We estimate how labor force participation among married women in Sweden responded to changing work incentives implied by a reform in the tax/transfer‐system in 1997. Using rich, population‐wide, administrative data we estimate an average participation elasticity of 0.13, thereby adding to the scarce literature estimating participation elasticities using quasi‐experimental methods. We also highlight that estimated extensive margin responses necessarily are local to the observed equilibrium. Among low‐income earners, elasticities are twice as large in the group with the lowest employment level as compared to the group with the highest employment level.
We investigate if employers avoid hiring workers living in neighborhoods with low socioeconomic status and/or with long commuting times. In a large-scale field experiment in the Swedish labor market, we sent more than 4,000 fictitious resumes, with randomly assigned information about the applicants’ residential locations, to firms with advertised vacancies. Our findings show that commuting time has a negative effect on the likelihood of being contacted by an employer, while the socioeconomic status of a neighborhood does not appear to be important. These results offer guidance for policymakers responsible for reversing segregation patterns.
This paper investigates coworker peer effects in parental leave usage in Sweden. Weuse an instrumental variable approach labeled peers of peers in which parental leave usage byfamily peers (siblings and cousins) of coworkers is used as an instrument for coworkers’parental leave usage. For fathers, we find that a 10-day increase in average parental leave usageamong coworkers increases usage by approximately one and a half days, while for mothers,the increase is approximately one day. The results are robust to alternative model specifications.We explore possible mechanisms and discuss policy implications.
In a field experiment, we study the causal effects of previous experience and language skills when newly arrived Syrian refugees in Sweden apply for low-skilled jobs. We find no evidence of sizeable effects from previous experience or completed language classes on the probability of receiving callback from employers. However, female applicants were more likely than males to receive a positive response. As a complement to the experiment, we interview a select number of employers, which provides additional insights into how they judge candidates for low-skilled jobs.
In this paper, we investigate the impact on firms of the value added tax (VAT) reform that took effect in Sweden on 1 January 2012 for restaurant and catering services. Unlike previous research, we use a synthetic control group approach to construct our counterfactual. Our analysis shows that the VAT reduction had a positive effect on turnover, total wages, employment, profit margins, and net entry of firms. The effects of the reform tend to decrease over time. In all, the results point to an overall better performance for the restaurant industry compared with what it would have been in absence of the reform.
We exploit high-quality vital statistics data and annual income data, obtained from historical municipality tax records, to study the economic aftermath of the 1918-influenza epidemic in Denmark. We find that average income followed a V-shaped path from 1917 to 1919 and (if anything) municipalities with higher 1918-influenza mortality rates experienced more pronounced declines and recoveries. In addition, national month-by-industry unemployment data show that unemployment rates were high during the epidemic, but decreased again a couple of months after the epidemic receded. Evidence from the Danish stock market exchange also indicates that the epidemic only had short-lived effects on the economy.
This study uses a cognitive test score, the Swedish Military Enlistment test taken at age 18, to identify whether the ethnic employment and income gap in Sweden is caused by a pre-market skill gap and/or ethnic discrimination. The employment gap and income gap are estimated for males born in Sweden with different ethnic backgrounds: their parents were born in Sweden or in southern Europe or outside Europe. Controlling for the cognitive test score does not affect the ethnic employment gap, and for incomes the ethnic income gap almost disappears.