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on Labour Economics |
| By: | Ruth Lupton |
| Abstract: | Both educational attainment and school quality are typically lower in disadvantaged areas than others and much recent policy attention has been focused on each. This paper looks at the quality problem, exploring the relationships between disadvantaged contexts, what schools do, and the quality of schooling that they provide. The findings suggest that disadvantaged contexts impact on the organisation and processes of schools and that these effects differ significantly from one area to another, in ways that are not reflected by the usual indicators of disadvantage. School managers respond by adapting organisational design and processes. They are, however, constrained in these responses by the limited and short-life funding available, by the lack of evidence of good practice in specific contexts, and by lack of flexibility over major issues of organisation design and curriculum. Challenging contexts and the constraints on school responses together exert a downward pressure on quality. The paper argues that because school processes and quality are affected by context, school improvement in disadvantaged areas will not be achieved by generic measures, but only by policies tailored to disadvantaged areas and sensitive to differences between these areas. It suggests ways in which school improvement policies could be contextualised in order to raise quality in the poorest areas. |
| Keywords: | education, schools, poverty, area deprivation, neighbourhoods, quality, OFSTED, educational attainment, context |
| JEL: | I28 R00 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:76&r=lab |
| By: | Arnstein Aassve; Simon Burgess; Matt Dickson; Carol Propper |
| Abstract: | The paper investigates the relationship between work and family life in Britain. Using appropriate statistical techniques we estimate a five-equation model, which includes birth events, union formation, union dissolution, employment and non-employment events. The model allows for unobserved heterogeneity that is correlated across all five equations. We use information from the British Household Panel Survey, including the retrospective histories concerning work, union, and child bearing, to estimate this model. We obtain well-defined parameter estimates, including significant and correlated unobserved heterogeneity. We find that transitions in and out of employment for men are relatively independent of other transitions. In contrast, there are strong links between female employment, having children and union formation. By undertaking a detailed micro simulations analysis, we show that different levels of female labour force participation do not necessarily lead to large changes in fertility levels. Changes in union formation and fertility levels, on the other hand, do have a significant impact on employment rates. |
| Keywords: | demographic transitions, marriage, divorce, birth, employment |
| JEL: | J12 J13 J22 |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:84&r=lab |
| By: | Berta Esteve-Volart |
| Abstract: | Gender inequality is an acute and persistent problem, especially in developing countries. This paper argues that gender discrimination is an inefficient practice. We model gender discrimination as the complete exclusion of females from the labor market or as the exclusion of females from managerial positions. The distortions in the allocation of talent between managerial and unskilled positions, and in human capital investment, are analyzed. It is found that both types of discrimination lower economic growth; and that the former also implies a reduction in per capita GDP, while the latter distorts the allocation of talent. Both types of discrimination imply lower female-to-male schooling ratios. We discuss the sustainability of social norms or stigma that can generate discrimination in the form described in this paper. We present evidence based on panel-data regressions across Indian states over 1961-1991 that is consistent with the model¿s predictions. |
| Keywords: | Growth, gender discrimination, labor market, allocation of talent, India. |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stidep:42&r=lab |
| By: | Saul Lach; Mark Schankerman |
| Abstract: | We show that economic incentives affect the commercial value of inventions generated in universities. Using data for 102 U.S. universities during the period 1991-1999, we find that universities which give higher royalty shares to academic scientists generate higher license income, controlling for other factors including university size, quality, research funding and technology licensing inputs. We provide evidence that this is due to the fact that public universities are less effective at commercialising inventions, which weakens the incentive effect of higher royalty shares. Other findings include: 1) there is a Laffer effect in private universities: raising the inventor's royalty share increases the license income retained by the university; 2) the incentive effect works primarily by increasing the quality of inventions, and 3) the incentive effect appears to operate both by raising faculty effort and by sorting academic scientists across universities. |
| Keywords: | Academic research, incentives, licensing, royalties, technology transfer, intellectual property. |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieip:33&r=lab |
| By: | Elise S. Brezis; François Crouzet |
| Abstract: | The aim of this paper is to examine the evolution of recruitment of elites and to investigate the nature of the links between recruitment of elites and economic growth. The main change that occurred in the way the Western world trained its elites is that meritocracy became the basis for their recruitment. Although meritocratic selection should result in the best being chosen, we show that meritocratic recruitment actually leads to class stratification and auto-recruitment. We analyze the consequences of stratification resulting from meritocratic selection for the development of a country, and show that these consequences are dependent upon the type of technological changes occurring in the country. |
| Keywords: | economic growth, education, elites, meritocracy, recruitment, social mobility, stratification |
| JEL: | I21 O15 O40 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1360&r=lab |
| By: | Forslund, Anders (IFAU - Institute for Labour Market Policy Evaluation); Johansson, Per (IFAU - Institute for Labour Market Policy Evaluation); Lindqvist, Linus (IFAU - Institute for Labour Market Policy Evaluation) |
| Abstract: | The treatment effect of a Swedish employment subsidy is estimated using exact covariate-matching and instrumental variables methods. Our estimates suggest that the programme had a positive treatment effect for the participants. <p> We also show how non-parametric methods can be used to estimate the time profile of treatment effects as well as how to estimate the effect of entering the programme at different points in time in the unemployment spell. <p> Our main results are derived using matching methods. However, as a sensitivity test, we apply instrumental variables difference-in-difference methods. These estimates indicate that our matching results are robust |
| Keywords: | Evaluation; employment subsidies; exact covariate-matching |
| JEL: | C14 C41 J23 J38 J68 |
| Date: | 2004–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2004_018&r=lab |
| By: | Zijl, Marloes (SEO University of Amsterdam); van den Berg, Gerard J (Free University Amsterdam); Heyma, Arjan (SEO University of Amsterdam) |
| Abstract: | Individual labour market transitions from unemployment into temporary work are often succeeded by a transition from temporary into regular work. We investigate whether temporary work increases the transition rate to regular work. In that case, temporary work may enhance labour market efficiency. We use longitudinal survey data of individuals to estimate a multi-state duration model, applying the “timing of events” approach. To deal with selectivity, the model incorporates transitions from unemployment to temporary jobs and unobserved determinants of the transition rates. The data contain multiple spells in labour market states at the individual level. We analyse the results using novel graphical representations. The results unambiguously show that temporary jobs serve as stepping-stones towards regular employment. They shorten the duration of unemployment and they substantially increase the fraction of unemployed workers who have regular work within a few years after entry into unemployment, as compared to a situation without temporary jobs. |
| Keywords: | Unemployment; fixed term contracts; temporary work; job search; duration model; treatment effect |
| JEL: | C41 J64 |
| Date: | 2004–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2004_019&r=lab |
| By: | Andrew Jenkins; Rosalind Levacic |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0038&r=lab |
| By: | Robert Prasch |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0427&r=lab |
| By: | Arnaud Chevalier |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0040&r=lab |
| By: | Tetsuji Okazaki (Faculty of Economics, University of Tokyo) |
| Abstract: | This paper examines the boundaries of the internal labor markets in Mitsubishi Zaibatsu and the career paths of the employees of Mitsubishi Bank, using the employee lists of Mitsubishi Zaibatsu. The fact that a comprehensive employee list was compiled by the personal section of the holding company every year, suggests that there might be a unified internal labor market of Mitsubishi Zaibatsu. However, transfers of employees between the affiliated companies were exceptional, which means that the internal labor market in Mitsubishi Zaibatsu was partitioned into the internal labor markets of the individual companies. On the other hand, each of those internal markets was relatively open to the external market, compared with major companies in present Japan. It is also found that the career paths of the employees of Mitsubishi Bank were different from those of the bank employees in present Japan. In particular, many of the loan section chiefs of Mitsubishi Bank did not have much experience as loan officers, while they spent long time in various sections including deposit section and exchange section. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:tky:jseres:2004cj122&r=lab |
| By: | Daniela Andren (University of Gothenborg); John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Dana Sapatoru (W.E. Upjohn Institute for Employment Research) |
| Abstract: | We estimate the impact of schooling on monthly earnings from 1950 to 2000 in Romania. Nearly constant at about 3-4 percent during the socialist period, the coefficient on schooling in a conventional earnings regression rises steadily during the 1990s, reaching 8.5 percent by 2000. Our analysis finds little evidence for either the standard explanations of such an increase in the West (labor supply movements, product demand shifts, technical change) or the transition-specific accounts sometimes offered (wage liberalization, border opening, increased quality of education). But we find some support for institutional and organizational explanations, particularly the high productivity of education in restructuring and entrepreneurial activities in a disequilibrium environment. |
| Keywords: | returns to schooling, human capital, education, wage differentials, transition, Romania |
| JEL: | I20 J23 J24 J31 O15 P23 P31 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:04-108&r=lab |
| By: | Avdullah Hoti (University of Prishtina, Faculty of Economy, Kosova) |
| Abstract: | In this paper we explore the issues of human capita in Kosova, a country which is characterised by high unemployment and large-scale emigration. Using data from the Riinvest Labour Force and Household Survey (December 2002), we estimate the probability of being unemployed for those who are of working age, are active in the labour force and reside in Kosova. Apart from this, we estimate the probability of emigrating for those of working age. There seems to be some systematic patterns: (i) those who are unemployed are not randomly selected from the labour force; (ii) those who emigrate are not randomly selected from working age population. The empirical results show that the individuals residing in rural areas face higher probability of being unemployed. Consequently, they tend to emigrate more compared to those residing in urban areas. Second, males and married people face lower probability of being unemployed. But they also tend to emigrate more compared to their respective counterparts. Third, although the more educated individuals face lower probability of being unemployed in Kosova, they tend to emigrate more than less educated individuals. These research findings might be used for developing policy proposals. |
| Keywords: | Transition, human capital, unemployment, emigration, Kosova |
| JEL: | J |
| Date: | 2004–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0412007&r=lab |
| By: | Eric Furstenberg (Department of Economics, College of William and Mary) |
| Abstract: | This paper develops a theoretical model of college admissions to study the effects of affirmative action policies on the high school achievement of college bound students. The innovation is to include endogenous human capital decisions in the model. When colleges switch admissions policies, they implicitly alter the likelihood of acceptance earned by a given human capital investment. Thus, human capital investments are sensitive to changes in admissions policies. The main results are that banning affirmative action increases the black-white test score gap and decreases college enrollment and social welfare of the minority group. |
| Keywords: | Affirmative Action, Discrimination, Public Policy, Education, Asymmetric Information |
| JEL: | I20 J71 D82 |
| Date: | 2004–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:3&r=lab |
| By: | Christopher A. Pissarides |
| Abstract: | Unemployment in Britain has fallen from high European-style levels to US levels. I argue that the key reasonsare first the reform of monetary policy, in 1993 with the adoption of inflation targeting and in 1997 with theestablishment of the independent Monetary Policy Committee, and second the decline of trade union power. Iinterpret the reform of monetary policy as an institutional change that reduced inflationary expectations in theface of falling unemployment. The decline of trade union power contributed to the control of wage inflation.The major continental economies failed to match UK performance because of institutional rigidities, despite lowinflation expectations. |
| Keywords: | unemployment in UK, monetary policy, Beveridge curve, Phillips curve |
| JEL: | E5 J5 J64 |
| Date: | 2003–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0600&r=lab |
| By: | Gueorgui Kambourov (Department of Economics, University of Toronto); Iourii Manovskii (Department of Economics, University of Pennsylvania) |
| Abstract: | We analyze the dynamics of worker mobility in the United States over the 1968-1993 period at various levels of occupational and industry aggregation. We find a substantial overall increase in occupational and industry mobility over the period and document the levels and time trends in mobility for various age-education subgroups of the population. To control for measurement error in occupation and industry coding, we develop a method that utilizes the newly released, by the Panel Study of Income Dynamics, Retrospective Occupation-Industry Supplemental Data Files. We emphasize the importance of the findings for understanding a number of issues in macro and labor economics, including changes in wage inequality, productivity, life-cycle earnings profiles, job stability and job security. |
| Keywords: | Occupational Mobility, Industry Mobility, Career Mobility, Sectoral Real-location |
| JEL: | E20 J21 J24 J44 J45 J62 J63 |
| Date: | 2001–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:04-012&r=lab |
| By: | Nicola Persico (Department of Economics, University of Pennsylvania); Andrew Postlewaite (Department of Economics, University of Pennsylvania); Dan Silverman (Department of Economics, University of Michigan) |
| Abstract: | Taller workers receive a wage premium. Net of differences in family background, the disparity is similar in magnitude to the race and gender gaps. We exploit variation in an individual’s height over time to explore how height affects wages. Controlling for teen height essentially eliminates the effect of adult height on wages for white males. The teen height premium is not explained by differences in resources or endowments. The teen height premium is partly mediated through participation in high school sports and clubs. We estimate the monetary benefits of a medical treatment for children that increases height. |
| Keywords: | Confidence, Optimism, Behavioral Economics |
| JEL: | D81 D83 |
| Date: | 2001–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:04-013&r=lab |
| By: | César Alonso-Borrego (Department of Economics,Universidad Carlos III de Madrid); Jesús Fernández-Villaverde (Department of Economics, University of Pennsylvania); José E. Galdón-Sánchez (Department of Economics,Universidad Publica de Navarra) |
| Abstract: | Job security provisions are commonly invoked to explain the high and persistent European unemployment rates. This belief has led several countries to reform their labor markets and liberalize the use of fixed-term contracts. Despite how common such contracts have become after deregulation, there is a lack of quantitative analysis of their impact on the economy. To fill this gap, we build a general equilibrium model with heterogeneous agents and firing costs in the tradition of Hopenhayn and Rogerson (1993). We calibrate our model to Spanish data, choosing in part parameters estimated with firm-level longitudinal data. Spain is particularly interesting, since its labor regulations are among the most protective in the OECD, and both its unemployment and its share of fixed-term employment are the highest. We find that fixed term contracts increase unemployment, reduce output, and raise productivity. The welfare effects are ambiguous. |
| Keywords: | Fixed-term contracts, Firing costs, General equilibrium, Heterogeneous agents |
| JEL: | E24 C68 J30 |
| Date: | 2004–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:04-016&r=lab |
| By: | Gueorgui Kambourov (Department of Economics, University of Toronto); Iourii Manovskii (Department of Economics, University of Pennsylvania) |
| Abstract: | In this study we argue that wage inequality and occupational mobility are intimately related. We are motivated by our empirical findings that human capital is occupation-specific and that the fraction of workers switching occupations in the United States was as high as 16% a year in the early 1970s and had increased to 19% by the early 1990s. We develop a general equilibrium model with occupation-specific human capital and heterogeneous experience levels within occupations. We argue that the increase in occupational mobility was due to the increase in the variability of productivity shocks to occupations. The model, calibrated to match the increase in occupational mobility, accounts for over 90% of the increase in wage inequality over the period. A distinguishing feature of the theory is that it accounts for changes in within-group wage inequality and the increase in the variability of transitory earnings. |
| Keywords: | Occupational Mobility, Wage Inequality, Within-Group Inequality, Human Capital, Sectoral Reallocation |
| JEL: | E20 E24 E25 J24 J31 J62 |
| Date: | 2000–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:04-026&r=lab |
| By: | Donghoon Lee (Department of Economics, New York University); Kenneth I. Wolpin (Department of Economics, University of Pennsylvania) |
| Abstract: | One of the most striking changes in the U.S. economy over the past 50 years has been the growth in the service sector. In 1950, 57 percent of workers were employed in the service sector, by 1970 that figure had risen to 63 percent and by 2000 to 75 percent. While service sector employment grew by 2.2 percent per year faster than employment in the goods sector between 1968 and 2000, the real hourly wage in the service sector grew only by 0.23 percent more per year over the same period. In this paper, we assess whether or not the essential constancy of the relative wage implies that individuals face small costs of switching sectors and quantify the relative importance of labor supply and demand factors in the growth of the service sector. We specify and estimate a two-sector growth model with idiosyncratic and aggregate shocks that allows us to address these empirical issues in a unified coherent framework. Our estimates imply that there are large mobility costs; output in both sectors would have been double their current levels if these mobility costs had been zero. In addition, we find that demand side factors, that is, technical change and movements in product and capital prices, were responsible for the growth of the service sector. |
| Keywords: | labor mobility, service sector growth, labor market equilibrium |
| JEL: | D1 D58 J2 J6 |
| Date: | 2004–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:04-036&r=lab |
| By: | Ghazala Azmat; Maia Guell; Alan Manning |
| Abstract: | There is an enormous literature on gender gaps in pay and labour market participation but virtually noliterature on gender gaps in unemployment rates. Although there are some countries in which there isessentially no gender gap in unemployment, there are others in which the female unemployment rate issubstantially above the male. Although it is easy to give plausible reasons for why more women than menmay decide not to want work, it is not so obvious why, once they have decided they want a job, women insome countries are less likely to be in employment than men. This is the subject of this paper. We showthat, in countries where there is a large gender gap in unemployment rates, there is a gender gap in bothflows from employment into unemployment and from unemployment into employment. We investigatedifferent hypotheses about the sources of these gaps. Most hypotheses find little support in the data and thegender gap in unemployment rates (like the gender gap in pay) remains largely unexplained. But it doesseem to correlate with attitudes on whether men are more deserving of work than women so thatdiscrimination against women may explain part of the gender gap in unemployment rates in theMediterranean countries. |
| Keywords: | Gender Gap, Unemployment Rates |
| JEL: | J16 J64 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0607&r=lab |
| By: | Borghijs Alain; Di Bartolomeo Giovanni; Merlevede Bruno |
| Abstract: | This paper considers the effects of central bank independence, labor market institutions and the political partisanship on economic performance. In particular, we test if the partisanship of the government and the degree of central bank independence affect the relationship between labor market institutions and economic performance. We find evidence of interaction effects between the government’s partisanship and the labor market institutions. An increase in union density favors a left-wing government, while an increase in coordination favors a right-wing government. We also find that changes in the partisanship of the government have a larger impact on inflation and unemployment when the labor market is more institutionalized. |
| Date: | 2003–02 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2003001&r=lab |
| By: | Késenne Stefan |
| Abstract: | In this paper we try to show that a salary cap, as it is proposed by the G-14, the association of the 18 most successful clubs in European football, is fundamentally different from the salary cap as it has been introduced in some major leagues in the U.S. Whatever the objectives, the impact of these two types of salary caps on the distribution of playing talent, which is the most important determinant of the competitive balance in a sports league, can be very different, depending, among other things, on the cost structure of the large and the small market clubs. |
| Date: | 2003–07 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2003018&r=lab |
| By: | D Blanchflower; Alex Bryson |
| Abstract: | This paper presents evidence of both counter-cyclical and secular decline in the union membership wage premiu m inthe US and the UK over the last couple of decades. The premium has fallen for most groups of workers, the mainexception being public sector workers in the US. By the beginning of the 21st Century the premium remainedsubstantial in the US but there was no premium for many workers in the UK. Industry, state and occupation-levelanalyses for the US identify upward as well as downward movement in the premium characterized by regression tothe mean. Using linked employer-employee data for Britain we show estimates of the membership premium tend tobe upwardly biased where rich employer data are absent and that OLS estimates are higher than those obtained withpropensity score matching. |
| Keywords: | union membership wage premium. |
| JEL: | J51 J52 |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0612&r=lab |
| By: | Victor Matheson (Department of Economics, College of the Holy Cross) |
| Abstract: | Previous research has concluded that the 1981 and 1994/95 Major League Baseball (MLB) strikes have caused short-term losses in attendance but have not resulted in any long-term effects on attendance. While total attendance at MLB games following the 1994/95 strike has recovered to its pre-strike levels, this has been done only through the construction of new stadiums at an unprecedented pace which cannot continue into the future. After accounting for stadium effects, average MLB baseball attendance has dropped significantly since the 1994/95 strike. |
| Keywords: | baseball, strikes, sports, attendance |
| JEL: | D12 J52 L83 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:0405&r=lab |
| By: | David Marsden |
| Abstract: | Can unions substitute a procedural justice role for their traditional reliance on establishing a¿common rule¿? The decline of ¿bureaucratic¿ models of employee management and the riseof performance pay and performance management conflicts with the common rule asmanagement seek to tie rewards more closely to individual and organisational performance.CEP studies of performance pay in the British public services illustrate the potential for aprocedural justice role to ensure that such pay systems are operated fairly, otherwise they riskdemotivating staff. Evidence is presented to show that employees regard unions as effectivevehicles for procedural justice. In this way, management can achieve better operation of theirincentive schemes, and employees may experience less unfairness and poisoned workrelations. |
| Keywords: | performance-related pay, public services, procedural justice, management |
| JEL: | J33 M12 |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0613&r=lab |
| By: | Emek Basker (Department of Economics, University of Missouri-Columbia) |
| Abstract: | This paper estimates the effect of Wal-Mart expansion on retail employment at the county level. Using an instrumental-variables approach to correct for both measurement error in entry dates and endogeneity of the timing of entry, I find that Wal-Mart entry increases retail employment by 100 jobs in the year of entry. Half of this gain disappears over the next five years as other retail establishments exit and contract, leaving a long-run statistically significant net gain of 50 jobs. Wholesale employment declines by approximately 20 jobs due to Wal-Mart’s vertical integration. No spillover effect is detected in retail sectors in which Wal-Mart does not compete directly, suggesting Wal-Mart does not create agglomeration economies in retail trade at the county level. |
| Keywords: | Wal-Mart |
| JEL: | J21 L11 L81 |
| Date: | 2004–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0215&r=lab |
| By: | Richard Layard |
| Abstract: | 1. Human happiness is more affected by whether or not one has a job than by what kindof job it is.2. Thus, when jobs are to hand, we should insist that unemployed people take them. Thisinvolves a much more pro-active placement service and clearer conditionality thanapplies in many countries.3. But we should also guarantee unemployed people work within a year of becomingunemployed. In this way we put a reciprocal obligation on the state (to produce work)and on the individual (to take it). Such a guarantee requires a well- judged mix ofsubsidies, supported work, and training.4. Where there is low pay, the correct response is in-work benefits, together with a longtermstrategy to reduce low skill. |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:op19&r=lab |
| By: | Andrew B. Bernard; Stephen Redding; Peter K. Schott; Helen Simpson |
| Abstract: | Relative wages vary considerably across regions of the United Kingdom, with skill-abundantregions exhibiting lower skill premia than skill-scarce regions. This paper shows that thelocation of economic activity is correlated with the variation in relative wages. U.K. regionswith low skill premia produce different sets of manufacturing industries than regions withhigh skill premia. Relative wages are also linked to subsequent economic development: overtime, increases in the employment share of skill- intensive industries are greater in regionswith lower initial skill premia. Both results suggest firms adjust production across and withinregions in response to relative wage differences. |
| Keywords: | Deindustrialization, Relative Factor Prices, Diversification Cones |
| JEL: | F11 F14 C14 |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0614&r=lab |
| By: | Steven McIntosh |
| Abstract: | This paper uses recent data from the UK Labour Force Survey to estimate the wage gains thatindividuals make on average if they complete an apprenticeship programme. The resultssuggest gains of around 5-7% for men, but no benefit for women. Further analysis extendsthe results by considering the returns by age group, by qualification obtained, by highest priorqualification and by industrial sector. A key finding emerging from this further analysis is theimportance of acquiring qualifications with the apprenticeship, at level 3 or above. |
| Keywords: | apprenticeship, wage equations |
| JEL: | J24 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0622&r=lab |
| By: | Michele Pellizzari |
| Abstract: | Informal contacts are extensively used by both firms and workers to find jobs and fill vacancies. Thecommon wisdom in the economic literature is that jobs created through this channel are of better qualityand pay higher wages than jobs created through formal methods. This paper explores the empiricalevidence for European countries using the European Community Household Panel (ECHP) and discovers alarge cross-country as well as cross-industry variation in the wage differentials between jobs found throughinformal and formal methods. Across countries and industries wage premiums and wage penalties tofinding jobs through personal contacts are equally frequent. This paper argues that such variation can beexplained by looking at firms' recruitment strategies. In labour markets where employers invest largely informal recruitment activities, matches created through this channel are likely to be of average better qualitythan those created through informal networks. A simple theoretical model is used to show that employersinvest more in recruitment for high productivity jobs and for positions that require considerable training.The empirical predictions of the theory are successfully tested using industry-level data on recruitmentcosts. |
| Keywords: | Social Networks, Wage Differentials, Recruitment, Hiring |
| JEL: | J31 J64 M51 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0623&r=lab |
| By: | Andrew Neal; M Patterson; M West |
| Abstract: | Contingency formulations of Human Resource Management (HRM) theory suggest thatthe effectiveness of HRM practices should vary across firms. This study examinedwhether the relationship between HRM practices and productivity in manufacturingcompanies is contingent upon organizational climate and strategic orientation.Information on HRM, organizational structure, and competitive strategy was collected byinterviewing senior managers, whilst organizational climate was assessed via employeesurveys. Although organizational climate and HRM practices were both positivelyassociated with subsequent productivity, the relationship between HRM practices andsubsequent productivity was stronger for firms with a poor climate. |
| Keywords: | Human Resource Management, organisational structure, organisationalclimate, productivity |
| JEL: | M11 M12 J5 J24 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0624&r=lab |
| By: | J Dawson; Neal Knight-Turvey; Andrew Neal; M West |
| Abstract: | The current study examined the impact of the human resource function and financing strategyon the financial performance of 104 UK manufacturing firms. Hypotheses are drawn from aresource-based perspective on human resource management and a financial theoryperspective on capital structure. Results show that an innovative HR function is significantlyrelated to economic performance. However, the relationship between an innovative HRfunction and economic performance was moderated by the firm¿s financing strategy. Firmsobtained higher returns from an innovative HR function when pursuing a low leveraging(debt) financing strategy, a finding consistent with modern finance theory notions that firmspecificstrategic assets provide greatest value when financed primarily through equity asopposed to debt. |
| Keywords: | human resource function, manufacturing, firm performance, asset characteristics |
| JEL: | M11 M12 J5 J24 J51 J71 |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0630&r=lab |
| By: | Fabiano Schivardi; Roberto Torrini |
| Abstract: | We study the role of employment protection legislation (EPL) in determining firm size distribution. In manycountries the provisions of EPL are more stringent for firms above certain size thresholds. We construct asimple model that shows that the smooth relation between size and growth probability is interrupted inproximity of the thresholds at which EPL applies differentially. We use a comprehensive longitudinal dataset ofall Italian firms, a country with an important threshold at 15 employees, to estimate the effects of EPL in termsof discouraging small firms from growing. We find that the probability of firms ' growth in the proximity of thethreshold is reduced by around 2 percentage points. Using the stochastic transition matrix for firm size, wecompute the long-run effects of EPL on size distribution. We find that average firm size would increase by lessthan 1% in steady state when removing the threshold; a quantitatively modest effect. |
| Keywords: | Firm size distribution, Employment protection, Firing costs |
| JEL: | J65 D21 L11 |
| Date: | 2004–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0633&r=lab |
| By: | Stephen Nickell |
| Abstract: | This paper considers the impact of taxation policy on market work. On the basis of theevidence, we find that a 10 percentage point rise in the tax wedge will reduce overall labourinput provided via the market by around 2 per cent of the population of working age. The taxwedge is the sum of the payroll, income and consumption tax rates.This only explains a minority of the market work differentials across count ries. Muchof the remainder is probably down to the differences in the social security systems supportingthe unemployed, the sick and disabled and the early retired. |
| Keywords: | Employment, Taxation, Labour Supply |
| JEL: | H2 J2 |
| Date: | 2004–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0634&r=lab |
| By: | Paul Gregg; Rosanna Scutella; Jonathan Wadsworth |
| Abstract: | Individual and household based aggregate measures of worklessness can, and do, offer conflicting signalsabout labour market performance. We outline a means of quantifying the extent of any disparity,(polarisation), in the signals stemming from individual and household-based measures of worklessness andapply this index to data from 5 countries over 25 years. Built around a comparison of the actual householdworkless rate with that which would occur if employment were randomly distributed over householdoccupants, we show that in all the countries we examine, there has been a growing disparity between theindividual and household based workless measures. The polarisation count can be decomposed to identifywhich household groups are exposed to workless concentrations and can also be used to test whichindividual characteristics account for any excess worklessness among these household groups. We showthat the incidence and magnitude of polarisation varies widely across countries, but that in all countriespolarisation has increased. For each country most of the discrepancies between the individual andhousehold workless counts stem from within-household factors, rather than from changing householdcomposition. |
| Keywords: | Workless households, Inequality, Distribution of work, Polarisation, Worklessness |
| JEL: | C0 J0 J6 |
| Date: | 2004–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0635&r=lab |
| By: | Ann Bartel; Richard Freeman; Casey Ichniowski; Morris Kleiner |
| Abstract: | In this study we examine whether a workplace can induce good or bad attitudes among its employees andwhether any such ¿workplace attitudes¿ affect economic outcomes. This study analyzes responses ofthousands of employees working in nearly two hundred branches to the emp loyee opinion survey of amajor US bank in 1994 and 1996. The results document the existence and persistence of a genuineworkplace effect in how workers view their jobs and organizations. Employee attitudes differ significantlyacross branches in ways that cannot be explained by branches randomly drawing workers from adistribution of workers with different innate attitudes. Furthermore, newly hired workers adopt thefavourable or unfavourable attitudes that the branches exhibited before they arrived. These workplaceattitudes also have significant effects on economic outcomes. Branches with less favourable attitudes havehigher turnover, lower levels of sales, and lower rates of sales growth than branches where workers havemore favourable attitudes. Less favourable branch attitudes are also a significant predictor of subsequentbranch closings. The study¿s results show that there are happy and unhappy workplaces, as well as happyand unhappy workers, with very different patterns of turnover and productivity in these workplaces. |
| Keywords: | work motivation, workplace attitudes, organization, performance |
| JEL: | J0 J2 |
| Date: | 2004–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0636&r=lab |
| By: | B Petrongolo |
| Abstract: | This paper presents evidence on gender segregation in employment contracts in 15 EUcountries, using micro data from the ECHPS. Women are over-represented in part-time jobsin all countries considered, but while in northern Europe such allocation roughly reflectswomen¿s preferences and their need to combine work with child care, in southern Europepart-time jobs are often involuntary and provide significantly lower job satisfaction than fulltimeones. Women are also over-represented in fixed-term contracts in southern Europe, andagain this job allocation cannot be explained by preferences or productivity differentialsbetween the two genders. There is thus a largely unexplained residual in the gender joballocation, which may be consistent with some degree of discrimination in a few of the labourmarkets considered, especially in southern Europe. |
| Keywords: | Gender gap, employment, taxation, public policy |
| JEL: | J22 J28 J71 |
| Date: | 2004–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0637&r=lab |
| By: | Alan Manning |
| Abstract: | There is little doubt that technology has had the most profound effect on altering the tasks that wehumans do in our jobs. Economists have long speculated on how technical change affects boththe absolute demand for labour as a whole and the relative demands for different types of labour.In recent years, the idea of skill-biased technical change has become the consensus view aboutthe current impact of technology on labour demand, namely that technical change leads to anincrease in the demand for skilled relative to unskilled labour painting a bleak future for theemployment prospects of less-skilled workers. But, drawing on a recent paper by Autor, Levyand Murnane (2003) about the impact of technology on the demand for different types of skills,this paper argues that the demand in the least-skilled jobs may be growing. But, it is argued thatemployment of the less-skilled is increasingly dependent on physical proximity to the moreskilledand may also be vulnerable in the long-run to further technological developments. |
| Keywords: | Labor Demand and Technology, Inequality |
| JEL: | J21 |
| Date: | 2004–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0640&r=lab |
| By: | Joseph Blasi; Robert Buchele; Richard Freeman; Douglas Kruse; Chris Mackin; Loren Rodgers; Adria Scharf |
| Abstract: | What enables some employee ownership firms to overcome the free rider problem andmotivate employees to improve performance? This study analyzes the role of humanresource policies in the performance of employee ownership companies, using employeesurvey data from 14 companies and a national sample of employee-owners. Between-firmcomparisons of 11 ESOP firms show that an index of human resource policies, nominallycontrolled by management, is positively related to employee reports of co-workerperformance and other good workplace outcomes (including perceptions of fairness, goodsupervision, and worker input and influence). Within-firm comparisons in three ESOP firms,and exploratory results from a national survey, show that employee-owners who participatein employee involvement committees are more likely to exert peer pressure on shirking coworkers.We conclude that an understanding of how and when employee ownership workssuccessfully requires a three-pronged analysis of: 1) the incentives that ownership gives; 2)the participative mechanisms available to workers to act on those incentives; and 3) thecorporate culture which battles against tendencies to free ride. |
| Keywords: | human resources, industrial relations, employee ownership |
| JEL: | M5 M40 O15 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0658&r=lab |
| By: | Richard Belfield; David Marsden |
| Abstract: | Performance-related pay (PRP) and performance management (PM) are now a part of the organizationallandscape that unions face in the UK's public services. While PRP and PM threaten the scope of traditionalunion bargaining activities, they simultaneously offer a new role to unions as providers of 'procedural justiceservices' to both union members and employers. We explore the case of the introduction of these systems forclassroom teachers in England and Wales as a means of testing this idea. Our survey evidence shows thatclassroom teachers experiencing the introduction of PRP have expressed a strong demand for such services fromthe teachers' unions. Further, analysis of the PRP implementation process for classroom teachers indicates thatthe teachers' unions have progressively assumed a 'procedural justice role' since its introduction. Union actionin this regard has led to substantial modification over time of classroom teachers' PRP and PM. These changeshave addressed many of the concerns of teachers, have created a new institutional role for the relevant unions,and may permit the systems to avoid the operational difficulties they have experienced elsewhere in the UK'spublic services. |
| Keywords: | Unions, Procedural Justice, Performance-Related Pay, Teachers |
| JEL: | J33 J51 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0660&r=lab |
| By: | Alex Bryson; Lorenzo Cappellari; Claudio Lucifora |
| Abstract: | We investigate the effect of employer job security guarantees on employee perceptions of jobsecurity. Using linked employer-employee data from the 1998 British Workplace EmployeeRelations Survey, we find job security guarantees reduce employee perceptions of jobinsecurity. This finding is robust to endogenous selection of job security guarantees byemployers engaging in organisational change and workforce reductions. Furthermore, thereis no evidence that increased job security through job guarantees results in greater workintensification, stress, or lower job satisfaction. |
| Keywords: | Job insecurity, job guarantees, linked employer-employee data |
| JEL: | J28 J32 J63 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0661&r=lab |