Job Spells Research Articles

Payroll tax incidence: Evidence from unemployment insurance

Economic models assume that payroll tax burdens fall fully on workers, but where does tax incidence fall when taxes are firm-specific and time-varying? Unemployment insurance in the United States has the key feature of varying both across employers and over time, creating the potential for labor demand responses if tax costs cannot be fully passed through to worker wages. Using state policy changes and administrative data of matched employer–employee job spells, I study how employment and earnings respond to unexpected payroll tax increases for highly exposed employers. I find significant drops in employment growth driven by lower hiring, and minimal evidence of pass-through to earnings. The negative employment effects are strongest for young workers and single-establishment firms.

Labor market adjustment to extreme heat shocks: Evidence from Brazil

Despite ample evidence on the labor productivity impact of heat shocks, little is known about how heat shocks affect labor adjustment over time. This paper uses administrative employer–employee linked data from Brazil to examine margins of labor market adjustment to extreme heat. Tracking workers over time and across job spells, I find that quarterly heat shocks increase the probability of formal manufacturing layoffs. In the medium run, there is limited intersectoral and interregional reallocation, as well as a significant failure rate to reallocate back to formal sectors, indicating job transitional costs. Finally, the employment impact of heat shocks is larger for workers in more routine manual task intensive, less abstract occupations.

Worker and workplace determinants of employment exit: a register study

BackgroundWorkers with chronic illness are in higher risk of unemployment. This article investigated the worker and workplace characteristics associated with labour market inclusion for workers with a diagnosed chronic illness.MethodsLinked...

There's no going back? The influence of prior entrepreneurial experience timing on voluntary turnover in post‐entrepreneurship wage employment

AbstractDespite the prevalent stereotype that former entrepreneurs are undesirable employees due to a high likelihood of quitting, little research has empirically verified its accuracy. With a growing population of former entrepreneurs in the workforce, it has become more important than ever to understand whether, when, and which former entrepreneurs may or may not be likely to quit their post‐entrepreneurship employment. We used a sample of nationally representative 20‐year data from Australia to examine how timing of prior entrepreneurial experience relative to a focal wage job relates to voluntary turnover via a serial mediation by entrepreneurial intention and turnover intention. Results showed that employees with entrepreneurial experience in their second most recent job spell were more likely to develop entrepreneurial intention and turnover intention in sequence, which, in turn, increased quitting risk relative to employees without entrepreneurial experience in the same job spell. However, we did not find evidence for such differences between employees with and without entrepreneurial experience in their most recent job spell. Moreover, the serial mediation effect holds among men but not women. These findings highlight the important role of timing in the relationship between of entrepreneurial experience and post‐entrepreneurship employment attitude and behavior. Theoretical contributions and practical implications are discussed.

De Jure versus De Facto transparency: Corruption in local public office in India

Governments and NGOs have invested heavily in fighting corruption by designing anti-poverty programs that maximize transparency and accountability. We analyze whether corruption is still widespread in the context of one such program, a massive make-work scheme in India where every job spell is posted publicly online. Linking millions of administrative job records to local election outcomes, we measure how many jobs local politicians self-deal. In the year after the election, winners of close elections receive 3 times as many workdays as losers and typical villagers. We find that corruption persists because of a gap between de jure and de facto transparency. Only when citizens have tools to access information in a timely manner does corruption eventually vanish.

One (program) for all or all (programs) for one: Evaluation of the employment program opportunity for all of the federation of Bosnia and Herzegovina

Using administrative data from tax records and public employment services, this paper examines whether the largest wage subsidy program deployed in 2014 in the Federation of Bosnia and Herzegovina, Opportunity for All, was effective at improving employment outcomes. Given the non-experimental design, the paper relies on propensity score matching estimators. It contributes to the literature on impact evaluations of active labor market policies (ALMPs) by exploiting detailed work histories of jobseekers to identify the control group. In the preferred specification, the program was effective in increasing employment among program participants relative to the control by 13 % 12 months after completing the subsidized period. However, the results are highly sensitive to the assumption of the starting date of the job spell in the control group, which carries information about previous work history. When changing the assumptions about the starting date of the subsidized job spell of the control group, the results remain positive in the short run, but turn out to be either larger or even negative for the medium run. In all cases, heterogeneity analysis reveals that the program is most beneficial for jobseekers of about 40 years of age and older, and for low-skilled workers.

The Role of Perceived Job Insecurity in Predicting Multiple Jobholding

Perceived job insecurity is often viewed as a work stressor that impacts cognitive, affective, and behavioral reactions on the job. Encouraged by the shift toward greater flexibility and gig work in modern times, individuals may decide to pursue multiple jobholding, i.e., start side jobs alongside a primary employed or self-employed position, to diversify risk and acquire additional resources to deal with perceived job insecurity. While acknowledging these benefits, this paper further argues that the resources provided to job insecure individuals by multiple jobholding, such as greater financial security, come at the expense of other resources, such as the investment of effort and time. Thereby, drawing from conservation of resources theory and relying on longitudinal data about 3,117 job spells for 807 unique German individuals from the German Socio-Economic Panel, we develop and test competing hypotheses about the relationship between individuals’ perceptions of job insecurity and the decision to take on multiple jobs. Results from survival analyses indicate that higher levels of perceived job insecurity reduce the probability of taking on secondary jobs. These findings advance existing research on job insecurity and multiple jobholding and in the growing fields of sustainable careers and career inaction while informing a broad audience, including individuals, organizations, and policymakers.

Employer-to-Employer Transitions and Time Aggregation Bias

The rate at which workers switch employers without experiencing a spell of unemployment is one of the most important labor market indicators. However, Employer-to-Employer (EE) transitions are hard to measure in widely used matched employer-employee datasets such as those available in the US. We investigate how the lack of the exact start and end dates for job spells affect the level and cyclicality of EE transitions using Danish data containing daily information on employment relationships. Defining EE transitions based on quarterly data overestimates the EE transition rate by approximately 30% compared to daily data. The bias is procyclical and is reduced by more than 10% in recessions. We propose an algorithm that uses earnings and not just start and end dates of jobs to redefine EE transitions. Our definition performs better than definitions used in the literature.

Temporary jobs and increasing inequality for recent cohorts in Italy

AbstractUsing tax‐based longitudinal microdata from 1985 to 2016, I document how the widening income distribution in Italy is driven by younger cohorts. Entry wages started to decrease around the mid‐1990s, at the same time returns to experience of new entrants in the labour market declined. Falling wage growth is linked to the institutional changes that occurred in the Italian labour market in the decade across the 2000s. I examine the impact of Italian labour market reforms on cohort‐specific wage inequality by looking at the relationship between the number of temporary job spells and individual earnings. Results confirm that young and high‐skilled new entrants show higher wage differential in comparison to older workers and that the increase in temporary jobs is a crucial factor in explaining the cohort wage gap.

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.

The Evolution of the Earnings Distribution in a Volatile Economy: Evidence from Argentina

This paper studies earnings inequality and dynamics in Argentina between 1996 and 2015. Following the 2001--2002 crisis, the Argentine economy transitioned from a low- to a high-inflation regime. At the same time, the number of collective bargaining agreements increased and the minimum wage adjustments became more frequent. We document that this macroeconomic transition was associated with a persistent decrease in the dispersion of real earnings and cyclical movements in higher-order moments of the distribution of earnings innovations. To understand this transition at the micro level, we estimate processes of regular wage adjustments within job spells. As the Argentine economy transitioned from low to high inflation, the monthly frequency of regular wage adjustments almost doubled, while the distribution of changes in regular wages morphed from having a mode close to zero and being positively skewed to having a positive mode and being more symmetric.

Treatment Versus Regime Effects of Carrots and Sticks

Public employment service (PES) agencies and caseworkers (CWs) often have substantial leeway in the design and implementation of active labor market policies for the unemployed, and they use policies to a varying extent. We estimate regime effects which capture how CW and PES affect outcomes through different policy intensities. These operate potentially on all forward-looking job seekers regardless of actual treatment exposure. We consider regime effects for two sets of programs, supporting (“carrots”) and restricting (“sticks”) programs, and contrast regime and treatment effects on unemployment durations, employment, and post-unemployment earnings using register data that contain PES and caseworker identifiers for about 130,000 job spells. Regime effects are important: earnings are higher in a PES if carrot-type programs are used more intensively and stick-type programs are used less intensively. Actual treatment effects on earnings have a similar order of magnitude as regime effects and are positive for participation in carrot-type programs and negative for stick-type treatments. Regime effects are economically substantial. A modest increase in the intended usage of carrots and sticks reduces the total cost of an unemployed individual by up to 7.5%.

Locked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers

We examine how the enforceability of covenants not to compete (CNCs) affects employee mobility and wages of high-tech workers. We expect CNC enforceability to lengthen job spells and constrain mobility, but its impact on wages is ambiguous. Using a matched employer- employee dataset covering the universe of jobs in thirty U.S states, we find that higher CNC enforceability is associated with longer job spells (fewer jobs over time), and a greater chance of leaving the state for technology workers. Consistent with a “lock-in” effect of CNCs, we find persistent wage-suppressing effects that last throughout a worker’s job and employment history.

Firms, Jobs, and Gender Disparities in Top Incomes: Evidence from Brazil

This paper studies the gender disparities among top incomes in Brazil during the period 1994-2013 using administrative data on the universe of formal-sector job spells and detailed information on educational attainment, employers, and occupations performed. Over these two decades, differences in pay and participation between genders have narrowed, yet the process has been slow and women are still severely underrepresented, especially within the very top percentiles of the earnings distribution. The following findings highlight the role of firms and occupations in explaining these patterns. At the start of the period, women in the top percentile of the distribution owe a larger fraction of their earnings to working at high-paying firms than do men, while men’s top incomes are in excess of their firms’ average pay. In addition, belonging to the top percentile is initially much more persistent for men than for women. Both of these differences have vanished over time. I also document that the increase in the share in participation of women in top percentiles is primarily a within-firm and within-occupation phenomenon, which suggests that the evolution of cultural and institutional elements deserves further examination. Finally, I study the careers of female and male top earners, finding that the path to the top percentiles of the distribution is quite different across genders: Top-earning women work in larger firms from the start of their careers. Top-earning men earn large earnings premia above what their firm average pays throughout their career, and after their mid-30s switch employers at a higher frequency than women.

Wage stickiness, offshoring and unemployment

This note investigates how the effect of offshoring on unemployment is influenced by the wage setting process. We assume staggered wage contracts in an otherwise standard search and matching model. In this setup, the contract wage depends also on expected future conditions. We show that more flexibility in the wage contracting process induces greater offshoring, a decrease in the worker’s job-finding probability and higher worker’s wage within job spells. Notably, less stickiness leads to a fall in the rents that firms can extract by producing domestically.

Foreign direct investment and wage dispersion: Evidence from French employer-employee data

This article investigates to what extent outward foreign direct investment (FDI) affects domestic wages. Results reveal that multinational companies pay a wage premium to their employees and the wage premium is increasing within the wage distribution. In a second step, we use a fixed effect and match effect model to analyze the effect of outward FDI within job spells. Results suggest that outward FDI raises manager wages by 0.077% and reduces wages for workers performing offshorable tasks by 0.34%. The positive effect of FDI on manager wages is mainly driven by the intensive margin of outward FDI. This result is observed even after controlling for endogenous worker mobility. Finally, we observe that the increase of outward foreign direct investment cause wages to be higher, and this effect is due to both multinational companies paying a wage premium and to changes in the market value of unobservable worker skills.

Labor-Market Adjustment Under Extreme Heat Shocks: Evidence From Brazil

Despite rich evidence on the contemporaneous labor-productivity impact of heat shocks, little is known about what happens to employment over time. This paper provides worker-level evidence on labor-market adjustment margins to extreme heat. Exploiting employer-employee matched data from Brazil, I find that quarterly heat shocks lead to increases in the propensity of manufacturing-worker layoff. I further combine agricultural census and crop calendars to identify the transmission mechanism. Second, consistent with the direct labor productivity channel, the impact is stronger for workers in routine-manual task intensive occupations. Third, tracking individuals across job spells, I provide evidence on heat-related worker reallocation failures.

Employment in Long-Term Care: The Role of Macroeconomic Conditions

Abstract As populations age dramatically in developed economies, understanding the dynamics of employment in long-term care will help to ensure an adequate workforce and increase quality of care. Although downturns in the business cycle are associated with decreases in employment at the aggregate level and across most sectors of the economy, there are several reasons to believe that employment in the health and long-term care sectors increases during recessions. This is the first study of the relationship between changes in macroeconomic conditions and employment duration of direct care workers based upon analysis of detailed, monthly individual-level data. The results suggest that direct care workers have longer employment spells during recessionary periods, a countercyclical effect, but one that is confined to nursing home settings. However, the length of job spells in hospitals appears to be procyclical.

There And Back Again: Women's Marginal Commuting Costs

BackgroundBetter estimates of workers' willingness to pay to reduce commutes can help evaluate transport policy as well as innovations in workplace organisation implemented by firms (such as telecommuting). These measures could facilitate the employment of workers with care responsibilities by reducing commuting cost.
 ObjectivesWe estimate female workers' marginal willingness to pay to reduce commuting distance in Germany in a partial-equilibrium model of job search with non-wage job attributes. We consider heterogeneity by parenthood, regional structure and part-time status of workers and are moreover able to explore the role of housing cost, childcare and intra-household interactions for subsamples of the data.
 Methods and DataWe use national insurance data based on a 10\% sample of the German labour force including daily information on job spells, personal and job characteristics and residential and workplace post codes between 2000 and 2013 (a customised version of the ``Integrated Employment Biographies'' provided by the Institute of Employment Research, IAB). Taking advantage of the longitudinal structure of the data, our analysis uses a stratified Cox model to take better account of unobserved individual heterogeneity than the previous literature has been able to do. We control for housing costs using additional data on rents at the county level.
 FindingsWe find a substantial gender gap in marginal willingness to pay for reduced commuting distance between men and women which is not explained by individual unobserved heterogeneity. When women have their first child, their willingness to pay increases further. Preliminary results suggest that heterogeneity between urban, conurbational and rural areas in Germany plays a minor role in determining women's willingness to pay.
 ConclusionsSubstantial gender and motherhood gaps in implicit commuting cost provide an important link between the household and labour market in understanding gender and job choice, with implications for gender-sensitive labour market policy.

Measuring links between labor monopsony and the gender pay gap in Brazil

This paper focuses on gender differences in job mobility and earnings for workers in Brazil. Monopsony theory suggests a link between the wage elasticity of labor supply and wage penalties. Should one group of workers be less elastic in their supply choices, that group is predicted to earn less than others. To measure wage elasticity, I estimate a hazard model on voluntary job separations using the RAIS, a linked employer-employee dataset that captures formal-sector workers’ job durations over time. Four models are specified and point to significant gender differences. Across the models, male elasticity ranges from 1.638 to 2.175 while female elasticity ranges from 1.22 to 1.502. The female wage penalty predicted by these elasticity differences ranges from 11.4 to 20.5%, compared to an actual gender wage difference of 16.4%. Results of higher male elasticity are robust to the use of a more parsimonious specification, a discrete-time approach, the use of job spell data for a single year, and disaggregation by region. I extend the model through decomposition methods to help clarify the association between earnings, job separations, and elasticity.