Gender gaps in unemployment rates in OECD countries

There is an enormous literature on gender gaps in pay and labour market participation but virtually no literature on gender gaps in unemployment rates. Although there are some countries in which there is essentially no gender gap in unemployment, there are others in which the female unemployment rate is substantially above the male. Although it is easy to give plausible reasons for why more women than men may decide not to want work, it is not so obvious why, once they have decided they want a job, women in some countries are less likely to be in employment than men. This is the subject of this paper. We show that, in countries where there is a large gender gap in unemployment rates, there is a gender gap in both flows from employment into unemployment and from unemployment into employment. We investigate different hypotheses about the sources of these gaps. Most hypotheses find little support in the data and the gender gap in unemployment rates (like the gender gap in pay) remains largely unexplained. But it does seem to correlate with attitudes on whether men are more deserving of work than women so that discrimination against women may explain part of the gender gap in unemployment rates in the Mediterranean countries

Revisiting the determinants of unemployment duration:Variance decomposition à la ABS in Spain

This paper is based on material presented by Güell in the Frisch-Tinbergen Lecture at 33th the European Association of Labour Economists Conference in September 2021 in Padova.Using the methodology developed in Alvarez et al. (2014), we decompose the variance of unemployment duration in Spain into three main components: labour market frictions, duration dependence and heterogeneity. Crucial to our analysis are the comparisons by different demographic groups over the business cycle to shed light in the mechanisms behind duration dependence. We offer a general approach for interpreting administrative data that is closer to unemployment than non-employment and includes different types of unemployment spells, particularly short spells without the right to claim benefits. Labour market frictions account for the bulk of the variance of unemployment duration, and become more prominent during recessions. Duration dependence constitutes 25% of the total variance, followed by heterogeneity, which represents 18%. Women and college graduates have larger shares of duration dependence. Finally, the share of duration dependence does not vary over the business cycle for non-college workers. But it is higher during expansions for college workers, which is consistent with a statistical discrimination mechanism due to dynamic sample selection.This research has been supported by the UK Economic and Social Research Council MacCaLM Grant (ES/L009633/1)

The effects of fixed-term contracts on labour market performance.

During the 1980's, many European countries introduced flexibility measures in their labour market to fight high and persistent levels of unemployment. In particular, in many countries reforms consisted of the introduction of more flexible labour contracts (fixed-term contracts) in comparison to the predominant ones (permanent contracts). The purpose of this thesis is to analyse the effects of such contracts on the overall performance of the labour market. First, an economy with firing costs is analysed theoretically. Firing costs are generally considered one of the most important elements in making a labour market rigid. This chapter stresses the fact that it is not just the level of severance payments what matters, but a wider view of employment protection. In particular, dismissal conflicts are modeled explicitly and their cost is derived. In the second chapter, the effects on employment of introducing fixed-term contracts in an economy with only permanent contracts are analysed theoretically. Our findings are that higher employment at the expense of segmentation of the labour market only arises if wages are very flexible. Otherwise, employment is not necessarily higher than in a system with only permanent contracts. Moreover, from the social point of view, market segmentation is too large. The last two chapters are empirical work applied to Spain. The Spanish experience appears to be particularly useful in this context to draw some lessons of these policies because the unemployment rate is the highest among OECD economies despite the several "policy experiments" implemented in the last two decades. In Chapter 3 the duration pattern of fixed-term contracts and the determinants of the transformation of these into permanent ones are analysed. Evidence is found that fixed-term contracts are used as a screening device instrument. Also, employers use fixed-term contracts until their legal limit. In Chapter 4, we study the effects of fixed-term contracts on the duration distribution of unemployment. It is found that the chances of leaving unemployment for a reference group have increased at short durations, while they have decreased at long durations of unemployment

Income contingent university loans:Policy design and an application to Spain

In Europe, the need for additional funding coming from either budget cuts and/or increased costs due to increased competition in university quality has reopened the debate on the financing of university systems. An attractive alternative to the current general-tax-financed subsidies is Income Contingent Loans (ICL), a flexible scheme that puts more weight on private resources while enhancing progressivity. One challenge of the viability of ICL systems is the functioning of the labor market for university graduates. This paper offers a general analysis of the economics of ICL, followed by an application to Spain. We set up a loan laboratory in which we can explore the distributional effects of different loan systems to finance tertiary education at current costs as well as to increase university funding to improve its quality. We use simulated lifetime earnings of graduates matching the dynamics of employment and earnings in the Spanish administrative social security data to calculate the burden of introducing ICL for individuals at different points of the earnings distribution and for the government. We find that (1) our proposed structure is highly progressive under all specifications, with the top quarter of the distribution paying close to the full amount of the tuition and the bottom 10% paying almost no tuition and (2) the share of total university education subsidized by the government is between 16 and 56 percentage points less than under the current system