On the job
Trading Down and the Business Cycle
Nir Jaimovich, Sergio Rebelo & Arlene Wong
NBER Working Paper, September 2015
Abstract:
We document two facts. First, during recessions consumers trade down in the quality of the goods and services they consume. Second, the production of low-quality goods is less labor intensive than that of high-quality goods. So, when households trade down, labor demand falls, increasing the severity of recessions. We find that the trading-down phenomenon accounts for a substantial fraction of the fall in U.S. employment in the recent recession. We study two business cycle models that embed quality choice and find that the presence of quality choice magnifies the response of these economies to real and monetary shocks.
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Identifying Opportunity Occupations in the Nation's Largest Metropolitan Areas
Keith Wardrip et al.
Federal Reserve Working Paper, September 2015
Abstract:
In this paper, we investigate the extent to which the U.S. economy offers decent-paying jobs to workers without a four-year college degree. We define an “opportunity occupation” as one that is generally considered accessible to someone without a bachelor’s degree and that pays at least the national annual median wage, adjusted for differences in local consumption prices. Focusing on the 100 largest metropolitan areas and using measures that reflect both the typical education needed to enter an occupation and the requisite education suggested by incumbent workers and occupational experts, we find that 27.4 percent of employment could be found in opportunity occupations in 2014. This estimate falls by more than seven percentage points — to 20.3 percent — when we predicate job accessibility on the educational attainment requested by employers in online job ads. The availability of opportunity-rich work for those without a bachelor’s degree varies dramatically across the metropolitan areas in our study, ranging from 36.6 percent to well under half that level. The educational preferences of employers as expressed in online job ads introduce a potentially significant barrier to economic self-sufficiency for those without a four-year degree, lowering the share of opportunity occupations by more than 10 percentage points in some metro areas. Our analysis suggests that since 2011, the level of education requested in job ads has become less stringent for some occupations and more stringent for others.
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Factors Determining Callbacks to Job Applications by the Unemployed: An Audit Study
Henry Farber, Dan Silverman & Till von Wachter
NBER Working Paper, October 2015
Abstract:
We use an audit study approach to investigate how unemployment duration, age, and holding a low-level “interim” job affect the likelihood that experienced college-educated females applying for an administrative support job receive a callback from a potential employer. First, the results show no relationship between callback rates and the duration of unemployment. Second, workers age 50 and older are significantly less likely to receive a callback. Third, taking an interim job significantly reduces the likelihood of receiving a callback. Finally, employers who have higher callback rates respond less to observable differences across workers in determining whom to call back. We interpret these results in the context of a model of employer learning about applicant quality.
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Does a high minimum wage spur low-skilled emigration?
D. Martin & A. Termos
Economics Letters, December 2015, Pages 200–202
Abstract:
We investigate the migration response to state and local variation in minimum wages in the United States. We find that a one dollar difference between two areas’ real minimum wage is associated with 3.1% more migration of low-skilled workers towards the location with the lower minimum wage. The minimum wage does not influence the migration decisions of high-skilled workers.
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Peter Dolton, Chiara Rosazza Bondibene & Michael Stops
Labour Economics, December 2015, Pages 54–76
Abstract:
This paper assesses the impact of the National Minimum Wage (NMW) on employment in the UK over the 1999-2010 period explicitly modelling the effect of the 2008-10 recession. Identification of invoking a NMW is possible by reference to a pre-period (prior to 1999) without a NMW. Separate identification of the effect of incremental changes (and year interaction effects) in the NMW is facilitated by variation in the bite of the NMW across local labour markets. We address the issues of: possible endogeneity and dynamic structure of employment rate changes; regional demand side shocks induced by the recession; and take account of the spatial dependence of local labour markets. Using System GMM we conclude that there is no discernable effect of the NMW introduction or its uprating on employment but show how more naïve estimation may have revealed the various widely different positive and negative effects found in the literature.
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The Employment Effects of State Hiring Credits
David Neumark & Diego Grijalva
University of California Working Paper, June 2015
Abstract:
State and federal policymakers grappling with the aftermath of the Great Recession sought ways to spur job creation, in many cases adopting hiring credits to encourage employers to create new jobs. However, there is virtually no evidence on the effects of these kinds of counter-recessionary hiring credits – the only evidence coming from much earlier studies of the federal New Jobs Tax Credit in the 1970s. This paper provides evidence on the effects of state hiring credits on job growth. For many of the types of hiring credits we examine we do not find positive effects on job growth. However, some specific types of hiring credits – most notably including those targeting the unemployed, those that allow states to recapture credits when job creation goals are not met, and refundable hiring credits – appear to have succeeded in boosting job growth, more so during the Great Recession period or perhaps recessions generally. At the same time, some credits appear to generate hiring without increasing employment or to generate much more hiring than net employment growth, consistent with these credits leading to churning of employees that raises the costs of producing jobs via hiring credits.
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Work Incentives in the Social Security Disability Benefit Formula
Gopi Shah Goda, John Shoven & Sita Slavov
NBER Working Paper, November 2015
Abstract:
We examine the connection between taxes paid and benefits accrued under the Social Security Disability Insurance (SSDI) program on both the intensive and extensive margins. We perform these calculations for stylized workers given the existing benefit structure and disability hazard rates. On the intensive margin, we examine the effect of an additional dollar of earnings on the marginal payroll taxes contributed and future benefits earned. We find that the present discounted value of disability benefits received from an additional dollar of earnings, net of the SSDI payroll tax, generally declines with age, becoming negative around age 40 and reaching almost zero at age 63. On the extensive margin, we determine the effect of working an additional year on the additional payroll taxes and future benefits as a percentage of income. The return to working an additional year at an income level just large enough to earn Social Security credits for the year is large and positive through age 60. However, the return to working an additional full year is substantially smaller and becomes negative at approximately age 57. Thus, older workers face strong incentives to earn enough to obtain creditable coverage through age 60, but they face disincentives for additional earnings. In addition, workers ages 61 and older face work disincentives at any level of earnings. We repeat this analysis for stylized workers at different levels of earnings and find that, while the program transfers resources from high earners to low earners, the workers experience similar patterns in the returns to working.
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Education and regional mobility in Europe
Christoph Weiss
Economics of Education Review, December 2015, Pages 129–141
Abstract:
This paper estimates the impact of education on regional mobility in Europe using compulsory schooling reforms. Using data on individuals from eight European countries, I find that people who are induced by a school reform to acquire one more year of education are much more likely to relocate to another region in their country between the age of 15 and 50. I also show that education increases the probability of moving to a city for people from rural areas.
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The Effects of Job Insecurity on Health Care Utilization: Findings from a Panel of U.S. Workers
Rita Hamad, Sepideh Modrek & Mark Cullen
Health Services Research, forthcoming
Objective: To examine the impacts of job insecurity during the recession of 2007–2009 on health care utilization among a panel of U.S. employees.
Data Sources/Study Setting: Linked administrative and claims datasets on a panel of continuously employed, continuously insured individuals at a large multisite manufacturing firm that experienced widespread layoffs (N = 9,486).
Study Design: We employed segmented regressions to examine temporal discontinuities in utilization during 2006–2012. To assess the effects of job insecurity, we compared individuals at high- and low-layoff plants. Because the dataset includes multiple observations for each individual, we included individual-level fixed effects.
Principal Findings: We found discontinuous increases in outpatient (3.5 visits/month/10,000 individuals, p = .002) and emergency (0.4 visits/month/10,000 individuals, p = .05) utilization in the panel of all employees. Compared with individuals at low-layoff plants, individuals at high-layoff plants decreased outpatient utilization (−4.0 visits/month/10,000 individuals, p = .008), suggesting foregone preventive care, with a marginally significant increase in emergency utilization (0.4 visits/month/10,000 individuals, p = .08).
Conclusions: These results suggest changes in health care utilization and potentially adverse impacts on employee health in response to job insecurity during the latest recession. This study contributes to our understanding of the impacts of economic crises on the health of the U.S. working population.
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Race, gender, and public-sector work: Prioritizing occupational values as a labor market privilege
Lauren Benditt,
Research in Social Stratification and Mobility, December 2015, Pages 73–86
Abstract:
This paper examines the role of occupational values in job choice. Using public service motivation (PSM), a value orientation associated with public workers, this analysis predicts public sector employment using a mixed-methods approach: a quantitative analysis of the 2006 General Social Survey and a qualitative analysis of 87 semi-structured interviews with state government workers in Wisconsin, Minnesota and Oregon. The results indicate variation within the public employee population in the effect of PSM on choosing to work in the public sector. They also suggest that prioritizing values in occupational choice may be a luxury, and assuming shared occupational values lacks consideration of the underlying rationales some individuals use when choosing a job.
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Mass Layoffs, Manufacturing and State Business Climates: Does State Policy Matter?
Christopher Surfield & Surender Reddy
Contemporary Economic Policy, forthcoming
Abstract:
This study provides the first estimates on the relationship between state public policies and job losses in the manufacturing sector. In addition, spatial model estimation is adopted to identify any effect that state policies may have on the adopting state as well as upon neighboring states. We find evidence that favorable ratings regarding some elements of a state's business climate coincide with a lower incidence of job loss. This relationship holds beyond the adopting state and is correlated with lower job losses in contiguous states.
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Richard Cebula et al.
Applied Economics Letters, Winter 2016, Pages 167-170
Abstract:
This brief exploratory empirical note seeks to identify key determinants of geographic differentials in the percentage growth rate of state-level employment in the US, with the primary focus being on the percentage net growth rate in the number of small firms (i.e., those with fewer than 20 employees) in each state, where this variable serves as a de facto reflection of ‘entrepreneurship’. In the interest of identifying other key factors that influence state-level employment growth rates, the effective income tax rate in each state, quality of life elements and labour market considerations are also included in the analysis. The study period runs from the year 2000 to the year 2007, ending just prior to the ‘Great Recession’. The estimation results imply that the state-level employment growth rate in the US was an increasing function of the percentage net growth rate in the number of small firms in each state. Thus, it appears that the small firms growth rate may in fact be a significant source.
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The Long Road to Employment: Incivility Experienced by Job Seekers
Abdifatah Ali et al.
Journal of Applied Psychology, forthcoming
Abstract:
This study addresses how job seekers’ experiences of rude and discourteous treatment — incivility — can adversely affect self-regulatory processes underlying job searching. Using the social–cognitive model (Zimmerman, 2000), we integrate social–cognitive theory with the goal orientation literature to examine how job search self-efficacy mediates the relationship between incivility and job search behaviors and how individual differences in learning goal orientation and avoid-performance goal orientation moderate that process. We conducted 3 studies with diverse methods and samples. Study 1 employed a mixed-method design to understand the nature of incivility within the job search context and highlight the role of attributions in linking incivility to subsequent job search motivation and behavior. We tested our hypotheses in Study 2 and 3 employing time-lagged research designs with unemployed job seekers and new labor market entrants. Across both Study 2 and 3 we found evidence that the negative effect of incivility on job search self-efficacy and subsequent job search behaviors are stronger for individuals low, rather than high, in avoid-performance goal orientation. Theoretical implications of our findings and practical recommendations for how to address the influence of incivility on job seeking are discussed.