The Unequal Consequences of Job Loss across Countries

with Antoine Bertheau, Edoardo Acabbi, Cristina Barcelo, Andreas Gulyas, and Raffaele Saggio

American Economic Review: Insights, 2023, 5(3), pp. 393-408

Media coverage: and World Economic Forum (in English), (in Italian), The Conversation (in Spanish), Portuguese Economy Research Report (in English).

We document the consequences of losing a job across countries using a harmonized research design and high-quality administrative registers. Workers in Denmark and Sweden experience the lowest earnings declines following job displacement, while workers in Italy, Spain, and Portugal experience losses three times as high. French and Austrian workers face earnings losses somewhere in between. Key to these differences is that Southern European workers are less likely to find employment following displacement. Loss of employer-specific wage premiums accounts for 40% to 95% of within-country wage declines. The use of active labor market policies predicts a significant portion of the cross-country heterogeneity in earnings losses.

Evidence from Finland and Sweden on the relationship between early-life diseases and lifetime childlessness in men and women

with Aoxing Liu, Evelina T. Akimova, Xuejie Ding, Sakari Jukarainen, Pekka Vartiainen, Tuomo Kiiskinen, Sara Koskelainen, Aki S. Havulinna, Mika Gissler, Tove Fall, Melinda C. Mills, and Andrea Ganna

Nature Human Behaviour, 2023 (accepted)

The percentage of people without children over their lifetime is approximately 25% in men and 20% in women. Individual diseases have been linked to childlessness, mostly in women, yet we lack a comprehensive picture of the effect of early-life diseases on lifetime childlessness. We examined all individuals born in 1956–1968 (men) and 1956–1973 (women) in Finland (n = 1,035,928) and Sweden (n = 1,509,092) to the completion of their reproductive lifespan in 2018. Leveraging nationwide registers, we associated sociodemographic and reproductive information with 414 diseases across 16 categories, using a population and matched-pair case–control design of siblings discordant for childlessness (71,524 full sisters and 77,622 full brothers). The strongest associations were mental–behavioral disorders (particularly among men), congenital anomalies and endocrine–nutritional–metabolic disorders (strongest among women). We identified new associations for inflammatory and autoimmune diseases. Associations were dependent on age at onset and mediated by singlehood and education. This evidence can be used to understand how disease contributes to involuntary childlessness.

Inequality in Mortality between Black and White Americans by Age, Place, and Cause, and in Comparison to Europe, 1990-2018

with Hannes Schwandt, Janet Currie, Marlies Bär, James Banks, Paola Bertoli, Aline Bütikofer, Sarah Cattan, Beatrice Zong-Ying Chao, Claudia Costa, Libertad Gonzalez, Veronica Grembi, Kristiina Huttunen, René Karadakic, Lucy Kraftman, Sonya Krutikova, Peter Redler, Carlos Riumallo-Herl, Ana Rodríguez-González, Kjell Salvanes, Paula Santana, Josselin Thuilliez, Eddy van Doorslaer, Tom Van Ourti, Joachim Winter, Bram Wouterse and Amelie Wuppermann

Proceedings of the National Academy of Sciences (PNAS), 2021, 118(40)

Although there is a large gap between Black and White American life expectancies, the gap fell 48.9% between 1990-2018, mainly due to mortality declines among Black Americans. We examine age-specific mortality trends and racial gaps in life expectancy in rich and poor U.S. areas and with reference to six European countries. Inequalities in life expectancy are starker in the U.S. than in Europe. In 1990 White Americans and Europeans in rich areas had similar overall life expectancy, while life expectancy for White Americans in poor areas was lower. But since then even rich White Americans have lost ground relative to Europeans. Meanwhile, the gap in life expectancy between Black Americans and Europeans decreased by 8.3%. Black life expectancy increased more than White life expectancy in all U.S. areas, but improvements in poorer areas had the greatest impact on the racial life expectancy gap. The causes that contributed the most to Black mortality reductions included: Cancer, homicide, HIV, and causes originating in the fetal or infant period. Life expectancy for both Black and White Americans plateaued or slightly declined after 2012, but this stalling was most evident among Black Americans even prior to the COVID-19 pandemic. If improvements had continued at the 1990-2012 rate, the racial gap in life expectancy would have closed by 2036. European life expectancy also stalled after 2014. Still, the comparison with Europe suggests that mortality rates of both Black and White Americans could fall much further across all ages and in both rich and poor areas.

Mortality Inequality in Finland

with Kristiina Huttunen

Fiscal Studies, 2021, 42(1), pp. 223-244

We study inequality in mortality in Finland using registry data that covers the whole population for years 1990-2018. We create municipality-level indexes of regional deprivation (poverty rate), and show how age-specifc mortality rates have evolved across regions and over time. The inequality in mortality has been remarkably low over the time period for most age groups. However, among young and prime-age males the mortality rates have been persistently higher in the poorer areas. For these age groups the leading causes of death are deaths of despair (alcohol and suicides) and accidents. For the cohorts that were young during the deep early-1990's recession, we also document higher inequality in middle-age mortality than for cohorts entering the labor market in recovery periods.

Targeted Wage Subsidies and Firm Performance

with Oskar Nordström Skans and Johan Vikström

Labour Economics, 2018, 53, pp. 33-45

This paper studies how targeted wage subsidies affect the performance of the recruiting firms. Using Swedish matched employer-employee administrative data from the period 1998–2008, we show that treated firms substantially outperform other recruiting firms after hiring through subsidies, despite identical pre-treatment performance levels and trends in a wide set of key dimensions. The pattern is less clear from 2007 onwards, after a reform removed the involvement of caseworkers from the subsidy approval process. Overall, our results suggest that targeted employment subsidies can have large positive effects on post-match outcomes of the hiring firms, at least if the policy environment allows for pre-screening by caseworkers.

Working papers

Threat Effects of Monitoring and Unemployment Insurance Sanctions: Evidence from Two Reforms

The paper provides among the first quasi-experimental estimates of the threat of unemployment insurance (UI) benefit sanctions on job-exit rates. Using a difference-in-differences design, I exploit two reforms of the Swedish UI system that made monitoring and sanctions considerably stricter at different points in time for (i) UI claimants and (ii) job-seekers who exhausted their UI benefits and therefore receive alternative “activity support” benefits instead. Results show that men (in particular if long-term unemployed) respond to monitoring and the threat of sanctions by finding jobs faster. By contrast, the existing literature has almost exclusively focused on estimating how job-finding rates respond for those actually receiving a sanction. I estimate such “sanction-imposition effects” and find that they are similar in size for men and women. I further show that properly aggregated sanction-imposition effects explain very little of the overall reform effects for males, and that they are sufficiently small to be consistent with the small and insignificant reform effects found for women. A direct policy implication is that the total impact of monitoring and sanctions may be severely underestimated when focusing only on the sanction imposition effects as is typically done in the literature.

Firm productivity and immigrant-native earnings disparities

with Olof Åslund, Cristina Bratu, and Anna Thoresson

We develop a grouping measure based on persistent firm productivity to study the role of employers in explaining the immigrant-native earnings gap. Using Swedish population-wide matched employer-employee data, we find substantial returns to working in more productive firms for all workers. However, the returns are particularly high for those immigrants concentrated in low-productive firms. The unequal sorting of workers across the firm productivity distribution explains one fifth of the immigrant-native earnings gap. Worker sorting cannot be explained by skill differences between native and immigrant workers. Instead, managerial hiring practices along origin lines reinforce the unequal access to high-productive firms.

Empirical Monte Carlo Evidence on Estimation of Timing-of-Events Models

with Gerard J. van den Berg, and Johan Vikström

This paper uses an Empirical Monte Carlo simulation approach to study estimation of Timing-of-Events (ToE) models. We exploit rich Swedish data of jobseekers with information on participation in a training program to simulate realistic placebo treatment durations. We first use these simulations to examine which covariates are major confounding variables to be included in selection models. We then show that the joint inclusion of specific types of short-term employment history variables (notably, the share of time spent in employment), together with baseline socio-economic characteristics, regional and inflow timing information, is able to remove selection bias. Next, we omit sets of variables and estimate ToE models with discrete distributions for the ensuing systematic unobserved heterogeneity. We show that in many cases the ToE approach provides accurate effect estimates, especially if calendar-time variation in the unemployment rate of the local labor market is taken into account.

Ongoing projects

2024-: The centralization of monitoring in Unemployment Insurance systems (Principal Investigator).

2023-: LinkEED project, second round (OECD cross-country project that uses microdata from 15 countries; Principal Investigator for Finland).

2023-: Gene-environemnt interactions and socioeconomic inequality (Co-Principal Investigator with Andrea Ganna).

2022-: Nordic comparative micro-data laboratory for analyses of common shocks (joint collaboration with researchers from all Nordic countries; Co-Principal Investigator for the Finnish team with Hanna Pesola).

2022-: Labor Market integration in changing times (Principal Investigator: Olof Åslund).