Periodic Reporting for period 3 - MaMiLabor (Macro- and Microeconomic Analyses of Heterogeneous Labor Market Outcomes)
Berichtszeitraum: 2022-03-01 bis 2023-08-31
This proposal analyzes labor markets from both a macro- and a microeconomic perspective. Its subprojects have the common objective to significantly advance our understanding of heterogeneities in labor market behavior and outcomes.
(i) The first subproject introduces structural change in labor supply – namely the transition from subsistence self-employment to market work, and the decrease in fixed costs of market work - as a key driver of hours worked differences across countries. Structural change in labor supply generates convexity in the employment rate and concavity in hours per worker over the development spectrum, as observed in the data. The subproject establishes that structural change in labor supply is of quantitative importance to explain lower hours worked in richer countries, and matters for the prediction of future hours.
(ii) The Covid epidemic led to unprecedented losses of schooling time worldwide. Based on a structural model, we analyze the expected long-term consequences of the school closures on the human capital, earnings, and ultimately welfare of the affected children. At the core of the model is a human capital production function, which features both parental and governmental inputs in the human capital of children. We find that one year of school closures are associated with life-time earnings losses of around -2%, and welfare losses of around -1% in terms of the consumption equivalent variation. This is the case despite parents reacting optimally to the school closures by increasing their own investment into their children. We document substantial heterogeneity in the effects depending on parental background. We find that extending schooling time in the next two years would reduce the losses and is a roughly budget neutral policy measure.
(iii) The German short school years in the 1960s were a historical episode in which schooling time was reduced for a cohort of children. We empirically analyze the long-term consequences of this episode on the affected children.
(iv) The fall of Communism in Eastern Europe changed labor markets drastically. One subproject analyzes the developments of labor market outcomes in Eastern Europe after the Fall of Communism, with a particular attention towards the gender dimension.
(v) An increasing female share in an occupation is associated with lower relative wages in this occupation. We analyze whether there is a causal effect of the female share on wages exploiting the natural experiment of German reunification.
(vi) Maternity leave policies are typically considered to be not only family-friendly, but also more specifically female-friendly. But are women as a group really benefitting from these policies, or are there potential unintended consequences? Since the take-up of maternal leave leads to indirect costs for employers, maternity leave policies could lower the incentives of employers to hire or promote women of child-bearing age. We investigate empirically whether there is evidence for these indirect effects, and then use a model to analyze optimal policies.
(ii) The Covid epidemic led to unprecedented losses of schooling time worldwide. Based on a structural model, we analyze the expected long-term consequences of the school closures on the human capital, earnings, and ultimately welfare of the affected children. At the core of the model is a human capital production function, which features both parental and governmental inputs in the human capital of children. We find that one year of school closures are associated with life-time earnings losses of around -2%, and welfare losses of around -1% in terms of the consumption equivalent variation. This is the case despite parents reacting optimally to the school closures by increasing their own investment into their children. We document substantial heterogeneity in the effects depending on parental background. We find that extending schooling time in the next two years would reduce the losses and is a roughly budget neutral policy measure.
(iii) The German short school years in the 1960s were a historical episode in which schooling time was reduced for a cohort of children. We empirically analyze the long-term consequences of this episode on the affected children.
(iv) The fall of Communism in Eastern Europe changed labor markets drastically. One subproject analyzes the developments of labor market outcomes in Eastern Europe after the Fall of Communism, with a particular attention towards the gender dimension.
(v) An increasing female share in an occupation is associated with lower relative wages in this occupation. We analyze whether there is a causal effect of the female share on wages exploiting the natural experiment of German reunification.
(vi) Maternity leave policies are typically considered to be not only family-friendly, but also more specifically female-friendly. But are women as a group really benefitting from these policies, or are there potential unintended consequences? Since the take-up of maternal leave leads to indirect costs for employers, maternity leave policies could lower the incentives of employers to hire or promote women of child-bearing age. We investigate empirically whether there is evidence for these indirect effects, and then use a model to analyze optimal policies.