Zitatform

Barham, Tania, Brian C. Cadena & Patrick S. Turner (2023): Taking a Chance on Workers. Evidence on the Effects and Mechanisms of Subsidized Employment from an RCT. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16221), Bonn, 114 S.

Abstract

"This paper estimates experimental impacts of a supported work program on employment, earnings, benefit receipt, and other outcomes. Case managers addressed employment barriers and provided targeted financial assistance while participants were eligible for 30 weeks of subsidized employment. Program access increased employment rates by 21 percent and earnings by 30 percent while participants were receiving services. Though gains attenuated after services stopped, treatment group members experienced lasting improvements in employment stability, job quality, and well-being, and we estimate the program's marginal value of public funds to be 0.64. Post-program impacts are entirely concentrated among participants whose subsidized job was followed by unsubsidized employment with their host-site employer. This decomposition result suggests that encouraging employer learning about potential match quality is the key mechanism underlying the program's impact, and additional descriptive evidence supports this interpretation. Machine learning methods reveal little treatment effect heterogeneity in a broad sample of job seekers using a rich set of baseline characteristics from a detailed application survey. We conclude that subsidized employment programs with a focus on creating permanent job matches can be beneficial to a wide variety of unemployed workers in the low-wage labor market." (Author's abstract, IAB-Doku) ((en))

Zitatform

Cotofan, Maria & Konstantinos Matakos (2023): Adapting or compounding? The effects of recurring labour shocks on stated and revealed preferences for redistribution. (CEP discussion paper / Centre for Economic Performance 1957), London, 34 S.

Abstract

"The evidence on the impact of employment shocks on preferences for redistribution is mixed on stated outcomes and sparse on revealed ones. We conduct a survey of US workers to measure the impact of repeated labour market shocks on both stated and revealed redistributive preferences. We measure the former by support on seven different policies and the latter through donations. We look at experiences of both mild shocks (having to reduce working hours) and hard shocks (unemployment), as well as past unemployment during formative years. We find evidence of adaptation to unemployment on policy preferences and compounding for milder shocks on donations, suggesting that the effects of repeated shocks on preferences for redistribution are not independent. Our results show that unemployment impacts preferences in a self-interested way, while milder shocks lead to broader support for redistribution." (Author's abstract, IAB-Doku) ((en))

Zitatform

Créchet, Jonathan (2023): Heterogeneity in labor mobility and unemployment flows across countries. In: European Economic Review, Jg. 155. DOI:10.1016/j.euroecorev.2023.104441

Abstract

"Empirical studies of labor-market flows suggest cross-country differences in long-run aggregate unemployment inflows and outflows of a strikingly large magnitude. The canonical search-and-matching framework of Mortensen and Pissarides (1994, 1999b; the MP model) features small elasticities of steady-state unemployment flows with respect to firing costs, at odds with the idea that labor-market institutions such as employment protection policies are a primary driver of this variation. This paper shows that introducing permanent match-quality heterogeneity in the standard MP model substantially amplifies these elasticities. It then develops a quantitative search model with worker and job heterogeneity consistent with U.S. worker-flow data. This model implies that employment protection differences plausibly account for most of the long-run unemployment-flow variation across high-income countries. In sharp contrast, shutting down heterogeneity implies that large changes in matching efficiency are required to explain the same cross-country variation." (Author's abstract, IAB-Doku, © 2023 Elsevier) ((en))

Zitatform

Garcia-Cabo, Joaquin, Anna Lipinska & Gaston Navarro (2023): Sectoral shocks, reallocation, and labor market policies. In: European Economic Review, Jg. 156. DOI:10.1016/j.euroecorev.2023.104494

Abstract

"Unemployment insurance and wage subsidies are key tools to support labor markets in recessions. We develop a multisector search-and-matching model with on-the-job human capital accumulation to study labor market policy responses to sector-specific shocks. Our calibration accounts for structural differences in labor markets between the United States and the euro area, including a lower job-finding rate in the latter. We use the model to evaluate unemployment insurance and wage subsidy policies in recessions of different duration. After a temporary sector-specific shock, unemployment insurance improves reallocation toward productive sectors at the cost of initially higher unemployment and, thus, human capital destruction. By contrast, wage subsidies reduce unemployment and preserve human capital at the cost of limiting reallocation. In the United States, unemployment insurance is preferred to wage subsidies when it does not distort job creation for too long. In the euro area, wage subsidies are preferred, given the lower job-finding rate and reallocation." (Author's abstract, IAB-Doku, © 2023 Elsevier) ((en))

Zitatform

Guo, Angela, Pawel Krolikowski & Meifeng Yang (2023): Displaced workers and the pandemic recession. In: Economics Letters, Jg. 226. DOI:10.1016/j.econlet.2023.111071

Abstract

"Workers displaced during the pandemic recession experienced better earnings and employment outcomes than workers displaced during previous recessions. A sharp recovery in aggregate labor market conditions after the pandemic recession accounts for these better outcomes. The industry and occupation composition of displaced workers, the prevalence of recalls, and increased take-up of unemployment insurance benefits are unlikely explanations." (Author's abstract, IAB-Doku, © 2023 Elsevier) ((en))

Zitatform

Holzer, Harry J. (2023): Can Workforce Development Help Us Reach Full Employment? (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 16624), Bonn, 24 S.

Abstract

"In this paper, I review the potential of workforce development programs to help the US get closer to "full employment." First, I provide some background on workforce development in the US, and also on the aggregate employment/labor force issues that workforce programs may or may not address. Then I review the empirical evidence on job training and other forms of workforce development, in terms of impacts on employment (as opposed to earnings). I briefly consider how the US experience in this regard compares and contrasts with that of other countries in the EU or OECD, and what we might learn from them. I conclude that more and better workforce development could help somewhat to achieve lower unemployment and higher labor force participation in the US, though we also need a range of other policies to achieve these goals." (Author's abstract, IAB-Doku) ((en))

Zitatform

Hornstein, Andreas, Marios Karabarbounis & Andre Kurmann (2023): Disincentive Effects of Unemployment Insurance Benefits. (Working paper series / Federal Reserve Bank of Richmond 2023-11), Richmond, VA, 65 S. DOI:10.21144/wp23-11

Abstract

"Unemployment insurance (UI) acts both as a disincentive for labor supply and as a demand stimulus which may explain why empirical studies often find limited effects of UI on employment. This paper provides independent estimates of the disincentive effects arising from the largest expansion of UI in U.S. history, the pandemic unemployment benefits. Using high-frequency data on small restaurants and retailers from Homebase, we control for local demand effects by comparing neighboring businesses that largely share the positive impact of UI stimulus. We find that employment in low-wage businesses recovered more slowly than employment in high-wage businesses in labor markets with larger differences in the relative generosity of pandemic UI benefits. According to a labor search model that replicates the estimated employment differences between low- and high-wage businesses, the disincentive effects from the pandemic UI programs held back the aggregate employment recovery by 4.7 percentage points between April and December 2020." (Author's abstract, IAB-Doku) ((en))

Zitatform

Kim, Jaeyoung, Katherine Inge, Beth Keeton, Tim Riesen, Yazmin Castruita-Rios & Timothy N. Tansey (2023): Use of Customized Employment in State Vocational Rehabilitation Programs: A Retrospective Study 2017–2020. In: Rehabilitation Counseling Bulletin, Jg. 66, H. 3, S. 186-194. DOI:10.1177/00343552221140335

Abstract

"The purpose of this study was to examine the outcomes of customized employment via an analysis using the U.S. Rehabilitation Services Administration Case Service Report (RSA-911) from Federal Fiscal Years of 2017 through 2020. The independent variables were demographics, barriers to employment, and types of state vocational rehabilitation agency (SVRA) services, and the dependent variables were competitive integrated employment status and weekly earnings at exit. Descriptive analyses, multiple logistic regression, and hierarchical multiple regression comprised data analysis. The study sample (N = 2,280) was 57.9% male and 42.1% female and had a mean age of 32.69 years (SD = 12.83). Seventy-seven percent identified themselves as White and 46.7% had a cognitive disability. The results of this study indicated that consumers who have cognitive disability and cultural barriers; are migrant farmworkers and/or dependents; and receive job placement assistance, short-term job supports, maintenance services, benefits counseling, and supported employment are more likely to get competitive integrated employment at exit (R2 = .34). Multiple variables were found to be significantly related to weekly earnings at exit and explained 24% of the variance. Rehabilitation counselors should take into consideration the findings of this study to determine from which supports consumers may benefit to attain successful employment goals, particularly for customized employment." (Author's abstract, IAB-Doku) ((en))

Zitatform

Autor, David, David Cho, Leland D. Crane, Mita Goldar, Byron Lutz, Joshua K. Montes, William B. Peterman, David D. Ratner, Daniel Villar Vallenas & Ahu Yildirmaz (2022): The $800 Billion Paycheck Protection Program: Where Did the Money Go and Why Did it Go There? (NBER working paper 29669), Cambridge, Mass, 46 S. DOI:10.3386/w29669

Abstract

"The Paycheck Protection Program (PPP) provided small businesses with roughly $800 billion dollars in uncollateralized, low-interest loans during the pandemic, almost all of which will be forgiven. With 93 percent of small businesses ultimately receiving one or more loans, the PPP nearly saturated its market in just two months. We estimate that the program cumulatively preserved between 2 and 3 million job-years of employment over 14 months at a cost of $170K to $257K per job-year retained. These estimates imply that only 23 to 34 percent of PPP dollars went directly to workers who would otherwise have lost jobs; the balance flowed to business owners and shareholders, including creditors and suppliers of PPP-receiving firms. Program incidence was highly regressive, with about three-quarters of PPP funds accruing to the top quintile of households. This compares unfavorably to the other two major pandemic aid programs, enhanced UI benefits and Economic Impact Payments (i.e. stimulus checks). PPP's breakneck scale-up, its high cost per job saved, and its regressive incidence have a common origin: PPP was essentially untargeted because the United States lacked the administrative infrastructure to do otherwise. The more targeted pandemic business aid programs deployed by other high-income countries exemplify what is feasible with better administrative systems. Building similar capacity in the U.S. would enable greatly improved targeting of either employment subsidies or business liquidity when the next pandemic or other large-scale economic emergency occurs, as it surely will." (Author's abstract, IAB-Doku) ((en))

Zitatform

Binder, Barbara & Andreas Haupt (2022): The fundamental role of tax systems in the relationship between workfare and inequality in the lower half of the income distribution. In: Research in Social Stratification and Mobility, Jg. 80. DOI:10.1016/j.rssm.2022.100712

Abstract

"In recent decades, many affluent democracies moved from traditional welfare states to workfare systems. Meanwhile, income inequality developed differently across countries, even when they made apparently similar shifts from welfare to workfare. It is a matter of debate why welfare state change had such heterogeneous consequences across countries. This article proposes that different incentives to take up low-wage work set by tax reforms in the wake of welfare-to-workfare transitions alter consequences on inequality in the lower half of the income distribution. To support this argument, we contrast the trends between the U.S. and Germany. The German and U.S. tax systems were used in very different ways to incentivize low-wage work. The U.S. provided strong incentives to take up low-wage, high-hour work through refundable tax credits. They act as in-work subsidies and represent an enormous public income support program. In contrast, in Germany, payroll taxes were reduced for marginal employment. These jobs were intended to serve as a stepping stone to full employment. Germany aimed to reduce barriers to labor market entry, but did not increase subsidies for those working higher hours in low-wage jobs. We hypothesize that the German path led to increased income inequality within the lower half of the income distribution, whereas the large U.S. tax-based subsidies in the U.S. significantly counteracted it. Decompositions of unconditional quantile regressions based on the SOEP and the CPS-ASEC for 1992 and 2014 strongly support these assumptions. Households with no labor market integration lost ground with the workfare reforms in both countries, increasing inequality in the lower half. However, U.S. households that conformed to the new workfare system by taking low-wage jobs received additional after-tax income through tax cuts and credits. This additional income of the beneficiary households increased the percentile values between the 10th and 30th percentiles by about 6 per cent, thus reducing income inequality in the lower half. Germany, on the contrary, lacked such compensatory subsidies for compliant households. Thus, increased take-up of low-wage work was associated with an increase in income inequality in the lower half. We conclude that tax systems are important in understanding why the shift towards workfare was associated with heterogeneous trends in income inequality across countries." (Author's abstract, IAB-Doku, © 2022 Elsevier) ((en))

Zitatform

Ferragina, Emanuele & Federico Danilo Filetti (2022): Labour market protection across space and time: A revised typology and a taxonomy of countries' trajectories of change. In: Journal of European Social Policy, Jg. 32, H. 2, S. 148-165. DOI:10.1177/09589287211056222

Abstract

"We measure and interpret the evolution of labour market protection across 21 high-income countries over three decades, employing as conceptual foundations the ‘regime varieties’ and ‘trajectories of change’ developed by Esping-Andersen, Estevez-Abe, Hall and Soskice, and Thelen. We measure labour market protection considering four institutional dimensions – employment protection, unemployment protection, income maintenance and activation – and the evolution of the workforce composition. This measurement accounts for the joint evolution of labour market institutions, their complementarities and their relation to outcomes, and mitigate the unrealistic Average Production Worker assumption. We handle the multi-dimensional nature of labour market protection with Principal Component Analysis and capture the characteristics of countries’ trajectories of change with a composite score. We contribute to the literature in three ways. (1) We portray a revised typology that accounts for processes of change between 1990 and 2015, and that clusters regime varieties on the basis of coordination and solidarity levels, that is, Central/Northern European, Southern European, liberal. (2) We illustrate that, despite a persistent gap, a large majority of Coordinated Market Economies experiencing a decline in the level of labour market protection became more similar to Liberal Market Economies. (3) We develop a fivefold taxonomy of countries’ trajectories of change (liberalization, dualization, flexibility, de-dualization and higher protection), showing that these trajectories are not always path-dependent and consistent with regime varieties previously developed in the literature." (Author's abstract, IAB-Doku) ((en))

Zitatform

Spiritus, Kevin, Etienne Lehmann, Sander Renes & Floris Zoutman (2022): Optimal Taxation with Multiple Incomes and Types. (CESifo working paper 9534), München, 53 S.

Abstract

"We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple incomes and differ along many unobserved dimensions. We derive the necessary conditions for the government’s optimum using both a tax perturbation and a mechanism design approach, and show that both methods produce the same results. Our main contribution is to propose a numerical method to find the optimal tax schedule. Applied to the optimal taxation of couples, we find that optimal isotax curves are very close to linear and parallel. The slope of isotax curves is strongly affected by the relative tax-elasticity of male and female income. We make several additional contributions, including a test for Pareto efficiency and a condition on primitives that ensures the government’s necessary conditions are sufficient and the solution to the problem is unique." (Author's abstract, IAB-Doku) ((en))

Zitatform

Bown, Chad P. & Caroline Freund (2019): Active labor market policies. Lessons from other countries for the United States. (Working paper / Peterson Institute for International Economics 2019-02), Washington, DC, 12 S.

Abstract

"US labor force participation has been weak in recent decades, especially during the recovery of the financial crisis of 2007 - 09. This paper examines several programs that governments in other advanced industrial countries have established to help jobless workers continue to seek employment, not drop out of the labor force, and ultimately find jobs. These programs more actively support out-of-work citizens by facilitating matches between workers and firms, helping workers in their job searches, and sometimes creating jobs when none are available in the private sector. The evidence presented in this paper concludes that job placement services, training, wage subsidies, and other labor adjustment policies can be used to successfully help workers find employment and remain tied to the labor market. By contrast, direct job creation through public works projects and other government programs are less effective in helping workers over the long run." (Author's abstract, IAB-Doku) ((en))

Zitatform

Gómez, Marcos & Francisco Parro (2019): Unintended displacement effects of youth training programs in a directed search model. In: Journal of labor research, Jg. 40, H. 2, S. 230-247. DOI:10.1007/s12122-019-09284-1

Zitatform

Schwandt, Hannes & Till M. von Wachter (2019): Unlucky cohorts: Estimating the long-term effects of entering the labor market in a recession in large cross-sectional data sets. In: Journal of labor economics, Jg. 37, H. S1, S. S161-S198. DOI:10.1086/701046

Abstract

"This paper studies the differential persistent effects of initial economic conditions for labor market entrants in the United States from 1976 to 2015 by education, gender, and race using labor force survey data. We find persistent earnings and wage reductions, especially for less advantaged entrants, that increases in government support only partly offset. We confirm that the results are unaffected by selective migration and labor market entry by also using a double-weighted average unemployment rate at labor market entry for each birth cohort and state-of-birth cell based on average state migration rates and average cohort education rates from census data." (Author's abstract, IAB-Doku) ((en))

Zitatform

Card, David, Jochen Kluve & Andrea Weber (2018): What works? A meta analysis of recent active labor market program evaluations. In: Journal of the European Economic Association, Jg. 16, H. 3, S. 894-931. DOI:10.1093/jeea/jvx028

Abstract

"We summarize the estimates from over 200 recent studies of active labor market programs. We classify the estimates by type of program and participant group, and distinguish between three different post-program time horizons. Using regression models for the estimated program effect (for studies that model the probability of employment) and for the sign and significance of the estimated effect (for all the studies in our sample) we conclude that: (1) average impacts are close to zero in the short run, but become more positive 2 - 3 years after completion of the program; (2) the time profile of impacts varies by type of program, with larger average gains for programs that emphasize human capital accumulation; (3) there is systematic heterogeneity across participant groups, with larger impacts for females and participants who enter from long term unemployment; (4) active labor market programs are more likely to show positive impacts in a recession." (Author's abstract, Published by arrangement with John Wiley & Sons) ((en))

Zitatform

Carriero, Andrea, Todd E. Clark & Massimiliano Marcellino (2018): Measuring uncertainty and its impact on the economy. In: The Review of Economics and Statistics, Jg. 100, H. 5, S. 799-815. DOI:10.1162/rest_a_00693

Abstract

"We propose a new model for measuring uncertainty and its effects on the economy, based on a large vector autoregression with stochastic volatility driven by common factors representing macroeconomic and financial uncertainty. The uncertainty measures reflect changes in both the conditional mean and volatility of the variables, and their impact on the economy can be assessed within the same framework. Estimates with U.S. data show substantial commonality in uncertainty, with sizable effects of uncertainty on key macroeconomic and financial variables. However, historical decompositions show a limited role of uncertainty shocks in macroeconomic fluctuations." (Author's abstract, © MIT Press Journals) ((en))

Zitatform

Michaelides, Marios & Peter Mueser (2018): Are reemployment services effective? Experimental evidence from the Great Recession. In: Journal of policy analysis and management, Jg. 37, H. 3, S. 546-570. DOI:10.1002/pam.22063

Zitatform

Murtin, Fabrice & Jean-Marc Robin (2018): Labor market reforms and unemployment dynamics. In: Labour economics, Jg. 50, H. March, S. 3-19. DOI:10.1016/j.labeco.2016.05.025

Abstract

"We quantify the contribution of labor market reforms to unemployment dynamics in nine OECD countries (Australia, France, Germany, Japan, Portugal, Spain, Sweden, UK, US). We estimate a dynamic stochastic search-matching model with heterogeneous workers and aggregate productivity shocks. The heterogeneous-worker mechanism proposed by Robin (2011) explains unemployment volatility by productivity shocks well in all countries. Placement and employment services, UI benefit reduction and product market deregulation are found to be the most prominent policy levers for unemployment reduction. Business cycle shocks and LMPs explain about the same share of unemployment volatility (except for Japan, Portugal and the US)." (Author's abstract, © 2016 Elsevier) ((en))

Zitatform

Barnow, Burt S. & Jeffrey Smith (2015): Employment and training programs. (NBER working paper 21659), Cambrige, Mass., 154 S. DOI:10.3386/w21659

Abstract

"This chapter considers means-tested employment and training programs in the United States. We focus in particular on large, means-tested federal programs, including the Job Training Partnership Act (JTPA), its successor the Workforce Investment Act (WIA), that program's recent replacement, the Workforce Innovation and Opportunity Act (WIOA), the long-running Job Corps program, and the Trade Adjustment Assistance (TAA) program. The first part of the chapter provides details on program history, organization, expenditures, eligibility rules, services, and participant characteristics. In the second part of the chapter, we discuss the applied econometric methods typically used to evaluate these programs, which in the United States means primarily social experiments and methods such as matching that rely on an assumption of 'selection on observed variables.' The third part of the chapter reviews the literature evaluating these programs, highlighting both methodological and substantive lessons learned as well as open questions. The fourth part of the chapter considers what lessons the evaluation literature provides on program operation, especially how to best allocate particular services to particular participants. The final section concludes with the big picture lessons from this literature and discussion of promising directions for future research." (Author's abstract, IAB-Doku) ((en))