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Controlling for country fixed effects, there is a positive and statistically significant relationship between the degree of housing market regulation (HMR) and the strictness of employment protection legislation (EPL) in OECD countries. We provide a model in which HMR increases foreclosure costs in case of mortgage default, while EPL raises the administrative cost of dismissal. Owing to banks' lending behavior, individuals' demand for job protection increases with the cost of foreclosure. We use the model to discuss social housing and family insurance, the case for mortgage unemployment insurance, the impact of min down-payment policies, regulations on the use of fixed-term contracts, the failure of a 2006 French reform of labor contracts, and feed-back effects from HMR to EPL.
We propose a search equilibrium model in which homogenous rms post wages along with a vacancy to attract job-seekers, while homogenous unemployed workers invest in costly job-seeking. The key innovation relies on the organization of the search market and the search behavior of the job-seekers. The search market is continuously segmented by wage level, individuals can spread their search investment over the di¤erent sub-markets, and search intensity has marginal decreasing returns on each sub-market. We show that there exists a non-degenerate equilibrium wage distribution. The density of this wage distribution is increasing at low wages, and decreasing at high wages. Under additional restrictions, it is hump-shaped, and it can be right-tailed. Our results are illustrated by an example originating a Beta wage distribution.
We consider a static search model with two types of workers, Nash bargaining, and free entry of firms. The matching function is specified so as cross-type congestion effects are asymmetric. Skilled workers create congestion effects for all, while unskilled workers do not affect the odds of employment for the skilled. An increase in the share of skilled workers has two effects on the welfare of the unskilled: a negative crowding-out effect, and a positive labor demand effect. The former (latter) effect dominates whenever the skill differential is small (large).
We set a model of skill acquisition where individuals choose the scope and intensity of their skills. More general skills allow the worker to perform on more jobs, but with a lower productivity. When the investment takes place before the labor market entry, frictions motivate the acquisition of more general skills. When the investment takes place once on the job, frictions have an ambiguous impact on the degree of skill generality. Classification JEL : I21 ; J24
This paper studies the efficiency of educational choices in a two sector/two schooling level matching model of the labor market where a continuum of heterogenous workers allocates itself between sectors depending on their decision to invest in education. Individuals differ in working ability and schooling cost, the search market is segmented by education, and there is free entry of new firms in each sector. Self-selection in education causes composition effects in the distribution of skills across sectors. This in turn modifies the intensity of job creation, implying the private and social returns to schooling always differ. Provided that ability and schooling cost are not too positively correlated, agents with large schooling costs – the 'poor' – underinvest in education, while there is overinvestment among the low schooling cost individuals – the 'rich'. We also show that education should be more taxed than subsidized when the Hosios condition holds.
This article surveys the literature studying the links between unemployment and the family. First, we focus on the interactions between family status and unemployment risks. Being in a couple rather than single, as the number of children influence unemployment duration. In turn, unemployment impacts couple formation and dissolution, as the decision to have children and the timing of births. We then investigate the mutual insurance role against labour income risks played by the spouses. We insist on the limited insurance provided by the spouses due to limited commitment, and the particularly high default risk in bad times for the couple. The latter risk is all the more important than unemployment alters bargaining powers inside the couple. Finally, this leads us to investigate the institutional framework aimed at protecting individuals/ families against labour market hazards (Unemployment Insurance and Employment Protection Legislation) and its interactions with the family. It turns out that many countries provide more Employment Protection to those having a family. However, Unemployment Insurance depends very little on family status, once taxes and transfers are taken into account.
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Géographie du chômage des personnes d'origine africaine : 2) Pourquoi une si faible mobilité résidentielle ? Nous montrons à l'aide de l'enquête nationale Logement de l'Insee que les personnes d'origine africaine tendent à se fixer dans les grandes agglomérations dans des proportions beaucoup plus importantes que les personnes d'origine française. Deux raisons expliquent ce phénomène : la concentration du logement social dans les grandes villes et des phénomènes de discrimination à l'œuvre sur le marché du logement que nous mettons en évidence, tant sur le marché de la location que sur le marché de l'accession. Ces deux raisons permettent également d'expliquer, en dehors de toute préférence particulière, une sorte de tropisme des Africains vers le logement social : ils sont plus enclins à y entrer et beaucoup moins enclins à en sortir. Ces constats apparaissent robustes au contrôle des caractéristiques individuelles. ché de l'accession. Ces deux raisons permettent également d'expliquer, en dehors de toute préférence particulière, une sorte de tropisme des Africains vers le logement social : ils sont plus enclins à y entrer et beaucoup moins enclins à en sortir. Ces constats apparaissent robustes au contrôle des caractéristiques individuelles.
[eng] The Geography of Unemployment of First and Second-generation Africans in France:. 1) Customer Discrimination in Face-to-face Jobs.. . It is well-known that the unemployment rate differential between people of foreign and French origins has increased over the past decades. This statement must be completed by two key features. First, the unemployment rate differential is considerably higher in large cities than in small ones. Second, this geographic dualism has been magnified over time. This paper documents these two facts and offers a credible interpretation that relies on market failures on local labour markets. The hypotheses we test are the following ones. 1) People of foreign origin are mostly discriminated against in jobs which imply a face-to-face interaction with the customers. 2) Jobs that do not imply such an interaction have been swept out of big cities because of the increase in land prices ; the proportion of discrimination-prone jobs in urban areas has increased accordingly. If we buy the idea that foreign populations were stuck in large cites due to biased preferences or reasons linked to the housing market (an hypothesis we test in the companion paper we publish in this issue of the journal), we shed light on a spatial mismatch for foreign population at the national level. It would have been easier for them to find a non-discriminated job in smaller cities. Our empirical work is based on national labor surveys (FQJP and CdT) and the French census. in large cities than in small ones. Second, this geographic dualism has been magnified over time. This paper documents these two facts and offers a credible interpretation that relies on market failures on local labour markets. The hypotheses we test are the following ones. 1) People of foreign origin are mostly discriminated against in jobs which imply a face-to-face interaction with the customers. 2) Jobs that do not imply such an interaction have been swept out of big cities because of the increase i
This paper presents a continuous time overlapping-generation (OLG) model which generalizes the Blanchard-Buiter-Weil model and clarifies the relationships between dynastic altruism, the length of planning horizons, and dynamic inefficiency. Our main innovation relies on the introduction of parental altruism, whose intensity is variable. We first show that parental altruism and life expectancy do favor overaccumulation. Second, we give a condition that explains why the Ramsey model may only display dynamic efficiency. These theoretical results are illustrated by a parameterization from US data. Our numerical exercises suggest that the US economy is dynamically efficient, mainly because of the shortness of life expectancy.