Neighborhood effects of high unemployment rates: Welfare implications among different social groups

This study analyzes spillover effects of high unemployment rates on well-being using cross-sectional data for Germany. Context effects among the employed arise due to the informational character of high unemployment rates. Using data on job security perceptions as well as regional unemployment rates the paper shows that high unemployment rates cause negative externalities among the employed. In addition, subjective perceptions of job security depend on local labor market conditions indicating the informational value of employment data. For unemployed persons we cannot find any welfare gains owing to a social norm effect. Thus, the existence of a public bad is not more enjoyable the more people suffer from the public bad.     

Befristete Beschäftigung: Chance oder Risiko?

The paper investigates whether increased labor market flexibility leads to a reinforcement of the existing segmentation of the labor market or whether it is dismantling the barriers in the labor market. Using spell data (employment and unemployment periods) from the German Socio-economic Panel (GSOEP, time period: 1984–1999) both determinants of fixed-term contracts and their consequences (renewed temporary employment, unemployment) are investigated with the help of random-effects logit-models. The results show that respondents’ characteristics (amount and type of human capital, formerly experienced periods of unemployment), structural variables (branch, firm size), and occupational characteristics (position, marginal employment) are influencing the risk of getting a temporary job. Furthermore it becomes evident that fixed-term contracts are increasing the risk of getting a temporary job again or of becoming unemployed after termination of the temporary job. These results show that fixed-term contracts above all are part of the secondary labor market, and that they especially have negative consequences for the employees in this segment. On the other hand fixed-term contracts can be seen as a chance in the way that they offer at least an alternative to unemployment. Hence, a too narrow evaluation of temporary employment would be too simplistic.     

GEOGRAPHIC DIFFERENCES IN U.S. UNEMPLOYMENT RATES: A VARIANCE DECOMPOSITION APPROACH

This paper analyzes the determinants of the geographic dispersion of unemployment rates. The model presented here recognizes that structural labor market relationships differ across areas and that area unemployment rates and some of the explanatory variables are determined simultaneously. Most importantly, the methodology introduced here provides an estimate of the impact of each of the explanatory variables on the overall dispersion of unemployment rates, allowing comparison of several competing hypotheses that purport to explain why areas differ so widely in terms of their unemployment rates. The empirical results indicate that inter-area differences in product market demand and in sensitivity to changes in conditions in the product market are the most important factors accounting for geographic differences in unemployment rates. More generally, the results indicate that unemployment rates differ widely across areas not so much because areas differ in terms of the underlying characteristics that determine unemployment rates but because areas are so heterogeneous with respect to labor market structure.     

UNEMPLOYMENT AND OTHER MEASURES OF LABOR MARKET INEFFICIENCY: A COMPARISON OF U.K. AND U.S. LABOR MARKETS 1931–96

Although unemployment is often used as a measure of labor market inefficiency, economic theory indicates that market inefficiency is determined by both the gap between and the elasticities of supply and demand. Using time series data for the United States and United Kingdom, this article investigates how good the unemployment rate is as a measure of labor market inefficiency by calculating the deadweight loss associated with unemployment rates over time. Results show that the loss arising from unemployment is low across time and countries and that the unemployment rate is often a weak proxy for comparing labor market inefficiency. (JEL J6 )     

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)     

Regional unemployment,gender, and time allocation of the unemployed

This paper analyzes the relationship between time allocation decisions of the unemployed, gender, and regional unemployment rates. Using two cross-sections from the 2002–2003 and 2009–2010 Spanish Time Use Surveys, we find that higher regional unemployment rates are associated with increases in the time devoted to study by men. Regional unemployment rates are also associated with more time devoted to household production, particularly for unemployed men and women living in a couple, and to less time devoted to leisure, particularly for unemployed men with a working partner and unemployed women not living in a couple. We interpret our findings as evidence favoring consumption smoothing. Higher regional unemployment rates imply a lower availability of jobs for the unemployed, it reduces individual expectations of finding a job, and thus households may try to increase their time spent on household production to reduce market expenditures and thus maintain their consumption constant. Increases in the time devoted to household production during business cycles need to be considered in the analysis of the wellbeing of the unemployed. Consumption smoothing may imply increased wellbeing, but more time devoted to household production is associated with lower experienced utility of individuals throughout the day.     

Household job search: A theoretical and empirical model

This article links the literature on family decision making and the economics of job search by examining job search by an unemployed individual within a household context. A theoretical model was developed which demonstrates the interdependence of the utility of household members when one is searching for work. The costs of search are borne by all household members while the benefits are captured in the searcher's expected future wage. A reservation wage was shown to be determined by household financing options, and the perception of relevant labor market parameters. An empirical model of the reservation wage for a sample of unemployment insurance recipients was estimated using two-stage least squares. Results, reported for male and female subgroups, support the hypotheses derived from the household job search model. In particular, the reservation wage was shown to depend on unemployment duration, labor market conditions, increased labor force participation of other household members, use of household assets to finance search, existence of dependents, and unemployment insurance benefits.     

The Effect of Private Sector Work Opportunities in Prison on Labor Market Outcomes of the Formerly Incarcerated

This paper examines the effects of a private-sector prison work program called the Prison Industry Enhancement Certification Program (PIECP) on formal unemployment duration, duration of formal employment, and earnings of men and women released from various state prisons between 1996 and 2001. It also investigates the labor market dynamics of formerly incarcerated men and women. The program is found to increase reported earnings and formal employment on the extensive margin, with a stronger impact on the formal employment of women. There is little evidence that it increases formal employment along the intensive margin (i.e., duration of formal employment). Contrary to segmented labor market theories, superior employment (i.e., higher-paying jobs) does not lead to increased job stability. Roughly 92 % of individuals who obtained formal employment in the sample experienced job loss; however, reincarceration rates are too low to explain this fact. An evaluation of labor market dynamics reveals that traditional human capital variables, criminogenic factors, and a few demographic characteristics determine job loss. In addition, black women, single women, and women with more extensive criminal histories face greater barriers in the labor market than their male counterparts.     

Die soziale Diffrenzierung der Übergangsmuster in den Beruf

Growing risks in working lives and in the transition to the first job are supposed to be a core characteristic of labor market changes in the last two decades. However, they cover heterogeneous phenomena that have to be treated separately. Regarding the job entry process among in-firm training diploma holders, firm shifts, occupational shifts and unemployment represent distinct indicators of non-standard transitions to the first job. The empirical analyses, using data from the German IAB-employment-subsample 1975–1995, show that transition patterns have changed differently in the respective cohorts. The probability of experiencing specific transition patterns strongly depends on social structural as well as occupation-specific characteristics. The strongest risks at labor market entry are associated with combined firm and occupational shifts. There is no coherent evidence of a dominant trend towards less structured job entry patterns.     

Unemployment,Reemployment, and Health Insurance Status Among Older Workers in the Flexible Labor Market

As employment becomes more precarious, and spells of displacement become more common across the labor market, many individuals are forced to make decisions about the speed at which they seek reemployment and the types of employment they will seek. Using repeated cross‐sectional data from various years of the Displaced Worker Supplement of the Current Population Survey, we examine the degree to which employer‐provided health insurance and organizational provision of advanced layoff warning helped workers—particularly those from earlier birth cohorts—navigate the labor market during a period of growing employment flexibility. Our results indicate that workers from older cohorts, rather than older chronological ages, suffered more from displacement in terms of longer unemployment spells and declines in job quality upon reemployment. Workers able to obtain a job with health insurance had shorter unemployment durations, while those displaced from jobs with health insurance remained unemployed for longer periods of time. Advance notice appears to reduce some of the disproportionately negative effects of displacement for older workers, perhaps by easing the shock of a psychological contract breach. Our findings point to the importance of historical and cultural factors in shaping labor market outcomes.     

LABOR QUEUES AND INVOLUNTARY UNEMPLOYMENT

This paper outlines a job search model which emphasizes the placing of applications by job searchers and the firm's use of a queue of applicants as an inventory of labor. The paper analyzes the consequences of the assumption that firms hold queues of applicants both for the decisions of a single firm and for a market composed of several such firms. The aggregate results suggest that considering such labor market queuing helps explain wage rigidity and involuntary unemployment.     

An Economic Analysis of the Gap Between Desired and Actual Fertility: The Case of Spain

Family size is the outcome of sequential decisions influenced both by preferences and by ongoing changes in the environment where a family lives. During the last two decades, the gap between the number of children women prefer and their actual fertility has widened in Spain. The paper uses the 1985 and 1999 Spanish Fertility Surveys to study whether the tightening of the labor market and worsening of economic conditions in Spain during the last 20 years are important determinants of this change. I find that women facing high unemployment rates in their mid-twenties tend to restrict their fertility below their ideal level. Among women in the labor force, the stability of a public sector job lessens the difficulties of balancing employment and family and of achieving preferred fertility. Temporary contracts work in the opposite direction. Findings are robust to the inclusion of controls for within-couple discrepancies in either preferences or religious affiliation.

The link between male employment and child maltreatment in the U.S., 2000–2012

Child maltreatment rates are strongly linked to adult male behavior, suggesting that labor market conditions, by influencing male behaviors, can influence maltreatment rates. Using the unemployment rate as the sole measure of labor market conditions, past studies generally conclude that employment conditions do not systematically influence child maltreatment rates. By contrast, this study found that state-level child maltreatment rates were statistically significant and inversely related to the state-level employment rates of men, aged 20 to 34 yrs old. It also found that the interaction of child poverty and living in a single-parent household is positively related to child maltreatment rates. Policies to reduce employment problems are discussed.     

Better Off Jobless? Scarring Effects of Contingent Employment in Japan

Previous research fails to address whether contingent employment benefits individuals' careers more than the alternative they often face: being without a job. Using work history data from Japan, this study shows that accepting a contingent job delays individuals' transition to standard employment more than remaining jobless. Moreover, having a contingent job, rather than having no job, leads Japanese men to have lower occupational status after they transition back to standard employment. I argue that in a highly segmented labor market like Japan's, the strict separation of labor pools for standard and contingent jobs makes being labeled as a contingent worker particularly detrimental. Meanwhile, the legacy of Japan's welfare corporatism alleviates the stigma of unemployment, making individuals better off jobless than having a contingent job. This research thus demonstrates the importance of labor-market contexts in shaping the scarring effects of contingent work arrangements.     

Returning migrant characteristics and labor market demand in Greece

Immigrants who repatriate bring with them modern work skills which many observers in labor exporting regions describe as a great contribution to the mother country. Using data from 2 samples of Greek repatriates as well as projections of industrial labor force demands in Greece for the 1980s, this article challenges this concept. The authors find that the uneven regional development and stunted industrial growth which pushed these workers abroad are also responsible for the narrowly limited employment options which they face once they repatriate. For the urban repatriate, the market is limited to unemployment, the urban informal sector and scattered jobs, while for the rural repatriate, small-scale agriculture, multiple job holdings and unemployment are the only viable options.     

The nation's youth: an employment perspective

Statistics on youth employment problems are quite revealing—they accounted for almost one fourth of the unemployed eventhough they constituted only one-tenth of the nation's labor force in 1977. Youth unemployment is universally high, but variations by area of residence are evident and can be useful in analyzing their job market problems. To this end, data on the labor force characteristic of the nation's 16.5 million young people in three geographic areas—central cities, suburbs, and nonmetropolitan areas were examined. This investigation utilizes metropolitan and nonmetropolitan area data gathered monthly through a sample survey of some 47,000 households throughout the nation during 1977. Further, the labor market experience of both whites and blacks, and males and females are compared.     

Before Crisis: Gender and Economic Outcomes of the Two Largest Immigrant Communities in Spain1

In this study, we compare labor force outcomes of the two largest immigrant communities in Spain (Moroccans and Romanians) before the economic crisis hit. We are interested in understanding if and how gender influences the labor force outcomes (wage per hour, labor force participation, and unemployment rate) of these two immigrant groups. Our analyses show that, overall, gender is an important variable on Spanish labor market, but it affects differently the two groups. There is a male job market and a female job market for both Romanian and Moroccan immigrants, with men earning significantly higher wages than women. However, while for Moroccans, working women differ significantly from men in terms of demographic characteristics, Romanian women and men have similar demographic characteristics and comparable levels of labor force participation, but differ in terms of wage levels.     

A CONTEXTUAL ANALYSIS OF THE EFFECTS OF GENDER AND PLACE ON WORKERS INCOMES

This research uses the 1987 National Longitudinal Surveys of Youth to construct a national and Appalachian subsample of workers at the initial stages of their labor force participation and during a national economic recovery. This contextual research examines the impact of education, work effort, type of job, marital status, family size, Appalachian residence, urban or rural location, unemployment rate, and manufacturing concentration on the incomes of women and men. The results document the overall depressive effect that living in Appalachia has on the incomes of both male and female workers.     

Discouraging Workers: Estimating the Impacts of Macroeconomic Shocks on the Search Intensity of the Unemployed

Discouraged and marginally attached workers have received increasing attention from policy makers over the past several years. Through slackness in the labor market, periods of high unemployment should reduce the likelihood of receiving a job offer and thus create more discouraged workers. However, the existing literature generally fails to find evidence of such pro-cyclicality in search intensity. Surprisingly, search appears to be acyclical. We hypothesize the observed acyclicality may be the result of coarse measurement of search intensity in previous studies and the failure to account for changes in individuals’ wealth across the business cycle. In this paper we use daily time use dairies from the American Time Use Survey 2003–2011 to examine the cyclicality of search intensity to explain this apparent contradiction between theory and data. Results indicate that workers do reduce their search in response to deteriorating labor market conditions, but these effects appear to be offset by the positive effects on search that are correlated with declines in household wealth.     

EVALUATING ALTERNATIVE JOB CREATION STRATEGIES

This paper examines the costs of job creation under a wide range of programs that the government has at its disposal. The framework chosen for the analysis is a standard neo-classical model which allows for pockets of unemployment (created by structural imperfections in the operation of the labor market) but not cyclical unemployment. A general conclusion that emerges from the analysis is that job creation programs which are tightly targeted at disadvantaged workers (the structurally unemployed) are much less costly methods of creating additional employment than are untargeted programs.