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<p>This thesis comprises three essays. The first two essays examine what inferences can be drawn about the structure of wages from the experiences of displaced workers using the Ontario Ministry of Labour Plant Closure Survey. The third essay examines the effect of unemployment benefits on household consumption during spells of unemployment, with a particular emphasis on durables purchases. It employs data from a second and new data source, the Canadian Out of Employment Panel.</p> <p>The first essay revisits the issue of what can be learned about wage tenure profiles from displaced worker data. The positive relationship between wages and tenure in cross section data is consistent with the accumulation of firm specific capital. Alternatively, it may be explained by unobserved heterogeniety across workers, or by endogenous mobility. Displaced worker data is quite helpful in correcting for the first possible bias, and less so for the second. The relationship between various estimation strategies in the literature is illustrated. Estimates that control for individual heterogeniety and endogenous mobility driven by systematic differences in the pay policies of firms are presented. In this data, 10 years of tenure appears to raise wages by about 7%.</p> <p>The second essay examines intra-industry wage differentials. Even after conditioning on a rich set of worker and job characteristics, firm of employment is a significant determinant of wages. Estimates that employ the longitudinal nature of data demonstrate that sorting of workers across firms by unobserved ability can explain about half of the observed differentials. Firm wage differentials are observed within narrow industries, consistent across broad occupational groups, and robust to conditioning on differences in the mix of skills or job characteristics. Further "high wage" firms exhibit high average tenures suggesting that positive wage premia are associated with reduced mobility. These observations imply that compensating wage differentials are also a poor candidate explanation for the observed differentials. The results are more consistent with models based on rents or some firm monopsony power. The results also raise questions about the interpretation of wage regressions which ignore firm heterogeneity, and about the sources of wages losses among displaced workers.</p> <p> The final essay examines how households smooth consumption over the income losses due to an unemployment spell. A model of "internal capital markets" is proposed, which suggests that households adjust the timing of the replacement of small durables to income flows. The plausibility of this model is investigated empirically, using a series of program changes in the Canadian unemployment insurance scheme for exogenous variation in transitory income. The data are consistent with the predictions of the "internal capital markets model" while rejecting both a standard life cycle model and a "rule of thumb" model of household expenditure patterns.</p> / Thesis / Doctor of Philosophy (PhD)

From being an unemployment success story, Sweden was during the 1990s thrown into a European normality, with apparent high and persistent unemployment. This has made unemployment a central issue in the Swedish public debate as a social problem directly affecting hundreds of thousands of individuals. In the public debate there is however no consensus on what characterises the experience of unemployment. One perspective emphasises the role of employment for self-realisation. Unemployment here becomes a very destructive experience, due to the psychosocial value attached to employment. An alternative perspective instead views employment as a necessary evil that brings little satisfaction to those who participate in it. From this perspective unemployment mean very little to those struck by it outside the possible negative effects on income (which are minimised by the welfare state). The objective of this thesis has been to move beyond the postulated truths of what the experience of unemployment means. It uses an empirical approach in order to investigate the consequences of unemployment for mental well-being, and to develop an understanding of the reasons for this relationship. The following conclusions can be drawn from the five articles that make up the thesis. In line with previous international and Swedish research, the thesis shows that unemployment as compared to employment is in general a distressing experience. This does however not mean that we can draw the simple conclusion that unemployment represents misery and employment represents the absence of misery. The thesis finds the relationship to be more complex than so. There is a need to take into account more of the possible variations in status available both on and outside the labour market. Different exit routes from unemployment were found to have different consequences for the mental well-being of the unemployed individual. Further, the evidence in the thesis shows that there is variation in the impact of unemployment on mental well-being within the unemployment group. We should, thus, not talk about the experience of unemployment, but rather about varying unemployment experiences. The general effect of unemployment on mental well-being, and the variation in the unemployment experience, was in turn shown to be mainly dependent on two factors. Firstly on the psychosocial need for employment in a society where employment is the norm. Secondly, on the economic need for employment in a society where employment, as the thesis also shows, for many still is necessary for adequate economic resources. / <p>Härtill 5 uppsatser.</p> / digitalisering@umu

<p>This dissertation consists of three separate essays on job search and labor market dynamics. In the first essay, “The Impact of Labor Market Conditions on Job Creation: Evidence from Firm Level Data”, I study how much changes in labor market conditions reduce employment fluctuations over the business cycle. Changes in labor market conditions make hiring more expensive during expansions and cheaper during recessions, creating counter-cyclical incentives for job creation. I estimate firm level elasticities of labor demand with respect to changes in labor market conditions, considering two margins: changes in labor market tightness and changes in wages. Using employer-employee matched data from Brazil, I find that all firms are more sensitive to changes in wages rather than labor market tightness, and there is substantial heterogeneity in labor demand elasticity across regions. Based on these results, I demonstrate that changes in labor market conditions reduce the variance of employment growth over the business cycle by 20% in a median region, and this effect is equally driven by changes along each margin. Moreover, I show that the magnitude of the effect of labor market conditions on employment growth can be significantly affected by economic policy. In particular, I document that the rapid growth of the national minimum wages in Brazil in 1997-2010 amplified the impact of the change in labor market conditions during local expansions and diminished this impact during local recessions.</p><p>In the second essay, “A Framework for Estimating Persistence of Local Labor</p><p>Demand Shocks”, I propose a decomposition which allows me to study the persistence of local labor demand shocks. Persistence of labor demand shocks varies across industries, and the incidence of shocks in a region depends on the regional industrial composition. As a result, less diverse regions are more likely to experience deeper shocks, but not necessarily more long lasting shocks. Building on this idea, I propose a decomposition of local labor demand shocks into idiosyncratic location shocks and nationwide industry shocks and estimate the variance and the persistence of these shocks using the Quarterly Census of Employment and Wages (QCEW) in 1990-2013.</p><p>In the third essay, “Conditional Choice Probability Estimation of Continuous- Time Job Search Models”, co-authored with Peter Arcidiacono and Arnaud Maurel, we propose a novel, computationally feasible method of estimating non-stationary job search models. Non-stationary job search models arise in many applications, where policy change can be anticipated by the workers. The most prominent example of such policy is the expiration of unemployment benefits. However, estimating these models still poses a considerable computational challenge, because of the need to solve a differential equation numerically at each step of the optimization routine. We overcome this challenge by adopting conditional choice probability methods, widely used in dynamic discrete choice literature, to job search models and show how the hazard rate out of unemployment and the distribution of the accepted wages, which can be estimated in many datasets, can be used to infer the value of unemployment. We demonstrate how to apply our method by analyzing the effect of the unemployment benefit expiration on duration of unemployment using the data from the Survey of Income and Program Participation (SIPP) in 1996-2007.</p> / Dissertation

LEGAL REGULATIONS OF UNEMPLOYMENT BENEFITS IN CZECH REPUBLIC AND IN SELECTED COUNTRIES This graduation thesis describes and analyzes legal regulations of unemployment benefits in Czech Republic and in Sweden. Main reason why I have chosen that topic could be seen in the fact that in both countries exist two different systems. In Czech Republic we have compulsory state system of unemployment benefits but Sweden is one of four European countries where we can find so-called Ghent system. Sweden is also known as typical example of welfare state, so I came to conclusion it could be interesting to focus attention also to this matter and its influence to the topic. The aim of the thesis is to compare both systems, individual institutes of this problematic, focus on main differences and also point out common rules and principles. The thesis involves an introduction, main part and conclusion. The main part is divided into seven chapters. The first one presents explanation of unemployment, its different types and consequences. Following two chapters concern development of legal regulations of this problematic both in Czech Republic (also in Czechoslovakia) and in Sweden. Because some of the mentioned acts are very extensive, I focused only on legal rules concerning the unemployment benefits. The main part of...

This thesis looks at the politics of labor market policy in the postwar period in the advanced industrialized democracies. Specifically, the dissertation seeks to explain stark cross-national differences in unemployment benefit systems and employment protection legislation. The theory advanced in this thesis emphasizes significant differences in union organization across the rich democracies. This view, “Varieties of Unionism”, shows how the varying political capacities and policy preferences of labor movements explain most of the cross-national policy differences. In particular, the research points to union movements’ ideological traditions and varying rates of union density, union centralization, and involvement in unemployment benefit administration as crucial explanatory forces. Each feature of union movements captures an important part of why they might choose to advocate on behalf of the unemployed and to their differential ability to have those policy preferences realized, as well as indicating the kinds of preferences they will have for employment protection legislation. In the case of policies directed at the unemployed (or so-called labor market ‘Outsiders’), these insights lead to the construction of an index of “Outsider-oriented Unionism”, which correlates very closely to cross-national variations in unemployment benefit generosity as well as to active labor market policy spending. The thesis also introduces a new fourfold typology of unionism that helps to explain the different combinations of employment protection legislation and ‘Outsider policy’ generosity that exist among the rich democracies, or labor market policy ‘regimes’. The thesis makes this argument with multiple regression analysis of fifteen rich democracies and with detailed historical case studies of Britain, The Netherlands, and Sweden. In making this case, the thesis strongly challenges the explanations of labor market policy put forward by the Varieties of Capitalism literature and Insider-Outsider theory. In addition, the thesis reformulates the traditional Power Resource view by introducing a more rigorous theory of labor movements’ policy preferences and thereby qualifies recent statements that have emphasized partisanship almost alone. Most broadly, the theory challenges the “individualist turn” in recent comparative political economy scholarship and suggests that the field needs to return its gaze far more toward organized interests.

This thesis looks at the politics of labor market policy in the postwar period in the advanced industrialized democracies. Specifically, the dissertation seeks to explain stark cross-national differences in unemployment benefit systems and employment protection legislation. The theory advanced in this thesis emphasizes significant differences in union organization across the rich democracies. This view, “Varieties of Unionism”, shows how the varying political capacities and policy preferences of labor movements explain most of the cross-national policy differences. In particular, the research points to union movements’ ideological traditions and varying rates of union density, union centralization, and involvement in unemployment benefit administration as crucial explanatory forces. Each feature of union movements captures an important part of why they might choose to advocate on behalf of the unemployed and to their differential ability to have those policy preferences realized, as well as indicating the kinds of preferences they will have for employment protection legislation. In the case of policies directed at the unemployed (or so-called labor market ‘Outsiders’), these insights lead to the construction of an index of “Outsider-oriented Unionism”, which correlates very closely to cross-national variations in unemployment benefit generosity as well as to active labor market policy spending. The thesis also introduces a new fourfold typology of unionism that helps to explain the different combinations of employment protection legislation and ‘Outsider policy’ generosity that exist among the rich democracies, or labor market policy ‘regimes’. The thesis makes this argument with multiple regression analysis of fifteen rich democracies and with detailed historical case studies of Britain, The Netherlands, and Sweden. In making this case, the thesis strongly challenges the explanations of labor market policy put forward by the Varieties of Capitalism literature and Insider-Outsider theory. In addition, the thesis reformulates the traditional Power Resource view by introducing a more rigorous theory of labor movements’ policy preferences and thereby qualifies recent statements that have emphasized partisanship almost alone. Most broadly, the theory challenges the “individualist turn” in recent comparative political economy scholarship and suggests that the field needs to return its gaze far more toward organized interests.

Unemployment in Austria has been considerably low in the past decades compared to other European countries. Nevertheless, recent increases in the past five years started a controversial discussion about the generous unemployment insurance system in place. The current government, therefore, argues to change the insurance system similar to the German HARTZ IV reform, although the effects on unemployment have proven to be ambiguous in Germany. I introduce a discrete time life-cycle model with endogenous job-search effort to inquire the potential effects of such a reform on long- and short-term unemployment, as well as individuals' job-search incentives. Individuals are ex-ante heterogeneous in their labour income possibilities and are subject to exogenous layoffs throughout their life. The model suggests that the proposed reform would reduce long-term unemployment substantially, however, to the cost of a larger amount of short-term unemployment spells and decreased overall welfare. Job-search effort over the whole life-cycle appears to increase, with the largest differences at the end of the life-cycle.