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on Labour Economics |
| By: | Claudia Marcela Umaña |
| Abstract: | This paper examines the relationship between economic growth, households’ income, child labour and school attendance in Colombia. It also analyses the impact of the economic recession of 1999 on child labour and education. An important contribution of this paper is the use of micro and macro data in the estimation of the empirical models, since they allow analysing micro and macro sources of child labour. The results show that both households’ earnings and economic growth are relevant for the families’ decision-making process regarding education or labour activities of their children. I find that, in Colombia, child labour is contra-cyclical and education is pro-cyclical to economic growth. Therefore, higher levels of social income increase the children’s welfare providing them with more education and less economic responsibilities. This implies that the main reason why children work in Colombia is poverty. The late nineties’ economic crisis impact on child labour and education was a sharp increase of children in the labour force and a slight decrease of school attendance. |
| Date: | 2004–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:col:000107:000179&r=lab |
| By: | Kreider, Brent |
| Abstract: | This paper studies how optimal wage tax conclusions from the classic life-cycle model of endogenous human capital accumulation are affected by relaxing a standard assumption that everyone works. In the standard model, the optimal wage tax is zero when wages are nonstochastic regardless of the impact of human capital on the future wage rate or the wage elasticity of labor hours. After allowing human capital accumulation to affect the extensive margin decision to work as well as the intensive number of labor hours to supply, distortionary wage taxation becomes desirable even with nonstochastic wages. In the absence of a corrective policy, young individuals underinvest in human capital from a social perspective because tax premiums for transfers to nonworkers are not actuarially adjusted downward for human capital attainment. To restore proper price signals, wage taxes should be negatively correlated with age. Results from previous models hold when the decision to work is treated as exogenous or premiums for transfers are actuarially tailored to human capital choices. Calibrating the model using data from the 2000 Current Population Survey, numerical simulations suggest that even modest extensive margin employment elasticities can be sufficient to substantially impact the magnitudes -- and even change the signs -- of optimal wage tax rates on prime-age workers. |
| JEL: | H2 H3 J2 |
| Date: | 2005–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12358&r=lab |
| By: | Christian Belzil (CNRS-GATE, CIRANO, CIREQ and IZA Bonn); Jörgen Hansen (Concordia University, CEPR, CIRANO, CIREQ and IZA Bonn) |
| Abstract: | We estimate a finite mixture dynamic programming model of schooling decisions in which the log wage regression function is set within a correlated random coefficient model and we use the structural estimates to perform counterfactual experiments. We show that the estimates of the dynamic programming model with a rich heterogeneity specification, along with simulated schooling/wage histories, may be used to obtain estimates of the average treatment effects (ATE), the average treatment effects for the treated and the untreated (ATT/ATU), the marginal treatment effect (MTE) and, finally, the local average treatment effects (LATE). The model is implemented on a panel of white males taken from the National Longitudinal Survey of Youth (NLSY) from 1979 until 1994. We find that the average return to experience upon entering the labor market (0.059) exceeds the average return to schooling in the population (0.043). The importance of selectivity based on individual specific returns to schooling is illustrated by the difference between the average returns for those who have not attended college (0.0321) and those who attended college (0.0645). Our estimate of the MTE (0.0573) lies between the ATU and ATT and exceeds the average return in the population. Interestingly, the low average wage return is compatible with the occurrence of very high returns to schooling in some subpopulation (the highest type specific return is 0.13) and the simulated IV estimates (around 0.10) are comparable to those very high estimates often reported in the literature. The high estimates are explained by the positive correlation between the returns to schooling and the individual specific reactions. Moreover, they are not solely attributable to those individuals who are at the margin, but also to those individuals who would achieve a higher grade level no matter what. The structural dynamic programming model with multi-dimensional heterogeneity is therefore capable of explaining the well known OLS/IV puzzle. |
| Keywords: | random coefficient, returns to schooling, treatment effects, dynamic programming, dynamic self-selection |
| JEL: | J2 J3 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1585&r=lab |
| By: | Christian Dustmann (University College London and IZA Bonn); Sonia C. Pereira (University College London and Yale University) |
| Abstract: | This paper investigates job mobility and estimates the returns to tenure and experience in the United Kingdom and Germany. We show evidence that job mobility is higher in the UK than in Germany, and that job movers may be negatively selected in Germany, but not in the UK. Our findings suggest that returns to experience are substantially higher in the UK. According to our estimates, ten years of labour market experience are associated with average wage returns of around 70 percent in the UK and 30 percent in Germany. Separate estimates for different qualification groups show that in Germany, it is the group of workers with apprenticeship training that is driving the low returns to labour market experience, while wages growth due to labour market experience is similar between the two countries for the other skill groups. Furthermore, returns to tenure are close to zero in both countries, while wage growth due to the macro trend is markedly higher in Germany. |
| Keywords: | returns to seniority, job mobility, asymmetric information |
| JEL: | J24 J31 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1586&r=lab |
| By: | Gaia Garino; Christopher Martin |
| Abstract: | We analyse the impact of labour turnover on profits. We extend the efficiency wage model of Salop (1979) by separating incumbent and newly hired workers in the production function. We show that an exogenous increase in the turnover rate can increase profits, but only where firms do not choose the wage. This effect of turnover varies across firms as it depends on turnover costs, the substitutability of incumbents and new hires and other factors. We test our model on UK cross-sectional establishment-level data. We find that the data are consistent with our predictions. |
| Keywords: | Labour Turnover; Turnover Costs; Optimal Turnover |
| JEL: | J21 J23 E3 F4 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:05/10&r=lab |
| By: | Orietta DESSY |
| Abstract: | In this paper we construct and compare different measures of nomi nal wage rigidity for the EU countries using the 1994-2000 waves of the European Community Household Panel. The observed distribut ions of nominal wage changes show a relevant percentage of nomina l wage cuts and freezes across countries. When measurement error is taken into account in an econometric model of wage changes app ropriately estimated, it explains almost the totality of wage cut s observed. Therefore the extent of nominal wage rigidity is quit e high in Europe. Institutional causes of wage rigidity are inves tigated, finding an ''hump-shaped'' relationship between nominal wage flexibility and both employment protection legislation and c oordination. On the other hand, an ''u-shaped'' impact of union c overage on measures of downward wage rigidity is found |
| Keywords: | Nominal wage rigidity, measurement error, intercountry comparison, institutions in labor markets |
| URL: | http://d.repec.org/n?u=RePEc:mil:wpdepa:2005-09&r=lab |
| By: | Paola Giuri; Salvatore Torrisi; Natalia Zinovyeva |
| Abstract: | This paper explores the complementarity between skills, organizational change and investments in information and communication technology (ICT). Our work contributes to the literature on the effects of ICT by testing the hypothesis of complementarity in a panel of 540 Italian manufacturing firms during the period 1995-2000. Our analysis provides strong support to the hypothesis of complementarity between skills and ICT (which is at the core of the skill-biased technical change theory). We also find some evidence in favour of the skill-biased organizational change hypothesis. The results obtained by drawing on different statistical methods suggest that interactions among ICT, skills and organizational change are complex and non-linear and difficult to explain. |
| Keywords: | Organisational Change, ICT Investment, Workplace Organization, Human Capital, Productivity |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2005/11&r=lab |
| By: | Stephanie Seguino |
| Abstract: | This paper explores the possibility that unregulated FDI flows are causally implicated in the decline in labor productivity growth in semi- industrialized economies. These effects are hypothesized to operate through the negative impact of firm mobility on worker bargaining power and thus affecting wages. Downward pressure on wages can reduce the pressure on firms to raise productivity in defense of profits, contributing to a low wage–low productivity trap. This paper presents empirical evidence, based on panel data fixed effects and GMM estimation for 37 semi-industrialized economies, that supports the causal link between increased firm mobility and lower wages, as well as slower productivity growth over the period 1970–2000. |
| Keywords: | Foreign direct investment, productivity, capital mobility. |
| JEL: | F2 F16 O3 |
| Date: | 2005–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0505008&r=lab |
| By: | Maria Racionero (Australian National University); John Quiggin (Department of Economics, University of Queensland) |
| Abstract: | In this paper, we extend the state-contingent production approach to principal-agent problems to the case where the state space is an atomless continuum. The approach is modelled on the treatment of optimal tax problems. The central observation is that, under reasonable conditions, the optimal contract may involve a fixed wage with a bonus for above-normal performance. This is analogous to the phenomenon of `bunching' at the bottom in the optimal tax literature. |
| Keywords: | state-contingent production, moral hazard |
| JEL: | D21 D82 |
| Date: | 2004–06 |
| URL: | http://d.repec.org/n?u=RePEc:rsm:riskun:r04_6&r=lab |
| By: | Horst Entorf (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)); Jochen Möbert (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)) |
| Abstract: | This article summarizes important aspects of illegal immigration. We analyse incentives of illegal immigrants as well as those of their employers by applying basic principles of labour economics, and by customising the workhorse of the economic theory of crime to suit the labour market for illegals immigrants. In addition, we describe the economic and social consequences of possible market outcomes. |
| JEL: | F22 J31 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:130&r=lab |
| By: | Eckhard Hein (WSI, Hands-Boeckler-Stiftung, Düsseldorf); Achim Truger (WSI, Hands-Boeckler-Stiftung, Düsseldorf) |
| Abstract: | This paper challenges the institutional sclerosis view of the German crisis according to which rigid labour markets and generous welfare state institutions have driven Germany into its position as "Europe's sick man". In general, the view is not convincing, because the underlying hypotheses about the effects of labour market regulation and welfare state institutions on employment and growth cannot unambiguously be derived from modern labour market theory and are at least partially at odds with accepted empirical findings. In particular, the explanation is unconvincing, because in international comparison Germany's labour market and welfare state institutions are simply not as sclerotic as often supposed. In most of the aggregate indicators for structural rigidities Germany is not worse than the average OECD or EU country. Moreover, there is a macroeconomic explanation focusing on the combined effects of restrictive and pro-cyclical monetary, fiscal and wage policies in Germany that is broadly consistent with modern macroeconomic theory and is supported by empirical data. |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:134&r=lab |
| By: | Volker Caspari (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)); Günther Rehme (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)); Jens Rubart (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)) |
| Abstract: | It is obvious that the German economy exhibits a significant decline in economic growth during the last two decades. Although the German economy has still to overcome the burden of the reunification in 1990 it is shown that this burden might be only one reason of this decline. In this study we follow the new growth theory and develop and com-pare indicators for the educational and R&D systems of the U.S. and Germany. In this line, we show that on average the German system can compete with the U.S. one, but a lack of human capital at very high skill levels becomes obvious. This lack, particularly leads to a lower performance of German R&D and could, therefore, possibly explain the decline of the German growth trend. |
| Keywords: | Human Capital, Research and Development, Efficiency of Educational Systems; Sources of Economic Growth |
| JEL: | O11 O30 |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:138&r=lab |
| By: | Martina Lauk (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)); Susanne Meyer (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)) |
| Abstract: | The gender relationship, characterised to a high degree by the gender-specific division of labour into paid work and housework, is in the process of change. In Germany, however, housework continues to be considered a typically female chore. The present study considers the empirical relevance of three theoretical approaches to gender-specific time allocation from the economic and social sciences. The various models are assessed using the Socioeconomic Panel (SOEP) for the year 2000. The estimation results imply that no single theory can be favoured as opposed to any other. Accordingly, prevalent approaches to the explanation of household division of labour are at the same time equally suited and unsuited to grasping the problem empirically. A person's individual housework time is determined by both economic and ideological characteristics. Following on from the evaluation of different theories, an approach is evaluated which simultaneously takes individual work time and paid work time into account. This integrative evaluation shows that the economic rational choice model finds only limited application in the area of private households, thus pointing to the necessity for an interdisciplinary treatment of the subject. |
| Keywords: | time allocation, household division of labour, SOEP data |
| JEL: | J22 J16 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:143&r=lab |
| By: | Dragana Djurdjevic (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)) |
| Abstract: | In this paper, I investigate employment behaviour of women one year after childbirth. Since the study is based on a sample of mothers only, a corrective method for selection into motherhood has been applied. In the empirical work, I use the family sex composition as an instrument for fertility. The primary focus of this study is to investigate the regional differences in the labour supply of women after childbirth. In Switzerland, childcare policy is an area being the responsibility of cantons and communes. There are thus considerable geographical, linguistic and cultural differences in childcare provision within the country. For instance, childcare policy is more strongly integrated at the cantonal level in the French and Italian speaking regions ("Latin part") than in the German speaking regions ("German part") where communes operate at their own discretion. The federal structure of Switzerland poses thus issues of policy coherence. The main results of this paper indicate that Latin mothers are more likely to return to work and to report more hours of work than their German counterparts. As a consequence, a more coherent and more harmonised childcare policy at the federal level should prove worthwhile. Adopting measures that increase the availability and the quality of childcare is important to promote mother's full-time and continuous employment. |
| Keywords: | fertility, labour supply, selectivity, instrumental variables |
| JEL: | D1 J13 J21 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:144&r=lab |
| By: | Katrin Schleife (Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology)) |
| Abstract: | This paper analyzes computer use by older male employees and estimates the impact of computer use on their employment status, based on individual data from the German Socio-Economic Panel (GSOEP) for the years 1997 and 2001. In line with previous research on the diffusion of new technologies, a strong and negative relationship between the age of workers and computer use is found. In addition, the impact of occupational status and hourly wage on computer use is significantly positive. However, the estimated impact of computer use on the change in employment status of older workers becomes insignificant when controlling for individual and firm-specific characteristics. |
| Keywords: | computer use, older workers, employment status |
| JEL: | J14 J26 O33 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:tud:ddpiec:145&r=lab |
| By: | Joshua L. Rosenbloom (Department of Economics, The University of Kansas, NBER) |
| Abstract: | Since 1990 employment in the city of Lawrence, Kansas has grown by 34 percent, nearly three times as fast as the state as a whole. Such rapid growth both creates economic benefits for residents and increases the cost of city services. This paper shows that the main beneficiaries of rapid growth were homeowners, who realized capital gains because of the increasing real estate values. Local workers experienced little or no improvement in relative wage levels or reduced chances of unemployment because job growth resulted in substantial population migration. On the cost side, city expenditures nearly doubled in real terms since 1990. This rise in spending was financed primarily through increased sales tax revenues and higher charges for city services. Thus the burden of increased spending was distributed more widely than the benefits of rising property values. The extent to which the rise in city expenditures is directly attributable to increased population cannot be determined without further investigation into the changes in the quality of city services provided. |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:200514&r=lab |