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on Labour Economics |
| By: | Elena Glinskaya (The World Bank); Michael Lokshin (The World Bank) |
| Abstract: | The authors use 1993-94 and 1999-2000 India Employment and Unemployment surveys to investigate wage differentials between the public and private sectors as well as workers' decisions to join a particular sector. To obtain robust estimates of the wage differential, they apply three econometric techniques each relying on a different set of assumptions about the process of job selection. All three methods show that differences in wages between public sector workers and workers in the formal-private and informal-casual sectors are positive and high. Estimates show that, on average, the public sector premium ranges between 62 percent and 102 percent over the private-formal sector, and between 164 percent and 259 percent over the informal-casual sector, depending on the choice of methodology. The authors' review of wage differentials (estimated using similar methodologies) across the world shows that India has one of the largest differentials between wages of public workers and workers in the formal private sector. The wage differentials in India tend to be higher in rural as compared with urban areas, and are higher among women than among men. The wage differential also tends to be higher for low-skilled workers. There is considerable evidence of an increase in the wage differential between 1993-94 and 1999-2000. |
| Keywords: | Private sector development, Labor and employment, Public sector management |
| Date: | 2005–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3574&r=lab |
| By: | Wiji Arulampalam (University of Warwick); Alison L. Booth (Department of Economics, University of Essex); Mark L Bryan (Institute for Social and Economic Research) |
| Abstract: | Using harmonised data from the European Union Household Panel, we analyse gender pay gaps by sector across the wages distribution for ten countries. We find first, that quantile regression estimates are preferred to the OLS estimates, which give a misleading picture of gender pay gaps. Second, gender pay gaps are typically bigger at the top and the bottom of the wage distribution than in the middle, a finding that is consistent with (whilst not proving) the existence of sticky floors and glass ceilings. Third, the gender pay gap is typically higher at the top than the bottom end of the wage distribution, suggesting that glass ceilings are more prevalent than sticky floors and that these prevail in the majority of our countries. |
| Keywords: | european union, gender, quantile regression, wage differentials |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2005-25&r=lab |
| By: | Stephania Albanesi (Columbia University); Claudia Olivetti (Department of Economics, Boston University) |
| Abstract: | This paper explores the hypothesis that gender wage differentials arise from the interaction between the intra-household allocation of labor and the contractual relation between firms and workers in the presence of private information on workers’ labor market attachment. In our model, households efficiently choose the contribution of each spouse to home production. Workers with high home hours are less attached to market work. Individual home hours and effort applied to market work are private information. Firms offer incentive compatible labor contracts that are constrained-efficient. Optimal contracts imply earnings that are inversely related to home hours. If firms believe women to be less attached to market work than men, they will offer women contracts with lower earnings and lower hours even in the absence of gender differences in productivity. If firms believe that labor market attachment is the same across genders, they will offer the same contract to male and female workers. Spouses’ optimal allocation of home hours will respond to firms’ beliefs, thus generating the potential for statistical discrimination by gender. It is the incentive problem in the labor market that gives rise to statistical discrimination in our model. The central role for informational problems as an important determinant of gender differences in labor market outcomes is motivated by the large variation in gender earnings differentials across industries and occupations observed in the data. We document these differences using Census data and we relate them to the severity of incentive problem across industries and occupations. |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:bos:macppr:wp2005-004&r=lab |
| By: | Manolis Galenianos; Philipp A. Kircher |
| Abstract: | We develop an equilibrium directed search model of the labor market where workers can simultaneously apply for multiple jobs. The main result is that all equilibria exhibit wage dispersion despite the fact that workers and firms are homogeneous. Wage dispersion is driven by the simultaneity of application choice. Risk-neutral workers apply for both ‘safe’ and ‘risky’ jobs. The former yield a high probability of a job offer, but for low pay, and act as a fallback option; the latter provide with higher potential payoff, but are harder to get. Furthermore, the density of posted wages is decreasing, consistent with stylized facts. Unlike most directed search models, the equilibria are not constrained efficient. |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse20_2005&r=lab |
| By: | Claudia Olivetti (Department of Economics, Boston University); Barbara Petrongolo (London School of Economics, CEP, CEPR and IZA) |
| Abstract: | There is substantial international variation in gender pay gaps, from 25-30% in the US and the UK, to 10-20% in a number of central and northern EU countries, down to an average of 10% in southern EU. We argue that non-random selection of women into work across countries may explain part of such variation. This ides is supported by the observed variation in employment gaps, from 10% in the US, UK and Scandinavian countries, to 15-25% in northern and central EU, up to 30-40% in southern EU and Ireland. If women who are employed tend to have relatively high-wage characteristics, low female employment rates may become consistent with low gender wage gaps simply because low-wage women would not feature in the observed wage distribution. We explore this idea across the US and EU countries estimating gender gaps in potential wages. In order to do this, we recover information on wages for those not in work in a given year by simply making assumptions on the position of the imputed wage observations with respect to the median, not on the actual level. Imputation is based on wage observations from nearest available waves in the sample and/or observable characteristics of the nonemployed. We estimate median wage gaps on the resulting imputed wage distributions. Our estimates for 1999 deliver higher median wage gaps on imputed rather than actual wage distributions for most countries in the sample, meaning that, as one would have expected, women tend on average to be more positively selected into work than men. However, this di¤erence is tiny or virtually zero in the US and northern and central EU countries (except Ireland), and becomes sizeable in Ireland, France and southern EU, all countries in which gender employment gaps are high. In particular, in Spain, Portugal and Greece the median wage gap on the imputed wage distribution reaches 20 log points, a closely comparable level to that of the UK and other central and northern EU countries. |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:bos:macppr:wp2005-003&r=lab |
| By: | Christian Grund |
| Abstract: | The internet virtually revolutionized the possibilities of employee recruiting. First of all, this contribution undertakes a description of the market. Then, advantages and possible problems of the recruitment via internet are discussed. The empirical study analyses the issues, which persons search for and find a new job via internet and which consequences arise for these persons. The results include that rather well educated persons find jobs with long working hours via internet. Controlling for several individual and job-based characteristics no differences with regard to wages and job satisfaction are found compared to other ways of recruiting. |
| Keywords: | Job satisfaction; Job search; Internet; Matching; Recruiting; Wages |
| JEL: | M12 J64 L86 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse18_2005&r=lab |
| By: | Bruno, CREPON; Muriel, DEJEMEPPE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Marc, GURGAND |
| Abstract: | This article evaluates the effects of intensive counseling schemes that are provided to about 20% of the unemployed since the 2001 French unemployment policy reform (PARE). Several of the schemes are dedicated at improving the quality of assignment of workers to jobs. As a result, it is necessary to assess their impact on unemployment recurrence as well as unemployment duration. Using duration models and a very rich data set, we can identify heterogeneous and time-dependent causal effects of the schemes. We find significant favorable effects on both outcomes, but the impact on unemployment recurrence is stronger than on unemployment duration. In particular, the program shifts the incidence of recurrence, one year after employment, from 33 to 26%. This illustrates that labor market policies evaluations that consider unemployment duration alone can be misleading. |
| Date: | 2005–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2005034&r=lab |
| By: | Nicolai Kristensen (The World Bank); Dorte Verner (The World Bank) |
| Abstract: | The authors investigate the extent and nature of distortions in the labor market in the Republic of Côte d'Ivoire by using quantile regression analysis on employer-employee data from the manufacturing sector. They find that the labor markets in Côte d'Ivoire do not seem to be much distorted. Unions may influence employment through tenure but do not seem to influence wages directly except for vulnerable minorities that seem protected by unions. Establishment-size wage effects are pronounced and highest for white-collar workers. This may be explained by the efficiency wage theory, so that, even in the absence of unions, segmentation and inefficiencies will still be present as long as firms seek to retain their employees by paying wages above the market clearing level. The inefficiency arising from establishment-size wage effects can be mitigated by education. Furthermore, the authors find that the premium to education is highly significantly positive only for higher education, and not for basic education, indicating that educational policies should also focus on higher education. |
| Keywords: | ??? |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3771&r=lab |
| By: | Jorg, LINGENS; Klaus, WAELDE |
| Abstract: | We investigate how continental European unemployment can be reduced without reducing unemployment benefits and without reducing the net income of low-wage earners. Lower unemployment replacement rates reduce unemployment, the net wage and unemployment benefits. A lower tax on labour increases net wages and - for certain benefit-systems - unemployment benefits as well. Combining these two policies allows to reduce unemployment in countries with “net-Bismarck” and Beveridge systems without reducing net income of workers or the unemployed. Such a policy becomes self-financing under realistic parameter constellations when taxes are reduced only for low-income workers. |
| Keywords: | Inequality; Unemployment; Taxation; Policy reform |
| JEL: | J38 J51 H23 E60 |
| Date: | 2005–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2005033&r=lab |
| By: | Olivier Baguelin (EUREQua) |
| Abstract: | A model of employment relation is provided in which agents choose whether to seek self-esteem through work. When they do, they develop an intrinsic motivation to effort. Depending on non-wage characteristics of the job the employer wants to fill, she can encourage this intrinsic motivation by a well-designed contract. We show that the profitability as well as the efficiency of the employment relation may depend on non-wage gratification opportunities workers get. |
| Keywords: | Intrinsic motivation, self-esteem, moral hazard, profitability, efficiency. |
| JEL: | J24 J32 J33 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:v05062&r=lab |
| By: | Dorte Verner (The World Bank) |
| Abstract: | The author addresses the labor markets in rural and semi-urban Mexico. The empirical analyses show that non-farm income shares increase with overall consumption levels and, also, with time. Rural-dwellers in lower quintiles of the consumption distribution tend to earn a larger share of their nonagricultural incomes from wage labor activities. For the poorest, low-productivity wage labor activities are important. The quantile wage regression analysis for rural Mexico shows a rather heterogeneous impact pattern of individual characteristics across the wage distribution on monthly wages. The author's findings reveal that education is key to earning higher wages, and that workers in more dispersed rural areas earn less than their peers in semi-urban rural areas (localities with less than 15,000 inhabitants). The rural non-farm sector is heterogeneous and includes a great variety of activities and productivity levels across non-farm jobs. Moreover it can reduce poverty in a couple of distinct but qualitatively important ways in rural Mexico. The analysis of non-farm employment in rural Mexico suggests that the two key determinants of access to employment and productivity in non-farm activities are education and location. |
| Keywords: | Agriculture, Poverty, Rural development, Social Development, Labor and employment, Education |
| Date: | 2005–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3561&r=lab |
| By: | Véronique Genre (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Daphne Momferatou (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Gilles Mourre |
| Abstract: | This Paper provides an overview of the magnitude of sectoral wage differentials in the euro area as a whole. Even when adjusting for structural sectoral features such as the skill structure or the proportion of part-timers, average wage levels in services are substantially lower than in manufacturing. The paper also studies how the euro area wage structure compares with that of the United States and the United Kingdom. It discusses some possible determinants of intersectoral wage differentials in the euro area and their likely implications from a policy perspective. A number of worker characteristics (e.g. age, skills, the proportion of temporary or self-employed) are highly correlated with the structure of wage differentials. At the same time, wage differentials are also highly correlated with sector-specific features such as average firm size or capital intensity. Finally, the paper presents some stylised facts on how the euro area wage structure has evolved since the early 1980s. |
| Keywords: | Intersectoral wage differential; wage determination; euro area. |
| JEL: | J31 E24 J41 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:20050024&r=lab |
| By: | Claudia Olivetti (Department of Economics, Boston University) |
| Abstract: | Over the past several decades, married women?s hours of market work increased signi?cantly in the US. I argue that changes in behavior by married women with children account for much of this change. In particular, the pattern of married women?s work hours has changed substantially over the life-cycle. In the past, married women in childbearing age tended to specialize in childrearing and home production activities at the expense of engaging in market work. Now they do not curb the hours worked on the market. What factors contribute to this change in behavior? In this paper, I focus on relative changes in returns to experience as an explanation. I quantitatively assess how these changes in returns to experience contributed to changes in married women?s life cycle pro?les of hours worked. I build a life-cycle model with human capital accumulation and home production in which the basic unit of analysis is a married couple with children, and calibrate it using data from the 1970s and 1990s. I show that changes in returns to experience account for a large part of the observed variation. Moreover, according to the model, the increase in returns to experience accounts for roughly half of the increase in the female/male wage ratio that is found in the data. I also show that a decline in the gender wage gap, holding returns to experience constant, cannot explain the change in the shape of women?s life cycle pro?les. Although the focus of the analysis is the labor supply behavior of women, the model also allows predictions about the behavior of men and single women. These predictions are consistent with the data. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:bos:macppr:wp2005-008&r=lab |
| By: | Kenneth M. Chomitz (The World Bank); Daniel da Mata (Institute of Applied Economic Research (IPEA)); Alexandre Ywata de Carvalho (Institute of Applied Economic Research (IPEA)); João Carlos Magalhães (Institute of Applied Economic Research (IPEA)) |
| Abstract: | There was substantial spatial variation in labor market outcomes in Brazil over the 1990s. In 2000, about one-fifth of workers lived in apparently economically stagnant municipios where real wages declined but employment increased faster than the national population growth rate. More than one-third lived in apparently dynamic municipios, experiencing both real wage growth and faster-than-average employment growth. These areas absorbed more than half of net employment growth over the period. To elucidate this spatial variation, the authors estimate spatial labor supply and demand equations describing wage and employment changes of Brazilian municipios. They use Conley's spatial GMM technique to allow for instrumental variable estimation in the presence of spatially autocorrelated errors. The main findings include: (1) a very strong influence of initial workforce educational levels on subsequent wage growth (controlling for possibly confounding variables such as remoteness and climate); (2) evidence of positive spillover effects of own-municipio growth onto neighbors' wage and employment levels; (3) an exodus from farming areas; (4) relatively elastic response of wages to an increase in labor supply; and (5) evidence of a local multiplier effect from government transfers. |
| Keywords: | Rural development, Labor and employment |
| Date: | 2005–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3752&r=lab |
| By: | Paula Inés Giovagnoli (Universidad Nacional de la Plata); Ariel Fiszbein (The World Bank); Harry Anthony Patrinos (The World Bank) |
| Abstract: | The authors estimate returns to schooling in urban Argentina for a 10-year period. In addition to comparable earnings functions, they also estimate the returns using quantile regression analysis to detect differences in the returns across the distribution. Over time, men in higher quantiles have higher returns to schooling compared with those in the lower quantiles. For women, returns are highest at the lowest quantile. The returns to education increased during the past decade. The authors do not rule out that increased demand for skills is driving the increasing returns over the decade. |
| Keywords: | Labor and employment, Education |
| Date: | 2005–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3715&r=lab |
| By: | Rinku Murgai (The World Bank); Martin Ravallion (The World Bank) |
| Abstract: | Minimum wages are generally thought to be unenforceable in developing rural economies. But there is one solution - a workfare scheme in which the government acts as the employer of last resort. Is this a cost-effective policy against poverty? Using a microeconometric model of the casual labor market in rural India, the authors find that a guaranteed wage rate sufficient for a typical poor family to reach the poverty line would bring the annual poverty rate down from 34 percent to 25 percent at a fiscal cost representing 3-4 percent of GDP when run for the whole year. Confining the scheme to the lean season (three months) would bring the annual poverty rate down to 31 percent at a cost of 1.3 percent of GDP. While the gains from a guaranteed wage rate would be better targeted than a uniform (untargeted) cash transfer, the extra costs of the wage policy imply that it would have less impact on poverty. |
| Keywords: | Poverty, Rural development, Labor and employment |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3640&r=lab |
| By: | Mariano Bosch (The World Bank); William Maloney (The World Bank) |
| Abstract: | The authors study the dynamics of three developing country labor markets using recent advances in the estimation of continuous time Markov processes. They first examine the flows of workers among five states: three types of paid labor, unemployment, and out of the labor force. The authors find a high degree of commonality in patterns of worker flows among the three countries and attempt to compare the flexibility of the markets by examining an index of overall mobility. Second, they seek to establish whether the issues of advanced country labor markets apply to developing country markets or whether the latter constitute a different phylum. Paralleling the mainstream literature on the role of being out of the labor force as discouraged unemployment, the authors then identify some common stylized facts about the role of the informal self-employed and salaried sectors and to what degree they serve as a holding pattern versus a desirable alternative to formal sector work. In the process, the authors identify very strong differences in mobility patterns between men and women and attempt to shed some light on whether these differences arise from discrimination or perhaps instead the constraints imposed by household responsibilities. Finally, they study labor market adjustment across the business cycle in Mexico and identify patterns of job creation and destruction among the three paid sectors and confirm the mainstream view of the role of out of the labor force as a procyclical phenomenon. |
| Keywords: | Labor and employment |
| Date: | 2005–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3583&r=lab |
| By: | Patrick W. Schmitz |
| Abstract: | Consider an employer who wants her employee to work hard. As is well known from the e.ciency wage literature, the employer must pay the (wealth-constrained) employee a positive rent to provide incentives for exerting unobservable e.ort. Alternatively, the employer could make effort observable by costly workplace surveillance. It is argued that a privacy protection law preventing surveillance may increase the total surplus. While such a law reduces the employer’s profit, this loss can be overcompensated by the employee’s gain, because the employer invests in surveillance not only to implement higher effort, but also to reduce the employee’s rent. |
| Keywords: | Privacy protection laws; workplace surveillance; moral hazard |
| JEL: | K31 J83 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse25_2005&r=lab |
| By: | Ingrid Verheul; Andre van Stel; Roy Thurik |
| Abstract: | This study aims at explaining female and male entrepreneurship across countries. Explanatory variables are derived from three streams of literature, including the literature on the determinants of entrepreneurship, the literature on female labor force participation, and that on female entrepreneurship. To test the hypotheses use is made of Global Entrepreneurship Monitor data, including total entrepreneurial activity rates for both women and men for 2002, as well as a range of prospective determinants derived from standardized national statistics. We find that female and male entrepreneurship are largely influenced by the same factors in the same direction. A remarkable exception is life satisfaction for which we find a positive impact on female entrepreneurship and no impact on male entrepreneurship. The paper pays explicit attention to the methodological aspects of investigating the determinants of female and male entrepreneurship. |
| Keywords: | entrepreneurship, gender, determinants of entrepreneurship |
| JEL: | M13 H10 J16 J23 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2005-34&r=lab |
| By: | Kenneth A. Couch (University of Connecticut); Robert Fairlie (University of California, Santa Cruz) |
| Abstract: | Past studies have tested the claim that blacks are the last hired during periods of economic growth and the first fired in recessions by examining the movement of relative unemployment rates over the business cycle. Any conclusion drawn from this type of analysis must be viewed as tentative because the cyclical movements in the underlying transitions into and out of unemployment are not examined. Using Current Population Survey data matched across adjacent months from 1989 to 2004, this paper examines labor market transitions for prime age males to test this hypothesis. Considerable evidence is presented that blacks are the first fired as the business cycle weakens. However, no evidence is found that blacks are the last hired. Instead, blacks are initially hired from the ranks of the unemployed early in the business cycle and later are drawn from non-participation. Narrowing of the racial unemployment gap near the peak of the business cycle is driven by a reduction in the rate of job loss for blacks rather than increases in hiring. There is also evidence that residual differences in the racial unemployment gap vary systematically over the business cycle in a manner consistent with discrimination being more evident in the economy at times when its cost is lower. |
| Keywords: | unemployment, race, business cycle, discrimination |
| JEL: | J1 J6 J7 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2005-50&r=lab |
| By: | Jorge Augusto Paz |
| Abstract: | This work studies the relationship between education and labor market performance, first by making a review of the literature on the subject, and then by examining certain stylized facts. For the empirical evaluation, education is analysed through the educational attainment reached by economic agents and the labor market by certain results: remunerations, probabilities to participate, to be employed or unemployed. The issue of the probability to access better jobs is also approached. Therefore, education is here discussed as an input, and labor market results, as an output. |
| JEL: | I20 J24 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:311&r=lab |