Category: featured

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Unemployment Insurance and Reservation Wages: Evidence from Administrative Data

Le Barbanchon, Thomas and Alexandra Roulet. Unemployment Insurance and Reservation Wages: Evidence from Administrative Data. Journal of Public Economics, forthcoming.

Although the reservation wage plays a central role in job search models, empirical evidence on the determinants of reservation wages, including key policy variables such as unemployment insurance (UI), is scarce. In France, unemployed people must declare their reservation wage to the Public Employment Service when they register to claim UI benefits. We take advantage of these rich French administrative data and of a reform of UI rules to estimate the effect of the Potential Benefit Duration (PBD) on reservation wages and on other dimensions of job selectivity, using a difference-in-difference strategy. We cannot reject that the elasticity of the reservation wage with respect to PBD is zero. Our results are precise and we can rule out elasticities larger than 0.006. Furthermore, we do not find any significant effects of PBD on the desired number of hours, duration of labor contract and commuting time/distance. The estimated elasticity of actual benefit duration with respect to PBD of 0.3 is in line with the consensus in the literature. Exploiting a Regression Discontinuity Design as an alternative identification strategy, we find similar results.

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Measuring Segregation on Small Units: A Partial Identification Analysis

D’Haultfoeuille Xavier and Rathelot Roland. Measuring Segregation on Small Units: A Partial Identification Analysis. Quantitative Economics,
8(1), pp. 39-73, March 2017.

We consider the issue of measuring segregation in a population of small units, considering establishments in our application. Each establishment may have a different probability to hire an individual from the minority group. We define segregation indices as inequality indices on these un- observed, random probabilities. Because these probabilities are measured with error by proportions, standard estimators are inconsistent. We model this problem as a nonparametric binomial mixture. Under this testable assumption and conditions satisfied by standard segregation indices, such indices are partially identified and sharp bounds can be easily obtained by an optimization over a low dimensional space. We also develop bootstrap confidence intervals and a test of the binomial mixture model. Finally, we apply our method to measure the segregation of foreigners in small French firms.

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The Heterogeneity of Ethnic Employment Gaps

Aeberhardt Romain, Coudin Elise and Rathelot, Roland. The Heterogeneity of Ethnic Employment Gaps. Journal of Population Economics, 30(1), pp. 307-337, January 2017.

This paper investigates the heterogeneity of ethnic employment gaps using a new single-index based approach. Instead of stratifying our sample by age or education, we study ethnic employment gaps along a continuous measure of employability, the employment probability minority workers would have if their characteristics were priced as in the majority group. We apply this method to French males, comparing those whose parents are North African immigrants and those with native parents. We find that both the raw and the unexplained ethnic employment differentials are larger for low-employability workers than for high-employability ones. We show in a theoretical framework that this heterogeneity can be accounted for by homogeneous underlying mechanisms and is not evidence for, say, heterogeneous discrimination. Finally, we discuss our main empirical findings in the light of simple taste-based vs. statistical discrimination models.