Boomerang Kids in the Pandemic: How High-Income Families Are Their Own Safety Net

In this Economic Commentary, we use the Current Population Survey to identify and examine the influx of young adults who moved in with their parents during the COVID-19 pandemic—the so-called boomerang kids—and how being in their family home influences their labor market decisions and sensitivity to occupational risk relative to that of other young adults. We find that most boomerang kids come from high-income families that can financially support them through nonemployment spells that are, on average, longer than those of young adults not living with their parents. Young adults living with their parents are also more responsive to the risk of COVID-19 exposure in the workplace and are less likely to work in occupations with high exposure risk.

DOES MATERNAL MIGRATION AFFECT SPOUSAL LABOR MARKET DECISIONS? EVIDENCE FROM SRI LANKA

This paper examines Sri Lankan men’s labor market outcomes when their wives emigrate to work, leaving the husbands and their children at home in Sri Lanka — the effects of maternal migration on the husbands’ labor market decisions. We used nationally representative cross-sectional data and historical migration rates at the community level as an instrument for maternal migration in two-stage least squares estimations. We find that maternal migration reduces the husbands’ labor supply. Husbands are more likely to exit the labor market and become unemployed; the employed are less likely to moonlight and have lower wages, and those that exit the labor market are more likely to become stay-at-home dads. Using a second instrument, an indicator of whether a community has foreign-employment agencies, we also confirmed our main results. Our findings indicate that policies that aim to promote female migration as an exogenous income source may fall short if they do not address the effects of the husbands’ labor market decisions.

Agricultural Resources and Trade Strategies: Response to Falling Land-to-Labor Ratios in Malawi

This study assesses how growing land scarcity relative to family labor is influencing farm household decisions to trade in agricultural land and labor markets to improve their livelihood. Using the farm household model, I analyze decisions to rent-in land or hire out labor among smallholders in Malawi. I use data from two rounds of a nationally representative balanced-household panel and apply a systems approach to jointly estimate land rental and labor market decisions while controlling for simultaneity and unobserved heterogeneity. The results indicate that the falling owned-land-to-labor-endowment ratio can push households to participate in either land rental or seasonal agricultural labor markets. However, the probability of hiring out labor for casual work and short-term gains decreases when potential tenant households rent-in land. Based on asset-wealth-to-labor-endowment ratios, wealthier households are more likely to rent-in land while poorer households, including most smallholder households, are more likely to hire out labor. These results suggest higher friction in the land rental market compared to the agricultural labor markets and liquidity constraints dictating what is necessary to support agricultural operations and household needs. Accordingly, agricultural policy in Malawi should aim to reduce friction in factor markets.

Information Dispersion across Employees and Stock Returns

Rank-and-file employees are becoming increasingly critical for many firms, yet we know little about how their employment dynamics matter for stock prices. We analyze new data from the individual CV’s of public company employees and find that rank-and-file labor flows can be used to predict abnormal stock returns. Accounting data and survey evidence indicate that workers’ labor market decisions reflect information about future corporate earnings. Investors, however, do not appear to fully incorporate this information into their earnings expectations. The findings support the hypothesis that rank-and-file employees’ entry and exit decisions reveal valuable insights into their employers’ future stock performance.

An Economic Perspective on the Affordable Care Act: Expectations and Reality

The Affordable Care Act (ACA) was enacted in 2010 to address both high uninsured rates and rising health care spending through insurance expansion reforms and efforts to reduce waste. It was expected to have a variety of impacts in areas within the purview of economics, including effects on health care coverage, access to care, financial security, labor market decisions, health, and health care spending. To varying degrees, legislative, executive, and judicial actions have altered its implementation, affecting the extent to which expectations in each of these dimensions have been realized. We review the ACA's reforms, the subsequent actions that countered them, and the expected and realized effects on coverage, access to care, financial security, health, labor market decisions, and health care spending.

SPOUSAL INFLUENCE ON EARLY RETIREMENT DECISIONS: ORIGINS AND MECHANISMS

The interdependence between partners raises considerable interest in the sociology of life course, work and families. Partner influences play a particularly important role in the work domain, because each partner’s work decisions have profound effects on the couple as a whole. In contrast to previous research, this study pays detailed attention to the role partners play in workers’ labor market decisions by using the case of early retirement decisions. We hypothesize that partners’ preferences for older workers’ retirement originate from altruism and self-interest. For example, partners might prefer workers to retire early because the worker’s job is highly stressful or partners might prefer workers to retire early to increase possibilities for joint leisure. Moreover, we expected that partners influence older workers’ early retirement behavior via persuasion and pressure. So, partners might either convince workers to change their preferences, or they might pressure workers to act according to the partners’ preferences, irrespective of workers’ own preferences. To adequately estimate partners’ and workers’ preferences for workers’ early retirement, we used an instrumental variable approach. This was possible due to the multi-actor longitudinal data available from a large representative sample of older workers and their partners in the Netherlands. The results support that partners’ preferences originate in altruism and self-interest and that partners influence workers through persuasion and pressure. Gender differences were marginal, with stronger signs for altruistic origins among female than male partners.

The effect of intimate partner violence on labor market decisions

Purpose The purpose of this paper is to investigate the heterogeneous labor market responses of indigenous and non-indigenous women to intimate partner violence (IPV) using information from the 2003 Demographic and Health Survey for Bolivia. Design/methodology/approach This analysis employs an instrumental variable with a Heckman correction approach to account for possible endogeneity problems between IPV and job exit decisions, and the self-selection of women into the labor force. It also analyses the sample across different population characteristics to search for heterogeneity and potential explanations to the observed effects. Findings The results show that the effect of IPV on women’s job exits is stronger among non-indigenous women compared to their indigenous counterparts. These differences could be tied to the cultural differences between these two segments of the population. These results are robust using different methodologies and specifications. Originality/value To the best of the authors’ knowledge, this paper is the first one to compare the relationship between domestic violence and labor market outcomes in a multi-ethnic developing country, such as Bolivia.