Essays on the macroeconomics of labor market institutions
Title: Essays on the macroeconomics of labor market institutions
Author: HELM, Moritz
Citation: Florence : European University Institute, 2014
Series/Number: EUI PhD theses; Department of Economics
This thesis contributes to furthering the understanding of the macroeconomic impact of two types of labor market institutions: temporary help service agencies and temporary contracts. In the first chapter, I depart from the observation that employment in the temporary help service industry in the United States has seen a secular rise in recent decades. The chapter provides a theory of the temporary help service industry within the steady state version of a random search model of the labor market with endogenous job destruction and a second sector in which employment relationships are intermediated. In this framework temporary jobs are endogenously of short duration and recruitment is fast. Conditions are provided under which intermediated employment relationships exist in equilibrium. The implications of the model for two possible explanations of the secular rise of employment in the temporary help service industry, technological progress and a rise in firm-level uncertainty, are such that technological progress as an explanation is favored. In the second chapter, I investigate the impact of uncertainty shocks on a dual labor market using the Spanish economy as a case study. In an empirical analysis, I find that, given my identification strategy, fluctuations in uncertainty cause a significant drop in temporary employment, a non-significant reaction in permanent employment and a significant decline in GDP. Since in the data the responses to a second-moment shock are similar to the responses to a first-moment shock, a quantitative labor demand model of the Spanish labor market is built and calibrated. I use this model to generate simulated response functions to a (pure) second-moment, a (pure) first-moment and a combined first- and second moment shock. I find that the empirical impulse responses can only partially be rationalized by the model when considering a (pure) second-moment shock. A (pure) first moment shock in the model generates impulse response functions similar to the empirical ones. A combined first- and second moment shock cannot improve on the first-moment shock in replicating the data.
LC Subject Heading: Labor market; Industrial relations
Defence date: 5 December 2014; Examining Board: Professor Árpád Ábrahám, European University Institute (Supervisor); Professor Samuel Bentolila, CEMFI Madrid; Professor Piero Gottardi, European University Institute; Professor Thijs van Rens, University of Warwick.
Type of Access: openAccess