Effect of the Big Five Personality Traits on Entrepreneurial Probability: Influence of China’s Household Registration System Abstract Entrepreneurship can promote economic growth and reduce unemployment. However, the extent to which personality traits influence entrepreneurial probability in China is unclear. To bridge this gap in the literature, this study uses China Family Panel Studies data to examine the relationship between personality traits and entrepreneurial probability for three types of employment status: self-employment, farming, and non-agricultural employment. The results show that personality traits affect entrepreneurial probability and this effect differs by household registration and city size. Specifically, we find that personality traits have no significant effects on entrepreneurial probability in either the urban or rural hukou subsamples for those in non-agricultural employment, whereas conscientiousness and agreeableness are significantly positively related to entrepreneurial probability in the rural subsample for those in farming. We also show that individuals with a higher level of conscientiousness and openness in large cities are more likely to be self-employed than in non-agricultural employment, while the rural subsample remains unaffected by personality traits. Meanwhile, among the rural subsample, those with a higher level of agreeableness are more likely to enter self-employment in small cities than farming.

Language Premium Myth or Fact: Evidence from Migrant Workers of Guangdong, China Abstract Using unique matched employer-employee data from China, we discover that migrant workers in the manufacturing industry who are proficient in the local dialect earn lower wages than those who are not. We also find that workers with better dialect skills are more likely to settle for lower wages in exchange for social insurance. We hypothesize that they are doing so in the hope of obtaining permanent residency and household registration status (Hukou) in the host city where they work. Further tests show that the phenomenon of “exchanging wages for social insurance participation” is more pronounced among workers employed in smaller enterprises. Moreover, migrant workers with better language skills have a stronger desire to stay in the host city. Our conclusions are robust to different specifications, even after addressing the endogeneity issue for language acquisition. The present study provides a new perspective on the impact of language fluency on social integration among migrants, one of the most disadvantaged groups in developing countries.

Wage Returns to English Proficiency in Poland Abstract We investigate the effect of English language proficiency on the wages of native full-time employees in Poland. Using a unique data set with information on over 600,000 survey respondents polled over the five-year period from 2013 to 2017, we employ an IV approach founded on a natural experiment - namely, the reform of foreign language instruction in Polish schools. Our preferred estimates indicate that monthly wages for those individuals with ‘good’ or ‘very good’ knowledge of English exceeded the wages of those with ‘no English’ (or those with just a conversational proficiency) by nearly 60% for men and more than 50% for women. The estimates are statistically significant for both genders, and suggest quantitatively relevant wage returns for proficiency in English.

Liquidity Constraint Shock, Job Search and Post Match Quality—Evidence from Rural-to-Urban Migrants in China Abstract This paper studies the impact of a liquidity constraint shock on the job search behavior and outcomes among rural-to-urban migrant workers in China. A negative liquidity constraint shock significantly reduces job search duration and increases the job finding hazard rate for female migrant workers. A negative liquidity constraint shock also lowers the subsequent job match quality, including a lower hourly wage, longer working hours, a higher probability of on-the-job searches and lower quality in terms of subsidy. We find little effect on the job search process and post match quality for male migrant workers. From the policy perspective, we show evidence that rural medical insurance, namely, the New Cooperative Medical Scheme (NCMS), can actually ease the impact of a liquidity constraint shock for female migrant workers.

Transformations in China’s Internal Labor Migration and Hukou System Abstract This paper examines China’s changing internal labor migration patterns between 1990 and 2005 as its household registration (hukou) system evolves. We document a drastic increase in the size of the migrant population, along with significant composition shifts in migrants’ characteristics, and geographic and employment distributions. Recent migrants are on average older, more educated, more likely to be female, more likely to be married, and more likely to have an urban hukou. Regression analysis shows that migration rates increased substantially during this period for all individuals regardless of their education, gender, age, marital or hukou status. By employing a simple migration location choice model, we investigate the relationship between hukou policy and migration behavior. We find that larger and more developed cities are more attractive to migrants but tend to set more stringent hukou restrictions. Rural migrants are significantly more deterred by hukou restrictions relative to urban migrants. These findings suggest that institutional factors, such as the hukou system, are important for understanding the observed patterns in China’s labor migration.

Pathways to Retirement, Well-Being, and Mandatory Retirement Rules: Evidence from Canadian Reforms Abstract Amid the aging workforce, a better understanding of the retirement transition patterns of older workers has implications for public policy. Such transitions are often characterized as complex trajectories involving multiple stages and alternative pathways which, in turn, depend on labor market regulations. This study investigates the factors affecting bridge employment and partial retirement and their subsequent effects on health, well-being and financial security, using micro-level data from a national healthy aging survey and augmented with personal income tax records. The analysis exploits policy-induced changes in retirement status arising from the elimination of mandatory retirement rules in Canada—which occurred at different times across provinces—in an instrumental variables design. The results indicate, first, that mandatory retirement is not used often by employers even when it is permissible: only approximately 7% of current retirees report that their first retirement occurred for this reason. This finding is consistent with limited international evidence on how employers use these rules. Second, we find supportive evidence that the elimination of mandatory retirement reduced the likelihood of individuals being retired by approximately 7–16% but raised the likelihood of subjective partial retirement by 5–6%. Most notably, the reforms reduced the incidence of work after retirement as workers become permitted to stay in their incumbent jobs longer, this finding being very robust across several statistical estimators commonly used in the related literature. No discernible effects are observed on individuals’ health, well-being or future financial security. These findings suggest that costs of mandatory retirement are limited to adjustment frictions among individuals searching for new work or entering retirement earlier than desired under the prevailing wage.

The Effects of an Employment Bonus for Long-Term Social Assistance Recipients Abstract This study uses a regression discontinuity design to estimate effects of an employment bonus program for long-term unemployed social assistance recipients. The program pays benefit bonuses to persons in the target group for any hours they work in regular employment or subsidized employment schemes. The program pays up to 6 % of post-tax earnings if they enter regular or subsidized employment over a specific two-year period. Our results show that the program has no effects on employment rates, earnings or participation in subsidized employment. The null findings are robust when using RD estimates based on different bandwidths and different window widths around the eligibility threshold and hold for given gender, age, ethnicity and parental status.

Monopsony Power in Occupational Labor Markets Abstract We collect data from the 1979 National Longitudinal Survey of Youth and create comparable measures of monopsonistic power for up to 46 occupational labor markets in the USA, starting in 1979 and ending in 2000. Our results suggest most occupational labor markets during that period were characterized by substantial amounts of monopsonistic, wage-setting power. Furthermore, after controlling for individual, time, and industry fixed effects, our results show a negative and significant correlation between the extent of monopsony power that characterizes a market and both, the wages and fringe benefits received by workers.

Unintended Displacement Effects of Youth Training Programs in a Directed Search Model Abstract The rise in the productivity of inexperienced young workers suggests a positive partial equilibrium effect of youth training programs on employment. However, in a general equilibrium context, displacement effects that impact other groups of workers could also arise. We build a directed search model to study the unintended displacement effects of youth training programs. We calibrate the model to match data from the US labor market. The model is then used to simulate a policy experiment that resembles a training program that raises the productivity of a targeted group of low-skilled and inexperienced agents. Our counterfactual analysis shows that the policy indeed triggers displacement effects. Consequently, these unintended displacement effects must be taken into account in the evaluation of youth training programs.

Planning for Retirement? The Importance of Time Preferences Abstract Ensuring retirement income security is a priority for individuals, employers, and policymakers. To achieve this, employers and policymakers sponsor and subsidize retirement saving plans and provide educational interventions. The effectiveness of these tools will depend on individuals’ interest and willingness to engage in planning and preparing for retirement. Using merged administrative and survey data for public sector workers in North Carolina, we find that individuals who more heavily discount the future are less likely to plan and save for retirement. Further, retirement planning behavior is measured both subjectively and objectively, and time preferences have an association with subjectively measured retirement planning but not with objectively measured retirement planning. Finally, individuals’ retirement timing is associated with time preferences but only among individuals with a retirement plan. In total, our results highlight the important role of time preferences in determining retirement planning and preparedness.