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on Labor Markets - Supply, Demand, and Wages |
| By: | Michael Böhm (University of Bonn and IZA); Hans-Martin von Gaudecker (University of Bonn and IZA); Felix Schran (AXA) |
| Abstract: | This paper studies the relationship between occupational employment, occupational wages, and rising wage inequality. We document that in all occupations, entrants and leavers earn less than stayers. This suggests selection effects that are negative for growing occupations and positive for shrinking ones. We estimate a model of occupational prices and skills, which includes occupation-specific skill accumulation and endogenous switching across many occupations. Consistent with leading explanations for occupational changes, estimated prices (i.e., selection-corrected wages) and occupational employment growth are positively related. Just over 40% of selection is due to age in the sense that marginal workers have had less time to accumulate skills. The remainder is due to Roy-type selection, i.e., workers reacting to changing prices and shocks unrelated to age. Skill prices establish a long-suspected quantitative connection between occupational changes and the surge in wage inequality. |
| Keywords: | Skill Prices, Selection Effects, Multidimensional Skill Accumulation, Occupational Employment and Wages, Administrative Panel Data, Wage Inequality |
| JEL: | J21 J23 J24 J31 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:167&r= |
| By: | Bhalotra, Sonia R. (University of Warwick); Fernández, Manuel (Universidad de los Andes); Wang, Fan (University of Houston) |
| Abstract: | We develop an equilibrium model of the labor market to investigate the joint evolution of gender gaps in labor force participation and wages. We do this overall and by task-based occupation and skill, which allows us to study distributional effects. We structurally estimate the model using data from Mexico over a period during which women’s participation increased by fifty percent. We provide new evidence that male and female labor are closer substitutes in high-paying analytical task-intensive occupations than in lower-paying manual and routine task-intensive occupations. We find that demand trends favored women, especially college-educated women. Consistent with these results, we see a widening of the gender wage gap at the lower end of the distribution, alongside a narrowing at the top. On the supply side, we find that increased appliance availability was the key driver of increases in the participation of unskilled women, and fertility decline a key driver for skilled women. The growth of appliances acted to widen the gender wage gap and the decline of fertility to narrow it. We also trace equilibrium impacts of growth in college attainment, which was more rapid among women, and of emigration, which was dominated by unskilled men. Our counterfactual estimates demonstrate that ignoring the countervailing effects of equilibrium wage adjustments on labor supplies, as is commonly done in the literature, can be misleading. |
| Keywords: | task-based approach, supply-demand framework, technological change, gender wage gap, female labor force participation, wage distribution, wage inequality |
| JEL: | J16 J21 J24 J31 O33 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15258&r= |
| By: | Priyaranjan Jha; David Neumark; Antonio Rodriguez-Lopez |
| Abstract: | Dube, Lester, and Reich (2010) argue that state-level minimum wage variation can be correlated with economic shocks, generating spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs that share a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. We show that this finding hinges critically on using cross-border counties to define local economic areas with which to control for economic shocks that are potentially correlated with minimum wage changes. We use, instead, multi-state commuting zones, which provide superior definitions of local economic areas. Using the same within-local area research design−but within cross-border commuting zones−we find a robust negative relationship between minimum wages and employment. |
| Keywords: | minimum wage, employment, commuting zones |
| JEL: | J23 J38 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9746&r= |
| By: | Ruediger Bachmann; Christian Bayer; Heiko Stüber; Felix Wellschmied |
| Abstract: | When employers face a trade-off between growing large and paying low wages—that is, when they have monopsony power—some productive employers will decide to acquire fewer customers, forgo sales, and remain small. These decisions have adverse consequences for aggregate labor productivity. Using high-quality administrative data from Germany, we document that East German plants (compared to West German ones) face a steeper size-wage curve, invest less into marketing, and remain smaller. A model with labor market monopsony, product market power, and customer acquisition matching these features of the data predicts 10 percent lower aggregate labor productivity in East Germany. . |
| Keywords: | aggregate productivity, plant heterogeneity, unions, monopsony power, size-wage curve, monopolistic competition, customer capital, size distortions |
| JEL: | E20 E23 E24 J20 J42 J50 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9751&r= |
| By: | Becchetti, Leonardo; Salustri, Francesco; Solferino, Nazaria |
| Abstract: | The forced remote working relationships experienced during the COVID-19 pandemics made employers and employees more aware of the productivity gains arising from the digital revolution. To investigate the characteristics of such gains, we model firms' production allowing companies to choose among three types of (face-to-face in presence, remote synchronous, and remote asynchronous) employees relationships. The introduction of remote interactions allows us to outline five features affecting workers productivity such as i) mobility reduction, ii) frequency of interactions, iii) optimal time/place, iv) work-life balance, and v) relationship decay effects. We calculate the optimal share of the three types of relationships that maximise corporate profits conditional to reasonable parametric assumptions on the five effects under perfect and asymmetric information. We as well assess the potential productivity growth of companies that use only faceto- face interactions when allowing also remote interactions. We finally discuss existing private business contracts that introduced hybrid combinations of in-person and remote work activities for their employees, that are aligned with our theoretical findings and call for new industrial and environmental policies at national and supranational level. |
| Keywords: | flexible work,remote work,digital relationship,productivity |
| JEL: | J24 O30 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1087&r= |
| By: | Joshua Mask (Department of Economics, Temple University) |
| Abstract: | The literature has traditionally focused on the local unemployment rate one faces at the beginning of their career to measure how initial economic conditions affect long-run outcomes. However, the unemployment rate moves in response to changes in labor supply or labor demand. Using JOLTS State Estimates for job openings, hires, and separations along with Local Area Unemployment Statistics, I test how changes in more direct measures of demand at labor market entry affect long run outcomes. I find that for every one point increase in the local unemployed-to-job-opening ratio, annual earnings are reduced by 4.53% and remain depressed for 13 years. Conversely, I find that a one percentage point increase in the local job openings rate or the local quits rate, increases initial annual earnings by 8.15% and 14.23%, respectively. |
| Keywords: | wage scarring, labor discrimination, Job Openings and Labor Turnover Survey |
| JEL: | J11 J15 J16 J24 J31 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:2201&r= |
| By: | Storm, Eduard |
| Abstract: | Using German survey and expert data on job tasks, this paper explores the presence of omitted-variable bias suspected in conventional task data derived from expert assessment. I show expert task data, which is expressed at the occupation-level, introduces omitted-variable bias in task returns on the order of 24-34%. Motivated by a theoretical framework, I argue this bias results from expert data ignoring workplace heterogeneity rather than fundamental differences on the assessment of tasks between experts and workers. My findings have important implications for the interpretation of conventional task models as task returns expressed at the occupation-level are overestimated. Moreover, a rigorous comparison of the statistical performance of various models offers guidance for future research regarding choice of task data and construction of task measures. |
| Keywords: | Expert vs survey task data,workplace heterogeneity,omitted-variable bias |
| JEL: | C18 J24 J31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:948&r= |
| By: | Liu, Sitian; Su, Yichen |
| Abstract: | We analyze the effect of working from home on the agglomeration economies of large cities and the aggregate productivity implications of such effect. Using advertised wages from job ads, we show that occupations with the highest work-from-home adoption during the COVID-19 pandemic saw a strong decrease in the urban wage premium. The decline in the urban wage premium is accompanied by an exodus of employment (based on firms' locations) from large cities to small cities. In contrast, occupations with low or moderate levels of work-from-home adoption saw little overall reduction in the urban wage premium. The empirical evidence in our paper points to weakened agglomeration economies in large cities among professions with the highest prevalence of working from home. A decomposition exercise reveals that a sizable portion of the decline in the urban wage premium is driven by the decline in the urban wage premium of relationship-building skills, suggesting the decreased agglomeration effect in large cities is at least partially a result of reduced occurrence of interactive activities. |
| Keywords: | Agglomeration; Productivity; Spillover; Urban Wage Premium; Working from Home; Remote; Virtual; WFH; Wages; Job Posting; COVID-19; Pandemic |
| JEL: | J24 J31 R12 R23 |
| Date: | 2022–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113108&r= |
| By: | Philippe Sterkens; Adelina Sharipova; Stijn Baert (-) |
| Abstract: | To study hiring discrimination against cancer survivors, we conduct a vignette experiment in which American and British recruiters evaluate fictitious job candidates. Candidates differed by periods of non-employment in their career, including non-employment due to suffering from cancer. We study the effect of cancer experiences on the recruiters’ hiring decisions, as well as its effect on underlying candidate perceptions, related to various potential forms of stigma identified in the literature. We find that employment opportunities are lower for candidates with a history of cancer, compared to candidates without such a gap. This penalty is particularly explained by perceptions that these candidates will have higher sick leave probabilities and create additional costs. However, relative to candidates with a comparable gap due to depression or personal reasons, former cancer patients are less stigmatised, with relatively favourable assessments of their emotional abilities, social abilities, motivation and positive impact on workplace culture. |
| Keywords: | Hiring discrimination, cancer, depression, signalling |
| JEL: | I10 I12 J70 J71 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:22/1048&r= |
| By: | Laun, Lisa (IFAU - Institute for Evaluation of Labour Market and Education Policy); Palme, Mårten (Department of Economics, Stockholm University) |
| Abstract: | This paper investigates to what extent the 1998 reform of Sweden’s public old-age pension system contributed to the increase in extensive margin labor supply among older workers seen in the country in recent decades. We use a large data set containing all males and females born in Sweden between 1927 and 1950 and observe their retirement behavior during 1991–2012. The data show that the reform changed the incentives to remain in the labor force ambiguously: although it induced an income effect towards later retirement through lower replacement levels,it also implied a lower price on leaving the labor market under some assumptions. We use an econometric model in which the economic incentives to stay in the labor market are measured by Social Security Wealth, defined at each hypothetical retirement age, and a variable measuring the implicit tax, imposed by the income security system, on staying in the labor force. The point estimates from our econometric model, which should be interpreted with caution, suggest that at most a small part of the increase in labor force participation of the elderly can be attributed to the pension reform. |
| Keywords: | retirement; pension; reform; incentives to retire |
| JEL: | H30 J10 J20 |
| Date: | 2022–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_008&r= |
| By: | Xinwei Dong (Graduate School of Economics, The University of Tokyo); Dean R. Hyslop (Motu Economic and Public Policy Research); Daiji Kawaguchi (Faculty of Economics, The University of Tokyo) |
| Abstract: | Firms frequently provide general skill training to workers at the firm's cost. Theories proposed that labor market frictions entails wage compression, larger productivity gain than wage growth to skill acquisition, and motivates a firm to offer opportunities for skill acquisition, but few studies directly test the hypothesis. We use unusually rich data from a temporary help service firm that records both workers' wages and their productivity as measured by the fees charged to client firms. We first document that the firm provides upfront training, and show that both workers' tenure and the initial fee charged to clients are positively related to the length of training, but the initial wage paid to workers is not. We then demonstrate that the fees charged to clients grow faster over workers' tenure than the wages paid to workers. Finally, we find that about one-quarter of the fee growth is associated with client quality upgrading, but that workers receive none of this growth. Each of these results are consistent with wage compression that skills acquired through training and learning-by-doing increases productivity more than wages. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2022cf1195&r= |
| By: | Lewandowski, Piotr (Institute for Structural Research (IBS)); Lipowska, Katarzyna (Institute for Structural Research (IBS)); Smoter, Mateusz (Institute for Structural Research (IBS)) |
| Abstract: | The COVID-19 pandemic has transformed working from home from a rarity to a widely adopted job amenity. We study workers' willingness to pay for working from home, and how it may be affected by subjective and objective assessments of COVID-19-related risks. We conducted a discrete choice experiment with more than 10,000 workers in Poland. We randomised wage differences between otherwise identical home- and office-based jobs. We also randomised an information provision treatment in which we informed 50% of workers about the level of exposure to contagion in their occupation, and how it may be reduced by working from home. We found that the demand for working from home was substantial – the majority of participants would prefer to work from home if they were offered the same wage for a home-based job as they would earn in an office-based job. On average, workers would sacrifice 5.1% of their earnings for the option to work from home, especially for 2-3 days a week (7.3%) rather than 5 days a week (2.8%). We also found that the perception of COVID-19 mattered, as workers who perceived it as a threat were willing to give up a much higher share of their earnings than those who did not. However, the willingness to pay did not differ significantly between individuals depending on whether their occupation had a high or a low level of exposure, or between individuals treated in the information experiment and those in the control group. |
| Keywords: | working from home, discrete choice, information provision experiment, occupational exposures, COVID-19 |
| JEL: | J21 J44 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15251&r= |
| By: | Palma Filep-Mosberger (Magyar Nemzeti Bank (Central Bank of Hungary)); Adam Reiff (Magyar Nemzeti Bank (Central Bank of Hungary)) |
| Abstract: | This paper studies labour market tax avoidance in the 2010s in Hungary, following major labour market tax reforms in the beginning of the decade. First we show that aggregate time series are broadly consistent with a †whitening†process, in which a higher fraction of incomes are declared. However, as aggregate developments are driven by several, often unobservable factors, we cannot conclude that the observed phenomena are indeed caused by a whitening process in the labor market. Therefore in the second part of the paper we use several micro datasets to shed light on the nature of the whitening process. By comparing the consumption pattern of entrepreneurs (who might have undeclared incomes) and state sector employees (who are unlikely to have undeclared income), we show that income underreporting of entrepreneurs did decline in the 2010s. On the other hand, we find that the number of illegal employees – e.g. of those who work without any work contract – only temporarily declined in the aftermath of the financial crisis and seems to follow a procyclical pattern. |
| Keywords: | labour market tax avoidance, illegal employment, income underreporting. |
| JEL: | H26 J21 J31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2022/4&r= |
| By: | Turon, Hélène (University of Bristol) |
| Abstract: | This chapter surveys recent literature on the drivers of mothers’ labour supply in OECD countries. We present a number of facts on the variations across time and across countries of family composition and mothers’ employment. We aim to answer key questions on their decision to return to work after childbirth: How is the decision taken within the household? What are the contemporaneous and longer term determinants of this decision? What other lifecycle choices are interrelated with the labour supply choice? How do social norms and policy influence this decision? What role is there for policy to play in households’ decision regarding mothers’ participation in the labour force? We aim to summarise the main results from recent research on these questions. We will see that there are large variations in the policy choices made in different countries, which may reflect both the difficulty of designing an optimal mix of policies and the diversity of societies’ perceptions of women combining motherhood and career. |
| Keywords: | labour force participation, hours of work, children, collective model, wages, childcare, social norms |
| JEL: | J12 J22 J38 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15312&r= |
| By: | Takushi Kurozumi; Willem Van Zandweghe |
| Abstract: | Should monetary policy offset the effects of labor supply shocks on inflation and the output gap? Canonical New Keynesian models answer yes. Motivated by weak labor force participation during the pandemic, we reexamine the question by introducing labor force entry and exit in an otherwise canonical model with sticky prices and wages. The entry decision generates an employment channel of monetary policy, and a labor supply shock to the value of nonparticipation in the labor market induces a policy trade-off between stabilization of the employment gap and wage growth. For an adverse labor supply shock, optimal policy dampens the decline in employment to rein in wage growth, which entails a period of higher inflation and a positive output gap. A welfare analysis of policy rules shows that monetary policy should not lean against the employment gap. |
| Keywords: | Labor supply shock; Labor force entry; Employment channel of monetary policy |
| JEL: | E24 E31 E52 J21 |
| Date: | 2022–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:94266&r= |
| By: | Andrea Otero-Cortés |
| Abstract: | This paper estimates the marginal treatment effect of informality on wages for Brazil at the individual level using regional data on labor inspectors for identification. The results show that there is significant essential heterogeneity among otherwise identical workers that lead them to self-select into the type of jobs, formal or informal, that better reward their skills. The Average Treatment Effect (ATE) is 22%, but not statistically different from zero. But there are individuals with very low non-observed costs of formality that in fact earn premiums of up to 100% of their wage rate from being formal and workers who would be hurt from switching to formality as they experience very high non-observed costs of being formal. Two policy experiments in which we tighten enforcement of the labor law via hiring more labor inspectors increases the likelihood of workers being formal, but it has, on average, a negative effect on wages for the workers who are induced to switch from informality to formality. **** RESUMEN: Este documento estima para Brasil el efecto marginal de la formalidad laboral en los salarios a nivel individual utilizando una combinación de datos regionales sobre inspecciones laborales y actividad económica. Los resultados muestran que existe una heterogeneidad esencial significativa entre trabajadores que son idénticos en sus características observadas, que los lleva a auto-seleccionarse en el tipo de trabajos, formales o informales, que recompensan mejor sus habilidades. El efecto promedio del tratamiento (ATE) es del 22%, pero no es estadísticamente diferente de cero. Sin embargo, hay individuos con costos de formalidad no observados muy bajos que de hecho ganan primas de hasta el 100% de su salario por ser formales y trabajadores que se verían perjudicados por cambiar a la formalidad ya que experimentan costos no observados muy altos de ser formales. Dos experimentos de políticas en los que imponemos una aplicación más estricta de la ley laboral mediante la contratación de más inspectores laborales aumenta la probabilidad de que los trabajadores sean formales, pero tiene, en promedio, un efecto negativo en los salarios de los trabajadores que son inducidos a pasar de la informalidad a la formalidad. |
| Keywords: | Labor informality, labor regulation, enforcement, marginal treatment effects, Informalidad laboral, regulación laboral, aplicación, efectos marginales de tratamiento |
| JEL: | H26 J24 J32 J46 K31 |
| Date: | 2022–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:col:000102:020176&r= |
| By: | Ollikainen, Jani-Petteri (LABORE Labour Institute for Economic Research); Pekkarinen, Tuomas (VATT, Helsinki); Uusitalo, Roope (University of Jyväskylä); Virtanen, Hanna (ETLA - The Research Institute of the Finnish Economy) |
| Abstract: | We exploit admission cutoffs to secondary schools to study the effects of general academically oriented, versus vocational secondary schooling on cognitive and non-cognitive skills using a regression discontinuity design. We measure these skills using the Finnish Defence Forces Basic Skills Test that due to compulsory military service covers the vast majority of Finnish men and is a strong predictor of later labor market success. We find that large differences in average skills across students that differ in their schooling when entering military service are due to selection rather than causal effects of secondary schooling on either cognitive or non-cognitive skills. |
| Keywords: | non-cognitive skills, regression discontinuity, secondary schooling |
| JEL: | J24 I21 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15318&r= |
| By: | Silva, Pedro Luís (University of Porto) |
| Abstract: | This paper studies whether universities should select their students only using specialised subject-specific tests or based on a broader set of skills and knowledge. I show that even if broader skills are not improving graduates' outcomes in the labour market, the university chooses to use them as a criterion for selection alongside the mastery of more subject-specific tools. Empirically, I exploit the variation between subject-specific and non-specific entrance exam sets on Portuguese students' large administrative dataset. My central finding is that, on average, universities with less specialised admission policies admit a pool of students who obtain a higher final GPA. |
| Keywords: | university choice, admission tests, job market, general skills |
| JEL: | I23 I24 I28 J24 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15271&r= |
| By: | José Ramos López (Ivie (Instituto Valenciano de Investigaciones Económicas)); Mariam Ramos (IDOCAL); Montserrat Subirats Ferrer (IDOCAL) |
| Abstract: | Overqualification is a common form of underemployment in recent times, reaching in some countries one third of work force. Defined as an excess of possessed qualification (education, work experience or skills) by workers regarding the level of qualifications required by the current job, there is a relevant person-job mismatch. Research on overqualified had proliferated recently, allowing to provide insights regarding substantial issues. This paper summarizes recent research on overqualification, reflecting the state of the art around four main points: Different concepts (over-education, skills mismatch) and measures (objective vs. perceived) of overqualified; Relevant theoretical frameworks, the motives workers and employees have to engage in overqualified employment and the institutional and individual antecedents of overqualified; Relationships between overqualified and different work outcomes; and the dynamics of over-qualified along time, considering if it is a temporary phenomenon that is overpassed as workers gain job experience (step-stone) or if most over-qualified workers remain trapped in deprived jobs during long periods. Implications for labour market and educational institutions, as well as for career orientation agents, employers and individuals are considered. Recommendation for employers, policy-makers and employees, as well as future directions, are discussed. La sobrecualificación es una forma de subempleo frecuente en los últimos tiempos, que en algunos países afecta a un tercio de la población activa. Definida como un exceso de cualificación (educación, experiencia laboral o habilidades) por parte de los trabajadores en relación con el nivel requerido por su trabajo actual, supone un desajuste entre la persona y el puesto. La investigación reciente acerca de la sobrecualificación permite extraer conclusiones sobre la misma. Este documento resume las evidencias recientes, centrándose en cuatro puntos: los distintos conceptos (sobreeducación, desajuste de competencias) y formas de medir (objetivas vs. subjetivas) la sobrecualificación; los marcos teóricos pertinentes, los motivos que tienen los trabajadores y empleados en asumir empleo sobrecualificado y los antecedentes institucionales e individuales; las relaciones entre la sobrecualificación y los distintos trabajos; y la dinámica de la sobrecualificación a lo largo del tiempo, considerando si se trata de un fenómeno temporal que se supera a medida que los trabajadores ganan experiencia laboral o si la mayoría de los trabajadores sobrecualificados permanecen atrapados durante largos períodos en esta situación. Finalmente, se abordan las implicaciones para el mercado laboral y las instituciones educativas, así como para los agentes de orientación profesional, los empleadores y los individuos, y se discuten las recomendaciones para los empleadores, los responsables políticos y los empleados, así como las direcciones futuras de la investigación. |
| Keywords: | sobrecualificación, sobre-educación, desajuste de competencias, mercado laboral, resultados laborales. overqualified, overeducation, skills’ mismatch, labour market, job outcomes. |
| JEL: | J21 J24 J28 J31 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpivie:2022-04&r= |
| By: | Jolly, Nicholas A.; Theodoropoulos, Nikolaos |
| Abstract: | This paper uses data from the Survey of Health, Ageing and Retirement in Europe to analyze the effect of spousal health shocks on own labor supply decisions. Results from the analysis suggest minimal changes to the probability of work and the intensity of work for both husbands and wives of disabled spouses. Wives, however, do experience an increase in the probability of retirement after their husbands experience a work-limiting health shock. Results suggest that this increased probability is due to the desire to consume joint leisure. Finally, the analysis finds substantial cross-regional heterogeneity in the effect spousal health shocks have on the various labor market outcomes examined here, which suggests an important role for country-specific factors in the estimates provided in the earlier literature. |
| Keywords: | health shocks,marriage,labor supply |
| JEL: | I10 J12 J22 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1086&r= |
| By: | Katrine Marie Jakobsen; Thomas H. Jørgensen; Hamish Low; Katrine Marie Jakobsen |
| Abstract: | We study the role of fertility adjustments for the labor market responsiveness of men and women. First, we use longitudinal Danish register data and tax reforms from 2009 to provide new empirical evidence on asymmetric fertility adjustments to tax changes of men and women. Second, we quantify the importance of these fertility adjustments for understanding the labor supply responsiveness of couples through a life-cycle model of family labor supply and fertility. Allowing fertility adjustments increases the labor supply responsiveness of women by 28%. These adjustments affect human capital accumulation and has permanent implications for the gender wage gap within couples. |
| Keywords: | fertility, labor supply, human capital accumulation, gender inequality, tax reform, life-cycle |
| JEL: | J22 J13 D15 H24 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9750&r= |
| By: | Miller, Cristina (U.S. Department of Agriculture); Mishra, Ashok K. (Arizona State University) |
| Abstract: | The aging of the farmer population has led to concern about a shortage of beginning farmers and ranchers. This study investigates the impact of health insurance coverage and participation in government and private insurance programs on off-farm labor allocation decisions of beginning farm-operator households in the United States. We use farm household-level data from the 2015 Agricultural Resource Management Survey and the simultaneous Probit estimation method to estimate our empirical model. Results show that beginning farm-operator households with health insurance coverage from off-farm jobs are 14% more likely to work off the farm. Our analysis also depicts a negative relationship between the receipt of counter-cyclical, conservation, risk management payments, and off-farm work by beginning farm-operator households. |
| Keywords: | Agricultural Resource Management Survey, beginning farm-operator household, counter-cyclical payments, risk management payments, health insurance coverage, off-farm labor supply, two-stage simultaneous probit model |
| JEL: | C34 I13 J22 J38 J43 Q12 Q18 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15262&r= |
| By: | Julien Albertini (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Xavier Fairise (GAINS, University of Le Mans); Arthur Poirier (LED, Paris 8 University Vincennes-Saint-Denis); Anthony Terriau (GAINS, University of Le Mans) |
| Abstract: | In this paper, we analyze the impact of short-time work programs on the French labor market during the COVID-19 pandemic. We develop a dynamic model with incomplete markets, search frictions, human capital, and aggregate and idiosyncratic productivity shocks. We calibrate our model and simulate what the labor market response to a lockdown shock would have been under various STW programs. We show that STW succeeded in stabilizing employment and consumption but generated substantial windfall effects characterized by an excessive reduction in hours worked. |
| Keywords: | COVID-19, matching frictions, short-time work policies, incomplete markets. |
| JEL: | E21 E24 J24 J38 J63 J65 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2204&r= |
| By: | D'Albis, Hippolyte (University of Toulouse I); Doorley, Karina (Economic and Social Research Institute, Dublin); Stancanelli, Elena G. F. (Paris School of Economics) |
| Abstract: | A significant literature in the social sciences addresses the impact of child-bearing and rearing on marital stability and on mothers' labour market outcomes. Much less is known about older mothers' employment and marriage patterns when the adult children leave the parental nest. This study aims to shed light on these issues using longitudinal labour force data for France. Exploiting retirement laws for identification purposes, and taking a regression discontinuity approach, we find that older women's retirement probability is positively associated with an empty nest. We also conclude that an empty nest is negatively associated with older mothers' marriage probability. There is scope for better targeting of both family and retirement policies for older mothers during those critical years when adult children leave the parental nest. |
| Keywords: | ageing, retirement, divorce |
| JEL: | J12 J14 J22 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15272&r= |
| By: | Miao, Dingquan (Linnaeus University); Selin, Håkan (IFAU - Institute for Evaluation of Labour Market and Education Policy); Söderström, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | We exploit a recent Swedish tax reform, implying higher marginal tax rates for the top 5% of the earnings distribution, to learn about earnings responses in an economy where taxes already are high. Using a simple and graphical cross sectional method, we estimate earnings elasticities in the range 0.13-0.16. We interpret the response using a simulation model in which people face uncertain marginal tax rates due to earnings dynamics. The tax response is surprisingly sharp given the earnings variability at the top of the earnings distribution. |
| Keywords: | Earnings supply; Income taxation |
| JEL: | H24 J22 |
| Date: | 2022–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2022_012&r= |
| By: | Heckman, James J. (University of Chicago); Zhou, Jin (University of Chicago) |
| Abstract: | Empirical studies in the economics of education, the measurement of skill gaps across demographic groups, and the impacts of interventions on skill formation rely on psychometrically validated test scores that record the proportion of items correctly answered. Test scores are sometimes taken as measures of an invariant scale of human capital that can be compared over time and people. We show that for a prototypical test, invariance is violated. We use an unusually rich data set from an early childhood intervention program that measures knowledge of narrowly defined skills on essentially equivalent subsets of tasks. We examine if conventional, broadly-defined measures of skill are the same across people who are comparable on detailed knowledge measures. We reject the hypothesis of aggregate scale invariance and call into question the uncritical use of test scores in research on education and on skill formation. We compare different measures of skill and ability and reject the hypothesis of valid aggregate measures of skill. |
| Keywords: | testing child development, psychometrics, measurement of discrimination, human capital, demographic economics |
| JEL: | I21 C81 J71 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15252&r= |
| By: | Preston, Alison (University of Western Australia); Wright, Robert E. (University of Glasgow) |
| Abstract: | Using micro-data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey this paper examines the relationship between the gender gap in financial literacy and the gender gap in pension savings amongst non-retired adults aged 18-64 in 2018. A simple theoretical model is presented. It implies two empirical specifications: a reduced-form specification where the focus is on pension savings and a more structural specification where the focus is on the "pension return" (the ratio of pension savings to cumulative earnings). Oaxaca-Blinder decomposition analysis suggests that around 8.5 per cent of the gender gap in pension savings may be attributed to the gender gap in financial literacy. This finding holds even in the presence of controls for financial risk tolerance. Policy implications and directions for future research are discussed in the paper. |
| Keywords: | pension savings, superannuation, financial literacy, gender gap, decomposition |
| JEL: | H53 J16 J32 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15250&r= |
| By: | Paula Garda; Jens Matthias Arnold |
| Abstract: | The pandemic has highlighted significant gaps in social protection, in particularamong informal workers. With around 60% of workers in informal jobs, many of those most in need of social protection are left behind. The government has attempted to fill this gap with non-contributory benefits, but coverage and benefit levels are low. Better-off formal workers have access to a full range of social protection benefits, involving large-scale public subsidies that widen the gap. Labour informality and social protection coverage are interlinked, as high social contributions are one of the main barriers to formal job creation. Ensuring some universal basic social protection, while simultaneously lowering the cost of formal employment, would reduce labour informality, poverty and inequality and raise productivity, all of which are long-standing challenges in Colombia. |
| Keywords: | Colombia, employment, health, informality, pensions, public policy, social protection |
| JEL: | H51 H53 H55 I14 J32 J43 J65 |
| Date: | 2022–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1715-en&r= |
| By: | Bussink, Henri (SEO Amsterdam); Vervliet, Tobias (SEO Amsterdam); ter Weel, Bas (SEO Amsterdam) |
| Abstract: | This research documents employment opportunities of labour-market entrants during the COVID-19 crisis in the Netherlands. Two recent cohorts of graduates are studied and compared to two pre-COVID-19 cohorts: the 2019 cohort was unexpectedly hit by the COVID-19 crisis about six months after entering the labour market and the 2020 cohort graduated and entered the labour market in the midst of a lockdown. Our estimation results suggest short-term effects of lockdowns on employment probabilities, specifically for relatively lower educated labour-market entrants. The effects appear to be relatively small in size and seem to fade when the lockdown measures are eased. Men seem to have suffered more than women and some sectors are hit harder than others, which could result in short-run mismatches. Overall the effects appear to be less severe than during an economic recession, which is most likely due to the tight labour market and the strong measures taken by the government to mitigate the labour-market impact of the COVID-19 crisis. |
| Keywords: | COVID-19, employment, young workers |
| JEL: | J10 J23 I24 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15242&r= |
| By: | Maximilian Boeck; Jesús Crespo Cuaresma; Christian Glocker |
| Abstract: | We study empirically how various labor market institutions – (i) union density, (ii) unemployment benefit remuneration, and (iii) employment protection – shape fiscal multipliers and output volatility. Our theoretical model highlights that more stringent labor market institutions attenuate both fiscal spending multipliers and macroeconomic volatility. This is validated empirically by an interacted panel vector autoregressive model estimated for 16 OECD countries. The strongest effects emanate from employment protection, followed by union density. While some labor market institutions mitigate the contemporaneous impact of shocks, they, however, reinforce their propagation mechanism. The main policy implication is that stringent labor market institutions render cyclical fiscal policies less relevant for macroeconomic stabilization. |
| Keywords: | fiscal policy, fiscal multipliers, labor market institutions, interacted panel VAR |
| JEL: | E62 C33 J21 J38 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9749&r= |
| By: | Martín-Román, Ángel L.; Moral, Alfonso; Pinillos-Franco, Sara |
| Abstract: | We study the gender gap in the duration of sick leave in Spain by splitting this duration into two types of days - those which are related to biological characteristics and those derived from behavioral reasons. Using the Statistics of Accidents at Work for 2011-2019, we found that women presented longer standard durations (i.e., purely attached to physiological reasons) compared to men. However, when estimating individuals' efficiency as the ratio between actual and standard durations, we found that women were more inefficient at lower levels of income, whereas in case of men, this occurred at higher levels of income. These results were reinforced when considering that men and women do not recover from the same injury at the same rate. Women were more efficient than men across all the compensation distribution, especially at higher income levels. |
| Keywords: | Moral hazard,Glass ceiling,Workplace injuries,Gender,Stochastic frontiers |
| JEL: | I12 I13 I18 J28 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1099&r= |
| By: | Sarah Necker; Fabian Paetzel |
| Abstract: | Competitive rewards are often assigned on a regular basis, e.g., in annual salary negotiations or employee-of-the-month schemes. The repetition of competitions can imply that opponents are matched based on earlier outcomes. Using a real-effort experiment, we examine how cheating and effort evolve in two rounds of competitions in which subjects compete with different types of opponents in the second round (random/based on first-round outcome). We find that (i) losing causes competitors to increase cheating in the second round while winning implies a tendency to reduce cheating. A similar effect is found with regard to effort, which losers increase to a larger extent than winners. (ii) Competitor matching does not significantly affect behavior. |
| Keywords: | cheating, effort, competition, competitor, social recognition, laboratory experiment |
| JEL: | C91 C92 M52 J28 J33 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9744&r= |
| By: | Brant Abbott; Nam Phan |
| Abstract: | We use a labor search model with heterogenous households and firms to study the efficacy of a wage subsidy during a pandemic, relative to enhancing unemployment benefits. A large proportion of the economy is forced to shut down, and firms in that sector choose whether to lay off workers or keep them on payroll. A wage subsidy encourages firms to keep workers on payroll, which speeds up labor market recovery after the pandemic ends. However, a wage subsidy can be costlier than enhancing unemployment benefits. If the shutdown is long or profit margins are low then a wage subsidy is preferable, and vice-versa. The optimal mixture of policies includes a wage subsidy that covers 90% the first $200/week of earnings, and expands unemployment benefits to cover all salary up to $275/week. Low income workers, as well as those in less productive jobs, benefit the most from a wage subsidy. |
| Keywords: | wage subsidy, unemployment insurance, search, pandemic, Covid-19 |
| JEL: | E2 E32 J40 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1486&r= |
| By: | Koohborfardhaghighi, Somayeh (Deloitte FAS LLP); Altmann, Jörn (Seoul National University); Heshmati, Almas (Jönköping University, Sogang University) |
| Abstract: | Organization theorists identify organizational social capital as one of the primary building blocks of a potentially powerful resource for improving organizational performance. However, little is known about the impact of the socio-emotional skills of the employees within their social capital and its relationship with other important organizational constructs such as organizational culture and structure. This study is the first to develop an integrated model which in addition to existing organizational constructs (i.e., organizational culture and structure) explicitly accounts for the influence of the social tolerance of employees (i.e., an example of socio-emotional skills within a workplace) on their happiness. In our model, the concept of employee’s socio-emotional skill cannot be measured directly. Therefore, we developed two latent hypothetical sub-constructs and we refer to them throughout this paper as social capital (i.e., which at the micro-level points to the interactions and socializations of the employees) and social tolerance (i.e., social tolerance towards others’ social status), each of which is measured by its observable indicators. We apply our model to empirical data that we collected from East Asian Social Survey (EASS) only for the year 2012. The data was available for four East Asian countries of South Korea, Japan, Taiwan, and China. Our analysis shows that even though the skill of social tolerance is not observed to increase happiness by itself, it has been observed to show a significant impact on the level of trust among employees. Trust among colleagues also in its own turn significantly impacts the employees’ level of happiness. This finding can be applied in empowering the cognitive dimension of social capital within an organization. |
| Keywords: | organizational culture, organizational structure, social capital, structural equation modeling, social tolerance, happiness, Southeast Asia |
| JEL: | C31 D20 J29 L22 M14 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15316&r= |
| By: | Nicholas-James Clavet; Mayssun El-Attar; Raquel Fonseca |
| Abstract: | When individuals decide to retire from the labour force, different sources of income can help to maintain consumption and welfare. One of those is public pensions. Their importance as an income source varies greatly according to socio-economic status (SES). This paper analyzes how replacement rates (RR) of public pensions (OAS and GIS) and mandatory public pension benefits (C/QPP) vary across SES by using the Longitudinal and International Study of Adults dataset (LISA). Using the longitudinal nature of this survey, we compute and compare average RRs by SES. We specifically consider the role of education and health, and we study how living arrangements can explain RRs variations. To give an idea the average RR of public pensions for individuals in bad health is 32%, while it is 21% for those who report being in good health. Including public pensions and C/QPP benefits, these numbers become 54% for those in bad health and 41% for those in good health. When estimating a multivariate regression model and controlling for past income, we find for couples, that past income does not eliminate differences in replacement ratio by individuals’ characteristics. We argue that assortative mating plays a role in explaining the variation of replacement rates across individuals’ characteristics. To quote this document Clavet N-J., El-Attar M. and Fonseca R. (2022). Replacement rates of public pensions in Canada: heterogeneity across socio-economic status (2022s-11, CIRANO). https://doi.org/10.54932/WSRJ9253 Lorsque les individus décident de se retirer de la vie active, différentes sources de revenus peuvent contribuer à maintenir la consommation et le bien-être. L'une d'entre elles sont les pensions publiques. Leur importance en tant que source de revenu varie grandement en fonction du statut socio-économique (SSE). Cet article analyse comment les taux de remplacement (TR) des pensions publiques (SV et SRG) et des prestations de retraite publiques obligatoires (RPC/RRQ) varient selon le SSE en utilisant l'ensemble de données de l'Étude longitudinale et internationale des adultes (LISA). Grâce à la nature longitudinale de cette enquête, nous calculons et comparons les TR moyens selon le SSE. Nous considérons spécifiquement le rôle de l'éducation et de la santé, et nous étudions comment les conditions de vie peuvent expliquer les variations des TR. Pour donner une idée, le TR moyen des pensions publiques pour les individus en mauvaise santé est de 32%, alors qu'il est de 21% pour ceux qui déclarent être en bonne santé. Si l'on inclut les pensions publiques et les prestations du RPC/RRQ, ces chiffres deviennent 54 % pour les personnes en mauvaise santé et 41 % pour celles en bonne santé. En estimant un modèle de régression multivarié et en contrôlant le revenu antérieur, nous constatons pour les couples, que le revenu antérieur n'élimine pas les différences de ratio de remplacement selon les caractéristiques des individus. Nous soutenons que le choix d’un conjoint avec des caractéristiques similaires joue un rôle dans l'explication de la variation des taux de remplacement selon les caractéristiques des individus. Pour citer ce document Clavet N-J., El-Attar M. and Fonseca R. (2022). Replacement rates of public pensions in Canada: heterogeneity across socio-economic status (2022s-11, CIRANO). https://doi.org/10.54932/WSRJ9253 |
| Keywords: | Replacement rates,retirement,Canadian public pensions,LISA, Taux de remplacement,retraite,pensions publiques canadiennes,LISA |
| JEL: | H55 J26 |
| Date: | 2022–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2022s-11&r= |