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on Labour Economics |
| By: | Libertad González (Universitat Pompeu Fabra and IZA Bonn) |
| Abstract: | This paper examines the effect of public assistance, labor market and marriage market conditions on the prevalence of single mother families across countries and over time. A multinomial logit derived from a random utility approach is estimated using individual-level data for 14 countries. I find evidence that increases in the level of public support are significantly and positively associated with a higher incidence of both never married and divorced mothers. The results also suggest that single mothers are more prevalent when female wages are lower. Higher male earnings and employment opportunities in a woman’s marriage market appear to lead to fewer never married mothers, but more divorced mothers. Higher child support or alimony payments are associated with a higher prevalence of divorced mothers. |
| Keywords: | single mothers, marriage, fertility, welfare benefits, marriage markets |
| JEL: | J12 J13 I38 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1677&r=lab |
| By: | Pierre Cahuc (CREST-INSEE, University of Paris 1, CEPR and IZA Bonn); André Zylberberg (EUREQua, University of Paris 1 and CNRS) |
| Abstract: | This paper analyzes optimum income taxation in a model with endogenous job destruction that gives rise to unemployment. It is shown that optimal tax schemes comprise both payroll and layoff taxes when the state provides public unemployment insurance and aims at redistributing income. The optimal layoff tax is equal to the social cost of job destruction, which amounts to the discounted value of the sum of unemployment benefits (that the state pays to unemployed workers) and payroll taxes (that the state does not get when workers are unemployed). Our quantitative analysis suggests that the introduction of layoff taxes, that are usually absent from actual tax schemes, could lead to significant increases in employment and GDP. |
| Keywords: | layoff taxes, optimal taxation, job destruction |
| JEL: | H21 H32 J38 J65 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1678&r=lab |
| By: | Yann Algan (Université Marne la Vallée, CEPREMAP, OEP and IZA Bonn); Pierre Cahuc (University of Paris 1, CREST-INSEE, CEPR and IZA Bonn) |
| Abstract: | OECD countries faced largely divergent employment rates during the last decades. But the whole bulk of the cross-national and cross-temporal heterogeneity relies on specific demographic groups: prime-age women and younger and older individuals. This paper argues that family labor supply interactions and cross-country heterogeneity in family culture are key for explaining these stylized facts. First we provide a simple labor supply model in which heterogeneity in family preferences can account for cross-country variations in both the level and the dynamics of employment rates of demographic groups. Second, we provide evidence based on international individual surveys that family attitudes do differ across countries and are largely shaped by national features. We also document that cross-country differences in family culture cause cross-national differences in family attitudes. Studying the correlation between employment rates and family attitudes, we then show that the stronger preferences for family activities in European countries may explain both their lower female employment rate and the fall in the employment rates of young and older people. |
| Keywords: | employment rate, culture, family attitudes |
| JEL: | J21 J22 Z13 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1683&r=lab |
| By: | SALVADOR CARMONA (Instituto de Empresa) |
| Abstract: | (WP 17/03 Clave pdf) In this investigation, we focus on the individual characteristics of newly certified auditors who apply for their auditing licenses in anticipation of entering solo practice or a partnership in an auditing firm, comparing them to their counterparts who do not apply for such a license. Our analysis draws on an integration of the human capital and entrepreneurship literatures, leading us to a number of hypotheses that are tested through logistic regression models. |
| Keywords: | Auditing, Human capital theory |
| Date: | 2003–11 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp03-17&r=lab |
| By: | Flavio Cunha (University of Chicago); James J. Heckman (University of Chicago, University College London, American Bar Foundation and IZA Bonn); Lance Lochner (University of Western Ontario); Dimitriy V. Masterov (University of Chicago) |
| Abstract: | This paper presents economic models of child development that capture the essence of recent findings from the empirical literature on skill formation. The goal of this essay is to provide a theoretical framework for interpreting the evidence from a vast empirical literature, for guiding the next generation of empirical studies, and for formulating policy. Central to our analysis is the concept that childhood has more than one stage. We formalize the concepts of self-productivity and complementarity of human capital investments and use them to explain the evidence on skill formation. Together, they explain why skill begets skill through a multiplier process. Skill formation is a life cycle process. It starts in the womb and goes on throughout life. Families play a role in this process that is far more important than the role of schools. There are multiple skills and multiple abilities that are important for adult success. Abilities are both inherited and created, and the traditional debate about nature versus nurture is scientifically obsolete. Human capital investment exhibits both self-productivity and complementarity. Skill attainment at one stage of the life cycle raises skill attainment at later stages of the life cycle (self-productivity). Early investment facilitates the productivity of later investment (complementarity). Early investments are not productive if they are not followed up by later investments (another aspect of complementarity). This complementarity explains why there is no equity-efficiency trade-off for early investment. The returns to investing early in the life cycle are high. Remediation of inadequate early investments is difficult and very costly as a consequence of both self-productivity and complementarity. |
| Keywords: | skill formation, education, government policy, educational finance |
| JEL: | J31 I21 I22 I28 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1675&r=lab |
| By: | Catalina DELGADO GONZALEZ |
| Abstract: | Este trabajo recurre al marco de análisis sobre los sistemas públicos de educación y pensiones de Boldrin y Montes (2002), basado en un modelo de generaciones traslapadas con producción y acumulación de capital físico y humano. Partiendo de este modelo teórico, se presenta un ejercicio empírico para el caso colombiano, en el que se busca establecer hasta qué punto las transferencias intergeneracionales inducidas por los sistemas de educación y pensiones vigentes, replican las condiciones de eficiencia que plantea el modelo. Con base en información micro de la Encuesta de Calidad de Vida y cifras agregadas del Presupuesto para 2003, se realizaron las estimaciones, que muestran que en Colombia no sólo no existen los mecanismos de transferencias intergeneracionales que permiten asignaciones eficientes, sino también que existen asimetrías de género que hacen que invertir en capital humano sea más rentable para los hombres. |
| Keywords: | pensiones |
| Date: | 2005–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:col:000107:001106&r=lab |
| By: | Kenneth G. Stewart (Department of Economics, University of Victoria); J. C. H. Jones (Department of Economics, University of Victoria) |
| Abstract: | The appropriate conception of team outputs is investigated by estimating a two-output factor demand system for baseball teams, relative to which single-output models are rejected. There is, however, some empirical support for output separability, suggesting that team outputs may sometimes be adequately treated as a production aggregate. |
| Keywords: | Sports economics, multi-output production |
| JEL: | D24 L83 |
| Date: | 2005–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:vic:vicewp:0513&r=lab |
| By: | Andrea Galeotti (California Institute of Technology and University of Essex); Gerrit Mueller (Erasmus University Rotterdam, Tinbergen Institute and IZA Bonn) |
| Abstract: | We analyze the impact of adolescents’ friendship relations in their final-year class of high school on subsequent labor market success. Based on a typology of network positions we locate each student within the social system of the school class as either: an isolate, a sycophant, a broker or a receiver. These positions identify individuals’ social standing within the group of classmates and proxy for their interpersonal behavior and social competencies. We offer empirical evidence that differential social standing in adolescence predicts large and persistent earnings disparities over the entire life course. The estimated wage premia and penalties do not appear to be substantially confounded by measures of family and school resources, and materialize largely independent of differences in cognitive abilities, grade rank in class, personality traits or friends’ characteristics. A moderate share of the earnings inequalities is mediated by differential post-secondary human and social capital investment. From a conceptual point of view, we contribute an application of egocentered network methods within conventional labor economic survey research. |
| Keywords: | friendship ties, social capital, earnings |
| JEL: | A14 I21 J31 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1682&r=lab |
| By: | Daniele Checchi (University of Milan and IZA Bonn); Cecilia García Peñalosa (CNRS and GREQAM) |
| Abstract: | We examine what determines differences across countries and over time in the distribution of personal incomes in the OECD. We first model the wage determination process and show that unemployment, the labour share, and the wage differential are all functions of labour market institutions. Next we show that in a model economy with only four types of agents - capitalists, skilled and unskilled workers, and unemployed - the Gini coefficient of personal incomes can be expressed as a function of the above three variables. Labour market institutions hence affect income inequality, though the sign of their impact is ambiguous. Stronger unions and/or a more generous unemployment benefit tend to reduce inequality through reduced wage differentials, a higher labour share, and also higher unemployment. We then use a panel of OECD countries for the period 1970-96 to examine these effects. We find, first, that the labour share remains an important aspect of overall inequality patterns, and, second, that stronger unions and a more generous unemployment benefit tend to reduce income inequality. High capital-labour ratios also emerge as a strong equalising factor, which has in part offset the impact of increasing wage inequality on the US distribution of personal incomes. |
| Keywords: | income inequality, labour share, trade unions |
| JEL: | D31 D33 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1681&r=lab |
| By: | Surendra Gera (Industry Canada); Thitima Songsakul (Industry Canada) |
| Abstract: | An important aspect of the global knowledge-based economy is the emergence of a new trend where certain groups of highly-qualified workers have become increasingly mobile internationally. Reaching the goal of being more innovative economy requires that the highly-qualified workforce is of sufficient quantity and quality to support the expansion of innovative activities by firms. Many industrialized countries compete strategically in attracting these workers. It is necessary that the economic policy discussion surrounding the international mobility of skilled labour must take into consideration the wide variety of ways the migration of labour affects the economy. Numerous drivers, policy and non-policy induced, are at work. Attention must now turn towards the links between these movements and the regulating institutions; the performance in the trade of goods and services, FDI, human capital formation and multinational enterprises location, and income convergence among countries. This paper focuses on four key issues: First, it examines the global trends in the international migratory flows of highly qualified persons (HQPs), focusing on APEC economies. Second, it discusses the fundamental non-policy drivers of the increased HQP flows in the new global economy. Third, it reviews the literature on the economic costs and benefits associated with cross-country movement of HQPs and the main factors conditioning these costs and benefits. Finally, it addresses the question of how policy in APEC economies has adjusted or should adjust to the increased international HQP mobility. |
| Keywords: | International migration, Skilled workers, Labour mobility |
| JEL: | F1 F2 |
| Date: | 2005–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0507002&r=lab |
| By: | Stephanie Seguino (University of Vermont & The Levy Economics Institute) |
| Abstract: | Emphasis on market-friendly macroeconomic and development strategies in recent years has resulted in deleterious effects on growth and well- being, and has done little to promote greater gender equality. This paper argues that the example of East Asia states, which recognized their position as “late industrializers,” relied on a managed-market approach with the state that employed a wide variety of policy instruments to promote industrialization. Nevertheless, while Asian growth was rapid, it was not enough to produce greater gender equality. A concentration of women in mobile export industries that face severe competition from other low-wage countries reduces their bargaining power and inhibits closure of gender-wage gaps. Gender-equitable macroeconomic and development policies are thus required, including financial market regulation, regulation of trade and investment flows, and gender- sensitive public sector spending.. |
| Keywords: | gender, inequality, industrial policy, firm mobility, trade |
| JEL: | L5 F4 E24 F16 J16 I31 |
| Date: | 2005–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0507005&r=lab |
| By: | John Beath (University of St Andrews); Joanna Poyago-Theotoky (University of Loughborough); David Ulph (Inland Revenue) |
| Abstract: | This paper addresses the following question: how does a higher education funding system influence the trade-off that universities make between research and teaching? We do so by constructing a general model that allows universities to choose actively the quality of their teaching and research when faced with different funding systems. In particular, we derive the feasible sets that face universities under such systems and show how, as the parameters of the system are varied, the nature of the university system itself changes. The “culture” of the university system thus becomes endogenous. This makes the model useful for the analysis of reforms in funding and also for international comparisons. |
| Keywords: | University funding system, higher education, teaching quality, research quality, research elite. |
| JEL: | I21 I22 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2005_2&r=lab |
| By: | Marit Hinnosaar |
| Abstract: | The current paper analyses unemployment and labour movements between labour market statuses in the period of January 1997 to July 2000 using data from the Estonian Labour Force Surveys. The paper is motivated by the hypothesis that in the beginning of transition in Estonia high labour mobility and low unemployment rate seemed to be related. The analysis reveals that in the end of the 1990s labour mobility has decreased substantially in Estonia compared to 1994. The results from the paper indicate that unemployment rate and labour mobility measure have inverse relationship, both in aggregate and disaggregate level. The most mobile groups in Estonian labour market are Estonians, people living in the area of capital Tallinn and people with higher education. Young people also tend to move a lot from job to job. High mobility in case of young workers is accompanied by high number of unemployment incidents, which is captured by the aggregate unemployment rate time series. |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2002-07&r=lab |
| By: | Paolo Angelini (Bank of Italy, Economic Research Department); Andrea Generale (Bank of Italy, Economic Research Department) |
| Abstract: | We address the question in the title using survey-based measures of financial constraints, as opposed to the proxies typically used in the literature. We find that in our dataset of Italian firms, those declaring to be financially constrained are smaller and younger than the others. However, the size distribution of non constrained firms is significantly skewed, and virtually overlaps with the FSD for the entire sample. Similar conclusions are drawn from the analysis of a large subsample comprising very young firms. These results are broadly confirmed using several non survey-based proxies of financial constraints, and over a second large sample including firms from OECD and non OECD countries. The analysis of the latter dataset suggests that financial constraints are a relatively more serious problem in developing countries. We conclude that financial constraints cannot be the main determinant of the FSD evolution over time, especially in financially developed economies. |
| Keywords: | firm size distribution, financial constraints. |
| JEL: | L11 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_549_05&r=lab |
| By: | Aubert Patrick; Caroli Eve; Roger Muriel |
| 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.. |
| Keywords: | new work practices, technology, older workers, labour demand |
| JEL: | J23 L23 O33 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:lea:leawpi:0506&r=lab |
| By: | Daniel S. Hamermesh (University of Texas at Austin, NBER and IZA Bonn); Joel Slemrod (University of Michigan and NBER) |
| Abstract: | A large literature examines the addictive properties of such behaviors as smoking, drinking alcohol and eating. We argue that for some people addictive behavior may apply to a much more central aspect of economic life: working. Workaholism is subject to the same concerns about the individual as other addictions, is more likely to be a problem of higher-income individuals, and can, under conditions of jointness in the workplace or the household, generate negative spillovers onto individuals around the workaholic. Using the Retirement History Survey and the Panel Study of Income Dynamics, we find evidence that is consistent with the idea that high-income, highly educated people suffer from workaholism with regard to retiring, in that they are more likely to postpone earlier plans for retirement. The theory and evidence suggest that optimal policy involves a more progressive tax system than in the absence of workaholism. |
| Keywords: | addiction, retirement, labor supply, tax policy |
| JEL: | J26 H21 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1680&r=lab |
| By: | João Cerejeira Silva (Universidade do Minho - NIPE; European University Institute) |
| Abstract: | In this paper the individual optimal level of education is set in a frictional labor market, where matching is not perfect. Also search frictions are a function of the average education can improve economic efficiency, not only through improvements in workers productivity, but also making the matching process more efficient, and thus reducing the unemployment level. |
| Keywords: | Education, Externalities, Search, Matching, Unemployment. |
| JEL: | I21 J41 J64 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:11/2005&r=lab |
| By: | MONIKA HAMORI (Instituto de Empresa) |
| Abstract: | This paper examines the career moves of executives between two different organizations and looks at the characteristics of executives´ employing organizations as a predictor of the success of the moves. The paper uses a proprietary data set of a retained executive search firm that contains information on the career paths of executives in the financial services industry. The results show that the perceived operational excellence of executives´ employing organization has a significant signaling power for other employers and strongly impacts the success of executives´ moves across different organizations. |
| Keywords: | Career management, Organizations, Executives, Finacial services industry, Signaling theory |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp04-32&r=lab |
| By: | JULIO DE CASTRO (Instituto de Empresa) |
| Abstract: | (WP 09/04 Clave pdf) Based on responses from 159 owners-managers in family firms, we examined the association between specific individual characteristics, firm characteristics, and the individual psychosocial outcomes of satisfaction, intentions to exit, and perceived fit. Hierarchical regression analyses indicated higher satisfaction, lower intentions to exit, and higher perceived fit for owner-managers whose dominant decision-making style complemented the levels of formalization in their firms.The results suggested that owner-managers with intuitive decision-making styles were better fitted to the demands corresponding to less structured firm environments than their analytic counterparts. |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp04-09&r=lab |
| By: | JUAN CARLOS PASTOR (Instituto de Empresa); MARGARITA MAYO (Instituto de Empresa) |
| Abstract: | This paper examine the role of social networks as mediating factors in the relationship between diversity and work team effectiveness. These effects were tested with a sample of 71 organizational teams. Results show that the degree of diversity in a team influences the density and centralization of the communication network. In turn, network density and centralization affect work team outcomes. Results are discussed in terms of their theoretical significance for network and diversity theory. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp05-10&r=lab |
| By: | Marit Hinnosaar |
| Abstract: | This paper analyses the factors determining reservation wages in Estonia, and estimates the influence of the reservation wage on unemployment duration. According to estimations there is no statistically significant effect of unemployment benefit and social assistance on the reservation wage in Estonia. While evidence was found, that the higher the reservation wage, the lower the probability of finding a job, if all other things are equal. It was also found that the eligibility of unemployment benefit or social assistance increases the duration of the unemployment period, which indicates the lower offer arrival rate in the case of unemployed receiving assistance, which might be caused by a lower search intensity. |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2003-01&r=lab |
| By: | Surendra Gera (Industry Canada); Samuel Laryea (Human Resources Development Canada); Thitima Songsakul (Industry Canada) |
| Abstract: | The international mobility of skilled labour has become a key component of the global knowledge-based economy. Rising levels of foreign direct investment (FDI), international trade, research and development (R&D), technological advances and increased demand for skilled workers seem to have all contributed to an increase in the international mobility of skilled labour. Internationally mobile individuals are often found participating in industries that are largely knowledge-based and global in scope. As a result, it has become increasingly important that the economic policy discussion surrounding the international mobility of skilled labour must take into consideration the wide variety of ways the migration of skilled labour affects the economy. Numerous drivers, policy and non-policy induced, are at work. Attention must now turn towards the links between these movements and the institutions regulating them; the performance in the trade of goods and services; FDI; human capital formation and multinational enterprises location; and income convergence among countries. This paper provides an overview of the literature on four key issues surrounding the international mobility of skilled workers, while identifying potential directions for future research. First, global trends of recent international skilled migratory flows – magnitude and their composition in terms of underlying skills/education of migrants with a focus on Canada-US migratory flows. Second, fundamental (non-policy) drivers of the increased skilled migratory flows, especially among advanced countries. Third, economic costs and benefits associated with cross-country movement of skilled labour and the main factors conditioning these costs and benefits. Fourth, how policy has adjusted or should adjust to increased skilled labour mobility in the global economy? |
| JEL: | F1 F2 |
| Date: | 2005–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0507004&r=lab |
| By: | Luc Behaghel (LEA-INRA); Bruno Crépon (CREST-INSEE and IZA Bonn); Béatrice Sédillot (DARES) |
| Abstract: | French firms laying off workers aged 50 and above have to pay a tax to the unemployment insurance system, known as the Delalande tax. This is an original case of experience rating in the European context, restricted to older workers, whose employment prospects are particularly bad. We evaluate its impact on layoff (firing) as well as on hiring, taking advantage of several changes in the measure since its introduction in 1987. We find particularly strong evidence of an adverse effect of the tax on the firms’ propensity to hire older workers, thanks to a legislative change in 1992, when workers hired after the age of 50 stopped being liable for the tax. Chances to find a job increased significantly for unemployed workers older than 50, compared to workers just below 50 who remained liable for the tax. We estimate that before 1992, the tax reduced the probability that an unemployed worker aged 50 find a job by as much as 25%. Evidence on the effect on layoffs is less clear cut. The impact is sizeable only for the most stringent tax schedule, after 1998, but it is also imprecisely estimated. |
| Keywords: | experience rating, employment protection, older workers, firing, hiring |
| JEL: | J23 J63 J65 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1679&r=lab |
| By: | Marit Hinnosaar; Tairi Rõõm |
| Abstract: | In Estonia, as in several other EU acceding countries, minimum wage has been on an upward trend and in the coming years it will expectedly be raised faster than the average wage. Despite its rapid increase, the impact of the minimum wage on Estonian labour market has not been analysed. The current paper aims to fill this gap. We estimate the effect of the minimum wage on employment and wages in Estonia during the period of 1995-2000, using micro-data from Estonian Labour Force Surveys. The estimation results indicate that a minimum wage increase leads to employment reduction for the group of workers who are directly affected by this change, ie those whose wages have to be raised as a result. Additional negative effect of raising the minimum wage is that the rate of compliance with this regulation diminishes as a result, thereby enlarging the share of workers whose salaries remain below the legally set minimum. |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2003-08&r=lab |