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How Far Away Is a Single European Labor Market?

September 2, 2014 Comments off

How Far Away Is a Single European Labor Market? (PDF)
Source: Institute for the Study of Labor

A Single European Labor Market, particularly involving the free movement of workers within Europe, has been a goal of the European community since the 1950s. Whereas it may entail opportunities and drawbacks alike, the benefits – such as greater economic welfare for most citizens – are supposed to outweigh the losses. However, over fifty years after the aim was first established, a Single European Labor Market has not yet been achieved. This paper gives an overview of current European macroeconomic trends, with a particular focus on the Great Recession, and also explores the drivers of and obstacles to labor mobility. Complementarily, it analyzes the results of a unique opinion survey among labor market experts, as well as formulates policy recommendations to enhance mobility. The development of a Single European Labor Market is also discussed in relation to the German model.

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Social Mobility and the Importance of Networks: Evidence for Britain

September 1, 2014 Comments off

Social Mobility and the Importance of Networks: Evidence for Britain (PDF)
Source: Institute for the Study of Labor

Greater levels of social mobility are widely seen as desirable on grounds of both equity and efficiency. Debate on social mobility in Britain and elsewhere has recently focused on specific factors that might hinder social mobility, including the role of internships and similar employment opportunities that parents can sometimes secure for their children. We address the help that parents give their children in the job market using data from the new age 42 wave of the 1970 British Cohort Study. We consider help given to people from all family backgrounds and not just to graduates and those in higher level occupations who have tended to be the focus in the debate in Britain. Specifically, our data measure whether respondents had ever had help to get a job from (i) parents and (ii) other relatives and friends and the form of that help. We first assess the extent and type of help. We then determine whether people from higher socio-economic status families are more or less likely to have such help and whether the help is associated with higher wages and higher occupations. Our paper provides insight into whether the strong link between parental socio-economic background and the individual’s own economic success can be explained in part by the parents assisting their children to get jobs. We find parental help to have a strong social gradient. But we are unable to identify a clear link between any particular type of help – advice, help through contacts etc. – and individuals’ wages or occupations.

National Happiness and Genetic Distance: A Cautious Exploration

August 4, 2014 Comments off

National Happiness and Genetic Distance: A Cautious Exploration (PDF)
Source: Institute for the Study of Labor

This paper examines a famous puzzle in social science. Why do some nations report such high happiness? Denmark, for instance, regularly tops the league table of rich nations’ wellbeing; Great Britain and the US enter further down; France and Italy do relatively poorly. Yet the explanation for this ranking – one that holds even after adjustment for GDP and socioeconomic and cultural variables – remains unknown. We explore a new avenue. Using data on 131 countries, we document a range of evidence consistent with the hypothesis that certain nations may have a genetic advantage in well-being.

Cohort Size and Youth Employment Outcomes

June 10, 2014 Comments off

Cohort Size and Youth Employment Outcomes (PDF)
Source: Institute for the Study of Labor

This paper utilizes a cross-country panel of 83 developing countries to examine how changes in cohort size are correlated with subsequent employment outcomes for workers at different ages. The results depend on countries’ level of development. In low-income countries, young adults that are born into smaller cohorts are less likely to work, but school attendance remains unchanged. In middle-income countries, young adults in smaller cohorts are less likely to be unemployed and more likely to work outside of agriculture. Neither pattern can be discerned among older adults, although the estimates are imprecise. In sum, reductions in cohort size are associated with moderate improvements in employment outcomes for youth in middle-income countries, but there is scant evidence that these improvements persist into adulthood.

Are Ghettos Good or Bad? Evidence from U.S. Internal Migration

May 6, 2014 Comments off

Are Ghettos Good or Bad? Evidence from U.S. Internal Migration (PDF)
Source: Institute for the Study of Labor

It is difficult to determine whether ghettos are good or bad, partly because racial segregation may have some effects that are unobservable. To overcome this challenge, we present a migration choice model that allows for estimating the overall effects of racial segregation. The key idea underlying our empirical approach is that if segregation indeed has a negative overall effect, migrants should be willing to give up some earnings to avoid living in segregated cities. Using decennial census data from 1980 to 2000, we provide new evidence that ghettos are bad. It is shown that both black and white migrants prefer to live in less segregated cities. For example, for a one-percentage-point reduction in the dissimilarity index, the estimated marginal willingness to pay of blacks is $436 (in 1999 dollars) in 2000. Among whites, this marginal willingness to pay is $301.

Female Brain Drains and Women’s Rights Gaps: A Gravity Model Analysis of Bilateral Migration Flows

May 1, 2014 Comments off

Female Brain Drains and Women’s Rights Gaps: A Gravity Model Analysis of Bilateral Migration Flows (PDF)
Source: Institute for the Study of Labor

In this paper we model the migration decisions of high-skilled women as a function of the benefits associated with moving from an origin with relatively low women’s rights to a destination with a relatively high level of women’s rights. However, the costs faced by women are decreasing in the level of women’s rights provided. The model predicts a non-linear relationship between the relative levels of women’s rights in destination versus origin countries (the women’s rights gap) and the gender gap in high-skilled migration flows (the female brain drain ratio). In particular, starting from large values of the women’s rights gap (where women’s rights are very low in the origin) decreases in the gap may be associated with increases in the female brain drain ratio. However, starting from lower levels of the gap the relationship is positive: a greater gain in women’s rights moving from origin to destination is, all else equal, associated with a greater likelihood of migration. Using a cross section of over 3,000 bilateral migration flows across OECD and non-OECD countries and the women’s rights indices from the CIRI Human Rights Dataset, we report evidence consistent with the theory. A statistically significant and nonlinear relationship exists between women’s rights gaps and female brain drain ratios. The evidence is particularly strong for the case of women’s political rights.

Linguistic Barriers in the Destination Language Acquisition of Immigrants

May 1, 2014 Comments off

Linguistic Barriers in the Destination Language Acquisition of Immigrants (PDF)
Source: Institute for the Study of Labor

There are various degrees of similarity between the languages of different immigrants and the language of their destination country. This linguistic distance is an obstacle to the acquisition of a language, which leads to large differences in the attainments of the language skills necessary for economic and social integration in the destination country. This study aims at quantifying the influence of linguistic distance on the language acquisition of immigrants in the US and in Germany. Drawing from comparative linguistics, we derive a measure of linguistic distance based on the automatic comparison of pronunciations. We compare this measure with three other linguistic and non-linguistic approaches in explaining self-reported measures of language skills. We show that there is a strong initial disadvantage from the linguistic origin for language acquisition, while the effect on the steepness of assimilation patterns is ambiguous in Germany and the US.

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