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on Labour Economics |
| By: | Buhai, Sebastian (Department of Economics, Aarhus School of Business); Teulings, Coen (SEO Economic Research) |
| Abstract: | This paper provides a new way of analyzing tenure profiles in wages, <p> by modelling simultaneously the evolution of wages and the distribution <p> of tenures. Starting point is the observation that within-job log wages for <p> an individual can be described by random walk. We develop a theoretical <p> model based on efficient bargaining, where both log outside wage and log <p> wage in the current job follow a random walk. This setting allows the <p> application of real option theory. We derive the efficient separation rule, <p> which stipulates that workers switch jobs when the difference between the <p> outside wage and the wage in the current job reaches a threshold. The <p> model fits well the observed distribution of job tenures. Since we observe <p> outside wages only at job start and job separation, our empirical analysis <p> of within job wage growth is based on expected wage growth conditional <p> on the outside wages at both dates. Our modelling allows testing of the <p> 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: | 2005–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2005_009&r=lab |
| By: | Cornelißen, Thomas |
| Abstract: | This paper investigates the effects of detailed job characteristics on job satisfaction, job search and quits using data from the German Socio-Economic Panel (GSOEP) in a fixed effects framework. Using a factor analysis, seventeen job characteristics are reduced to seven factors that describe different aspects of a job, which are qualified as status, physical strain, autonomy, advancement opportunities, social relations at the work place, work time and job security. The effects of these factors on job satisfaction, job search and quits differ. For example, job insecurity reduces job satisfaction, increases the subjective probability of job search but it decreases quits. In circumstances of higher job insecurity it seems to be hard to find a job to quit into. Regressing job satisfaction, job search and quits on the detailed job characteristics shows that, when judging from the number of statistically significant coefficients, the job characteristics explain satisfaction best, while it is harder to explain job search and quits by these characteristics. Job satisfaction, however, is confirmed as a strong predictor of job search and quits after controling for both, individual fixed effects and a set of detailed job characteristics. |
| Keywords: | job satisfaction, job mobility, quits, job search, fixed effects |
| JEL: | J28 J62 C23 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-334&r=lab |
| By: | Wiji Arulampalam; Alison Booth; Mark L. Bryan |
| Abstract: | Recent studies have used quantile regression (QR) techniques to estimate the impact of education on the location, scale and shape of the conditional wage distribution. In our paper we investigate the degree to which work-related training – another important form of human capital – affects the location, scale and shape of the conditional wage distribution. Using the first six waves of the European Community Household Panel, we utilise both ordinary least squares and QR techniques to estimate associations between work-related training and wages for private sector men in ten European Union countries. Our results show that, for the majority of countries, there is a fairly uniform association between training and hourly wages across the conditional wage distribution. However, there are considerable differences across countries in mean associations between training and wages. |
| Keywords: | private sector training, wages, education, quantile regression, unobservables |
| JEL: | J24 J31 C29 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:523&r=lab |
| By: | Francesco Drago (University of Naples, Parthenope, University of Siena and IZA Bonn) |
| Abstract: | In this paper I address theoretically and assess empirically the effect of impatience on workers’ on-the-job behavior. Theoretically, short-run impatience explains several empirical regularities concerning job mobility and account for different on-the-job behaviors. On-the-job search on one hand and "collaborative behaviors" such as low absence rate and high effort on the other, strongly affect mobility and individual wage growth. On-the-job search results in higher wages with the new employer while collaboration leads to permanent wage increases with the same employer, mainly through promotion or position change. I provide a model that shows that, for identically productive individuals, heterogeneity in hyperbolic time preferences accounts for different mobility and career patterns. Patient workers undertake behaviors that lead to promotions. Impatient workers are more likely to be movers and to experience wage increases by switching jobs. The model rests on the empirical findings that the long term wage increases of stayers are in general larger than those of the movers, and the benefits resulting from collaboration are not as immediate as the rewards from search conditional on the arrival of a better job offer. I use a large longitudinal data set (NLSY 79) to test the predictions of the model. Various measures of impatience are positively correlated to the job arrival rate and negatively correlated to collaboration. Finally, using some theoretical predictions I am able to show empirically that the results are driven by variation in short-run impatience within the hyperbolic model rather than by variation in long-run impatience within the exponential model. |
| Keywords: | job mobility, hyperbolic discounting, wage growth |
| JEL: | C23 C70 J63 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2113&r=lab |
| By: | Jakob Roland Munch (University of Copenhagen, CEBR and EPRU); Michael Rosholm (University of Aarhus and IZA Bonn); Michael Svarer (University of Aarhus) |
| Abstract: | We investigate the impact of home ownership on individual job mobility and wages in Denmark. We find that home ownership has a negative impact on job-to-job mobility both in terms of transition into new local jobs and new jobs outside the local labour market. In addition, there is a clear negative effect of home ownership on the unemployment risk and a positive impact on wages. These results are robust to different strategies for correcting for the possible endogeneity of the home owner variable. |
| Keywords: | home ownership, job mobility, duration model |
| JEL: | J6 R2 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2110&r=lab |
| By: | Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University); Munshi, Farzana (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper explores the relationship between trade liberalization and skilled-unskilled wage inequality in the Bangladesh cotton textile industry. A dynamic two-equation model is estimated for wages of skilled and unskilled workers over the period 1973-2002, using four different openness measures. In no case does opening up affect unskilled wages differently than skilled wages, implying that openness per se has not contributed to changes in wage inequality. Our findings also suggest that openness increased real wages for both skilled and unskilled workers. <p> |
| Keywords: | Bangladesh; cotton textile industry; openness; relative wages; trade liberalization; wage inequality |
| JEL: | F13 F14 F15 O15 O24 |
| Date: | 2006–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0205&r=lab |
| By: | Fabio Sabatini |
| Abstract: | This paper provides an exploratory analysis on the relationship between educational qualification and work status in Italy, with a particular focus on entrepreneurs and self-employed workers. Rough data are drawn from four waves (1995, 1998, 2002, and 2004) of the Survey of Household Income and Wealth (SHIW) carried out by the Bank of Italy. Stylised facts emerging from the empirical evidence are the surprisingly low level of educational qualification exhibited by employers and the tendency of workers holding higher levels of educational qualification not to chose to undertake an entrepreneurial activity. Such workers generally become members of the arts and professions, or take up a career as high-level employees. |
| Keywords: | Education, Work status, Employment, Self-employment, Entrepreneurship, Human capital |
| JEL: | I21 J23 J24 M13 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:sap:spesar:02&r=lab |
| By: | J. David Brown; John Earle; Vladimir Vakhitov |
| Abstract: | This paper estimates the effects of privatization on worker separations and wages using retrospective data from a national probability sample of Ukrainian households. Detailed worker characteristics are used to control for compositional differences and to assess types of observable "winners" and "losers" from privatization. Pre-privatization worker-firm matches are used to control for unobservables in worker and firm selection. The results imply that privatization reduces wages by 5 percent and cuts the layoff probability in half. Outside investor ownership reduces separations but leaves wages unaffected. Winners from privatization tend to be higher-skilled employees of larger firms, but there is no discernable relationship with gender, education, or experience. |
| Keywords: | privatization, layoffs, wages, Ukraine |
| JEL: | D21 G34 J23 J31 L33 P23 P31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:hwe:certdp:0601&r=lab |
| By: | Dean Hyslop; Suresh Yahanpath (The Treasury) |
| Abstract: | This work provides an update of changes in the income distribution over the period from 1998-2004, using data from the Household Labour Force Survey's annual Income Supplement (HLFS-IS). We focus on changes in working-age individuals' earnings and total income distribution and, to allow for resource sharing within households, their equivalised household total income distribution over the period. Our analysis shows that there have been broad gains in income to both individuals and households, suggesting the spoils of growth have been shared widely across the income distribution. Mean and median earnings increased 15 percent and 23 percent respectively, while mean and median individual income both increased 12-13 percent and equivalised household income by 11 percent. Inequality, as measured by the Gini coefficient, was more stable: individual earnings inequality fell 4 percent; individual income inequality was unchanged, while equivalised household income inequality increased 2-3 percent. The main contributors to the observed changes appear to be employment and real wage growth. We estimate that roughly one-half of the growth in average individual incomes is due to employment growth, and one-quarter each to demographic changes and wage growth. We also find that the relative employment and wage contributions have varied across the distribution: income gains at the lower end of the income distributions have been largely driven by employment, while changes at the higher end have been driven by wage gains. |
| Keywords: | Income; earnings; employment; wages; inequality |
| JEL: | I32 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nzt:nztwps:05/11&r=lab |
| By: | Benoit Dostie; Rajshri Jayaraman; Mathieu Trépanier |
| Abstract: | Using North American data, we revisit the question first broached by Krueger (1993) and re-examined by DiNardo and Pischke (1997) of whether there exists a real wage differential associated with computer use. Employing a mixed effects model to correct for both worker and workplace unobserved heterogeneity using matched employer-employee panel data, we find that computer users enjoy an almost 4 per cent wage premium over non-users. Failure to correct for the worker selection effect leads to a more than twofold overestimate of this premium, as does failure to correct for workplace unobserved heterogeneity. |
| Keywords: | Wage determination, Computers, Mixed models, Linked employer-employee data |
| JEL: | J30 J31 O30 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0614&r=lab |
| By: | Giuseppe Tattara (Department of Economics, University Of Venice Cà Foscari); Marco Valentini (Department of Statistics, University Of Venice Cà Foscari) |
| Abstract: | Official Italian statistics undervalue the presence of short-term labour contracts. A more careful account of short term labour contracts more than doubles the official figures ranking Italy among the countries with a large amount of temporary work. Temporary labour contracts represent half of the total yearly labour flows and doubled in recent years in France, Italy and Spain in an attempt to avoid labour market rigidities imposed by the employment national legislations. But temporary contracts have larger potential costs. Very little is known about temporary workers in Italy and it is therefore important to improve our understanding of their career opportunities and to asses the impact of this form labour market flexibility. A succession of temporary jobs can push workers towards more permanent forms of employment, so that worse conditions received during the temporary contract period are compensated for by better conditions in the future. But people working for short spells can be also considered as an extreme case of outsiders, who receive low wages and have worse conditions compared to permanent workers, and this situation may last for their entire working life. In the nineties the divide between movers (non tenure workers) and stayers has increased and a considerable quota of the work force is deemed to never stabilize. |
| Keywords: | Regional Labour Markets; Temporary work; Tenure; Segmentation. |
| JEL: | J21 J44 R23 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:03_06ev&r=lab |
| By: | Lena Jacobi (RWI Essen); Jochen Kluve (RWI Essen and IZA Bonn) |
| Abstract: | Having faced high unemployment rates for more than a decade, the German government implemented a comprehensive set of labour market reforms during the period 2003-2005. This paper describes the economic and institutional context of the German labour market before and after these so-called Hartz reforms. Focussing on active policy measures, we delineate the rationale for reform and its main principles. As results of programme evaluation studies post-reform have become available just now, we give a first assessment of the effectiveness of key elements of German ALMP before and after the Hartz reforms. The evidence indicates that the re-organisation of public employment services was mainly successful, with the exception of the outsourcing of services. Re-designing training programmes seems to have improved their effectiveness, while job creation schemes continue to be detrimental for participants' employment prospects. Wage subsidies and startup subsidies show significantly positive effects. On balance, therefore, the reform seems to be moving the German labour market in the right direction. |
| Keywords: | Active Labour Market Policy, labour market reform, programme evaluation |
| JEL: | J0 J68 J88 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2100&r=lab |
| By: | Alessio J. G. Brown (Kiel Institute for World Economics and University of Kiel); J. Michael Orszag (Watson Wyatt Worldwide and IZA Bonn); Dennis J. Snower (Kiel Institute for World Economics, University of Kiel, CEPR and IZA Bonn) |
| Abstract: | We explore the far-reaching implications of replacing current unemployment benefit (UB) systems by an unemployment accounts (UA) system. Under the UA system, employed people are required to make ongoing contributions to their UAs and the balances in these accounts are available to them during periods of unemployment. The government is able to undertake balanced-budget interpersonal redistributions among the UAs. At the end of their working lives, people could transfer the remaining balances on their UAs into their pensions. We present an analytical framework to analyse the incentive effects of UAs and calibrate our model for the high unemployment countries of Europe. Our results suggest that this policy reform would significantly change people’s employment incentives and could achieve reductions in unemployment without reducing the level of support to the unemployed. |
| Keywords: | unemployment benefits, unemployment accounts, redistribution, employment, unemployment |
| JEL: | I38 J22 J32 J38 J64 J65 J68 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2105&r=lab |
| By: | Grund, Christian (Department of Business and Economics); Westergård-Nielsen, Niels (Department of Economics, Aarhus School of Business) |
| Abstract: | In this contribution, we examine the interrelation between corporate age structures and firm performance. In particular, we address the issues, whether firms with young rather than older employees are successful and whether firms with homogeneous or heterogeneous workforces are doing well. Several theoretical approaches are discussed with respect to these questions and divergent hypotheses are derived. Using Danish linked employer-employee data, we find that both mean age and dispersion of age in firms are inversely u-shaped related to firm performance. |
| Keywords: | Firm performance; Corporate age structures; Demographic change |
| JEL: | J21 L25 M54 |
| Date: | 2005–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2005_010&r=lab |
| By: | O'Brien, Martin (University of Wollongong) |
| Abstract: | The youth labour market, comprising the age subgroups 15-19 and 20-24 years, forms a unique segment of the Australian labour market. The issue of youth employment has received attention most recently in 2005 in relation to industrial relations reforms (Work Choices legislation). Because of their relative inexperience, youth are seen as particularly vulnerable and in a weak bargaining position in the case of increasing prevalence of individual bargaining. We start with a review of the labour market for youth in 2005 for males and females compared to prime aged (25-44 years). We then explore specific features of youth employment such as industry representation, earnings and trade union membership, compared to the prime aged group. These results are then assessed in the light of industrial relations reforms in the Work Choices legislation. |
| Keywords: | Youth labour market, Work Choices legislation, industrial relations reforms |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp06-08&r=lab |