUNEF UNIVERSIDAD); Carlos Sanz (BANCO DE ESPAÑA AND CEMFI) |
| Abstract: | Family-friendly policies aim to help women balance work and family life, encouraging them to participate in the labor market. How effective are such policies in increasing fertility? We answer this question using a search model of the labor market where firms make hiring, promotion and firing decisions, taking into account how these decisions affect workers’ fertility incentives and labor force participation decisions. We estimate the model using administrative data from Spain, a country with very low fertility and a highly regulated labor market. We use the model to study family-friendly policies and demonstrate that firms’ reactions result in a trade-off: policies that increase fertility reduce women’s participation in the labor market and lower their lifetime earnings. |
| Keywords: | family-friendly policies, fertility, flexibility, search and matching, human capital accumulation, gender gaps, welfare |
| JEL: | E24 J08 J13 J18 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2547 |
| By: | Amandine Aubry; Anthony Edo |
| Abstract: | This paper studies how immigrants in intermediate sectors affect downstream export performance. We develop a theoretical model in which a sector’s exports depend not only on its own immigrant workforce, but also on immigrant labor in input-supplying sectors. Using a new dataset on U.S. input–output from 2003-2017, we show that increases in immigrant employment in these sectors raise exports in connected downstream industries. This effect operates partly through improved production efficiency that lowers upstream input costs. By linking labor migration to production networks, we identify a new channel through which immigration shapes comparative advantage in international trade. |
| Keywords: | Immigration;Trade;Sectoral Linkages;Intermediate Sectors |
| JEL: | F22 F16 J61 O31 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2025-17 |
| By: | Cobb-Clark, Deborah A. (University of Sydney); Dang, Tung; Fisher, Hayley (University of Sydney) |
| Abstract: | Using administrative data on Australian daycare centers and a triple-difference design, we examine the impact of daycare availability and quality ratings on childcare utilization and mothers’ labor market outcomes. We document a substantial positive impact of daycare availability and higher quality ratings on formal care usage and mothers’ employment and earnings. The effect of quality ratings is particularly pronounced among high-income, more-educated, and first-time mothers, whose perceptions of local daycare quality are most responsive to changes in ratings. Our findings underscore the important roles of childcare quality, in addition to accessibility, in shaping families’ childcare choices and mothers’ employment decisions. |
| Keywords: | earnings, employment, utilization, quality, childcare, administrative data |
| JEL: | J13 J22 J31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18300 |
| By: | Chao Gu (University of Missouri); Janet Hua Jiang (Bank of Canada); Liang Wang (University of Hawaii) |
| Abstract: | We construct a New Monetarist model with labor market search and identify two channels that affect the long-run relationship between inflation and unemployment. First, inflation lowers wages through bargaining because unemployed workers rely more heavily on cash transactions and suffer more from inflation than employed workers; this wage-bargaining channel generates a downward-sloping Phillips curve without assuming nominal rigidity. Second, inflation increases firms' financing costs, which discourages job creation and increases unemployment; this cash-financing channel leads to an upward-sloping Phillips curve. We calibrate our model to the U.S. economy. The improvement in firm financing conditions can explain the observation that the slope of the long-run Phillips curve has switched from positive to negative post-2000. |
| Keywords: | Credit Conditions, Inflation, Liquidity, Money, Phillips Curve, Unemployment |
| JEL: | E24 E31 E44 E51 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:hai:wpaper:202503 |
| By: | Julien Grenet; Hans Grönqvist; Edvin Hertegård; Martin Nybom; Jan Stuhler |
| Abstract: | We study how students adjust their early career choices in response to economic crises and how these decisions affect their long-run labor market outcomes. Focusing on Sweden’s deep recession in the early 1990s—which hit the manufacturing and construction sectors hardest—we first show that students whose fathers lost jobs in these sectors were more likely to choose career paths tied to less-affected industries. These students later experienced better labor market outcomes, including higher employment and earnings. Our findings suggest that informational frictions are a key obstacle to structural change and identify career choice as an important channel through which recessions reshape labor markets in the long run. |
| Keywords: | high school major, recession, information frictions, structural change |
| JEL: | I25 J24 J63 E32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12307 |
| By: | Alem, Yonas (University of Gothenburg and Jameel Poverty Action Lab - J-PAL,); Schürz, Simon (Federal Statistical Office of Germany) |
| Abstract: | Spouses not matched in preference and decision-making power may make inefficient household decisions that may have long-term implications. In this paper, we conduct a series of lab-in-the-field experiments with parents to test whether mothers avoid bargaining with their more powerful spouses, thereby sacrificing the ability to finance expensive educational inputs through income pooling. We asked mothers and fathers to allocate money between a cash payout and a voucher double the value of the cash payout for children’s school materials, either individually or jointly with their spouse. We randomly varied how much couples could gain by deciding jointly on the allocation. We find that parents strategically react to higher levels of the treatment by cooperating more, but mothers in particular are more likely to avoid bargaining and sacrifice voucher value. We show that these results are driven by mothers with low empowerment, who believe their spouses disagree with their preferred allocations. After the redemption of the voucher for school materials, children of noncooperative parents achieve significantly lower test scores, suggesting a negative intergenerational externality of parents’ decisions. |
| Keywords: | intra-household decision-making; gender; educational investments; income pooling |
| JEL: | D13 D14 O12 O15 |
| Date: | 2025–10–08 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunefd:2025_008 |
| By: | Cruz, Ronize (University of Coimbra); Nobre, Francisco (Kingston University London); Pereira dos Santos, João (ISEG) |
| Abstract: | We analyze how the proliferation of short-term rentals (STRs) affects firm survival, performance, and entry in two European cities with high STR density. Using administrative firm-level accounting data, a shift-share instrument, and an event-study design, we find that STR growth increases exit rates among underperforming firms, while surviving firms experience relative gains in sales and profits, with minimal effects on employment or investment. Operational costs, particularly rents and liabilities, also rise. STR expansion stimulates entrepreneurship, though new entrants face higher costs and lower initial profitability. These findings underscore the nuanced impacts of tourism-driven demand shocks on urban economic ecosystems. |
| Keywords: | tourism, local businesses, short-term rentals, Portugal |
| JEL: | R12 L25 L83 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18295 |
| By: | Holthaus, Krista L.H.; Nuevo-Chiquero, Ana (Universidad Autónoma de Madrid) |
| Abstract: | We study within-family differences by order of birth in survival and longevity in 19th century Netherlands. Using existing matched birth and death records from the Dutch provinces of Groningen and Drenthe, we report no significant differences in survival to ages 5 or 18 or longevity for those reaching adulthood by their order of birth among all siblings. When we allow the effect to vary by gender of the individual and of the older siblings, we find a small negative (positive) effect driven by same-(different-)gender older siblings, suggesting certain within-gender competition on survival. The effects, however, are small -- around 0.5 percentage points on survival levels above 75\% -- and are consistently restricted to early life. Longevity, once the individual reaches adulthood, is not consistently correlated with birth order for more flexible specifications. Importantly, we do not detect any differences by socio-economic status as captured by the father's occupation, nor do we observe a particular trend over time. This lack of observable differences by socio-economic status is noteworthy, especially given the radical changes during the study period, suggesting that it was homogeneously distributed by order of birth. |
| Keywords: | historical data, demographic transition, birth order, the Netherlands |
| JEL: | N33 I14 J13 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18298 |
| By: | Xie, Zoe Leiyu; Yu, Pei Cheng |
| Abstract: | his paper studies how the unemployment insurance system should be designed when considering costly self-control. The standard optimal unemployment insurance with dynamic moral hazard features declining benefits over the unemployment spell, without a lower bound on consumption (“immiseration”). As documented in the empirical literature, unemployed workers may be tempted to undervalue the future benefits of job search. The paper models this behavioral bias using costly self-control—a utility cost incurred when a worker’s job search choice deviates from the choice that maximizes current period utility and disregards future utility. Compared with the standard setup with moral hazard alone and without behavioral bias, the optimal system features lower benefit levels, a less rapid decline in benefits over the unemployment spell, a lower bound on consumption for the unemployed, and a one-time reward when a worker returns to work. The findings suggest that food assistance benefits and a back-to-work bonus in many U.S. states are broadly in line with such an optimal unemployment system. |
| Date: | 2025–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11265 |
| By: | Trang Le; George Kudrna; John Piggott |
| Abstract: | This paper studies how the social norm of intergenerational support, where parents anticipate financial assistance from their adult children in old age, influences fertility and education investment decisions in developing countries. We develop a dynamic life-cycle model with uncertain labor income and endogenous fertility and education choices, incorporating expectations of private transfers driven by this norm. Using data from the Indonesian Family Life Survey, we estimate labor income profiles and income risks, account for parental financial constraints, and document the prevalence of intergenerational transfers in the 2000s. The model is calibrated to match key empirical patterns in fertility and schooling. Counterfactual simulations reveal that a weakening of this social norm leads to declines in both fertility and educational investment, particularly among lower-educated parents. Our findings underscore the central role of intergenerational transfers in shaping demographic and human capital outcomes and provide new insights into the persistence of educational inequality in developing economies. |
| Keywords: | fertility, human capital, education investment, intergenerational transfers, life-cycle model |
| JEL: | J13 J24 J62 D15 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-66 |
| By: | Ryoji Ohdoi (School of Economics, Kwansei Gakuin University) |
| Abstract: | This paper studies how international asymmetries in population aging shape cross-country technology gaps and global growth. I develop a two-country, two-sector overlapping-generations model with endogenous technological progress free from scale effects. The analysis shows that, in the long-run equilibrium, the faster-aging country's relative technology declines through two mechanisms: reduced per capita labor supply and a reallocation of employment toward the non-tradable sector. Consequently, policies aimed solely at increasing labor-force participation are insufficient to prevent such relative technological decline, because the latter mechanism persists. Numerical simulations confirm these mechanisms and reveal potentially non-monotonic effects on global growth under large demographic asymmetries. I also quantify Japan's relative technological decline due solely to differential aging by calibrating the two countries to Japan and the United States. |
| Keywords: | International asymmetries in population aging; Overlapping generations; Endogenous technological progress without scale effects; Non-tradable goods; Sectoral reallocation |
| JEL: | F43 J11 O30 O41 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:kgu:wpaper:302 |
| By: | Carvalho, Leandro; Walque, Damien de; Lund, Crick; Schofield, Heather; Somville, Vincent; Wei, Jingyao |
| Abstract: | Mental health conditions are strongly associated with reduced labor market participation, but the underlying channels through which such conditions impact labor supply remain unclear. This paper reports on a two-phase study decomposing this relationship by examining (i) job take-up decisions; (ii) labor supply, output, and earning conditional on job take-up; and (iii) quit rates. In Phase 1, women in rural Ghana were asked whether they would be willing to take up a cash-for-work job during the lean season when alternative work is scarce. The findings show that individuals with depression and anxiety, which are common in this population, are much more likely to decline work offers outside the home but equally likely to accept work-from-home positions. In Phase 2, jobs at home were randomly offered to those who were willing to work from home, avoiding selection effects. Neither depression nor anxiety predicted work completion, income, or quit rates. These findings suggest that poor mental health may harm labor market outcomes in traditional jobs outside the home via reduced take-up, above and beyond the established negative impacts of mental health on productivity in work outside the home. The results also suggest an alternative approach to improving labor market outcomes for those in poor mental health: work-from-home opportunities, which are not associated with lower take-up or lower productivity on the job for those in poor mental health. |
| Date: | 2025–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11271 |
| By: | Aapo Hiilamo (Max Planck Institute for Demographic Research, Rostock, Germany); Moritz Oberndorfer |
| Abstract: | A randomized trial of a partial basic income scheme for the population in unemployment in Finland was conducted in 2017–2018. No studies to date that we are aware of have investigated to what extent the effects of the trial on self-reported mental health were heterogeneous. This is an important question for understanding the implications of basic income schemes for the distribution of mental health in a population. We studied effect heterogeneity using data from a survey conducted at the end of the two-year experiment with a response rate of 20% (intervention n=569, control n=1028). Mental health was measured by the MHI-5 five-item instrument. We considered effect heterogeneity across potential indicators of labor market disadvantages, including age, gender, education, prior employment status, household size, and family type. Participants in the intervention group had moderately better mental health compared with those in the control group (adjusted risk difference for poor mental health -0.08 [95%CI: -0.12; -0.03]). Multilevel modelling and causal forest showed no evidence for heterogenous effects on mental health. Our results suggest that basic incomes schemes have no harmful effects on mental health across multiple potential axes of labor market disadvantage, and are unlikely to increase mental health inequalities among people in unemployment. |
| JEL: | J1 Z0 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dem:wpaper:wp-2025-035 |
| By: | Belén Rodríguez Moro; Olatz Román |
| Abstract: | We investigate how having children impacts the quality of couples' relationships, a proxy of the non-material gains from being in a relationship. Using a novel measure of relationship quality (RQ), we perform a dynamic difference-in-differences estimation around the birth of the first child. We find a sharp and lasting decrease in RQ immediately after birth. We attribute this effect to changes in household specialization. Traditional gender-based specialization prevails after birth, regardless of the baseline distribution of tasks within the couple. Leveraging heterogeneous changes in household specialization after birth, we find that couples undergoing larger rearrangements also suffer larger RQ drops. |
| Keywords: | Fertility, Marital decisions, Time allocation, Household specialization |
| JEL: | J12 J13 J22 D13 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_719 |
| By: | Jan Bietenbeck; Matthew Collins; Petter Lundborg; Kaveh Majlesi |
| Abstract: | We estimate the effects of exposure to income and wealth inequality during adolescence on long-term educational and labor market outcomes. Using detailed Swedish register data covering all students completing compulsory education between 1989 and 2013, we construct measures of inequality among students’ school-cohort peers and exploit variation between cohorts within schools to identify plausibly causal effects. We find no evidence that exposure to inequality affects GPA, high school graduation, university enrollment, university completion, or income up to age 35. These null results are precisely estimated and robust to alternative measures of inequality, sample definitions, and specifications. Moreover, we find no evidence of systematic heterogeneity by socioeconomic background. Taken together, these findings provide reassurance that school integration policies mixing students from different socioeconomic backgrounds do not carry hidden long-run costs stemming from exposure to inequality. More broadly, they challenge the view that school-based exposure to peer inequality during adolescence is a causal driver of human capital accumulation or later-life mobility. |
| Keywords: | inequality, education, peer effects |
| JEL: | I21 I24 J62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12295 |