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on Labour Economics |
| By: | Dario Sciulli |
| Abstract: | The Treu Law introduced temporary contracts and extended the applicability of fixed-term contracts in order to increase the flexibility of the labour market and to reduce unemployment. The paper inquires whether the reform has affected the duration dependence related to the out-flow from non-employment, how previous atypical contract experiences affect the probability of finding a stable job and if the probability of flowing toward a permanent contract is higher moving from a non-working state rather than from an atypical job. Applying a Mixed Proportional Hazard (MPH) model with competing risk to a sub-sample drawn from the WHIP dataset, I estimate the hazard rate for the state transitions. My main findings predict an increase in negative duration dependence for non-working state out-flow, meaning an amplification of the short-term unemployed - long-term unemployed duality. It is a consequence of the larger use of atypical contracts, that would provide a screening instrument for the hiring choices of firms. Previous atypical job experiences play a negative effect on the probability of moving toward a stable job if the origin state is a non-working condition, while they have a positive role in the transition toward an atypical job. Besides, there is no evidences that the probability of finding a permanent contract is higher for workers who move from an atypical contract rather from a non-working state. Finally, a human capital accumulation effect is found to explain the transition toward a stable job. Policy recommendations include promotion of longer contracts, implementation of training programs and services to facilitate job-search. |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we063408&r=lab |
| By: | Lutz C. Kaiser |
| Abstract: | Using micro panel data, labor market transitions are analyzed for the EU-member states by cumulative year-by-year transition probabilities. As female (non-)employment patterns changed more dramatically than male employment in past decades, the analyses mainly refer to female labor supply. In search for important determinants of these transitions, six EU-countries with different labor market-regimes are selected as examples (Denmark, Germany, Netherlands, Portugal, Ireland, UK). Within these countries, women's determinants of labor market transitions are compared by means of pooled multinominal logit-regressions. The outcomes hint at both, the importance of socio-economic determinants, like the life cycle or human capital, but also address gender related differences in the paths of labor market transitions. Clearly, the observed cross-national differences are driven by specific national institutional settings. Among others, one of the most crucial features is the day-care infrastructure concerning children, which either fosters or restricts a sustainable risk management between family and work in the respective countries. |
| Keywords: | labor supply, labor market transitions, socio-economic determinants, institutional settings, risk management, cross-national comparison |
| JEL: | J21 J22 J78 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp606&r=lab |
| By: | Gupta, Bishnupriya (Department of Economics, University of Warwick) |
| Abstract: | This paper uses firm level data from all the textile producing regions in India to examine the relation between wages, unionization and labour productivity. We find that fewer workers were employed per machine in the unionized mills in Bombay and Ahmedabad, as compared to non-unionized regions implying that low labour productivity was not due to union resistance to increased work intensity. Our findings suggest that while low wages in India encouraged overmanning, higher wages, prompted by unionization, had productivity enhancing effects. We explore alternative explanations for low labour productivity, arising from the managerial and institutional structure of Indian cotton mills. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:753&r=lab |
| By: | Shandre Thangavelu (Singapore Centre for Applied and Policy Economics, Department of Economics, National University of Singapore); Yong Aik Wei (Singapore Centre for Applied and Policy Economics, Department of Economics, National University of Singapore) |
| Abstract: | The paper studies the effects of the changing age and education composition of the labour force on productivity growth in Singapore. The quality change of workers from aging and education is measured through a quality index. Quality change through education is the key driving force for the productive performance of the labour force. On the other hand, the growth in the labour quality of workers by age, and hence, its contribution to labour productivity growth is falling. To moderate the impact of the aging labour force on productivity growth, greater efforts to raise the educational profile of the labour force and to re-train older workers are required. |
| JEL: | J24 O40 |
| URL: | http://d.repec.org/n?u=RePEc:sca:scaewp:0613&r=lab |
| By: | Kai Philipp Christoffel (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Keith Kuester (Goethe University Frankfurt, Senckenberganlage 31, 60054 Frankfurt am Main, Germany.); Tobias Linzert (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | We focus on a quantitative assessment of rigid labor markets in an environment of stable monetary policy. We ask how wages and labor market shocks feed into the inflation process and derive monetary policy implications. Towards that aim, we structurally model matching frictions and rigid wages in line with an optimizing rationale in a New Keynesian closed economy DSGE model. We estimate the model using Bayesian techniques for German data from the late 1970s to present. Given the pre-euro heterogeneity in wage bargaining we take this as the first-best approximation at hand for modelling monetary policy in the presence of labor market frictions in the current European regime. In our framework, we find that labor market structure is of prime importance for the evolution of the business cycle, and for monetary policy in particular. Yet shocks originating in the labor market itself may contain only limited information for the conduct of stabilization policy. JEL Classification: E32; E52; J64; C11. |
| Keywords: | Labor market; wage rigidity; bargaining; Bayesian estimation. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20060635&r=lab |
| By: | Morten Bennedsen; Kasper M. Nielsen; Francisco Pérez-González; Daniel Wolfenzon |
| Abstract: | This paper uses a unique dataset from Denmark to investigate the impact of family characteristics in corporate decision making and the consequences of these decisions on firm performance. We focus on the decision to appoint either a family or external chief executive officer (CEO). The paper uses variation in CEO succession decisions that result from the gender of a departing CEO’s firstborn child. This is a plausible instrumental variable (IV), as male first-child firms are more likely to pass on control to a family CEO than are female first-child firms, but the gender of the first child is unlikely to affect firms’ outcomes. We find that family successions have a large negative causal impact on firm performance: operating profitability on assets falls by at least four percentage points around CEO transitions. Our IV estimates are significantly larger than those obtained using ordinary least squares. Furthermore, we show that family-CEO underperformance is particularly large in fast-growing industries, industries with highly skilled labor force and relatively large firms. Overall, our empirical results demonstrate that professional, non-family CEOs provide extremely valuable services to the organizations they head. |
| JEL: | G32 G34 M13 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12356&r=lab |
| By: | Maurice Kugler |
| Abstract: | In this paper we model the effect of migrant remittances on job creation and human capital formation, given migration prospects. Model calibration of deep parameters was performed with data from the AMCO survey on migration and remittances. The simulations based on the model show that remittances can have offsetting effects on equilibrium human capital and labor market out- comes in the country of origin of migrants. First, remittances enhance school- ing opportunities for recipient households, and human capital formation can be augmented. Second, an increase in human capital supply by recipient house- holds induces job creation as labor demand increases in the origin country. If a sufficiently large share of remittance recipients do not migrate, then the net effect is brain gain rather than brain drain ensuing remittances. The job cre- ation spillover in local labor markets increases the rate of return to schooling for nonrecipient households, whose members are less likely to migrate. As a result, there are more incentives to substitute consumption for human capital investment. At the same time, the rise in expected income due to the spillover induces higher desired consumption. If the “substitution effect” outweighs the “income effect”, then remittances will increase overall human capital and re- duce the unemployment rate. The calibration and simulation analyses suggest that he net effect of remittances depends upon the accessibility of education and the degree and labor market frictions in the origin country as well as the immigration policy in the destination country of migrants. |
| Keywords: | Migrant remittances, education, brain gain, job creation |
| JEL: | F22 F36 O11 J69 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:370&r=lab |
| By: | Kai-Joseph Fleischhauer |
| Abstract: | In Germany, there is currently a discussion about the implementation of penalty charges if firms refuse to offer apprenticeship training positions to school graduates. This paper aims at analyzing the policy instrument of penalty charges by a theoretical model that systematically compares its costs and benefits. Building on recent training literature, a two-period partialequilibrium model is designed that allows for worker heterogeneity in ability and covers special features of the German apprenticeship system. With respect to overall welfare, the implementation of penalty charges solves a trade-off. On the one hand, penalty charges increase the number of apprenticeship training positions and thus the fraction of trained workers in the workforce. On the other hand, some firms will leave the market to avoid the financial burden, which generates unemployment among workers with low ability. Altogether, we demonstrate that optimal penalty charges increase the overall welfare compared to the laissez-faire equilibrium if the productivity-enhancement of apprenticeship training exceeds some lower bound. |
| Keywords: | Human Capital Formation, Apprenticeship Training, Inefficient Training Decision of Firms, Penalty Charges |
| JEL: | I28 J24 J31 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2006:2006-18&r=lab |
| By: | Christos Koulovatianos; Carsten Schröder; Ulrich Schmidt |
| Abstract: | A distinguishing feature among households is whether adult members work or not, since the occupational status of adults affects their available time for home activities. Using a survey method in two countries, Belgium and Germany, we provide household incomes that retain the level of well-being across different family types, distinguished by family size and occupational status of adults. Our tests support that childcare-time costs are important determinants of household well-being. Estimates of child costs relative to an adult are higher for households that are time-constrained (all adults in the household work). Moreover, we find supportive evidence for the hypothesis that, in two-adult households, there is a potential for within-household welfare gains from specialization in market- vs. domestic activities, especially childcare. |
| JEL: | D13 J22 D31 I31 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0606&r=lab |
| By: | Philip Vermeulen (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | Small firms often do not change their number of employees from year to year. This paper investigates the role of adjustment costs and indivisibility of labor in the employment stickiness of manufacturing firms with less than 75 employees. When small firms have to adjust employment in units of at least one employee, indivisibility becomes an important source of stickiness. A structural model of dynamic labor demand with adjustment costs and indivisibility is estimated using indirect inference on a panel of small French manufacturing firms. Adjustment cost are estimated to be very small. Indivisibility explains around 50% of the stickiness of employment, adjustment costs explain the other 50%. JEL Classification: E24. |
| Keywords: | Indivisibility; labor adjustment costs; employment; sticky. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20060640&r=lab |
| By: | Nicola D. Coniglio (Norwegian School of Economics and Business Administration (NHH) and University of Bari.); Giuseppe De Arcangelis (University of Rome La Sapienza.); Laura Serlenga (CREST and University of Bari.) |
| Abstract: | In this paper we show that highly skilled illegal migrants may be more likely to return home than migrants with low or no skills when illegality causes skill waste, i.e. reduced ability of making use of individual capabilities both in the labor and the financial markets. This result is in contrast with common wisdom on return migration, according to which low-skill individuals are more likely to go back home rather than high-skill migrants. The simple theoretical life-cycle framework that shows the former result is tested on a sample of illegal migrants crossing Italian borders in 2003. The estimation results confirm that highly skilled illegal migrants are more willing to return home. |
| Keywords: | Illegal migration, labor skills, skill waste. |
| JEL: | F22 C25 |
| URL: | http://d.repec.org/n?u=RePEc:bai:series:wp0011&r=lab |
| By: | Helmut Rainer; Thomas Siedler |
| Abstract: | In most industrialized countries, more people than ever are having to cope with the burden of caring for elderly parents. This paper formulates a model to explain how parental care responsibilities and family structure interact in affecting children's mobility characteristics. A key insight we obtain is that the mobility of young adults crucially depends on the presence of a sibling. Our explanation is mainly, but not ex-clusively, based on a sibling power effect. Siblings compete in location and employment decisions so as to direct parental care decisions at later stages towards their preferred outcome. Only children are not exposed to this kind of competition. This causes an equilibrium in which siblings not only exhibit higher mobility than only children, but also have better labor market outcomes. Using data from the German Socio-Economic Panel Study (SOEP) and from the American National Survey of Families and House- holds (NSFH), we find strong evidence that confirms these patterns. The implications of our results are then discussed in the context of current population trends in Europe and the United States. |
| Keywords: | Geographic Mobility, Intergenerational Relationships, Care of the Elderly, Family Bargaining. |
| JEL: | D19 J14 C13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp608&r=lab |
| By: | Beckstead, Desmond; Brown, W. Mark |
| Abstract: | This paper provides an analysis of trends in business sector head office employment in Canada from 1999 to 2005. It investigates changes in the number of head offices and head office employment over this period. The paper also examines the effect of foreign ownership on head office employment. It asks how much foreign-controlled firms contribute to Canadian head office employment and employment growth and what happens to head office employment when control of a firm changes from domestic to foreign. The paper also looks at the rate at which head offices enter and exit over time with a view to ascertaining whether the loss of a head office is a rare occurrence or a relatively common event. Finally, the paper presents trends in head office employment across metropolitan areas over the past six years. |
| Keywords: | Labour, Business enterprises, Employment, Business conditions |
| Date: | 2006–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp2e:2006014e&r=lab |
| By: | Marco Francesconi; Stephen P. Jenkins; Thomas Siedler |
| Abstract: | We analyse the impact on schooling outcomes of growing up in a family headed by a single mother. Growing up in a non-intact family in Germany is associated with worse outcomes in models that do not control for possible correlations between common unobserved determinants of family structure and educational performance. But once endogeneity is accounted for, whether by using sibling-difference estimators or two types of quasi-experiments, the evidence that family structure affects schooling outcomes is much less conclusive. Although almost all the point estimates indicate that non-intactness has an adverse effect on schooling outcomes, confidence intervals are large and span zero. |
| Keywords: | Childhood family structure, lone parenthood, educational success, sibling differences, instrumental variables, treatment effects |
| JEL: | C23 D13 I21 J12 J13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp610&r=lab |
| By: | Lesia Nedoluzhko (Max Planck Institute for Demographic Research, Rostock, Germany); Gunnar Andersson (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | In this paper, we investigate the reproductive behavior of young women and men in Kyrgyzstan, with special emphasis on the demographic adjustment strategies of internal migrants in this post-Soviet Central Asian republic. We employ event-history techniques to data from the “Marriage, Fertility, and Migration” survey conducted in northern Kyrgyzstan in 2005 to estimate relative risks of becoming a parent. We demonstrate to what extent migration is part of the family building process and how it is related to elevated parenthood risks shortly after resettlement. We gain additional insight by information on factors such as the geographical destination of migration, and of retrospectively stated motives for the move. In addition, we reveal clear ethnic differences in the timing of entry into parenthood in Kyrgyzstan. |
| Keywords: | Kyrgyzstan, fertility, migration |
| JEL: | J1 Z0 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2006-020&r=lab |