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Daca, Mobility Investments, And Economic Outcomes Of Immigrants And Natives, Jimena Villanueva Kiser, Riley Wilson
Daca, Mobility Investments, And Economic Outcomes Of Immigrants And Natives, Jimena Villanueva Kiser, Riley Wilson
Upjohn Institute Working Papers
Exploiting variation created by Deferred Action for Childhood Arrivals (DACA), we document the effects of immigrant legalization on immigrant mobility investments and economic outcomes. We provide new evidence that DACA increased both geographic and job mobility of young immigrants, often leading them to high-paying labor markets and licensed occupations. We then examine whether these gains to immigrants spill over and affect labor market outcomes of U.S.-born workers. Exploiting immigrant enclaves and source-country flows of DACA-eligible immigrants to isolate plausibly exogenous variation in the concentration of DACA recipients, we show that in labor markets where more of the working-age population can …
Information, Intermediaries, And International Migration, Samuel Bazzi, Lisa Cameron, Simone Schaner, Firman Witoelar
Information, Intermediaries, And International Migration, Samuel Bazzi, Lisa Cameron, Simone Schaner, Firman Witoelar
Upjohn Institute Working Papers
Job seekers face substantial information frictions, especially in international labor markets where intermediaries match prospective migrants with overseas employers. We conducted a randomized trial in Indonesia to explore how information about intermediary quality shapes migration outcomes. Holding access to information about the return to choosing a high-quality intermediary constant, intermediary-specific quality disclosure reduces the migration rate, cutting use of low-quality providers. Workers who do migrate receive better pre-departure preparation and have improved experiences abroad, despite no change in occupation or destination. These results are not driven by changes in beliefs about average provider quality or the return to migration. Nor …
Labor Market Consequences Of Antitax Avoidance Policies, Katarzyna Bilicka
Labor Market Consequences Of Antitax Avoidance Policies, Katarzyna Bilicka
Upjohn Institute Working Papers
In this paper, I analyze the local labor market consequences of multinational firms reallocating employees across their affiliates in response to antitax avoidance policies. I leverage the introduction of a worldwide debt cap in 2010 in the United Kingdom as a quasi-natural experiment that limited one of the forms of profit shifting—debt shifting—for a group of multinational corporations (MNCs). Multinationals affected by the reform reallocated their employees from the United Kingdom to foreign locations. This affected London-based service sector firms the most. I show that this led to a reduction in the number of jobs available in regions exposed to …
When Labor Enforcement And Immigration Enforcement Collide: Deterring Worker Complaints Worsens Workplace Safety, Amanda M. Grittner, Matthew S. Johnson
When Labor Enforcement And Immigration Enforcement Collide: Deterring Worker Complaints Worsens Workplace Safety, Amanda M. Grittner, Matthew S. Johnson
Upjohn Institute Working Papers
Regulatory agencies overseeing the labor market often rely on worker complaints to direct their enforcement. However, if workers face differential barriers to complain, this system could result in ineffective targeting and create disparities in working conditions. To investigate these implications, we examine how the onset of Secure Communities—a localized immigration enforcement program—affected occupational safety and health. Counties’ participation in Secure Communities substantially reduced complaints to government safety regulators, but increased injuries, at workplaces with Hispanic workers. We show that these effects are most consistent with employers reducing safety inputs in response to workers’ decreased willingness to complain.
Trade Policy As An Exogenous Shock: Focusing On The Specifics, Andrew Greenland, John W. Lopresti
Trade Policy As An Exogenous Shock: Focusing On The Specifics, Andrew Greenland, John W. Lopresti
Upjohn Institute Working Papers
This paper proposes a novel strategy for identifying the effects of import competition on economic outcomes that avoids standard concerns related to the endogeneity of trade policy and provides a consistent measure of exposure to trade over time. Conditioning on the level of import tariffs, our approach exploits cross-industry differences in the relative importance of specific rather than ad valorem tariffs. As they are expressed in per unit terms rather than as a share of value, the effective protection provided by a given specific tariff varies with price levels. Using digitized tariff line data between 1900 and 1940, we relate …
Globalization, Trade Imbalances, And Labor Market Adjustment, Rafael Dix-Carneiro, João Paulo Pessoa, Ricardo Reyes-Heroles, Sharon Traiberman
Globalization, Trade Imbalances, And Labor Market Adjustment, Rafael Dix-Carneiro, João Paulo Pessoa, Ricardo Reyes-Heroles, Sharon Traiberman
Upjohn Institute Working Papers
We study the role of global trade imbalances in shaping the adjustment dynamics in response to trade shocks. We build and estimate a general equilibrium, multicountry, multisector model of trade with two key ingredients: 1) consumption-saving decisions in each country commanded by representative households, leading to endogenous trade imbalances, and 2) labor market frictions across and within sectors, leading to unemployment dynamics and sluggish transitions to shocks. We use the estimated model to study the behavior of labor markets in response to globalization shocks, including shocks to technology, trade costs, and intertemporal preferences (savings gluts). We find that modeling trade …
Understanding The Decline Of U.S. Manufacturing Employment, Susan N. Houseman
Understanding The Decline Of U.S. Manufacturing Employment, Susan N. Houseman
Upjohn Institute Working Papers
U.S. manufacturing experienced a precipitous and historically unprecedented decline in employment in the 2000s. Many economists and other analysts—pointing to decades of statistics showing that manufacturing real (inflation-adjusted) output growth has largely kept pace with private sector real output growth, that productivity growth has been much higher, and that the sector’s share of aggregate employment has been declining—argue that manufacturing’s job losses are largely the result of productivity growth (assumed to reflect automation) and are part of a long-term trend. Since the 1980s, however, the apparently robust growth in manufacturing real output and productivity have been driven by a relatively …
Understanding The Effects Of Legalizing Undocumented Immigrants, Joan Monràs, Javier Vázquez-Grenno, Ferran Elias
Understanding The Effects Of Legalizing Undocumented Immigrants, Joan Monràs, Javier Vázquez-Grenno, Ferran Elias
Upjohn Institute Working Papers
This paper investigates the consequences of the legalization of around 600,000 immigrants by the unexpectedly elected Spanish government of Zapatero following the terrorist attacks of March 2004 (Garcia-Montalvo, 2011). Using detailed data from payroll-tax revenues, we estimate that each newly legalized immigrant increased local payroll-tax revenues by 4,189 euros on average. This estimate is only 55 percent of what we would have expected from the size of the influx of newly documented immigrants, which suggests that newly legalized immigrants probably earned lower wages than other workers and maybe affected the labor-market outcomes of those other workers. We estimate that the …
Testing The Heckscher-Ohlin-Vanek Theory With A Natural Experiment, Assaf Zimring
Testing The Heckscher-Ohlin-Vanek Theory With A Natural Experiment, Assaf Zimring
Upjohn Institute Working Papers
This paper uses the historical episode of the near-elimination of commuting from the West Bank into Israel, which caused a large and rapid expansion of the local labor force in the West Bank, to test the predictions of the Heckscher-Ohlin-Vanek (HOV) mode of trade. I use variation between districts in the West Bank to test these predictions, and find strong support for them: Wage changes were not correlated with the size of the shock to the district labor force (Factor Price Insensitivity); Districts that received larger influx of returning commuters shifted production more towards labor intensive industries (Rybczynski effect); And …
Trade Reform And Regional Dynamics: Evidence From 25 Years Of Brazilian Matched Employer-Employee Data, Rafael Dix-Carneiro, Brian K. Kovak
Trade Reform And Regional Dynamics: Evidence From 25 Years Of Brazilian Matched Employer-Employee Data, Rafael Dix-Carneiro, Brian K. Kovak
Upjohn Institute Working Papers
We empirically study the dynamics of labor market adjustment following the Brazilian trade reform of the 1990s. We use variation in industry-specific tariff cuts interacted with initial regional industry mix to measure trade-induced local labor demand shocks, and then examine regional and individual labor market responses to those one-time shocks over two decades. Contrary to conventional wisdom, we do not find that the impact of local shocks is dissipated over time through wage-equalizing migration. Instead, we find steadily growing effects of local shocks on regional formal sector wages and employment for 20 years. This finding can be rationalized in a …
Offshoring And The State Of American Manufacturing, Susan N. Houseman, Christopher Kurz, Paul A. Lengermann, Benjamin R. Mandel
Offshoring And The State Of American Manufacturing, Susan N. Houseman, Christopher Kurz, Paul A. Lengermann, Benjamin R. Mandel
Upjohn Institute Working Papers
The rapid growth of offshoring has sparked a contentious debate over its impact on the U.S. manufacturing sector, which has recorded steep employment declines yet strong output growth—a fact reconciled by the notable gains in manufacturing productivity. We maintain, however, that the dramatic acceleration of imports from developing countries has imparted a significant bias to the official statistics. In particular, the price declines associated with the shift to low-cost foreign suppliers generally are not captured in input cost and import price indexes. To assess the implications of offshoring bias for manufacturing productivity and value added, we implement the bias correction …
Mass Privatisation And The Post-Communist Mortality Crisis: Is There Really A Relationship?, John S. Earle, Scott G. Gehlbach
Mass Privatisation And The Post-Communist Mortality Crisis: Is There Really A Relationship?, John S. Earle, Scott G. Gehlbach
Upjohn Institute Working Papers
We reexamine the recent, well-publicized claim that "rapid mass privatisation [of state-owned enterprises]...was a crucial determinant of differences in adult mortality trends in postcommunist countries" (Stuckler, King and McKee, 2009). Our analysis shows that the estimated correlation of privatization and mortality in country-level data is not robust to recomputing the mass-privatization measure, to assuming a short lag for economic policies to affect mortality, and to controlling for country-specific mortality trends. Further, in an analysis of the determinants of mortality in Russian regions, we find no evidence that privatization increased mortality during the early 1990s. Finally, we reanalyze the relationship between …
Understanding The Contributions Of Reallocation To Productivity Growth: Lessons From A Comparative Firm-Level Analysis, J. David Brown, John S. Earle
Understanding The Contributions Of Reallocation To Productivity Growth: Lessons From A Comparative Firm-Level Analysis, J. David Brown, John S. Earle
Upjohn Institute Working Papers
We analyze comprehensive manufacturing firm data to measure the contribution of interfirm employment reallocation to aggregate productivity growth during the socialist and reform periods in six transition economies. Modifying a standard decomposition technique to better reflect the role of firm entry, we find that reallocation rates and productivity contributions are very low under socialism, but they rise dramatically after reforms, and productivity contributions greatly exceed those observed in market economies. Early in transition, more reform is associated with larger contributions from reallocation, but later, and on average over the whole transition, this relationship is reversed. Though reallocation rates are larger …
Helping Hand Or Grabbing Hand? State Bureaucracy And Privatization Effectiveness, J. David Brown, John S. Earle, Scott G. Gehlbach
Helping Hand Or Grabbing Hand? State Bureaucracy And Privatization Effectiveness, J. David Brown, John S. Earle, Scott G. Gehlbach
Upjohn Institute Working Papers
Why have economic reforms aimed at reducing the role of the state been successful in some cases but not others? Are reform failures the consequence of leviathan states that hinder private economic activity, or of weak states unable to implement policies effectively and provide a supportive institutional environment? We explore these questions in a study of privatization in postcommunist Russia. Taking advantage of large regional variation in the size of public administrations, and employing a multilevel re-search design that controls for pre-privatization selection in the estimation of regional privatization effects, we examine the relationship between state bureaucracy and the impact …
The Productivity Effects Of Privatization In Ukraine: Estimates From Comprehensive Manufacturing Firm Panel Data, 1989-2005, J. David Brown, John S. Earle
The Productivity Effects Of Privatization In Ukraine: Estimates From Comprehensive Manufacturing Firm Panel Data, 1989-2005, J. David Brown, John S. Earle
Upjohn Institute Working Papers
This paper estimates the effect of domestic and foreign privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially state-owned manufacturing firms in Ukraine. The longitudinal dimension of the data is used to measure and control for pre-privatization selection bias and to estimate long-run impacts. The data imply steadily increasing MFP as a result of domestic privatization, reaching about 25 percent relative to state-owned firms after six years. Until recently, Ukraine has had relatively few cases of privatization to foreign investors, and estimates of the MFP impact are more sensitive to controls for selection bias, …
Outsourcing, Offshoring, And Productivity Measurement In U.S. Manufacturing, Susan N. Houseman
Outsourcing, Offshoring, And Productivity Measurement In U.S. Manufacturing, Susan N. Houseman
Upjohn Institute Working Papers
I discuss reasons why manufacturing productivity statistics should be interpreted with caution in light of the recent growth of domestic and foreign outsourcing and offshoring. First, outsourcing and offshoring are poorly measured in U.S. statistics, and poor measurement may impart a significant bias to manufacturing and, where offshoring is involved, aggregate productivity statistics. Second, companies often outsource or offshore work to take advantage of cheap (relative to their output) labor, and such cost savings are counted as productivity gains, even in multifactor productivity calculations. This fact has potentially important implications for the interpretation of productivity statistics. Whether, for instance, productivity …
Ownership And Wages: Estimating Public-Private And Foreign-Domestic Differentials With Leed From Hungary, 1986-2003, John S. Earle, Álmos Telegdy
Ownership And Wages: Estimating Public-Private And Foreign-Domestic Differentials With Leed From Hungary, 1986-2003, John S. Earle, Álmos Telegdy
Upjohn Institute Working Papers
How do state, domestic, private, and foreign ownership of firms differ in average wages? We address these questions using linked employer-employee panel data containing 1.35mln worker-year observations for 21,238 firms from 1986 to 2003 in Hungary. Our econometric methods exploit the long panel together with the presence of 3,700 switches of ownership type in the postsocialist Hungarian transition to estimate these wage differentials.
Manufacturers' Outsourcing To Employment Services, Matthew Dey, Susan N. Houseman, Anne E. Polivka
Manufacturers' Outsourcing To Employment Services, Matthew Dey, Susan N. Houseman, Anne E. Polivka
Upjohn Institute Working Papers
We estimate the effects of manufacturers' use of employment services—comprised primarily of temporary help and professional employer organizations—on measured employment and labor productivity in manufacturing between 1989 and 2004. A major contribution of the paper is the construction of panel data on employment by occupation and industry from the Occupational Employment Statistics program. We use these data to document the dramatic rise of production and other manual occupations within the employment services sector and, in conjunction with information from the Contingent Worker Supplements, to estimate the number of employment services workers assigned to manufacturing over the period. Although measured employment …
Complementarity And Custom In Wage Contract Violation, John S. Earle, Klara Sabirianova Peter
Complementarity And Custom In Wage Contract Violation, John S. Earle, Klara Sabirianova Peter
Upjohn Institute Working Papers
We analyze a model of wage delay in which strategic complementarity arises because each employer's costs of violating its contracts decrease with the arrears in its labor market. The model is estimated on panel data for workers and firms in Russia, facilitating identification through fixed effects for employees, employers, and local labor markets, and instrumental variables based on policy interventions. The estimated reaction function displays strongly positive neighborhood effects, and the estimated feedback loops - worker quits, effort, strikes, and legal penalties - imply that costs of wage delays are attenuated by neighborhood arrears. We also study a nonlinear case …
Does Privatization Hurt Workers? Lessons From Comprehensive Manufacturing Firm Panel Data In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Does Privatization Hurt Workers? Lessons From Comprehensive Manufacturing Firm Panel Data In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Upjohn Institute Working Papers
We estimate the effects of privatization on firm-level wages and employment in four transition economies. Applied to longitudinal data on manufacturing firms, our fixed effect and random trend models consistently fail to support workers' fears of job losses from privatization, and they never imply large negative effects on wages; only for domestic privatization in Hungary and Russia are small (3-5%) negative wage effects found. Privatization to foreign investors has positive estimated impacts on both employment and wages in all four countries. The negligible consequences of domestic privatization for workers result from effects on scale, productivity, and costs that are large …
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Upjohn Institute Working Papers
This paper estimates the effects of privatization on worker separations and wages using retrospective data from a national probability sample of Ukrainian households. Detailed worker characteristics are used to control for compositional differences and to assess types of observable "winners" and "losers" from privatization. Preprivatization worker-firm matches are used to control for unobservables in worker and firm selection. The results imply that privatization reduces wages by 5 percent and cuts the layoff probability in half. Outside investor ownership reduces separations but leaves wages unaffected. Winners from privatization tend to be higher-skilled employees of larger firms, but there is no discernible …
Nonstandard Forms And Measures Of Employment And Unemployment In Transition: A Comparative Study Of Estonia, Romania, And Russia, J. David Brown, John S. Earle, Vladimir Gimpelson, Rostislav Kapeliushnikov, Hartmut Lehmann, Álmos Telegdy, Irina Vantu, Ruxandra Visan, Alexandru Voicu
Nonstandard Forms And Measures Of Employment And Unemployment In Transition: A Comparative Study Of Estonia, Romania, And Russia, J. David Brown, John S. Earle, Vladimir Gimpelson, Rostislav Kapeliushnikov, Hartmut Lehmann, Álmos Telegdy, Irina Vantu, Ruxandra Visan, Alexandru Voicu
Upjohn Institute Working Papers
This paper looks behind the standard, publicly available labor force statistics relied upon in most studies of transition economy labor markets. We analyze microdata on detailed labor force survey responses in Russia, Romania, and Estonia to measure nonstandard, boundary forms and alternative definitions of employment and unemployment. Our calculations show that measured rates are quite sensitive to definition, particularly in the treatment of household production (subsistence agriculture), unpaid family helpers, and discouraged workers, while the categories of part-time work and other forms of marginal attachment are still relatively unimportant. We find that tweaking the official definitions in apparently minor ways …
The Productivity Effects Of Privatization: Longitudinal Estimates From Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
The Productivity Effects Of Privatization: Longitudinal Estimates From Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Upjohn Institute Working Papers
This paper estimates the effect of privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially state-owned manufacturing firms in four economies. We exploit the key longitudinal feature of our data to measure and control for pre-privatization selection bias and to estimate long-run impacts. We find that the magnitudes of our estimates are robust to alternative functional forms, but sensitive to how we control for selection. Our preferred random growth models imply that majority privatization raises MFP about 15% in Romania, 8% in Hungary, and 2% in Ukraine, while in Russia it lowers it 3%. …
The Incidence And Cost Of Job Loss In The Ukrainian Labor Market, Hartmut Lehmann, Norberto Pignatti, Jonathan Wadsworth
The Incidence And Cost Of Job Loss In The Ukrainian Labor Market, Hartmut Lehmann, Norberto Pignatti, Jonathan Wadsworth
Upjohn Institute Working Papers
We examine the effects of economic transition on the pattern and costs of worker displacement in Ukraine, using the Ukrainian Longitudinal Monitoring Survey (ULMS) for the years 1992 to 2002. Displacement rates in the Ukrainian labor market average between 3.4 and 4.8 percent of employment, roughly in line with levels typically observed in several Western economies, but considerably larger than in Russia. The characteristics of displaced workers are similar to those displaced in the West, in so far as displacement is concentrated on the less skilled. Around one third of displaced workers find re-employment immediately while the majority continues into …
Evaluating Job Training In Two Chinese Cities, Benu Bidani, Chor-Ching Goh, Niels-Hugo Blunch, Christopher J. O'Leary
Evaluating Job Training In Two Chinese Cities, Benu Bidani, Chor-Ching Goh, Niels-Hugo Blunch, Christopher J. O'Leary
Upjohn Institute Working Papers
Recent years have seen a surge in the evidence on the impacts of active labor market programs for numerous countries. However, little evidence has been presented on the effectiveness of such programs in China. Recent economic reforms, associated massive lay-offs, and accompanying public retraining programs make China fertile ground for rigorous impact evaluations. This study evaluates retraining programs for laid-off workers in the cities of Shenyang and Wuhan using a comparison group design. To our knowledge, this is the first evaluation of its kind in China. The evidence suggests that retraining helped workers find jobs in Wuhan, but had little …
Do Government Sponsored Vocational Training Programs Help The Unemployed Find Jobs? Evidence From Russia, Anton Nivorozhkin, Eugenity Nivorozhkin
Do Government Sponsored Vocational Training Programs Help The Unemployed Find Jobs? Evidence From Russia, Anton Nivorozhkin, Eugenity Nivorozhkin
Upjohn Institute Working Papers
The study estimates the employment effect of vocational training programs for the unemployed in urban Russia. The results of propensity score matching indicate that training programs had a non-negative overall effect on the program participants relative to non-participants.
The Wage Effects Of Schooling Under Socialism And In Transition: Evidence From Romania, 1950-2000, Daniela Andrén, John S. Earle, Dana Sapatoru
The Wage Effects Of Schooling Under Socialism And In Transition: Evidence From Romania, 1950-2000, Daniela Andrén, John S. Earle, Dana Sapatoru
Upjohn Institute Working Papers
We estimate the impact of schooling on monthly earnings from 1950 to 2000 in Romania. Nearly constant at about 3-4 percent during the socialist period, the coefficient on schooling in a conventional earnings regression rises steadily during the 1990s, reaching 8.5 percent by 2000. Our analysis finds little evidence for either the standard explanations of such an increase in the West (labor supply movements, product demand shifts, technical change) or the transition-specific accounts sometimes offered (wage liberalization, border opening, increased quality of education). But we find some support for institutional and organizational explanations, particularly the high productivity of education in …
Does Privatization Raise Productivity? Evidence From Comprehensive Panel Data On Manufacturing Firms In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Does Privatization Raise Productivity? Evidence From Comprehensive Panel Data On Manufacturing Firms In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Upjohn Institute Working Papers
We analyze the impact of privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially state-owned manufacturing firms in four economies. Controlling for firm and industry-year fixed effects and employing a wide variety of measurement approaches, we estimate that majority privatization raises MFP about 28 percent in Romania, 22 percent in Hungary, and 3 percent in Ukraine, with some variation across specifications, while in Russia it lowers it about 4 percent. Privatization to foreign rather than domestic investors has a larger impact (about 44 percent) and is much more consistent across countries. The positive effects …
Job Reallocation And Productivity Growth In The Ukrainian Transition, J. David Brown, John S. Earle
Job Reallocation And Productivity Growth In The Ukrainian Transition, J. David Brown, John S. Earle
Upjohn Institute Working Papers
We analyze the pace and patterns of job reallocation in Ukraine using 1992-2000 panel data on nearly the surviving universe of manufacturing firms inherited from the Soviet Union. Employment growth displays substantial increase in heterogeneity during this transition period, with a corresponding rise in excess job reallocation. Unlike data for Soviet Russia in the 1980s, Ukrainian job reallocation in the 1990s was clearly productivity-enhancing, both within and cross industries. The paper also estimates the effects of firm and market characteristics on the magnitude of reallocation and on the extent to which it has contributed to aggregate productivity growth.
What Makes Small Firms Grow? Finance, Human Capital, Technical Assistance, And The Business Environment In Romania, J. David Brown, John S. Earle, Dana Lup
What Makes Small Firms Grow? Finance, Human Capital, Technical Assistance, And The Business Environment In Romania, J. David Brown, John S. Earle, Dana Lup
Upjohn Institute Working Papers
Although the development of a new private sector is generally considered crucial to economic transition, there has been relatively little empirical research on the determinants of startup firm growth. This paper uses panel data techniques to analyze a survey of 297 new small enterprises in Romania containing detailed information from the startup date through 2001. We find strong evidence that access to external credit increases the growth of both employment and sales. Taxes appear to constrain growth. The data suggest that entrepreneurial skills have little independent effect on growth, once demand conditions are taken into account. The evidence for the …