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on Labour Economics |
| By: | Hielke Buddelmeyer (Melbourne Institute of Applied Economic and Social Research); Gilles Mourre (Directorate-General for Economic and Financial Affairs (ECFIN), European Commission, Brussels, Belgium); Melanie Ward-Warmedinger (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany) |
| Abstract: | This paper looks at the role of part-time work in labour mobility for 11 European countries. We find some evidence of part-time work being used as a stepping stone into full-time employment, but for a small proportion of individuals (less than 5%). Part-time jobs are also found to be more frequently taken up as a means to enter the labour market than to leave it. Multinomial logit regression of the determinants of parttime work reveals household composition, past labour market history and country of residence as very important for both men and women in their decision to work part time. Random effects regression controlling for individual heterogeneity, and the comparison of results for Europe and the US, reveals that a significantly higher proportion of female workers in Europe prefer inactivity and a significantly lower percentage prefer full-time, over part-time employment, than in the US, with considerable variation across EU countries. |
| Keywords: | Labour market mobility and flexibility; labour supply; full-time and part-time employment; unemployment; non-employment; gender; stepping stones; labour market entry and exit. |
| JEL: | J21 J22 J16 J60 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050460&r=lab |
| By: | Anna Sanz de Galdeano (CSEF, University of Salerno, 84084 Fisciano, Salerno, Italy); Jarkko Turunen (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany) |
| Abstract: | We present empirical evidence of the extent of wage rigidity in the euro area and European countries derived from longitudinal data on individuals. Wage rigidity is measured by the elasticity of individual real wages with respect to local unemployment. The results suggest that the elasticity is indeed negative, i.e. that real wages are lower in local labour markets with higher unemployment. The size of the elasticity for the euro area is similar to that found in previous studies for a number of countries, including the United States. Furthermore, there is some variation in the unemployment elasticity by worker groups and along the wage distribution. In particular, public sector wages are relatively rigid compared to wages in the private sector, contributing significantly to wage rigidity in the euro area. Country results show some heterogeneity in wage rigidity across European countries and suggest a tentative ranking of countries. |
| Keywords: | Real wages; local unemployment; wage curve; panel data. |
| JEL: | E24 J45 J64 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050471&r=lab |
| By: | Mihails Hazans (University of Latvia & BICEPS) |
| Abstract: | This paper shows that in the Baltic countries, commuting reduces urban- rural wage and employment disparities and increases national output. To quantify the effect of commuting on wage differentials, two sets of earnings functions are estimated (based on Estonian, Latvian, and Lithuanian Labor Force Surveys) with location variables (capital city, rural, etc.) measured at the workplace and at the place of residence. We find that the ceteris paribus wage gap between capital city and rural areas, as well as between capital and other cities is significantly narrowed by commuting in some cases but remains almost unchanged in other. Different outcomes are explained by country-specific spatial patterns of commuting, educational and occupational composition of commuting flows, and presence or absence of wage discrimination against rural residents in urban markets. A treatment effects model is used to estimate individual wage gains to rural—urban or inter-city commuting; these gains are substantial in most but not all cases. Wage effects of commuting distance, as well as impact of education, gender, ethnicity, and local labor market conditions on the commuting decision are also explored. |
| Keywords: | commuting, wage disparities, earnings functions, Baltic countries |
| JEL: | J31 J61 P52 R12 R23 |
| Date: | 2005–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0509012&r=lab |
| By: | Gielen, Anne; van Ours, Jan C |
| Abstract: | We present an empirical analysis of job reallocation and labour mobility using matched worker-firm 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: | accessions; job creation; job destruction; matched worker-firm data; separations |
| JEL: | J23 J62 J63 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5161&r=lab |
| By: | Ramón Gómez-Salvador (European Central Bank, Kaiserstr. 29, D-60311 Frankfurt am Main, Germany); Julián Messina (European Central Bank, Kaiserstr. 29, D-60311 Frankfurt am Main, Germany); Giovanna Vallanti (London School of Economics, Houghton Street, London WC2A 2AE, United Kingdom) |
| Abstract: | We examine job flows in the 1990s for a sample of 13 European countries. By using a dataset of continuing firms that covers all sectors, we find firm characteristics to be important determinants of job flows, with smaller and younger firms within services typically having a larger degree of job turnover. Once controlled for firm and sectoral effects, the role of institutions in the dynamics of job creation and destruction is examined. As expected, employment protection is found to reduce job flows. Similarly, countries with higher unemployment benefits and more coordinated wage bargaining systems are characterised by lower job flows. |
| Keywords: | Gross Job Flows; Labour market institutions. |
| JEL: | J23 J60 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20040318&r=lab |
| By: | Christian Bessy (IDHE - Institutions et Dynamique de l'Histoire Economique - http://www.idhe.ens-cachan.fr - CNRS : UMR8533) |
| Abstract: | From the construction of a French data base of 309 employment contracts, we analyse current practices in firms, their manpower management methods and their use of the law in the drafting of employment contracts. We present a typology of ‘employment contracts' based on different indicators characterising the terms of the employment relationship (flexibility, employee's subordination to the firm, employee's individual accountability, appropriation of immaterial asserts) Our observations show that the contractual framework and the legal guarantees that it offers are still used relatively infrequently and concern certain types of employment relationship. In conclusion, we give some insights on the French reforms concerning labour contract legislation. |
| Keywords: | labour legislation; employment contract; employee's subordination; individual accountability; flexibility |
| Date: | 2005–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00004762_v1&r=lab |
| By: | Véronique Genre; Ramón Gómez Salvador; Ana Lamo (Corresponding author: European Central Bank, Directorate General Research, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper provides an empirical study of the determinants of female participation decisions in the European Union. The analysis is performed by estimating participation equations for different age groups (i.e. young, prime-age and older females), using annual data for a panel of 12 EU-15 countries over the period 1980- 2000. Our findings show that the strictness of labour market institutions negatively affects the participation rate. Decisions linked to individual preferences with regards to education or fertility are also found relevant to participation of the youngest and prime-age females respectively. The inclusion of a proxy to capture cohort effects is crucial in order to explain the oldest females’ participation. |
| Keywords: | Labour force participation; labour market institutions. |
| JEL: | J21 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050454&r=lab |
| By: | Cahuc, Pierre; Zylberberg, Andre |
| Abstract: | This paper analyses 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: | job destruction; layoff taxes; optimal taxation |
| JEL: | H21 H32 J38 J65 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5170&r=lab |
| By: | Panu Poutvaara |
| Abstract: | Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the country with earnings-related benefits to a country with flat-rate benefits may reduce their investment in education. With suitably planned transfers between the two countries, allowing for migration may generate a Pareto-improvement for all current and future generations. Without transfers, either country may be unable to pay for promised benefits when labor becomes mobile. |
| Keywords: | social security, education, migration, earnings-related and flat-rate pensions |
| JEL: | F22 H55 I20 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1544&r=lab |
| By: | Ottaviano, Gianmarco I P; Peri, Giovanni |
| Abstract: | Recent influential empirical work has emphasized the negative impact immigrants have on the wages of US-born workers, arguing that immigration harms less educated American workers in particular and all US-born workers in general. Because US and foreign born workers belong to different skill groups that are imperfectly substitutable, one needs to articulate a production function that aggregates different types of labour (and accounts for complementarity and substitution effects) in order to calculate the various effects of immigrant labour on US-born labour. We introduce such a production function, making the crucial assumption that US and foreign-born workers with similar education and experience levels may nevertheless be imperfectly substitutable, and allowing for endogenous capital accumulation. This function successfully accounts for the negative impact of the relative skill levels of immigrants on the relative wages of US workers. However, contrary to the findings of previous literature, overall immigration generates a large positive effect on the average wages of US-born workers. We show evidence of this positive effect by estimating the impact of immigration on both average wages and housing values across US metropolitan areas (1970-2000). We also reproduce this positive effect by simulating the behaviour of average wages and housing prices in an open city-economy, with optimizing US-born agents who respond to an inflow of foreign-born workers of the size and composition comparable to the immigration of the 1990s. |
| Keywords: | foreign-born; gains from migration; skill complementarity; wages |
| JEL: | F22 J31 J61 R13 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5226&r=lab |
| By: | Nina Smith (Department of Economics, Aarhus School of Business); Valdemar Smith (Department of Economics, Aarhus School of Business); Mette Verner (Department of Economics, Aarhus School of Business) |
| Abstract: | Corporate governance literature argues that board diversity is potentially positively related to firm performance. This study examines the relationship in the case of women in top executive jobs and on boards of directors. We use data for the 2500 largest Danish firms observed during the period 1993–2001 and find that the proportion of women in top management jobs tends to have positive effects on firm performance, even after controlling for numerous characteristics of the firm and direction of causality. The results show that the positive effects of women in top management depend on the qualifications of female top managers. |
| Keywords: | firm performance; female CEOs; gender diversity |
| JEL: | G38 J16 M14 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieci:2005-03&r=lab |
| By: | Gilles Mourre (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | The paper examines whether the pattern of growth in euro area employment seen in the period 1997- 2001 differed from that recorded in the past and what could be the reasons for that. First, a standard employment equation is estimated for the euro area as a whole. This shows that the lagged impact of both output growth and real labour cost growth, together with a productivity trend and employment “inertia”, can account for most of the employment developments between 1970 and the early 1990s. Conversely, these traditional determinants can only explain part of the employment development seen in recent years (1997-2001). Second, the paper shows sound evidence of a structural break in the aggregate employment equation in the late 1990s. Third, the paper provides some tentative explanations for this change in aggregate employment developments, using in particular country panels of institutional variables and of active labour market policies but also cross-sectional analyses. Among the relevant factors likely to have contributed to rising aggregate employment in recent years are changes in the sectoral composition of euro area employment, the strong development of part-time jobs, lower labour tax rates and possibly less stringent employment protection legislation and greater subsidies to private employment. |
| Keywords: | Euro area; Aggregate employment; Demand for labour; Labour market institutions; Active labour market policies. |
| JEL: | C2 E24 H50 J23 |
| Date: | 2004–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20040358&r=lab |
| By: | Ricardo Llaudes (The Johns Hopkins University, Department of Economics, 3400 N. Charles Street, Baltimore, MD 21218, USA.) |
| Abstract: | This paper studies the role of long-term unemployment in the determination of prices and wages. Labor market theories such as insider-outsider models predict that this type of unemployed are less relevant in the wage formation process than the newly unemployed. This paper looks for evidence of this behavior in a set of OECD countries. For this purpose, I propose a new specification of the Phillips Curve that contains different unemployment lengths in a time-varying NAIRU setting. This is done by constructing an index of unemployment that assigns different weights to the unemployed based on the length of their spell. The results show that unemployment duration matters in the determination of prices and wages, and that a smaller weight ought to be given to the long-term unemployed. This modified model has important implications for the policy maker: It produces more accurate forecasts of inflation and more precise estimates of the NAIRU. |
| Keywords: | Long-term unemployment; Phillips curve; NAIRU; Kalman filter. |
| JEL: | C22 E31 E50 J64 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050441&r=lab |
| By: | Ott-Siim Toomet |
| Abstract: | Danish unemployment assistance depends on age; it increases by 70% when unemployed individuals turn 25. This feature is used to identify the impact of income on the unemployment-to-employment hazard rate. A mixed proportional hazard framework based on a 10% representative Danish registry data set is used. The results indicate that the income effect for females is negative and significant, corresponding to an income elasticity of -0.4. The effect for males is positive but insignificant. |
| Keywords: | welfare benefits, incentive effect, unemployment duration |
| JEL: | J64 J65 |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2005-09&r=lab |