|
on Labour Economics |
| By: | B. Petrongolo; Z. Eckstein (Economics Tel Aviv University); S. Ge |
| Keywords: | minimum wages, compliance, job search, wage growth |
| JEL: | J42 J63 J64 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:76&r=lab |
| By: | Richard Dickens; Mirko Draca |
| Abstract: | There is a growing body of research that measures employment effects of the minimum wageby using longitudinal data on individuals to compare job loss of workers affected by aminimum wage increase with those who are not directly affected. This sort of study requiresgood quality wage data in order to clearly identify these treatment and control groups. Muchof the evidence on the impact of the UK minimum wage uses this technique with poor qualitywage data. This paper examines the impact of the October 2003 increase in the NationalMinimum Wage (NMW) using a much better measure of the wage. We find insignificantnegative effects on the employment retention rates of all adults and, most notably, maleworkers. Analysis of the probability of employment retention across different hourly wagerates also show how sensitive this methodology can be to different definitions of thetreatment and control group. |
| Keywords: | Minimum Wages, Employment Transitions, Wages |
| JEL: | J31 J63 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0693&r=lab |
| By: | Alan Manning; Joanna Swaffield |
| Abstract: | In the UK the gender pay gap on entry to the labour market is approximately zero but afterten years after labour market entry, there is a gender wage gap of almost 25 log points. Thispaper explores the reason for this gender gap in early-career wage growth, considering threemain hypotheses - human capital, job-shopping and 'psychological' theories. Human capitalfactors can explain about 12 log points, job-shopping about 1.5 log points and thepsychological theories about half a log point. But a substantial unexplained gap remains:women who have continuous full-time employment, have had no children and express nodesire to have them earn about 12 log points less than equivalent men after 10 years in thelabour market. |
| Keywords: | Gender Pay Gap, Wage Growth |
| JEL: | J24 J31 J7 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0700&r=lab |
| By: | Marja-Liisa Halko; Klaus Kultti; Juha Virrankoski (Department of Economics University of Helsinki) |
| Keywords: | wage distribution, job search, auctions |
| JEL: | J64 J31 J41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:518&r=lab |
| By: | Andrew Clark; Fabien Postel-Vinay |
| Abstract: | We construct indicators of the perception of job security for various types of jobs in 12 European countriesusing individual data from the European Community Household Panel (ECHP). We then consider the relationbetween reported job security and OECD summary measures of Employment Protection Legislation (EPL)strictness on one hand, and Unemployment Insurance Benefit (UIB) generosity on the other. We find that, aftercontrolling for selection into job types, workers feel most secure in permanent public sector jobs, least secure intemporary jobs, with permanent private sector jobs occupying an intermediate position. We also find thatperceived job security in both permanent private and temporary jobs is positively correlated with UIBgenerosity, while the relationship with EPL strictness is negative: workers feel less secure in countries wherejobs are more protected. These correlations are absent for permanent public jobs, suggesting that such jobs areperceived to be by and large insulated from labor market fluctuations. |
| Keywords: | Perceived Job Security, Employment Protection Legislation, Unemployment Insurance Benefits |
| JEL: | J28 J65 I31 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0678&r=lab |
| By: | Fabio Veras Soares |
| Abstract: | This paper investigates the effect of the minimum wage on employment transitions in Brazil and, in particular, on the informal sector transitions. We estimate the probability of becoming nonemployed (unemployed or out of the labour force) and the probability of moving to the informal sector after minimum wage hikes. We estimate these effects separately for periods with high and low inflation to assess how agents react to minimum wage hikes under different inflationary expectations, particularly, under different degrees of wage indexation. Workers affected by minimum wage increases are compared with similar workers further up in the wage distribution. In order to account for heterogeneity between the treated minimum wage workers and the comparison groups we use a difference-in-differences approach that compares treated and comparison groups in periods with nominal increase in the minimum wage with periods with no increase. In this last case the comparison and treated groups are defined as if there had been an increase in the minimum wage (pseudo-experiment). Such strategy is applied in a parametric way via probit estimates and also in a nonparametric way using kernel propensity score matching method. Our findings suggested that disemploymet effects were more likely to be observed in the late 1990´s than in the early 1980´s. This negative effect affects in 1990 affects both informal and formal workers, but it is not a characteristic of all minimum wage hike episodes. We also find no robust evidence that minimum wage hikes lead to transitions from the formal to the informal sector. |
| JEL: | J6 J38 C21 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2005:164&r=lab |
| By: | Adrian Masters |
| Keywords: | directed search, commitment, mininimum wage |
| JEL: | J41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:347&r=lab |
| By: | Carlos Carrillo-Tudela (Department of Economics University of Essex) |
| Keywords: | Search, experience, contracts, promotion, dual labour markets, discrimination. |
| JEL: | J63 J64 J41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:110&r=lab |
| By: | Andres Erosa; Luisa Fuster; Diego Restuccia |
| Abstract: | An important feature of the U.S. labor market is that, even after controlling for measurable differences in education and experience, the average wage of women with children is 89 percent of the average wage of women without children. This "family gap" in wages accounts for almost half the gender gap in wages. Proponents of mandatory-leave policies argue that career interruptions associated with fertility have long-lasting effects on female employment and are costly in terms of human-capital losses for females. Despite the fact that mandatory leaves are widely applied in developed countries, their effects on the economy are not well understood. We develop and calibrate a general-equilibrium model of fertility and labor-market decisions to study the quantitative impact of such policies. We build on the Mortensen and Pissarides (1994) labor-market framework by introducing male and female workers, general and specific human-capital accumulation on the job, and temporary separations between the worker and a job. We find that: (i) the loss of specific human capital accounts for a small fraction of the wage gaps and (ii) mandatory-leave policies have substantial aggregate and redistributive effects on fertility, employment, and welfare. Interestingly, we find that the general-equilibrium effect of mandatory-leave policies is a reduction in the amount of time females spend at home with children. |
| Keywords: | Labor market ; Labor economics |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:05-08&r=lab |
| By: | Bjoern Bruegemann |
| Keywords: | Employment Protection, Wage Determination, Job Creation and Destruction, Political Economy |
| JEL: | E24 J41 J65 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:811&r=lab |
| By: | Andres Erosa; Luisa Fuster; Diego Restuccia |
| Abstract: | Using panel data from the National Longitudinal Survey of Youth (NLSY), we document that gender differences in wages almost double during the first 20 years of labor market experience and that there are substantial gender differences in employment and hours of work during the life cycle. A large portion of gender differences in labor market attachment can be traced to the impact of children on the labor supply of women. We develop a quantitative life-cycle model of fertility, labor supply, and human capital accumulation decisions. We use this model to assess the role of fertility on gender differences in labor supply and wages over the life cycle. In our model, fertility lowers the lifetime intensity of market activity, reducing the incentives for human capital accumulation and wage growth over the life cycle of females relative to males. We calibrate the model to panel data of men and to fertility and child related labor market histories of women. We find that fertility accounts for most of the gender differences in labor supply and wages during the life cycle documented in the NLSY data. |
| Keywords: | Labor economics ; Wages |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:05-09&r=lab |
| By: | Alan Manning; B Petrongolo |
| Abstract: | In 2003, women working part-time in the UK earned, on average, 22% less than women working full-time. Compared to women who work FT, PT women are more likely to have low levels of education, to be in a couple, to have young and numerous children, to work in small establishments in distribution, hotels and restaurants and in low-level occupations. Taking account of these differences, the PT penalty for identical women doing the same job is estimated to be about 10% if one does not take account of differences in the occupations of FT and PT women and 3% if one does. The occupational segregation of PT and FT women can explain most of the aggregate PT pay penalty. In particular, women who move from FT to PT work are much more likely to change employer and/or occupation than those who maintain their hours status. And, when making this transition, they tend to make a downward occupational move, evidence that many women working PT are not making full use of their skills and experience. Women working PT in the other EU countries have similar problems to the UK but the UK has the highest PT pay penalty and one of the worst problems in enabling women to move between FT and PT work without occupational demotions. At the same time, PT work in the UK carries a higher job satisfaction premium (or a lower job satisfaction penalty) than in most other countries. Policy initiatives in recent years like the National Minimum Wage, the Part-Time Workers Regulations and the Right to Request Flexible Working appear to have had little impact on the PT pay penalty as yet although it is too early to make a definitive assessment of the full impact of some of these regulations. The most effective way to reduce the PT pay penalty would be to strengthen rights for women to move between FT and PT work without losing their current job. |
| Keywords: | employment transitions, part-time work, motherhood, EU, equality |
| JEL: | D12 H31 J16 J18 J2 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0679&r=lab |
| By: | Michael W. L. Elsby |
| Abstract: | This paper seeks to contribute to the literature on downward nominal wage rigidity (DNWR)along two dimensions. First, we formulate and solve an explicit model of wage-setting in thepresence of worker resistance to nominal wage cuts - something that has previously beenconsidered intractable. In particular, we show that this resistance renders wage increases(partially) irreversible. Second, using this model, we can explain why previous estimates ofthe macroeconomic effects of DNWR have been so weak despite remarkably robustmicroeconomic evidence. In particular, we show that previous studies have neglected thepossibility that DNWR can lead to a compression of wage increases as well as decreases.Thus, the literature may have been overstating the costs of DNWR to firms. Using micro-datafor the US and Great Britain, we find robust evidence in support of the predictions of themodel. In the light of this evidence, we conclude that increased wage pressure due to DNWRmay not be as large as previously envisaged, but that the data is nevertheless consistent with amodel in which workers resist nominal wage cuts. |
| Keywords: | Nominal Wage Rigidity, Loss Aversion, Irreversibility |
| JEL: | J30 J41 E24 E31 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0704&r=lab |
| By: | Zenou, Yves (The Research Institute of Industrial Economics) |
| Abstract: | The Todaro Paradox states that policies aimed at reducing urban unemployment are bound to backfire: they will raise rather than reduce urban unemployment. The aim of this paper is to reexamine this paradox in the context of efficiency wage and search-matching models. For that, we study a policy that consists in decreasing the urban unemployment benefit. In an efficiency wage model, we find that there is no Todaro paradox while this is not always true in a search-matching model since a decrease in the urban unemployment benefit can increase both urban employment and unemployment. |
| Keywords: | Efficiency Wages; Search-Matching; Rural-Urban Migration; Policy |
| JEL: | D83 J41 J64 O15 |
| Date: | 2005–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0652&r=lab |
| By: | Leena Rudanko |
| Keywords: | Search, Matching, Wage Contracts, Business Cycles |
| JEL: | E24 E32 J41 J63 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:876&r=lab |
| By: | Antonio Cabrales; Antoni Calvo-Armengol; Nicola Pavoni (Department of Economics University College of London) |
| Keywords: | Social Preferences, Skill Segregation, Internal Labor Market. |
| JEL: | E24 J31 J41 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:205&r=lab |
| By: | John Kennan |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:555&r=lab |
| By: | Jonathan Heathcote (Department of Economics New York University); Kjetil Storesletten |
| Keywords: | Insurance, Labor supply, Productivity, Wage dispersion, Welfare. |
| JEL: | D31 D58 D91 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:107&r=lab |
| By: | Andrey Launov; Christian Holzner (Social Policy and Labor Markets IFOInstitute for Economic Research) |
| Keywords: | Search, wage correlation, social returns to education |
| JEL: | J21 J23 J64 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:604&r=lab |
| By: | Antonella Trigari; Mark Gertler (Economics IGIER, Università Bocconi) |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:921&r=lab |
| By: | Alan Manning |
| Abstract: | In 1996 the UK made major changes to its welfare system for the support of the unemployedwith the introduction of the Jobseeker's Allowance. This tightened the work searchrequirements needed for eligibility for benefit. It resulted in large flows out of claimantstatus, but, this paper concludes, not into employment. The movement out of claimant statuswas largest for those with low levels of search activity. But, this paper finds no evidence ofincreased job search activity as a result of this change. |
| Keywords: | Unemployment Insurance, Job Search, Labour Supply |
| JEL: | J64 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0697&r=lab |