Age effects in Swedish local labour markets

The paper studies the effects of changes in the age structure on aggregate labour market performance using a panel of Swedish local labour markets. The methodology of Shimer (2001) is used for studying the effects of youth cohort size and is extended to include the full age distribution. The results show that young workers benefit from belonging to a large cohort. This is in line with previous results for the US. Furthermore it is shown that most of the positive effect for young workers is due to an inward shift in the Beveridge-curve even though tightness seems to increase as well. In contrast to the US experience, older workers in Sweden do not benefit from large youth cohorts. Further results show that large numbers of 50 to 60 year old workers have an adverse effect on the labour market. This is consistent with negative externalities from well-matched individuals.Unemployment; cohort crowding; age structure; matching

The effects of working time reductions on wages, actual hours and equilibrium unemployment

This paper extends a general equilibrium model of unemployment and working hours and evaluates the model on a 5 percent working time reduction for shift workers in Sweden. Panel data from firms' payroll records are used to examine the relationship between standard hours, actual hours and hourly wages. The main results are: i) Actual hours only decreased by 40 percent of the reduction in standard hours. ii) Hourly wages for shift workers rose relative to wages for daytime workers. iii) The wage increase was more pronounced for workers who received a larger reduction of actual hours. The conclusion is that working time reductions that allow for discretion on lower levels of bargaining do not necessarily reduce actual hours. Furthermore, working time reductions may result in an increase in wage pressure, causing unemployment to rise.Work sharing; working hours; unemployment; wage pressure

The Duration of Paid Parental Leave and Children's Scholastic Performance

We study how the duration of paid parental leave affects the accumulation of cognitive skills among children. We use a reform which extended parental leave benefits from 12 to 15 months for Swedish children born after August 1988 to evaluate the effects of prolonged parental leave on children's test scores and grades at age 16. We show that, on average, the reform had no effect on children's scholastic performance. However, we do find positive effects for children of well-educated mothers, a result that is robust to a number of different specifications. We find no corresponding heterogeneity relative to parental earnings or fathers' education, or relative to other predictors of child performance. We find no effects on intermediate outcomes such as mothers' subsequent earnings, child health, parental fertility, divorce rates, or the mothers' mental health. Overall the results suggest positive causal interaction effects between mothers' education and the amount of time mothers spend with their children. Since the institutional context is one in which the alternative is subsidized day care, the results imply that subsidizing longer parental leave spells rather than day care reinforce the relationship between maternal education and school outcomes.maternal employment, education, human capital, cognitive skills

Evaluating microfoundations for aggregate price regidities: evidence from matched firm-level data on product prices and unit labor cost

Using data on product-level prices matched to the producing �rm�s unit labor cost, we reject the hypothesis of a full and immediate pass-through of marginal cost. Since we focus on idiosyncratic variation, this does not �t the predictions of the Ma´ckowiak and Wiederholt (2009) version of the Rational Inattention Model. Neither do we �nd that �rms react strongly to predictable marginal cost changes, as expected from the Mankiw and Reis (2002) Sticky Information Model. We �nd that, in line with Staggered Contracts models, �rms consider both the current and future expected marginal cost when setting prices with a sum of coe¢ cients not signi�cantly di¤erent from unity. JEL Classification: D8, E3, L1business cycles, Information, Micro Data, price setting

Measuring conditional segregation: methods and empirical examples

In empirical studies of segregation it is often desirable to quantify segregation that cannot be explained by underlying characteristics. To this end, we propose a fully non-parametric method for accounting for covariates in any measure of segregation. The basic idea is that given a set of discrete characteristics, there is a certain probability that a person belongs to a particular group, which can be used to compute an expected level of segregation. We also demonstrate that a modified index of exposure has both favorable analytical features and interpre-tational advantages in such settings. The methods are illustrated by an applica-tion to ethnic workplace segregation in Sweden. We also show how one can use a measure of exposure to study the earnings consequences of segregation stemming from different sources.Exposure; covariates; ethnic workplace segregation

Early indication of program performance: The case of a Swedish temporary employment program

This paper proposes an application of standard evaluation techniques to obtain an early indication of the efficiency of a social program. An explicit distinction is made between participation and treatment since non-participants in many cases can find treatment outside of the program. By estimating the amount of treatment participants would have received if there had been no program it is possible to derive the net treatment provided by the program as soon as the first participants have entered the program. Using propensity score matching to study substitutes in the recently implemented Swedish “Career Break“ pilot program we obtain three main results: First, the selection into the program favours participants that would have received treatment even without the program. Second, the net treatment provided by the program is on average only about half of the expected program length. Third, a simulation shows how the net treatment could be increased by a simple change in the eligibility criteria.Evaluation; propensity score matching; social programmes; treatment intensity

Will I see you at work? Ethnic workplace segregation in Sweden 1985–2002*

We study ethnic workplace segregation in Sweden using linked employer-employee data covering the entire working-age Swedish population during 1985–2002. Segregation is measured as overexposure to a particular group, taking into account the distribution of human capital, industry and geography. We find considerable workplace segregation between immigrants and natives but the results differ substantially between ethnic groups. Segregation has increased during the period, mainly due to changes in the ethnic composition. Immigrants are particularly overexposed to workers from their own birth region but also to other immigrants. Children to immigrants are only overexposed to immigrants from their parents region of birth. Segregation—particularly in the immigrant-native dimension—is in general negatively correlated with economic status.Workplace segregation; ethnic minorities; immigrant assimilation

Swedish youth labour market policies revisited

The paper studies the efficiency of Swedish labour market policies for young workers. Using age discontinuities which define which policy regime an individual is covered by we present quasi-experimental evidence on the relative efficiency of different policy regimes currently in use. Results suggest that youth policies are more effective than the policies covering adult unemployed. The effects mainly appear early in the unemployment spell; we find no evidence of positive long run effects. To uncover which part of the policies that accounts for the positive effect, we use matching techniques to study the relative efficiency of youth programmes and general adult programmes which are available also for the young. The results indicate that youth programmes are significantly less effective than adult oriented programmes. Overall, the evidence thus suggest that youth policies speed up the transition from unemployment to jobs either due to pre-programme deterrence effects or because of more intense job search support from the public employment services before the programmes.Youth unemployment; program evaluation; pre-program effects

Do anonymous job application procedures level the playing field?

Anonymous application procedures (AAP) are increasingly promoted as a way to combat employment discrimination. The idea gets support from theory and experimental evidence, but virtually nothing is known about its real-life effects. We present empirical evidence building on micro data collected in the Swedish city of Gothenburg, where AAP was used in parts of the local administration. Difference-in-differences estimates, with extensive controls for qualifications, suggest that AAP increased the chances of advancing to interviews for both women and individuals of non-Western origin. Women also experienced a higher probability of being offered a job, but no such effect is found for immigrants.Anonymous applications; discrimination; employment

When strong ties are strong Networks and youth labor market entry

The conditions under which young workers find their first real post-graduation jobs are both very important for the young’s future careers and insufficiently known given their public policy implications. To study these conditions, and in particular the role played by networks, we use a Swedish population-wide linked employer-employee data set of graduates from all levels of schooling which includes detailed information on family ties, neighborhoods, schools, and class composition over a period covering high as well as low unemployment years. We find that strong social ties (parents) are an important determinant of where young workers find their first job. This remarkably robust effect is estimated controlling for all confounding factors related to time, location, education, occupation, and the interaction of these. The effect is larger if the graduate’s position is “weak” (low education) or during high unemployment years, a pattern which does not emerge when analyzing the role of weak ties (neighbors or friends as measured using classmates and their parents). On the hiring side, by contrast, the effects are larger if the parent’s position is “strong” (e.g. by tenure or wage). We find no evidence of substitution in recruitment over time and fields induced by “family ties hires”. However, we do find that, just after their child is hired in their plant, parents experience a sharp drop in their wage growth. Overall, our results show that strong (family) ties are more important in the job finding process of young workers in weak positions than those weak ties usually measured in the literature (neighbors, in particular), suggesting that labor market experience and education are essential conditions for weak ties to be strong.Weak ties; social networks; youth employment