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on Labour Economics |
| By: | Carlo Dell’Aringa (Catholic University of Milan); Claudio Lucifora (Catholic University of Milan, ERMES, CEPR and IZA Bonn); Federica Origo (University of Bergamo) |
| Abstract: | This paper investigates regional public-private wage differentials in Italy. Following the recent wave of reforms that significantly changed wage setting and employment relations in both sectors - increasing decentralisation in collective bargaining and enforcing a "privatisation" of public sector employment contracts - we present new estimates of the public-private wage gap by geographical location. We report both 'standardised' public-private wage differentials, as well as estimates obtained using Geographically Weighted Regressions methods. We show that significant differences exist in public-private wage differentials across Italian regions, and that the latter can be partly explained by local labour market conditions affecting the private sector and only marginally the public sector. Differences in public-private wage differentials across regions are expected to determine several imbalances in terms of ‘wait’ unemployment and recruitment problems in the different areas. |
| Keywords: | public-private wage differentials, regional labour market, geographically weighted regressions |
| JEL: | J31 J45 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1828&r=lab |
| By: | Peter Skott (University of Massachusetts Amherst); Frederick Guy (Birkbeck College) |
| Abstract: | New information and communication technologies, we argue, have been 'power-biased': they have allowed firms to monitor low-skill workers more closely, thus reducing the power of these workers. An efficiency wage model shows that 'power-biased technical change' in this sense may generate rising wage inequality accompanied by an increase in both the effort and unemployment of low-skill workers. The skill-biased technological change hypothesis, on the other hand, offers no explanation for the observed increase in effort. JEL Categories: J31, O33 |
| Keywords: | power-biased technical change, skill bias, efficiency wages, wage inequality, work intensity |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2005-17&r=lab |
| By: | Robert Pollin; Jeannette Wicks-Lim |
| Abstract: | In a new study by Yelowitz “Santa Fe’s Wage Ordinance and the Labor Market,” dated September 23, 2005 (published by the Employment Policies Institute) Yelowitz claims to have demonstrated that the Santa Fe living wage ordinance is responsible for significant, negative consequences for Santa Fe’s least educated residents, including a 9.0 percentage point increase in the city’s unemployment rate among such workers. However, he derives these findings through a presentation of evidence that is misleading and incomplete, misusing the available data. We replicate and extend Yelowitz’s model to look at job growth specifically, and, using the same data as Yelowitz, we find that the Santa Fe ordinance did not produce any decline at all in the availability of jobs. Moreover, our estimates suggest that the living wage ordinance did increase earned income for the average worker affected by the ordinance, even if we accept Yelowitz’s estimates on reduced hours of work. In short, even while relying on Yelowitz’s own model and estimates, we find that, to date, the Santa Fe ordinance has succeeded in achieving its main aims: to improve the quality of jobs for low-wage workers in Santa Fe without reducing their employment opportunities. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp108&r=lab |
| By: | Denis Fougère (CREST-INSEE, CNRS, CEPR and IZA Bonn); Jacqueline Pradel (EUREQua, University of Paris-I Panthéon-Sorbonne); Muriel Roger (INRA-LEA, Paris) |
| Abstract: | In this paper, we examine the disincentive effects of the public employment service on the search effort of unemployed workers and on their exit rate from unemployment. For that purpose, we specify a structural search model with fixed and variable costs of search in which unemployed workers select their optimal search intensity given the exogenous arrival rate of job offers coming from the public employment agency. Because the theoretical effect of an increase in this exogenous job offer arrival rate on the structural exit rate from unemployment is ambiguous, we estimate this model using individual unemployment duration data. Our results show that the exit rate from unemployment increases with the arrival rate of job contacts obtained by the public employment service, especially for low-educated and lowskilled workers. They also show that the search effort is more costly for low-educated women and low-skilled adult unemployed workers. This last result suggests that a public employment agency that matches searchers and employers is beneficial, in the sense that it saves searchers in terms of search costs they would otherwise bear. |
| Keywords: | job search, search intensity, public employment agency, simulated maximum likelihood |
| JEL: | C41 J64 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1825&r=lab |
| By: | Adebayo B. Aromolaran |
| Abstract: | Economists have argued that increasing female schooling positively influences the labor supply of married women by inducing a faster rise in market productivity relative to non-market productivity. I use the Nigerian Labor Force Survey to investigate how own and husband's schooling affect women's labor market participation. I find that additional years of postsecondary education increases wage market participation probability by as much as 15.2%. A marginal increase in primary schooling has no effect on probability of wage employment, but could enhance participation rates in self-employment by about 5.40%. These effects are likely to be stronger when a woman is married to a more educated spouse. The results suggest that primary education is more productive in non-wage work relative to wage work, while postsecondary education is more productive in wage work. Finally, I find evidence suggesting that non-market work may not be a normal good for married women in Nigeria. |
| Keywords: | Nigeria, Female Schooling, Women's Labor Market Participation, Non-Market Productivity |
| JEL: | I21 J22 J24 O15 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:879&r=lab |
| By: | Elke Jahn (Institute for Employment Research (IAB), University of Erlangen-Nuremberg and IZA Bonn); Thomas Wagner (University of Applied Sciences, Nuremberg) |
| Abstract: | Risk-averse job seekers fearing the scarring effect of unemployment meet vacancies offering contractual employment protection (CEP) in form of guaranteed employment (GEC) or severance pay contracts (SPC). A GEC fully eliminates both the income risk and the scarring risk of unemployment. SPC diversify the income risk, but provide only limited protection against the scarring risk. (1) Workers strictly prefer contract market to spot market jobs. (2) A higher productivity, a lower probability of demand shocks or of finding a re-employment after a dismissal as well as lower public unemployment benefits increase the fraction of workers concluding a GEC. (3) Although firms are risk-neutral, first-best SPC are not incentive compatible under asymmetric information on the demand for the output of the job. In the second-best equilibrium, a positive fraction of over-insured workers will conclude a GEC, while workers signing a SPC incur income risk. (4) With asymmetric information on the reemployment status of a dismissed worker, employees who conclude a third-best SPC face both uninsurable income risk and the unemployment scar. Workers with a precautionary motive who expect a large or long lasting scar, conclude SPC with wage replacement rates strictly larger than one and low recession wages, which make their jobs more viable. |
| Keywords: | scarring effect of unemployment, contractual employment protection, guaranteed employment contract, severance pay contract, implicit contract, moral hazard, prudence |
| JEL: | J31 J32 J81 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1813&r=lab |
| By: | Robert Pollin |
| Abstract: | In October, 2005, citizens of Albuquerque, New Mexico will have the opportunity to vote on a proposal to raise the citywide minimum wage to $7.50 per hour for businesses that employ 10 or more workers. This would represent a 46 percent increase over the current federal minimum wage of $5.15 per hour, the minimum wage mandate that prevails in Albuquerque at present. The $5.15 federal minimum has been in place since 1997. In addition, for tipped workers, the minimum wage would rise from its current federal level of $2.13 to $4.50. The aim of this study is to provide a rough assessment of what the overall impact is likely to be were Albuquerque to proceed with this measure. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp103&r=lab |
| By: | Richard D. Barwell; Mark E. Schweitzer |
| Abstract: | This paper analyzes the extent of rigidities in wage setting in Great Britain over the 1980s and 1990s. Our estimation strategy, which generalizes the work of Altonji and Devereux (2000), models the notional wage growth distribution--the distribution of nominal wage growth that would occur in the absence of rigidities in pay--while allowing for the presence of measurement error in the data. The model then allows for the possibility that the nominal wage growth of a fraction of the workforce may be subject to a nominal or real downward rigidity. Our model suggests that real rigidities in wage setting are more prevalent than nominal rigidities, although the incidence of these real wage rigidities has fallen gradually over time. If firms cannot cut real wages in response to negative demand shocks they may resort to laying off workers. Our results support this microfoundation of the wage-unemployment Phillips curve: Workers who are more likely to be protected from wage cuts are also more likely to lose their jobs. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0508&r=lab |
| By: | David S. Lee |
| Abstract: | This paper empirically assesses the wage effects of the Job Corps program, one of the largest federally-funded job training programs in the United States. Even with the aid of a randomized experiment, the impact of a training program on wages is difficult to study because of sample selection, a pervasive problem in applied micro-econometric research. Wage rates are only observed for those who are employed, and employment status itself may be affected by the training program. This paper develops an intuitive trimming procedure for bounding average treatment effects in the presence of sample selection. In contrast to existing methods, the procedure requires neither exclusion restrictions nor a bounded support for the outcome of interest. Identification results, estimators, and their asymptotic distribution, are presented. The bounds suggest that the program raised wages, consistent with the notion that the Job Corps raises earnings by increasing human capital, rather than solely through encouraging work. The estimator is generally applicable to typical treatment evaluation problems in which there is non-random sample selection/attrition. |
| JEL: | J0 J3 C1 C2 C5 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11721&r=lab |
| By: | Jürgen Meckl (University of Giessen and IZA Bonn) |
| Abstract: | This paper integrates institutionally determined wage rigidities into an otherwise standard Heckscher-Ohlin model of international trade. It accounts for differences in individual productivities and their implications for individual wage incomes and demand for education. Although preserving the factor-price-equalization property of the global equilibrium approach, the model does not support the view expressed by Davis (1998) that global equilibrium links insulate the US labor market from exogenous shocks. It provides a foundation of the derived from comparative studies that do not consistently account for the global general equilibrium links. |
| Keywords: | wage rigidities, international trade, education, skill-specific unemployment |
| JEL: | F11 J31 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1817&r=lab |
| By: | Hector Sala (Universitat Autònoma de Barcelona and IZA Bonn); José I. Silva (Universitat Autònoma de Barcelona and Central Bank of Venezuela) |
| Abstract: | We present a Search and Matching model with heterogeneous workers (entrants and incumbents) that replicates the stylized facts characterizing the US and the Spanish labor markets. Under this benchmark, we find the Post-Match Labor Turnover Costs (PMLTC) to be the centerpiece to explain why the Spanish labor market is as volatile as the US one. The two driving forces governing this volatility are the gaps between entrants and incumbents in terms of separation costs and productivity. We use the model to analyze the cyclical implications of changes in labor market institutions affecting these two gaps. The scenario with a low degree of workers' heterogeneity illustrates its suitability to understand why the Spanish labor market has become as volatile as the US one. |
| Keywords: | search, matching, training, firing costs, productivity differentials |
| JEL: | J23 J24 J31 J41 J63 J64 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1823&r=lab |
| By: | Harounan Kazianga |
| Abstract: | This paper uses national survey data to estimate up-to-date private rates of return to education in Burkina Faso. Mincer earning regressions are fitted to wage data for women and men, and for public and private sector workers. The main results indicate that rates of return rise by level of education, and the public sector does not compensate female primary education. The findings suggest that current education polices which focus on increasing primary schooling supply be complemented with support for children, especially girls from resource constrained households to reach the secondary and tertiary levels. The estimated returns to education are strongly influenced by sample selection. For both men and women, failing to control for both selection in the wage sector and sector choice leads to biased estimates based on my identification of the selection process. |
| Keywords: | Burkina, Education, Labor |
| JEL: | I21 J31 |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:892&r=lab |
| By: | Christian Grund (University of Bonn, RWTH Aachen, CCP and IZA Bonn); Niels Westergård-Nielsen (CCP, Aarhus School of Business and IZA Bonn) |
| Abstract: | In this contribution, we examine the interrelation between corporate age structures and firm performance. In particular, we address the issues, whether firms with young rather than older employees are successful and whether firms with homogeneous or heterogeneous workforces are doing well. Several theoretical approaches are discussed with respect to these questions and divergent hypotheses are derived. Using Danish linked employeremployee data, we find that both mean age and dispersion of age in firms are inversely ushaped related to firm performance. |
| Keywords: | firm performance, corporate age structures, demographic change |
| JEL: | M54 J21 L25 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1816&r=lab |
| By: | T. Paul Schultz (Economic Growth Center, Yale University) |
| Abstract: | Wage-differentials by education of men and women are examined from African household surveys to suggest private wage returns to schooling. It is commonly asserted that returns are highest at primary school levels and decrease at secondary and postsecondary levels, whereas private returns in six African countries are today highest at the secondary and post secondary levels, and rates are similar for women as for men. The large public subsidies for postsecondary education in Africa, therefore, are not needed to motivate students to enroll, and those who have in the past enrolled in these levels of education are disproportionately from the better-educated families. Higher education in Africa could be more efficient and more equitably distributed if the children of well-educated parents paid the public costs of their schooling, and these tuition revenues facilitated the expansion of higher education and financed fellowships for children of the poor and less educated parents. |
| Keywords: | Africa, Wage Returns to Schooling, Inequality, HIV/AIDS |
| JEL: | O15 O55 J31 J24 |
| Date: | 2003–12 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:875&r=lab |
| By: | Andrew Grodner (Center for Policy Research, Maxwell School, Syracuse University); Thomas Kniesner (Center for Policy Research, Maxwell School, Syracuse University) |
| Abstract: | Our research econometrically tests the presence of social interactions in the labor supply model. The interdependence is defined as a response of individual's hours worked to the mean hours worked in one's reference group. The reference group includes individuals who share similar age, family structures, and location, all of which jointly determine the economic distance that reflects the cost of interactions. We identify an endogenous social interactions effect by instrumenting for the variable representing the mean hours worked of the people in an individual's reference group with the mean hours worked of the individuals in the adjacent reference groups. Estimates of the linear labor supply model proposed in the literature using Panel Study of Income Dynamics data indicate the presence of positive and non-negligible spillovers in hours worked. The total wage elasticity of labor supply os 0.22, where 0.08 is due to the exogenous wage change, and 0.14 is due to social interactions. |
| JEL: | J22 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:69&r=lab |
| By: | Daniel S. Hamermesh (University of Texas at Austin) |
| Abstract: | Retirement ages among older Americans have only recently begun to increase after their precipitous fifty-year decline. Early retirement may result from incentives provided by retirement systems; but it may also result from the rigidities imposed by market work schedules. Using the American Time Use Survey of 2003, I first examine whether additional market work is neutral with respect to the mix of non-market activities. The estimates indicate that there are fixed time costs of remaining in the labor market that alter the pattern of non-market activities, reducing leisure time and mostly increasing time devoted to household production. These costs impose a larger burden on households with lower full incomes, since wealthier households apparently purchase market substitutes that allow them to maintain the mix of non-market activities when they undertake market work. Market work also raises the set-up costs of switching among different non-market activities, thus raising the costs of generating utility-increasing variety. It also alters the daily distribution of a fixed amount of non-market activities, away from the distribution chosen when the constraint of a work schedule is not present. All these effects are mitigated by higher family income, presumably because higher-income people can purchase market substitutes that enable them to overcome the fixed time costs of market work. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp104&r=lab |
| By: | Isik Urla Zeytinoglu; Margaret Denton; Sharon Davies; Andrea Baumann; Jennifer Blythe; Ann Higgins |
| Abstract: | This report examines the effects of contemporary employment arrangements on the quality of nursing work life, and the implications of these employment arrangements for individual nurses, the hospitals, and also for the organization. First we look at nurse work status (full-time, part-time or casual job), contract status (permanent or temporary), and employment preference as factors affecting commitment to the hospital and profession, job satisfaction, retention in the organization, and absenteeism from work. Second, we examine stress, burnout, and physical occupational health problems (in particular, musculoskeletal disorders), as affecting nurse and hospital outcomes. This project investigated how the quality of nursing worklife and career choices differ for nurses in full-time, part-time and casual employment, and whether nurses who have the employment arrangements they prefer enjoy a standard of worklife that encourages retention. We collected data for the study from 1,396 nurses employed at three large teaching hospitals in Southern Ontario (Hamilton Health Sciences, Kingston General Hospital, and St. Michael's Hospital in Toronto) using the New Health Care Worker Questionnaire. Results indicate that although a substantial majority of the nurses were employed in the type of job that they preferred, problems of stress, burnout and physical health problems were reported. Further, these problems affected the nurses' job satisfaction, commitment, and propensity to leave the hospitals. |
| Keywords: | health care workers, employment status, nurses, job satisfaction, commitment, stress, burnout, physical health problems, MSD, propensity to leave |
| JEL: | I11 I18 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:qseprr:394&r=lab |