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on Labour Economics |
| By: | Hartmut Lehmann; Norberto Pignatti; Jonathan Wadsworth |
| Abstract: | We examine the effects of economic transition on the pattern and costs of worker displacement in Ukraine, using the Ukrainian Longitudinal Monitoring Survey (ULMS) for the years 1992 to 2002. Displacement rates in the Ukrainian labour market average between 3.4 and 4.8 percent of employment, roughly in line with levels typically observed in several Western economies, but considerably larger than in Russia. The characteristics of displaced workers are similar to those displaced in the West, in so far as displacement is concentrated on the less skilled. Around one third of displaced workers find re-employment immediately while the majority continues into long-term non-employment. The wage costs of displacement for the sub-sample of displaced workers do not seem to be large. The main cost for displaced workers in Ukraine consists in the extremely long non-employment spell that the average worker experiences after layoff. |
| Keywords: | Displaced workers, labour markets in transition, Ukraine |
| JEL: | J64 J65 P50 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:hwe:certdp:0504&r=lab |
| By: | Catalina Amuedo-Dorantes (San Diego State University and IZA Bonn); Sara de la Rica (Universidad del País Vasco and IZA Bonn) |
| Abstract: | This paper presents new evidence on the role of gender segregation within industry, occupation, establishment, and occupation-establishment cells in explaining gender wage differentials of full-time salaried workers in Spain during 1995 and 2002. Using data from the Spanish Wage Structure Surveys, we find that the raw gender wage gap decreased from 0.26 to 0.22 over the course of seven years. However, even after accounting for workers’ human capital, job characteristics, and female segregation into lower-paying industries, occupations, establishments, and occupations within establishments, women still earned approximately 13 percent and 16 percent less than similar male counterparts as of 1995 and 2002, respectively. Most of the gender wage gap is attributable to workers’ sex. Yet, female segregation into lower-paying occupations within establishments, establishments and industries accounted for a sizable and growing fraction of the female-male wage differential. |
| Keywords: | gender wage differentials, female segregation, matched employer-employee data |
| JEL: | J16 J7 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1742&r=lab |
| By: | Adriana Kugler (University of Houston, Universitat Pompeu Fabra, NBER, CEPR and IZA Bonn); Giovanni Pica (University of Southampton, University of Salerno and CSEF) |
| Abstract: | This paper uses the Italian Social Security employer-employee panel to study the effects of the Italian reform of 1990 on worker and job flows. We exploit the fact that this reform increased unjust dismissal costs for firms below 15 employees, while leaving dismissal costs unchanged for bigger firms, to set up a natural experiment research design. We find that the increase in dismissal costs decreased accessions and separations for workers in small relative to big firms, especially in sectors with higher employment volatility. Moreover, we find that the reform reduced firms' employment adjustments on the internal margin as well as entry rates while increasing exit rates. |
| Keywords: | unjust dismissal costs, European unemployment, firms' entry and exit, employment volatility |
| JEL: | E24 J63 J65 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1743&r=lab |
| By: | Arcand Jean-Louis (CERDI-CNRS, University of Auvergne & European Development Network); Béatrice d'Hombres (CERDI-CNRS, University of Auvergne) |
| Abstract: | The social science literature has done much to document pervasive racial discrimination in Brazil and there is little doubt that a very dark color is a handicap to social advancement. Nevertheless, very few empirical economic studies have attempted to quantify the impact of ethnic discrimination in Brazil. Using data culled from the Pesquisa National por Amostra de Domicílios (PNAD), this paper fills this void by analysing ethnic wage and employment gaps, as well as sectoral segregation in Brazil, using the Oaxaca decomposition methodology. In addition, we use a quantile regression approach to see whether the inter-ethnic wage gap is heterogeneous over the conditional wage distribution |
| Keywords: | Discrimination, Earnings, Unemployment, Segregation |
| JEL: | J |
| Date: | 2005–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0510015&r=lab |
| By: | Carlos Carrillo Tudela |
| Abstract: | The objective of this paper is to study equilibrium in a labour market in which identical firms post wage-contracts and ex-ante identical workers search on the job. The main novelty of this paper is to generate dispersion in contract offers by allowing firms to condition their offers on workers' initial experience and employment status although these characteristics do not affect productivity. In this context I show that changes in firms' information set at the moment of recruiting can have strong effects on wage dispersion and turnover without changing the agents' payoffs. I construct an equilibrium in which firms compete in promotion contracts. Employed and more experience workers are offered better contracts with shorter time-to-promotion periods. This implies contract offers are disperse within and between experience levels. The earnings distribution within the firm is then such that workers who have acquired more "outside" firm experience and more tenure are higher in the earnings scale. This generates workers cohort effects within a firm that depend on the level of experience at which they where hired. |
| Date: | 2005–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:600&r=lab |
| By: | William M. Rodgers III (Rutgers University); Leslie S. Stratton (Virginia Commonwealth University and IZA Bonn) |
| Abstract: | Married white men have higher wages and faster wage growth than unmarried white men. Using the NLSY, we examine whether racial differences in intrahousehold specialization and formal training explain married men’s faster wage growth, and individual-specific data on cognitive skills, family background, and self-esteem contribute to married men's higher wages. African American households engage in less intrahousehold specialization and experience no differential wage growth - a finding consistent with an intrahousehold specialization argument. However, while married men have more training, cognitive ability, and self-esteem than unmarried men, controlling for these differences does not explain any component of the marital wage differential. |
| Keywords: | wages, marriage, race, training, fixed effects |
| JEL: | J31 J12 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1745&r=lab |
| By: | Spyros Konstantopoulos (Northwestern University and IZA Bonn) |
| Abstract: | The impact of schools on student achievement has been of great interest for the last four decades. This study examines trends of school effects on student achievement employing three national probability samples of high school seniors: NLS:72, HSB:82, and NELS:92. Hierarchical linear models are used to investigate school effects. The findings reveal that the substantial proportion of the variation in student achievement lies within schools not between schools. There is also considerable between school variation in achievement, which becomes larger over time. Schools are more diverse and more segregated in the 1990s than in the 1970s. In addition, school characteristics such as school region, school SES, and certain characteristics of the student body of the school, such as students’ daily attendance, students in college preparatory classes, and high school graduates enrolled in colleges are important predictors of average student achievement. The school predictors explained consistently more than 50% of the variation in average student achievement across surveys. We also find considerable teacher heterogeneity in achievement within schools, which suggests important teacher effects on student achievement. Teacher heterogeneity in student achievement was larger than school heterogeneity, which may indicate that teacher effects have a relatively larger impact on mathematics and science student achievement than school effects. |
| Keywords: | school effects, trends, student achievement |
| JEL: | I2 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1749&r=lab |
| By: | Martin Jørgensen; Deborah Roseveare |
| Abstract: | <P>Immigration could offer one way for Denmark to expand its labour supply, thereby lowering the dependency ratio, at least for some time, and easing the task of ensuring fiscal sustainability. However, these beneficial effects are obtained only if immigrants are in work. Yet a significant proportion of immigrants have found it quite difficult to get work in Denmark, while the country has been relatively unattractive to high-skilled foreigners. Furthermore, the structure of the economy not only makes it difficult for low-skilled foreigners to gain a foothold in the labour market, but also provides generous social benefits that have caught many of the least skilled immigrants in a benefit trap. A heightened appreciation of these problems, including a tighter focus on the economic situation of the immigrants already present, have underpinned the main changes in policies on immigration in recent years ...</P> <P>L’immigration pourrait être, pour le Danemark, un moyen d’accroître son offre de main-d’œuvre. Cela ferait baisser le taux de dépendance, pour quelque temps du moins, et serait propice à la viabilité budgétaire. Toutefois, ces effets bénéfiques ne se font sentir que si les immigrants sont pourvus d’un emploi. Or, un pourcentage non négligeable de cette population a eu de graves difficultés à trouver du travail dans ce pays qui, par ailleurs, n’attire que relativement peu de travailleurs hautement qualifiés. De surcroît, non seulement la structure de l’économie danoise permet difficilement aux étrangers faiblement qualifiés de s’insérer sur le marché du travail, mais le pays est généreux en matière d’octroi de prestations sociales, ce qui fait que beaucoup d’immigrants les moins qualifiés se sont trouvés pris au piège de l’assistance. Ces dernières années, les principaux changements apportés aux mesures concernant l’immigration ont été inspirés par une perception plus aigue de ces ...</P> |
| Keywords: | Denmark, Danemark, fiscal sustainability, immigration patterns, demographic projections, participation rates, integration policies, language skills, wage compression, benefit traps, tendances des flux d'immigration, perspectives démographiques, taux de participation, politiques d'intégration, compétences linguistiques, compression des salaires, piège des prestations sociales, viabilité budgétaire |
| JEL: | H53 H6 I38 J11 J15 J21 J61 |
| Date: | 2004–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:386-en&r=lab |
| By: | Maasoumi, Esfandiar (SMU); Millimet, Daniel (SMU); Sarkar, Dipanwita (SMU) |
| Abstract: | The phenomenon that married men earn a higher wage on average than unmarried men, the so-called marriage premium, is rather well established. However, the robustness of the marriage premium across the wage distribution and the underlying cause of the marriage premium are not well known. Focusing on the entire wage distribution and employing recently developed nonparametric tests for stochastic dominance, our findings question the current conception of the marriage premium, calling instead for the introduction of a broader concept incorporating wage dispersion. This broader notion arises from evidence suggesting that the marriage premium is primarily confined to the lower tail of the wage distribution; the premium is negligible at best in the upper tail. Finally, the majority of the premium is explained by selection, but there is a small role for ‘causal’ explanations. |
| Keywords: | Marriage premium, stochastic dominance, difference-in-differences, instrumental variable, nonparametric, selection |
| JEL: | C14 C33 D31 J12 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:0503&r=lab |
| By: | Namkee Ahn |
| Abstract: | Using the data from the Spanish survey on life quality at work, we examine the factors which affect Spanish workers’ life satisfaction. Our analysis shows that subjective intangible job characteristics, such as independence, social usefulness, pleasant work environment, pride, stress and the perception of receiving an adequate wage have substantial effects on the workers’ life satisfaction. Some evidence for the difficulties in work-life balance is also shown as we observe the negative effects of dependent children, long hours of work and commuting time to work. |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2005-17&r=lab |
| By: | Caitlin Knowles Myers |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0525&r=lab |
| By: | Dale T. Mortensen |
| Abstract: | Shimer (2005a) argues that the Mortensen-Pissarides equilibrium search model of unemployment grossly under predicts the size of the response in the job finding rate to a productivity shock. Some of the recent papers inspired by his critique are reviewed and commented on here. Specifically, I suggest that the problem is not procylciality of the wage, as Shimer, Hall (2005), and Hall and Milgrom (2005) argue, or a failure to account fully for the opportunity cost of employment, as Hagedorn and Manovskii (2005) contend. Instead, I show that a properly calibrated variant of the model, one that accounts for capital cost, counter cyclic involuntary separations, and the large flow of workers from job-to-job, can explain the observed volatility of the job finding rate. |
| JEL: | E2 G0 J0 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11692&r=lab |
| By: | Giovanni Pica (University of Salerno and CSEF) |
| Abstract: | This paper analyzes the long-run effects of capital markets integration on production and wages, explicitly accounting for the impact of deeper economic linkages on labor market institutions. We consider a two-country OLG model where labor market imperfections are modeled as an endogenous wage floor. We first characterize the closed economy and provide conditions for the minimum wage to arise in steady state. We then show that increased integration always provides incentives to reduce labor market rigidities. However, this is not enough to conclude that openness is unambiguously beneficial. |
| Keywords: | Unemployment, Factor mobility, Political economy, Globalization |
| JEL: | E24 F20 F4 |
| Date: | 2005–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:144&r=lab |
| By: | Robert Shimer; Ivan Werning |
| Abstract: | We study the optimal design of unemployment insurance for workers sampling job opportunities over time. We focus on the optimal timing of benefits and the desirability of allowing workers to freely access a riskless asset. When workers have constant absolute risk aversion preferences it is optimal to use a very simple policy: a constant benefit during unemployment, a constant tax during employment that does not depend on the duration of the spell, and free access to savings using a riskless asset. Away from this benchmark, for constant relative risk aversion preferences, the welfare gains of more elaborate policies are minuscule. Our results highlight two largely distinct roles for policy toward the unemployed: (a) ensuring workers have sufficient liquidity to smooth their consumption; and (b) providing unemployment benefits that serve as insurance against the uncertain duration of unemployment spells. |
| JEL: | D82 J65 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11689&r=lab |
| By: | Fabien Postel-Vinay; Hélène Turon |
| Abstract: | The existing literature on inequality between private and public sectors focuses on cross-section differences in earnings levels. A more general way of looking at inequality between sectors is to recognize that forward-looking agents will care about income and job mobility too. We show that these are substantially different between the two sectors. Using data from the BHPS, we estimate a model of income and employment dynamics over seven years. We allow for unobserved heterogeneity in the propensity to be unemployed or employed in either job sector and in terms of the income process. We then combine the results into lifetime values of jobs in either sector and carry out a cross-section comparative analysis of these values. We have four main findings. First focusing on cross-sector differences in terms of the income process only, we detect a positive average public premium both in income flows and in the present discounted sum of future income flows. Second, we argue that income inequality is lower but more persistent in the public sector, as most of the observed relative cross-sectional income compression in the public sector is due to a lower variance of the transitory component of income. Third, when taking job mobility into account, the lifetime public premium is essentially zero for workers that we categorize as "high-employability" individuals, suggesting that the UK labor market is sufficiently mobile to ensure a rapid allocation of workers into their "natural" sector. Fourth, we find some evidence of job queuing for public sector jobs among "low-employability" workers. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-30&r=lab |
| By: | Robert E. Hall |
| Abstract: | The evolution of the aggregate labor market is far from smooth. I investigate the success of a macro model in replicating the observed levels of volatility of unemployment and other key variables. I take variations in productivity growth and in exogenous product demand (government purchases plus net exports) as the primary exogenous sources of fluctuations. The macro model embodies new ideas about the labor market, all based on equilibrium – the models I consider do not rest on inefficiency in the use of labor caused by an inappropriate wage. I find that non-standard features of the labor market are essential for understanding the volatility of unemployment. These models include simple equilibrium wage stickiness, where the sticky wage is an equilibrium selection rule. A second model based on modern bargaining theory delivers a different kind of stickiness and has a unique equilibrium. A third model posits fluctuations in matching efficiency that may arise from variations over time in the information about prospective jobs among job-seekers. Reasonable calibrations of each of the three models match the observed volatility of unemployment. |
| JEL: | E24 E52 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11684&r=lab |
| By: | Bruno Crépon; Muriel Dejemeppe; Marc Gurgand |
| Abstract: | This article evaluates the effects of intensive counseling schemes that are provided to about 20% of the unemployed since the 2001 French unemployment policy reform (PARE). Several of the schemes are dedicated at improving the quality of assignment of workers to jobs. As a result, it is necessary to assess their impact on unemployment recurrence as well as unemployment duration. Using duration models and a very rich data set, we can identify heterogenous and time-dependent causal effects of the schemes. We find significant favorable effects on both outcomes, but the impact on unemployment recurrence is stronger than on unemployment duration. In particular, the program shifts the incidence of recurrence, one year after employment, from 33 to 26%. This illustrates that labor market policies evaluations that consider unemployment duration alone can be misleading. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-27&r=lab |
| By: | Julen Esteba-Pretel (Faculty of Economics, University of Tokyo) |
| Abstract: | This paper studies the effects of the loss of skills on the persistence of unemployment and other macroeconomic variables. It combines a Real Business Cycle model with a search and matching labor market to explain how the loss of skill of workers and the subsequent decrease in their probability of finding new jobs creates more persistent business cycles. The paper proves that the introduction of this mechanism improves the performance of the model and is able to replicate cross country differences in unemployment and output persistence. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2005cf371&r=lab |
| By: | Helena Marques (Loughborough University); Hugh Metcalf (University of Newcastle-upon-Tyne) |
| Abstract: | In this paper we estimate a sectoral real wage equation for three regional blocs of the enlarged EU that we defined as North (wealthiest EU), South (Greece, Portugal and Spain) and East (acceding Central and Eastern European countries). The estimation results show that real wages react differently in each of the blocs to the impact of market size, location and factor endowments across a range of industrial sectors which differ by their degrees of economies of scale and skill-intensities in the presence of transport costs. |
| Keywords: | wage equation, labour demand, human capital, EU enlargement |
| JEL: | F15 F22 J31 L6 |
| Date: | 2003–12 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2003_13&r=lab |
| By: | Timothy J. Perri |
| Abstract: | Publications signal a professor’s productivity and may lead to raids by other universities. A raided professor learns the value of non-wage benefits at a raiding university, and will quit only if benefits elsewhere are relatively high. The social value of these benefits suggests research may be efficient even in the absence of a direct social value from research. Other results are: in some cases, a school may preempt signaling by paying a higher wage, but it will only do so when signaling is inefficient; and it is inefficient for a university to commit to not match outside offers. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:05-21&r=lab |
| By: | Fabien Postel-Vinay; Hélène Turon |
| Abstract: | Individual labor earnings observed in worker panel data have complex, highly persistent dynamics. We investigate the capacity of a structural job search model with i.i.d. productivity shocks to replicate salient properties of these dynamics, such as the covariance structure of earnings, the evolution of individual earnings mean and variance with the duration of uninterrupted employment, or the distribution of year-to-year earnings changes. Specifically, we show within an otherwise standard job search model how the combined assumptions of on-the-job search and wage renegotiation by mutual consent act as a quantitatively plausible "internal propagation mechanism" of i.i.d. productivity shocks into persistent wage shocks. The model suggests that wage dynamics should be thought of as the outcome of a specific acceptance/rejection scheme of i.i.d. productivity shocks. This offers an alternative to the conventional linear ARMA-type approach to modelling earnings dynamics. Structural estimation of our model on a 10-year panel of highly educated British workers shows that our simple framework produces a dynamic earnings structure which is remarkably consistent with the data. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-31&r=lab |
| By: | BLUNDELL, Richard; CHIAPPORI, Pierre-André; MAGNAC, Thierry; MEGHIR, Costas |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:2267&r=lab |
| By: | Shun-ichiro Bessho (Ministry of Finance Japan - Policy Research Institute); Masayoshi Hayashi (Ministry of Finance Japan - Policy Research Institute) |
| Abstract: | When the labour supply is elastic with respect to the net wage, labour income taxation generates economic distortion and welfare loss. The substitute effect is a key determinant of the magnitude of such deadweight loss; thus, evaluating the elasticity of the labour supply has broad and significant implications for assessing the effects of changes in public policy. We estimate the labout supply function based on the CES utility function, using large microdata sets in Japan and treating the complex Japanese income tax system carefully. The results of this chapter suggest that the uncompensated elasticity of the labour supply of prime-age males is at most 0.1. |
| Keywords: | piecewise linear budget constraint, labout supply, CES utility function |
| JEL: | D31 D61 D63 H21 H31 J22 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:eab:microe:637&r=lab |
| By: | Eren, Ozkan (SMU); Millimet, Daniel (SMU) |
| Abstract: | Utilizing parametric and nonparametric techniques, we asses the impact of a heretofore relatively unexplored ‘input ’in the educational process, time allocation, on the distribution of academic acheivement. Our results indicate that school year length and the number and average duration of classes are salient determinants of student performance. However, the effects are not homogeneous — in terms of both direction and magnitude — across the distribution. We find that students below the median benefit from a shorter school year, while a longer school year benefits students above the median. Furthermore, low-achieving students benefit from fewer, shorter classes per day, while high-achieving students benefit from more and longer classes per day. |
| Keywords: | student achievement, school quality, school year length, stochastic dominance, distributional analysis |
| JEL: | C14 I21 I28 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:0506&r=lab |
| By: | Francesco Magris; Giuseppe Russo |
| Abstract: | An increasing literature encourages the use of selective immigration policies as a tool to promote incentives to education. It is argued that, since not everybody is allowed to migrate, under these policies a poor country may well turn out with more human capital than in autarchy. The implicit assumption is that migrations are permanent. However, this assumption has recently been dropped: a large literature studies the optimal migration duration in an intertemporal framework. In our work we study how selective immigration policies affect the human capital accumulation and the migration duration. Unlike most of the existing literature, the probability of entering abroad is endogenous and our analisys is not limited to two periods: there is no reason to consider a single migration spell, and our infinite-horizon model includes an aggregate shock as a source of constrained migration. Contrary to the "brain gain with a brain drain" reasoning, we show that selective policies may be harmful for human capital accumulation. As a consequence, their effectiveness is questionable, and they may produce a "brain loss" rather than a brain gain. Besides, borders closure backfires on migration duration especially for unskilled workers. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-26&r=lab |