Duration Dependence and Labor Market Conditions: Evidence from a Field Experiment

Kroft, Kory; Lange, Fabian; Notowidigdo, Matthew

doi:10.2139/ssrn.2273652

“…Gaini et al (2012) report in this country lower employment rates for cohorts graduating in a recession only during the first two years and no wage penalty. The authors advance two potential explanations: (1) a high minimum wage dampens the effect on wages and (2) a persistently high unemployment rate, such that employers use unemployment less as a negative signal in the hiring process (Biewen and Steffes, 2010;Kroft et al, 2013).…”

Section: Literature Reviewmentioning

confidence: 96%

Scars of recessions in a rigid labor market

Cockx

¹

,

Ghirelli

²

2016

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Scars of Recessions in a Rigid Labor Market AbstractWe study the impact of graduating in a recession in Flanders (Belgium), i.e. in a rigid labor market. In the presence of a high minimum wage, a typical recession hardly influences the hourly wage of low educated men, but reduces working time and earnings by about 4.5% up to twelve years after graduation. For the high educated, the working time is not persistently affected, but the penalty on the hourly wage (and earnings) increases with experience, and attains roughly -6% ten years after labor market entry. We also contribute to the literature on inference with few clusters.

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“…More recently, correspondence tests have been used to study discrimination based on other grounds, such as beauty, criminal background and sexual orientation (Baert and Verhofstadt, 2015;Drydakis, 2009;Drydakis, 2011;Rooth, 2009). In addition, scholars have started to employ correspondence experiments to study phenomena other than labour market discrimination in strict sense, such as unemployment duration dependence and the labour market penalty of motherhood (Baert, 2014;Eriksson and Rooth, 2014;Kroft et al, 2013).…”

Section: Correspondence Experimental Evidence On Age Discriminationmentioning

confidence: 99%

Getting grey hairs in the labour market. An alternative experiment on age discrimination

Baert

¹

,

Norga

²

,

Thuy

³

et al. 2016

Journal of Economic Psychology

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Getting Grey Hairs in the Labour ABSTRACT Getting Grey Hairs in the Labour Market: An Alternative Experiment on Age DiscriminationThis study presents a new field experimental approach for measuring age discrimination in hiring. In addition to the classical approach in which candidates' ages are randomly assigned within pairs of fictitious resumes that are sent to real vacancies, we randomly assign activities undertaken by the older candidates during their additional life years between these pairs. When applying this design to the Belgium case, we find that age discrimination is fundamentally heterogeneous by older candidates' career pattern. Older age affects call-back only (negatively) in case older candidates were inactive or employed in an out-of-field job during their additional post-educational years. NON-TECHNICAL SUMMARYWe measured age discrimination in the Belgian labour market. To this end, we sent out fictitious job applications, only differing in age, to real vacancies. We distinguished between older candidates who were (i) employed in an in-field job, (ii) employed in an out-of-field job or (iii) inactive during their additional post-educational years (in comparison to the younger fictitious candidates). We found that revealing an older age decreased the probability of getting invited to a job interview with 65.0% when revealing out-of-field employment and with 41.2% when revealing inactivity. On the other hand, older candidates with more in-field employment had the same hiring chances as their younger counterparts. JEL Classification:C90, C93, J14, J71

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“…Regarding the explanation of this phenomenon there is, however, a debate in the literature (Machin and Manning 1999: 12): according to some studies, unobserved heterogeneity explains this outcome, whereby the most employable workers leave unemployment quickly while the least employable remain in the group of the unemployed. Other authors have argued that there is true duration dependence, meaning either that long spells of unemployment reduce reemployment prospects because the workers lose their knowhow, motivation and selfconfidence or that employers perceive long unemployment spells as a negative signal of workers' abilities (Pissarides 1992;Flückiger 2002: 15;Eriksson andRooth 2014: 1029;Kroft et al 2013Kroft et al : 1128.…”

Section: Unemployment Durationmentioning

confidence: 99%