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on Labour Economics |
| By: | Caitlin Knowles Myers (Middlebury College and IZA Bonn) |
| Abstract: | Proposition 209, enacted in California in 1996 and made effective the following year, ended state affirmative action programs not only in education, but also for public employment and government contracting. This paper uses CPS data and triple difference techniques to take advantage of the natural experiment presented by this change in state law to gauge the labor market impacts of ending affirmative action programs. Employment among women and minorities dropped sharply, a change that was nearly completely explained by a decline in participation rather than by increases in unemployment. This decline suggests that either affirmative action programs in California had been inefficient or that they failed to create lasting change in prejudicial attitudes. |
| Keywords: | economics of gender and minorities, affirmative action, Proposition 209, discrimination |
| JEL: | J71 J78 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1674&r=lab |
| By: | Chang-Soo Lee (Korea Institute for International Economic Policy) |
| Abstract: | This study examines the impact of strengthening employment protection legislation, the structure of collective bargaining (centralization and coordination) and the labor market variables (national levels of unionization, strike levels and tax wedges on labor income) on a country's FDI inflows. Examining 29 OECD nations, our statistical analysis shows that strict EPL, which increases labor market rigidity, is usually associated with lower levels of FDI shares. Japanese investors are more sensitive to employment protection measures in choosing destinations for FDI than others. A 1-percentage-point increase in EPL causes a decrease of about 4.2 percent to Japan’s FDI share, compared to the decrease of 2.2 percent that results in the worldwide share. Finally, we discuss the implications of the recent employment protection policies in Korea that focus only on the interests of inside labor, reducing FDI inflows as well as neglecting the interests of outside labor (unemployed and future labor). Thus, policies for spending on outside labor and promoting entrepreneurship are necessary for national welfare to increase. |
| Keywords: | Labor Market , FDI Inflows, entrepreneurship |
| JEL: | E24 J23 J31 J51 |
| Date: | 2003–10 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:343&r=lab |
| By: | René Fahr (University of Cologne and IZA Bonn); Uwe Sunde (IZA Bonn) |
| Abstract: | This paper investigates the efficiency of the matching process between job seekers and vacancy posting firms in West-Germany, using variation across labor market regions and across time. The results of a stochastic frontier analysis shed new light on extent and regional differences of search frictions, on potential determinants of frictional inefficiencies and on the consequences of German reunification for the matching process. The paper also presents novel evidence on the complex interactions between spatial contingencies among regional labor markets: matching efficiency decreases with spatial autocorrelation in hiring, implying indirect evidence for crowding externalities. |
| Keywords: | regional unemployment, stochastic frontier, matching function, spatial autocorrelation |
| JEL: | J61 J64 J21 R12 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1660&r=lab |
| By: | Karen Kopecky (University of Rochester) |
| Abstract: | A model with leisure production and endogenous retirement is used to explain the declining labor force participation rates of elderly males. The model is calibrated using the health and retirement study. The model is able to predict both the increase in retirement since 1850 and the observed drop in market consumption at the moment of retirement. The increase in retirement is driven by rising real wages and a falling price of leisure goods over time. |
| Keywords: | retirement, leisure, home production, consumption-drop,technological progress |
| JEL: | E13 J26 O11 O33 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:roc:ecavga:12&r=lab |
| By: | Daniela Mantovani; Fotis Papadopoulos; Holly Sutherland; Panos Tsakloglou |
| Abstract: | This paper considers the effects on current pensioner incomes of reforms designed to improve the long-term sustainability of public pension systems in the European Union. We use EUROMOD to simulate a set of common illustrative reforms for four countries selected on the basis of their diverse pension systems and patterns of poverty among the elderly: Denmark, Germany, Italy and the UK. The variations in fiscal and distributive effects on the one hand suggest that different paths for reform are necessary in order to achieve common objectives across countries, and on the other provide indications of the appropriate directions for reform in each case. |
| Keywords: | Pensions; European Union; Microsimulation |
| JEL: | C81 I30 H55 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:mod:cappmo:0507&r=lab |
| By: | José António Cabral Vieira (University of the Azores and IZA Bonn); João Pedro Almeida Couto (University of the Azores); Maria Teresa Borges Tiago (University of the Azores) |
| Abstract: | This paper examines the size o inter-regional wage dispersion in Portugal. For this purpose, we estimate a Mincer-type human capital wage equation, including controls for a large number of regions, and calculate a weighted and adjusted standard deviation (WASD) of inter-regional wage differentials. The value is high and quite stable over time. The highest wages are found in the region of Lisbon. Moreover, the results are quite sensitive to inclusion of human capital and industry controls. A decomposition analysis reveals that differences average years of education and in the return to education across regions account for a significant fraction of observed wage differentials. |
| Keywords: | regions, wages, human capital, Portugal |
| JEL: | J31 R10 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1664&r=lab |
| By: | Raaum, Oddbjørn (The Ragnar Frisch Centre for Economic Research); Rogstad, Jon (Institute for Social Research); Røed, Knut (The Ragnar Frisch Centre for Economic Research); Westlie, Lars (The Ragnar Frisch Centre for Economic Research) |
| Abstract: | We develop a forward-looking empirical concept of social exclusion based on the estimated transition probabilities from a random effects multinominal logit-model. Youths are considered socially excluded if they are currently outside school/work and have a low predicted probability of re-entering in the near future. Implemented on extraordinary rich event history data of compulsory school graduates, we estimate social exclusion among Norwegian youths and find that social exclusion is (i) non-cyclical; (ii) rare among teen-agers, except for immigrant children and individuals with a disadvantaged family background; (iii) more prevalent among young adults in their early twenties; and (iv) independent of gender |
| Keywords: | social exclusion; multinominal logit-model; Youths; |
| JEL: | I29 |
| Date: | 2005–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2005_017&r=lab |
| By: | Christopher J. Ruhm (University of North Carolina at Greensboro, NBER and IZA Bonn) |
| Abstract: | This study investigates how maternal employment is related to the outcomes of 10 and 11 year olds, controlling for a wide variety of child, mother and family characteristics. The results suggest that limited amounts of work by mothers benefit youths who are relatively "disadvantaged" and even long hours, which occur relatively rarely, are unlikely to leave them much worse off. By contrast, maternal labor supply is estimated to have much more harmful effects on "advantaged" adolescents. Particularly striking are the reductions in cognitive test scores and increases in excess body weight predicted by even moderate amounts of employment. The negative cognitive effects occur partly because maternal labor supply reduces the time these children spend in enriching home environments. Some of the growth in obesity may be related to determinants of excess weight that are common to the child and mother. Work hours are also associated with relatively large (in percentage terms) increases in early substance use and small decreases in behavior problems; however, neither are statistically significant. |
| Keywords: | maternal employment, adolescent development, child obesity, socioeconomic status |
| JEL: | I20 J13 J18 J22 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1673&r=lab |
| By: | Marisa Ratto (CMPO, University of Bristol); Wendelin Schnedler (University of Heidelberg and IZA Bonn) |
| Abstract: | We examine a situation where efforts on different tasks positively affect production but are not separately verifiable and where the manager (principal) and the worker (agent) have different ideas about how production should be carried out: agents prefer a less efficient way of production. We show that by dividing labour (assigning tasks to different agents and verifying that agents do not carry out tasks to which they are not assigned), it is possible for the principal to implement the efficient way of production. Colluding agents can undermine this implementation. However, if agents have different abilities, collusion can be prevented by a specific assignment of agents to tasks. |
| Keywords: | hidden action, moral hazard, specialisation, job design |
| JEL: | L23 M52 D82 J24 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1669&r=lab |
| By: | Xabier Raurich (Universitat Girona and Creb, Universitat de Barcelona); Hector Sala (Universitat Autònoma de Barcelona and IZA); Valeri Sorolla (Universitat Autònoma de Barcelona) |
| Abstract: | We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and balanced budget rules cause a complementarity between capital and employment capable of explaining the existence of multiple equilibrium paths. Hysteresis is viewed as the result of a selection between these different paths. We use this model to argue that, in contrast to the US, those fiscal policies followed by most of the European countries after the shocks of the 1970’s may have played a central role in generating hysteresis. |
| Keywords: | unemployment,hysteresis,multiple equilibria,economic growth,fiscal policy |
| JEL: | E24 E62 O41 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iei:wpaper:0502&r=lab |
| By: | Lixin Cai (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Guyonne Kalb (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) |
| Abstract: | The trend of declining labour force participation by older working-age men, combined with an ageing population, has led many industrialised nations to develop policies encouraging older male workers to remain in the labour force. A better understanding of how an individual’s health influences the labour force participation decision among this group of workers would facilitate the development of effective policies. The current research uses the Household, Income and Labour Dynamics in Australia (HILDA) survey to investigate the issue. The longitudinal nature of the three-wave HILDA data, which are currently available, allows for a better control for unobserved heterogeneity than was possible with earlier data. Therefore, more efficient estimates of the direct health effects on labour force participation can be obtained than in a cross-sectional analysis. Unobserved factors are likely to affect both health and labour force status, therefore we estimate a model that takes the correlation between the two error terms in the health and labour force status equations into account. The results show that controlling for unobserved heterogeneity and the correlation between the two equations is important. That is, the estimated variances of the unobserved heterogeneity terms are significantly different from zero in both equations and the two error terms are correlated. Any restriction on the correlation between the two equations appears to lead to underestimation of the direct health effects. |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2005n09&r=lab |
| By: | John W. Budd (University of Minnesota); Karen Mumford (University of York and IZA Bonn) |
| Abstract: | Using linked data for British workplaces and employees we find a low base rate of workplacelevel availability for five family-friendly work practices - parental leave, paid leave, job sharing, subsidized child care, and working at home - and a substantially lower rate of individual-level perceived accessibility. Our results demonstrate that statistics on workplace availability drastically overstate the extent to which employees perceive that family-friendly are accessible to them personally. British workplaces appear to be responding slowly and perhaps disingenuously to pressures to enhance family-friendly work practices. |
| Keywords: | family friendly, perceived, access, availability |
| JEL: | J13 J32 J70 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1662&r=lab |
| By: | Patrick Aubert; Eve Caroli; Muriel Roger |
| Abstract: | This paper investigates the relationships between new technologies, innovative workplace practices and the age structure of the workforce in a static labour demand framework. As a first step, we assume that, in the short run, the only variable factor is the number of workers in different age groups. We then assume, as a second step that the number of workers by age and skill group may vary. The data we use come from several sources: the Changements Organisationnels et Informatisation survey (COI); the Déclarations Annuelles des Données Sociales (DADS) and the Bénéfices Réels Normaux database (BRN). We find evidence that the wage-bill share of older workers is lower in innovative firms. This age bias affects is also evidenced within occupational groups, thus suggesting that skills do not completely protect workers against the labour-market consequences of ageing. Cet article s'intéresse aux relations entre nouvelles technologies, changements organisationnels et structure par âge de la main-d'oeuvre dans un cadre classique de demande de travail statique. Sous l'hypothèse d'une fonction de coût translog, comme cela est habituel dans ce genre de modèle, nous considérons que les seuls facteurs variables sont, dans un premier temps, les effectifs des différents groupes d'âge puis, dans un second temps, les effectifs des groupes d'âge par qualification. Les données utilisées pour estimer ce modèle sont issues de l'appariement de plusieurs sources : l'enquête Changements Organisationnels et Informatisation (COI), les Déclarations Annuelles des Données Sociales (DADS) et la base des Bénéfices Réels Normaux (BRN). Les résultats des estimations montrent que les salariés âgés représentent une part plus faible de la masse salariale dans les entreprises innovantes. Ce " biais à l'encontre de l'âge " est vérifié également au sein des différentes catégories de qualifications : la qualification ne suffit donc pas à protéger complètement contre les conséquences de l'âge. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-19&r=lab |
| By: | Bertrand M. Koebel (BETA-Thème, Louis Pasteur University, Strasbourg and IZA Bonn) |
| Abstract: | In order to simplify the representation of a technological relationship between inputs and outputs, a production unit’s technology must typically satisfy some restrictive conditions, some of them being well known in the literature. This paper presents new results for aggregating labour inputs and outputs, in terms of restrictions on elasticities of scale and substitution. These conditions are then empirically investigated, in a framework that is flexible and does not lose its flexibility after separability being imposed. The empirical findings of the exact approach to aggregation are found to be rather pessimistic on the possibility to provide a simplified representation. |
| Keywords: | aggregation, separability, flexibility, exports, labour demand, Box-Cox, system serial correlation |
| JEL: | C33 D24 E10 J23 L60 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1672&r=lab |
| By: | ERTUR, Cem (LEG - CNRS UMR 5118 - Université de Bourgogne); THIAW, Kalidou (LEG - CNRS UMR 5118 - Université de Bourgogne) |
| Abstract: | The aim of this paper is to analyze the theoretical and econometric implications of omitting spatial dependence in the Mankiw, Romer, and Weil (1992) model. Indeed, the international distribution of income levels and growth rates suggests the existence of large international disparities, and therefore the important role of location on economic performance. However, taking spatial dependence into account requires resorting to the methods of Spatial Econometrics, not only for a valid statistical inference, but also for revaluating the impact of the variables generally considered as crucial in the growth phenomenon and finding the processes underlying growth rates and income levels. / L'objectif de cet article est d'analyser les implications économétriques et théoriques de l'omission de la dépendance spatiale dans le cadre de l'estimation du modèle de Mankiw, Romer et Weil (1992). En effet, la distribution internationale des taux de croissance et des niveaux de revenu suggère l'existence de bassins de croissance et de récession, et donc un rôle important de la localisation dans les performances économiques. Cependant, la prise en compte de l'autocorrélation spatiale dans l'estimation nécessite de recourir aux méthodes de l'économétrie spatiale afin, non seulement d'obtenir une inférence statistique valide, mais également d'élucider les processus qui sous-tendent la détermination des rythmes de croissance et des niveaux de revenu. |
| Keywords: | Economic growth ; Human capital ; convergence ; spatial econometrics ; Croissance économique ; capital humain ; convergence ; économétrie spatiale |
| JEL: | C14 C31 O4 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:lat:legeco:2005-04&r=lab |
| By: | Guillaume Vandenbroucke (University of Rochester) |
| Abstract: | During the 20th century the average number of hours worked per worker in the United States declined, and the distribution of hours across wage deciles narrowed. Coincidentally, the wage distribution narrowed and then widened again. The explanation proposed here is that (i) Home production of leisure services creates an incentive to work less on the market as wages increase and the price of leisure goods decrease (ii) The development of education in the early 20th century explains the narrowing of the wage structure and, henceforth, of the distribution of hours. |
| Keywords: | Hours worked, leisure, home production, technological progress |
| JEL: | E24 J22 O11 O33 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:roc:ecavga:11&r=lab |
| By: | Anne C. Gielen (Tilburg University, CentER); Jan C. van Ours (Tilburg University, CentER, CEPR and IZA Bonn) |
| Abstract: | We present an empirical analysis of job reallocation and labor mobility using matched workerfirm data for the Netherlands to investigate how firms adjust their workforce over the cycle. Our data cover the period 1993-2002. We find that cyclical adjustments of the workforce occur mainly through fluctuations in job creation for young and prime-age workers while for old workers they occur mainly through fluctuations in job destruction. Moreover, we find that business cycle fluctuations are used to rejuvenate the workforce. Workforce reductions are most harmful for old workers; for them the flow out of employment is a one-way street. |
| Keywords: | job creation, job destruction, accessions, separations, matched worker-firm data |
| JEL: | J23 J62 J63 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1670&r=lab |
| By: | Andrew E. Burke; Michael A. Nolan; Felix R. FitzRoy |
| Abstract: | The paper makes three contributions to the economics literature on entrepreneurship. We offer a new measure of entrepreneurship which accounts for variations in persistence in self-employment. We outline an econometric methodology to account for this approach and find that it is superior to probit/logit models which have dominated the literature. While our results indicate that this existing literature is good at explaining an individual's propensity to try self-employment, we find that entrepreneurial persistence is determined by a different model and unearth some new insights into the roles of early career experience, finance, role models, gender and the unemployment push effect. |
| Keywords: | Self-employment, entrepreneurial persistence, count data |
| JEL: | C25 J23 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2005-23&r=lab |
| By: | Muriel Niederle; Lise Vesterlund |
| Abstract: | Competitive high ranking positions are largely occupied by men, and women remain scarce in engineering and sciences. Explanations for these occupational differences focus on discrimination and preferences for work hours and field of study. We examine if absent these factors gender differences in occupations may still occur. Specifically we explore whether women and men, on a leveled playing field, differ in their selection into competitive environments. Men and women in a laboratory experiment perform a real task under a non-competitive piece rate and a competitive tournament scheme. Although there are no gender differences in performance under either compensation, there is a substantial gender difference when participants subsequently choose the scheme they want to apply to their next performance. Twice as many men as women choose the tournament over the piece rate. This gender gap in tournament entry is not explained by performance either before or after the entry decision. Furthermore, while men are more optimistic about their relative performance, differences in beliefs only explain a small share of the gap in tournament entry. In a final task we assess the impact of non-tournament-specific factors, such as risk and feedback aversion, on the gender difference in compensation choice. We conclude that even controlling for these general factors, there is a large residual gender gap in tournament entry. |
| JEL: | L0 C9 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11474&r=lab |
| By: | Sergio Destefanis, Raquel Fonseca (CELPE – CSEF, Università di Salerno) |
| Abstract: | A matching theory approach is utilised to assess the impact on the Italian labour market of the 1997 legge Treu, which considerably eased the regulation of temporary work and favoured its growth in Italy. We re-parameterise the matching function as a Beveridge Curve and estimate it as a production frontier. We find huge differences in matching efficiency between the South and the rest of the country. The legge Treu appears to have reduced unemployment in the more developed regions of the country but did not greatly affect the matching efficiency of the regional labour markets. |
| Keywords: | temporary contracts, matching efficiency, regionaldisparities |
| JEL: | J64 J69 C24 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:sal:celpdp:93&r=lab |
| By: | Brian A. Jacob; Lars Lefgren |
| Abstract: | This paper examines revealed parent preferences for their children's education using a unique data set that includes the number of parent requests for individual elementary school teachers along with information on teacher attributes including principal reports of teacher characteristics that are typically unobservable. We find that, on average, parents strongly prefer teachers that principals describe as good at promoting student satisfaction and place relatively less value on a teacher's ability to raise standardized math or reading achievement. These aggregate effects, however, mask striking differences across family demographics. Families in higher poverty schools strongly value student achievement and are essentially indifferent to the principal's report of a teacher's ability to promote student satisfaction. The results are reversed for families in higher-income schools. |
| JEL: | I2 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11494&r=lab |
| By: | Metin Cosgel (University of Connecticut) |
| Abstract: | Interdisciplinary citation patterns and other indicators of the flow and sharing of academic knowledge suggest that economists and anthropologists do not talk to each other. Previous studies of this puzzling trend have typically attributed the problem to methodological differences between the two disciplines. Although there are significant differences between economics and anthropology in behavioral assumptions and modes of inquiry, similar differences exist between them and other disciplines (some with much heavier volumes of cross-citations with economics or anthropology), suggesting that the source of the problem lies elsewhere. This paper considers the problem at a deeper level by examining systematic differences in the preferences, capabilities, and literary cultures of economists and anthropologists. Adopting a rhetorical perspective, I consider not the firms, households, or tribes as the principal objective of analysis in the two disciplines, but the conversations between these units. These conversations (through non-verbal as well as verbal media) can be grouped into two genres, based on the type of problem they aim to solve. Those in the first genre aim to solve the problem of interest--how to align the incentives of the parties involved. Those in the second genre deal with the problem of knowledge--how to align localized, and dispersed information. Economists are interested and capable of dealing with primarily, if not exclusively, the first genre, and anthropologists focus on the second. This difference has far reaching consequences for how economists and anthropologists conduct their own scholarly conversations with their own colleagues, why they are having difficulty talking to each other across disciplinary boundaries, and what can be done to change the patterns of communication. |
| Keywords: | anthropology, conversation, interest, incentive, knowledge |
| JEL: | A12 B4 O5 Z1 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2005-29&r=lab |
| By: | David G. Blanchflower (Dartmouth College, NBER and IZA Bonn); Andrew J. Oswald (University of Warwick and IZA Bonn) |
| Abstract: | This paper provides evidence for the existence of a wage curve - a micro-econometric association between the level of pay and the local unemployment rate - in modern U.S. data. Consistent with recent evidence from more than 40 other countries, the wage curve in the United States has a long-run elasticity of approximately -0.1. In line with the paper’s theoretical framework: (i) wages are higher in states with more generous unemployment benefits, (ii) the perceived probability of job-finding is lower in states with higher unemployment, and (iii) employees are less happy in states that have higher unemployment. We conclude that it is reasonable to view the wage curve as an empirical law of economics. |
| Keywords: | wages, unemployment, wage curves |
| JEL: | J3 E2 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1665&r=lab |
| By: | Patrick Aubert; Eve Caroli; Muriel Roger |
| Abstract: | This paper investigates the relationships between new technologies, innovative workplace practices and the age structure of the workforce in a sample of French manufacturing firms. We find evidence that the wage-bill share of older workers is lower in innovative firms and that the opposite holds for younger workers. This age bias affects both men and women. It is also evidenced within occupational groups, thus suggesting that skills do not completely protect workers against the labour-market consequences of ageing. More detailed analysis of employment inflows and outflows shows that new technologies essentially affect older workers through reduced hiring opportunities as compared to younger workers. In contrast, organisational innovations mainly affect the probability of exit, which decreases much more for younger than for older workers following reorganisation. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-18&r=lab |
| By: | Tairi Rõõm (Bank of Estonia) |
| Abstract: | Differences in job search behaviour have long been recognized in theoretical literature as a potential source of wage differentials. The aim of the current paper is to estimate whether there exists a systematic difference in search activity between genders and whether this can explain a part of the gender wage gap. These hypotheses are tested using micro-level data for the years 1998-2000 from the Estonian Labour Force Survey. The empirical model yields a result that unemployed men search more actively for new jobs than women. Controlling for the difference in search intensity significantly reduces the residual gender wage differential. |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2004-01&r=lab |
| By: | Carlos Pestana Barros (Technical University of Lisbon); Isabel Proença (Technical University of Lisbon); José Cabral Vieira (University of the Azores and IZA Bonn) |
| Abstract: | In this paper, we examine the determinants of low-wage employment in Portugal. For this purpose, we use a data file of the European Community Household Panel (ECHP) for the years 1998 and 1999. In order to take into account unobserved heterogeneity in the data, a random-parameter logit model is used to analyse the probability of a worker receiving a low wage. The results indicate that the consideration that the effects of the explanatory variables are the same across all individuals, such as is assumed in most of the literature may be misleading. From the policy perspective, this implies that the use of a single instrument in order to combat low-wage employment is inappropriate to satisfy the whole population. In view of this, policies tailored by clusters would be more appropriate. |
| Keywords: | low-wage employment, random-parameter logit model, public policy |
| JEL: | C25 J31 J38 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1667&r=lab |
| By: | Jonathan Gruber; Michael Frakes |
| Abstract: | The strong negative correlation over time between smoking rates and obesity have led some to suggest that reduced smoking is increasing weight gain in the U.S.. This conclusion is supported by the findings of Chou et al. (2004), who conclude that higher cigarette prices lead to increased body weight. We investigate this issue and find no evidence that reduced smoking leads to weight gain. Using the cigarette tax rather than the cigarette price and controlling for non-linear time effects, we find a negative effect of cigarette taxes on body weight, implying that reduced smoking leads to lower body weights. Yet our results, as well as Chou et al., imply implausibly large effects of smoking on body weight. Thus, we cannot confirm that falling smoking leads in a major way to rising obesity rates in the U.S. |
| JEL: | H1 I1 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11483&r=lab |
| By: | Luojia Hu; Christopher Taber |
| Abstract: | This paper expands on Gibbons and Katz (1991) by looking at how the difference in wage losses across plant closing and layoff varies with race and gender. We find that the differences between white males and the other groups are striking and complex. The lemons effect of layoff holds for white males as in Gibbons and Katz model, but not for the other three demographic groups (white females, black females, and black males). These three all experience a greater decline in earnings at plant closings than at layoffs. This results from two reinforcing effects. First, plant closings have substantially more negative effects on minorities than on whites. Second, layoffs seem to have more negative consequences for white men than the other groups. We also find that the relative wage losses of blacks following layoffs increased after the Civil Rights Act of 1991 which we take as suggestive of an informational effect of layoff as in Gibbons and Katz. The results are suggestive that the large losses that African Americans experience at plant closing could result from heterogeneity in taste discrimination across firms. |
| JEL: | J6 J7 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11481&r=lab |
| By: | Frédéric Docquier (University of Lille 2, World Bank, IWEPS and IZA Bonn); Olivier Lohest (IWEPS (Regional Govt. of Wallonia, Belgium)); Abdeslam Marfouk (Free University of Brussels and IWEPS) |
| Abstract: | In this paper, we analyze the distribution of the brain drain in the LAC region (Latin America and the Caribbean), Asia and Africa. We rely on an original data set on international migration by educational attainment for 1990 and 2000. Our analysis reveals that the brain drain is strong in Eastern, Middle and Western Africa, Central America and the Caribbean. However, the Kernel approach suggests that the dispersion and the intradistribution dynamics of skilled migration rates strongly differ across regions. We then tautologically disentangle the brain drain into two multiplicative components, the global migration rate and the selection bias. Among the most affected countries, LAC countries suffer from high migration rates whilst most African countries suffer from high selection biases. Finally, exploratory Moran’s tests reveal strong spatial, political and cultural autocorrelations in migration rates and selection biases. The latter result suggests that skilled workers react differently than unskilled workers to a large set of variables. |
| JEL: | F22 O15 J11 J24 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1668&r=lab |
| By: | Zhong Zhao (Institute for the Study of Labor) |
| Abstract: | This paper reviews economic studies on rural-urban migration issues in China. The paper focuses on four issues: the household registration system in China, the profile of the migrants, explanations for rural-to-urban migration, and the interaction between migration and labor market evolution, with special reference to labor market segregation, labor market flexibility, and wage differentials. The paper concludes with suggestions for further research topics. |
| Keywords: | Migration, Labor Market, Segregation, Mobility, China |
| JEL: | J61 J68 J42 |
| Date: | 2005–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0507009&r=lab |
| By: | H. Mehmet Tasci (Middle East Technical University); Aysit Tansel (Middle East Technical University and IZA Bonn) |
| Abstract: | This paper provides a systematic analysis of the determinants of transitions in the Turkish labor market by using the Household Labor Force Survey (HLFS) panel data of 2000 and 2001. We provide two types of evidence. First, we compute annual transition probabilities between the labor market states of employment, unemployment and out-of-the labor force under Markovian assumptions by gender and rural-urban residence and marital status. Transition probabilities are used to analyze the differences in unemployment rates of these groups. Second, we present estimates of gender-specific multinomial logit models to analyze the determinants of men’s and women’s transition probabilities across labor market states. We find that urban women have higher unemployment rates than urban men because they have lower probability of exiting unemployment for a job and higher probability of exiting employment for unemployment. Non-married men and women’s unemployment rates are higher than married men and women’s. This may be attributed to the higher probability of nonmarried men and women’s to lose a job. Increases in education level are found to decrease the probability of losing a job. University graduates of two-year and over are more likely to find employment compared to non-graduates. Younger individuals are more likely to lose a job but older individuals are less likely to find a job from unemployment. In provinces with high unemployment the probability of obtaining a job is lower from unemployment. The findings indicate negative duration dependence for women, but not for men. Men improve their chances of obtaining a job if they use newspapers or worker agents. |
| Keywords: | panel data, unemployment, transition probabilities, gender, Turkey |
| JEL: | J23 J64 J16 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1663&r=lab |
| By: | Garett Jones (Southern Illinois University Edwardsville); W. Joel Schneider (Illinois State University) |
| Abstract: | Human capital plays an important role in the theory of economic growth, but it has been difficult to measure this abstract concept. We survey the psychological literature on cross-cultural IQ tests, and conclude that modern intelligence tests are well-suited for measuring an important form of a nation’s human capital. Using a new database compiled by Lynn and Vanhanen (2002) along with a Bayesian methodology derived from Sala-i-Martin, Doppelhofer, and Miller (AER, 2004), we show that national average IQ has a robust positive relationship with economic growth. In growth regressions that include only robust control variables, IQ is statistically significant in 99.8% of these 1330 regressions, and the IQ coefficient is always positive. A strong relationship persists even when OECD countries are excluded from the sample. A 1 point increase in a nation’s average IQ is associated with a persistent 0.11% annual increase in GDP per capita. |
| Keywords: | Economic Growth, Human Capital, Intelligence, IQ, Education |
| JEL: | O41 J24 I20 |
| Date: | 2005–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0507005&r=lab |
| By: | Mihails Hazans (University of Latvia & BICEPS) |
| Abstract: | This paper looks at the evolution of the labour markets in Estonia, Latvia, and Lithuania since the beginning of transition (in some respects since 1996/1998) until 2003, with a particular focus on labour force participation. How did labour supply in the Baltic countries respond to changes in minimum wages, unemployment benefits and retirement regulation? Do the marked differences in labour market policies between the countries result in different patterns of participation? What are the obstacles to and driving forces of participation? We find that relative contribution of participation and demographic trends to the dynamics of the labour force varied substantially both over the years and across the three countries. Participation, in turn, has been shaped by sometimes complicated interaction between educational choices, retirement, policy changes, and external shocks. Resulting differences in trends and patterns are quite substantial, indicating that there is a room for increasing participation in each of the countries. Recent rates of transition from unemployment to employment and to inactivity are similar to those found in EU-15. Panel data analysis of determinants of participation and discouragement suggests that increasing after-tax real minimum wage has significant positive effect on participation and reduces discouragement in Lithuania. In Estonia, by contrast, positive effect of minimum wage on participation is found only for teenagers of both genders and for young males. Ethnic minorities, especially females, in all three Baltic countries are less likely to be in the labour force, other things equal. |
| Keywords: | Labour supply; discouraged workers; labour market flows; minimum wages; ethnic minorities. |
| JEL: | J14 J15 J22 P52 |
| Date: | 2005–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0507008&r=lab |