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on Labour Economics |
| By: | Jan C. van Ours (Tilburg University, CentER, CEPR and IZA Bonn:); Milan Vodopivec (World Bank and IZA Bonn) |
| Abstract: | This paper investigates how the potential duration of unemployment benefits affects the quality of post-unemployment jobs. It takes advantage of a natural experiment introduced by a change in Slovenia’s unemployment insurance law that substantially reduced the potential benefit duration. Although this reduction strongly increased job finding rates, the quality of the post-unemployment jobs remained unaffected: the paper finds that the law change had no effect on either the type of the contract (temporary vs. permanent), the duration of the postunemployment jobs, or the wage earned in this job. |
| Keywords: | unemployment insurance, potential benefit duration, job separation rates, post-unemployment wages |
| JEL: | C41 H55 J64 J65 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2171&r=lab |
| By: | Francine D. Blau (Cornell University, NBER, CESifo and IZA Bonn); Lawrence M. Kahn (Cornell University, CESifo and IZA Bonn) |
| Abstract: | Using Michigan Panel Study of Income Dynamics (PSID) data, we study the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s. We find that changes in human capital did not contribute to the slowdown, since women’s relative human capital improved comparably in the two decades. Occupational upgrading and deunionization had a larger positive effect on women’s relative wages in the 1980s, explaining a portion of the slower 1990s convergence. However, the largest factor was that the “unexplained” gender wage gap fell much faster in the 1980s than the 1990s. Our evidence suggests that changes in labor force selectivity, changes in gender differences in unmeasured characteristics and in labor market discrimination, as well as changes in the favorableness of demand shifts each may have contributed to the slowing convergence of the unexplained gender pay gap. |
| Keywords: | gender pay gap, wage differentials |
| JEL: | J16 J31 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2176&r=lab |
| By: | Katalin Balla (Hungarian Academy of Sciences); János Köllo (Hungarian Academy of Sciences and IZA Bonn); András Simonovits (Hungarian Academy of Sciences, Budapest University of Technology and CEU) |
| Abstract: | We extend the benchmark model of Aghion and Blanchard (1994), assuming two segments of the emerging private sector that differ in workers’ productivity. We look at the paths of employment, wages, taxes, labor costs and profits during and after the transition, up until the shock is fully absorbed. Viability is a function of the speed of job destruction and the strength of the initial shock to employment. In the long run, the system asymptotically converges to full employment. If the rate of job destruction is sufficiently low, the unemployment rates can get close to steady-state values during the transition. Within the realm of feasible scenarios, unemployment differentials are simultaneously determined by the speed of destruction, the level of benefits and the cross-subsidization of low-productivity groups. Lower benefits induce higher aggregate employment and inequalities throughout the redeployment process, while higher subsidies are conducive to lower inequalities and higher aggregate employment. The choice between low versus high benefits is a matter of preferences but the systems with subsidies dominate the systems with no subsidies. The subsidy has strongest marginal effect on employment and income when job destruction is fast and benefits are high. |
| Keywords: | transition, heterogeneous labor, job creation, unemployment benefit, wage subsidy |
| JEL: | J64 P31 H53 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2179&r=lab |
| By: | Thorsten Schank (Institute of Economics, Friedrich-Alexander-University Erlangen-Nürnberg); Claus Schnabel (Institute of Economics, Friedrich-Alexander-University Erlangen-Nürnberg); Joachim Wagner (Institute of Economics, University of Lüneburg) |
| Abstract: | Many plant-level studies find that average wages in exporting firms are higher than in non-exporting firms from the same industry and region. This paper uses a large set of linked employer-employee data from Germany to analyze this exporter wage premium. We show that the wage differential becomes smaller but does not completely vanish when observable and unobservable characteristics of the employees and of the work place are controlled for. For example, blue-collar (white-collar) employees working in a plant with an export-sales ratio of 60 percent earn about 1.8 (0.9) percent more than similar employees in otherwise identical non-exporting plants. |
| Keywords: | Export, wages, exporter wage premium, linked employer-employee data, Germany |
| JEL: | F10 D21 L60 |
| Date: | 2006–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:28&r=lab |
| By: | William Evans; Wooyoung Kim |
| Abstract: | Using restricted-use data from the 1990 and 2000 Census long-form, we analyze the impact of local labor market conditions on the demand for education using the economic shock produced by the opening of a new casino on an Indian reservation as the identifying event. Federal legislation in 1988 allowed Indian tribes to open casinos in many states and since then, over 400 casinos have opened, 240 of which have Las Vegas-style games. We demonstrate that the opening of a casino increased the employment and wages of low-skilled workers. Young adults responded by dropping out of high school and reducing college enrollment rates, even though many tribes have generous college tuition subsidy programs. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:06-14&r=lab |
| By: | Cindy Zoghi (U.S. Bureau of Labor Statistics); Sabrina Wulff Pabilonia (U.S. Bureau of Labor Statistics) |
| Abstract: | Using the Canadian Workplace and Employee Survey and controlling for individual and establishment fixed effects, we find that within a year of adopting a computer, the average worker earns a 3.6 percent higher wage than a similar worker who did not adopt a computer. Returns are even larger for managers and professionals, highly educated workers, and those with significant prior computer experience. Employees who use computer applications that require high cognitive skills earn the highest returns. |
| Keywords: | Computer Use, Technology, Computer Applications |
| JEL: | J31 O30 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec060070&r=lab |
| By: | David Haardt (Institute for Social and Economic Research) |
| Abstract: | This paper presents the frst comprehensive analysis of older men and women's labour market transitions in the United Kingdom using data from the British Household Panel Survey (BHPS), 1990-2004. When looking at the empirical hazard rates, I find large peaks in the exit rates out of employment at ages 60 (women) and 65 (both sexes) which occur in the exact birthday month. This points towards strong incentives of pension schemes. Discrete-time hazard regression analysis shows that benefits and health status are the two most important determinants of retirement, with effects that are larger than found in previous studies. When modelling unobserved heterogeneity I find that women are twice as likely as men to be 'movers' between work and non-work. |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2006-20&r=lab |
| By: | Guillaume Vandenbroucke (University of South California) |
| Abstract: | During the first half of the 20th century the workweek in the United States declined, and the distribution of hours across wage deciles narrowed. At the same time, the distribution of wages narrowed too. The hypothesis proposed is (i) Households have access to an increasing number of leisure activities which enhance the value of non-market time; (ii) The rise of education accounts for the narrowing of the wage and hours distribution. Such mechanisms, embedded into a neoclassical growth model, quantitatively account for the observations. The rise in wages is the main contributor to the decline in hours. The decline in the price of leisure goods is second in importance, yet its contribution is large. |
| Keywords: | Hours worked, leisure, home production, technological progress |
| JEL: | E24 J22 O11 O33 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:eag:rereps:11&r=lab |
| By: | Anna Iara (The Vienna Institute of International Economic Studies and Center for European Integration Studies, University of Bonn) |
| Abstract: | Temporary migration is of growing significance in Europe. Upon migration to a country with higher technological development that typically coincides with positive wage differentials, temporary migrants may upgrade their skills by learning on the job and subsequently import the newly acquired human capital to their source country, thus adding to international know-how diffusion and the catching up of the respective economy. This paper is the first to provide supportive evidence of this hypothesis in a cross-country East to West European perspective, using the 2003 Youth Eurobarometer dataset. |
| Keywords: | Central and Eastern Europe, return migration, wage premium, skill diffusion |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:210&r=lab |
| By: | Martin Browning; Thomas F. Crossley |
| Abstract: | The costs of involuntary job loss are of substantial research and policy interest. We consider the measurement of the cost of job displacement with household expenditure data. With a Canadian panel survey of individuals who experienced a job separation, we compare the consumption growth of households that experienced a permanent layoff to a control group of households that experienced a temporary layoff with known recall date. Because the firms employing the latter group are providing insurance, these workers approximate a bench mark of full insurance against job loss shocks. We estimate that permanent layoffs experience an average consumption loss of between 4 and 10 percent. Older workers and workers with high job tenure have losses closer to the top of this range. |
| Keywords: | Job Displacement, Consumption |
| JEL: | D91 J63 J65 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:152&r=lab |
| By: | José A.F. Machado (Universidade NOVA de Lisboa); Pedro Portugal (Banco de Portugal, Universidade NOVA de Lisboa and IZA Bonn); Juliana Guimaraes (Universidade Federal de Pernambuco) |
| Abstract: | The U.S. labor market has been experiencing unprecedented high average unemployment duration. The shift in the unemployment duration distribution can be traced back to the early nineties. In this study, censored quantile regression methods are employed to analyze the changes in the US unemployment duration distribution. We explore the decomposition method proposed by Machado and Mata (2005) to disentangle the contribution of the changes generated by the covariate distribution and by the conditional distribution. The data used in this inquiry are taken from the nationally representative Displaced Worker Surveys of 1988 and 1998. We provide evidence that the change in the unemployment duration distribution is mainly produced by the opposing effects of a sharp rise in job-to-job transition rates and an increased sensitivity of unemployment duration to unemployment rates. Compositional changes in the labor force played a limited role. We rationalize our findings by arguing that improved screening technology is likely to be the relevant underlying mechanism at work. |
| Keywords: | quantile regression, duration analysis, unemployment duration, counterfactual decomposition |
| JEL: | C14 C21 C41 J64 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2174&r=lab |
| By: | Stephane Mechoulan |
| Abstract: | We examine how the rising incarceration of Black men and the sex ratio imbalance it induces shapes young Black women’s behavior during their late teens and early twenties. Combining data from the BJS and the CPS to match incarceration rates with individual observations, we show that Black male incarceration lowers the odds of non-marital teenage fertility and increases single Black women’s school attainment and early employment. We do not find consistent evidence that high Black male incarceration rates decrease the likelihood of getting married for young Black women. These results are robust to using sentencing changes and prison capacity expansions as instruments for incarceration. |
| Keywords: | incarceration, prison, prison capacity, sentencing laws, teenage fertility, education, school, labor force participation |
| JEL: | I21 K42 J12 J13 J15 J22 J24 |
| Date: | 2006–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-240&r=lab |
| By: | Karen Kopecky (University of Rochester) |
| Abstract: | A model with leisure production and endogenous retirement is used to explain the declining labor-force participation rates of elderly males. Using the Health and Retirement Study, the model is calibrated to cross-sectional data on the labor-force participation rates of elderly US males by age and their average drop in market consumption in the year 2000. Running the calibrated model for the period 1850 to 2000, a prediction of the evolution of the cross-section is obtained and compared with data. The model is able to predict both the increase in retirement since 1850 and the observed drop in market consumption at the moment of retirement. The increase in retirement is driven by rising real wages and a falling price of leisure goods over time. |
| Keywords: | retirement, leisure, home production, consumption-drop,technological progress |
| JEL: | E13 J26 O11 O33 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:eag:rereps:12&r=lab |
| By: | Muriel Egerton (Institute for Social and Economic Research); Killian Mullan (Institute for Social and Economic Research) |
| Abstract: | This paper is set in the context of macrosocial/macroeconomic theories of the organization of both paid and unpaid work. The specific topic investigated is engagement in unpaid voluntary work, an activity which is thought to be important for social cohesion. Research on the sources of social cohesion has focussed on organisational membership and voluntary organisation activity. There has been little investigation of informal helping of non-resident kin, friends or acquaintances, an activity which is not measured in most social surveys but is available from time use surveys. Previous research shows that the highly educated are more likely to engage in formal voluntary organisations and data from the UK 2000 HETUS survey confirm that the highly educated spend more time on formally organised voluntary work. However, the less qualified, particularly women, spend more time on extra-household unpaid helping activities. Since voluntary work is partly dependent on available time, these findings are modelled adjusting for time allocated to paid work, study, family and personal care. The findings remain statistically significant and it is hypothesised that social networks may play an important role in mobilising both formal and informal helping. Drawing on work carried out by the Office for National Statistics, a monetary value is placed on the both types of unpaid helping work. Although the average wage rates for voluntary work are greater than those for informal helping, the latter is greater in frequency and duration and therefore more economically valuable from a population perspective. |
| Keywords: | education, gender, social capital, time use, volunteering |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2006-22&r=lab |
| By: | Lemieux, Thomas; Milligan, Kevin |
| Abstract: | Before 1989, childless social assistance recipients in Quebec under age 30 received much lower benefits than recipients over age 30. We use this sharp discontinuity in policy to estimate the effects of social assistance on various labour market outcomes using a regression discontinuity approach. We find strong evidence that more generous social assistance benefits reduce employment. The estimates exhibit little sensitivity to the degree of flexibility in the specification, and perform very well when we control for unobserved heterogeneity using a first difference specification. Finally, we show that commonly used difference-in-differences estimators may perform poorly with inappropriately chosen control groups. |
| Keywords: | Labour, Personal finance and household finance, Employment, Social assistance |
| Date: | 2006–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2006280e&r=lab |
| By: | Randall Reback (Barnard College, Columbia University) |
| Abstract: | This paper examines whether minimum competency school accountability systems, such as those created under No Child Left Behind, influence the distribution of student achievement. Because school ratings in these systems only incorporate students' test scores via pass rates, this type of system increases incentives for schools to improve the performance of students who are on the margin of passing but does not increase short-run incentives for schools to improve other students' performance. Using student-level, panel data from Texas during the 1990's, I explicitly calculate schools' short-run incentives to improve various students' expected performance, and I find that schools do respond to these incentives. Students perform better than expected when their test score is particularly important for their schools' accountability rating. Also, low achieving students perform better than expected in math when many of their classmates' math scores are important for the schools' rating, while relatively high achieving students do not perform better. Distributional effects appear to be related to broad changes in resources or instruction, as well as narrowly tailored attempts to improve the performance of specific students. |
| Keywords: | School Accountability; Performance measures; Test scores; No Child Left Behind; School Ratings; Incentives; Distributional Effects; Minimum Competency |
| JEL: | I28 H39 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:brn:wpaper:0602&r=lab |
| By: | Pierpaolo Giannoccolo |
| Abstract: | To obtain the "1.2 million additional research personnel, including 700.000 additional researchers" necessary to "irrigate" the industries science-based, The EU stresses that it is not sufficient increase the investment in Research. We have to stop the European Brain Drain. We have to reverse it; "Europeans who have moved abroad would love to come home". We have to remember that the "Brain Drain should work in both directions", then we have to attract foreign brilliant scientists and compete to the US A. In this paper we give a survey of the principal “Brain Drain Competition” policies implemented in Europe. The key strategies and mechanisms found are: making the academic system more open and flexible; improving the regulatory conditions particularly on immigration; better sign-posting and information at national level; dedicated grants for foreign researchers; adapting income situations to market forces; providing tax reductions specifically for researchers and knowledge workers; more active international marketing and support for international researchers. Finally, we analyse the effects of these policies on the Brain Drain in Europe by giving examples of countries (i.e. UK, France, Germany, Belgium, etc) that that effectively reverse the Brain Drain and attract foreign researchers, and the exemplum of the Italy that it is “a countries that supplies talent to Europe and the Americas”. |
| Keywords: | Brain Drain, Migration policies, Human Capital, High skilled workers. |
| JEL: | F22 I23 J24 P16 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:mis:wpaper:20060201&r=lab |
| By: | Servaas van der Berg (Department of Economics, Stellenbosch University) |
| Abstract: | Massive differentials on achievement tests and examinations reflect South Africa’s divided past. Improving the distribution of educational outcomes is imperative to overcome labour market inequalities. Historically white and Indian schools still outperform black and coloured schools in examinations, and intraclass correlation coefficients (rho) reflect far greater between-school variance compared to overall variance than for other countries. SACMEQ’s rich data sets provide new possibilities for investigating relationships between educational outcomes, socio-economic status (SES), pupil and teacher characteristics, school resources and school processes. As a different data generating process applied in affluent historically white schools (test scores showed bimodal distributions), part of the analysis excluded such schools, sharply reducing rho. Test scores were regressed on various SES measures and school inputs for the full and reduced sample, using survey regression and hierarchical (multilevel) (HLM) models to deal with sample design and nested data. This shows that the school system was not yet systematically able to overcome inherited socio-economic disadvantage, and poor schools least so. Schools diverged in their ability to convert inputs into outcomes, with large standard deviations for random effects in the HLM models. The models explained three quarters of the large between-school variance but little of the smaller within-school variance. Outside of the richest schools, SES had only a mild impact on test scores, which were quite low in SACMEQ context. |
| Keywords: | Analysis of Education |
| JEL: | J21 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers20&r=lab |