Institute for the Study of Labor

About: Institute for the Study of Labor is a nonprofit organization based out in Bonn, Germany. It is known for research contribution in the topics: Wage & Unemployment. The organization has 2039 authors who have published 13475 publications receiving 439376 citations.

Civil War, Crop Failure, and Child Stunting in Rwanda

Abstract: Economic shocks at birth have lasting effects on children's health several years after the shock. The authors calculate height for age z-scores for children under age five using data from a Rwandan nationally representative household survey conducted in 1992. They exploit district and time variation in crop failure and civil conflict to measure the impact of exogenous shocks that children experience at birth on their height several years later. They find that boys and girls born after the shock in regions experiencing civil conflict are both negatively affected with height for age z-scores 0.30 and 0.72 standard deviations lower, respectively. Conversely, only girls are negatively affected by crop failure, with these girls exhibiting 0.41 standard deviation lower height for age z-scores and the impact is worse for girls in poor households. Results are robust to using sibling difference estimators, household level production, and rainfall shocks as alternative measures of crop failure.

The Cost of the COVID-19 Crisis: Lockdowns, Macroeconomic Expectations, and Consumer Spending

Abstract: We study how the differential timing of local lockdowns due to COVID-19 causally affects households’ spending and macroeconomic expectations at the local level using several waves of a customized survey with more than 10,000 respondents. About 50% of survey participants report income and wealth losses due to the corona virus, with the average losses being $5,293 and $33,482 respectively. Aggregate consumer spending dropped by 31 log percentage points with the largest drops in travel and clothing. We find that households living in counties that went into lockdown earlier expect the unemployment rate over the next twelve months to be 13 percentage points higher and continue to expect higher unemployment at horizons of three to five years. They also expect lower future inflation, report higher uncertainty, expect lower mortgage rates for up to 10 years, and have moved out of foreign stocks into liquid forms of savings. The imposition of lockdowns can account for much of the decline in employment in recent months as well as declines in consumer spending. While lockdowns have pronounced effects on local economic conditions and households’ expectations, they have little impact on approval ratings of Congress, the Fed, or the Treasury but lead to declines in the approval of the President.

'It Wasn't Me, It Was Them!' Social Influence in Risky Behavior by Adolescents

Abstract: Many years of concerted policy effort in Western countries has not prevented young people from experimenting with cigarettes, alcohol and marijuana. One potential explanation is that social interactions make consumption "sticky". We use detailed panel data from the Add Health survey to examine risky behavior (the consumption of tobacco, alcohol and marijuana) by American adolescents. We find that, even controlling for school fixed effects, these behaviors are correlated with lagged peer group behavior. Peer group effects are strongest for alcohol use, and young males are more influential than young females. Last, we present some evidence of non-linearities in social interactions.

Rising wage inequality : the role of composition and prices

Abstract: During the early 1980s, earnings inequality in the U.S. labor market rose relatively uniformly throughout the wage distribution. But this uniformity gave way to a significant divergence starting in 1987, with upper-tail (90/50) inequality rising steadily and lower tail (50/10) inequality either flattening or compressing for the next 16 years (1987 to 2003). This paper applies and extends a quantile decomposition technique proposed by Machado and Mata (2005) to evaluate the role of changing labor force composition (in terms of education and experience) and changing labor market prices to the expansion and subsequent divergence of upper- and lower-tail inequality over the last three decades We show that the extended Machado-Mata quantile decomposition corrects shortcomings of the original Juhn-Murphy-Pierce (1993) full distribution accounting method and nests the kernel reweighting approach proposed by DiNardo, Fortin and Lemieux (1996). Our analysis reveals that shifts in labor force composition have positively impacted earnings inequality during the 1990s. But these compositional shifts have primarily operated on the lower half of the earnings distribution by muting a contemporaneous, countervailing lower-tail price compression. The steady rise of upper tail inequality since the late 1970s appears almost entirely explained by ongoing between-group price changes (particularly increasing wage differentials by education) and residual price changes.

Economic Reform and Mortality in the Former Soviet Union: A Study of the Suicide Epidemic in the 1990s

Abstract: Male suicide rates in Russia, Belarus, Ukraine and the Baltic countries increased substantially in the early 1990s and are now the highest in the world. To what extent is this suicide epidemic explained by the macroeconomic instability experienced by these countries in that period? Fixed effects regressions across 22 transition economies indicate that male suicide rates are highly sensitive to the state of the macroeconomy, suggesting that the steep and prolonged declines in GDP in the western countries of the former Soviet Union may have been partly to blame for the suicide epidemic. Evidence also indicates that the general adult male mortality crisis in the region had a 'feedback' effect on suicide rates, with the loss of a spouse or friend ? or declining life expectancy itself ? contributing to rising suicide rates. Female suicide rates, in contrast, are insensitive to the state of the macroeconomy and are more strongly related to alcohol consumption.