62 research outputs found
Repeated Job Quits: Stepping stones or learning about quality?
Abstract
Increasing labor mobility is high on the political agenda because of its supposedly positive
eects on labor market functioning. However, little attention has been paid to information
imperfections, and to what extent they limit potential eciency gains of labor mobility.
When the quality of a new job oer is known ex ante, job quits serve as a stepping
stone to better jobs. Yet, if job quality is only observed ex post, job quits may lead to
worse matches. This paper argues that actual job quit behavior is characterized by a
mixture of both, and investigates the relative empirical content of both extremes in quit
decisions. A variance decomposition shows that for nearly 70% of job quits job quality was
observed ex-ante; the remaining 30% was learned ex post. Hence, stimulating job mobility
mostly improves labor market outcomes, though governments may aim to further reduce
information imperfections in order to maximize the ecacy of labor policies
Intergenerational Spillovers in Disability Insurance
Using a 1993 Dutch policy reform and a regression discontinuity design, we find children of parents
whose disability insurance (DI) eligibility was reduced are 11% less likely to participate in DI themselves,
do not alter their use of other government programs, and earn 2% more as adults. The reduced transfers
and increased taxes of children account for 40% of the fiscal savings relative to parents in present
discounted value terms. Moreover, children of treated parents complete more schooling, have a lower
probability of serious criminal arrests and incarceration, and take fewer mental health drugs as adults
Intergenerational spillovers in disability insurance
Does participation in a social assistance program by parents have spillovers
on their children's own participation, future labor market attachment, and human
capital investments? While intergenerational concerns have figured prominently in
policy debates for decades, causal evidence is scarce due to nonrandom participation
and data limitations. In this paper we exploit a 1993 policy reform in the Netherlands
which tightened disability insurance (DI) criteria for existing claimants, and use rich
panel data to link parents to children's long-run outcomes. The key to our regression
discontinuity design is that the reform applied to younger cohorts, while older cohorts
were exempted from the new rules. We find that children of parents who were
pushed out of DI or had their benefits reduced are 11% less likely to participate in
DI themselves, do not alter their use of other government safety net programs, and
earn 2% more in the labor market as adults. The combination of reduced government
transfers and increased tax revenue results in a fiscal gain of 5,900 euros per treated
parent due to child spillovers by 2014. Moreover, children of treated parents complete
an extra 0.12 years of schooling on average, an investment consistent with an
anticipated future with less reliance on DI. Our findings have important implications
for the evaluation of this and other policy reforms: ignoring parent-to-child spillovers
understates the long-run cost savings of the Dutch reform by between 21 and 40% in
present discounted value terms
Nederland verloor tijdens de vorige economische crisis koppositie inkomensmobiliteit
Recent onderzoek laat zien dat de inkomensmobiliteit in Nederland de laatste jaren is gedaald. Kinderen overtreffen het inkomen van hun ouders minder vaak. Maar hoe verhoudt de Nederlandse situatie zich tot andere Europese landen en de VS
Earnings responses to disability insurance stringency
Accurate assessment of earnings capacity is critical to the efficient operation of disability insurance (DI) programs.
We use administrative data on the universe of Dutch DI recipients to estimate employment and earnings responses
to reassessment of their earnings capacity under more stringent rules. We estimate that reassessment of recipients
aged 30–44 removed 17 percent from the program and reduced benefit income by 20 percent, on average. In
response, employment increased by 6.7 percentage points and earnings rose by 18 percent. Recipients were able
to increase earnings by € 636 for every € 1000 reduction in DI benefit. This earnings response was strongest from
those with more subjectively defined disabilities and a shorter claim duration, as well as younger and female
recipients
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