A new GLO Discussion Paper investigates whetherthe socio-economic disadvantages that platform workers are likely to face are primarily channeled through lower incomes or more precarious working conditions.They are primarily students and face greater economic insecurity relative to all other occupations.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: The emergence of the platform economy has served as a defining feature of increasing fragmented labour markets in modern economies. Recent research on platform work, however, has struggled to quantify the socio-economic conditions of platform workers relative to other occupation groups. Moreover, it remains unclear if the socio-economic disadvantages that platform workers are likely to face are primarily channeled through lower incomes or their more precarious working conditions. This study uses representative survey data of platform workers in Italy to investigate their size, composition, and socio- economic conditions relative to individuals in other occupations. Our findings reveal that platform workers tend to be students and of younger age, but are diverse with respect to sex, educational attainment, and native-born status. We find that platform workers face greater economic insecurity relative to all other occupation classes. Strikingly, they also feature a rate of economic insecurity that is not significantly different from that of unemployed adults. Moreover, we find that the higher levels of insecurity are not primarily channeled through lower incomes; instead, higher rates of insecurity persist even when taking family incomes into account, suggesting that the precarity and volatility of platform work matter as much as income differences in shaping economic disadvantage. Results hold under analyses that account for selection into platform work. Our findings carry important consequences for understandings of the intensity and sources of socio- economic disadvantage of individuals engaged in platform work.
A new GLO Discussion Paper demonstrates how immigrant men following the 1965 Immigration and Nationality Act in the United States have low initial earnings and high earnings growth after all.A re-visit of an influential debate in migration economics.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: Two radically different descriptions of immigrant earnings trajectories in the U.S. have emerged. One asserts that immigrant men following the 1965 Immigration and Nationality Act have low initial earnings and high earnings growth. Another asserts that post-1965 immigrants have low initial earnings and low earnings growth. We describe the methodological issues that create this divide and show that low earnings growth becomes high earnings growth when immigrants are followed from their initial years in the U.S., earnings growth is allowed to vary with entry earnings, and-when following cohorts instead of individuals-sample restrictions commonly used by labor economists are avoided.
A new GLO Discussion Paper finds that the recent adoption of a two-child policy in China has substantially increased the number of second-child births.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: This study examines the consequences of relaxing birth quotas by exploiting an exogenous two-child policy adopted by local Chinese governments on different dates. Using China’s 2015 population census combined with a difference-in-differences framework, we find that the adoption of a two-child policy substantially increases the number of second-child births. The impact of the policy is more pronounced among couples who have higher fertility preferences and who are less sensitive to child-rearing costs. At the same time, this policy substantially decreases the number of first-child births. Child-rearing costs are a likely underlying mechanism for this decrease. All of these findings are in line with an extended Barro-Becker model.
GLO Policy Note No. 4 Theme 2: Inequalities and labor markets Theme 3: Future of Work
Working from home and income inequality in the time of COVID-19
A case study of Italy
by Luca Bonacini, Giovanni Gallo, Sergio Scicchitano
Luca Bonacini (University of Modena and Reggio Emilia, GLO)
Giovanni Gallo (Sapienza University of Rome, University of Modena and Reggio Emilia, GLO)
Sergio Scicchitano (National Institute for Public Policies Analysis – INAPP, GLO)
Luca Bonacini
Giovanni Gallo
Sergio Scicchitano
In a recent GLO Discussion Paper and just published in the Journal of Population Economics (Bonacini et al., 2021), we explore the potential consequences in labour income distribution of long-lasting increase in Working From Home (WFH) among Italian employees. Results show that an increase in WFH would be associated with an increase in the average labour income, but this potential benefit would not be equally distributed among employees. Specifically, an increase in WFH would favour male, older, high-educated, and high-paid employees. This “forced innovation” thus risks to exacerbate pre-existing inequalities in the labour market. As a consequence, this study suggests a series of policies aimed at alleviating inequality in the short run and, more importantly, that should play a rebalancing role, in the long run. ____________________
What we should know
To limit the number of deaths and hospitalisations due to the novel coronavirus, most governments decided to suspend many economic activities and restrict people’s freedom of mobility.
In this context, the opportunity to work from home (hereinafter called WFH) became of great importance, since it allows: employees to continue working and thus receiving wages, employers to keep producing services and revenues, and overall limits infection spread risk and pandemic recessive impacts.
Recent estimates for the US show that between February and May 2020 over one third of the labour force switched to WFH, resulting in about half of workers working remotely during the pandemic. Remote workers have quadrupled to 50% of US workforce (Brynjolfsson et al., 2020). Due to uncertainty about the duration of the health emergency and future contagion waves, the role of WFH in the labour market is further emphasized by the fact that it might become a new standard (rather than an unconventional) way of working in many economic sectors, possibly resulting in structural effects on the labour market worldwide (Baert et al., 2020).
Because of the WFH sudden prominence and growth, several studies recently investigated this phenomenon, especially with the objective of identifying the number of jobs that can be done remotely (Adams-Prassl et al., 2020; Dingel and Neiman, 2020; Mongey at al., 2020). However, the literature neglects potential effects of WFH on wage distribution and on income inequality in general.
What we do
This study is a first to show how a future increase in WFH would be related to changes in labour income levels and inequality.
We analyse to what extent an increase in the number of employees who have the opportunity to WFH (or at least an increase in the likelihood their professions can be performed from home) would influence the wage distribution, under the hypothesis that this WFH feasibility shift is long lasting.
We focus on Italy as an interesting case study because before the pandemic, the WFH practice was not widespread and it is the first Western country to adopt a lockdown of economic activities (on March 11). Barbieri et al. (2020) estimated that at least 3 million employees started to WFH because of lockdown measures, and a large number started even earlier due to the closure of schools and universities on March 5. Moreover, Italy was the European country with the lowest share of teleworkers before the crisis (Eurofound and ILO, 2017) and, because of the pandemic, it had to face a massive increase in WFH in a very short time without precise legislation and adequate policies.
Our analysis relies on a uniquely detailed dataset relying on the merge of two sample surveys: the Survey on Labour Participation and Unemployment (INAPP-PLUS) for the year 2018, which contains information on incomes, skills, education level, and employment conditions of approximately 45,000 working-age Italians and the Italian Survey of Professions (ICP) for the year 2013, which provides detailed information on the task-content of occupations. The analysis is conducted through an influence function regression method which allows to estimate the impact of marginal changes on an outcome variable distribution (see the paper for more details on the method).
What we find
Employees with high WFH feasibility levels are more often female, older, highly educated, and among those living in metropolitan areas.
Economic sectors being characterized by greater shares of employees with high WFH feasibility are: Finance and Insurance, Information and Communications, and Other Business Services (e.g., car renting, travel agencies, employment agencies).
Figure 1 shows the wage gap between employees with high and low WFH feasibility and the share of WFH feasibility along the income deciles. The figure clearly shows that the wage gap is increasing along the distribution and reaches highest values in the last two decile groups, as well as the same incidence of high WFH feasibility among employees.
Figure 1 – Incidence of high WFH feasibility and wage gap in favor of employees with high feasibility levels by decile of annual income
What we suggest
WFH risks to exacerbate pre-existing inequalities in the labour market. In this respect, while during the current emergency, policies aimed at alleviating inequality in the short run (e.g. income support measures for the most vulnerable), should be implemented, long-term interventions are even more necessary in order to prevent future rise of inequalities in the labour market. These long-term policies go in three interrelated directions:
The necessary massive reorganisation of work, particularly in the field of reengineering of production processes based on new digital technologies and on the possibility offered in terms of work from home requires new and more widespread skills.
We need to promote through adequate economic and cultural incentives, non-compulsory education for youth coming from poorer households. This would include training courses, which would play an important role in reducing future unequal distribution of benefits related to an increase of WFH opportunities, by increasing human capital and favouring its complementarities with technology.
Our study highlights that while most of the increase in WFH will concern women, the wage premium would be borne by male employees. In this perspective, a possible, non-exhaustive solution could be offered by policies aimed at improving work–family reconciliation, that continues to be shouldered more significantly by women. In particular, we stress the importance of an improving of public childcare and financial support to households with children.
Our study brings out several policy issues for tackling inequalities that will arise in the labour market because of the current pandemic in particular the more than probable increase in Working From Home. Our results are based on Italian data, but they may be useful to policymakers in other countries as well and, in general, where COVID-19 has forced governments and businesses to rethink production processes with a more intense and stable use of WFH. __________________
References
Adams-Prassl, A., Boneva, T., Golin M., Rauh C., (2020). Inequality in the Impact of the Coronavirus Shock: Evidence from Real Time Surveys. IZA Discussion Paper No. 13183.
Baert, S. Lippens, L. Moens, E. Sterkens, P. Weytjens, J. (2020), How do we think the COVID-19 crisis will affect our careers (if any remain)?, GLO Discussion Paper, No. 520, Global Labor Organization (GLO), Essen.
Barbieri, T., Basso, G., Scicchitano, S., (2020). Italian Workers at Risk during the COVID-19 Epidemic, GLO Discussion Paper, No. 513, Global Labor Organization (GLO), Essen.
Bonacini, L., Gallo, G. & Scicchitano, S. (2021). Working from home and income inequality: risks of a ‘new normal’ with COVID-19. J Popul Econ 34, 303–360.
Brynjolfsson, E., Horton, J. Ozimek, A. Rock, D. Sharma, G. and Yi Tu Ye, H. (2020). Covid-19 and remote work: An early look at U.S. data. NBER Working Paper 27344.
Dingel, J. I. and B. Neiman (2020). How many jobs can be done at home? Journal of Public Economics 189, 104235.
Eurofound and the International Labour Office (2017), Working anytime, anywhere: The effects on the world of work, Publications Office of the European Union, Luxembourg, and the International Labour Office, Geneva.
Mongey, S., Pilossoph, L., Weinberg. A., (2020). Which Workers Bear the Burden of Social Distancing Policies?. NBER Working Paper No. 27085.
Note: The opinions expressed here are those of the authors and not of the GLO, which has no institutional position.
A new GLO Discussion Paper studies a model economy where a firm and its workforce are linked by an implicit contract and examine the dynamic behavioral properties.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: In this paper, we explore the dynamics of working hours and wages in a model economy where a firm and its workforce are linked to each other by an implicit contract. Specifically, we develop a deterministic and a stochastic framework in which the firm sets its level of labour utilization by considering that workers’ earnings tend to adjust in the direction of a fixed level. Without any uncertainty in firm’s profitability, we show that the existence and the properties of stationary solutions rely on factors that usually determine the enforceability of contracts and we provide evidence that wages tend to move countercyclically towards the allocation preferred by the firm. Moreover, we show that adding uncertainty does not overturn the counter-cyclical pattern of wages but is helpful in explaining their dynamic behaviour in response to demand shocks as well as their typical stickiness observed at the macro level.
A new paper published ONLINE FIRST with free READ ACCESS show that male scarcity (a decrease in the male-to-female sex ratio) induces an increase in the number and a decrease in the quality of children in a reasonable model framework and confirms this for post World War II Japan.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Consequences of war: Japan’s demographic transition and the marriage market
by Kota Ogasawara & Mizuki Komura
Published ONLINE FIRST 2021: Journal of Population Economics FREE READ LINK: https://rdcu.be/ci5pw
Author Abstract: This study explores the effects of imbalances in the sex ratio on both the quantity and the quality of children, with a focus on changes in intra-household bargaining power. We first present a theoretical model of intra-household bargaining in the presence of conflicting family goals within a couple, and show that male scarcity (a decrease in the male-to-female sex ratio) induces an increase in the number of children and a decrease in the quality of children. Second, using the impact of World War II on the sex ratio as a quasi-natural experiment, we establish empirically that the decrease in the male-to-female sex ratio in World War II contributed to a smaller decline in fertility and child mortality rates in postwar Japan. In particular, the fertility rate would have fallen by an additional 12% and the child mortality rate by an additional 13% between 1948 and 1970 absent the decrease in the sex ratio.
A new GLO Discussion Paper reviews and evaluates the concept of the quality of work and employment including both ‘decent work’ and the narrower concept of ‘job quality’.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: This review examines the concept of the quality of work and employment (QWE), including both ‘Decent Work’ and the narrower concept of ‘job quality’. The key axiom is that ‘quality’ relates to the extent and manner in which working conditions meet people’s needs from work. The review emphasises the multi-disciplinary nature of the topic. It discusses the concept’s objective character, its relationship with well-being, and its link with productivity. Important measurement issues are considered, including cost, international comparability, the choice of how many indices, the treatment of inequality and the problem of discipline insularity. Some theories of the antecedents of QWE imply universal trends, while others predict differentiation across countries and regions, attributable to labour market institutions and policy. The effects on well-being and health are studied in several disciplines, including a substantial research programme in psychology. Summary trends in Europe and distributions of job quality are presented for context, including gender gaps. This description shows gradual improvement in the physical environment of work and in working time quality over the decade from 2005. Yet the distribution of job quality in several domains is not at all closely related to a country’s GDP. The review concludes with a discussion of job quality policy making, and frames the ongoing research agenda.
A new paper published ONLINE FIRST with free READ ACCESS reveals that girls are mostly unaffected by peers from disrupted families, while boys exhibit more school problems in adolescence and higher arrest probabilities, less stable jobs, and higher probabilities of suffering from financial stress as young adults.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Short-run and long-run effects of peers from disrupted families
by Ziteng Lei
Published ONLINE FIRST 2021: Journal of Population Economics FREE READ LINK: https://rdcu.be/ciWuz
Author Abstract: I study the short-run and long-run effects of exposure to peers from disrupted families in adolescence. Using the National Longitudinal Study of Adolescent to Adult Health (Add Health) data, I find that girls are mostly unaffected by peers from disrupted families, while boys exposed to more peers from disrupted families exhibit more school problems in adolescence and higher arrest probabilities, less stable jobs, and higher probabilities of suffering from financial stress as young adults. These results suggest negative effects on non-cognitive skills but no effect on cognitive skills, as measured by academic performance. The dramatic increase in family disruption in the USA should thus receive more attention, as the intergenerational mobility and inequality consequences could be larger than anticipated as a result of classroom spillovers.
A new GLO Discussion Paper assesses firm data from World Bank enterprise surveys to obtain lessons from the early stages of the Coronavirus pandemic.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
Author Abstract: This study uses evidence from World Bank enterprise surveys of a sample of firms from six countries in Southern Europe. It examines the early evidence of the effects of Covid-19 on labour markets. The evidence and the analysis are provided at a time when the pandemic is still in progress. The future progress of Covid-19 and government containment measures is uncertain, and the full economic consequences will probably continue to emerge after the end of the pandemic. The full extent of the impact on labour will probably not be the first of these. Nonetheless the possibility of learning lessons from the early stages of the pandemic is sufficiently important to make the exercise valuable. The study suggests that, despite efforts to support firms and hoard labour, there is a prospect of a significant number of firm closures with a consequent loss of employment. Temporary firm closures also represent a substantial loss of labour weeks. These are partly related to a significant number of workers subject to furloughs. Both temporary closures and furloughs impose costs that will be borne by firms, workers and government. The effects of Covid-19 on firms differ across sectors. Adverse effects tend to be higher in hospitality, non-essential retail and travel. A degree of gender segregation means that these are sectors with a high proportion of female workers and, in consequence, most of the countries in the sample exhibit an early decline of the share of women in employment. That many firms lack the capacity to survive further temporary closures of a similar duration to those in the earlier stages emphasises that the support provided in the near future is of critical importance to control employment losses through permanent firm closures.
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