CEU Electronic Theses and Dissertations, 2025
| Author | Mark, Lili Katalin |
|---|---|
| Title | Topics on Interactions of Public Policies and Labor Markets |
| Summary | In my thesis, I examine how public policies targeting specific groups affect labor market outcomes in Hungary using administrative data. My first chapter focuses on the labor market participation among mothers in the years following childbirth. I estimate the substitution effect of paid parental leave -- that is, the distortionary effect of losing all benefits if a mother chooses to work -- by evaluating a Hungarian reform. In 2014, restrictions on working for mothers receiving parental leave benefits were abolished for children aged one to two. As a result, the monthly employment rate of affected mothers increased by 3.2 percentage points. However, most mothers still stay home for reasons other than the estimated substitution effect, such as the income effect of paid parental leave, social norms, and the unavailability of childcare. Descriptive evidence suggests that, for those who complied with the policy, an earlier return to work may have increased the likelihood of remaining with their previous employer beyond the period of job protection, which could improve their labor market trajectories. In chapter 2 (joint with Márton Csillag), we analyze the impact of a unique ``sickness benefit for the unemployed'' on benefit claiming and employment. In Hungary, employees could claim sickness benefits within three days of losing their job, which enabled them to extend their potential benefit duration by 90 days during their nonemployment spell. This provided a huge incentive to report sick at the onset of unemployment. In 2007, the maximum number of days of “sickness benefit for the unemployed” was halved. First, we demonstrate that higher-income individuals and workers with longer employment histories were more likely to claim sickness benefits, even when controlling for various health variables. These groups benefit most from using sickness benefits instead of unemployment benefits. Second, we find that a large portion of lost sickness benefit days were substituted by taking unemployment insurance benefits. Third, we demonstrate that the reform decreased the job-finding rate right after the pre-reform maximum duration and increased the job-finding rate right after the new maximum. In Chapter 3 (joint with Anikó Bíró, Réka Branyiczki, Attila Lindner and Dániel Prinz) we study the impact of a large payroll tax cut for older workers on employment and wages in Hungary. By exploiting administrative data and applying a difference-in-differences empirical strategy, we document a modest employment increase equivalent to a labor demand elasticity of -0.3 and pass-through rate of 22\%. These average effects mask large heterogeneity across firms. Employment mainly increases at low-productivity, low-paying firms, while no jobs are created at high-productivity, high-paying firms. At the same time, the tax cut is passed through to wages at high-productivity, high-paying firms, while low-productivity, low-paying firms do not share the benefits of the tax cut with their workers. These results point to important heterogeneity in the incidence of payroll tax cuts across firms, highlighting that workers at different firms benefit differently from payroll taxes. They also demonstrate that payroll taxes can have a significant impact on the composition of jobs in the labor market. |
| Supervisor | Weber, Andrea |
| Department | Economics PhD |
| Full text | https://www.etd.ceu.edu/2025/mark_lili.pdf |
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