Capital tax,minimum wage,and labor market outcomes

Often an increase in the minimum wage is accompanied by a reduction in the capital tax. This paper analyzes the effects of interactions between the minimum wage and the capital tax in the general equilibrium framework. The analysis is conducted in an inter-temporal search model in which firms post wages. A (binding) minimum wage provides a lower support for the distribution of wages. The paper finds that the interaction of these two policy instruments significantly modify labor market outcomes and welfare cost. In the presence of a binding minimum wage, a decrease in the capital tax leads to an increase in wage dispersion. In contrast, when it is not binding, a lower capital tax may reduce the dispersion in wages. A binding minimum wage magnifies the positive effects of a lower capital tax on labor supply, employment, and output. It also enhances the welfare cost of capital tax. A policy change which involves an increase in the minimum wage and a fall in the capital tax such that employment level remains constant increases welfare and output.     

Effects of social distancing policy on labor market outcomes

US workers receive unemployment benefits if they lose their job, but not for reduced working hours. In alignment with the benefits incentives, we find that the labor market responded to COVID-19 and related closure-policies mostly on the extensive (12 pp outright job loss) margin. Exploiting timing variation in state closure-policies, difference-in-differences (DiD) estimates show, between March 12 and April 12, 2020, employment rate fell by 1.7 pp for every 10 extra days of state stay-at-home orders (SAH), with little effect on hours worked/earnings among those employed. Forty percentage of the unemployment was due to a nationwide shock, rest due to social-distancing policies, particularly among “non-essential” workers.     

Conflict displacement and labor market outcomes in post-war Bosnia and Herzegovina

The war in Bosnia and Herzegovina of the early nineties displaced 1.3 million people. This study uses longitudinal data to document the effects of this displacement on labor market outcomes. To account for endogeneity in displacement, I exploit the fact that the level of violence affected the decision to leave and that pre-war economic performance is orthogonal to local violence levels. I find that displaced Bosnians are less likely to be working relative to the people who stayed. Displaced men experience higher unemployment levels, and displaced women are more likely to drop out of the labor force.     

Globalization and labor market outcomes: Wage bargaining, search frictions, and firm heterogeneity

We introduce search unemployment into Melitz's trade model. Firms' monopoly power on product markets leads to strategic wage bargaining. Solving for the symmetric equilibrium we show that the selection effect of trade influences labor market outcomes. Trade liberalization lowers unemployment and raises real wages as long as it improves average productivity. We show that this condition is likely to be met by a reduction in variable trade costs or by entry of new trading countries. Calibrating the model shows that the long-run impact of trade openness on the rate of unemployment is negative and quantitatively significant.     

From income to consumption: measuring households partial insurance

This article computes the degree of consumption insurance with respect to transitory and permanent income shocks. The lack of income–consumption data in the US surveys forces researchers to use an empirical strategy to impute consumption. This procedure is avoided by using the Spanish Household Budget Continuous Survey, which contains true panel data on consumption and income information in the same survey. We find full insurance for transitory income shocks and partial insurance for permanent shocks for some sub-groups. For the full sample, a 10% permanent income shock induces a 4.8% permanent change in consumption, with higher insurance capacity for college, home-owner and high-wealth households. We also compute the role of durables and family income transfers as smoothing devices. The comparison of insurance level when based on true consumption data versus imputed consumption data shows that the use of imputed consumption underestimates permanent insurance.     

处在变革当中的韩国劳务市场

上世纪90年代以前,韩国不仅是世界上实力雄厚的国际工程承包商的国家,而且也是最大的劳务输出国之一。然而,随着经济的发展,韩国目前实际上已由劳务输出国成为部分行业劳动力短缺的国家。劳动力缺失严重已经成为困扰韩国中小企业发展的瓶颈据韩国统计厅公布的一份资料显示:2002     

The impact of sustained attention on labor market outcomes: The case of Ghana

In this paper, we go beyond traditional measures of cognitive abilities (IQ) in explaining labor market and social outcomes in developing countries. We exploit a rich dataset from Ghana that provides information on demographics, labor market outcomes, and a direct measure of cognitive ability along with other test scores to construct a measure of sustained attention. Our work is therefore related to the broader literature in psychology on the importance of executive function on individual behavior and outcomes. We find that, at least for the case of Ghana, after controlling for IQ and other covariates, higher levels of sustained attention are associated with higher educational attainment and a higher likelihood of being employed in a white‐collar job.     

The dynamic impact of immigration on natives' labor market outcomes: Evidence from Israel

This paper studies the short and medium run impact of highly skilled immigrants from the Former Soviet Union to Israel on natives' wages and employment. If immigrants are relatively good substitutes for native workers, the impact of immigration will be largest immediately upon the immigrants' arrival, and may become smaller as the labor market adjusts to the supply shock. Conversely, if immigrants upon arrival are poor substitutes for natives, the initial effect of immigration is small, and increases over time as immigrants acquire local labor market skills and compete with native workers. We empirically examine these alternative hypotheses using data from Israel between 1989 and 1999.We find that wages of both men and women are negatively correlated with the fraction of immigrants with little local experience in a labor market segment. A 10 percent increase in the share of immigrants lowers natives' wages in the short run by 1–3 percent, but this effect dissolves after 4–7 years. This result is robust to a variety of different segmentations of the labor market, to the inclusion of cohort effects, and to different dynamic structures in the residual term of the wage equation. On the other hand, we do not find any effect of immigration on employment, neither in the short nor in the medium run.     

International factor mobility and the labor market: A macroeconometric analysis of the German labor market

This paper deals with some problems of international factor mobility with respect to labor using the case of the German labor market. A quarterly macroeconometric model of the German labor market is developed and estimated. It consists of equations explaining labor supply and demand for men and women. Most equations distinguish between labor measured in persons and hours. After a determination of the variables of this model which are influenced by foreign employment two groups of foreign workers which differ according to their EC-member status are discussed separately. Because of several legal and institutional regulations a different treatment of each group with respect to employment policy is necessary. For foreigners from outside the EC alternative reaction functions of the government are discussed and estimated. As the officially published unemployment rate is not comparable intertemporally because of foreign involuntary remigration during recession a new unemployment series including these persons is constructed and explained. The influence of foreign employment on wages is examined and two wage equations are estimated. Finally, some simulation results of an enforced remigration policy are reported.     

Arab spring protests and women's labor market outcomes: Evidence from the Egyptian revolution

We analyze the effects of the 2011 Egyptian protests on the relative labor market conditions of women using panel data from the Egypt Labor Market Panel Survey (ELMPS). Using unique information from the Statistical Database of the Egyptian Revolution, we geocode each “martyr”, i.e. demonstrators who died during the protests, based on the location of the political incident. We construct our measure of the intensity of the protests – the district-level number of “martyrs” – and rely on a Difference-in-Differences approach. We find that the 2011 protests have reduced intra-household differences in labor force participation by increasing women's employment and unemployment relative to men. Women's employment relative to men increased in both the private and informal sectors. Our estimates suggest how economic uncertainty such as the one associated to the recent protests may undermine the importance of cultural factors and attitudes towards female work. We link these findings to the literature showing how a relevant shock to the labor division between women and men may have long run consequences on the role of women in society.     

Taxation,insurance, and precautionary labor

We examine optimal taxation and social insurance with adverse selection in competitive insurance markets. In a previous literature, it has been shown that, with perfect insurance markets, social insurance improves welfare since it is able to redistribute without creating distortions. This result has been taken as robust to the introduction of adverse selection as this would only provide additional justifications for social insurance. We show, however, that adverse selection can weaken the case for social insurance compared to a situation with perfect markets. Whenever social insurance mitigates private underinsurance, it also causes welfare-reducing effects by decreasing precautionary labor supply and hence tax revenue. In addition, adverse selection may reduce the redistributive potential of social insurance. We illustrate our general results using different equilibrium concepts for the insurance market. Notably, we derive conditions under which a complete renunciation of social insurance is optimal and the government only relies on income taxation to achieve its redistributive objectives.     

Health insurance market reform and employee compensation: The case of pure community rating in New York

Pure community rating, which was enacted to improve access to health insurance in New York's small group market in 1993, prevents carriers from charging different premiums based on the ages of a firm's workers. If small firms were adjusting compensation packages prior to reform to offset higher health care costs of older workers, then community rating could lead to greater relative wages for older workers post reform and not necessarily induce adverse selection that results in changes in who is insured. I present evidence showing that relative wages of older workers in small firms increased in comparison with other states and with large firms within New York following reform.     

Supply‐chain trade and labor market outcomes: The case of the 2004 European Union enlargement

The structure of international trade is increasingly characterized by fragmentation of production processes and trade policy. Yet, how trade policy affects supply‐chain trade is largely unexplored territory. This paper shows how the accession of 10 Central and Eastern European Countries (CEECs) to the European Union affected European supply‐chain trade. We find that accession primarily fostered CEECs’ integration in global value chains of other entrants. Smaller integration benefits stem for East–West trade in services for lower‐skill activities. These increases in value‐added exports translate into sizeable job creation.     

Pro-market institutions and labor market outcomes: A panel-data analysis of U.S. metropolitan areas

We expand previous U.S. state-level research on the relationship between pro-market institutions and labor market outcomes by examining this relationship at the U.S. metropolitan-area level. Using panel data for 1992–2012 in a fixed-effects model, we investigate the effect of pro-market institutions on the unemployment rate, labor force participation rate, employment-population ratio, and employment growth across 366 U.S. metropolitan areas. The results indicate that pro-market institutions are associated with a lower unemployment rate, higher employment-population ratio, and faster employment growth. These results suggest that local-area policies are important for achieving favorable labor market conditions at the local level.     

Health insurance and lifestyles

This article contributes to the discussion surrounding the existence of ex ante moral hazard and propitious selection in a voluntary private health insurance scenario. Moreover, it provides an estimation of the determinants of lifestyle choices and of private health insurance demand. A multivariate probit is estimated for health insurance demand and lifestyle decisions to take into account the potential endogeneity of these decisions. The results indicate that there is evidence of ex ante moral hazard in deciding to do sports and eating healthy snacks. Hence, no propitious selection has been found for these decisions. Another relevant result shows that there is no individual heterogeneity for the lifestyle choices, except for smoking, and private health insurance choice. Evidence from the results also supports the idea that there are nonobservable variables playing a role in the lifestyle decisions. These results provide some directions for policymakers, such as the promotion of precautionary behaviours and the use of implicit lifestyle drivers to promote healthy choices by people.     

Disability in Italian households: income,poverty and labour market participation

This article studies the economic effects of disabled members on Italian households, with the aim of identifying a suitable target group for welfare policies. Survey of Households Income and Wealth data for the year 2000 is used. Preliminary results show significant differences in levels of income and poverty diffusion to the detriment of households with disabled members. We propose an exogenous explanation: the replacement ratio between disability benefits and expected labour income shows that disability benefits do not compensate the potential incomes of the disabled person and of the possible carer, except in households with severe socioeconomic disadvantages. We also propose an endogenous explanation: applying a logit model we show that the labour market participation of the possible carer is reduced in households with disabled persons. In order to increase the income of the households with disabled members, policy recommendations include the provision of care services and structural policies to improve employment, income and educational opportunities for households at greatest disadvantage.     

Educational supply policies: distortions and labor market performance

Journal of Economics - Is it always worth implementing an open enrollment policy? And implementing policies that pursue equity in school supply? What is the impact of these two policies on the...     

Globalization and labor market institutions: International empirical evidence

A widespread concern is that labor market institutions erode in the course of globalization, which, in turn, decreases employment and wages. By using panel data and cross-sectional data, I investigate the influence of globalization on labor market regulation. I use the indicators of labor market institutions by Gwartney et al. (2012) and the KOF indices of globalization. To deal with potential reverse causality, I employ a system GMM panel estimator and use a constructed trade share as proposed by Frankel and Romer (1999) as an instrumental variable for globalization in cross-sectional models. The results do not show that globalization induced labor market deregulation.     

The life insurance market: Asymmetric information revisited

This paper finds evidence for the presence of asymmetric information in the life insurance market, a conclusion contrasting with the existing literature. In particular, we find a significant and positive correlation between the decision to purchase life insurance and subsequent mortality, conditional on risk classification. Individuals who died within a 12-year time window after a base year were 19% more likely to have taken up life insurance in that base year than were those who survived the time window. Moreover, as might be expected when individuals have residual private information, we find that the earlier an individual died, the more likely she was to have initially bought insurance. The primary factor driving the difference between our and the prior literature's findings is that we focus on a sample of potential new buyers, rather than on the entire cross section, to address the sample selection problem induced by potential mortality differences between those with and those without coverage.     

On market imperfections and labor management

It is shown that, in an imperfect setting, the labor-managed firm must stop producing in the long-run.