nep-lma New Economics Papers
on Labor Markets - Supply, Demand, and Wages
Issue of 2018‒12‒24
thirty papers chosen by
Joseph Marchand
University of Alberta

  1. Creators’ Income Situation in the Digital Age By Alexander Cuntz
  2. Adaptation to Shocks and The Role of Capital Structure: Danish Exporters During the Cartoon Crisis By Benjamin U. Friedrich; Michal Zator
  3. Unions and Wage Inequality: The Roles of Gender, Skill and Public Sector Employment By Card, David; Lemieux, Thomas; Riddell, W. Craig
  4. Taking Time Use Seriously: Income, Wages And Price Discrimination By Daniel S. Hamermesh; Jeff Biddle
  5. HPWS in the Public Sector: Are There Mutual Gains? By White, Michael; Bryson, Alex
  6. Elite Schools and Opting-In: Effects of College Selectivity on Career and Family Outcomes By Suqin Ge; Elliott Isaac; Amalia Miller
  7. Government Transfers, Work and Wellbeing: Evidence from the Russian Old-Age Pension By Grogan, Louise; Summerfield, Fraser
  8. Evaluation of Language Training Programs in Luxembourg using Principal Stratification By Bia, Michela; Flores-Lagunes, Alfonso; Mercatanti, Andrea
  9. Labor Market Effects of High School Science Majors in a High STEM Economy By Jain, Tarun; Mukhopadhyay, Abhiroop; Prakash, Nishith; Rakesh, Raghav
  10. Early Labor Market Prospects and Family Formation By Mattias Engdahl; Mathilde Godard; Oskar N. Skans
  11. Informing Employees in Small and Medium Sized Firms about Training: Results of a Randomized Field Experiment By van den Berg, Gerard J.; Dauth, Christine; Homrighausen, Pia; Stephan, Gesine
  12. The ups and downs of the gig economy, 2015–2017 By Bracha, Anat; Burke, Mary A.
  13. Firm Leverage and Regional Business Cycles By Giroud, Xavier; Mueller, Holger M
  14. Whither the American West? Natural Amenities, Energy and Nonmetropolitan County Growth By Rickman, Dan S.; Wang, Hongbo
  15. Does Remedial Education at Late Childhood Pays Off After All? Long-Run Consequences for University Schooling, Labor Market Outcomes and Inter-Generational Mobility By Victor Lavy; Assaf Kott; Genia Rachkovski
  16. Women, Wealth Effects, and Slow Recoveries By Masao Fukui; Emi Nakamura; Jón Steinsson
  17. The economics of sharing macro-longevity risk By Dirk Broeders; Roel Mehlkopf; Annick van Ool
  18. The Returns to Parental Health: Evidence from Indonesia By Dara Lee Luca; David E. Bloom
  19. Is Nepotism Inevitable Under Search and Matching Friction? By Mazumder, Debojyoti; Biswas, Rajit
  20. Beyond Okun's Law: Output Growth and Labor Market Flows By Dixon, Robert; Lim, Guay C.; van Ours, Jan C.
  21. The Causal Link between Relative Age Effect and Entrepreneurship: Evidence from 17 Million Users across 49 Years on Taobao By Youwei Wang; Yuxin Chen; Yi Qian
  22. Strategic Fertility Behaviour, Early Childhood Human Capital Investments and Gender Roles in Albania By Grogan, Louise
  23. Monopsony in Labor Markets: A Meta-Analysis By Sokolova, Anna; Sorensen, Todd A.
  24. How Do Nascent Social Entrepreneurs Respond to Rewards? A Field Experiment on Motivations in a Grant Competition By Ganguli, Ina; Le Coq, Chloé; Huysentruyt, Marieke
  25. Annuity Pricing in Public Pension Plans: Importance of Interest Rates By Nino Abashidze; Robert L. Clark; Beth Ritter; David Vanderweide
  26. The introduction of serfdom and labor markets By Jensen, Peter Sandholt; Radu, Cristina Victoria; Severgnini, Battista; Sharp, Paul
  27. Not so disruptive after all: How workplace digitalization affects political preferences By Aina Gallego; Thomas Kurer; Nikolas Schöll
  29. Health and the Wage Rate: Cause, Effect, Both, or Neither? New Evidence on an Old Question By Dench, Daniel; Grossman, Michael
  30. Does the Deregulation of the Labour Market Reduce Employment Hysteresis? An Analysis in a Low Interest Rate Environment By Paulo R. Mota; Paulo B. Vasconcelos

  1. By: Alexander Cuntz
    Abstract: The digital transformation imposes both opportunities and risks for creativity and for creative employment, with implications for trends in income levels and the distribution of income. First, we consider skill-biased technological change as a determinant of income and labor market outcomes in the arts. Arguably, the IT revolution has changed the demand for certain skills, with creative occupations being more in demand than general employment. Second, we consider declines in the costs of generating new works and artistic experimentation due to digital technologies, and their effect on the barriers to entry in labor markets. Third, we touch upon the rise of online contract labor in certain creative professions as a determinant of income. Here, online platforms can change creators’ access to work opportunities and it may alter the way income is distributed. We find that wage trends for creative workers in the digital age outperform general trends in the population: based on various data sources and various ways to identify creators, we see creators losing less or even gaining a better income position in relative terms. From a policy perspective, results do not lend support to the idea that creators’ income situation has systematically worsened with the rise of the internet and its intermediaries. Evidence on changing distributions of income is ambiguous as trends differ from one country to the next.
    JEL: J24 J28 J31 L82 O15 O33 O34 Z10
    Date: 2018–12
  2. By: Benjamin U. Friedrich (Northwestern University, Kellogg School of Management); Michal Zator (Northwestern University, Kellogg School of Management)
    Abstract: How do firms’ responses to an unexpected demand shock vary with their capital structure? We study the boycott of Danish products in Muslim countries in response to a Danish newspaper publishing caricatures of prophet Muhammad. Using detailed firm data on financial statements, trade flows, product innovation, and outsourcing activities of Danish exporters, we exploit variation in their capital structure and exposure to Muslim countries to analyze the effect of leverage on their response to the boycott in input and output markets. We find that firms with low leverage compensate for lost demand by increasing investment, introducing new products and redirecting their sales elsewhere. In contrast, high leverage firms reduce sales, employment and investment and substitute employees with outsourcing and owning assets with leasing. This focus on short-term cost savings is consistent with indirect costs of financial distress borne away from bankruptcy in the form of constrained adjustment to changing demand.
    JEL: D22 F14 G32 J21 L23 L25
    Date: 2018–12–12
  3. By: Card, David (University of California, Berkeley); Lemieux, Thomas (University of British Columbia, Vancouver); Riddell, W. Craig (University of British Columbia, Vancouver)
    Abstract: We examine the changing relationship between unionization and wage inequality in Canada and the United States. Our study is motivated by profound recent changes in the composition of the unionized workforce. Historically, union jobs were concentrated among low-skilled men in private sector industries. With the steady decline in private sector unionization and rising influence in the public sector, unionization is now five times higher in the public than the private sector in both countries. Though the public sector represents only 15-20% of employment, half of unionized workers are in the public sector. Accompanying these changes was a remarkable rise in the share of women among unionized workers. Currently, approximately half of unionized employees in North America are women. While early studies of unions and inequality focused on males, recent studies examine both and reveal striking gender differences. A consistent - and puzzling - finding is that unions reduce wage inequality among men but not among women. In both countries we find striking differences between the private and public sectors in the effects of unionization on wage inequality. These differences have become more pronounced over time. At present, unions reduce economy-wide wage inequality by less than 10% in both countries. However, union impacts on wage inequality are much larger in the public sector. Once we disaggregate by sector the effects of unions on male and female wage inequality no longer differ. The key differences in union impacts are between the public and private sectors - not between males and females.
    Keywords: wage inequality, wage structure, unions, collective bargaining, Canada, United States, public sector
    JEL: J31 J45 J51
    Date: 2018–11
  4. By: Daniel S. Hamermesh; Jeff Biddle
    Abstract: The American Time Use Survey 2003-15, the French Enquête Emploi du Temps, 2009-10, and the German Zeitverwendungserhebung, 2012-13, have sufficient observations to allow examining the theory of household production in much more detail than ever before. We identify income effects on time use by non-workers, showing that relatively time-intensive commodities—sleep and TV-watching—are inferior. For workers we identify income and substitution effects separately, with both in the same direction on these commodities as the income effects among non-workers. We rationalize the results by generalizing Becker’s (1965) “commodity production” model, allowing both substitution between time and goods in household production and substitution among commodities in utility functions. We then use the evidence of price discrimination in product markets against minorities in the U.S. and immigrants in France to motivate an extension of the model that predicts how household production differs between members of these groups and the majority. We find the predicted results—minorities engage in more time-intensive activities, sleep and TV-watching, than otherwise identical majority-group members.
    JEL: J15 J22
    Date: 2018–11
  5. By: White, Michael (Policy Studies Institute); Bryson, Alex (University College London)
    Abstract: Few studies investigate the links between high-performance work systems (HPWS) on public sector organizational performance and worker job attitudes. We fill this gap with analyses of these links using linked employer-employee surveys of workplaces in Britain in 2004 and 2011. We find robust evidence of positive associations between the use of HPWS and organizational performance in the public sector but no associations with worker attitudes. The implication is that, in contrast to similar work on the private sector in the United States (Appelbaum et al., 2000) HPWS is not delivering mutual gains for employers and employees in the British public sector.
    Keywords: public sector, HRM, HPWS, workplace performance, job satisfaction, organizational commitment, trust
    JEL: J28 L23 M50 M54
    Date: 2018–11
  6. By: Suqin Ge; Elliott Isaac; Amalia Miller
    Abstract: Using College and Beyond data and a variant on Dale and Krueger's (2002) matched-applicant approach, this paper revisits the question of how attending an elite college affects later-life outcomes. We expand the scope along two dimensions: we do not restrict the sample to full-time full-year workers and we examine labor force participation, human capital, and family formation. For men, our findings echo those in Dale and Krueger (2002): controlling for selection eliminates the positive relationship between college selectivity and earnings. We also find no significant effects on men's educational or family outcomes. The results are quite different for women: we find effects on both career and family outcomes. Attending a school with a 100-point higher average SAT score increases women's probability of advanced degree attainment by 5 percentage points and earnings by 14 percent, while reducing their likelihood of marriage by 4 percentage points. The effect of college selectivity on own earnings is significantly larger for married than for single women. Among married women, selective college attendance significantly increases spousal education.
    JEL: I23 J12 J16 J22 J23
    Date: 2018–11
  7. By: Grogan, Louise (University of Guelph); Summerfield, Fraser (University of Aberdeen)
    Abstract: This paper examines the impacts of a large and anticipated government transfer, the Russian old-age pension, on labor supply, home production and subjective wellbeing. The discontinuity in eligibility at pension age is exploited for inference. The 2006-2011 Russian Longitudinal Monitoring Survey is employed. Causal impacts differ across the sexes. Women reduce market work and appear to increase home production. They report increased wellbeing. Men reduce labor supply without any apparent increase in wellbeing. Pension receipt does not impact household composition.
    Keywords: fuzzy regression discontinuity, subjective wellbeing, pensions, labor supply
    JEL: I31 J22 J26 Z13
    Date: 2018–11
  8. By: Bia, Michela; Flores-Lagunes, Alfonso; Mercatanti, Andrea
    Abstract: In a world increasingly globalized, multiple language skills can create more employment opportunities. Several countries include language training programs in active labor market programs for the unemployed. We analyze the effects of a language training program on the re-employment probability and hourly wages of the unemployed simultaneously, using highquality administrative data from Luxembourg. We address selection into training by exploiting the rich administrative information available, and account for the complication that wages are “truncated” by unemployment by adopting a principal stratification framework. Estimation is undertaken with a mixture model likelihood-based approach. To improve inference, we use the individual’s hours worked as a secondary outcome and a stochastic dominance assumption. These two features considerably ameliorate the multimodality problem commonly encountered in mixture models. We also conduct sensitivity analysis to assess the unconfoundedness assumption employed. Our results strongly suggest a positive effect (of up to 12.7 percent) of the language training programs on the re-employment probability, but no effects on wages for those who are observed employed regardless of training participation. It appears that, in the context of an open and multilingual economy, language training improve employability but the language skills acquired are not sufficiently rewarded to be reflected in higher wages.
    Keywords: language training programs,policy evaluation,principal stratification,unconfoundedness,sensitivity analysis
    JEL: C21 I38 J38
    Date: 2018
  9. By: Jain, Tarun (Indian School of Business); Mukhopadhyay, Abhiroop (Indian Statistical Institute); Prakash, Nishith (University of Connecticut); Rakesh, Raghav (Michigan State University)
    Abstract: This paper explores the association between studying science at the higher secondary stage and labor market earnings using nationally representative data on high school subject choices and adult outcomes for urban males in India. Results show that those who studied science in high school have 22% greater earnings than those who studied business and humanities, even after controlling for several measures of ability. These higher earnings among science students are further enhanced if the students also have some fluency in English. Moreover, greater earnings are observed among individuals with social and parental support for translating science skills into higher earnings. Science education is also associated with more years of education, likelihood of completing a professional degree, and among low ability students, working in public sector positions.
    Keywords: high-school majors, labor markets, science, STEM, India
    JEL: J24
    Date: 2018–11
  10. By: Mattias Engdahl (Institute for evaluation of labor market and education policy (IFAU) and Uppsala Center for Labor Studies (UCLS), Box 513, S-751 20 Uppsala, Sweden); Mathilde Godard (University of Lyon, CNRS, GATE UMR 5824, F-69130 Ecully, France.); Oskar N. Skans (Uppsala University, UCLS, IZA and IFAU. Correspondance to: Department of Economics, Uppsala University Box 513 SE-751 20 Uppsala, Sweden)
    Abstract: We use quasi-random variation in graduation years during the onset of a very deep national recession to study the relationship between early labor market conditions and young females’ family formation outcomes. A policy-pilot affecting the length of upper-secondary vocational tracks allows us to compare females who graduated into the onset of the Swedish financial crisis of the 1990s to those graduating during the final phase of the preceding economic boom while netting out the main effect of the policy. We find pronounced, but short-lived, negative labor market effects from early exposure to the recession for low-grade students in particular. In contrast, we document very long-lasting effects on family formation outcomes, again concentrated among low-grade students. Young women who graduated into the recession because of the policy-pilot formed their first stable partnerships earlier and had their first children earlier. Their partners had lower grades, which we show to be a strong predictor of divorce, and worse labor market performance. Divorces were more prevalent and the ensuing increase in single motherhood was long-lasting. These negative effects on marital stability generated persistent increases in the use of welfare benefits despite the short-lived impact on labor market outcomes. The results suggest that young women respond to early labor market prospects by changing the quality threshold for entering into family formation, a process which affects the frequency of welfare-dependent single mothers during more than a decade thereafter.
    Keywords: Family formation, female labor supply, cost of recessions
    JEL: E32 J12 J13 J22 J31
    Date: 2018
  11. By: van den Berg, Gerard J. (University of Bristol); Dauth, Christine (Institute for Employment Research (IAB), Nuremberg); Homrighausen, Pia; Stephan, Gesine (Institute for Employment Research (IAB), Nuremberg)
    Abstract: We analyze a German labor market program that subsidizes skill-upgrading occupational training for workers employed in small and medium sized enterprises. This WeGebAU program reimburses training costs but take-up has been low. In an experimental setup, we mailed 10,000 brochures to potentially eligible workers, informing them about the importance of skill-upgrading occupational training in general and about WeGebAU in particular. Using combined survey and register data, we analyze the impact of receiving the brochure on workers' awareness of the program, on take-up of WeGebAU and other training, and on job characteristics. The survey data reveal that the brochure more than doubled workers' awareness of the program. We do not find effects on WeGebAU program take-up or short-run labor market outcomes in the register data. However, the information treatment positively affected participation in other (unsubsidized) training among employees under 45 years.
    Keywords: information treatment, wages, skills, employment, randomized controlled trial
    JEL: J24 J65
    Date: 2018–11
  12. By: Bracha, Anat (Federal Reserve Bank of Boston); Burke, Mary A. (Federal Reserve Bank of Boston)
    Abstract: A variety of researchers and public entities have estimated the prevalence of nontraditional work arrangements — using diverse definitions — in recent decades, and the topic has received increasing attention in the past five years. Despite numerous media reports that the prevalence of nonstandard work has increased since the Great Recession, not all sources agree on this point, and very little evidence exists relating to hours or earnings from such arrangements and their changes over time. Using unique data from the Survey of Informal Work Participation (SIWP), we describe changes in informal work activity across 2015, 2016, and 2017 along multiple dimensions and for a variety of specific jobs. Considering the net changes observed between 2015 and 2017, we find that participation rates and earnings were mostly flat across the period, while average hours for gig workers declined by economically and statistically significant margins. The aggregate number of full-time equivalent jobs embodied in informal work — a measure combining participation rates and hours — also declined by an economically significant margin between 2015 and 2017. A major exception to these trends is that average ridesharing hours more than quadrupled between 2015 and 2017. We find some evidence that the recent declines in informal work hours represented a response to declining unemployment rates, but during this time period there also appears to have been upward structural pressure on gig work that provided a particular boost to platform-based work.
    Keywords: gig economy; informal work; survey; business cycle fluctuations
    JEL: E26 E32 J22
    Date: 2018–10–01
  13. By: Giroud, Xavier; Mueller, Holger M
    Abstract: This paper shows that buildups in firm leverage predict subsequent declines in aggregate regional employment. Using confidential establishment-level data from the U.S. Census Bureau, we exploit regional heterogeneity in leverage buildups by large U.S. publicly listed firms, which are widely spread across U.S. regions. For a given region, our results show that increases in firms' borrowing are associated with "boom-bust" cycles: employment grows in the short run but declines in the medium run. Across regions, our results imply that regions with larger buildups in firm leverage exhibit stronger short-run growth, but also stronger medium-run declines, in aggregate regional employment. We obtain similar results if we condition on national recessions-regions with larger buildups in firm leverage prior to a recession experience larger employment losses during the recession. When comparing regional firm and household leverage growth, we find qualitatively similar patterns for both. Finally, we find that regions whose firm leverage growth comoves more strongly also exhibit stronger comovement in their regional business cycles.
    Keywords: Business Cycles; Firm leverage
    JEL: E24 E32 G32
    Date: 2018–12
  14. By: Rickman, Dan S.; Wang, Hongbo
    Abstract: The American West has long experienced strong economic growth. The varied economy of the region though has produced a diversity of economic outcomes and trends. In this paper, we assess whether there have been significant relative shifts in economic growth across the nonmetropolitan counties of the region between the periods of 1992-2004 and 2004-2016. We find significant relative downward growth shifts in areas most abundant in natural amenities. Further analysis suggests the downward growth shifts in high amenity counties resulted from the capitalization of the amenities into housing costs, not from diminished quality of life in the counties. Economic growth significantly accelerated in counties where significant oil and gas extractive activity occurred, in which most of the counties were not previously considered as highly dependent on the energy industry. Counties with low levels of natural amenities and an absence of oil and gas resources continued to struggle and are suggested to likely be in need of place-based labor demand policies.
    Keywords: Natural amenities; Oil and gas boom; Nonmetropolitan counties
    JEL: R11 R12 R23
    Date: 2018–11–16
  15. By: Victor Lavy; Assaf Kott; Genia Rachkovski
    Abstract: We analyze in this paper the long term effect of a high school remedial education program, almost two decades after its implementation. We combine high school records with National Social Security administrative data to examine longer-term outcomes when students were in their early 30s. Our evidence suggest that treated students experienced a 10 percentage points increase in completed years of college schooling, an increase in annual earnings of 4 percentage points, an increase of 1.5 percentage points in months employed, and a significant increase in intergenerational income mobility. These gains are reflecting mainly improvement in outcomes of students from below median income families. Therefore, we conclude that remedial education program that targeted underachieving students in their last year of high school had gains that went much beyond the short term significant improvements in high school matriculation exams. A cost benefit analysis of the program suggests that the government will recover its cost within 7-8 years, implying a very high rate of return to this remedial education program.
    JEL: I28 J24
    Date: 2018–12
  16. By: Masao Fukui; Emi Nakamura; Jón Steinsson
    Abstract: Business cycle recoveries have slowed in recent decades. This slowdown comes entirely from female employment: as women's employment rates converged towards men's over the past half-century, the growth rate of female employment slowed. We ask whether this slowdown in female employment caused the slowdown in overall employment during recent business cycle recoveries. Standard macroeconomic models with “balanced growth preferences” imply that this cannot be the cause, since the entry of women “crowds out” men in the labor market almost one-for-one. We estimate the extent of crowd out of men by women in the labor market using state-level panel data and find that it is small, contradicting the standard model. We show that a model with home production by women can match our low estimates of crowd out. This model – calibrated to match our cross-sectional estimate of crowd out – implies that 70% of the slowdown in recent business cycle recoveries can be explained by female convergence.
    JEL: E24 E32 J21
    Date: 2018–11
  17. By: Dirk Broeders; Roel Mehlkopf; Annick van Ool
    Abstract: Pension funds face macro-longevity risk or uncertainty about future mortality rates. We analyze macro-longevity risk sharing between cohorts in a pension fund as a risk management tool. We show that both the optimal risk-sharing rule and the welfare gains from risk sharing depend on the retirement age policy. Welfare gains from sharing macro-longevity risk measured on a 10-year horizon in case of a fixed retirement age are between 0.2 and 0.3 percent of certainty equivalent consumption after retirement. Cohorts experience a similar impact of macro-longevity risk on post retirement consumption and it is not optimal for young cohorts to absorb risk of older cohorts. However, in case the retirement age is fully linked to changes in life expectancy, the welfare gains are substantially higher. The risk bearing capacity of workers is larger when they use their labor supply as a hedge against macro-longevity risk. As a result, workers absorb risk from retirees in the optimal risk-sharing rule, thereby increasing the welfare gain up to 2.7 percent.
    Keywords: Macro-longevity risk; risk sharing; welfare analysis; retirement age
    JEL: D61 G22 J26 J32
    Date: 2018–12
  18. By: Dara Lee Luca; David E. Bloom
    Abstract: This paper investigates the economic returns to parental health. To account for potential endogeneity between parental health and child outcomes, we leverage longitudinal microdata from Indonesia to estimate individual fixed effects models. Our results show that the economic returns to parental health are high. We show that maternal health not only significantly affects her children’s health, but is also intrinsically linked to her spouse’s labor market status and earnings. Paternal health appears to be more linked to child schooling outcomes, especially for girls. When both parents are in poor health, the negative effects on their children are compounded. Additionally, the consequences of poor parental health are enduring. Longer-run effects of poor parental health manifest in a lower likelihood of high school completion, fewer years of schooling, and poorer adult health.
    JEL: I10 J13 J24
    Date: 2018–11
  19. By: Mazumder, Debojyoti; Biswas, Rajit
    Abstract: The present article develops a search and matching framework to model political nepotism in the job market. The model argues that labor market friction generates incentives for the political leaders to provide nepotism under a democratic set up. Both the leaders optimally choose nepotism when the labor market friction is higher. It is shown that even for a relatively lesser labor market friction at least one leader would always choose nepotism. The results of the basic model remain robust in an extension where followers can pay a price and choose their allegiance, to any one of the political parties.
    Keywords: search and matching, nepotism, political regime change
    JEL: D72 J64 J71
    Date: 2018–11–02
  20. By: Dixon, Robert; Lim, Guay C.; van Ours, Jan C.
    Abstract: This paper studies the relationship between the change in the unemployment rate and output growth using an approach based on labor market flows. The framework shows why the Okun coefficient may be constant/time-varying and/or symmetric/asymmetric and that the outcome lies with the behavior of the labor flows in response to growth. The encompassing framework nests the conditions to determine the properties of the Okun coefficient without the need to rely on retrospective arbitrary dating of recessions. The framework also highlights the potential misspecification in conventional models of Okun's Law unless stringent conditions are assumed about the behavior of labor flows. The empirical analysis is based on the stock-consistent labor market flows data developed by the BLS for the period 1990:2-2017:3.
    Keywords: Asymmetry; Labor flows; Time-varying Okun
    JEL: E24 E32 J21
    Date: 2018–12
  21. By: Youwei Wang; Yuxin Chen; Yi Qian
    Abstract: We use an extensive panel of 17 million individuals born between 1947 and 1995 from China’s largest online marketplace, Taobao, to study the impact of RAE on the propensity to become an entrepreneur. Using events surrounding the Cultural Revolution and the issuance of the Compulsory Education Law whereby COD policies varied, we conceptualize a natural experiment to identify the RAE effects. The youngest students are 5.4% less likely to become an entrepreneur compared to the oldest within the cohort, translating to approximate 43.7 thousand additional sellers born in September with an estimated USD 1.29 billion in additional annual sales.
    JEL: I24 I38 J21 J24
    Date: 2018–11
  22. By: Grogan, Louise (University of Guelph)
    Abstract: Preferences for male children in Albania are shown to have persisted through nearly half a century of communist rule, and twenty five years of economic transition. Substantial contemporary birth masculinisation is concentrated amongst higher order births. Fertility falls strongly when a firstborn child is male. Still, there is only mixed evidence that parents invest more in young boys than girls, or that women's status increases with the birth of a son. Earlier male births reduce women's midlife employment but do not appear to affect say in household resource allocation. Women in their forties who bore sons at younger ages are considerably more accepting of spousal violence.
    Keywords: sex information technology, patrilocality, son preference, 1918 Albanian census, demographic and health surveys (DHS), old-age security, resource allocation, communism, household violence
    JEL: O12 I31 J7
    Date: 2018–11
  23. By: Sokolova, Anna (University of Nevada, Reno); Sorensen, Todd A. (University of Nevada, Reno)
    Abstract: When jobs offered by different employers are not perfect substitutes in the minds of workers, employers gain wage-setting power; the extent of this power can be captured by the elasticity of labor supply that each employer faces. Estimates of this parameter reported by the literature vary broadly. We collect 801 estimates from published studies, record 20 aspects of each study’s design and perform Bayesian Model Averaging to show that this observed variation is systematic and can be attributed to four groups of factors. First, estimates depend on methodologies used by the researchers: different specifications pro- duce systematically different results that are also affected by whether the study employs an identification strategy; the choice between linear and non-linear estimation techniques also matters. Second, estimates vary with the underlying data: labor markets seem to be more competitive in Europe, and less competitive in developing countries - compared to the US, Canada and Australia. The market for medical workers appears to be more monopsonistic compared to others. Third, there is evidence of publication bias in parts of the literature, which results in negative estimates of supply elasticities receiving lower probability of being reported, and a (slightly) exaggerated mean. Fourth, estimates seem to vary with study quality, with top journals publishing higher estimates and studies using larger data sets producing more evidence of competitive behavior.
    Keywords: monopsony, labor supply, meta-analysis, Bayesian Model Averaging
    JEL: J42 C83
    Date: 2018–11
  24. By: Ganguli, Ina (University of Massachusetts Amherst); Le Coq, Chloé (Stockholm Institute of Transition Economics); Huysentruyt, Marieke (HEC Paris)
    Abstract: We conducted a field experiment to identify the causal effects of extrinsic incentive cues on the sorting and performance of nascent social entrepreneurs. The experiment, carried out with one of the United Kingdom’s largest support agencies for social entrepreneurs, encouraged 431 nascent social entrepreneurs to submit a full application for a grant competition that provides cash and in-kind mentorship support through a one-time mailing sent by the agency. The applicants were randomly assigned to one of three groups: one group received a standard mailing that emphasized the intrinsic incentives of the program, or the opportunity to do good (Social treatment), and the other two groups received a mailing that instead emphasized the extrinsic incentives - either the financial rewards (Cash treatment) or the in-kind rewards (Support treatment). Our results show that an emphasis on extrinsic incentives strongly affects who applies for the grant and consequently the type of submissions received. The extrinsic reward cues “crowded out” the more prosocial candidates, leading fewer candidates to apply and fewer applicants targeting disadvantaged groups. Importantly, while the full applications submitted by candidates in the extrinsic incentives groups were more successful in receiving the grant, their social enterprises were less likely to be successful at the end of the one-year grant period. Our results highlight the critical role of intrinsic motives to the selection and performance of social enterprises and suggest that using extrinsic incentives to promote the development of successful social enterprises may backfire in the longer run.
    Keywords: social entrepreneurship; field experiment; incentives; motivations; grants
    JEL: C93 J24 L31
    Date: 2018–12–01
  25. By: Nino Abashidze; Robert L. Clark; Beth Ritter; David Vanderweide
    Abstract: There is little systematic information on the distribution options in public sector retirement plans and how annuity options are priced relative to the standard single life annuity. This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. An important component of the analysis is the construction of a data set presenting the annuity options offered by each of these plans and how the monthly benefits for these distribution options are priced. The analysis shows that interest rates used to price annuities vary considerably across the plans. As a result, retirees with the same monthly benefit if a single life benefit is chosen will have substantially different monthly benefits if they select the joint and survivor annuity offered by their retirement plan.
    JEL: H7 J26 J45
    Date: 2018–12
  26. By: Jensen, Peter Sandholt; Radu, Cristina Victoria; Severgnini, Battista; Sharp, Paul
    Abstract: We provide evidence of how restrictions on labor mobility, such as serfdom and other types of labor coercion, impact labor market outcomes. To do so, we estimate the impact of a large negative shock to labor mobility in the form of the reintroduction of serfdom in Denmark in 1733, which was targeted at limiting the mobility of farmhands. Using a unique data source based on the archives of estates from the eighteenth century, we test whether serfdom affected the wages of farmhands more strongly than other groups in the labor market, and results based on a differences-in-differences approach reveal evidence consistent with a strong negative effect following its introduction. We also investigate whether one mechanism was that boys with rural backgrounds were prevented from taking up apprenticeships in towns, and find suggestive evidence that this was indeed the case. Thus, our results suggest that serfdom was effectively reducing mobility.
    Keywords: coercion; labor mobility; serfdom
    JEL: J3 N33 P4
    Date: 2018–11
  27. By: Aina Gallego; Thomas Kurer; Nikolas Schöll
    Abstract: New digital technologies are transforming workplaces, with unequal economic consequences depending on workers’ skills. Does digitalization also cause divergence in political preferences? Using an innovative empirical approach combining individuallevel panel data from the United Kingdom with a time-varying industry-level measure of digitalization, we first show that digitalization was economically beneficial for a majority of the labor force between 1997-2015. High-skilled workers did particularly well, they are the winners of digitalization. We then demonstrate that economic trajectories are mirrored in political preferences: Among high-skilled workers, exposure to digitalization increased voter turnout, support for the Conservatives, and support for the incumbent. An instrumental variable analysis, placebo tests and multiple robustness checks support our causal interpretation. The findings complement the dominant narrative of the "revenge of the left-behind": While digitalization undoubtedly produces losers, there is a large and often neglected group of winners who react to technological change by supporting the status quo.
    Keywords: Political economy, digitalization, labor markets, voters
    JEL: P16 D72 O33 J31
    Date: 2018–11
  28. By: Paulo R. Mota (University of Porto – School of Economics and Business and CEF.UP); Abel L. C. Fernandes (University of Porto – School of Economics and Business and NIFIP); Paulo B. Vasconcelos (University of Porto – School of Economics and Business and CMUP)
    Abstract: The austerity policy applied by the Eurozone peripheral governments under the International Monetary Fund (IMF)/ European Central Bank (ECB)/ European Commission financial assistance programs has contributed to a sharp reduction of aggregate demand, regardless of the unconventional measures undertaken by the ECB. The ECB decreased the interest rate on the main refinancing operations to zero, and is buying assets from banks on a massive scale under the Expanded Asset Purchase Programme. The fact that these extraordinary measures have not been enough to produce a strong recovery, shifts the focus again to fiscal policy. Central to assessing the effects of fiscal policy are the value of impact fiscal multipliers and the size of hysteretic effects. There is widespread evidence that public expenditure multipliers are greater than one when the economy is depressed and the interest rates are close to zero. However, less is known about the importance of hysteresis effects. Using the linear play model of hysteresis we find that hysteresis effects are important in the Eurozone peripheral countries. Large fiscal impact multipliers combined with the presence of hysteresis implies that front-loaded austerity depresses the economy in the short run and these effects may persist in the long run.
    Keywords: Employment, fiscal multipliers, hysteresis
    JEL: E24 E62 J23
    Date: 2018–12
  29. By: Dench, Daniel (City University of New York); Grossman, Michael (CUNY Graduate Center)
    Abstract: We investigate two-way causality between health and the hourly wage by employing insights from the human capital and compensating wage differential models, a panel formed from the National Longitudinal Survey of Youth 1997, and dynamic panel estimation methods in this investigation. We uncover a causal relationship between two of five measures of health and the wage in which a reduction in health leads to an increase in the wage rate in a panel of U.S. young adults who had completed their formal schooling by 2006 and were continuously employed from that year through 2011. There is no evidence of a causal relationship running from the wage rate to health in this panel. The former result highlights the multidimensional nature of health. It is consistent with an extension of the compensating wage differential model in which a large amount of effort in one period is required to obtain promotions and the wage increases that accompany them in subsequent periods. That effort may cause reductions in health and result in a negative effect of health in the previous period on the current period wage. The finding also is consistent with a model in which investments in career advancement compete with investments in health for time- the ultimate scarce resource. The lack of a causal effect of the wage on health may suggest that forces that go in opposite directions in the human capital and compensating wage differential models offset each other.
    Keywords: health, wage, causality
    JEL: I10 J24
    Date: 2018–11
  30. By: Paulo R. Mota (University of Porto – School of Economics and Business and CEF.UP); Paulo B. Vasconcelos (University of Porto – School of Economics and Business and CMUP)
    Abstract: This paper analysis the effects of deregulation of the employment in an environment of low interest rates and economic uncertainty. For this purpose, we estimate a switching employment equation based on the play model of hysteresis. As a novel feature, the estimation allows for a possible change in the value of the switching parameter after the application of labour market reforms. We use Portuguese monthly data spanning from January 2000 to October 2016. Portugal provides a good case study since it is a country where significant measures towards the deregulation of the labour market were applied after the recent financial crises. The results show that these measures reduced the hysteresis effects in the dynamics of aggregate employment except in the period where uncertainty increased substantially.
    Keywords: employment, hysteresis, uncertainty, employment protection legislation
    JEL: E24 J23
    Date: 2018–12

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