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on Labour Economics |
| By: | Spyros Konstantopoulos (Northwestern University and IZA Bonn); Amelie Constant (IZA Bonn) |
| Abstract: | This study examines the gender gap in wages of young adults in the late 1970s, mid 1980s, and 2000, in the middle and the tails of the wage distribution using quantile regression. We also examine the importance of school quality indicators in predicting future labor market performance. We conduct analyses for three major racial groups in the US: Whites, Blacks, and Hispanics. We employ base year and follow up data from two rich longitudinal studies: the National Longitudinal Study (NLS) of high school seniors in 1972 and the National Education Longitudinal Study (NELS) of eighth graders in 1988. Our results indicate that school quality is an important predictor of and positively associated to future wages for Whites, but it is less so for the two minority groups. We confirm significant gender disparities in wages favoring men across three surveys in the 1970s, 1980s, and 2000 that are unaccounted for. While the unexplained gender gap is evident across the entire wage distribution, it is more pronounced for Whites and less pronounced for Blacks and Hispanics. Overall, the gender gap in wages is more pronounced in higher paid jobs (top 10 percent) for all groups, indicating the presence of a n alarming "glass ceiling." |
| Keywords: | wages, gender differences, school quality, school effects, quantile regression |
| JEL: | J16 J24 J31 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1830&r=lab |
| By: | Sebastian Buhai (Erasmus Universiteit Rotterdam, and Aarhus School of Business); Coen N. Teulings (Universiteit van Amsterdam) |
| Abstract: | This paper provides a new way of analyzing tenure profiles in wages, by modelling simultaneously the evolution of wages and the distribution of tenures. Starting point is the observation that within-job log wages for an individual can be described by random walk. We develop a theoretical model based on efficient bargaining, where both log outside wage and log wage in the current job follow a random walk. This setting allows the application of real option theory. We derive the efficient separation rule, which stipulates that workers switch jobs when the difference between the outside wage and the wage in the current job reaches a threshold. The model fits well the observed distribution of job tenures. Since we observe outside wages only at job start and job separation, our empirical analysis of with job wage growth is based on expected wage growth conditional on the outside wages at both dates. Our modelling allows testing of the efficient bargaining hypothesis. The model is estimated on the PSID. |
| Keywords: | random productivity growth; efficient bargaining; job tenure; wage growth; wage-tenure profiles; option theory |
| JEL: | C51 C52 J63 |
| Date: | 2005–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20050099&r=lab |
| By: | Sergi Jiménez-Martín; José M. Labeaga; Cristina Vilaplana Prieto |
| Abstract: | In this work we study older workers’ (50—64) labor force transitions after a health/disability shock. We find that the probability of keeping working decreases with both age and severity of the shock. Moreover, we find strong interactions between age and severity in the 50—64 age range and none in the 30–49 age range. Regarding demographics we find that being female and married reduce the probability of keeping work. On the contrary, being main breadwinner, education and skill levels increase it. Interestingly, the effect of some demographics changes its sign when we look at transitions from inactivity to work. This is the case of being married or having a working spouse. Undoubtedly, leisure complementarities should play a role in the latter case. Since the data we use contains a very detailed information on disabilities, we are able to evaluate the marginal effect of each type of disability either in the probability of keeping working or in returning back to work. Some of these results may have strong policy implications. |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2005-23&r=lab |
| By: | Emilia Del Bono; Massimiliano Bratti; Daniela Vuri |
| Abstract: | In this paper we use newly available individual-level data from the Longitudinal Survey of Italian Households to investigate the factors affecting female labour force participation after the birth of the first child. We focus on the effects of pre-marital job characteristics and find that working without a contract has a negative effect on new mothers' participation, while working in the public sector or in a large private firm increases the probability of participation after childbearing. We suggest that these effects could be at least partly attributed to differences in the level of job protection and employment stability enjoyed by workers. This implies that in Italy women with highly protected and stable jobs find it easier to combine career and family, while those who are less sheltered by the legislation are more likely to withdraw from the labour force after becoming mothers. |
| Keywords: | childbirth, employment, informal sector, job protection, private, public |
| JEL: | J13 J21 J23 O17 C3 |
| Date: | 2004–05 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp05_04&r=lab |
| By: | Namkee Ahn (FEDEA, Fundación de Estudios de Economía Aplicada); Juan Ramón García (FEDEA, Fundación de Estudios de Economía Aplicada); Juan Francisco Jimeno (FEDEA, Fundación de Estudios de Economía Aplicada) |
| Abstract: | Among the working-age population, one of the most damaging individual experiences is unemployment. Many previous studies have confirmed the devastating effects of unemployment on individual well-being, both pecuniary and non-pecuniary. Using the data from the European Community Household Panel survey, we examine the factors that affect unemployed workers’ well-being with respect to their situations in their main vocational activity, income, housing, leisure time and health in Europe. Unemployment substantially reduces an individual’s satisfaction levels with his or her main vocational activity and finance, while it greatly increases his or her satisfaction levels with leisure time. With respect to health, it has a small negative effect. Unemployment duration also has a small, negative impact on individual well-being, suggesting that unemployment has a lasting and aggravating effect throughout the spells of unemployment, contradicting the theory of adaptation. Three other results are worth mentioning. First, there are large cross-country differences in the consequences of unemployment on individual well-being. Fewer effects resulting from unemployment are observed in Denmark and the Netherlands than in other countries. Part of this difference seems to be the result of the differences in the regulations and functioning of the labour market. In these two countries, where the unemployment rate is lower, the spells are shorter and unemployment protection (unemployment benefits and active labour market policies) is greater. Second, with respect to methodology, there are small differences between the cross-section and panel estimates, suggesting a small bias as a result of unobserved fixed-effects in the cross-section estimation. Finally, among the unemployed, non-pecuniary factors – such as job prospects, health and social relations – show significant effects on individual well-being, along with household income. |
| Keywords: | satisfaction, health and unemployment |
| Date: | 2004–07 |
| URL: | http://d.repec.org/n?u=RePEc:epr:enepwp:029&r=lab |
| By: | Peter Auer (International Labour Office, Employment Strategy Department) |
| Abstract: | The paper finds that a cluster of OECD countries that might be called "numerically flexible" does in fact demonstrate good labour market results: employment rates overall and rates for relevant groups (young/female/older) are higher and unemployment is lower than in countries with less numerical flexibility as measured by employment tenure and tenure distribution. However, when considering indicators of job quality (measured by wages, perceived employment security, access to training, etc.) the picture is mixed, with some countries exhibiting low shares of good quality employment and some others high shares. The discriminating variable seems to be labour market institutions and policies. If they are extensive there is "protected flexibility", and job quality as well as perceived job security are high. In the absence of such policies, job quality and job security suffer. A conclusion is that if efficiency and equity are sought in labour markets in open economies then institutions and policies for “protected mobility” should exist. Institution building (or transformation of existing institutions) is important on several accounts. Firstly, globalisation and technical change transforms employment relations and entail more volatility and less security, because employers cannot maintain the same degree of employment protection as in less exposed economies. Secondly, collective bargaining agendas have to be extended to include labour market policies, as employers’ demands for more adjustment flexibility will increasingly be accompanied by worker representatives’ demands for better security in change. In other words: reduced employment protection has to be compensated by labour market security if decent work is a target. Protected mobility by sound labour market policies might result in real “flexicurity” (adaptability for firms and security for workers) and become a common objective of both sides of industry while also reconfirming an enhanced role for the State. |
| Keywords: | numerical flexibility, labour market policy, labour market institutions, tenure, job quality |
| Date: | 2005–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:empstr:2005-01&r=lab |
| By: | Patrick Bayer (Economic Growth Center, Yale University); Stephen L. Ross (Economics Department, University of Connecticut); Giorgio Topa (Federal Reserve Bank of New York) |
| Abstract: | We use a novel dataset and research design to empirically detect the effect of social interactions among neighbors on labor market outcomes. Specifically, using Census data that characterize residential and employment locations down to the city block, we examine whether individuals residing in the same block are more likely to work together than those in nearby blocks. We find evidence of significant social interactions operating at the block level: residing on the same versus nearby blocks increases the probability of working together by over 33 percent. The results also indicate that this referral effect is stronger when individuals are similar in sociodemographic characteristics (e.g., both have children of similar ages) and when at least one individual is well attached to the labor market. These findings are robust across various specifications intended to address concerns related to sorting and reverse causation. Further, having determined the characteristics of a pair of individuals that lead to an especially strong referral effect, we provide evidence that the increased availability of neighborhood referrals has a significant impact on a wide range of labor market outcomes including employment and wages. |
| Keywords: | Neighborhood Effects, Job Referrals, Social Interactions, Social Interactions, Social Networks, Labor Supply |
| JEL: | J2 J3 J6 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:927&r=lab |
| By: | John F. Heliwell; Haifang Huang |
| Abstract: | This paper takes a different tack in addressing one of the fundamental questions in economics: what are the factors that determine the distribution of jobs and wages? In Adam Smith’s classic formulation, and in much of the subsequent literature, wage levels have been used to estimate the values of job characteristics ("compensating" or "equalizing" differentials). There are econometric problems with this approach, principally caused by unmeasured differences in talents and aptitudes that enable people of high ability to have jobs with both high wages and good working conditions, thus understating the value of working conditions. We bypass this difficulty by estimating the extent to which incomes and job characteristics influence direct measures of life satisfaction from three large and recent Canadian surveys. The well-being results show strikingly large values for non-financial job characteristics, especially workplace trust and other measures of the quality of workplace social capital. The compensating differentials estimated for the quality of workplace social capital are so large as to suggest that they do not reflect a full equilibrium. Thus the current situation probably reflects the existence of unrecognized opportunities for managers and employees to alter workplace environments, or for workers to change jobs, so as to increase both life satisfaction and workplace efficiency. |
| JEL: | J31 I31 Z13 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11759&r=lab |
| By: | Simon D. Woodcock (Simon Fraser University) |
| Abstract: | This paper examines the role of agent heterogeneity and learning on wage dispersion and employment dynamics. In the first half of the paper, I present an equilibrium matching model where heterogeneous workers and firms learn about match quality and bargain over wages. The model generalizes Jovanovic (1979) to the case of heterogeneous workers and firms. Equilibrium wage dispersion arises due to productivity differences across workers, technological differences across firms, and heterogeneity in beliefs about match quality. Under a simple CRS technology, the equilibrium wage is additively separable in worker- and firm-specific components, and in the posterior mean of beliefs about match quality. This parallels the 'person and firm effects' empirical specification of Abowd et. al. (1999, AKM) and others. It consequently provides a theoretical context for the AKM model, and a formal economic interpretation of their empirical person and firm effects. The model also yields an assortative matching result that predicts a negative correlation between estimated person and firm effects, which is consistent with most empirical evidence. Finally, the model makes novel predictions about the relationship between the person and firm effects and separation behavior, job duration, and firm size. In the second half of the paper, I test the model's empirical predictions. I estimate fixed and mixed effects specifications of the equilibrium wage function on the LEHD database. The mixed effect specifications generalize the earlier work of AKM and others. The learning component of the matching model implies a specific structure for the error covariance. I exploit this structure to test whether earnings residuals are consistent with Bayesian learning, and to estimate structural parameters of the matching model. I find considerable support for the matching model in these data. |
| Keywords: | matching, learning, heterogeneity, longitudinal linked data, mixed model |
| JEL: | J31 D83 C23 |
| Date: | 2005–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0511012&r=lab |
| By: | Andreas Pollak |
| Abstract: | The framework of a general equilibrium heterogeneous agents model is used to study the optimal design of an unemployment insurance scheme and the voting behaviour on unemployment policy reforms. Agents, who have a limited lifetime and participate in the labour market until they reach the retirement age, can either be employed or unemployed in each period of their working life. Unemployed agents receive job offers of different (match) qualities. Moreover, unemployed agents suffer a decline of their individual productivity during unemployment, whereas the productivity of employed agents increases over time. Any form of unemployment insurance must take into account an important trade-off. On the one hand, generous benefits are desirable as they provide good insurance of the risk-averse agents against unforeseen income fluctuations (caused by layoffs and the randomness of individual job offers). On the other hand, high benefits induce a moral-hazard problem, as certain groups of agents choose to decline job offers that, while not being as attractive as the unemployment benefit from an individual point of view, a central planner would make them accept. An optimal unemployment insurance scheme is one that maximizes the expected lifetime utility of a newly born agent. Two types of unemployment insurance are considered, one with defined benefits and one with defined replacement ratios. A numerical version of the model is calibrated to the West German economy and simulated at ½-monthly frequency, resulting in an agent’s life-span of 1440 periods. The welfare maximising unemployment insurance scheme is determined in simulations. Under this optimal system, no payments are made to short-term unemployed agents. Long-term unemployed receive rather low (social assistance level) benefits, the optimal level of which depends on the assumed degree of risk aversion. Defined benefit systems provide a higher welfare than defined replacement ratios. I then address the question whether the majority of population would support the optimal system given the status quo. It turns out that older or unemployed agents tend vote in favour of the status quo, whereas young employed agents would approve the reform. If voters can choose between keeping their current unemployment system and jumping to the equilibrium associated with the optimal policy, there is a slight majority of just above 50% for the optimal policy. Finally, a more realistic case is considered, in which voters do not choose between the long-rung equilibria associated with policy changes, but take into account the transition process to the new equilibrium. The adjustment process of the macro environment after the policy reform is computed for a time span of sixty years. As some of the relevant variables adjust very slowly to their new long-run equilibrium values, the effect of the transition process on voting behaviour cannot be neglected |
| JEL: | C61 J64 J65 |
| Date: | 2005–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:sce:scecf5:324&r=lab |
| By: | Owen A O'Donnell (University of Macedonia); Furio C. Rosati (UCW Project; Erasmus University Rotterdam - Department of Health Policy and Management) |
| Abstract: | We test whether work in childhood impacts on health. We focus on agricultural work, the dominant form of child work worldwide. Data are from the Vietnam Living Standards Survey, 1992-93 and 1997-98. We correct for both unobservable heterogeneity and simultaneity biases. Instruments include small area labour market and education conditions obtained from community level surveys. We use three indicators of health: body mass index; reported illness; and, height growth. There is clear evidence of a healthy worker selection effect. We find little evidence of a contemporaneous impact of child work on health but work undertaken during childhood raises the risk of illness up to five years later and the risk is increasing with the duration of work. There is no evidence that work impedes the growth of the child. |
| Keywords: | Child labour, health, Vietnam |
| JEL: | I12 J13 J22 J28 J43 |
| Date: | 2004–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:53&r=lab |
| By: | Giuseppe Tattara (University of Venice, Dept economics); Marco Valentini (University of Venice, Dept statistics) |
| Abstract: | This research exploits a large employer-level panel dataset in order to analyse employment and worker flows for all establishments in a highly industrialized region in the North- East of Italy, the Veneto. Our results have relevance for models of job creation, job destruction and labour excess reallocation. The relation between separations from and accessions to existing jobs and between worker flows and job flows is scrutinized. Excess reallocation, the difference between worker flows and job flows at the plant level, is substantial. Mortality for new job matches is quite high and many new accessions are mismatched and lead to separations. Worker flows are very high for young workers to reduce drastically for workers after 35 years of age. The time series behaviour of worker flows and job excess reallocation from 1982 to 1996 is examined; worker level heterogeneity and employer level heterogeneity are discussed in determining the cyclical pattern of such flows and their rapid increment in more recent years. On this the paper makes progress in respect to the previous literature where turnover and excess reallocation are examined mainly in a static framework. |
| Keywords: | Regional Labour Markets; Job Flows; Worker Flows; Reallocation; Matched employer-employee panel data. |
| JEL: | R23 J21 J44 |
| Date: | 2005–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0511013&r=lab |
| By: | Holmlund, Helena (Swedish Institute for Social Research, Stockholm University); Sund, Krister (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | Girls outperform boys in school. We investigate whether the gender performance gap can be attributed to the fact that the teacher profession is female dominated, that is, is there a causal effect on student outcomes from having a same-sex teacher? Using data on uppersecondary school students and their teachers from the municipality of Stockholm, Sweden, we find that the gender performance differential is larger in subjects where the share of female teachers is higher. We argue, however, that this effect can not be interpreted as causal, mainly due to teacher selection into different subjects and nonrandom student-teacher matching. Exploring the fact that teacher turnover and student mobility give rise to variation in teacher’s gender within student and subject, we estimate the effect on student outcomes of changing to a teacher of the same sex. We find no strong support for our initial hypothesis that a same-sex teacher improves student outcomes. |
| Keywords: | - |
| Date: | 2005–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2005_005&r=lab |
| By: | Kamil Galuscak; Daniel Muenich |
| Abstract: | We explain movements in the UV space, i.e. the relationship between stocks of unemployment and vacancies known as the Beveridge curve, in the Czech Republic during 1995-2004. While the Beveridge curve is described by labour market stocks, we explain shifts in the Beveridge curve using gross labour market flows by estimating the matching function. We interpret parameter changes in the matching function during the business cycle, distinguishing cyclical and structural changes in the unemployment rate. We find that labour market flows are very good coincidence predictors of turning points in the business cycle. We show that the Czech economy already suffers from the labour market hysteresis common in many other developed market economies in the EU. |
| Keywords: | Beveridge curve, Czech Republic, matching function, panel data, structural unemployment. |
| JEL: | E24 E32 J41 J64 C23 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2005/2&r=lab |
| By: | Amelie Constant (IZA Bonn); Yochanan Shachmurove (Department of Economics, University of Pennsylvania); Klaus F. Zimmermann (Bonn University, IZA and DIW Berlin) |
| Abstract: | This paper addresses a central issue to migration the role of immigrants in entrepreneurial activity. In particular, the paper focuses on the determinants of the decision to become an entrepreneur for Turks living in Germany. The paper provides some important benchmarks, including the self-employment behavior of natives. The paper utilizes a comprehensive and reliable data base, the German Socioeconomic Panel to undertake systematic econometric analyses using appropriate statistical methods. The findings are that observable characteristics play different roles in the self-employment choice of immigrants and natives, whereas age-earnings profiles are similar for native and immigrant entrepreneurs. |
| Keywords: | Entrepreneurship, Self-employment, Immigration, Guest-workers, Turkey, Germany, European Union, German Socioeconomic Panel Data, Binomial Logit, Treiman international occupational prestige scale. |
| JEL: | J0 C23 C25 F22 J23 J61 |
| Date: | 2005–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:05-029&r=lab |
| By: | Justin Wolfers |
| Abstract: | Theory implies that employment protection will unambiguously decrease job flows. However, cross-country comparisons of annual rates of job reallocation seem to show that employment protection has no discernible effect on job flows. This paper presents a model that shows that employment protection does not significantly alter a firm’s response to highly persistent shocks – such as those present in annual data. By contrast, quarterly job flows will reflect highly transitory shocks – such as those associated with the seasonal cycle. It is here that employment protection should reduce job flows. Testing this hypothesis requires a consistent set of cross-country set of quarterly job flows. In the absence of such data, a novel approach is used, manipulating available household survey data. Specifically, a measure of job flows caused by the seasonal cycle is constructed. Analyzing these flows across 14 OECD countries, employment protection is shown to have significant and economically meaningful effects on job flows. Indeed, the size of the effect is sufficient to confirm Blanchard and Portugal’s hypothesis that it is employment protection that explains the different pattern of labor turnover between Portugal and the USA. |
| Keywords: | Employment protection, job flows, worker flows, seasonality, firing costs, labor market institutions |
| JEL: | E24 E32 |
| Date: | 2005–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:sce:scecf5:98&r=lab |
| By: | Chris van Klaveren (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Bernard M.S. van Praag (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Henriëtte Maassen van den Brink (Faculty of Economics and Econometrics, Universiteit van Amsterdam) |
| Abstract: | An empirical model is developed where the collective household model is used as a basic framework to describe the time allocation problem. The collective model views household behavior as the outcome of maximizing a household utility function which is a weighted sum of the utility functions of the male and the female. In this paper we estimate the two individual utility functions and the household power weight distribution, which is parameterized per household. The model is estimated on a sub-sample of the British Household Panel Survey, consisting of two-earner households. The empirical results suggest that: (1) Given that the weight distribution is wage dependent, preferences of males and females differ, which rejects the unitary model; (2) The male and female utility functions are weighted differently in the household function; (3) The power differences are explained by differences in the ratio of the partners' hourly wages, the presence of young children and the non-labor household income; (4) Both males and females have a backward bending labor supply curve. |
| Keywords: | Collective household models; Labor supply; Time allocation |
| JEL: | D12 D13 J22 |
| Date: | 2005–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20050096&r=lab |
| By: | Maria Enchautegui; Richard B. Freeman |
| Abstract: | Puerto Rico has an extraordinarily low employment rate for men. We document the low employment rate using Census of Population and labor force survey data and offer "the rich uncle (Sam) hypothesis" that the connection of the relatively poor economy of Puerto Rico to the wealthier US has created conditions that generate low employment. In support of the hypothesis, we show: 1) that GNP and GDP have diverged on the island, distorting the relationship between GDP and employment, due potentially to federal tax benefits to companies operating in Puerto Rico; 2) transfers to Puerto Rican families funded mainly by the federal government, which account for about 22 percent of personal income; 3) open borders to the U.S. that give men with high desire for work incentive to migrate to the US, and potentially creates a lower bound to wages on the island; (4) a wage structure with relatively higher earnings in low paid jobs; and (5) employment in the informal sector, which is unmeasured in official statistics. We note that other regional economies with rich "uncles", such as East Germany with West Germany, Southern Italy with Northern Italy, have comparable employment problems. |
| JEL: | J4 J6 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11751&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:sedapp:129&r=lab |
| By: | Marco Cozzi (Economics University College London and UPENN) |
| Abstract: | This paper develops a dynamic general equilibrium model to identify the impact of worse labour market conditions on the property crimes involvement of black American males. The related empirical evidence unambiguously shows higher participation in crime for black than for white males. In 1996, for example, the property crimes arrest rate by race (per 1.000 people) was equal to 6,43 for Whites and 18,3 for Blacks. Another set of stylised facts show for the same racial group worse labour market performances, with the African Americans supplying less hours of labour, gaining lower wages, experiencing both higher unemployment duration and rates. The theoretical model exploits the latter source of information to quantitatively assess the differences in crime induced by the different labour market outcomes. An infinitely lived agents model is developed, allowing for agents to be heterogeneous along four dimensions: race (synthesised by the labour market opportunities), education, employment status and asset holdings. The model is calibrated relying on US data and solved numerically. Preliminary results show that the observed labour market outcomes fully account for the substantial differences in the crime behaviours of the two racial groups. The model is in turn used both to understand to what extent the patterns in the race wage differentials can explain the observed decrease in the black labour supply and to compare some policy experiments aimed at reducing the aggregate crime rate |
| Keywords: | Property crimes, Race, Unemployment, Wealth Inequality. |
| JEL: | K42 D58 D99 J15 |
| Date: | 2005–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:sce:scecf5:339&r=lab |
| By: | Alberto Bennardo (Università di Salerno, CSEF and CEPR); Salvatore Piccolo (Università di Salerno, CSEF and Northwestern University) |
| Abstract: | We study a general equilibrium model where agents’ preferences, productivity and labor endowments depend on their health status, and occupational choices affect individual health distributions. Efficiency typically requires agents of the same type to obtain different expected utilities if assigned to di¤erent occupations. Under mild assumptions, workers with riskier jobs must get higher expected utilities if health a¤ects production capabilities. The same holds if health affects preferences and health enhancing consumption activities are sufficiently effective, so that income and health are substitutes. The converse obtains when health a¤ects preferences, but health enhancing consumption activities are not very effective, and hence income and health are complements. Competitive equilibria are first-best if lottery contracts are enforceable, but typically not if only assets with deterministic payoffs are traded. Compensating wage differentials which equalize the utilities of workers in different jobs are incompatible with ex-ante efficiency. Finally, absent asymmetric information, there exist deterministic cross-jobs transfers leading to ex-ante efficiency. |
| Keywords: | compensating wage differentials, competitive markets, individual health risks, Pareto efficiency |
| JEL: | D5 D61 D80 I18 |
| Date: | 2005–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:145&r=lab |
| By: | Sjef Ederveen (CPB Netherlands Bureau for Economic Policy Analysis); Laura Thissen (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | This study poses the question about whether labour market institutions can explain unemployment rates in the ten new European Union member states. In five out of the ten new member states, unemployment rates lie above the average in the 15 member states of the European Union (EU-15) that comprised the EU prior to May 2004. The study finds that labour market institutions in the acceding countries are less rigid than in the EU-15. Moreover, labour market institutions explain only a minor part of unemployment in the new EU member states. This does not mean that these countries have no labour market problems. Just as in the EU-15, a great deal of heterogeneity exists among the acceding countries. In some of them, labour market reforms could prove a key issue in improving employment performance. The main worry is the poor labour market performance in Poland and the Slovak Republic, where unemployment has risen to almost 20%. The main reasons for this growth are i) postponed restructuring in combination with tight monetary policy; ii) poor governance; and iii) an increasing labour force. |
| Keywords: | labour market institutions, social security, wage bargaining, unemployment, transition economies, EU accession countries |
| Date: | 2004–06 |
| URL: | http://d.repec.org/n?u=RePEc:epr:enepwp:027&r=lab |
| By: | Dupuy,Arnaud; Marey,Philip (ROA rm) |
| Abstract: | Skill-biased technical change is usually interpreted in terms of the efficiency parameters of skilled and unskilled labor. This implies that the relative productivity of skilled workers changes proportionally in all tasks. In contrast, we argue that technical changes also affect the curvature of the distribution of relative productivity. Building on Rosen''s (1978) tasks assignment model, this implies that not only the efficiency parameters of skilled and unskilled workers change, but also the elasticity of substitution between skill-types of labor. Using data for the United States between 1963 and 2002, we find significant empirical support for a decrease in the elasticity of substitution at the end of the 70s followed by an increase at the beginning of the 90s. This pattern of the elasticity of substitution has contributed to the labor productivity slowdown in the mid 70s through the 80s and to a speedup in the 90s. |
| Keywords: | education, training and the labour market; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2005007&r=lab |