The Use of New Technology and Occupational Mobility: An Event History Analysis of the Swiss Labor Market

The investigation of the consequences of new technologies has a long standing tradition within economics. Particularly, labor economists are wondering how the introduction of new technologies, e.g. Personal Computers, have shaped labor markets. Former research has concentrated on the question of whether on-the-job use of PCs creates a wage bonus for employees. In this paper, we investigate whether the use of PCs increases employees’ probability of an upward shift in their employment status and whether it reduces the risk of involuntary labor market exits. We do so by applying event history analysis to the Swiss Labor Market Survey, a random sample of 3028 respondents, and by analyzing a Panel sub-sample of 650 respondents conducted recently in Switzerland. Our results show that on-the-job use of PCs was beneficial for employees in the past by increasing their probability of an upward shift by approximately 50%. The analysis also suggests that PC use reduces the risk and duration of unemployment. However, these latter results fail to reach statistical significance.

Schools and Housing Markets: An Examination of School Segregation and Performance in Connecticut

This paper examines the relationship between house price levels, school performance, and the racial and ethnic composition of Connecticut school districts between 1995 and 2000. A panel of Connecticut school districts over both time and labor market areas is used to estimate a simultaneous equations model describing the determinants of these variables. Specifically, school district changes in price level, school performance, and racial and ethnic compositions depend upon each other, labor market wide changes in these variables, and the deviation of each school district from the overall metropolitan area. The specification is based on the differencing of dependent variables, as opposed to the use of level or fixed effects models and lagging level variables beyond the period over which change is considered; as a result the model is robust to persistence in the sample. Identification of the simultaneous system arises from the presence of multiple labor market areas in the sample, and the assumption that labor market changes in a variable due not directly influence the allocation of households across towns within a labor market area. We find that towns in labor markets that experience an inflow of minority households have greater increases in percent minority if those towns already ahve a substantial minoritypopulation. We find evidence that this sorting proces is reflected in housing price changes in the low priced segment of the housing market, not in the middle and upper segments.

Do Labor Market Imperfections Increase Trade Protection? A Theoretical Investigation

Labor market imperfections are commonly believed to be a major reason for imposing trade impediments. In this paper, I introduce labor market rigidities that are prevalent in continental European countries into the well-known protection for sale model proposed by Grossman and Helpman (1994). I show that contrary to commonly held views, imperfections in the labor market do not necessarily increase equilibrium trade protection. A testable equilibrium trade protection equation is also derived. The findings in this paper are hence particularly relevant for empirical tests of trade policy determinants in economies with more regulated labor markets.

Essays on Fiscal Policy, Monetary Policy and Currency Unions: Exploring the Role of Informality and Labor Mobility

Thesis (Ph.D.)--University of Washington, 2016-06

Essays on Job Search and Labor Market Dynamics

This dissertation consists of three separate essays on job search and labor market dynamics. In the first essay, “The Impact of Labor Market Conditions on Job Creation: Evidence from Firm Level Data”, I study how much changes in labor market conditions reduce employment fluctuations over the business cycle. Changes in labor market conditions make hiring more expensive during expansions and cheaper during recessions, creating counter-cyclical incentives for job creation. I estimate firm level elasticities of labor demand with respect to changes in labor market conditions, considering two margins: changes in labor market tightness and changes in wages. Using employer-employee matched data from Brazil, I find that all firms are more sensitive to changes in wages rather than labor market tightness, and there is substantial heterogeneity in labor demand elasticity across regions. Based on these results, I demonstrate that changes in labor market conditions reduce the variance of employment growth over the business cycle by 20% in a median region, and this effect is equally driven by changes along each margin. Moreover, I show that the magnitude of the effect of labor market conditions on employment growth can be significantly affected by economic policy. In particular, I document that the rapid growth of the national minimum wages in Brazil in 1997-2010 amplified the impact of the change in labor market conditions during local expansions and diminished this impact during local recessions.

In the second essay, “A Framework for Estimating Persistence of Local Labor

Demand Shocks”, I propose a decomposition which allows me to study the persistence of local labor demand shocks. Persistence of labor demand shocks varies across industries, and the incidence of shocks in a region depends on the regional industrial composition. As a result, less diverse regions are more likely to experience deeper shocks, but not necessarily more long lasting shocks. Building on this idea, I propose a decomposition of local labor demand shocks into idiosyncratic location shocks and nationwide industry shocks and estimate the variance and the persistence of these shocks using the Quarterly Census of Employment and Wages (QCEW) in 1990-2013.

In the third essay, “Conditional Choice Probability Estimation of Continuous- Time Job Search Models”, co-authored with Peter Arcidiacono and Arnaud Maurel, we propose a novel, computationally feasible method of estimating non-stationary job search models. Non-stationary job search models arise in many applications, where policy change can be anticipated by the workers. The most prominent example of such policy is the expiration of unemployment benefits. However, estimating these models still poses a considerable computational challenge, because of the need to solve a differential equation numerically at each step of the optimization routine. We overcome this challenge by adopting conditional choice probability methods, widely used in dynamic discrete choice literature, to job search models and show how the hazard rate out of unemployment and the distribution of the accepted wages, which can be estimated in many datasets, can be used to infer the value of unemployment. We demonstrate how to apply our method by analyzing the effect of the unemployment benefit expiration on duration of unemployment using the data from the Survey of Income and Program Participation (SIPP) in 1996-2007.

The negotiability of labor rights: an economic analysis

This paper shows the results of the applied research titled "Negotiating labor rights: an economic analysis", which analyzes the legal regulation on individual labor rights negotiation in Colombia from the viewpoint of basic economic principles (Economic Analysis of Law), in order to identify the inefficiencies caused by the prohibition of this type of negotiations -- After introducing the discipline of the Economic Analysis of Law, this article specifically analyzes the main legal principles that support the prohibition of individual negotiations which summed to the economic characteristics of the agents (workers), produce inefficiency in the labor markets

A Cointegration Approach to Topics in Empirical Macroeconomics (summary section only)

Mikael Juselius’ doctoral dissertation covers a range of significant issues in modern macroeconomics by empirically testing a number of important theoretical hypotheses. The first essay presents indirect evidence within the framework of the cointegrated VAR model on the elasticity of substitution between capital and labor by using Finnish manufacturing data. Instead of estimating the elasticity of substitution by using the first order conditions, he develops a new approach that utilizes a CES production function in a model with a 3-stage decision process: investment in the long run, wage bargaining in the medium run and price and employment decisions in the short run. He estimates the elasticity of substitution to be below one. The second essay tests the restrictions implied by the core equations of the New Keynesian Model (NKM) in a vector autoregressive model (VAR) by using both Euro area and U.S. data. Both the new Keynesian Phillips curve and the aggregate demand curve are estimated and tested. The restrictions implied by the core equations of the NKM are rejected on both U.S. and Euro area data. These results are important for further research. The third essay is methodologically similar to essay 2, but it concentrates on Finnish macro data by adopting a theoretical framework of an open economy. Juselius’ results suggests that the open economy NKM framework is too stylized to provide an adequate explanation for Finnish inflation. The final essay provides a macroeconometric model of Finnish inflation and associated explanatory variables and it estimates the relative importance of different inflation theories. His main finding is that Finnish inflation is primarily determined by excess demand in the product market and by changes in the long-term interest rate. This study is part of the research agenda carried out by the Research Unit of Economic Structure and Growth (RUESG). The aim of RUESG it to conduct theoretical and empirical research with respect to important issues in industrial economics, real option theory, game theory, organization theory, theory of financial systems as well as to study problems in labor markets, macroeconomics, natural resources, taxation and time series econometrics. RUESG was established at the beginning of 1995 and is one of the National Centers of Excellence in research selected by the Academy of Finland. It is financed jointly by the Academy of Finland, the University of Helsinki, the Yrjö Jahnsson Foundation, Bank of Finland and the Nokia Group. This support is gratefully acknowledged.

Price Inflation, Unemployment and Devaluations: The Finnish Experience of the 1990s

In this paper I provide some empirical answers to important questions such as the determinants of price inflation and the role of inflation polices. The results indicate that monetary policy is surprisingly impotent as a device for controlling inflation and there is little support that it influences the real variables. The low inflation after the Finnish devaluations in the beginning of 90s is foremost due to a previous imbalance in the labor markets and depressed aggregate demand.

La pobreza laboral

11p. -- [Nota: Variante del título de la publicación: Boletín electrónico de Hegoa]

Sector-Specific Training and Mobility in Germany

This article studies mobility patterns of German workers in light of a model of sector-specific human capital. Furthermore, I employ and describe little-used data on continuous on-the-job training occurring after apprenticeships. Results are presented describing the incidence and duration of continuous training. Continuous training is quite common, despite the high incidence of apprenticeships which precedes this part of a worker's career. Most previous studies have only distinguished between firm-specific and general human capital, usually concluding that training was general. Inconsistent with those conclusions, I show that German men are more likely to find a job within the same sector if they have received continuous training in that sector. These results are similar to those obtained for young U.S. workers, and suggest that sector-specific capital is an important feature of very different labor markets. In addition, they suggest that the observed effect of training on mobility is sensible to the state of the business cycle, indicating a more complex interaction between supply and demand that most theoretical models allow for.

Von Neumann-Morgenstern Stable Sets in Matching Problems

The following properties of the core of a one well-known: (i) the core is non-empty; (ii) the core is a lattice; and (iii) the set of unmatched agents is identical for any two matchings belonging to the core. The literature on two-sided matching focuses almost exclusively on the core and studies extensively its properties. Our main result is the following characterization of (von Neumann-Morgenstern) stable sets in one-to-one matching problem only if it is a maximal set satisfying the following properties : (a) the core is a subset of the set; (b) the set is a lattice; (c) the set of unmatched agents is identical for any two matchings belonging to the set. Furthermore, a set is a stable set if it is the unique maximal set satisfying properties (a), (b) and (c). We also show that our main result does not extend from one-to-one matching problems to many-to-one matching problems.