Labor Market

in the OECD [19]. The treatment and control groups are specifically defined in Fig. 3 to examine whether the U curves changes to a J curve in the study. The treatment group is that of people over 50 who are vulnerable to the medical and labor markets. It was necessary to sep- arate the 50s from the 60s group because the latter is part of the officially retired group. Therefore, the study set up treatment groups for people in their 50s and the over 50s. First, the basic control group consisted of people aged between 15 and 49, who are relatively less vulnerable in the medical market, to investigate whether the medically vulnerable group experiences a negative impact in the labor market compared to the other groups. Second, the study set up another control group of people aged between 30 and 49 not vulnerable in the medical and labor markets to investigate whether the middle aged and old groups experience more adverse ef- fects compared to the control group. Third, the study set up another control group of people aged between 15 and 29, vulnerable in the labor market like the treatment group but not in the medical market. The similarity be- tween the treatment and control groups was increased to examine whether the consciousness of the medically vulnerable group interacts with the vulnerability in the labor market to cause more adverse effects. Lastly, the study set up a control group of people aged between 30 and 49 and a treatment group of people aged between 15 and 29 to additionally investigate whether the impact increases due to vulnerability in the labor market despite good health.

The analysis of the degree of cooperation between organizations in the RPAnhn network displays that the network overall is reasonably well connected. This can be seen in figure 1 and is supported by the percentage of the density which means that the actual number of connections in the network is 35% of the possible number of connections between all organizations. So overall, more than one third of all the organizations cooperate with each other. When looking at reciprocal and non- reciprocal ties, there are no organizations that are not connected at all to one of the network members. Next to that, there are no fragmented parts which means there are no separate sections of the network that operate completely on their own. However, what is interesting is that the municipalities in the same sub-regions are drawn together and mainly cooperate with municipalities within their own sub- regions. Exceptions here are the municipalities of Alkmaar and Hoorn. Alkmaar is also connected to the employee and educational organizations. Hoorn on the other hand, is connected to many other municipalities and employers, employee and educational organizations. This leads to a large number of connections and thus a central role within the RPAnhn network. Besides the municipality of Hoorn, there are three other organizations with a very central role in the network: RPAnhn, UWV and Clusius College. Clusius College, as educational organization with various locations in the region, is an important connector regarding the School-Work theme. This is based on the relative number of cooperative ties on all three themes. These three organizations are connected to a large number of municipalities, employers’, employee and educational organizations. An important general finding in this research concerning regional labor market policy is that a coordinating network organization definitely has added value as a connector of organizations. This is true when focusing on the ties between organization, but a coordinating network organization is also a connector of different individual goals as is shown by the degree of goal consensus. Next to that, such an organization is also crucial in the contribution of certain specific resources in the network such as expertise (of the network and its members) and the realization of financial resources.

There are two main data limitation problems that distort cross-national analyses of labor market integration of immigrants. The first one deals with the composition of the migrant population in the sample countries. As there was no possibility to separate data for EU-migrants and Non-EU migrants, this paper makes no distinction between them. However, if we assume that the migrant population in some countries is made up mainly by EU-migrants and in other countries more by Non-EU migrants and that immigrants from different countries of origin face differences in the degree of integration (van Tubergen, 2004), we can expect data on ALMP expenditure and on Labor Market Mobility to be influenced by ‘composition effects’ (Koopmans, 2010). Furthermore the status of EU migrants compared to Non-EU migrants under EU law is important to mention. EU legislations, such as the free movement of people and labor, give EU-migrants nearly the same Labor Market Mobility rights than natives. Third country national however are disadvantaged in this regards as they do not fall under EU law and their Labor Market Mobility and access to ALMPs is mainly regulated by the hosting countries legal framework. This limitation will attract special attention during the analysis of Labor Market Mobility, as these policies actually refer to Non-EU migrants but the employment data covers immigrants in general. I am aware that this limitations makes argumentation more

In working-age populations, there is evidence that locus of control, like the Big Five, is stable (see Specht 2011, 2013; Cobb-Clark and Schurer 2012, 2013). However, stabil- ity is not the same thing as non-malleable, and the potential malleability (or not) of many non-cognitive skills remains an open issue, subject to a great deal of research ef- fort. It is a debate that is important to resolve. Labor economists need to know more about the potential for labor market events, work environments, compensation sched- ules, and institutional arrangements to shape workers’ locus of control. While providing no evidence, Miller et al. (1982) p.251, for example, conjecture that the dynamic versus stable nature of the workplace environment influences the perceptions of control of the workers employed there. If this is true, locus of control might be expected to evolve dy- namically throughout individuals’ careers.

This paper adds an alternative but not necessarily competing explanation. I argue that voters out of the labor force living in a household that receives labor market income have a vital interest in the protection of the employed household member who provides intra family transfers. Thus, countries in which the family is a major means of income source for voters not attached to the labor market will find themselves with relatively high levels of EPL. Unemployment benefits in those countries are relatively lower as benefits have to be financed by taxes on labor income that reduce the employed voters’ and consequently the families’ net income. Besides providing a different mechanism for explaining the trade-off, this paper also distinguishes itself from Boeri et al. (2004) by employing a probabilistic voting model.

Another mechanism that could generate the earnings gaps observed in the data are dif- ferences in job search and labor market networks. Consider the search and matching framework of Mortensen and Pissarides (1994). In this framework the wages are deter- mined through Nash bargaining and the resulting wage is positively related to the labor market tightness, which is defined as the ratio of the number of vacancies to the num- ber of unemployed workers. If Mestizo workers have larger networks in the labor market than Indigenous workers, this will result in a more favorable labor market tightness for Mestizo workers, resulting in better bargained wages than Indigenous workers. Also, the descriptive statistics in Tables 1 and 5 reveal that more-acculturated Indigenous work- ers, that is those who only speak Spanish, have labor market outcomes more similar to the Mestizos than less-acculturated Indigenous workers. Hence, if more-acculturated Indigenous workers have better networks than less-acculturated Indigenous workers, the more-acculturated group will face more favorable labor market tightness and bargain bet- ter wages than the less-acculturated Indigenous workers. A model that can be used to explain these earnings gaps in the Mexican labor market is developed in Mortensen and Pissarides (2003) which assumes segmented labor markets for different groups of workers in the labor market.

A common way of measuring inequality is by using the GINI-index, which measures the distribution of household income. The GINI index is measured on a scale from zero to one in which zero would represent a state where incomes are distributed equally to everyone, while a GINI-coefficient of one is a state of total inequality where one household gets all the income. In addition to capturing effects of changes in income, the GINI-index can capture demographic changes that affect the distribution on a household level, such as: ageing populations, increasing numbers of people living in single households, changing gender composition in the labor market, a higher degree of assortative mating, etc. Other measures are, however, better suited when looking at the distribution of wages. This thesis uses income- deciles as a measure of inequality. The decile ratios compare the gross yearly income of men in full-time dependent positions at different deciles in the distribution. This is a homogenous group which makes the measure much more comparable over time.

To many, the word “fraternities” brings to mind images of beer, parties and fun. Yet, frater- nity membership also enters prominently the job seeking process of many students: resumes often devote scarce space to highlighting a student’s society memberships in addition to the standard information about education, work experience, awards, etc. This suggests that fraternity membership helps employers evaluate a person’s productivity. On first impres- sion it is not clear why fraternity or sorority membership should matter for labor market outcomes. In particular, while fraternities make significant time demands — members must spend considerable time picking up trash on highways, raising money for charitable causes, and so on — these activities appear largely unrelated to skill development for future careers. Nonetheless, fraternities draw many applicants who eagerly spend money and devote time to these activities, and employers seem to weigh membership information positively.

This result leans against a theoretical literature arguing that the labor share has fallen in recent decades due to changes in labor market institutions (e.g., Caballero and Hammour, 1998 and Bental and Demougin, 2010). We should not, however, take literally our result that changes in labor mar- ket institutions play a minor role. Our model is simple and parsimonious, which has its advantages but also implies that it abstracts from other channels. For example, our model assumes the extreme case that the manual technology only employs labor and the automated technology only capital (as in Zeira, 1998, 2010, Alesina, Battisti and Zeira, 2018, and Acemoglu and Restrepo, 2018). Thus, our model abstracts from the interactions between capital and labor at the micro level, which influence how labor market institutions shape the labor share in this theoretical literature. But our model and the models within this theoretical literature also differ in another important result: the latter models usually predict that the labor share and employment drop simultaneously while our model predicts that they may go in opposite direction; this makes our model broadly consistent with the US expe- rience as we show in Section 4.3. Moreover, even though simple, our model is in line with another strand of literature. For example, as argued by Autor et al. (2017b), the fact that the labor share has fallen in countries with very different labor market institutions points to the existence of other factors to explain the drop in the labor share. The empirical work of Dao et al. (2017) confirms that logic: for developed countries, Dao et al. conclude that policy and institutional factors (including labor market institutions) barely play a role in explaining the fall in the labor share; conversely, technological chan- nels explain about half. Furthermore, our results concur with the argument by Karabarbounis and Neiman (2014) that the falling price of capital is a good candidate to explain the fall in the labor share.

We exploit this variation for two additional identification strategies. First, we test if the allocation of TV licenses is correlated with local labor supply trends in ways that our baseline regressions do not control for. This placebo test compares regions without a TV signal to regions that would have had a TV signal without the freeze. Note that none of the counties in this test have TV access. The placebo TV stations should have no effect in our regressions since these stations submitted applications but were not constructed (until after freeze was lifted). Effects of the zombie stations could indicate that our baseline findings are spurious. Panel A in table 20 reports the results of the placebo test. We find no significant changes in labor supply in places where TV was planned but blocked. Column 1 shows results for employment, and column 3 gives results for quarters worked. While the results are noisy because of the smaller sample, they suggest that treatment timing is unrelated to local labor market trends. Relative to the simple pre-trend check, we can now also rule out that trends change sharply around the time of intended treatment. In a second test, we make use of the sharp drop in license approvals and compare places whose station applications fall just to the right of the approval cutoff, and thus got frozen out of broadcasting, to places whose stations were approved. Columns 2 and 4 of Table 20 show that this test–which restricts the control group to stations that applied for licenses but were denied–yields similar results to our baseline estimates. Labor supply declines by about 0.4 percent . 86

This thesis has analyzed labor market issues in Indonesia. The first chapter analyzes the insurance role of self-employment during the Asian financial crisis. Di ff erence in di ff erence estimation is used to estimate the e ff ect of having self-employed business before the crisis on household consumption and labor supply during the crisis. I find that households with self-employed business before the crisis could increase labor supply by a much lesser amount to maintain the same level of consumption compared to households without self-employed business before the crisis. The second chapter looks at the e ff ect of women’s work hours on their intra-household bargaining power. I utilize direct information on household decision-making from the Indonesian Family Life Survey to construct direct measures of women’s intra-household bargaining power. I also utilize the price increase during the Asian Financial Crisis as an instrumental variable that positively a ff ects women’s work hours but does not a ff ect women’s bargaining power directly. I find evidence of a positive relationship between women’s work hours and their intra-household bargaining power. The third chapter compares the Indonesian Family Life Survey and the Indonesian Labor Force Survey and tries to reconcile the inconsistency between the two surveys in terms of employment measures. After documenting and testing potential causes of the inconsistencies, I find that the

Much research (surveyed in Lawrence F. Katz and David H. Autor [1999] and Daron Acemoglu [2002]) documents a substantial widening of the U.S. wage structure since the late 1970s, largely driven by increases in educational wage differentials and residual (within-group) wage inequality. The growth in overall wage inequality was most rapid during the 1980s, and involved a spreading out of the entire wage distribution. Rapid secular growth in the demand for skills, partly driven by skill-biased technical change (SBTC), combined with a sharp slowdown in the growth of the relative supply of college workers (starting in the early 1980s) help to explain these wage changes. The erosion of labor market institutions protecting low- and middle- wage workers—the minimum wage and unions—further contributed to rising wage inequality, especially during the 1980s.

I interpret the effect of the fall in consumer debt as an increase in credit con- straints for the unemployed and examine if this effect can explain the aggregate co-movement of debt, employment and consumption over the business cycle. To do so, I develop a model that features search in labor and goods markets in which credit is constrained by the ability of lenders to enforce financial contracts. The starting point is the canonical model of equilibrium unemployment by Mortensen and Pissarides (1994), hereafter MP, in which both firms and workers must go through frictional hiring before production can occur. However, in this framework firms are considered to sell their output seamlessly in a competitive, frictionless environment and there is no inherent role for credit in the goods market. I de- scribe a household’s need for liquidity (through credit) by incorporating search and matching frictions in the goods market in the style of Diamond (1990), Shi (1996), and Lagos and Wright (2005). A firm matched with a worker in the labor market produces intermediate output that it can either sell in a decentralized, frictional goods market or in a competitive, frictionless market as in MP. These two markets open sequentially and I assume that households have quasi-linear preferences over consumption in the decentralized and competitive market. This feature, combined with the fact that all labor income (wages and unemployment

Most statistical agencies publish data mainly on stocks of employed, unemployed and out of the labor force agents, at the beginning and end of each time period. Data on flow between labor market states are rare be- cause of the difficulties in collecting them.

In this paper, we have reviewed a new framework that combines …rm heterogeneity in the product market with search and matching frictions in the labor market to examine the economy’s response to trade. The resulting framework highlights a new mechanism for international trade to a¤ect wage inequality: when only some …rms export, the increase in wages that occurs at the productivity threshold for exporting raises wage inequality across …rms. This mechanism accounts for empirical …ndings of rising wage inequality in both developed and developing countries following trade liberalization and rationalizes rising wage inequality among groups of workers with the same observed characteristics. While the opening of trade can raise social disparity through both higher wage inequality and higher unemployment, expected welfare necessarily rises.

We propose a model that combines statistical discrimination and educational sorting that explains why blacks get more education than do whites of similar cognitive ability. Our model explains the difference between blacks and whites in the relations between education and AFQT and between wages and education. It cannot easily explain why, conditional only on AFQT, blacks earn no more than do whites. It does, however, suggest, that when comparing the earnings of blacks and whites, one should control for both AFQT and education in which case a substantial black-white wage differential reemerges. We explore and reject the hypothesis that differences in school quality between blacks and whites explain the wage and education di erentials. Our findings support the view that some of the black-white wage di erential reflects the operation of the labor market. Kevin Lang

target the mid point of those range, 3.9%, which gives vacancy expenditure to output ratio κv y = 0.0218. 19 . I use 40 percent as the value of unemployment benefits following Shimer (2005). In Shimer, this value implicitly includes the value of leisure, but in this paper I explicitly consider the leisure in the utility function, so unemployment benefits, b, are purely unemployment benefits as in Nakajima (2012). Targets and parameters determined using these targets are listed in Table 3.4 and Table 3.5 respectively. I set the mean value of the bargaining power of existing workers, γ, to be 0.5605 which is the same as the bargaining power of a marginal worker, µ, calibrated in the model. 20 Since the parameter γ is a free parameter and there is no clear way to pin down this parameter, I calibrate it such that γ = µ in the steady state. As I will discuss in the robustness section later, lower values of γ generates more volatile labor market variables. However, I set γ = µ = 0.5697 which gives almost the least volatility among γ ∈ (0, 1) in the baseline model. In this regard, I think the choice of γ = 0.5697 is innocuous and parsimonious. Also, note that calibrated value for the bargaining power of a marginal worker, µ, is 0.5697, which guarantees quantitative results of the baseline model are not a direct result from a low value of µ as noted in Hagedorn and Manovskii (2008).

The third big problem facing China's labor market is to move from a dualistic labor market in which earnings and social benefits are markedly higher for workers in the formal urban sector than for workers with rural hukou and workers in the informal sector to a market that provides similar social benefits and opportunity to all workers. Virtually everyone in China appreciates the unfair nature of the hukou system that restricts the opportunities and benefits for persons with rural hukou when they reside and work in a city. Top leaders and government bodies advocate hukou reforms. Public opinion favors reforms. 50 And various cities and provinces have experimented with ways to weaken the disadvantage of the rural hukou. But cities have been sluggish instituting changes to help migrants when the changes reduce the well-being of city residents – for instance by expanding city schools to accept the children of migrants or opening urban medical facilities to migrant workers. With limited city budgets and ways to raise money and local opposition, it is difficult to make radical changes in the system. The most success in reforming the hukou system has come in small and medium sized cities where urban amenities are limited. Some large cities have offered point systems through which rural persons can gain urban hukou. Some cities privilege persons with rural hukou in the same province.

In some countries, unemployment has either remained low (in Sweden, for example, except for a sharp cyclical upturn in the early 1990s) or declined dramatically after increasing in the 1970s and 1980s (for example, in the Netherlands). These countries have achieved low unemployment without dramatic labor market reforms. They have eliminated excesses, but continue to offer high levels of social protec- tion, even relative to the European average. Institutional reforms probably played some role in the decrease in unemployment. Wage moderation was a major factor, however, and this is not easily ex- plained by changes in institutions. It seems mostly to reflect the atti- tudes of unions in collective bargaining. 4 In countries where collective

The unemployment rate in the economy continued to decline in the first half of 2011, and reached a level of 5.6 percent. The decline in the unemployment rate ceased in the second half of the year, and the rate remained at a level of around 5.5 percent. Unemployment rates on these levels are the lowest in Israel for the past three decades. The fall in unemployment during the last two years resulted from the exit from recession in the most recent business cycle. It can however be assumed that the low unemployment rate over the latest business cycle derived from reduced friction in the labor market, which increased the efficiency of the market (Box 5.1). The decline in the unemployment rate reflects a decrease of 25,000 in the number of unemployed to 180,000. This decrease resulted from the increase in the employment rate and from stability in the labor force participation rate. The fall in the unemployment rate derived mainly from the decline in the unemployment rate among men, which is characteristic of the exit from a recession. This rate stabilized around a level similar to the unemployment rate among women, which was lower during the recession. However, the rapid decline in the unemployment rate ended in the second half of 2011 concurrent with the downturn in economic activity and the slacker demand for labor.