Demographic Change & Labor Market Flashcards
Correlation of female employment & fertility?
Globally, Women’s wage employment is negatively correlated with total fertility rates and unmet need for family planning and positively correlated with modern contraceptive use in every major world region.
Nonetheless, evidence suggest these findings hold for non-agricultural employment only employment in agriculture has close to a null relationship with having children at home
Regional heterogeneities fertility & female employment
Different institutional contexts and meaning of ‘FLFP’:
* ASEAN: negative
* Africa: positive in high range of # of children (4+)
* North America: positive but lower range of # of children (0-3)
Correlation of female employment & fertility - reversed?
high-income countries: the negative correlation between women’s wage employment and fertility has been well documented
BUT reversal in these trends in countries with lowest-low fertility:
“female labor force participation rates have a positive (and significant) influence on the TFR in cross-sectional analyses of OECD countries in the 1990s, while comparable analyses for the 1970s reveal a negative influence.”
Approaches to the employment–fertility correlation
1) Bidirectional causal relationship:
Birth control and lower fertility allow higher participation of women in the labor force; rising female labor force participation ‘forces’ women to reduce number of children
Approaches to the employment–fertility correlation
2) Incompatibility hypothesis:
Hinges on the nature of employment in industrialized economies –> ‘male-breadwinner’ model:
childrearing and paid work (typically outside the home w/ inflexible schedules) are incompatible for women due to logistical constraints (lack of child care availability) and ‘female-homemaker’ gender norms
How can recent reversal of correlations (fertility & women employment) be explained by incompatibility hypothesis?
- resulting from changes in social policies & institutions (e.g., parental leave, child-care centers, part-time and flexible employment)
- and changes in gender relations (men’s increased involvement in child-rearing might similarly reduce the negative association between employment and fertility)
-> partly endogenous relation, certain forms of social policy can trigger changes in gender relations and shifts in gender relations can increase demand for institutional change
Approaches to the employment–fertility correlation
3) Empowerment approach:
- Saying: women’s employment is an important form of economic empowerment that is important for fertility reduction
- widely utilized concept in research on low-income contexts where women are heavily involved in agricultural production, primarily as family workers, which can be more easily reconciled with reproductive work
-> Structural changes in the economy and women’s greater involvement in non-agricultural sectors may lead to economic empowerment and autonomy (= making own money reduces dependency on family ties aka fathers/husbands) -> important for fertility reduction (e.g. through greater bargaining power to advocate for their reproductive preferences)
-> At the same time, the reverse may be true also true: increased access to reproductive control and lowered fertility may empower women to enter the wage labor market
Women’s employment always empowering?
(1) informal/poorly paid jobs (i.e. agriculture, industry): may be less effective at changing women’s preferences or bargaining abilities because still lack financial security and/or personal autonomy
(2) patriarchal authority: employment does not inherently lead to increased women’s autonomy, needs to be outside of husbands’ farms to positively affect female autonomy outcomes (“contributing family workers”)
-> Particularly the case in sub-Saharan Africa and southern Asia, where significantly more women are contributing family workers
Empowerment perspective useful for high-income countries?
effects of educational expansion and ‘gender revolution’ in the late 1960s on women’s career and family-related choices!
Women might want fewer children (at least partially) not just because of incompatibility but because they find social meaning in other aspects of life outside of motherhood and have the resources to realize their goals (Blackstone and Stewart 2012).
Socio-cultural change of women’s employment
became more socially approved that women and mothers work
Public spending on family benefits
3 categories + conclusion
Can be categorised into three types:
- Child-related cash transfers to families with children (i.e. child allowances, income support during periods of parental leave / for single-parent families)
- Public spending on services for families with children (i.e. direct financing or subsidisation of childcare, early childhood education facilities, public spending on assistance for young people and residential facilities, home help services for families in need, etc.)
- Financial support for families provided through the tax system (i.e. tax exemptions, child tax allowances, child tax credits, etc.)
Conclusion
o Seems to be a positive relationship between family benefits & female work force participation
o But huge difference in how families are supported & in how much is spent in OECD countries
o No one-size-fits-all policy solutions!
Policy effects on women’s/mother’s employment
- Individual taxation vs. income tax splitting!
- Parental leave policies & subsidized public child care: Initially designed to improve children’s well-being, but also relevant for reconciling (maternal) employment and childrearing.
- Parental leave duration and benefits as well as child care availability affect mothers’ return-to-work behavior
-> Ziefle & Gangl 2014: transition rates at which mothers return to employment generally fall while being covered by parental leave entitlements but peak when entitlements are exhausted - Taking paternal leave (‘daddy months’) is associated with reductions in fathers’ time spent on paid work and with increases in fathers’ time spent on childcare (and housework); e.g. Bünning 2015
Theoretical perspectives of immigrants & labor market
- Neoclassical Economic Theory: Migration driven by macro-level differences in supply of and demand for labor (and resultant wage differences). Individuals seek to maximize their returns to education and labor by migrating.
- New Economic Theories of Migration: Emphasizing the intersection of labor market factors and family / household variables: Households send one or more members to foreign labor markets to return income and capital (remittances).
- Labor Market Segmentation Theory: Dual labor market theory suggest stratification in primary (capital intensive, better paid jobs for natives) & secondary (labor intensive, lower paid jobs for migrants) sectors w/ barriers preventing upward mobility.
–> Selection of immigrants & competition w/ natives (wage depression). o Example: 75% of workers on U.S. crop farms born abroad, mostly in Mexico, ~ 2/3 unauthorized
Employment Rate of Immigrants
- Recent immigrants (2016 vs. 1998) tend to integrate faster into the EU labor market than previous ones.
- BUT sizable employment gaps relative to natives upon arrival in the host country even after controlling for key individual characteristics, indicating an initial lack of country-specific knowledge
- As country-specific skills accumulate with time in residence, the probability of being employed gradually converges to that of otherwise comparable natives, but in most cases full convergence is not observed even after over 20 years
Employment Rate of Refugees
- Overall, employment rates of refugee migrants are very low immediately after arrival in the host country, considerably lower than those of other immigrant groups (as refugees are likely to arrive with skills less adapted to the receiving country’s labor market)
- Typically, increase most sharply during the first 2-3 years after arrival (crucial period for integration!), continues to grow quickly for the rest of the first half-decade, and further continues to grow – at a slower rate – in the second half-decade (longer time scale for refugees’ integration than for other immigrants)
- Employment levels of refugees in the longer term continue to vary significantly between countries, but in many cases do not approach – despite some convergence – the levels of natives or other immigrants
- Female refugees experience persistently lower employment rates than males, particularly missing out on the rapid employment growth experienced by men in the early years after migration
Wage rate of refugees
- Generally, they experience lower wages than the other migrant groups -> increase slowly but consistently relative to those of natives over time but they often do not approach those of natives and also lag significantly behind those of other immigrants
- Even in countries where refugee employment rates quickly approach the levels experienced by natives or other immigrants like the U.S., wage gaps tend to remain large and persistent!
- Cross-country variation in wages relative to natives is significant, but not nearly as large as that of employment rates
- No qualitative changes in the results when controlling for compositional differences (age, education, and gender), indicating that these factors are not the primary cause of the observed trends in refugee wages
–> health, social networks?
Labor force aging?
Labor force is aging but no indication for most of the 20th century, has been just the opposite:
- labor force participation of older persons has been declining (until recently),
- while life expectancy has increased (although there is substantial variation across countries)
–> Thus, making it more difficult for those who are working to support those who are retired
Development of labor market exit age in US?
Aging Population: Health improvement
In the mid-1970s, about 25% of 59-year-old men said that they were in fair or poor health. But in the mid-1990s, not until age 69 did 25% of men report that they were in fair or poor health, a difference of 10 years
-> Social and economic choices in societies must adjust as the age structure of the population changes. One such adjustment would take advantage of the gains that have been achieved in longevity to increase the labor force participation of older workers and reduce the number of retirees whom those in the workforce must support
Aging Population: Educational improvement
Highest employment rates (65-69 y.o.) are found for highly educated individuals – this result applies for both men and women in all three countries
Part of the explanation of the increase in the labour force participation rates might thus be that the educational level has increased among the 65–69-year-olds in the three countries.
(BUT Germany mainly seems to be a result of policy reforms, the increase in Sweden appear to be a result of a combination of policy changes and an increasing educational level)
-> Beware of social inequality: not everybody is healthy or highly educated (nor does everybody participate in progress therein in the same way); e.g. Gutin & Hummer 2021!
What affects the (speed of) employment integration of immigrants?
Varies substantially due to gender, education, country of origin, host countries as well as existing social networks and categories of migration (employment, family, etc.)
➢ Integration tends to be significantly slower for women and migrants from MENA countries
➢ Favorable macroeconomic/labor market conditions in the host country around the time of arrival help smooth (female) immigrants’ transition into the labor market.
➢ Schooling acquired in the migrants’ home country tends to pay off less than that acquired in the host country (due to difficulties in validating/transferring foreign degrees into
equivalent domestic-based qualifications).
➢ Returns to domestic education are lower for immigrants than for natives of similar characteristics, suggesting that non-skill barriers may be at work.
➢ Informal social networks are likely to be important in determining the labor market outcomes of (male) migrants.
