The Heterogeneous Earnings Impact of Job Loss Across Workers, Establishments, and Markets

Using generalized random forests and rich Swedish administrative data, we show that the earnings effects of job displacement due to establishment closures are extremely heterogeneous across workers, establishments, and markets. The decile of workers with the largest predicted effects lose 50 percent of annual earnings the year after displacement and accumulated losses amount to 250 percent during a decade. In contrast, workers in the least affected decile experience only marginal losses of less than 6 percent in the year after displacement. Workers in the most affected decile tend to be lower paid workers on negative earnings trajectories. This implies that the economic value of (lost) jobs is greatest for workers with low earnings. The reason is that many of these workers fail to find new employment after displacement. Overall, the effects are heterogeneous both within and across establishments and combinations of important individual characteristics such as age and schooling. Adverse market conditions matter the most for already vulnerable workers. The most effective way to target workers with large effects, without using a complex model, is by focusing on older workers in routine-task intensive job

IZA COVID-19 crisis response monitoring: short-run labor market impacts of COVID-19, initial policy measures and beyond

The unprecedented COVID-19 pandemic has a severe impact on societies, economies and labor markets. However, not all countries, socio-economic groups and sectors are equally affected. For example, occupational groups working in sectors where value chains have been disrupted and lockdowns have had direct impacts are affected more heavily, while the slowdown of hiring activities mostly affects young labor market entrants. As a result, there has been a steep increase in unemployment rates in many countries, but not everywhere to the same extent. Part of this difference can be related to the different role and extent of short-time work schemes, which is now being used more widely than during the Great Recession. Some countries have created or expanded these schemes, making coverage less exclusive and benefits more generous, at least temporarily. But short-time work is certainly not a panacea to “flatten the unemployment curve”. Furthermore, next to providing liquidity support to firms, unemployment benefits have been made more generous in many countries. Often, activation principles have also been temporarily reduced. Some countries have increased access to income support to some extent also for non-standard workers, such as temporary agency workers or self-employed workers, on an ad hoc basis. A major change in working conditions is the broad move towards telework arrangements and work from home. Nonetheless, it appears too early to assess the relative success of national strategies to cope with the pandemic and to revitalize the labor market as well as the medium-term fiscal viability of different support measures. Future monitoring will also have to trace policies to cope with the imminent structural changes that might result from the crisis or might be accelerated by the crisis

Do Anonymous Job Application Procedures Level the Playing Field?

Despite anti-discrimination legislation and the potential for hefty fines, labor market discrimination remains an issue for ethnic minorities and women, particularly in the recruitment and screening process. The apparent failure of legal and voluntary interventions has created a call for anonymous application procedures (AAP), in which key identifying data is hidden from recruiters in the initial recruiting process. Using unusually rich Swedish data on actual applications and recruitments, the authors show that AAP increased the chances of both women and individuals of non-Western origin of advancing to the interview stage. In addition, results show that women experienced an increased probability of being offered a job under AAP. However, applicants belonging to ethnic minorities were equally disadvantaged in terms of job offers under conventional and anonymous hiring procedures, suggesting that racial and ethnic discrimination may be harder to circumvent than gender discrimination

Early Labor Market Prospects and Family Formation

Présenté par Mathilde GodardWe use quasi-random variation in graduation years during the onset of a very deep national recession to study the relationship between early labor market conditions and young females' family formation outcomes. A policy-pilot affecting the length of upper-secondary vocational tracks allows us to compare females who graduated into the onset of the Swedish financial crisis of the 1990s to those graduating during the final phase of the preceding economic boom while netting out the main effect of the policy. We find pronounced, but short-lived, negative labor market effects from early exposure to the recession for low-grade students in particular. In contrast, we document very long-lasting effects on family formation outcomes, again concentrated among low-grade students. Young women who graduated into the recession because of the policy-pilot formed their first stable partnerships earlier and had their first children earlier. Their partners had lower grades, which we show to be a strong predictor of divorce, and worse labor market performance. Divorces were more prevalent and the ensuing increase in single motherhood was long-lasting. These negative effects on marital stability generated persistent increases in the use of welfare benefits despite the short-lived impact on labor market outcomes. The results suggest that young women respond to early labor market prospects by changing the quality threshold for entering into family formation, a process which affects the frequency of welfare-dependent single mothers during more than a decade thereafter

Early Labor Market Prospects and Family Formation

We use quasi-random variation in graduation years during the onset of a very deep national recession to study the relationship between early labor market conditions and young females' family formation outcomes. A policy-pilot affecting the length of upper-secondary vocational tracks allows us to compare females who graduated into the onset of the Swedish financial crisis of the 1990s to those graduating during the final phase of the preceding economic boom while netting out the main effect of the policy. We find pronounced, but short-lived, negative labor market effects from early exposure to the recession for low-grade students in particular. In contrast, we document very long-lasting effects on family formation outcomes, again concentrated among low-grade students. Young women who graduated into the recession because of the policy-pilot formed their first stable partnerships earlier and had their first children earlier. Their partners had lower grades, which we show to be a strong predictor of divorce, and worse labor market performance. Divorces were more prevalent and the ensuing increase in single motherhood was long-lasting. These negative effects on marital stability generated persistent increases in the use of welfare benefits despite the short-lived impact on labor market outcomes. The results suggest that young women respond to early labor market prospects by changing the quality threshold for entering into family formation, a process which affects the frequency of welfare-dependent single mothers during more than a decade thereafter

The causal effects on female careers and family outcomes from graduating during a very deep recession

Présenté par Mathilde GodardInternational audienc