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Unemployment Benefits and Unemployment Rates of Low-Skilled and Elder Workers in West Germany: A Search Equilibrium Approach
No full textApproach Author & abstract Download 16 References 1 Citations Related works & more Corrections Author Listed: Launov, Andrey ([email protected]) (University of Kent) Wolff, Joachim ([email protected]) (Institute for Employment Research (IAB), Nuremberg) Klasen, Stephan ([email protected]) (University of Göttingen) Registered: Stephan Klasen Abstract In this paper we investigate whether the extension of the entitlement to unemployment benefits in the mid 80s can explain the increase in the unemployment rates of unskilled and elder workers in western Germany. To answer this question we estimate a version of the Burdett-Mortensen search equilibrium model and analyze how workers’ search behaviour responded to these reforms. We try both nonparametric and fully-parametric estimation methods and identify the cases in which the nonparametric approach cannot be applied. We find that the entitlement reforms are largely responsible for the increase of unemployment among unskilled workers
Unemployment Benefits and Unemployment Rates of Low-Skilled and Elder Workers in West Germany: A Search Equilibrium Approach
No full textApproach Author & abstract Download 16 References 1 Citations Related works & more Corrections Author Listed: Launov, Andrey ([email protected]) (University of Kent) Wolff, Joachim ([email protected]) (Institute for Employment Research (IAB), Nuremberg) Klasen, Stephan ([email protected]) (University of Göttingen) Registered: Stephan Klasen Abstract In this paper we investigate whether the extension of the entitlement to unemployment benefits in the mid 80s can explain the increase in the unemployment rates of unskilled and elder workers in western Germany. To answer this question we estimate a version of the Burdett-Mortensen search equilibrium model and analyze how workers’ search behaviour responded to these reforms. We try both nonparametric and fully-parametric estimation methods and identify the cases in which the nonparametric approach cannot be applied. We find that the entitlement reforms are largely responsible for the increase of unemployment among unskilled workers
Analysis of the determinants of fertility decline in the Czech Republic
No full textIn this paper we study the decline in total fertility rates in the Czech Republic during the transition process. To identify transition-specific features of this decline we use a multiperiod model of birth process and apply it to the family and fertility survey of 1998. In a standard duration analysis setting the model allows for time-dependence of information sets, on which the decision about the next birth is made. It also enables to estimate probabilities of early exit from childbearing. In this work we find that the negative effect of transition on TFR is mostly translated through a sharply increased negative influence of higher education on fertility, and through the apparent lack of adequate childcare facilities
Conditional Poverty Gap
No full textWe propose an easy way of evaluating prospective poverty reduction policies. We assess the response of a poverty gap to the income and inequality effects of a given policy and define the pro-poorness of a policy. The paper contains a series of convenient analytical results useful for the evaluation of a wide variety of policy measures
Conditional Poverty Gap
No full textWe propose an easy way of evaluating prospective poverty reduction policies. We assess the response of a poverty gap to the income and inequality effects of a given policy and define the pro-poorness of a policy. The paper contains a series of convenient analytical results useful for the evaluation of a wide variety of policy measures
High School Dropout and Youth Labour Market outcomes in Sub-Saharan Africa: Evidence from South Africa
Full text linkChapter 2: Youth unemployment and high school dropout: The second chapter of this thesis provides a general description of the nature of high school dropout and youth unemployment in South Africa. This chapter is set as a motivational chapter for subsequent chapters. I defined a high school dropout in the data as an individual who was enrolled in high school at the beginning of the survey but failed to complete the last year of high school education (i.e., grade 12 in South Africa) before terminating their enrolment. A preliminary description of the data shows a high dropout rate of about 50% on the average. Upon estimation, I find that individuals who dropped out of high school have higher continuous spells of unemployment. In addition, I identify the following individuals as those more that are more vulnerable to high school dropout: black students, young students, students with record of poor academic performance, students who live close to school, and students with less educated fathers. On the other hand, factors that are associated with successful transition from school to employment include good academic performance, being white or coloured, age, and having an educated father. Chapter 3: Assessing the Patterns of Self-selection into High School Drop-out and Graduation. The third chapter of my thesis focuses primarily on assessing the patterns of self-selection into high school dropout and high school graduation. Specifically, I adopt a flexible framework that allows me to quantify selection on unobservables between dropouts and graduates and establish to what extent this selection matters. To do this, I write down a flexible discrete-time conditional competing risks model that allows for a general correlated risks across destinations. I treat individual differences that may exist between dropouts and graduates as both observed and unobserved. I then use the structure of my model to estimate a reducedform measure of self-selection into dropout and graduation. As a reduced-form measure of self-selection, I propose to consider the correlation coefficient of the bivariate distribution of unobserved heterogeneity across two possible exit states: high school dropout and high school graduation. I make no parametric assumption about the distribution of unobserved individual heterogeneity. Rather, I used a non-parametric approach, which relies on the data in estimating the distribution of unobserved differences. Results suggest that individuals who choose to drop out of high school are not systematically different from those who complete high school education in terms of unobservables. This runs contrary to typical findings in developed countries, which suggest that high school dropouts are individuals with relatively low ability, low expectations, and a set of negative preferences. Chapter 4: High School Dropout and its Wage Consequences The fourth chapter of my thesis focuses on the wage consequences of dropping out of high school. Specifically, I am interested in the severity and time pattern of the wage disadvantage dropouts face in the labour market, if any. This knowledge is important because lack of information or incomplete information about the worth of a high school diploma in the labour market could influence the decision to drop out of high school. Prior to estimating the wage equation, I check for self-selection both in the decision to drop out of high school and in the decision to participate in the labour market. Results from IV estimations show that OLS estimates are upward biased, even after controlling for measures of ability. Also, I find that dropouts earn less in the first year of labour market experience, and their wages progressively declined in subsequent years. This suggests that high school diploma may act as a signal of productivity, both immediately after graduation and in subsequent years
Essays on Labour Market Effects of Fiscal Policy
No full textThis thesis aims to contribute to the existing literature of fiscal policy with search and matching frictions using Dynamics Stochastic General Equilibrium (DSGE) modeling. This thesis consists of three essays (chapters) and the respective abstracts are as follows:
Title of first chapter is Labour Market Effects of Government Spending. In this chapter, I contributed to the Search and Matching Frictions (SMF) theory by examining the effects of fiscal multiplier shock on output and labour market for the US economy. I estimated US quarterly data and showed that government spending has positive
effect on output, employment, labour force participation, normalized vacancies, job finding probability and labour market tightness and negative effect on unemployment and real wages. This study contributes to the literature of SMF theory by estimating the model after inclusion of total job separation (a. as a combination of quits and layoffs, b. as segregated quits and layoffs) in the model. Positive government spending shock has a positive effect on total job separation and quits and negative effect on layoffs and average wages, which results in dispersion in wage distribution. This dispersion in wage distribution leads to income inequality. I also found that income inequality (gini) responded negatively to government spending shock, whereas P90/10 showed a positive response in short run and negative response in long run.
In the second essay, 'Fiscal Stimulus, On-The-Job-Search and Labor Market Dynamics', I theoretically examined the effects of government spending shock and aggregate productivity shock on the labour market using search and matching frictions. For this purpose, I developed a DSGE model using search and matching frictions and introduced two endogenous job separation margins (i.e., quits and Layoffs). I introduced quits as on-the-job-search with search effort and layoffs as operating cost. Results show that positive government spending shock has a positive effect on wages in good sector and a negative effect on wages in bad sector. Results also show that government spending increases job creation in good sector which leads to increase in job-to-job movements from bad to good sector. Fiscal policy shock has a negative effect on layoffs in bad sector. Using simulation, I calculated average wages by using both types of wages and both types of employment. Results show that initially there is a sharp decrease in average wage and subsequently showed increasing trend indicating wage inequality in labor market which results in movement of workers from bad to good sector.
In the third essay, 'Fiscal Policy with Labor Market Frictions', I investigated the effects of hiring subsidy (subsidy to the cost of posting vacancy) on US labor market in a DSGE model using search and matching frictions with two distinct margins of endogenous job separation i.e., quits through on-the-job-search and layoffs through
operating cost. The results show that hiring subsidy has a positive effect on job creation in both good and bad sectors. Hiring subsidy affects unemployment negatively in good sector and positively in bad sector. Hiring subsidy significantly affects wages in both sectors. All these results show that hiring subsidy has a positive effect on workers' welfare through wages and job creation. Results further show that firm's operating costresponded negatively to the hiring subsidy. Other variables also responded to positive hiring subsidy shock, but the effects are trivial
Structural Estimation of Search Equilibrium Models with Wage Posting
Full text linkThe dissertation deals with various aspects of the estimation of equilibrium search models with wage posting. It addresses estimation form incompletely observed data and explores applicability of parametric and nonparametric methods. Furthermore, the dissertation presents the estimation of a Burdett-Mortensen model extended for multiple skills.Search Equilibrium; Parametric and Nonparametric Estimation
Structural Estimation of Search Equilibrium Models with Wage Posting
Full text linkThe dissertation deals with various aspects of the estimation of equilibrium search models with wage posting. It addresses estimation form incompletely observed data and explores applicability of parametric and nonparametric methods. Furthermore, the dissertation presents the estimation of a Burdett-Mortensen model extended for multiple skills
An Alternative Approach to Testing Dual Labour Market Theory
Full text linkIn this paper we suggest an alternative approach to testing for the dual structure of the labour
market. The novelty of the suggested approach is that rather than considering wage
determination we concentrate on the turnover. To perform the test we suggest using a latent
class count data framework, which allows modelling the turnover in the unobserved primary
and secondary markets in the appropriate way. To illustrate the suggested approach we
apply our methodology to the German labour market data. Our testing procedure finds no
support for the predictions of the dual labour market theory. We also consider the problem of
inconclusiveness of the test for involuntary confinement to the secondary market
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