Labor Economics

Work in progress

Do Workers Learn? Evidence from the Treatment of Heart Attacks (with Bo Lagerqvist, Stefan James, Petter Lundborg)

Abstract: Estimating the effect of experience on performance is complicated due to the non-random sorting of workers to tasks. We propose a new empirical approach that addresses such sorting by exploiting as-if random assignment of physicians to patients during call-hours. For this purpose, we use linked patient-physician data on the treatment of heart attacks in Sweden and show that the systematic sorting of doctors to patients disappears during call-hours. Using data collected during call-hours, we show that experience has long-lasting effects on physician proficiency and decision-making, but that effects on patient outcomes are rapid and short-lasting. Our paper shows that using on-call time data could be a promising way to estimate causal learning curves.

Working papers

Cederlöf J, M Söderström and J Vikström (2021), "What makes a good caseworker?", IFAU Working paper 2021:19, latest version.

Abstract: How do caseworkers affect job finding and what characterizes a productive caseworker? To answer these questions we exploit variation coming from the fact that many local employment offices in Sweden assign job seekers to caseworkers based on their date of birth. We couple this identification strategy with fine-grained administrative data on both caseworkers and job seekers. Estimation of caseworker fixed effects reveals sizable variation in overall caseworker value-added. Female caseworkers perform better than male caseworkers and caseworkers with two years of experience outperform caseworkers with less experience. Cognitive ability and personal experience of unemployment are not related to caseworker performance. Based on the actions taken by the caseworkers we show that caseworker strategies are important. Analyses of caseworker--job seeker matching show that matching based on previous labor market experiences or gender leads to better outcomes.

Caliendo M, R Mahlstedt, G van den Berg and J Vikström (2020), "Side effects of labor market policies", IFAU Working paper 2020:20, R&R Scandinavian Journal of Economics

Abstract: Labor market policy tools such as training and sanctions are commonly used to help bring workers back to work. By analogy to medical treatments, the individual exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market events outcomes, drug prescriptions and sickness absence, comparing outcomes before and after exposure to training and sanctions. We find that training improves cardiovascular and mental health and lowers sickness absence. The results suggest that this is not due to improved employment prospects but rather to instantaneous features of participation such as, perhaps, the adoption of a more rigorous daily routine. Unemployment benefits sanctions cause a short-run deterioration of mental health, possibly due higher stress levels, but this tapers out quickly.

Cheung M, J Egebark, A Forslund, L Laun, M Rödin and J Vikström (2019), "Does job search assistance reduce unemployment? Experimental evidence on displacement effects and mechanisms", IFAU Working paper 2019:25.

Abstract: This paper uses a large-scale two-level randomized experiment to study direct and displacement effects of job search assistance. Our findings show that the assistance reduces unemployment among the treated, but also creates substantial displacement leading to higher unemployment for the non-treated. By using detailed information on caseworker and job seeker behavior we show that vacancy referrals passed on from caseworkers to job seekers is the driving mechanism behind the positive direct effect. We also examine explanations for the displacement effect and show that displacement is not due to constrained resources, but arises in the labor market. A comparison between different meeting formats suggests that face-to-face meetings and distance meetings are more effective than group meetings. Despite the existence of displacement effects, when we incorporate our results into an equilibrium search model we find that a complete roll-out of the program would lead to lower unemployment and slightly reduced government spending.

Publications

Lombardi S., O.N. Skans and J. Vikström (2018), "Targeted wage subsidies and firm performance", Labour Economics, 53, 33-45.

Abstract: This paper studies how targeted wage subsidies affect the performance of the recruiting firms. Using Swedish administrative data from the period 1998–2008, we show that treated firms substantially outperform other re- cruiting 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 subsi- dies 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.

Sjögren A. and J. Vikström (2015), "How long and how much? Learning about the design of wage subsidies from policy discontinuities", Labour Economics, 34, 127-137.

Abstract: Employment and wage subsidies are used to combat long-term unemployment, yet there is little research to guide the design of such programs. Discontinuities and changes in the design and implementation of wage subsidies under the Swedish NewStart Jobs-policy allowus to study effects of both subsidy rate and subsidy duration. We find that wage subsidies have substantial effect on job-finding rates for those eligible. The effect is stronger for larger subsidies and more than doubles as the length of the subsidy doubles. Although employment drops as subsidies expire, the probability of being employed remains higher for workers finding subsidized employment also after the expiry of the employment subsidies.

Van den Berg G.J. and J. Vikström (2014), "Monitoring Job Offer Decisions, Punishments, Exit to Work, and Job Quality", Scandinavian Journal of Economics, 116(2), 284-334 (SJE Best paper of 2014).

Abstract: Unemployment insurance systems include the monitoring of unemployed workers and punitive sanctions if job search requirements are violated. We analyze the causal effect of sanctions on the ensuing job quality, notably on wages and occupational level. We use Swedish data and estimate duration models dealing with selection on unobservables. We also develop a theoretical job search model that monitors job offer rejection versus job search effort. The empirical results show that, after a sanction, the wage rate is lower and individuals move more often to a part-time job and a lower occupational level, incurring human capital losses.

Hesselius P., P Johansson and J. Vikström (2013), "Social Behaviour in Work Absence", Scandinavian Journal of Economics, 115(4), 995-1019.

Abstract: By making use of a large-scale randomized experiment, we test whether social behaviour is important for work absence due to illness. The individuals treated in the experiment were exposed to less monitoring of their eligibility to collect sickness insurance benefits, which sharply increased their non-monitored work absence. This exogenous variation is exploited in two complementary analyses. In both analyses, we find significant social-behaviour effects. Using detailed data, we conclude that the social-behaviour effects most likely stem from fairness concerns.

Vikström J., M. Rosholm and M. Svarer (2013), "The effectiveness of active labor market policies: Evidence from a social experiment using non-parametric bounds", Labour Economics, 24, 58-67

Abstract: We re-analyze the effects of a Danish active labor market programme social experiment, which included a range of sub-treatments, including meetings with caseworkers, job search assistance courses, and activation programmes.Weuse newly developed non-parametric methods to examine howthe effects of the experimental treatment vary during the unemployment spell. Non-parametric techniques are important from a methodological point of view, since parametric/distributional assumptions are in conflict with the concept of experimental evidence. We find that the effects of the experiment vary substantially during the unemployment spell.

Forslund A, P Fredriksson and J Vikström (2011), "What active labor market policy works best in a recession?", Nordic Economic Policy Review, 2011(1), 171-202.

Abstract: This paper discusses the case for expanding active labor market policy in recession. We find that there is reasonable case for relying more heavily on certain kinds of programs. The argument is tied to the varying size of the lock-in effect in boom and recession. If programs with relatively large lock-in effects should ever be used, they should be used in a downturn. The reason is simply that the cost of forgoing search time is lower in recession. We also provide new evidence on the relative effectiveness of different kinds of programs over the business cycle. In particular we compare an on-the-job training scheme with (traditional) labor market training. We find that labor market training is relatively more effective in recession. This result is consistent with our priors since labor market training features relative large lock-in effects.