Re-employment Probabilities Research Articles

Temporary wage subsidies and post-COVID re-employment in Morocco: a regression discontinuity approach

ABSTRACT This paper aims to evaluate the causal effect of a temporary wage subsidy scheme implemented in Morocco during the COVID-19 crisis. It exploits a discontinuity in the eligibility condition of this subsidy, which is the number of days reported before job loss, to identify its causal effect on beneficiaries’ unemployment duration and re-employment probability by using the regression discontinuity method based on administrative data from the National Social Security Fund (CNSS). Our findings indicate that this subsidy has reduced the duration of unemployment and improved the probability of re-employment of beneficiary employees. However, they also show that these positive effects seem to have been less pronounced among those most excluded from the labour market, namely women and young people.

Self-affirmation increases reemployment success for the unemployed

Losing a job is one of life's most stressful events. Furthermore, maladaptive reactions to unemployment can trap people in a vicious cycle that derails their reemployment efforts. The current research tested whether a brief values-based self-affirmation intervention increases the odds of reemployment after a job loss and during unemployment, which presumably breaks this vicious cycle. Two field experiments, including one with a governmental employment agency, found that a 15-min self-affirmation exercise-i.e., reflecting on one's most important values-increased key employment-related outcomes after 4 wk, including the probability and speed of reemployment and the number of job offers. Because the ordeal of job loss and the probability of reemployment may be particularly challenging for individuals above the age of 50 y, we also explored whether the intervention was equally effective for those above and below 50 y of age. Demonstrating the generality of this effect, the efficacy of the intervention did not differ between individuals below and above the age of 50, and it was also effective for both recently unemployed and chronically unemployed individuals. Because self-affirmations have more typically been tested in educational contexts, the current research demonstrates the wide-ranging value of this intervention. By diminishing the vicious cycle of unemployment, the present studies show how a simple self-affirmation intervention can help individuals succeed in the labor market.

Reemployment premium effect of furlough programs: evaluating Spain’s scheme during the COVID-19 crisis

This paper presents an average treatment effect analysis of Spain’s furlough program during the onset of the COVID-19 pandemic. Using 2020 labour force quarterly microdata, we construct a counterfactual made of comparable nonfurloughed individuals who lost their jobs and apply propensity score matching based on their pretreatment characteristics. Our findings show that the probability of being re-employed in the next quarter significantly increased for the treated (furlough granted group). These results appear robust across models, after testing a wide range of matching specifications that reveal a reemployment probability premium of near 30 percentage points in the group of workers who had been furloughed for a single quarter. Nevertheless, a different time arrangement affected the magnitude of the effect, suggesting that it may decrease with the furlough duration. Thus, an analogous analysis for a longer (two quarter) scheme estimated a still positive but smaller effect, approximately 12 percentage points. Although this finding might alert against long lasting schemes under persistent recessions, this policy still stands as a useful strategy to face essentially transitory adverse shocks.

Structural change in the ICT sector: Where have former Nokia employees ended up?

This study empirically examines the reemployment of employees displaced from a high-tech firm. Since 2008, the plummeting market share of Nokia, the world’s largest mobile phone manufacturer at the time, has resulted in massive layoffs and the downsizing of its workforce. We analyze the labor market status of more than twenty thousand former Nokia employees in Finland who left the company during 2009-2014. Using a unique matched employee-employer dataset, we identify the key factors associated with the probability of reemployment. Our findings show that the majority of former Nokia employees were successful in becoming reemployed. According to the latest available data from 2017, more than three-quarters of these employees found new jobs. The remaining share includes people who retired or returned to study. Reemployment was often found in the service sector. Employees with higher education levels and those who had held senior positions at Nokia were more successful in finding new jobs than others. Some regional differences in reemployment were also found.

Double standard policy: why are immigrants still at the tail of welfare?

PurposeThis research considers the question of whether unemployment insurance benefit and labour-market activation measures induce the likelihood of re-employment and whether this effect differs for natives and immigrants.Design/methodology/approachStatistical processing was carried out on the European Union Statistics on Income and Living Conditions cross-sectional data for Finland for the period 2004 to 2016. Propensity score matching analysis was undertaken to investigate whether a treatment effect (unemployment insurance benefit) was a predictor of success in increasing re-employment rates, when controlling for participation in labour-market policy measures, subsidized employment and personal background characteristics.FindingsWe find that the probability of re-employment for recipients of unemployment benefits is half that of non-recipients of benefits. Due to the influence of subsidized employment, subsequent employment income decreases for recipients of unemployment benefits and especially for immigrants. Finally, we find that due to the influence of subsidized employment, time spent as a full-time employee decreases for recipients of unemployment benefits and especially for immigrants.Originality/valueAlthough our results indicate that benefit determination has a marked impact on re-employment probabilities, unobserved variables turn to play a significant role in selection of labour-market activation measures. In this respect, we find the treatment assignment to activation policy measures depends on influence of unobserved variables and this effect is more important for the re-employment rates of natives than it is for immigrants.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2019-0668.

Misaligned Meaning: Couples’ Work-Orientation Incongruence and Their Work Outcomes

This research investigates the relationship between couples’ work-orientation incongruence—the degree to which romantic partners view the meaning of their own work differently—and their ability to succeed in making job transitions and experiencing satisfaction with the jobs they hold. We use a social information-processing approach to develop arguments that romantic partners serve as powerful social referents in the domain of work. By cueing social information regarding the salience and value of different aspects of work, partners with incongruent work orientations can complicate each other’s evaluation of their own jobs and the jobs they seek. In a longitudinal study of couples in which one partner is searching for work, we find that greater incongruence in couples’ calling orientations toward work relates to lower reemployment probability, a relationship that is mediated by an increased feeling of uncertainty about the future experienced by job seekers in such couples. Calling-orientation incongruence also relates to lower job satisfaction for employed partners over time. We contribute to the burgeoning literature on the role romantic partners play in shaping work outcomes by examining the effect of romantic partners’ perception of the meaning of work, offering empirical evidence of the ways in which romantic partners influence key work and organizational outcomes. Our research also contributes to the meaning of work literature by demonstrating how work-orientation incongruence at the dyadic level matters for individual work attitudes and success in making job transitions.

Evaluation of the Effectiveness of Employment Programme on Young Unemployed People

Youth unemployment is of paramount concern for the European Union. Young people are facing potentially slow and difficult transitions into stable jobs. What optimally supports young people on the labour market poses a challenging question for economic policy makers. Active labour market policies can be beneficial to young unemployed people. The aim of active labour market policy is to improve employability of the unemployed. The consequences of an overly generous welfare state can be a reduction in motivation to work. The effectiveness of employment programmes is therefore a crucial step in the process. This paper aims to estimate the treatment effect of subsidized employment programmes on young Dutch unemployed people using difference in differences propensity score matching. We test whether the effects of subsidized employment programmes for young Dutch unemployed people are positive and strong in both the short and long term on the probability of re-employment and on the probability of participation in the regular educational system in comparison with the outcome produced in the event that an individual would continue seeking employment as an unemployed person. The probability of re-employment in short-term circumstances is positive, but small. Whereas with long-term examples (two years after the programme start) the probability is negative. Alternatively, the probability of participation in regular educational systems is positive in the short-term as well as in the long-term, but evidently decreases in the long-term. Welfare reforms undertaken in the Netherlands are directed towards enhancing efficiency. The role of social partners in social security administrations is reduced and the reforms are intended to promote reintegration of people who are out of work. There is a general agreement that the Netherlands is going in the right direction by giving priority to work and study over benefits, as it has become evident that generous social benefits make employment policies inefficient.

Later retirement and the labor market re-integration of elderly unemployed workers

This paper studies the impact of raising the eligibility age of early retirement on the re-integration into the labor market of elderly unemployed workers. I exploit two Austrian pension reforms increasing the early retirement age step-wise for different quarter-of-birth cohorts. Empirical results based on Austrian administrative data reveal a substantial gender difference in how unemployed workers are affected by the policy change. While unemployed women only benefit little with shorter unemployment duration, modest higher re-employment probability as well as labor income after unemployment, unemployed men benefit in several aspects: although unemployment duration remains unaffected, re-employment chances, labor income and participation in active labor market policies significantly increase. Elderly unemployed workers closer to their early retirement age are systematically assigned to programs increasing their job application and job search skills, while workers more than five years away from their early retirement age are more likely to participate in programs increasing their skills. The gender difference may be explained by the nature of the pension reforms. From a policy perspective, these results suggest that increasing the early retirement age is not only a feasible way to improve the financial sustainability of public pension systems but also improves the re-integration of elderly unemployed male workers.

Routine-Biased technical change: Individual-Level evidence from a plant closure

Routine-biased technical change (RBTC) argues that digitisation decreases job opportunities for workers with routine task competencies, but increases job opportunities for workers with nonroutine task competencies. While there is considerable evidence for RBTC at the aggregate level, its effects on individual workers are yet to be fully understood. Therefore, this paper uses unique survey data of workers at a large car plant who became unemployed when the plant closed. In line with the RBTC hypothesis, we find that re-employment probabilities 1,5 years after the plant’s closure are substantially higher for workers with nonroutine task competencies and with digital skills. Moreover, for the subset of individuals who were re-employed 1,5 years after the plant’s closure, we find that the nonroutine content of job tasks is higher, wages are lower, and contracts are less permanent. Finally, our paper shows that a crude age-based early retirement policy that was negotiated as part of the plant’s closure and that ignores workers’ skills, results in significant foregone employment of older workers with nonroutine task competencies.

Labor market networks and recovery from mass layoffs: Evidence from the Great Recession period

We measure the changing efficacy of neighborhood-based labor market networks, across the business cycle, in helping displaced workers become re-employed, focusing on the periods before, during, and just after the Great Recession. Networks can only be effective when hiring is occurring, and hiring varied greatly between 2005 and 2012, the period we study. We therefore focus on a measure of the strength of the labor market networks that includes not only the number of employed neighbors of a laid off worker, but also the gross hiring rate at that person's neighbors’ workplaces. Our evidence indicates that local labor market networks increase re-employment following mass layoffs, and in particular, that networks serve to markedly increase the probability of re-employment specifically at neighbors’ employers. This is especially true for low-earning workers. Moreover, although hiring and employment rates decreased during the Great Recession period, the productivity of labor market networks in helping to secure re-employment for laid off workers was remarkably stable during our sample period.

Hedging recessions

Traditional life-cycle models conclude that individuals should be fully invested in stocks when young—in stark contrast to observed stock holdings—and then gradually replace stocks with bonds as retirement is approaching. We show that a carefully specified and calibrated model of unemployment risk reduces the early-life stock holdings dramatically. The reduction is driven by the decline in current and expected future income caused by unemployment, the relatively high unemployment risk of young adults, and the business cycle variations in un- and reemployment probabilities that tend to deteriorate exactly when stocks perform poorly.

Successful return to work during labor market liberalization: the case of Italian injured workers

We investigate the long term employment outcomes of Italian injured workers over a time period when the country introduced policy reforms that increased labor market flexibility but reduced job security. Using an employer-employee database matched with injury data, we observe that both before and after the reforms almost one-fourth of injured workers were no longer employed 3 years after their “first” return to work. We note a slight decrease in this share after the reforms (from 24 to 22%) while we find a decline in workers’ job security as measured by their probability of re-employment in permanent contracts. We use multinomial logit estimates to study how liberalization reforms were associated with a changing role of individual, firm, and injury characteristics in shaping long-term employment outcomes of injured workers after their recovery period. Heterogeneity analyses show that low wage employees, women, immigrants, and individuals who suffered a more severe injury were penalized more. Pre-injury individual characteristics became stronger predictors of long-term employment than firms’ characteristics. In particular, we find that the advantage provided by working in larger firms was significant before the liberalization reforms, but disappeared afterward, while the advantage provided by human capital became more relevant after the liberalization.

Evaluation of Language Training Programs in Luxembourg using Principal Stratification

In a world increasingly globalized, multiple language skills can create more employment opportunities. Several countries include language training programs in active labor market programs for the unemployed. We analyze the effects of a language training program on the re-employment probability and hourly wages of the unemployed simultaneously, using high-quality administrative data from Luxembourg. We address selection into training by exploiting the rich administrative information available, and account for the complication that wages are truncated by unemployment by adopting a principal stratification framework. Estimation is undertaken with a mixture model likelihood-based approach.To improve inference, we use the individual's hours worked as a secondary outcome and a stochastic dominance assumption. These two features considerably ameliorate the multimodality problem commonly encountered in mixture models. We also conduct sensitivity analysis to assess the unconfoundedness assumption employed. Our results strongly suggest a positive effect (of up to 12.7 percent) of the language training programs on the re-employment probability, but no effects on wages for those who are observed employed regardless of training participation. It appears that, in the context of an open and multilingual economy, language training improve employability but the language skills acquired are not sufficiently rewarded to be reflected in higher wages.

What are the treatment effects of a work-first participation programme on young unemployed people in the Netherlands?

This paper evaluates the effects of the employment programme on young unemployed people in the Netherlands. The effectiveness of the programme is measured by probability of both re-employment and participation within the regular educational system. This evaluation is made in comparison to that of an individual who would continue seeking employment as an openly unemployed person. The effects of the programme are evaluated a year/two years following the start of the programme. We apply a propensity score matching method. The identification of an average treatment effect is based on the conditional independence assumption. The effects on re-employment probability and the probability of participation in the regular educational system are statistically negative, applicable to both long and short-term scenarios.

Does life satisfaction predict reemployment? Evidence form German panel data

While life satisfaction has been identified as an important predictor of occupational success, the question of whether it might contribute to reemployment success among unemployed individuals has received much less research attention. Contrasting three theoretical perspectives (motivation theories, positive psychology, and the optimum level of well-being literature), we explored whether life satisfaction has a negative, a positive, or a non-monotonic effect on the likelihood of reemployment. We used large-scale panel data from Germany that gave us the possibility to monitor unemployed individuals’ life satisfaction and labor market outcomes for 10 years. Results of a multi-level discrete-time hazard analysis supported the optimum level of well-being perspective providing evidence for an inverted-U-shaped association between life satisfaction and reemployment probability. Moderate levels of life satisfaction were associated with a stronger likelihood of reemployment than lower or higher levels of life satisfaction. This effect remained robust against controlling for individuals’ socio-economic characteristics, labor market experience and the Big Five personality traits.

Evaluation of Language Training Programs in Luxembourg Using Principal Stratification

In a world increasingly globalized, multiple language skills can create more employment opportunities. Several countries include language training programs in active labor market programs for the unemployed. We analyze the effects of a language training program on the re-employment probability and hourly wages of the unemployed simultaneously, using highquality administrative data from Luxembourg. We address selection into training by exploiting the rich administrative information available, and account for the complication that wages are “truncated” by unemployment by adopting a principal stratification framework. Estimation is undertaken with a mixture model likelihood-based approach. To improve inference, we use the individual’s hours worked as a secondary outcome and a stochastic dominance assumption. These two features considerably ameliorate the multimodality problem commonly encountered in mixture models. We also conduct sensitivity analysis to assess the unconfoundedness assumption employed. Our results strongly suggest a positive effect (of up to 12.7 percent) of the language training programs on the re-employment probability, but no effects on wages for those who are observed employed regardless of training participation.

Human Capital and Reemployment Success: The Role of Cognitive Abilities and Personality.

Involuntary periods of unemployment represent major negative experiences for many individuals. Therefore, it is important to identify factors determining the speed job seekers are able to find new employment. The present study focused on cognitive and non-cognitive abilities of job seekers that determine their reemployment success. A sample of German adults (N = 1366) reported on their employment histories over the course of six years and provided measures on their fluid and crystallized intelligence, mathematical and reading competence, and the Big Five of personality. Proportional hazard regression analyses modeled the conditional probability of finding a new job at a given time dependent on the cognitive and personality scores. The results showed that fluid and crystallized intelligence as well as reading competence increased the probability of reemployment. Moreover, emotionally stable job seekers had higher odds of finding new employment. Other personality traits of the Big Five were less relevant for reemployment success. Finally, crystallized intelligence and emotional stability exhibited unique predictive power after controlling for the other traits and showed incremental effects with regard to age, education, and job type. These findings highlight that stable individual differences have a systematic, albeit rather small, effect on unemployment durations.

Workplace training programs

PurposeThe purpose of this paper is to analyse the effect of an Italian training program on the re-employment probability of young unemployed workers. The program consists exclusively of workplace training and is coordinated by employment centers, even if it is fully implemented by firms.Design/methodology/approachThe authors develop a discrete duration analysis. In particular, the authors compare the re-employment process of individuals that just finished their workplace training program with individuals that just ended their job. The authors specifically take into account the issue of self-selection adopting the propensity score matching estimation.FindingsThe results suggest that this workplace training program improves only the immediate re-employability of trained workers, failing to bestow them with durable human capital improvements. These results appear to be robust to spurious duration dependence and to self-selection. The analysis focuses on unobserved heterogeneity and, accounting for it, the authors show that the training implementation is useful to divide “good” trainees (in terms of unobserved heterogeneity) from “bad” ones.Social implicationsTherefore, the authors suggest that firms are exploiting training as a screening device and that the implemented program is successful in easing the connection between workers and firms, but it fails to provide a durable improvement in skills and in re-employment prospects.Originality/valueThe evaluation of this program is important because it focus specifically on the workplace component of training, whereas previous analyses focused on generic training, because it evaluates a program targeting youth unemployment which is one the most urgent economic issues and because it helps in understanding the actual processes adopted by firms when implementing workplace training.

The Effects of UI Benefits on Unemployment and Subsequent Outcomes: Evidence from a Kinked Benefit Rule

This paper analyzes the effects of unemployment insurance (UI) benefits on unemployment exits and subsequent labor market outcomes. We exploit a piecewise linear relationship between the previous wage and UI benefits in Finland to identify the causal effects of the benefit level by using a regression kink design. According to our findings, higher benefits lengthen nonemployment spells and decrease time spent in part-time unemployment, and thus result in more full-time unemployment. Also the re-employment probability and post-unemployment wage are negatively affected. The results for the duration of the first post-unemployment job are not conclusive, but in total both employment and earnings in the two years following the beginning of the unemployment spell decrease with higher benefits.

Coworker networks in the labour market

This paper studies the effect of coworker-based networks on individual labour market outcomes. I analyse how the provision of labour market relevant information by former coworkers affects the employment probabilities and, if hired, the wages of male workers who have previously become unemployed as the result of an establishment closure. To identify the causal effect of an individual worker's network on labour market outcomes, I exploit exogenous variation in the strength of these networks that is due to the occurrence of mass-layoffs in the establishments of former coworkers. The empirical analysis is based on administrative data that comprise the universe of workers employed in Germany between 1980 and 2001. The results suggest a strong positive effect of a higher employment rate in a worker's network of former coworkers on his re-employment probability after displacement: a 10 percentage point increase in the prevailing employment rate in the network increases the re-employment probability by 7.5 percentage points. In contrast, there is no evidence of a statistically significant effect on wages.