|
on Labour Economics |
| By: | Claudio Lucifora; Dominique Meurs |
| Abstract: | We investigate public-private pay determination using French, British and Italian microdata. While traditional methods focus on parametric methods to estimate the public sector pay gap, in this paper, we use both non-parametric (kernel) and quantile regression methods to analyse the distribution of wages across sectors. We show that the public-private (hourly) wage differential is sensitive to the choice of quantile and that the pattern of premia varies with both gender and skill. In all countries the public sector is found to pay more low skilled workers with respect to the private sector, whilst the reverse is true for high skilled workers. The effects are more pronounced for females. |
| Keywords: | Wage differentials, Public sector, Quantile regression |
| JEL: | J31 J45 C14 |
| Date: | 2004–02 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp04_04&r=lab |
| By: | Gylfi Zoega (School of Economics, Mathematics & Statistics, Birkbeck College); Thorlakur Karlsson |
| Abstract: | There is a literature on the causes of wage rigidity and there is a literature on within firm wage structures. We use a survey of CEOs to show that the two are interlinked in that the proposed explanations for the compression of wages within firms also provide an explanation for wage rigidity. |
| Keywords: | Wage compression, wage rigidity. |
| JEL: | J24 J31 J42 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0516&r=lab |
| By: | Alessandra Venturini; Claudia Villosio |
| Abstract: | Gavosto, Venturini, Villosio (1999) found that the impact of immigrants on the wage rates of natives was positive. This result has led to the present paper which analyses the effect of immigrants on native employment. Two aspects of being unemployed are considered: i) displacement risk, the probability of moving from employment into unemployment; and ii) job-search effectiveness, the probability of moving from unemployment into employment within one year. The quarterly Labour Force Survey data (ISTAT) from 1993 to 1997 are used. The transition probabilities depend on two sets of independent variables at time t: the individual’s characteristics and the external conditions of the market. A probit model is applied for repeated-cross-sections on “specific” local areas in order to check for possible autocorrelation and endogeneity. The results show that in the North of Italy, where most immigrants are located, the share of immigrants has either no effect or has a complementary effect on the probability of finding a job in the case of workers looking for a new job; while in the case of people looking for a first job (young people) the effect was negative in 1993; while it was positive in the last years. A complementary effect prevails in the case of native transition from employment to unemployment. There is a negative effect only in the manufacturing sector in Northern Italy for 1996, and this is probably due to other factors, such as the increased use of temporary contracts in that area during that year. |
| Keywords: | Migration, Competition, Employment, Unemployment |
| JEL: | J61 F22 |
| Date: | 2004–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp17_04&r=lab |
| By: | David H. Autor; Susan Houseman |
| Abstract: | A disproportionate share of low-skilled U.S. workers is employed by temporary help firms. These firms offer rapid entry into paid employment, but temporary help jobs are typically brief and it is unknown whether they foster longer-term employment. We draw upon an unusual, large-scale policy experiment in the state of Michigan to evaluate whether holding temporary help jobs facilitates labor market advancement for low-skilled workers. To identify these effects, we exploit the random assignment of welfare-to-work clients across numerous welfare service providers in a major metropolitan area. These providers feature substantially different placement rates at temporary help jobs but offer otherwise similar services. We find that moving welfare participants into temporary help jobs boosts their short-term earnings. But these gains are offset by lower earnings, less frequent employment, and potentially higher welfare recidivism over the next one to two years. In contrast, placements in direct-hire jobs raise participants' earnings substantially and reduce recidivism both one and two years following placement. We conclude that encouraging low-skilled workers to take temporary help agency jobs is no more effective - and possibly less effective - than providing no job placements at all. |
| JEL: | I38 J20 J30 J40 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11743&r=lab |
| By: | Sarbajit Chaudhuri (Dept. of Economics, Calcutta University) |
| Abstract: | The paper is purported to analyze the impact of skill formation on the skilled-unskilled wage inequality using a few variants of the HOS-type framework. It shows that the effect of skill formation on the wage inequality depends crucially upon the technologies of production of the economy and institutional nature of the markets for unskilled labour. In the extreme case when all unskilled labour markets are distorted any attempt of skill formation unequivocally accentuates the wage gap and may increase the level of unemployment of unskilled labour. These results point out that the empirical evidence as found in Beyer, Rojas and Vergara (1999) and the World Development Report (1995) that skill formation has contributed in reducing the skilled-unskilled wage gap in some developing countries lack solid theoretical bearing. The paper suggests that institutional reform programs, designed for the removal of labour market distortions, should be given high priority along with skill improvement measures to improve the skilled-unskilled wage inequality in the developing countries. |
| Keywords: | Skilled labour, unskilled labour, wage inequality, skill formation, institutional reform programs |
| JEL: | D50 J31 I28 |
| Date: | 2005–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0511009&r=lab |
| By: | Bandick, Roger (Department of Business, Economics, Statistics and Informatics); Hansson, Pär (FIEF) |
| Abstract: | We observe a substantial increase of foreign ownership in Sweden in the 1990s. Did that have any effect on relative demand for skilled labor? Has technology transfers often associated with inward FDI led to increased demand for skills due to skilled-biased technical change? Are there any grounds for the worries in the public Swedish debate that more skilled activities have been moved abroad to countries where the headquarters are located? We obtain support for that the share of skilled labor tends to rise in non-multinationals but not in multinationals that become foreign owned. Yet it does not seem to be any relationship between increased foreign ownership and the relative demand for skilled labor in Swedish manufacturing between 1986 and 2000. <p> Interestingly, increased competition from low-wage countries, rather than inward FDI, has had significant impact on skill upgrading, and appears to have played a larger role in the 1990s than before. |
| Keywords: | foreign ownership; skill upgrading; wage differentials |
| JEL: | F23 J23 J31 |
| Date: | 2005–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2005_010&r=lab |
| By: | Mika Maliranta (Research Institute of the Finnish Economy ETLA); Pekka Ilmakunnas (Helsinki School of Economics & HECER) |
| Abstract: | Aggregate productivity growth can be decomposed into growth within establishments, between establishments, and the impact of entering and exiting establishments. We demonstrate that such a productivity decomposition formula can also be used for studying intraestablishment restructuring through the inflow and outflow of workers. There are, however, three requirements: Firstly, comprehensive longitudinal linked employeremployee data are needed. Secondly, now the productivity decomposition formula cannot be used for accounting but must be used as an estimation model. Thirdly, the decomposition formula should be such that a meaningful interpretation of its components is possible. The decomposition can also account for different worker types, e.g. age groups. We apply such a method to study the productivity growth and wage growth within the establishments of the Finnish business sector. The results provide empirical evidence on economic incentives for hiring young workers and separating older workers. |
| Keywords: | employer-employee data, labor productivity, productivity decomposition, wage determination, worker turnover |
| JEL: | C43 J23 J24 J63 |
| Date: | 2005–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0511003&r=lab |
| By: | Marie-Laure Michaud (Université Paris 1) |
| Abstract: | Over the last two decades, EU institutions have been increasingly concerned with the issues of unemployment reduction and job creation. The EU has recommended that member states develop welfare systems that moderate the negative effects of market relationships on the one hand, and enhance the efficiency of market performance on the other. This paper provides an overview of labour market policies to protect individuals from unemployment. It shows that in the context of EMU and EU enlargement, policies such as unemployment insurance could improve welfare, to the extent that it encourages labour mobility, but has negative effects on individuals’ job search efforts. To counter welfare and inactivity traps, member state governments are asked to reform benefit and tax systems towards more employment-friendly policies. Further, the effect of population ageing on the labour force is considered, along with options to sustain labour force supply and state pension provision. The paper concludes that measures to expand the range and quality of employment opportunities available to older workers will become increasingly important and that governments will have an important educational and coordinating role to play in facilitating these adjustments. |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:epr:enepop:07&r=lab |
| By: | Maciej Bukowski (Warsaw School of Economics, Institute for Structural Research); Piotr Lewandowski (Warsaw School of Economics, Institute for Structural Research) |
| Abstract: | This paper investigates the determinants of the flows out of employment in Poland using multinomial logit model based on the individual LFS panel data covering the 1997-2004 period. It focuses on the influence of the personal characteristics, macroeconomic environment, industry restructuring and labor market institutions on the individual's labor market prospects. Special attention is devoted to social security benefits and pensions as co-determinants of labor market behavior of older workers. |
| Keywords: | Labor dynamics, transition economies, job destruction, multinomial logit |
| JEL: | J2 H31 |
| Date: | 2005–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0511007&r=lab |
| By: | Stephanie Seguino |
| Abstract: | This paper explores the possibility that unregulated FDI flows are causally implicated in the decline in labor productivity growth in semi-industrialized economies. These effects are hypothesized to operate through the negative impact of firm mobility on worker bargaining power and thus affecting wages. Downward pressure on wages can reduce the pressure on firms to raise productivity in defense of profits, contributing to a low wageÐlow productivity trap. This paper presents empirical evidence, based on panel data fixed effects and GMM estimation for 37 semi-industrialized economies, that supports the causal link between increased firm mobility and lower wages, as well as slower productivity growth over the period 1970Ð2000. |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_423&r=lab |
| By: | Lorenzo Cappellari |
| Abstract: | Using microdata on the 1995 cohort of Italian high school graduates, this paper studies the relationship between the type of high school attended (general versus technical; private versus public) and indicators of subsequent performance. Simultaneity issues that potentially bias this type of exercise are tackled by instrumental variables. Results indicate that the type of high school attended greatly depends upon the family of origin and prior school performance. General high schools are found to increase the probability of transition to university and to improve performance once at university. On the other hand, private high schools appear to be associated with lower academic performance. Technical schools improve the quality of the school-to-work transition, both in terms of participation and employment probabilities. |
| Keywords: | high school types, academic and economic performance, endogeneity |
| JEL: | I21 J24 C35 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp03_04&r=lab |
| By: | Olivier Baguelin (EUREQua) |
| Abstract: | We develop a model in which agents choose whether to achieve self-esteem through work. When they do, they develop an intrinsic motivtion to effort. Depending on the characteristics of the job to be filled, an employer may try, or not, to encourage this intrinsic motivation by an adequately designed contract. Although equally productive, assuming that agents from distinct socio-demographic groups differ in their propensity to achieve self-esteem through work, this may lead to unequal access to employment. We analyse the consequences of this model on labor market outcomes. The model can give an account of many important traits of socio-demographic disparities in the labor market (notably of vertical occupational segregation. |
| Keywords: | Employment relation, self-esteem, intrinsic motivation, (seeming) hiring discrimination, occupational segregation, socio-demographic earnings gaps. |
| JEL: | J15 J24 J71 J16 Z13 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:v05065&r=lab |
| By: | Stephanie Seguino |
| 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. |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_426&r=lab |
| By: | Josse Delfgaauw (Faculty of Economics, Erasmus Universiteit Rotterdam) |
| Abstract: | Using survey data of public sector employees in the Netherlands, this paper shows that workers' satisfaction with various job domains not only affects whether but also where workers search for another job. An intuitive pattern emerges. Workers try to leave their current employer when their job search is instigated by dissatisfaction with an organisation-specific job domain, like management. Conversely, more job-specific problems, like a lack of autonomy, lead workers to opt for another position within their current organisation. Dissatisfaction with job domains which may have an industry-specific component, such as job duties, drives workers out of their industry. These findings suggest that on-the-job experience provides workers with information about the quality of their own job as well as of other jobs in their organisation and industry. |
| Keywords: | Job search; job satisfaction; public sector employees |
| JEL: | J28 J45 J63 M54 |
| Date: | 2005–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20050097&r=lab |
| By: | Engström, Per (Department of Economics); Holmlund, Bertil (Department of Economics) |
| Abstract: | The paper presents a tractable general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms offer wages, and possibly sick pay, so as to maximize expected profits, recognizing that the compensation package affects the queue of job applicants and possibly the absence rate as well. Shocks to the value of leisure among nonemployed individuals interact with their search decisions and trigger movements into and out of the labor force. The analysis provides a number of results concerning the impact of social insurance benefits and other determinants of workers’ and firms’ behavior. For example, higher nonemployment benefits are shown to increase absenteeism among employed workers. The normative anlysis identifies externalities associated with firm-provided sick pay and examines the welfare implications of alternative policies. Conditions are given under which welfare equivalence holds between publicly provided and firm-provided sick pay. Benefit differentiation across states of non-work are found to be associated with non-trival welfare gains. |
| Keywords: | Absenteeism; search; unemployment; social insurance |
| JEL: | J21 J64 J65 |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2005_022&r=lab |
| By: | Olivier Blanchard |
| Abstract: | In the 1970s, European unemployment started increasing. It increased further in the 1980s, to reach a plateau in the 1990s. It is still high today, although the average unemployment rate hides a high degree of heterogeneity across countries. The focus of researchers and policy makers was initially on the role of shocks. As unemployment remained high, the focus has progressively shifted to institutions. This paper reviews the interaction of facts and theories, and gives a tentative assessment of what we know and what we still do not know. |
| JEL: | E24 J6 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11750&r=lab |
| By: | David Autor; Susan Houseman |
| Abstract: | The high incidence of temporary agency employment among participants in government employment programs has catalyzed debate about whether these jobs help the poor transition into stable employment and out of poverty. We provide direct evidence on this question through analysis of a Michigan welfare-to-work program in which program participants were randomly allocated across service providers ('contractors') with different job placement practices. We draw on a telephone survey of contractors and on administrative program data linked with wage records data on all participants entering the program over a three-and-a half-year period. Our survey evidence documents a consensus among contractors that temporary help jobs are generally easier for those with weak skills and experience to obtain, but no consensus on whether temporary help jobs confer long-term benefits to participants. Our analysis of the quasi-experimental data introduced in Autor and Houseman (2005) shows that placing participants in either temporary or direct-hire jobs improves their odds of leaving welfare and escaping poverty in the short term. However, we find that only direct-hire placements help reduce welfare dependency over longer time horizons. Our findings raise questions about the incentive structure of many government employment programs that emphasize rapid placement of program participants into jobs and that may inadvertently encourage high placement rates with temporary help agencies. |
| JEL: | I38 J20 J30 J40 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11742&r=lab |
| By: | Battu, Harminder (Department o Economics); Mwale, McDonald (Health Economics Research Unit (HERU)); Zenou, Yves (The Research Institute of Industrial Economics) |
| Abstract: | We develop a model in which non-white individuals are defined with respect to their social environment (family, friends, neighbors) and their attachments to their culture of origin (religion, language), and in which jobs are mainly found through social networks. We find that, depending on how strong peer pressures are, non-whites choose to adopt "oppositional" identities since some individuals may identify with the dominant culture and others may reject that culture, even if it implies adverse labor market outcomes. |
| Keywords: | Ethnic Minorities; Identity; Social Networks; White's Norm; Multiple Equilibria |
| JEL: | A14 J15 |
| Date: | 2005–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0649&r=lab |
| By: | Barbara M. Roberts; Steve Thompson |
| Abstract: | This paper explores the impact of turnover and restructuring on labour productivity in the Polish economy over the period 1988-1993. Changes in aggregate productivity are decomposed into elements corresponding to productivity growth among survivors, market share growth by survivors and the contributions of entering and exiting firms. The traditional entry and exit effects begin to work as transition to a market economy progresses. However, initial productivity improvements are due to changes to market shares of the existing firms following the break-up of large enterprises. Regression analysis shows that changes in the firm-level productivity are affected by restructuring and a more competitive economic environment. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:05/27&r=lab |
| By: | Daniela Del Boca; Silvia Pasqua; Chiara Pronzato |
| Abstract: | According to the agenda for employment set by the EU in 2000 for the following ten years, the target for female employment was set at 60 per cent for the year 2010. While Northern and most Continental countries have achieved this quantitative target, the Mediterranean countries are lagging behind. Labor market policies should be aimed to encourage women’s participation and reduce the cost of working. However the persistence of a negative relationship between participation and fertility in these countries implies that it is important to take fertility into account . We analyze a model of labor supply and fertility, using data from the ECHP (European Community Household Panel) for the period 1994-2000, merged with regional data describing the available labor market opportunities in the households’ environment. |
| Keywords: | Labor Market Decisions, Fertility, Childcare |
| JEL: | J2 C3 D1 |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp08_04&r=lab |
| By: | Estelle Viger (EUREQua) |
| Abstract: | This study focus on the impact of the schooling massification on the rate of return to schooling in France during the period 1983 to 2002. Moreover, it allows us to make a statement on the advancement of econometric methods that have been developed during the past fifty years. In this way, we explain why it is essential for us to introduce implicit and explicit costs, taxes on wages or the probability of unemployment, which differs according to schoolling attainment. When we take into account these several elements, the rate of return of High School degree decreases until 1990. He is now negative around -3% contrary to the return to college who converge to 8%. The schooling democratization seems to lead to a depreciation of the High School degree. It gives birth to a new period compartmentalizing individuals who continue school in college or not in two distinct classes. |
| Keywords: | Education, schooling democratization, return to scholling, internal rate of return, human capital. |
| JEL: | I21 A21 A22 C42 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:v05058&r=lab |