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We study how the human capital embedded in teams is affected by, and reallocated through, corporate bankruptcies. After a bankruptcy, U.S. inventors produce fewer and less impactful patents. Moreover, teams become less stable. Consequently, compared to inventors that rely less on teamwork, the performance of team inventors deteriorates more. These findings point to the loss of team-specific human capital as a cost of resource reallocation through bankruptcy. Acquisitions by industrial firms and joint mobility of inventors with past collaborations limit these losses, suggesting that the labor market and the market for corporate control help preserve team-specific human capital in bankruptcies. [ABSTRACT FROM AUTHOR]

How does firm-specific human capital shape careers in the finance industry? We build a dynamic model where workers accumulate portable and nonportable (firm-specific) human capital and learn about their match quality with employers. Estimating the model using granular data on M&A advisory bankers, we show that a large fraction of bankers' human capital is nonportable, ranging from 12% to 46% across different firm types. Bankers make a dynamic trade-off between portability and returns on human capital, leading to time-varying job preferences over their life cycle. Our results have broad implications for careers in finance and the provision of financial services. [ABSTRACT FROM AUTHOR]

Uncertainty shocks are found to affect labour market outcomes adversely. Most studies interrelate non-convex labour adjustment costs with the propagation of macroeconomic uncertainty to the labour market. I show that non-convex labour adjustment costs differ by establishment size in Germany. Hence, uncertainty shocks should affect large and small establishments differently. Therefore, this article studies the effects of uncertainty shocks on employment adjustments in large and small establishments employing four structural vector auto-regressive models for Germany from 1992 to 2014. These four models estimate the effects of uncertainty shocks on employment, worker flows, job flows, as well as worker churn in establishments with fewer than 100 and with at least 100 employees. The results suggest that uncertainty shocks trigger considerable employment fluctuations in large establishments while they barely affect small establishments. Furthermore, large establishments adjust their labour input by delaying the replacement of workers. [ABSTRACT FROM AUTHOR]

Performance evaluation of leaders is challenging in contexts where production processes are complex and there are conflicting pressures from interest groups. In the education context, school accountability systems assemble rich data and report both categorical rating and the underlying student pass rates that determine it, permitting the investigation of how different information affects labor market outcomes of school leaders. Applying regression discontinuity methods that by design hold effectiveness constant, we find sizable positive impacts on Texas elementary school principal retention and salaries for crossing the unacceptable–acceptable boundary but not for crossing higher rating cutoffs. These patterns suggest that public stigma from receiving an unacceptable rating plays a role in the unequal treatment of equally effective principals. While the labor market penalty could theoretically improve the distribution of principal quality through well-targeted departures, there is substantial overlap in principal value-added distributions across rating categories, and failure to cross the acceptable threshold does not lead to future improvements in school performance. [ABSTRACT FROM AUTHOR]

We examine how the distribution of employment tenure has changed over time. The fraction of workers with short tenure (less than one year) has fallen since the mid-1990s, a trend associated with fewer workers cycling among briefly held jobs and an increase in perceived job security among short-tenure workers. Meanwhile, the fraction of men with long tenure (20 years or more) has declined markedly, partly due to the secular shift away from the manufacturing sector and the decline in unionization, as well as an increase in mid-career separations during the 1970s and 1980s that reduced the likelihood of reaching long tenure. [ABSTRACT FROM AUTHOR]

In today's competitive world, credit risk poses a significant challenge to lending institutions such as microfinance institutions (MFIs) due to its impact on their long-term institutional and financial viability. In recent years, high employee turnover has also emerged as a threat to the sustainability of MFIs. Therefore, this study investigates the impact of employee turnover on the credit risk of MFIs using nine years of unbalanced panel data (from 2010 to 2018) of 1266 unique MFIs from 101 countries, obtained from the World Bank databases. In general, we observe that employee turnover raises the credit risk of MFIs. The result is robust to endogeneity-correction techniques (e.g., Hausman-Taylor) and other alternative specification/robustness tests. The findings offer valuable insight for MFI managers, enabling them to make informed decisions about employee turnover management to mitigate credit risks.

We provide evidence on the evolution of worker reallocation in Italy and Spain during the pandemic. In both countries, job-to-job transition rates fell in 2020 but improved in 2021 in aggregate. We then focus on cross-sectoral mobility following job separation. In Italy, we find a modest increase in sectoral reallocation in 2020, reaching 4 percentage points at the end of 2021—around 11 percent of the pre-pandemic average reallocation rate. In contrast, there are no statistically significant differences in the reallocation probability with respect to the pre-pandemic average in Spain.

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After two decades of labour market reforms at the margin, the great recession created political scope to reduce the employment protection still benefitting the workers on open-ended contracts. To support employment levels, these policies have generally been combined with generous employment subsidies. While the theoretical and empirical literature on the two interventions taken in isolation appear generally abundant, almost nothing is known when they come combined. Analogously, no evidence is available on their distributional effects. This paper aims to fill these two gaps by means of counterfactual models estimated on high-frequency employer-employee-linked Italian data. Taking advantage of the quasi-experimental conditions created by the reforms enforced in Italy in 2015, we fit a (non-linear) difference-in-differences strategy into a competing risks duration model. We find prompt sensitivity of small firms to the incentives, while the large ones waited until they were combined with lower firing costs. Small firms substitute temporary for permanent employment, while larger ones do not seem inclined to forego fixed-term contracts, possibly for a probationary period. The reforms have benefitted domestic workers over foreigners, prime-age and older individuals over the young, and those with higher human capital. No gender effects emerge. Small firms operating in non-innovative sectors carry the bulk of heterogeneity effects. Finally, analysis on duration of newly activated open-ended contracts reveals a transitory effect, as separations jumped once the subsidies came to an end. [ABSTRACT FROM AUTHOR]

The current economy is subject to great uncertainty. Smooth labor reallocations are important. This calls for labor market policies that increase flexibility. Conventional wisdom suggests that such policies will increase general skills and reduce firm-specific skills. This study demonstrates that this conjecture is not a theoretical necessity. Indeed, increased labor market flexibility can depress both general and firm-specific skills. If flexibility increases in the experienced worker market, general and firm-specific skills increase or decrease simultaneously. The reason for this surprising outcome emerges from the model. [ABSTRACT FROM AUTHOR]

This paper examines inter-industry patterns of the employment of older workers over the last 20 years to understand where employment opportunities have grown the most. The underlying premise is that firms strategically align their age mix depending on production function and labor cost parameters. The industries that had the largest increases in the percentage of older workers were those that had the broadest pension coverage and those that made the greatest use of high-tech capital. There also is evidence in 2001–07 that the percentage of older workers increased more in the industries most exposed to increased Chinese imports. [ABSTRACT FROM AUTHOR]

Aim/purpose – This study examines the relationship between staff turnover and performance in the microfinance industry in a dynamic perspective and investigates some contingency factors that moderate this relationship.

Using a 40-year panel of public school teachers and principals in New York State, we explore how female principals affect rates of teacher turnover—an important determinant of school quality. We find that male teachers are about 12 percent more likely to leave their schools when they work under female principals than under male principals. In contrast, we find no such effects for female teachers. Furthermore, when male teachers request transfers, they are more likely to request schools with male principals. These results suggest that opposition from male subordinates could inhibit female progress in leadership. [ABSTRACT FROM AUTHOR]

We use high-quality UK panel data to document the extent that pre-existing labour market and financial inequalities were exacerbated by the pandemic between April 2020 and September 2021. Some inequalities worsened, others did not, and in some cases, initial widening of labour market inequalities was subsequently reversed. We find no evidence of an overall divergence in labour market outcomes by gender. Initial changes for ethnic minorities and the young were largely reversed by March 2021. Those in the top third of the long-run income distribution experienced income falls, but also increased saving. Net wealth increased not for only the affluent, but also for middle deciles of the long-run income distribution. These deciles were most protected by the furlough scheme. Those at the bottom of the income distribution were more likely to report a decline in net wealth over the year. [ABSTRACT FROM AUTHOR]

Our research examines the relationship between teachers' unions, teacher compensation, employment conditions, and turnover in Southern US states that prohibit the collective bargaining of public school teachers. We assess union strength by meet-and-confer status and the teacher union density of districts and estimate union impact using propensity score matching. We find that teachers' unions are positively associated with teacher compensation and employment conditions, even in the absence of collective bargaining. Districts with strong unions have higher dismissals of nontenured teachers for poor performance and a lower attrition rate of qualified teachers, compared to districts with weak unions. This study shows that teachers' unions in the United States still organize without formal labor-management institutions and make a significant impact on teachers' work lives, even in a hostile legal environment toward unions. [ABSTRACT FROM AUTHOR]

Income drops permanently after an involuntary job displacement, but it has never been clear what happens to long run wealth in the USA. Upon displacement, wealth falls 14% relative to workers of the same age and similar education from the Panel Study of Income Dynamics (PSID). Their wealth is still 18% lower 12 years after the event. A standard life cycle model calibrated to US data with permanent decreases in income after displacement behaves differently than these findings. The agents in the model also experience a large drop in wealth but they recover. The biggest culprit for these differences is small and statistically insignificant changes to consumption in the PSID whereas agents in the model decrease their consumption considerably. Extending the model to include habit formation reconciles some of these differences by generating similar long run effects on wealth. This allows for the examination of wealth at death through the lens of the model. [ABSTRACT FROM AUTHOR]

Following the covid-induced lockdowns, many commented on the role the German model of Kurzarbeit could play in reducing unemployment. Other countries emulated the model. Looking at the experiences of Germany, the UK, Sweden and the USA, the article analyses the strengths and weaknesses of short-time working (STW) schemes. It asks whether STW has been well designed to have optimal short and longer run impact. It is quite effective as a short-term palliative, but in longer downturns, its weaknesses come to the fore. It is by no means clear that the UK needs a permanent replacement for the furlough. [ABSTRACT FROM AUTHOR]