nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2019‒08‒19
five papers chosen by
Maximo Rossi
Universidad de la República

  1. Early Education and Gender Differences By Del Boca, Daniela; Martino, Enrica Maria; Meroni, Elena Claudia; Piazzalunga, Daniela
  2. Designing Good Labour Market Institutions: How to Reconcile Flexibility, Productivity and Security? By Eichhorst, Werner; Kalleberg, Arne; Portela de Souza, André; Visser, Jelle
  3. Long-Run Effects of Dynamically Assigned Treatments: A New Methodology and an Evaluation of Training Effects on Earnings By van den Berg, Gerard J.; Vikström, Johan
  4. Dissonant Works Councils and Establishment Survivability By John T. Addison; Paulino Teixeira; Philipp Grunau; Lutz Bellmann
  5. Is Employment Polarization Informative about Wage Inequality and Is Employment Really Polarizing? By Hunt, Jennifer; Nunn, Ryan

  1. By: Del Boca, Daniela (University of Turin); Martino, Enrica Maria (INED, France); Meroni, Elena Claudia (European Commission, Joint Research Centre); Piazzalunga, Daniela (FBK-IRVAPP)
    Abstract: A rich strand of the economic literature has been studying the impact of different forms of early childcare on children cognitive and non-cognitive development in the short and medium run, and on a number of educational, labor market, and life outcomes in the long run. These studies agree in assessing the importance of the first years of life on future outcomes, and identify early childhood interventions as a powerful policy instrument to boost child development. Furthermore, most research agrees in identifying stronger beneficial effects among children from disadvantaged backgrounds, making a case for the role of childcare policies in reducing inequality. Instead, heterogeneity of results across gender is less clear-cut. Yet, it is important to understand how childcare arrangements differently affect boys and girls, to figure out how to boost cognitive and non-cognitive development of young children and how to reduce gender gaps later in life. Our paper offers a comprehensive review of the literature on early childcare impacts, shedding light on the heterogeneous effects across genders, considering the role of institutional background, type of the intervention, and age of the child. We also present some empirical results on the Italian case which indicates that gender differences in the outcomes is lower among children who attended an impact toddler center, while it is higher and more often statistically significant for those who received informal care. This result confirms the positive and equalizing role of early public childcare.
    Keywords: childcare, child development, cognitive skills, non-cognitive skills, gender differences
    JEL: J13 J16
    Date: 2019–07
  2. By: Eichhorst, Werner (IZA); Kalleberg, Arne (University of North Carolina, Chapel Hill); Portela de Souza, André (Sao Paulo School of Economics); Visser, Jelle (University of Amsterdam)
    Abstract: The world of work is in constant change. Demographic shifts, technological innovation, institutional reforms and global economic integration affect the way people work. Technological innovations have a major impact on occupations and industries, changing the ways economies in different world regions, in both developed and developing countries, work along with new division of labour that are facilitated by global economic integration. This paper is based on the joint work within the International Panel on Social Progress. It highlights three main areas of attention: a) skill formation, d) the challenges to collective bargaining, and e) social protection and labour market policies. Based on an assessment of the existing evidence, the paper suggests some policy principles and concrete policy options that might further those objectives, not ignoring some tensions that might exist between flexibility and security in the different labour markets. The ultimate direction of reforms in line with an idea of social progress lies in institutional arrangements that facilitate the reconciliation of flexibility and productivity with access to decent jobs and social protection. We argue that distinct policy options are available that can be implemented more globally in order to achieve these goals simultaneously.
    Keywords: future of work, industrial relations, skill formation, social protection, non-standard work
    JEL: J21 J24 J52 J81
    Date: 2019–07
  3. By: van den Berg, Gerard J. (University of Bristol); Vikström, Johan (IFAU)
    Abstract: We propose and implement a new method to estimate treatment effects in settings where individuals need to be in a certain state (e.g. unemployment) to be eligible for a treatment, treatments may commence at different points in time, and the outcome of interest is realized after the individual left the initial state. An example concerns the effect of training on earnings in subsequent employment. Any evaluation needs to take into account that some of those who are not trained at a certain time in unemployment will leave unemployment before training while others will be trained later. We are interested in effects of the treatment at a certain elapsed duration compared to "no treatment at any subsequent duration". We prove identification under unconfoundedness and propose inverse probability weighting estimators. A key feature is that the weights given to outcome observations of non-treated depend on the remaining time in the initial state. We study earnings effects of WIA training in the US and long-run effects of a training program for unemployed workers in Sweden.
    Keywords: treatment effects, dynamic treatment evaluation, program evaluation, duration analysis, matching, unemployment, employment
    JEL: C14 J3
    Date: 2019–07
  4. By: John T. Addison; Paulino Teixeira; Philipp Grunau; Lutz Bellmann
    Abstract: Using subjective information provided by manager respondents on the stance taken by the works council in company decision making, this paper investigates the association between a measure of works council dissonance or disaffection and plant closings in Germany, 2006-2015. The potential effects of worker representation on plant survivability have been little examined in the firm performance literature because of inadequate information on plant closings on the one hand and having to assume homogeneity of what are undoubtedly heterogeneous worker representation agencies on the other. Our use of two datasets serves to identify failed establishments, while the critical issue of heterogeneity is tackled via manager perceptions of works council disaffection or otherwise. The heterogeneity issue is also addressed by considering the wider collective bargaining framework within which works councils are embedded, and also by allowing for works council learning. It is reported that works council dissonance is positively associated with plant closings, although this association is not found for establishments that are covered by sectoral agreements. Taken in conjunction, both findings are consistent with the literature on the mitigation of rent seeking behavior. Less consistent with the recent empirical literature, however, is the association between plant closings and dissonance over time, that is, from the point at which works council dissonance is first observed. Although the coefficient estimate for dissonance is declining with the length of the observation window, it remains stubbornly positive and highly statistically significant. Finally, there is evidence that establishments with dissonant works councils are associated with a much higher probability of transitioning from no collective bargaining to sectoral bargaining coverage over the sample period than their counterparts with more consensual works councils.
    Keywords: dissonance, works councils, plant closings, collective bargaining regime, rent seeking, learning
    JEL: J51 J53 J65
    Date: 2019
  5. By: Hunt, Jennifer (Rutgers University); Nunn, Ryan (Brookings Institution)
    Abstract: Equating a job with an individual rather than an occupation, we re-examine whether U.S. workers are increasingly concentrated in low and high-wage jobs relative to middle-wage jobs, a phenomenon known as employment polarization. By assigning workers in the CPS to real hourly wage bins with time-invariant thresholds and tracking over time the shares of workers in each, we do find a decline since 1973 in the share of workers earning middle wages. However, we find that a strong increase in the share of workers in the top bin is accompanied by a slight decline in the share in the bottom bin, inconsistent with employment polarization. Turning to occupation-based analysis, we show that the share of employment in low-wage occupations is trending up only from 2002-2012, and that the apparent earlier growth and therefore polarization found in the literature is an artefact of occupation code redefinitions. This new timing rules out the hypothesis that computerization and automation lie behind both rising wage inequality and occupation-based employment polarization in the United States.
    Keywords: employment polarization, wage inequality
    JEL: J31 J62
    Date: 2019–07

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