Labor Force Exit
Paper Session
Tuesday, Jan. 5, 2021 3:45 PM - 5:45 PM (EST)
- Chair: Melissa McInerney, Tufts University
No Longer Qualified? Changes in the Supply and Demand for Skills within Occupations
Abstract
Prior research has established that US employers increased education requirements within occupations for open positions during the Great Recession, a trend that became known as “upskilling” (Modestino, Shoag, and Ballance, 2020). Although roughly one-third of the upskilling that occurred during the Great Recession was cyclical (Modestino, Shoag, and Ballance 2016), as much as two-thirds of the increase appears to have been more persistent or structural (Hershbein and Kahn 2018). As a result, unemployed workers in some occupations may no longer qualify for the positions they once held if they lack the necessary educational credentials to meet these new hiring requirements.Using a novel database of 159 million online job postings, we examine movements in employer skill requirements for education and specific skill sets between 2007 and 2017. We find that occupations in the high-skill sector—jobs that as of 2006 were mainly held by individuals with at least a college degree—were more likely to have increased education requirements during the Great Recession, and maintained those higher requirements between 2010 and 2017 as the labor market generally improved. In contrast, occupations in the middle- and low-skill sectors largely engaged in temporary upskilling, posting higher education requirements during the recession, but then reverting to less stringent requirements between 2010 and 2017. We also show that persistent upskilling among the high-skill sector appears to be driven by the demand for software skills as opposed to other baseline or specialized skills.
Finally, constructing mismatch indexes by skill sector reveals that mismatch increased across all sectors between 2007 and 2010, but continued to increase between 2010 and 2017 in the high-skill sector while receding in the low- and middle-skill sectors. Our findings suggest that structural trends in employer upskilling are exacerbated during recessions, leading to greater mismatch and slower labor market recovery.
Entitled to Leave: the Impact of Unemployment Insurance Eligibility on Employment Duration and Job Quality
Abstract
Entitlement conditions are a little explored dimension of unemployment insurance(UI) schemes. In this paper, we provide a comprehensive evaluation of a reform
that softened the minimum employment record condition to qualify for UI benefits
in France after 2009. Using administrative panel data matching employment and
unemployment spells, we first provide clear evidence that the reform induced a
separation response at the eligibility threshold. It appears both at the micro level
– through a jump in transitions from employment to unemployment – and at the
macro level – through the scheduling of shorter contracts, in line with the new eligibility
requirements. Exploiting the reform as well as relevant sample restrictions,
we then estimate the effects of receiving UI benefits on subsequent labour market
outcomes using a regression discontinuity design. Our findings point to a large
negative impact of UI benefits receipt on employment probability up to 21 months
after meeting the eligibility criterion, which is not counterbalanced by an increase
in job quality.
Do Firms Exit the Formal Economy after a Minimum Wage Hike?
Abstract
This paper studies the effects of a large minimum wage hike on firm exits from the formal economy, and its associated impacts on employment and informality. Using an exceptionally rich linked employer-employee dataset, we estimate impacts for the universe of registered firms and workers in a developing economy. Data on the full wage distribution in firms allows to precisely measure minimum wage exposure, and to estimate the causal effect of the hike in a difference-in-difference setting. The hike is found to significantly increase the destruction rate of formal firms. Effects are concentrated among small and low-productivity firms while the exit of high-productivity firms is unaffected. The increase in firm exits is larger in industries with small profit margins, higher labor shares and stronger market competition. We also evidence negative effects on formal employment, which mainly originate from firm exits rather than employment cuts in surviving firms. We find that only a minority of workers from exiting firms found another formal employment one year after the hike. Corroborative evidence suggests that workers who are no longer formally employed mostly transition into informality, instead of remaining unemployed after the hike.Rural Hospital Closures and Local Economic Decline
Abstract
This paper studies the local economic impacts of rural hospital closures in the United States. The analysis begins with a difference-in-differences approach using county-by-year panel data on all hospital closures from 2003 through the first half of 2017. The results indicate that closures adversely affect employment, income, labor force participation, establishments, population, rents, and the unemployment rate. Estimated effect sizes grow over time and are explained largely by rural counties that lose their only hospital and in counties where hospitals occupy a large share of the local labor market. While there is little or no evidence of pre-trends, I estimate a range of robustness checks designed to further address endogeneity concerns, such as forward-looking behavior among hospital owners. The results are consistent across these specifications. I also document spillovers, as evidenced by a 1.8 percent decrease in non-hospital employment, an effect that explains 40 percent of the total employment loss. To characterize the significance of the adverse effects, I combine the reduced-form estimates with a spatial equilibrium model of various agents in a local economy. Analysis of the model indicates that rural hospital closures significantly harm welfare, an outcome that is internalized by workers, older residents no longer in the labor force, and landowners.JEL Classifications
- J2 - Demand and Supply of Labor