Job Separation Research Articles

Trade-off between job losses and the spread of COVID-19 in Japan

This paper quantitatively analyzes the trade-off between job losses and the spread of COVID-19 in Japan. We derive an empirical specification from the social planner’s resource constraint under the susceptible, infected, recovered, and deaths (SIRD) model and estimate how job losses and the case growth rate are related to people’s mobility using the Japanese prefecture-level panel data on confirmed cases, involuntary job losses, people’s mobility, and teleworkability. Our findings are summarized as follows. First, we find that a decrease in mobility driven by containment policies is associated with an increase in involuntary job separations, but the high teleworkability mitigates the negative effect of decreased mobility on job losses. Second, estimating how the case growth is related to people’s mobility and past cases, we find that the case growth rate is positively related to an increase in people’s mobility but negatively associated with past confirmed cases. Third, using these estimates, we provide a quantitative analysis of the trade-off between job losses and the number of confirmed cases. Taking Tokyo in July 2020 as a benchmark, we find that the cost of saving 1 job per month is 2.3 more confirmed cases per month in the short run of 1 month. When we consider a trade-off for 3 months from July to September of 2020, protecting 1 job per month requires 6.6 more confirmed cases per month. Therefore, the trade-off becomes worse substantially in the longer run of 3 months, reflecting the exponential case growth when the people’s mobility is high.

Health, wealth, and informality over the life cycle

What is the impact of bad health on labor market trajectories, consumption, and wealth accumulation in a developing country characterized by a large informal sector and strong inequalities? We develop and estimate a heterogeneous agents model with two sectors to quantify the impact of health shocks and to disentangle the channels through which they affect wealth and consumption over the life cycle in South Africa. We show that the effects of health shocks are significant and strongly depend on the job status of individuals. For formal workers, bad health reduces labor efficiency, which translates into lower earnings. For informal workers and the non-employed, the shock lowers the job finding rate and increases job separation into non-employment, which results in a surge in non-employment spells. As the non-employed are more likely to be unhealthy, health shocks generate a vicious circle.

Spatio-Temporal influence of Non-Pharmaceutical interventions policies on pandemic dynamics and the economy: the case of COVID-19

We have developed an extended mathematical graph-based spatial-temporal SIR model, allowing a multidimensional analysis of the impact of non-pharmaceutical interventions on the pandemic spread, while assessing the economic losses caused by it. By incorporating into the model dynamics that are a consequence of the interrelationship between the pandemic and the economic crisis, such as job separation not as a result of workers’ morbidity, analysis were enriched. Controlling the spread of the pandemic and preventing outbreaks have been investigated using two NPIs: the duration of working and school days and lockdown to varying degrees among the adult and children populations. Based on the proposed model and data from the Israeli economy, allowing 7.5 working hours alongside 4.5 school hours would maximise output and prevent an outbreak, while minimising the death toll (0.48% of the population). Alternatively, an 89% lockdown among children and a 63% lockdown among adults will minimise the death toll (0.21%) while maximising output and preventing outbreaks.

Working for References

We analyze incentive and welfare consequences of non-verifiable job references in a large economy marked by: moral hazard, limited liability, exogenous job separation, and structural unemployment. In the firm-optimal equilibrium, employers provide references whenever production is successful and workers holding references are hired with certainty in the ensuing period. Compared to a setting without references: The bonus-contract offers are lower, yet the workers’ equilibrium effort is higher. Profits and welfare are higher, yet aggregate worker welfare is lower. Also, firms do not fully internalize the incentive effect of references and could typically increase profits and welfare by jointly raising bonuses.

The quantitative importance of technology and demand shocks for unemployment fluctuations in a shopping economy

We construct and estimate a business cycle model with search and matching frictions in the labor market and in the product market. We show that the dynamic structure of the model and the endogenous job separation rate are important to accurately represent the empirical responses to the technology and the demand shocks. Our main finding is that the demand shock explains at least 58% of the unemployment fluctuations in the US, while the technology shock accounts for the residual.

Search Frictions and Evolving Labour Market Dynamics

This paper puts Search Frictions models under novel empirical scrutiny. To capture changing dynamics, we fit a Bayesian time-varying parameter VAR to US labour market data from 1965–2016. Using a DSGE model with Search Frictions, we identify several structural shocks, including a shock to worker bargaining power that we name a wage shock. We argue that the wage shock is a key driver of cyclical variation, explaining a higher proportion of the variation of these variables than productivity, demand or job separation shocks. We also document stark differences between empirical and theoretical impulse response functions that cast doubt on the core transmission mechanism of search and matching models.

The Ways the Cookie Crumbles: Education and the Margins of Cyclical Adjustment in the Labor Market

<ns2:p>I document that less educated workers experience higher and more cyclically sensitive job separation rates. Meanwhile, workers with a bachelor's degree or more exhibit pro-cyclical wages while workers without a high school degree exhibit no statistically discernible cyclical pattern. Differences in the sensitivity are most stark when measurement of labor costs accounts for the value of the persistent effects of current macroeconomic conditions on future remitted wages. These findings suggest optimally differential implementation of self-enforcing implicit wage contracts in which educated workers and their employers leverage relative employment stability to smooth the effects of cyclical fluctuations over longer horizons. This margin of adjustment is less available to the less well educated, who have shorter expected employment durations. Furthermore, failure to account for the heterogeneities documented here leads to substantial underestimation of the welfare costs of business cycles.</ns2:p>

Research on Sales Business Control Problem

Sales business control is an important part of the internal control of enterprises, which has a significant impact on the production, sales and management of enterprises. With the rapid development of China's market economy, the scale of enterprises is gradually expanding and the economic returns are constantly improving. However, the overall quality of sales business control is not high, which affects the development of enterprises and the realization of strategies. This paper analyzes the problems existing in the sales business control of enterprises in Our country, conducts pre-investigation and evaluation, performance assessment, incompatible job separation and sales price management, and puts forward its own views on how to improve the sales business control of enterprises.

Labor Market Effects of a Minimum Wage: Evidence from Ecuadorian Monthly Administrative Data

When Ecuador raised its monthly Unified Minimum Wage from $170 to $200 in 2008, it affected 35 percent of all private sector workers. We use this unexpected minimum wage hike under former president Rafael Correa to assess the labor market impacts of the minimum wage. We use an administrative dataset that covers all formal sector workers by month. Adopting a differences-in-differences approach at the firm level, we find that the minimum wage hike led to a decrease in labor demand in affected firms by 0.5 percent after one month and by 2.5 percent after four months. The decrease in labor demand resulted from both an increase in job separations and a slowdown in hiring. At the worker level, we find that the minimum wage hike led to a 2.2 percentage point decline in the probability of remaining employed after one month, and the treatment effect rose to 3.9 percentage points after four months. Last, we estimate the effects of the minimum wage hike on wage changes by wage bin throughout the monthly wage distribution. We find that, after one month, wages increased by 17 to 37 percent for workers who were being paid less than $200 and also uncover wage spillover effects up to the 77th percentile of the wage distribution.

Simulation of the Urban Jobs–Housing Location Selection and Spatial Relationship Using a Multi-Agent Approach

The jobs–housing balance concerns the spatial relationship between the number of jobs and housing units within a given geographical area. Due to the separation of jobs and housing, spatial dislocations have occurred in large cities, which have resulted in a significant increase in commuting distance and time. These changes have ultimately led to an increase in pressure on urban traffic, and the formation of tidal traffic. In this study we introduce a multi-agent approach to examine the jobs–housing relationship under the maximum location utility of agents. The jobs/housing ratio measures the balance of the of jobs–housing relationship, as well as comparing and analyzing jobs–housing separation in Beijing by district, county, and street scales. An agent-based model was proposed to simulate spatial location selection behavior of agents by considering environmental and economical influences on residential decisions of individuals. Results show that the jobs–housing relationship imbalance in Beijing has been mainly aggravated due to rapid population growth in the 6th Ring Road. An imbalance in the jobs–housing relationship has arisen due to a mismatch with the number of households available compared to the number of jobs; the surrounding urban areas cannot provide the required volume of housing to accommodate the increase in workers. Six sets of experiments were established to examine resident agents and enterprise agents. Differences in resident agents’ income level had a greater impact on residential location decision-making, and housing price was the primary factor affecting the decision of residents to choose their residential location. The spatial distribution of jobs and housing in Beijing under the maximization of micro-agent location utility was obtained in this study. Results indicated that the imbalance in the jobs¬-housing relationship in central Beijing has improved and, compared with the initial distributions, the number of jobs–housing balance areas in Beijing has increased.

Revisiting Retirement and Social Security Claiming Decisions

Why do individuals retire and claim their Social Security benefits at the age they do? Understanding the key drivers of these decisions has been an important topic of research as it can help guide policy discussions on the impact of potential reforms to the Social Security program. We revisit this crucial question by exploring new sources of heterogeneity in these decisions as well as novel mechanisms governing these trade-offs. Using data from the Health and Retirement Study and the Understanding America Survey, we first document (1) important heterogeneities in social security claiming behavior of men by their education and marital status, (2) strong correlations between health, labor supply and benefit claiming decisions and (3) significant misinformation related to Social Security program knowledge and survival chances at older ages. We then build a life-cycle model of consumption, savings, labor supply, and Social Security application decisions as well as heterogeneity in education, marital status and SS program knowledge. The model includes uncertainty in health, subjective survival, wages, and job separation as well as rich details of the U.S. Social Security program to understand why a majority of individuals claim Social Security benefits prior to their normal retirement age, despite large penalties associated with these early benefit claims. We show that the estimated model can closely match the claiming behavior as seen in the data and also produce differences in SS claims along the dimensions of heterogeneity considered. Counterfactual experiments indicate that precautionary motives, misinformation, and preferences governing future discounting as well as altruism, together, go a long way in explaining overall claiming behavior. Together, these forces can explain a third of the overall early benefit claims and two-thirds of age 62 claims– with varying intensities across education and marital groups.

Labor Market Effects of a Minimum Wage: Evidence from Ecuadorian Monthly Administrative Data

When Ecuador raised its monthly Unified Minimum Wage from $170 to $200 in 2008, it affected 35 percent of all private sector workers. We use this unexpected minimum wage hike under former president Rafael Correa to assess the labor market impacts of the minimum wage. We use an administrative dataset that covers all formal sector workers by month. Adopting a differences-in-differences approach at the firm level, we find that the minimum wage hike led to a decrease in labor demand in affected firms by 0.5 percent after one month and by 2.5 percent after four months. The decrease in labor demand resulted from both an increase in job separations and a slowdown in hiring. At the worker level, we find that the minimum wage hike led to a 2.2 percentage point decline in the probability of remaining employed after one month, and the treatment effect rose to 3.9 percentage points after four months. Last, we estimate the effects of the minimum wage hike on wage changes by wage bin throughout the monthly wage distribution. We find that, after one month, wages increased by 17 to 37 percent for workers who were being paid less than $200 and also uncover wage spillover effects up to the 77th percentile of the wage distribution.

How to Improve Worker-Firm Matching: Evidence from a Temporary Foreign Worker Market

This paper investigates the role of worker-firm matching algorithms in accounting for early job separation rates. For this purpose, we examine Korea’s temporary foreign worker program in which the government classifies firms by priority levels and matches them with foreign workers based on their stated preferences. Using administrative data, we examine predictors for the job separation rates and propose alternative matching methods using the serial dictatorship. Our simulation results show that alternative matching methods can substantially reduce job separation rates, suggesting a possible improvement of the Korean program.

Job Displacement and Job Mobility: The Role of Joblessness

Who is harmed by and who benefits from worker reallocation? We investigate the earnings consequences of changing jobs and find a wide dispersion in outcomes. This dispersion is driven not by whether the worker was displaced, but by the duration of joblessness between job spells. Job movers who experience joblessness suffer a persistent reduction in earnings and tend to move to lower-paying firms, suggesting that job ladder models offer a useful lens through which to understand the negative consequences of job separations.

Understanding Nursing Turnover: The Case of Home Health Care

Only a few studies of nursing turnover have examined post-acute home health care. This study examines factors that are associated with home health licensed nurse turnover using linked employee-level and patient-level data from one of the five largest home health companies in the US. The data include variables from human resources and payroll systems, visit logs, discharge records, physical and mental health assessments, care plans, and patient encounters and is organized at the employee-day level. We measured turnover using human resources data, including measures of voluntary and involuntary job separation, and from exit interviews that allow classification of whether turnover was associated with agency-related factors (e.g., pay, schedule, supervisor, coworkers) versus personal factors (e.g., family needs, relocation). In bivariate and multivariate analyses, explanatory variables included nurse demographics, patient population characteristics, and the degree to which nurses can delegate tasks to home care aides. We found a downward trend in turnover for licensed nurses between 2016 and 2019. Attrition in the first year was 34% for full-time nurses and 45% for part-time nurses, most of it occurring in the first 180 days of employment. The rate of voluntary turnover was nearly four times as great as involuntary turnover. We found that agency factors accounted for 26% of monthly turnover on average, while personal factors accounted for 74%. In states in which licensed nurses could delegate more tasks to home care aides, turnover rates were slightly higher than in states with little delegation.

Heterogeneous worker flows and Japan’s labour market

ABSTRACT This study analyzes the roles of heterogeneous worker flows in Japan’s labour market. I divide workers into regular, non-regular, and self-employed and other workers and examine the effects of these different types of worker flows on Japan’s labour stocks. I find that the fluctuations in the job separation rate for non-regular workers and the participation margin are relatively important for the evolution of Japan’s unemployment rate. Further, the transitions between regular and non-regular jobs play a major role in the dynamics of Japan’s non-regular worker ratio.

Understanding the compactness of employment activities in high-density cities through cellphone location data

Urban development in many cities worldwide presents a dispersed development with urban sprawl and excessive land use. Compact city development facilitates an efficient use of land that aims to reduce excessive land consumption and commuting. However, the ignorance of the relationships between land use and the compactness of employment activities has resulted in excessive commuting. The separation of jobs and housing due to functional zoning has caused criticism in compact city development. This research aims to examine the compactness of workers’ employment activities and its relationship with land use to enrich our knowledge on compact city development. The relationship between urban and employment activity compactness is examined through cellphone location data in Shanghai, China. A set of indicators, including intrazonal employment ratio and interzonal commuting distance, are examined to measure the compactness of employment activities. Land-use compactness is measured through building density, land-use diversity, and accessibility. The effect of land-use compactness on employment activity compactness is analyzed through structural equation modeling. A high proportion of residential land use reduces the intrazonal employment ratio and increases the average interzonal commuting distance. A high proportion of industrial and commercial land use increases the intrazonal employment ratio. These are the spatial characteristics to improve urban compactness. This study contributes to decision-making for compact development, which is of great significance to promoting compact activities. It can also provide spatial planning policies that facilitate workers’ access to local employment opportunities with short travel distances through land use planning for mixed land use.

The Global Financial Crisis and Employee Mental Health

We find that the Global Financial Crisis (2007-2009) had an adverse effect on employee mental health. To identify the causal effects of the credit shock, we exploit the plausibly exogenous variation in firms’ need to refinance their long-term debt in 2008, a period when refinancing became more difficult due to tightening bank lending standards. Using administrative data from the Netherlands, we demonstrate that antidepressant use grew significantly more in the 2008-2012 period among employees of firms in need of high debt refinancing. A higher probability of job separation in these firms suggests lower job security as a transmission channel.

Changes Over Time in the Cost of Job Loss for Young Men and Women

Abstract Using data from the two cohorts of the NLSY, we examine whether income losses due to involuntary job separations have changed over time. We find that wage losses among men are similar between the two cohorts. However, women in the 1979 cohort show little evidence of wage losses while women in the 1997 cohort experience wage losses similar to those of men. We present evidence that changes in occupations across cohorts help explain these results.

Do flexible working hours amplify or stabilize unemployment fluctuations?

In this paper we challenge the conventional view that increasing working time flexibility limits the amplitude of unemployment fluctuations. We start by showing that hours per worker in European countries are much less procyclical than in the US, and even co-move negatively with output in selected economies. This is confirmed by the results from a structural VAR model for the euro area, in which hours per worker increase after a contractionary monetary shock, exacerbating the upward pressure on unemployment. To understand these counterintuitive results, we develop a structural search and matching macroeconomic model with endogenous job separations that resemble layoffs. We show that this feature is key to generating a countercyclical response of hours per worker. When we augment the model with frictions in working hours adjustment and estimate it using euro area time series, we find that increasing flexibility of working time amplifies cyclical movements in unemployment.