Do memories of highly emotional stock market crashes permanently affect the investment decisions of households? The Initial Public Offerings of Deutsche Telekom during 1996- 2000 provide an optimal base to address this question, as it is known for its emotional character and is reputedly “the last time Germans invested in stocks.” Using Socio-Economic Panel (SOEP) household survey data, I show that having experienced this event leads to persistently lower stock market participation in the future. In addition, this effect is greater for households that had directly invested in Telekom shares, those being more likely to have high emotional experiences. Finally, I also show that such traumatic experiences on investment decisions have intergenerational consequences, significantly affecting how the next generation invests in the financial market.
{"title":"Optimism Gone Bad? The Persistent Effects of Traumatic Experiences on Investment Decisions","authors":"Chi Hyun Kim","doi":"10.2139/ssrn.3873165","DOIUrl":"https://doi.org/10.2139/ssrn.3873165","url":null,"abstract":"Do memories of highly emotional stock market crashes permanently affect the investment decisions of households? The Initial Public Offerings of Deutsche Telekom during 1996- 2000 provide an optimal base to address this question, as it is known for its emotional character and is reputedly “the last time Germans invested in stocks.” Using Socio-Economic Panel (SOEP) household survey data, I show that having experienced this event leads to persistently lower stock market participation in the future. In addition, this effect is greater for households that had directly invested in Telekom shares, those being more likely to have high emotional experiences. Finally, I also show that such traumatic experiences on investment decisions have intergenerational consequences, significantly affecting how the next generation invests in the financial market.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125082777","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper documents skill heterogeneity in hours and expenditures on market work, home production, and leisure between 2003 to 2018 by using the American Time Use Survey (ATUS) and the Consumer Expenditures Survey (CEX). The purpose is to infer the labor wedge by adding three margins cumulatively that are the Beckerian preference, home production, and heterogeneous skills. Given the identified structural parameters, the first finding is that as home production is introduced, the year-average size of the labor wedge rises by 2.84 log points, and the incorporation of heterogeneous skills further lifts by 1.48 log points. Secondly, the skill heterogeneity in market and time inputs tends to escalate the size of the labor wedge whereas the skill composition and skill premium tend to absorb the inferred labor wedge with the latter being much more significant. Lastly, home production reduces the countercyclicality of the labor wedge by 13%, and the further consideration of heterogeneity in skills cuts it down by 14% more.
{"title":"Inferring the Labor Wedge with Home Production: The Role of Skills","authors":"Sudong Hua","doi":"10.2139/ssrn.3741156","DOIUrl":"https://doi.org/10.2139/ssrn.3741156","url":null,"abstract":"The paper documents skill heterogeneity in hours and expenditures on market work, home production, and leisure between 2003 to 2018 by using the American Time Use Survey (ATUS) and the Consumer Expenditures Survey (CEX). The purpose is to infer the labor wedge by adding three margins cumulatively that are the Beckerian preference, home production, and heterogeneous skills. Given the identified structural parameters, the first finding is that as home production is introduced, the year-average size of the labor wedge rises by 2.84 log points, and the incorporation of heterogeneous skills further lifts by 1.48 log points. Secondly, the skill heterogeneity in market and time inputs tends to escalate the size of the labor wedge whereas the skill composition and skill premium tend to absorb the inferred labor wedge with the latter being much more significant. Lastly, home production reduces the countercyclicality of the labor wedge by 13%, and the further consideration of heterogeneity in skills cuts it down by 14% more.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"2 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115862039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study evaluates the effects of maternity leave duration on female and male labor force participation and on macroeconomic productivity in emerging countries. We build a comprehensive maternity leave data set for a panel of emerging countries at annual frequency that augments publicly available data on maternity leave with narrative evidence that identifies the exact dates when legislative changes to maternity leave policies were enacted and enforced. The higher data frequency allows us to study both the short-term and the intermediate-term effects of maternity leave duration. Maternity leave has positive but limited effects on female labor force participation, but it significantly increases male labor force participation. There is some evidence that increases in maternity leave duration decrease productivity in the short run, but there are no significant adverse effects at longer horizons. We also find evidence of substitutability between male and female workers. The results for emerging countries look substantially different when compared to the results for a panel of developed countries.
{"title":"Macroeconomic Effects of Maternity Leave Legislation in Emerging Economies","authors":"E. Aslim, Irina Panovska, M. Anıl Taş","doi":"10.2139/ssrn.3136631","DOIUrl":"https://doi.org/10.2139/ssrn.3136631","url":null,"abstract":"This study evaluates the effects of maternity leave duration on female and male labor force participation and on macroeconomic productivity in emerging countries. We build a comprehensive maternity leave data set for a panel of emerging countries at annual frequency that augments publicly available data on maternity leave with narrative evidence that identifies the exact dates when legislative changes to maternity leave policies were enacted and enforced. The higher data frequency allows us to study both the short-term and the intermediate-term effects of maternity leave duration. Maternity leave has positive but limited effects on female labor force participation, but it significantly increases male labor force participation. There is some evidence that increases in maternity leave duration decrease productivity in the short run, but there are no significant adverse effects at longer horizons. We also find evidence of substitutability between male and female workers. The results for emerging countries look substantially different when compared to the results for a panel of developed countries.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128403155","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I show that climate skepticism increases with negative economic shocks and that effects are concentrated among individuals in the labor force. I primarily employ a panel of US individuals in the period following the Great Recession, but also find consistent results with an alternative instrumental variables strategy. Among labor force participants, a one percentage point increase in the local unemployment rate leads to a 3 to 5 percentage point decrease in the probability of believing climate change is real and requires action. I conclude that support for climate change policies could depend on labor market conditions.
{"title":"Do Economic Conditions Affect Climate Change Beliefs and Support for Climate Action? Evidence from the U.S. in the Wake of the Great Recession","authors":"Andrew G. Meyer","doi":"10.2139/ssrn.3631339","DOIUrl":"https://doi.org/10.2139/ssrn.3631339","url":null,"abstract":"I show that climate skepticism increases with negative economic shocks and that effects are concentrated among individuals in the labor force. I primarily employ a panel of US individuals in the period following the Great Recession, but also find consistent results with an alternative instrumental variables strategy. Among labor force participants, a one percentage point increase in the local unemployment rate leads to a 3 to 5 percentage point decrease in the probability of believing climate change is real and requires action. I conclude that support for climate change policies could depend on labor market conditions.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"401 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124372676","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This is the first article to study the interaction between labour markets and endogenous referral networks in the context of worker heterogeneity. In equilibrium the structure of the referral network is hierarchical, which is different from the usual assumption of homophily but is consistent with the evidence. Hierarchy exacerbates inequality. The welfare effects of the use of referrals are subtle and depend on the nature of heterogeneity. If heterogeneity is due to productivity differences, referrals improve welfare. If workers face the different probability of forming a match despite having the same productivity, as in the case of discrimination, referrals reduce welfare.
{"title":"Referral Networks and Inequality","authors":"M. Galenianos","doi":"10.2139/ssrn.2768083","DOIUrl":"https://doi.org/10.2139/ssrn.2768083","url":null,"abstract":"\u0000 This is the first article to study the interaction between labour markets and endogenous referral networks in the context of worker heterogeneity. In equilibrium the structure of the referral network is hierarchical, which is different from the usual assumption of homophily but is consistent with the evidence. Hierarchy exacerbates inequality. The welfare effects of the use of referrals are subtle and depend on the nature of heterogeneity. If heterogeneity is due to productivity differences, referrals improve welfare. If workers face the different probability of forming a match despite having the same productivity, as in the case of discrimination, referrals reduce welfare.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127206884","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-01DOI: 10.1017/9781108278034.005
Italo Lopez Garcia, Nicole Maestas, Kathleen J. Mullen
We provide new evidence on the changing nature of work and its influence on individuals’ capacity to work by linking historical measures of occupational job demands with harmonized data on individual abilities from a unique survey conducted in the RAND American Life Panel in 2018. We start by examining how job demands have evolved over time between 2003 and 2018 for different dimensions of abilities (cognitive, physical, sensory and psychomotor), overall and by educational group. We then decompose job demand changes into within-occupation changes and changes in the economy’s distribution of occupations. Finally, we provide evidence on how individuals’ work capacities have evolved over time due to job demand changes.
{"title":"The Changing Nature of Work","authors":"Italo Lopez Garcia, Nicole Maestas, Kathleen J. Mullen","doi":"10.1017/9781108278034.005","DOIUrl":"https://doi.org/10.1017/9781108278034.005","url":null,"abstract":"We provide new evidence on the changing nature of work and its influence on individuals’ capacity to work by linking historical measures of occupational job demands with harmonized data on individual abilities from a unique survey conducted in the RAND American Life Panel in 2018. We start by examining how job demands have evolved over time between 2003 and 2018 for different dimensions of abilities (cognitive, physical, sensory and psychomotor), overall and by educational group. We then decompose job demand changes into within-occupation changes and changes in the economy’s distribution of occupations. Finally, we provide evidence on how individuals’ work capacities have evolved over time due to job demand changes.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"108 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116668433","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Unemployment insurance (UI) can affect unemployment duration and re-employment wages, through various dimensions of unemployed workers’ job search behavior. We shed light on the effects of UI on job search behavior using new longitudinal data: we link administrative registers to data from a major online search platform, and track the job applications sent over the unemployment spells of about 500,000 French workers. We identify changes in individual search behavior caused by UI around benefits exhaustion, after accounting for changes in the sample composition—i.e. dynamic selection—and for the effect of the time spent unemployed—i.e. duration dependence. We show that search effort (the count of job applications) increases by at least 50% during the year preceding benefits exhaustion and remains relatively high thereafter. The target monthly wage decreases by at least 2.4% during the year preceding benefits exhaustion, and remains relatively low thereafter. We document particularly large dynamic selection around benefits exhaustion, as some workers increase their search effort more before exhaustion and find a job faster. We also show evidence for duration dependence: workers decrease their target wage by 1.5% over each year of unemployment, irrespective of their UI status. Overall, the effect of UI on individual search behavior is consistent with the predictions of search models and constitutes evidence against search-free models where UI merely subsidizes leisure.
{"title":"Unemployment Insurance and Job Search Behavior","authors":"I. Marinescu, Daphné Skandalis","doi":"10.2139/SSRN.3303367","DOIUrl":"https://doi.org/10.2139/SSRN.3303367","url":null,"abstract":"Unemployment insurance (UI) can affect unemployment duration and re-employment wages, through various dimensions of unemployed workers’ job search behavior. We shed light on the effects of UI on job search behavior using new longitudinal data: we link administrative registers to data from a major online search platform, and track the job applications sent over the unemployment spells of about 500,000 French workers. We identify changes in individual search behavior caused by UI around benefits exhaustion, after accounting for changes in the sample composition—i.e. dynamic selection—and for the effect of the time spent unemployed—i.e. duration dependence. We show that search effort (the count of job applications) increases by at least 50% during the year preceding benefits exhaustion and remains relatively high thereafter. The target monthly wage decreases by at least 2.4% during the year preceding benefits exhaustion, and remains relatively low thereafter. We document particularly large dynamic selection around benefits exhaustion, as some workers increase their search effort more before exhaustion and find a job faster. We also show evidence for duration dependence: workers decrease their target wage by 1.5% over each year of unemployment, irrespective of their UI status. Overall, the effect of UI on individual search behavior is consistent with the predictions of search models and constitutes evidence against search-free models where UI merely subsidizes leisure.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125558803","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We provide an updated assessment of the labor market experiences of veterans between 2005 and 2018, documenting three facts. First, we find that male and female veterans receive civilian earnings nearly equivalent to nonveterans, suggesting military experience is valued similarly to foregone civilian experience. Second, veterans are clustered in occupations with below average employment and real earnings growth, and in metropolitan areas with lower levels and growth of GDP per capita. Third, veterans experience lower returns to formal educational investments (e.g., college) than do nonveterans. Veterans realize earnings gains from professional licenses, but their returns are lower than for nonveterans.
{"title":"Labor Market Earnings of Veterans: Is Time in the Military More Valuable or Less than is Civilian Experience?","authors":"C. Makridis, B. Hirsch","doi":"10.2139/ssrn.3466518","DOIUrl":"https://doi.org/10.2139/ssrn.3466518","url":null,"abstract":"We provide an updated assessment of the labor market experiences of veterans between 2005 and 2018, documenting three facts. First, we find that male and female veterans receive civilian earnings nearly equivalent to nonveterans, suggesting military experience is valued similarly to foregone civilian experience. Second, veterans are clustered in occupations with below average employment and real earnings growth, and in metropolitan areas with lower levels and growth of GDP per capita. Third, veterans experience lower returns to formal educational investments (e.g., college) than do nonveterans. Veterans realize earnings gains from professional licenses, but their returns are lower than for nonveterans.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125436695","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Labor income earned in Iceland in 1987 went untaxed. I use this episode to study labor supply responses to temporary wage changes. I construct a new population-wide dataset of earnings and working time from pay slips and use two identification strategies to estimate intensive and extensive margin Frisch elasticities of 0.37 and 0.10, respectively. Workers with the ability to adjust drive these average responses: extensive margin responses by young and close-to-retirement cohorts and intensive margin responses by workers in temporally flexible jobs. However, constrained workers take up secondary jobs, which contribute to one-tenth of the overall response. Importantly, married women with children and the wives of men in temporally inflexible jobs respond more strongly than other women do. Within families, wives respond more than do their husbands, who themselves respond negatively to their wives’ tax cuts. This is consistent with substitutability in nonmarket time. Overall, my results suggest that adjustment frictions reduce aggregate labor supply responses to tax cuts and can similarly explain differences in elasticities within and across countries.
{"title":"Labor Supply Responses and Adjustment Frictions: A Tax-Free Year in Iceland","authors":"Jósef Sigurdsson","doi":"10.2139/ssrn.3278308","DOIUrl":"https://doi.org/10.2139/ssrn.3278308","url":null,"abstract":"Labor income earned in Iceland in 1987 went untaxed. I use this episode to study labor supply responses to temporary wage changes. I construct a new population-wide dataset of earnings and working time from pay slips and use two identification strategies to estimate intensive and extensive margin Frisch elasticities of 0.37 and 0.10, respectively. Workers with the ability to adjust drive these average responses: extensive margin responses by young and close-to-retirement cohorts and intensive margin responses by workers in temporally flexible jobs. However, constrained workers take up secondary jobs, which contribute to one-tenth of the overall response. Importantly, married women with children and the wives of men in temporally inflexible jobs respond more strongly than other women do. Within families, wives respond more than do their husbands, who themselves respond negatively to their wives’ tax cuts. This is consistent with substitutability in nonmarket time. Overall, my results suggest that adjustment frictions reduce aggregate labor supply responses to tax cuts and can similarly explain differences in elasticities within and across countries.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125244059","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using data from a Big 4 professional services firm, I examine the performance evaluation score penalties associated with part-time working arrangements. First, I establish that performance evaluation scores (1) suffer for employees working part-time, and (2) rebound when part-timers return to full-time status. Prior research suggests that some of this penalty is attributable to supervisors’ heuristics creating a bias against part-timers, who supervisors often assume are less committed employees. I find that these performance evaluation score penalties are minimized and rebounds are maximized when supervisors have better information about part-time workers’ quality (i.e., when part-timers work on smaller teams or have long tenures in their role), perhaps because in these settings supervisors are less likely to rely on negatively biased heuristics relating to part-time workers. I also establish the importance of performance evaluation scores to part-timers, as relative to full-timers, part-timers’ bonuses perhaps rely more on performance evaluation scores (in line with an availability bias). Together, these findings shed light on strategies that can ease work-life conflicts for employees, as well as help employers better deploy human resources and evaluate employee performance.
{"title":"There and Back Again – The Performance Evaluation Effects of Going to and Returning from Part-Time Status","authors":"Roger M. White","doi":"10.2139/ssrn.2911397","DOIUrl":"https://doi.org/10.2139/ssrn.2911397","url":null,"abstract":"Using data from a Big 4 professional services firm, I examine the performance evaluation score penalties associated with part-time working arrangements. First, I establish that performance evaluation scores (1) suffer for employees working part-time, and (2) rebound when part-timers return to full-time status. Prior research suggests that some of this penalty is attributable to supervisors’ heuristics creating a bias against part-timers, who supervisors often assume are less committed employees. I find that these performance evaluation score penalties are minimized and rebounds are maximized when supervisors have better information about part-time workers’ quality (i.e., when part-timers work on smaller teams or have long tenures in their role), perhaps because in these settings supervisors are less likely to rely on negatively biased heuristics relating to part-time workers. I also establish the importance of performance evaluation scores to part-timers, as relative to full-timers, part-timers’ bonuses perhaps rely more on performance evaluation scores (in line with an availability bias). Together, these findings shed light on strategies that can ease work-life conflicts for employees, as well as help employers better deploy human resources and evaluate employee performance.","PeriodicalId":289235,"journal":{"name":"ERN: Econometric Studies of Labor Markets & Household Behavior (Topic)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126812396","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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