|
on Labor Markets - Supply, Demand, and Wages |
| By: | Christian Zimpelmann; Hans-Martin von Gaudecker; Radost Holler; Lena Janys; Bettina Siflinger (Department of Economics, University of Bonn, Adenauerallee 24-42, 53113 Bonn, Germany) |
| Abstract: | Using customized panel data spanning the entire year of 2020, we analyze the dynamics of working hours and household income across different stages of the CoVid-19 pandemic. Similar to many other countries, during this period the Netherlands experienced a quick spread of the SARS-CoV-2 virus, adopted a set of fairly strict social distancing measures, gradually reopened, and imposed another lockdown to contain the second wave. We show that socio-economic status is strongly related to changes in working hours, especially when strict economic restrictions are in place. In contrast, household income is equally unaffected for all socio-economic groups. Examining the drivers of these observations, we find that pandemic-specific job characteristics (the ability to work from home and essential worker status) explain most of the socio-economic gradient in total working hours. Furthermore, household income is largely decoupled from shocks to working hours for employees. We provide suggestive evidence that large-scale labor hoarding schemes have helped insure employees against demand shocks to their employees. |
| Keywords: | inequality, labor market, working from home, coronavirus, essential workers, mitigation policies |
| JEL: | D31 J21 J22 J24 J33 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:093&r= |
| By: | Chen, Jie; Pastore, Francesco |
| Abstract: | In this paper, we use the Chinese General Social Survey data to analyse the returns to upper secondary vocational education in China. To address possible endogeneity of vocational training due to omitted heterogeneity, we construct a novel instrumental variable using the proportion of tertiary education graduates relative to the entire population by year. Our main finding is that, although returns to vocational upper secondary education appear higher than returns to academic upper secondary education according to the Mincerian equation, the results from the instrumental variable method tell the opposite story: vocational upper secondary graduates face a wage penalty compared to academic upper secondary graduates. The wage penalty is confirmed by an alternative and more recent IV method - the Lewbel method (Lewbel, 2012). Our findings highlight the importance of properly accounting for endogeneity when estimating the returns to vocational education. |
| Keywords: | vocational education,academic education,upper secondary,China,Lewbel |
| JEL: | I26 I25 J24 J31 C36 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:858&r= |
| By: | Gehrke, Britta (University of Rostock); Maug, Ernst (University of Mannheim); Obernberger, Stefan (Erasmus University Rotterdam); Schneider, Christoph (University of Münster) |
| Abstract: | We study the restructuring of the labor force after mergers and acquisitions. Overall restructuring is large. Net employment of targets declines by more than half within two years after acquisitions relative to a matched sample, and is concentrated in targets that close all establishments. There is a substantial increase in employee turnover. We place our analysis within a framework in which acquirers seek growth options from targets and provide managerial capabilities to organize production more efficiently. Consistent with this framework, we show that growth and turnover are both higher for managers, and that firms become more hierarchical if they grow and if they become more diversified. Acquirers have a better-educated, better-paid, and more qualified workforce than targets, and they adapt the workforce by hiring new employees who are much younger and less expensive. Mergers create internal labor markets, which are more active if firms have more managerial capacities. However, most hiring is external, especially for managers. |
| Keywords: | M&A, restructuring, employment, internal labor markets |
| JEL: | G30 G34 J24 J31 M51 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14409&r= |
| By: | Bilgrami, A.; Cutler, H.; Sinha, K. |
| Abstract: | We estimated the impact of standardising workplace health and safety (WHS) laws and increasing enforcement activities in Australia on the probability of receiving workers' compensation. Standardised WHS laws were introduced in all but two Australian states over 2012-2013, creating a unique natural experiment. We exploited this jurisdictional variation to perform difference-in-difference estimation on a sample of workers from the Household, Income and Labour Dynamics in Australia survey. We found standardising WHS laws and increasing enforcement activities reduced the probability of receiving workers' compensation by 0.9 percentage points (p=0.047). Subgroup analysis suggests the probability of receiving workers' compensation declined by 2.9-3.6 percentage points (p=0.030) in the high-risk construction industry. The larger impact in construction may have resulted from more opportunities to reduce workplace risk and changes to laws specifically targeted at this industry. Our estimation results suggest reduced workers' compensation claims resulted from reduced injuries, supported by injury reduction trends and increased enforcement activity in national datasets. However, we cannot rule out that some policy effect component may also reflect employers discouraging claims due to stricter WHS requirements and higher non-compliance penalties. |
| Keywords: | workplace health and safety; Australia; workers' compensation; causal analysis; workplace injury; |
| JEL: | D04 I18 J28 J38 L52 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:21/08&r= |
| By: | Isabelle Sin (Motu Economic and Public Policy Research); Dean Hyslop (Motu Economic and Public Policy Research); Dave Maré (Motu Economic and Public Policy Research); Shakked Noy (Motu Economic and Public Policy Research) |
| Abstract: | Workers who experience involuntary job loss suffer from deep and persistent negative consequences. In this paper, we first summarise the evidence on the effects of involuntary job loss on displaced workers’ wellbeing. We conclude that displacement harms workers’ mental health and economic security in the short term and negatively affects their earnings and mortality risk in the long term. We then extrapolate the estimates of Hyslop and Townsend (2017) to estimate the economy-wide net-present value of wages lost as a result of displacement by the workers displaced in New Zealand in a representative year. Our estimates suggest that this value is likely between $3.3 billion (in a year of economic upswing) and $15.4 billion (in a year of very severe economic downswing). Finally, we survey the policy options available for dealing with involuntary displacement. We conclude that unemployment insurance or unemployment benefits can effectively mitigate the immediate negative effects of displacement and have only small downsides. By contrast, training and job placement programs are typically ineffective, but in some circumstances might have high potential upside. |
| Keywords: | Displaced workers, unemployment insurance, active labour market policies |
| JEL: | J08 J24 J63 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:21_06&r= |
| By: | Gilje, Erik P. (U of Pennsylvania); Wittry, Michael D. (Ohio State U) |
| Abstract: | We study how ownership structure, in particular public listing status, affects workplace safety and productivity tradeoffs. Theory offers competing hypotheses on how listing-related frictions affect these tradeoffs. We exploit detailed asset-level data in the U.S. coal industry and find that workplace safety deteriorates dramatically under public firm ownership, primarily in mines that experience the largest productivity increases. We find evidence consistent with information asymmetry between managers and share-holders of public firms, and ties of private firm ownership with local communities being first-order drivers of workplace safety and productivity tradeoffs. |
| JEL: | G30 G32 G34 J24 J38 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2021-05&r= |
| By: | Anna Baranowska-Rataj (Department of Sociology, UmeA University and Centre for Demographic and Ageing Research, UmeA University); Zoltán Elekes (Agglomeration and Social Networks Research Group, Centre for Economic and Regional Studies and Department of Geography, UmeA University); Rikard Eriksson (Department of Geography, Umea University and Centre for Regional Science, Umea University) |
| Abstract: | Low-wage jobs are often regarded as dead-ends in the labour market careers of young people. Previous research focused on disentangling to what degree the association between a low-wage job at the start of working life and limited chances of transitioning to better-paid employment is causal or spurious. Less attention has been paid to the channels that may facilitate the upward wage mobility of low-wage workers. We focus on such mechanisms, and we scrutinize the impact of social ties to higher-educated co-workers. Due to knowledge spillovers, job referrals, as well as firm-level productivity gains, having higher-educated co-workers may improve an individual’s chances of transitioning to a better-paid job. We use linked employer-employee data from longitudinal Swedish registers and panel data models that incorporate measures of low-wage workers’ social ties to higher-educated co-workers. Our results confirm that having social ties to higher-educated co-workers increases individual chances of transitioning to better-paid employment. |
| Keywords: | co-worker networks, employer-employee data, low-wage, wage mobility |
| JEL: | C23 D85 J24 J31 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2123&r= |
| By: | Yana Gallen (The University of Chicago); Melanie Wasserman (University of California, Los Angeles) |
| Abstract: | This paper estimates gender differences in access to informal information regarding the labor market. We conduct a large-scale field experiment in which real college students seek information from 10,000 working professionals about various career paths, and we randomize whether a professional receives a message from a male or a female student. We focus the experimental design and analysis on two career attributes that prior research has shown to differentially affect the labor market choices of women: the extent to which a career accommodates work/life balance and has a competitive culture. When students ask broadly for information about a career, we find that female students receive substantially more information on work/life balance relative to male students. This gender difference persists when students disclose that they are concerned about work/life balance. In contrast, professionals mention workplace culture to male and female students at similar rates. After the study, female students are more dissuaded from their preferred career path than male students, and this difference is in part explained by professionals’ greater emphasis on work/life balance when responding to female students. Finally, we elicit students’ preferences for professionals and find that gender differences in information provision would remain if students contacted their most preferred professionals. |
| Keywords: | career information, gender, discrimination, correspondence study |
| JEL: | C93 J16 J24 J71 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2021-025&r= |
| By: | David Carey; Naomitsu Yashiro; Hyunjeong Hwang |
| Abstract: | In the context of the COVID-19 pandemic and resulting economic contraction and government debt build-up, the government is formulating reforms to raise employment by 80 thousand workers by 2029. Finland’s employment rate has been lagging behind the Scandinavian Nordics, with most of the gap attributable to older workers, who have more favourable access to early retirement schemes than their Scandinavian counterparts. To restrict their use, extended unemployment benefit, which is paid to unemployed persons aged 61 or more after normal unemployment benefit expires until they retire or reach 65, should be phased out and non-medical conditions should no longer be taken into account for disability benefit applications of persons aged 60 or more. Activity rates for mothers of young children are also lower in Finland than in the Scandinavian Nordics mainly owing to Finland’s generous homecare allowance. It should be reduced and access to convenient early childhood education and care services expanded to improve mothers’ work incentives. By increasing mothers’ work experience at critical points in their careers, such a reform would also help to narrow Finland’s large gender wage gap. As part of its 2021 budget, the government is setting out labour market reforms to increase employment by 31 to 36 thousand workers. Such reforms should focus on promoting employment of older workers. |
| Keywords: | ALMPs, disability benefit, early childhood education and care, early retirement, employment rate, extended unemployment benefit, female labour-force participation, homecare allowance, vocational education and training |
| JEL: | J16 J21 J26 J65 |
| Date: | 2021–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1671-en&r= |
| By: | Robertson, Raymond (Texas A&M University); Vergara Bahena, Mexico Alberto (World Bank); Kokas, Deeksha (World Bank); Lopez-Acevedo, Gladys (World Bank) |
| Abstract: | Since the early 1990s, some developing countries have experienced a coincidence of rising exports – especially those related to global value chains – and improved labor market outcomes. During 2000–10, rising trade was associated with falling poverty and inequality in many developing countries. However, the Arab Republic of Egypt was not one of these countries, although it signed several trade agreements. The lack of trade-related improvements in labor market outcomes – including poverty, inequality, average wage levels, informality, and female labor force participation – could be explained by at least two possibilities. First, it is possible that trade agreements did not produce the same increase in trade for Egypt as for other countries. Second, it is possible that exports do not generate the same kinds of changes in labor market outcomes as experienced in other countries. After presenting the trends in key labor market outcomes over 2000–19, this paper evaluates both hypotheses. Using a gravity model approach, the results suggest that the changes in Egypt's exports following trade agreements are above internationally estimated averages. Second, the results from a Bartik approach find no significant relationship between rising exports and wages, informality, or female labor force participation. Additional analysis shows that Egypt's average wage levels are among the highest among countries that export the same goods exported by Egypt, possibly suggesting that Egypt has a relatively weak comparative advantage in currently exported goods, and thus might need to rethink its export basket. |
| Keywords: | labor market outcomes, trade agreements, Egypt |
| JEL: | J31 F16 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14413&r= |
| By: | Demid Getik; Marco Islam; Margaret Samahita |
| Abstract: | We study the origins of support for gender-related affirmative action (AA) in two pre-registered online experiments (N = 1, 700). Participants act as employers who decide whether to use AA in hiring job candidates. We implement three treatments to disentangle the preference for AA stemming from i) perceived gender differences in productivity, ii) beliefs about AA effects on productivity, or iii) other non-material motives. To test i), we provide information to employers that there is no gender gap in productivity. To test ii), we inform the candidates about the hiring rule ex-ante, allowing us to observe how AA is expected to affect productivity. To test iii), we remove the payment to the employers based on the chosen candidates’ productivity, thus making AA cheaper. We do not find significant differences in AA support across treatments, despite successfully altering beliefs about expected productivity differences. Our results suggest that AA choice reflects a more intrinsic and inelastic preference for advancing female candidates. |
| Keywords: | Affirmative action; Beliefs; Gender; Information; Institution |
| JEL: | C91 D02 D83 J38 J71 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:202112&r= |
| By: | Francesco Amodio; Nicolás de Roux |
| Abstract: | How much can employers in low and middle-income countries suppress wages below marginal productivity? Using plant and customs data from Colombia, we exploit predetermined variation across plants in sales export destination combined with variation in exchange rates to generate plant-specific shocks to marginal revenue productivity and labor demand. We estimate a firm-level labor supply elasticity of around 2.5, implying that workers produce about 40% more than their wage level. Our results indicate that Colombian and US manufacturers have a comparable degree of labor market power |
| Keywords: | labor market power, export, Colombia. |
| JEL: | J42 L10 O14 O54 |
| Date: | 2021–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:019267&r= |
| By: | DeVaro, Jed; Norlander, Peter |
| Abstract: | This study explores what determines employers' violations of the wage contracts of workers on H-1B temporary work visas, which occur when firms pay those workers below the promised prevailing or "market" wage. A theoretical framework is proposed that predicts more violations during economic downturns, fewer violations when firms have more labor-market power, and more violations by subcontractor firms. Empirical analysis is based on a firm-level matched dataset of wage and hour violations and the firms that sponsor H-1Bs. Higher labor market power, measured by the Herfindahl-Hirschman Index, is associated with fewer violations. Higher unemployment rates and subcontractor firms are associated with more violations. The effects of the unemployment rate and labor market power are amplified in subcontractor firms. |
| Keywords: | wage theft,guest workers,H-1B workers,labor market competition,wage and hour laws,monopsony labor market |
| JEL: | J31 J38 J42 J44 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:855&r= |
| By: | Albert Jan Hummel (University of Amsterdam) |
| Abstract: | This paper studies the implications of monopsony power for optimal income taxation and welfare. Firms observe workers' abilities while the government does not and monopsony power determines what share of the labor market surplus is translated into profits. Monopsony power increases the tax incidence that falls on firms. This makes labor income taxes less (more) effective in redistributing labor income (profits). The optimal tax schedule is less progressive. Monopsony power alleviates the equity-efficiency trade-off that occurs because the government does not observe ability, but at the expense of exacerbating capital income inequality. I illustrate these findings for the US economy. |
| Keywords: | monopsony, optimal taxation, tax incidence |
| JEL: | H21 H22 J42 J48 |
| Date: | 2021–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20210051&r= |
| By: | OECD |
| Abstract: | Embracing digitalisation throughout the tourism ecosystem will help to drive the ability of business to build resilience in a post-COVID-19 era. This will include exploiting the opportunities digitalisation opens up for marketing, product and destination development, as well as investing in human capital and skills to retain and develop a skilled workforce. To support the digital transformation of the sector, this report examines: i) the role of digital technology in tourism and its impact on work organisation; ii) how digitalisation affects the demand for skills in the sector; and iii) the role of government in creating the conditions to support the digital transformation of tourism business models, and preparing the tourism workforce for change. Acknowledging that national policies will need to be responsive to needs across a diverse sector, with varying levels of digital maturity amongst enterprises (and people), the report presents a selection of policy considerations to prepare the tourism workforce for the digital future. |
| Keywords: | digital future, digital skills, tourism, workforce |
| JEL: | Z38 L83 J24 |
| Date: | 2021–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaab:2021/02-en&r= |
| By: | Anikó Bíró (Health and Population Lendület Research Group, Centre for Economic and Regional Studies, 1097 Budapest, Tóth Kálmán u. 4.); Réka Branyiczki (Central European University and TÁRKI); Péter Elek (Health and Population Lendület Research Group, Centre for Economic and Regional Studies, 1097 Budapest, Tóth Kálmán u. 4. and Institute of Economics, Corvinus University of Budapest) |
| Abstract: | We analyse the causal effect of involuntary retirement on detailed indicators of healthcare use and health status. Our identification strategy is based on a pension reform in Hungary which forced public sector workers above the statutory retirement age to full time retirement. Using rich administrative data, we find that on the three-year horizon, involuntary retirement decreases the number of primary care doctor visits, the consumption of antiinfectives for systemic use and drugs of the respiratory system, and the non-zero spending on antiinfectives, the drugs of the alimentary tract and metabolism and of the cardiovascular system. We also find that the impact on the latter two drug categories is driven by the drop in income due to involuntary retirement. The effects of involuntary retirement are comparable to the short-run effects of voluntary retirement, identified from a change in the statutory retirement age. We conclude that there is little evidence for health deteriorating effects of involuntary retirement and provide explanations for the possible mechanisms behind our results. |
| Keywords: | healthcare use, involuntary retirement, voluntary retirement |
| JEL: | I10 J26 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2122&r= |
| By: | Poulissen, Davey (Maastricht University); de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Künn-Nelen, Annemarie (ROA, Maastricht University) |
| Abstract: | Various studies have shown that temporary workers participate less in training than those on permanent contracts. Human resources practices are considered to be an important explanation for this difference. We develop a theoretical framework for employers' provision of training that explicitly incorporates the costs and benefits associated with training investments in employees with different types of employment contracts. Our framework not only predicts employers to be less willing to invest in temporary workers due to the shorter time horizon associated with such an investment, but it also provides insights into how this willingness depends on characteristics of the training that are related to the expected costs and benefits of the training investment. A discrete choice experiment is used to empirically test the predictions from our theoretical framework. In line with our theoretical framework, we find that employers are less likely to invest in the training of temporary workers. This particularly holds when temporary workers do not have the prospect of a permanent contract with their current employer. Furthermore, we show that employers' likelihood of investing in temporary workers indeed depends on aspects related to the costs and benefits of training, that is, a financial contribution to the training costs made by employees, a repayment agreement that applies when workers leave the organisation prematurely, and the transferability of the skills being trained. Our findings can be used to increase employers' willingness to invest in temporary workers. However, similar effects are observed when looking at employers' willingness to invest in permanent workers, suggesting that it will be difficult to decrease the gap in employers' willingness to invest between temporary and permanent workers. |
| Keywords: | flexible contracts, human capital investments, stated preference experiment, cost–benefit assessment |
| JEL: | J24 J41 J62 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14395&r= |
| By: | Bettina Siflinger (Department of Econometrics and OR, Tilburg University, The Netherlands); Michaela Paffenholz (Center for Doctoral Studies in Economics, University of Mannheim, Germany); Sebastian Seitz (Center for Doctoral Studies in Economics, University of Mannheim, Germany); Moritz Mendel (Bonn Graduate School of Economics, Bonn, Germany); Hans-Martin von Gaudecker (University of Bonn, Germany; IZA, Bonn, Germany) |
| Abstract: | Since the start of the CoViD-19 pandemic, a major source of concern has been its effect on mental health. Using pre-pandemic information and five customized questionnaires in the Dutch LISS panel, we investigate how mental health in the working population has evolved along with the most prominent risk factors associated with the pandemic. Overall, mental health decreased sharply with the onset of the first lockdown but recovered fairly quickly. In December 2020, levels of mental health are comparable to those in November 2019. We show that perceived risk of infection, labor market uncertainty, and emotional loneliness are all associated with worsening mental health. Both the initial drop and subsequent recovery are larger for parents of children below the age of 12. Among parents, the patterns are particularly pronounced for fathers if they shoulder the bulk of additional care. Mothers’ mental health takes a particularly steep hit if they work from home and their partner is designated to take care during the additional hours. |
| Keywords: | COVID-19, mental health, gender inequality, lockdown |
| JEL: | I10 I14 I18 I30 J22 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:092&r= |
| By: | Cynthia Armas (Universitat de Barcelona); Fernando Sánchez-Losada (Universitat de Barcelona) |
| Abstract: | An increase in the supply of skilled labor has been common across the world. However, despite the rise in skilled labor force, not all countries have achieved high income levels, even when their structural transformation follows the same path (from agriculture to industry and, then, from industry to services). Skilled workers might end up in either high or low TFP sectors, according to two opposite theories of structural change (skill-biased structural transformation and stagnant structural transformation). We show that directed technical change is needed to achieve skill-biased structural transformation and, therefore, skilled workers are allocated to high TFP sectors. We present macrodata and microdata evidence to identify the existence of directed technical change. We reveal that in the U.S., South Korea and France, skilled workers have ended up in high TFP sectors due to the existence of directed technical change in the process of structural transformation, but not in Canada. There is a lack of clear evidence for Italy and Spain. |
| Keywords: | Structural change, directed technical change, unskilled and skilled sectors. |
| JEL: | J24 O14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:412web&r= |
| By: | Francesc Ortega (Queens College CUNY) |
| Abstract: | Wage gaps between documented (including natives) and undocumented workers reflect employer exploitation, endogenous occupational sorting and productivity losses associated with lack of legal status. Identification of the productivity penalty is crucial to estimate the net economic gains from legalization. Our paper presents a model-based strategy to identify the productivity penalty associated with lack of legal status. In the model, heterogeneous workers choose occupations and undocumented workers are subject to employer discrimination and experience productivity loss in occupations characterized by tasks that require legal status. The theoretical analysis provides guidance on how to identify occupational barriers and on how to compute a lower bound for the undocumented productivity penalty. Applying this strategy to individual-level data that imputes undocumented status, we estimate that the productivity penalty associated with lack of legal status in the United States is at least 5%. This implies that legalization of undocumented workers not only improves their wages, but also increases GDP |
| Keywords: | Immigration; Undocumented; Legalization; Discrimination |
| JEL: | J3 J7 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2118&r= |