EMPLOYMENT DYNAMICS OF IMMIGRANTS VERSUS NATIVES: EVIDENCE FROM THE BOOM‐BUST PERIOD IN SPAIN, 2000–2011

This article studies whether the durations in unemployment and employment for immigrants and natives respond differently to changes in economic conditions and to the receipt of unemployment benefits. Using Spanish administrative data for the period 2000–2011, we estimate multi‐spell duration models that disentangle unobserved heterogeneity from true duration dependence. Our findings suggest that immigrants are more sensitive to changes in economic conditions both in terms of unemployment and employment hazards. The effect of the business cycle is not constant but decreases with duration at a higher rate among immigrants. We provide evidence that the higher job separation rates and lower capital‐labor complementarity of immigrants are mechanisms that are possibly compatible with these results. We also find evidence of a disincentive effect of unemployment benefits on unemployment duration, which is stronger for immigrants, but only at the beginning of the unemployment spell, especially under good economic conditions. Finally, unemployment benefits increase job match quality only for native workers with temporary contracts. (JEL J64, J61, C23, C41, J65)     

The Influence of Temporary Employment on Unemployment Exits in a Competing Risks Framework

Using Spanish longitudinal data from the period 1992–2004, this paper examines labour market transitions of the newly unemployed in order to investigate the determinants of unemployment duration in a competing risks framework with four destination states: temporary employment, permanent employment, self-employment and inactivity. Special emphasis is placed on the influence of previous job variables. We find that individuals who become unemployed due to the end of a temporary contract are more likely to exit unemployment by finding another temporary job and less likely to exit through permanent jobs, self-employment or inactivity. However, long tenures in temporary jobs enhance the probability of finding a permanent employment. Moreover, the length of the previous job, when it terminates due to a layoff, hinders the probability of moving to employment (either permanent or temporary).     

Involuntary job loss and changes in personality traits

Economists consider personality traits to be stable, particularly throughout adulthood. However, evidence from psychological studies suggests that the stability assumption may not always be valid, as personality traits can respond to certain life events. Our paper analyzes whether and to what extent personality traits are malleable over a time span of eight years for a sample of working individuals. Furthermore, we specifically look at changes in personality traits after a major adverse life event: involuntary job loss. We use data from the German Socio-Economic Panel Study (SOEP) from 2004 to 2014 – a period over which individuals’ Big Five personality inventory was measured three times. Our dataset allows us to exploit detailed employment information, particularly reasons for job termination and unemployment spells. We focus solely on plant closures as a reason for job termination. Job loss due to plant closure is widely used as a relatively exogenous event to identify causal effects. Our results suggest that personality traits are indeed malleable during adulthood. Although the Big Five measures are relatively stable within the overall population of workers, we find an increase in openness, that is, the willingness to seek new experiences, for the average displaced worker. This increase, however, is fully driven by individuals with high educational attainment and by those who find a new job immediately after dismissal. The other dimensions of the Big Five personality inventory remain nearly unchanged after an involuntary job loss. Our findings hold for a number of robustness checks and are supported by the results of a falsification test using a placebo treatment.     

Constructing Unemployed Job Seekers as Professional Workers: The Depoliticizing Work–Game of Job Searching

Unemployed Americans overwhelmingly describe their predicament as an individual and private challenge, and not as a public issue with structural causes and political solutions. This case study utilizes participant observation and in-depth interviews at a support organization for unemployed white-collar workers to explore the concrete dynamics that render the structural and political dimensions of unemployment beyond discussion. Whereas the existing literature focuses on the role of ideology in shaping subjective understandings of unemployment, my ethnographic data indicate that the lived experience of job searching is critical to understanding why individualist ideologies resonate with unemployed job seekers. Engagement in the process of job searching is analyzed as a type of work that generates an absorbing “work–game.” Playing this game depoliticizes unemployment by channeling the players’ practical energies towards strategic decision-making and individual level maneuvers and away from larger structural contexts. The depoliticizing effects of the game endure even after job seekers cease to play. For job seekers who encounter obstacles to finding employment in the labor market and become discouraged, the process of playing the game generates the experience of being a loser, and thus reinforces individualized understandings of unemployment.

DO UNEMPLOYMENT BENEFITS AFFECT ON‐THE‐JOB SEARCH? EVIDENCE FROM LABOR TURNOVER BEFORE ESTABLISHMENT CLOSURES

We develop a job search model that predicts that potential job losers would reduce on‐the‐job search (OTJS) effort and job‐to‐job transitions before layoffs, in response to an increase in the potential duration of unemployment benefits (UB). To test this prediction, we exploit changes in the maximum potential duration of benefits in Germany to analyze how it affected labor turnover before establishment closings. The evidence supports the model prediction that workers with longer potential benefit duration are more likely to remain with their establishments until closure and to enter nonemployment. These findings indicate that the effects of UB on the OTJS decisions of potential job losers should be considered in the optimal design of the parameters of unemployment insurance systems. (JEL J63, J64, J65)     

The Assisted Living Residence: A Vision for the Future by Stephen M. Golant and Joan Hyde (Eds.)

Abstract

The employment prospects of older workers in Germany are widely endangered because of age discrimination. The main indicator concerning recruitment is that from the age of 45 on the difficulties in finding a new job rise extraordinarily and, accordingly, the duration of unemployment rises. Concerning further training, there is a lack of participation by older workers in vocational training and, additionally, they face numerous risks in the deterioration of their skills. Given the long-term implications of the aging labor force, employers must adapt their approaches to recruiting and training older workers to prevent a further loss of skills and knowhow. A comprehensive strategy for integrating older workers and overcoming age barriers in employment is required. To promote recruitment, job-placement programs should be linked more closely to companies and public programs should be targeted to older unemployed workers. To promote further training of older workers, the workplace needs to create a learning environment, introduce a greater variety of tasks, and develop training schemes.     

Der Einfluss von Persönlichkeitseigenschaften und sozialen Ressourcen auf die Arbeitslosigkeitsdauer

The influence of human capital, the local unemployment rate, the family situation, personality characteristics and the social resources on the individual length of unemployment in Germany are analysed with data from the German Socio-Economic Panel (GSOEP). Because of interactions of some covariables with time, an disproportional Cox-regression is estimated. This analysis confirms the results of previous studies, and the consideration of often neglected personality characteristics and social resources leads to interesting additional findings. In West-Germany mobile persons and actors with internalized control attitudes find a job more easily while in East-Germany social capital has a positive influence on the probability of reemployment.     

Family challenges created by unemployment

The detrimental effects of job loss and unemployment are not limited to the unemployed worker but ripple out to affect those closest to him or her. These ripple effects most notably impact the unemployed worker’s family, including a spouse or partner and/or children. Previous research related to the impacts on marital or partner relationships and families and the particular effects of unemployment on children is explored. Financial or economic stressors and strain brought about by job loss; the effects of stress and reduced mental health among unemployed workers and their spouses; and protective resources for coping with job loss are also discussed. The impact on children, in particular their mental health, development, and educational/human capital attainment are outlined. Implications for future interventions and unemployment policy are highlighted.     

Job security and unemployment in an efficiency-wage model

Job security and its effects on unemployment are controversial issues. I investigate the effects of job security in an efficiency-wage model of unemployment. Though efficiency-wage ideas have wide appeal and provide strong foundations of involuntary unemployment, not much has been written about the ramifications of job security in these scenarios. I show that job security creates wage and unemployment effects when efficiency-wage aspects are relevant, because employment guarantees shift the burden of workers' effort attraction to the wage mechanism. These effects are further enhanced when workers have some bargaining power. My results, therefore, suggest a trade-off between employment stability and employment: High employment security leads to smaller employment (or larger involuntary unemployment). I thank Ron Oaxaca and participants at the W.E. Upjohn Conference on Unemployment Insurance for useful comments.     

THE EFFECTS OF MACROECONOMIC CONDITIONS AT GRADUATION ON OVEREDUCATION

This article shows that unfavorable economic conditions at graduation decrease the likelihood of a good job‐worker match over a worker's subsequent career. Mismatch is quantified in terms of overeducation by both industry and occupation. The German Socio‐Economic Panel and region‐level unemployment rates from 1994 to 2012 are used. Instrumental variables estimates account for endogenous graduation timing. A single percentage point increase in regional unemployment causes an increase in the probability of overeducation of 1.6–1.7 percentage points for university graduates. Effects for technical tertiary education and apprenticeship graduates are smaller. Labor market entry conditions affect workers for up to 9 years after graduation. (JEL J23, J22, E32, I23)     

Assessing Personality Using Body Odor: Differences Between Children and Adults

Many studies have demonstrated that smell is an important sense in social interactions, and recently it was determined that olfactory cues might also convey information concerning certain personality traits. The present study investigated whether personality traits might be recognized using olfactory cues in contexts other than male–female interactions. 75 children (35 girls and 40 boys, M = 8.29 years) and 75 young adults (41 women and 34 men, M = 20.5 years) rated the personality traits of 50 unknown individuals (24 women and 26 men, M = 24.02 years) based on their body odor. The correlations between scent ratings and the self-assessed personality dimensions of odor donors were analyzed. The results show that both children and adults assess neuroticism relatively accurately, whereas only adults recognized dominance. These results suggest that olfaction supplements visual and auditory cues throughout our whole lives, contributing to the first impression accuracy of certain personality traits.     

Discrimination of older workers in Germany: obstacles and options for the integration into employment

The employment prospects of older workers in Germany are widely endangered because of age discrimination. The main indicator concerning recruitment is that from the age of 45 on the difficulties in finding a new job rise extraordinarily and, accordingly, the duration of unemployment rises. Concerning further training, there is a lack of participation by older workers in vocational training and, additionally, they face numerous risks in the deterioration of their skills. Given the long-term implications of the aging labor force, employers must adapt their approaches to recruiting and training older workers to prevent a further loss of skills and know-how. A comprehensive strategy for integrating older workers and overcoming age barriers in employment is required. To promote recruitment, job-placement programs should be linked more closely to companies and public programs should be targeted to older unemployed workers. To promote further training of older workers, the workplace needs to create a learning environment, introduce a greater variety of tasks, and develop training schemes.     

Dynamic Discrete-time Duration Models: Estimation via Markov Chain Monte Carlo

Discrete-time or grouped duration data, with one or multiple types of terminating events, are often observed in social sciences or economics. In this paper we suggest and discuss dynamic models for flexible Bayesian nonparametric analysis of such data. These models allow simultaneous incorporation and estimation of baseline hazards and time-varying covariate effects, without imposing particular parametric forms. Methods for exploring the possibility of time-varying effects, as for example the impact of nationality or unemployment insurance benefits on the probability of reemployment, have recently gained increasing interest. Our modeling and estimation approach is fully Bayesian and makes use of Markov Chain Monte Carlo (MCMC) simulation techniques. A detailed analysis of unemployment duration data, with full-time job, part-time job and other causes as terminating events, illustrates our methods and shows how they can be used to obtain refined results and interpretations.     

Work motivation of unemployed youths: Moderating effects of financial dependence on parents

Based upon a sample of 204 unemployed youths (mean age = 19.59, SD = 2.30) in Hong Kong, the present study investigates relationships between length of unemployment, job information acquisition, selfactualization, and work motivation, as well as the moderating effects of financial dependence on parents. The results generally supported the hypothesis that self-actualization was predictive of work motivation, while the length of unemployment and job information acquisition were not. Moreover, financial dependence on parents moderated the effect of length of unemployment on work motivation, as well as the effect of job information acquisition on work motivation; while the effect of selfactualization was not moderated. The results lent empirical support to the proposition of empowerment theory; and added new evidence to the interplay between unemployment, deprivation, information acquisition, and familism in explanations of work motivation. The results suggest some ways to elevate the work motivation of unemployed youth.     

Unemployment classifications and subjective well-being

Further research on the impact of unemployment on workers and their families requires greater refinement and more precise measurement of the concept. While previous studies have indicated the effects of unemployment on a wide range of variables, such as health and well-being, many of these studies suffer from imprecision by conceptualizing unemployment too narrowly and by using too strict a dichotomy between currently employed and currently unemployed workers. This research effort attempts to broaden and refine the concept of unemployment by defining it in terms of two job dimensions: current employment status and previous job loss. Using this conceptualization, the authors find that current unemployment after other job losses may have more devastating effects on well-being than losing one's job for the first time. Similarly, among the currently employed, those who have lost jobs in the past may experience more emotional difficulties than those who have never lost their jobs.     

Employers’ and employment counselors’ perceptions of desirable skills for entry-level positions for adolescents: how does it differ for youth with disabilities?

Today’s youth face high unemployment and other labor-market challenges; these challenges are often worse for youth with disabilities. This paper explores what employers and employment counselors look for when hiring youth into entry-level jobs and whether they believe youth with disabilities have fewer skills than those without. This study used a qualitative design with a purposive sample of 19 youth employers and employment counselors. Our findings show that youth employers and employment counselors identify the following traits as enhancing young workers’ employability: a well-prepared job applicant; job fit and a good attitude; and soft skills. We find youth with disabilities are perceived to be at a disadvantage. Consistent with a rising body of research, the emphasis on soft skills, and pliability, opens the door for employment discrimination.     

INVOLUNTARY, EMPLOYMENT IN CONTRACTS WITH RISKY JOB SEARCH

The implication of partially insurable job search risk for incentive compatibility in a standard contracting framework are explored. When unemployment spells provoke job search, workers face risk in spell duration and reemployment wages. When search effort is not variable, contracts including unemployment insurance will yield involuntary employment. When search effort is diminished by UI benefits, firms shift some compensation back to wages, increasing the relative attractiveness of employment. The analysis begins with a theorem on incomplete insurance by Imai, Geanakoplos and Ito [1981] for which a simple proof and economic intuition are provided.     

WHY DON'T ELIGIBLE FIRMS CLAIM HIRING SUBSIDIES? THE ROLE OF JOB DURATION

Only a small fraction of firms that hire disadvantaged workers claim the federal subsidies for which they qualify, namely, the Work Opportunity Tax Credit (WOTC) and Welfare‐to‐Work Tax Credit (WtW). Subsidy benefits depend partially on job duration, with higher subsidy rates above certain job‐duration thresholds. I estimate the relationship between a firm's WOTC/WtW participation and its eligible workers' job durations. Using unique Wisconsin administrative data, I find that workers' subsidy rates (determined by hours worked) have the expected relationship to participation: Firms with a larger fraction of workers exceeding the programs' job‐duration thresholds are more likely to claim the WOTC/WtW. I also find no evidence that firms systematically modify the job duration of their workers to maximize subsidy payments. (JEL J3)     

The Long-Run Effects of Job Displacement on Sources of Health Insurance Coverage

This paper examines job displacement’s long-run effect on health insurance coverage and source of coverage. We find that displacement lowers the probability that an individual receives health insurance even ten years after job loss. However, those without children at the time of job loss largely drive this result. While displaced workers with and without children face similar losses in access to employer-provided health insurance, those with children mostly offset these losses by acquiring health insurance from other sources, particularly through the increased use of Medicaid.     

Repas ambulants Informalité urbaine et modernité industrielle à la frontière nord du Mexique

The relation between urban informality and industrial modernity is analyzed by examining very small businesses specialized in selling prepared food to workers in the transnational manufacturing plants (maquiladoras) along Mexico’s northern border. In the urban setting along this border, the model of an export-driven industrialization is compatible with premodern aspects of the subsistence economy. In fact, it depends on subsistence activities for its very existence. As a consequence, informal services have emerged that help stabilize the work force needed by these plants. A survey of the owners of these microbusinesses has provided data for analyzing the organization and operation of this commerce and its relation with the family as a social unit. — Special issue: Latin America.