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on Labour Economics |
| By: | Robinson, Helen (Cardiff Business School); Wadsworth, Jonathan |
| Abstract: | The advent of any earnings boost, such as provided by the introduction of a minimum wage, might be expected to reduce the supply of low paid individuals wanting to hold a second job. This paper uses difference-in-differences estimation on a panel of individuals matched across successive Labour Force Surveys around the time of the introduction of the national minimum wage in the United Kingdom in order to estimate the impact of the minimum wage and its subsequent upratings on second job working. There is little evidence to suggest that the extra pay provided by the introduction of the minimum wage was sufficient to affect the incidence of second job holding significantly. However, hours worked in the main job by second job holders may have risen relative to those not covered by the minimum wage; and hours worked in second jobs may have fallen for those whose second job was initially below the minimum. |
| Keywords: | Second jobs; minimum wages |
| JEL: | J23 J31 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2006/14&r=lab |
| By: | David H. Autor; Lawrence F. Katz; Melissa S. Kearney |
| Abstract: | This paper analyzes a marked change in the evolution of the U.S. wage structure over the past fifteen years: divergent trends in upper-tail (90/50) and lower-tail (50/10) wage inequality. We document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years (since 1980). Wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987, but it has ceased growing (and for some measures actually narrowed) since the late 1980s. Furthermore we find that occupational employment growth shifted from monotonically increasing in wages (education) in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage (education) distribution in the 1990s. We characterize these patterns as the “polarization” of the U.S. labor market, with employment polarizing into high-wage and low-wage jobs at the expense of middle-wage work. We show how a model of computerization in which computers most strongly complement the non-routine (abstract) cognitive tasks of high-wage jobs, directly substitute for the routine tasks found in many traditional middle-wage jobs, and may have little direct impact on non-routine manual tasks in relatively low-wage jobs can help explain the observed polarization of the U.S. labor market. |
| JEL: | J3 D3 O3 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11986&r=lab |
| By: | Carlsson, Mikael (Research Department); Eriksson, Stefan (Department of Economics); Gottfries, Nils (Department of Economics) |
| Abstract: | How well do alternative labor market theories explain variations in net job creation? According to search-matching theory, job creation in a firm should depend on the availability of workers (unemployment) and on the number of job openings in other firms(congestion). According to afficiency wage and bargaining theory, wages are set above the market clearing level and employment is determined by labor demand. To compare models, we estimate an encompassing equation for net job creation on firm-level data. The results support demand-oriented theories of job creation, whereas we find no evidence in favor of the search-matching theory. |
| Keywords: | Job Creation; Involuntary Unemployment; Search-Matching; Labor Demand. |
| JEL: | E24 J23 J64 |
| Date: | 2006–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2006_007&r=lab |
| By: | René Böheim (Department of Economics, Johannes Kepler University Linz, Austria and IZA, Bonn.); Ulrike Muehlberger (Department of Economics, Vienna University of Economics & B.A.) |
| Abstract: | We analyse the characteristics of workers who provide work on the basis of a civil or commercial contract, but who are dependent on or integrated into the firm for which they work. We argue that these dependent self-employed lose their rights under labour law, receive less favourable benefits from social security protection and are often beyond trade union representation and collective bargaining. Using data from the British Labour Force Survey we test two hypotheses: (1) Dependent self-employed workers are significantly different from both employees and (independent) self-employed individuals, thus forming a distinct group. (2) Dependent selfemployed workers have lower labour market skills, less labour market attachment and, thus, less autonomy than self-employed workers. The data support our hypothesis that dependent selfemployed workers are a distinct labour market group which differs from both employees and independent self-employed individuals. Men, older workers, those with low education and a low job tenure have greater odds of working in dependent self-employment than their counterparts. Our results suggest that dependent forms of self-employment are used by firms to increase labour flexibility. |
| JEL: | K31 J21 L22 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp091&r=lab |
| By: | Xavier Cuadras Morató; Xavier Mateos-Planas |
| Abstract: | A skill-biased change in technology can account at once for the changes observed in a number of important variables of the US labour market between 1970 and 1990. These include the increasing inequality in wages, both between and within education groups, and the increase in unemployment at all levels of education. In contrast, in previous literature this type of technology shock cannot account for all of these changes. The paper uses a matching model with a segmented labour market, an imperfect correlation between individual ability and education, and a fixed cost of setting up a job. The endogenous increase in overeducation is key to understand the response of unemployment to the technology shock. |
| Keywords: | Unemployment, wage premium, overeducation, SBTC |
| JEL: | E24 J31 J64 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:938&r=lab |
| By: | Wouter Vermeulen; Jos van Ommeren |
| Abstract: | Why are regional unemployment differentials in Europe so persistent if, as the wage curve literature demonstrates, there is no compensation in labour markets? We hypothesise that workers in high-unemployment regions are compensated in housing markets. Modelling regional unemployment differentials as a consequence of centralised wage bargaining, we show that clearing of land markets may undo the incentive for workers to migrate to low-unemployment regions in general equilibrium. The compensating differentials hypothesis is tested on city-level data for several countries. Controlling for variation in income and amenities, housing is found to be about 3 percent less expensive on average in cities where unemployment is 10 percent up. An analysis of housing demand survey data, which takes account of housing heterogeneity, yields a similar negative relationship. The magnitude of the income effect generated by this compensating differential is consistent with a -0.10 wage curve elasticity. Workers in regions with high unemployment and low per capita income are therefore not necessarily worse off, and regional support programs should take this into account. |
| Keywords: | regional unemployment; housing markets; wage curve; compensating differentials; hedonic models; regional policy |
| JEL: | R23 R13 J64 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:57&r=lab |
| By: | Diego Comin; Erica L. Groshen; Bess Rabin |
| Abstract: | Has greater turbulence among firms fueled rising wage instability in the U.S.? Gottschalk and Moffitt ([1994]) find that rising earnings instability was responsible for one third to one half of the rise in wage inequality during the 1980s. These growing transitory fluctuations remain largely unexplained. To help fill this gap, this paper further documents the recent rise in transitory fluctuations in compensation and investigates its linkage to the concurrent rise in volatility of firm performance documented by Comin and Mulani [2005] among others. After examining models that explain the relationship between firm and wage volatility, we investigate the linkage in three complementary panel data sets, each with its own virtues and limitations: the Panel Study of Income Dynamics (detailed information on workers, but no information on employers), COMPUSTAT (detailed firm information, but only average wage and employment levels about workers), and the Federal Reserve Bank of Cleveland's Community Salary Survey (wages and employment for specific occupations for identified firms). We find complementary support for the hypothesis in all three data sets. We can rule out straightforward compositional churning as an explanation for the link to firm performance in high-frequency (over spans of 5 years) wage volatility, although not in more persistent fluctuations (between successive 5-year averages). We conclude that the rise in firm turbulence explains about sixty percent of the recent the rise in the high frequency (5-year) volatility of wages. |
| JEL: | J3 J5 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12032&r=lab |
| By: | Okkerse L. |
| Abstract: | This paper looks at the effects of migration in labour market models that allow for un-employment in equilibrium. We include three different models: a competitive labour market model, a wage bargaining model and an efficiency wage model. We simulate a one-percentage point increase in the labour force due to migration. Simulation results show that effects of migration do not differ that much between different labour market models: wages decrease with 0.3% to 0.4% and the unemployment rate increases with at most 0.24 percentage points. Migration also positively affects public financing by increasing government's budget with 0.3% to 0.5%. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2005036&r=lab |
| By: | Chusseau N.; Dumont M.; Hellier J.; Rayp G.; Willemé P. |
| Abstract: | In this paper we propose an explanation for the substantial migration inflows that occurred in North-Western Europe in the 1960s using a modified Heckscher-Ohlin model to show how migration inflows and the product specialisation pattern were linked to the skill premium of countries. In the 1960s, wages of low-skilled workers were essentially determined by bargaining or by institutional rules (e.g. minimum wages) that prevented labour markets from clearing automatically. Hence, immigration to Western Europe was essentially driven by the countries’ demand for lowskilled labour resulting from the institutionally determined skill premium. The model implies that, given a country’s domestic endowment of high-skilled labour, a high skill premium boosts immigration because it fosters the demand for low-skilled workers. Countries enforced higher wage inequality by importing more low-skilled workers from the South. This proposition is tested by estimating a push-pull immigration model for four Western-European countries (Belgium, France, West Germany and Sweden). In support of the model’s prediction, we find that the skill premium has a significant positive effect on immigration. Immigration inflows were mainly driven by the demand for low-skilled labour in the host countries. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2005025&r=lab |
| By: | Lex Borghans; Bas ter Weel; Bruce A. Weinberg |
| Abstract: | Despite indications that people skills are important for understanding individual labor-market outcomes and have become more important over the last decades, there is little analysis by economists. This paper shows that people skills are important determinants of labor-market outcomes, including occupations and wages. We show that technological and organizational changes have increased the importance of people skills in the workplace. We particularly focus on how the increased importance of people skills has affected the labor-market outcomes of under represented groups. We show that the acceleration rate of increase in the importance of people skills between the late 1970s and early 1990s can help explain why women’s wages increased more rapidly while the wages of blacks grew more slowly over these years relative to earlier years. |
| JEL: | J16 J21 J24 J31 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11985&r=lab |
| By: | Lindbeck, Assar (The Research Institute of Industrial Economics); Palme, Mårten (Stockholm University); Persson, Mats (Institute for International Economic Studies) |
| Abstract: | We analyze the consequences for sickness absence of a selective softening of job security legislation for small firms in Sweden in 2001. According to our differences-in-difference estimates, aggregate absence in these firms fell by 0.2-0.3 days per year. This aggregate net figure hides important effects on different groups of employees. Workers remaining in the reform firms after the reform reduced their absence by about one day. People with a high absence record tended to leave reform firms, but these firms also became less reluctant to hire people with a record of high absence. |
| Keywords: | Seniority Rules; Sick Pay Insurance; Firing Costs; Moral Hazard |
| JEL: | H53 I38 J22 J50 M51 |
| Date: | 2006–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0660&r=lab |
| By: | Kåre Johansen (Department of Economics, Norwegian University of Science and Technology); Ørjan Mydland; Bjarne Strøm (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | This paper studies the relationship between wage formation and the political colour of the government in an economy with centralized wage bargaining. Ideological, organizational and personal ties between the central trade union and the social democratic political party suggest that the trade union may behave significantly different in wage negotiations under a social democratic than under a conservative government. Using time series data for Norway, we estimate that changing from a conservative to a social democratic central government significantly reduces manufacturing wages and makes wages more responsive to unemployment. This result is consistent with a wage bargaining model augmented by political preferences of the union leaders and suggests that the effect of bargaining coordination depends on the political colour of the government. The estimated effects are both robust with respect to model specification and stable over time. |
| Keywords: | Wages; political regime;time series analysis |
| JEL: | J31 J51 |
| Date: | 2006–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:nst:samfok:6506&r=lab |
| By: | Arnstein Aassve; Simon Burgess; Matt Dickson; Carol Propper |
| Abstract: | The paper investigates the relationship between work and family life in Britain. Using appropriate statistical techniques we estimate a five-equation model, which includes birth events, union formation, union dissolution, employment and non-employment events. The model allows for unobserved heterogeneity that is correlated across all five equations. We use information from the British Household Panel Survey, including the retrospective histories concerning work, union, and child bearing, to estimate this model. We obtain well-defined parameter estimates, including significant and correlated unobserved heterogeneity. We find that transitions in and out of employment for men are relatively independent of other transitions. In contrast, there are strong links between female employment, having children and union formation. By undertaking a detailed micro simulations analysis, we show that different levels of female labour force participation do not necessarily lead to large changes in fertility levels. Changes in union formation and fertility levels, on the other hand, do have a significant impact on employment rates. |
| Keywords: | demographic transitions, marriage, divorce, birth, employment |
| JEL: | J12 J13 J22 |
| Date: | 2004–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:084&r=lab |
| By: | Michal Myck; Leszek Morawski; Jerzy Mycielski |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp545&r=lab |
| By: | Joshua C. Pinkston (U.S. Bureau of Labor Statistics) |
| Abstract: | This paper tests the hypothesis that referrals from various sources provide employers with more information about job applicants than they would have without a referral. I use data from the 1982 EOPP Survey of employers that contain information on two workers in the same job, allowing me to cancel out differences in job and firm characteristics and control for the possibility that workers with referrals from different sources (or no referral at all) might sort into jobs that put different weights on individual performance. My estimation results provide evidence consistent with referrals from friends and family members providing employers with more information than they would have otherwise. Despite the information they provide, however, it appears as though referrals from family members are associated with jobs that put less weight on performance overall. On the other hand, referrals from other employers or labor unions appear to provide little, if any, information but are associated with jobs that put more weight on performance than the average job does. I find no evidence that referrals from schools, community organizations or other sources provide useful information. |
| Keywords: | Referrals; Recruiting Methods; Labor Market Information |
| JEL: | J6 M51 J31 D83 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec060040&r=lab |
| By: | Aurora Galego (Department of Economics, University of Évora) |
| Abstract: | Female self-employment has been increasing steadily over the last years in many countries. However, not much is know about women’s decision to become self-employed, especially in Europe. Some few studies typically conclude that most women choose self-employment because it offers more flexibility to combine work and family responsibilities or because of discrimination. Portugal displays one of the highest rates of self-employment in Europe and is one of the countries where the number of self-employed women has increased more. This paper studies gender differences in the determinants of self-employment in Portugal. Unlike other countries, there is no evidence that women choose self-employment because of family reasons. However, there are some suggestions that the choice of self-employment is driven by economic necessity, particularly in the case of women. |
| Keywords: | Occupational Choice, Self-employment, Gender differences |
| JEL: | J23 J16 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:evo:wpecon:3_2006&r=lab |