Monday, January 26, 2015

Echoes from the European Summer Syposium in Labor Economics

I have not posted much recently. I am back on the tracks now. Here is a post I could have published a long time ago relating the papers that have been presented at a symposium I attended this fall.

I have spent three days at the ESSLE. This has been a really nice event extremely well organized in a delicious place. I've met really nice people, received encouragements and comments on my own research and have been exposed to some nice work. Let me here give a brief overview of some of the papers and posters that I have been exposed to. As I was presenting my own work in a poster session, I was not able to attend some of the presentations. Also, some of the work presented was too far from my own area of expertise for me to be able to comment on it.

Christina Gathmann showed that mass layoffs affect negatively local areas not only through the already documented negative long term effects on laid off workers, but also decrease total local employment in other firms. Javier Ortega brought evidence that immigration seems to have detrimental effects on the wages of blue collar workers in France. This would suggest that all the protests against immigration that we hear on the extreme right might have some empirical support. The effect seems to be especially major for construction workers. Christian Fons-Rosen presented evidence that former employees of big firms explore more risky and new ideas when they start their own firms, and produce higher quality research but with more variance. It seems to suggest that big firms are not an engine for radical ideas. Thomas Le Barbanchon showed that hiring subsidies (exemption of social taxes) have boosted employment in French firms during the recession, especially in slack labor markets. This is important because it shows that supply side reforms might have an effect even when demand is depressed. Ankita Patnaik showed that the move to a compulsory parental leave of 5 weeks for daddies in Quebec (required minimum amount of daddy's leave duration for mums to be able to take their own leave) generated not only an increase in the duration of daddy's leave by 3 weeks from an initial level of 2 weeks but also seems to have generated strong changes in intra household behavior that lasts after the parental leave period is over: dads spend less time at work, take more time for chores and earn less money whereas mums earn more money, do less chores and spend more time with their families. In my opinion,the results on earnings were very large, suggesting that there might be selection bias due to couples delaying or accelerating the decision to have a child because of the reform. Andrea Bassanini showed that in France the probability of layoffs seems to increase with the distance of a plant to its headquarters. This might be because of local social pressure not to hurt local employment or as a service to the local authorities. Kristina Huttunen showed evidence that offshoring might have negative effects on employment across industries but seem to have a positive effect within industries: firms that offshore part of their production seem to expand. The reverse is true for import competition. Nishith Prakash shows that you can obtain a substantial increase of enrollment in high school by girls in India by buying them a bike to ride to school. 

The second day, Stefania Albanesi documented that the increase in women labor force participation is slowing down in the US and in other OECD countries while at the same time the decrease in the gender wage gap slows down. She related that to the increase in top wages: women married to men whose wages have rapidly increased in the last decades do not need to work and thus take more time off the job market, yielding to lower salaries. My attention somewhat decreased thereafter, not doubt because the time of my own presentation was getting closer but also because I am less familiar with the topics covered. I apologize to Pietro Garibaldi and Gerard Pfann for not reporting on their work. Konstantinos Tatsiramos showed that the effects of school and community of people lifetime earnings seemed to stem mainly from the ignorance of the fact that family self select to schools and neighborhoods. Once taking this correlation into account, he finds that school and community do not seem to have strong effects on lifetime earnings. Ulf Zolitz presented in the poster session a very nice paper using the random assignement of students to classes to show that low achieving students benefit from having better classmates, but not the best classmates. The negative effect of the best students on the weak students is an interesting finding. Actually, Ulf has also a paper on the negative learning effects of cannabis usage. He cleverly exploits a local law forbidding French citizens to consume pot in the Netherlands. 

Finally, the third day, Erich Battistin presented a paper revisiting the famous Maimonides' rule approach for estimating the effect of class size on students' achievement. I am not going to describe this classical approach here. Erich shows that this classical result can be found in Italy, but only in the south. Because the south is also known for forging test scores, Erich and his coauthors suspect a link between the two phenomena. They actually show that a decrease in class size seems to improves test scores only by an increase in test misreporting. I do not remember the proposed mechanism, but the result is counterintuitive at first sight (smaller class is easier to grade and thus misreporting is less of an issue, though active cheating is easier). David Jaeger showed evidence from an experiment that halving class time only decreased test scores in a university introductory economics course by a few points, suggesting that class time could be reduced without strong detrimental effects on learning. Stefano Verzillo showed evidence that Italian academics seem to react to the competitive pressure exerted by peers at the time of promotion: the more competition they face, the more they work if they are already good. The reverse is true for scientists with a lower publication record. I apologize to Rainer Winkelmann and Winfried Koeninger for not relating the content of their talks.

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