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on Labour Economics |
| By: | Kyota Eguchi (University of Tsukuba) |
| Abstract: | I consider the effect of minimum wages to on-the-job training from the viewpoint of trainers' incentives. In the work environment, experienced employees play significant roles in training new employees. However, the more training they provide to trainees, the less likely those trainers would be promoted. I call the trainers' situation the trainers' dilemma between promotion and training. I show that minimum wages alleviate the trainers' dilemma, since minimum wages increase income for not-promoted workers and reduce net benefit of promotion. Hence, minimum wage legislations enhance on-the-job training and social welfare, but reduce firms' profit |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-18&r=lab |
| By: | Cheti Nicoletti (Institute for Social and Economic Research); Franco Peracchi |
| Abstract: | Social surveys are usually affected by item and unit nonresponse. Since it is unlikely that a sample of respondents is a random sample, social scientists should take the missing data problem into account in their empirical analyses. Typically, survey methodologists try to simplify the work of data users by ``completing'' the data, filling the missing variables through imputation. The aim of this paper is to give data users some guidelines on how to assess the effects of imputation on their micro-level analyses. We focus attention on the potential bias caused by imputation in the analysis of income variables and poverty measures. We consider two methods for evaluating the effects of imputation, using the European Community Household Panel as an illustration. |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-19&r=lab |
| By: | Marcus Eliason (Centre for European Labour Market Studies); Donald Storrie (Centre for European Labour Market Studies) |
| Abstract: | In this paper we examine the long-term effects of job displacement due to establishment closures in Sweden on labor market status. Using linked employer-employee data we are able to identify all employees displaced in 1987 and follow them until 1999. The displaced employees are compared to a large random sample of non-displaced employees by using a difference–in–difference matching estimator. We find a rapid and almost total recovery of those displaced in 1987 compared to the control group up to 1990, both with respect to employment and unemployment. However, with the advent of the deep recession in 1990, the two groups again diverge and by the end of the century, the echo of the job loss 13 years earlier had still not subsided. We attribute the longer-term effects to recurrent displacements. Among the various possible explanations of this phenomenon, we focus on short tenure on subsequent jobs which makes the previously displaced vulnerable to further adverse shocks. We cannot precisely identify the significance of short tenure for recurrent displacement but loss of job specific capital or seniority lay-offs rules are the prime candidates. |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-20&r=lab |
| By: | Marcus Eliason (Centre for European Labour Market Studies) |
| Abstract: | The objective of this paper is to examine the effect of a spouse's job loss on the probability that his/her marriage ends in divorce. Previous empirical studies on this matter are sparse, and the results inconclusive. Moreover, all previous studies focus on the short-term effects. A unique Swedish data set is used, containing all married couples where one of the spouses was displaced, due to an establishment closure, and an appropriate comparison group. I provide further evidence that the adverse consequences of a job loss cannot be measured in monetary terms alone, and extend the current literature on the impact of job loss (unemployment) on marital instability by also investigate the impact in the long run. The results suggest the existence of a destabilizing impact on marriages from both husbands’, and wives’, job losses, and both in the short and the longer run. |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-21&r=lab |
| By: | Maria A. Davia (Insitute for Social and Economic Research) |
| Abstract: | The general aim of this research is to study transitions from education into the labour market among youths under a simultaneous framework. Using a sub-sample of youths from the European Community Household Panel, the empirical strategy has consisted of a trivariate probit estimation; initial conditions are controlled for. Results show that expectations about future labour market outcomes do not always contribute to explain youths decisions regarding education, other factors (i.e., current unemployment, family background and institutional factors) being more important. Moreover, there is a strong state dependency in educational choices and the relevant transitions from school into employment and job search are shown to be clearly interdependent |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-22&r=lab |
| By: | Stephen P. Jenkins (Institute for Social and Economic Research); Peter Lynn (Institute for Social and Economic Research); Annette Jäckle (Institute for Social and Economic Research); Emanuela Sala (Institute for Social and Economic Research) |
| Abstract: | Linkages of household survey responses with administrative data may be based on unique individual identifiers or on survey respondent characteristics. The benefits gained from using unique identifiers need to be assessed in the light of potential problems such as non-response and measurement error. We report on a study that linked survey responses to UK government agency records on benefits and tax credits in five different ways. One matched on a respondent-supplied National Insurance Number and the other four used different combinations of sex, name, address, and date of birth. As many linkages were made using matches on sex, date of birth, and post-code, or on sex, date of birth, first name and family name, as were made using matches on self-reported National Insurance Number, and the former were also relatively accurate when assessed in terms of false positive and false negative rates. The five independent matching exercises also shed light on the potential returns from hierarchical and pooled matching. |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-23&r=lab |
| By: | Annette Jäckle (Institute for Social and Economic Research); Peter Lynn (Institute for Social and Economic Research) |
| Abstract: | Dependent interviewing has been introduced by a number of panel surveys as a means of reducing measurement error, in particular the typically observed concentration of transitions at the seam between waves, the ‘seam effect’. Little evidence exists, however, of the effects on survey estimates. We report on a large scale randomised experiment comparing dependent interviewing with traditional independent methods. Proactive dependent interviewing improves the quality of work history data by reducing seam effects, and reduces bias in estimates of monthly labour force transitions and spell durations. Proactive interviewing does not have any effect on measures of cumulative experience and does not appear to lead to under-reporting of change. Seam transitions in continuous work histories are largely explained by editing rules used to reconcile reports from repeated panel observations. Proactive methods reduce seam effects by precluding overlapping non-corresponding reports. The potential for eliminating seam effects is, however, limited by item non-response to date questions. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-24&r=lab |
| By: | Mark L. Bryan (Institute for Social and Economic Research) |
| Abstract: | Under plausible assumptions about firm preferences over the working time of their employees, the number of hours worked is likely to depend on firm, as well as individual, characteristics. I use the WERS98 employer-employee matched dataset to analyse the role played by differences between firms on the one hand, and between individuals on the other, in the observed variation in hours of work. I analyse whether and how hours vary within firms according to individual characteristics, and evaluate the degree to which individuals are sorted into different firms based on their human capital characteristics and working time preferences. Overall, I find substantial roles for both firm-level differences in technology and individual characteristics. A large share of hours variation is also due to the sorting of individuals into firms based on human capital characteristics. By contrast, there is less evidence of sorting on labour supply preference characteristics like marital status and parenthood, despite differing working hours across firms. Within firms, after controlling for the effects of human capital on hours, preference characteristics have a statistically and economically significant effect on hours of work. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-25&r=lab |
| By: | Elena Bardasi (The World Bank); Stephen P. Jenkins (Institute for Social and Economic Research) |
| Abstract: | Older women in Britain receive considerably less private pension income than older men, on average. We analyse this differential by examining differences between the sexes both in private pension coverage and in pension income conditional on receipt. Using regression-based decompositions, we show that both gaps are associated mainly with gender differences in returns to personal characteristics rather than with gender differences in personal characteristics per se. In particular, although there are marked differences between elderly men and elderly women in their lifetime employment histories, these differences account for only a small fraction of the overall private pension income gap between the sexes. |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2004-29&r=lab |
| By: | Maria A. Davia (Institute for Social and Economic Research) |
| Abstract: | This piece of work is aimed at studying the rewards to job mobility and whether it is a proper tool to experience wage growth and escaping situations of low-paid jobs. The data-base used will be the European Community Household Panel Survey, from which a sample of young people (under 30 in 1994) from thirteen different countries has been drawn. The selected technique will be a fixed-effects model where job mobility endogenous nature is taken into account and where the marginal wage increase for movers is approached. Results show that, on average, young workers who move across employers (being initially worse paid than the stable ones) achieve a positive increase in their wages vis-à-vis those who remain with the same employer. However, this advantage in the wage dynamics is positive but at a decreasing rate, with too much mobility resulting in lower outcomes. Although a causal relation between job mobility is found, including control for endogeneity often wipes the explanatory power of mobility away, particularly when accumulated mobility is looked at. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2005-03&r=lab |
| By: | Carneiro, Pedro (University College London); Heckman, James (University of Chicago); Masterov, Dimitriy (University of Chicago) |
| Abstract: | We investigate the relative significance of differences in cognitive skills and discrimination in explaining racial/ethnic wage gaps. We show that cognitive test scores taken prior to entering the labor market are influenced by schooling. Adjusting the scores for racial/ethnic differences in education at the time the test is taken reduces their role in accounting for the wage gaps. We also consider evidence on parental and child expectations about education and on stereotype-threat effects. We find both factors to be implausible alternative explanations for the gaps we observe. We argue that policies need to address the sources of early skill gaps and to seek to influence the more malleable behavioral abilities in addition to their cognitive counterparts. Such policies are far more likely to be effective in promoting racial and ethnic equality for most groups than are additional civil rights and affirmative action policies targeted at the workplace. |
| Keywords: | Cognitive skills; discrimination; wage gaps |
| JEL: | J31 |
| Date: | 2004–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2005_003&r=lab |
| By: | Bergh, Andreas (Department of Economics, Lund University); Fink, Günther (Bocconi University) |
| Abstract: | Private universities, as opposed to publicly financed ones, are dominant in some countries and almost non-existent in others. We develop a dynamic model to demonstrate that private providers emerge as soon as they can profitably sell an elite signal to the most highly talented. As private providers engage in cream skimming, the returns to publicly provided education decreases, but the average return to higher education increases because of the signaling benefit created. We use numerical simulations to demonstrate the dynamic implications of our model, and provide some basic empirical evidence in support of the theory presented |
| Keywords: | Higher education; tertiary education; Signaling |
| JEL: | H52 I22 |
| Date: | 2005–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2005_002&r=lab |
| By: | Ahituv, Avner (University of Haifa and Urban Institute); Lerman, Robert (American University, Urban Institute and IZA Bonn) |
| Abstract: | This study examines the interplay between job stability, wage rates, and marital instability. We use a Dynamic Selection Control model in which young men make sequential choices about work and family. Our empirical estimates derived from the model account for selfselection, simultaneity and unobserved heterogeneity. The results capture how job stability affects earnings, how both affect marital status, and how marital status affects earnings and job stability. The study reveals robust evidence that job instability lowers wages and the likelihood of getting and remaining married. At the same time, marriage raises wages and job stability. To project the sequential effects linking job stability, marital status, and earnings, we simulate the impacts of shocks that raise preferences for marriage and that increase education. Feedback effects cause the simulated wage gains from marriage to cumulate over time, indicating that long-run marriage wage premiums exceed conventional short-run estimates. |
| Keywords: | marriage and marital dissolution, job turnover, wage rates, panel data |
| JEL: | C15 C33 J12 J31 J63 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1470&r=lab |
| By: | Brunello, Giorgio (University of Padua, CESifo and IZA Bonn); Checchi, Daniele (University of Milan and IZA Bonn) |
| Abstract: | School vouchers introduced recently in some Italian regions have lowered the cost of private schools. On one side, we provide evidence that Italian private schools may be selected for different reasons than quality considerations. On the other side, by exploiting individual data on voucher applicants, we present evidence that the percentage of voucher applicants is higher the higher the average quality of private schools, which we explain with the fact that better quality schools provide better services to students, including information and consulting on vouchers. We show that enrolment in private schools responds sluggishly to changes in tuition induced by vouchers. Under stringent assumptions, we estimate the slopes of demand and supply of private education in the largest Italian region, Lombardy, during the first two years since implementation of a voucher scheme, and provide a quantitative assessment of the long-term impact of vouchers on tuition fees and enrolment in private schools. |
| Keywords: | school vouchers, Italy |
| JEL: | I22 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1475&r=lab |
| By: | Bell, David (University of Stirling); Heitmueller, Axel (London Business School and IZA Bonn) |
| Abstract: | The enactment of the Americans with Disabilities Act (ADA) in 1990 triggered a substantial academic debate about its consequences on employment rates of disabled people. In contrast, the employment provision of the 1996 Disability Discrimination Act (DDA) in Britain has received little attention. This paper provides robust evidence that, similar to the ADA in the US, the DDA has had no impact on the employment rate of disabled people or possibly worsened it. Possible reasons for this are low take-up of financial support, low levels of general awareness about the Act among disabled people and employers, and limited knowledge about the true costs of required adjustments. |
| Keywords: | disability, employment, difference-in-difference, discrimination |
| JEL: | J2 I18 J71 J78 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1476&r=lab |
| By: | Addison, John T. (University of South Carolina, University of Coimbra/GEMF and IZA Bonn); Surfield, Christopher J. (Lander University) |
| Abstract: | Atypical work, or alternative work arrangements in U.S. parlance, has long been criticized for providing poorly-compensated employment. Although one group of atypical workers (contractors) seems to enjoy a wage premium, our cross-section results from the CPS and NLSY for the better-known category of temporary workers point to a negative wage differential of some 7-12 percent. It emerges that much of the latter disparity stems from unobserved worker heterogeneity (accounting for which supports a wage advantage for contracting work). Turning to fringes, the appearance in cross section of a potentially large deficit in atypical worker health benefits is again reduced after accounting for permanent unobserved individual heterogeneity. But on this occasion the reduction is very modest. Further, there is now some indication that the wage advantage of contract workers partly compensates for their reduced access to such benefits. |
| Keywords: | atypical/contingent work, alternative work arrangements, wage differentials, employer-related health insurance |
| JEL: | J31 J33 J4 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1477&r=lab |
| By: | Konrad, Kai A. (Free University of Berlin, WZB Berlin and IZA Bonn); Spadaro, Amedeo (PSE Paris-Jourdan Sciences Economiques and Universitat de les Illes Balears) |
| Abstract: | We consider redistributional taxation between people with and without human capital if education is endogenous and if individuals differ in their perceptions about own ability. Those who see their ability as low like redistributive taxation because of the transfers it generates. Those who see their ability as high may also like redistributive taxation because it stops other people receiving education and increases the quasi rents on their own human capital. It is surprising that this rather indirect effect can overcompensate them for the income loss from taxation and make the overconfident want higher taxes than the less confident do. The results, however, turn out to be in line with empirical evidence on the desired amount of redistribution among young individuals. |
| Keywords: | education, redistribution, confidence |
| JEL: | D78 H23 I21 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1478&r=lab |
| By: | Dana Goldman; Neeraj Sood; Arleen Leibowitz |
| Abstract: | Many companies have defined-contribution benefit plans requiring employees to pay the full cost (before taxes) of more generous health insurance choices. Research has shown that employee decisions are quite responsive to these arrangements. What is less clear is how the total compensation package changes when health insurance premiums rise. This paper examines employee compensation decisions during a three-year period when health insurance premiums were rising rapidly. The data come from a single large firm with a flexible benefits plan wherein employees explicitly choose how to allocate compensation between cash wages and other benefits. Under such an arrangement, higher health insurance premiums must induce changes in the composition of total compensation%u2013either in lower after-tax wages or in decreased contributions to other benefits. The results suggest that about two-thirds of the premium increase is financed out of cash wages and the remaining one-thirds is financed by a reduction in benefits. |
| JEL: | J33 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11063&r=lab |