|
on Labour Economics |
| By: | Claudia Olivetti; B Petrongolo |
| Abstract: | There is evidence of a negative cross-country correlation between gender wage and employment gaps. We arguethat non-random selection of women into work explains an important part of such correlation and thus of theobserved variation in wage gaps. The idea is that, if women who are employed tend to have relatively high-wagecharacteristics, low female employment rates may become consistent with low gender wage gaps simplybecause low-wage women would not feature in the observed wage distribution. We explore this idea across theUS and EU countries estimating gender gaps in potential wages. We recover information on wages for those notin work in a given year using alternative imputation techniques. Imputation is based on (i) wage observationsfrom nearest available waves in the sample, (ii) observable characteristics of the nonemployed and (iii) astatistical repeated-sampling model. We then estimate median wage gaps on the resulting imputed wagedistributions, thus simply requiring assumptions on the position of the imputed wage observations with respectto the median, but not on their level. We obtain higher median wage gaps on imputed rather than actual wagedistributions for most countries in the sample. However, this difference is small in the US, the UK and mostcentral and northern EU countries, and becomes sizeable in Ireland, France and southern EU, all countries inwhich gender employment gaps are high. In particular, correction for employment selection explains more thana half of the observed correlation between wage and employment gaps. |
| Keywords: | median gender gaps, sample selection, wage imputation |
| JEL: | E24 J16 J31 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0711&r=lab |
| By: | Mirko Draca; Stephen Machin; John Van Reenen |
| Abstract: | Although there is a large literature on the economic effects of minimum wages on labour marketoutcomes (especially employment), there is hardly any evidence on their impact on firm performance.This is surprising: minimum wages appear to have a significant impact on wages, but only a limitedimpact on jobs, so it is natural to imagine there must be a stronger impact on other aspects of firmbehaviour. In this paper we consider the impact of minimum wages on firm profitability by exploitingthe introduction of a minimum wage to the UK labour market in 1999. We use pre-policy informationon the distribution of wages to construct treatment and comparison groups and implement a differencein differences approach. We show evidence that firm profitability was significantly reduced (andwages significantly raised) by the minimum wage introduction. This emerges from separate analysesof two distinct types of firm level panel data (one on firms in a very low wage sector, UK residentialcare homes, and a second on firms across all sectors). Interestingly, we find no evidence that theprofitability reductions resulted in increases in firm exit, so our findings may be consistent withredistribution of quasi-rents towards low wage employees. |
| Keywords: | Minimum Wage, Profitability, Exit |
| JEL: | J23 L25 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0715&r=lab |
| By: | Rafael Lalive |
| Abstract: | This paper studies a program that extends the maximum duration of unemployment benefits from 30 weeks to 209 weeks. Interestingly, this program is targeted to individuals aged 50 years or older, living in certain eligible regions in Austria. In the evaluation, I use sharp discontinuities in treatment assignment at age 50 and at the border between eligible regions and control regions to identify the effect of extended benefits on unemployment duration. Results indicate that the duration of job search is prolonged by at least .09 weeks per additional week of benefits among men, whereas unemployment duration increases by at least .32 weeks per additional week of benefits among women. The salient differences between men and women are consistent with the lower minimum age for early retirement applying to women. |
| Keywords: | benefit duration, unemployment duration, early retirement, regression discontinuity |
| JEL: | C41 J64 J65 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1765&r=lab |
| By: | Ghazala Yasmeen Azmat |
| Abstract: | Tax credits have been a popular way to alleviate in-work poverty. The assumption is typicallythat the incidence is on the claimant workers. However, economic theory suggests noparticular reason to believe that this should be the case. This paper investigates the incidenceof the Working Families Tax Credit in the UK introduced in 1999, which unlike similar taxcredit policies was paid through the wage packet, increasing the connection between theemployer and worker with regard to the tax credit. Using two stage parametric and nonparametriccensored regression methods we find compelling evidence to suggest that (1) thefirm discriminates by cutting the wage of claimant workers relative to similarly skilled nonclaimantworkers when looking at men and (2) there is a spill-over effect onto the wage ofboth groups for both men and women. |
| Keywords: | Wages, Incidence, Tax Credits |
| JEL: | J30 H22 I38 D58 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0724&r=lab |
| By: | Alex Bryson; Richard Freeman |
| Abstract: | The problems/need for representation and participation reported by workers vary acrossworkplaces and by types of jobs. Workers with greater workplace needs are more desirous ofunions but their preferences are fine-grained. Workers want unions to negotiate wages andwork conditions and for protection but do not see unions as helping them progress in theircareers. Many workers see no major workplace problems that would impel them to form orjoin unions. Unionism raises reported problems while firm-based non-union channels ofvoice reduce reported problems, but unions that work effectively with management and thosethat have sufficient strength to be taken seriously by management reduce the number ofproblems at union workplaces. |
| Keywords: | trades unions, worker voice, employment relations |
| JEL: | J51 J52 J53 J58 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0731&r=lab |
| By: | Jorge M. Streb |
| Abstract: | What happens to job market signaling under two-dimensional asymmetric information? With 2 types of productivity and noise, the equilibrium remains separating if an extended single-crossing condition is satisfied. If not, there are partially pooling equilibria where only extreme types can be distinguished, and supplementary information is needed. On-the-job interaction gives employers private information on productivity, which employment relationships may reveal to the market. While sticky wages lead to public revelation of this private information through dismissals, flexible wages do not, allowing employers to do cream skimming. Beyond the 2x2 case, employment relationships are always a noisy sign, so education is valuable as a life-time job market signal for high-ability workers. |
| Keywords: | two-dimensional asymmetric information, private information, informational rents, single-crossing, signals, signs |
| JEL: | J31 D10 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:326&r=lab |
| By: | Giulia Faggio; Stephen Nickell |
| Abstract: | Market work per person of working age differs widely across the OECD countries and therehave been some significant changes in the last forty years. How to explain this pattern?Taxes are part of the story but much remains to be explained. If we include all the elementsof the social security systems like early retirement benefits, sickness and disability benefitsand unemployment benefits, then we can capture some aspects of the overall pattern but stilla lot remains unexplained. The story favoured by Alesina et al. (CEPR DP.5140, 2005) isthat the nexus of strong unions, generous welfare and social democracy implies both hightaxes and pressure in favour of work-sharing in response to adverse shocks. This story,however, falls foul of the simple fact that most Scandinavian countries now do much morework than the French and Germans despite having stronger unions, more generous welfare,higher taxes and more social democracy. Ultimately, we are forced into the position thatthere is no simple story. Some of the broad patterns can be explained but there remaincountry specific factors which are hard to identify but lead to substantial differences from onecountry to another. |
| Keywords: | work, working hours, employment |
| JEL: | J22 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0730&r=lab |
| By: | Özlem Onaran (Department of Economics, Vienna University of Economics & B.A.); Nursel Aydiner-Avsar (University of Utah) |
| Abstract: | The purpose of this paper is to test the effects of labor cost, openness, and demand side variables on employment for the case of Turkey using the panel data of private manufacturing industry at three digit level for 25 sectors for the period of 1973-2001. We use a seemingly unrelated regression (SUR) model, which allows for cross-sectoral heterogeneity. The estimation results show that higher growth is more effective in stimulating employment compared to lower labor costs. The reliance of Turkey and many developing countries on labor market flexibility and openness as the unique tools of employment policy reflects a pro-capital incomes policy bias rather than a necessity. The results confirm the Keynesian emphasis on demand-side policies to fight against unemployment. |
| JEL: | J23 E24 F16 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp097&r=lab |
| By: | Alex Bryson; Michael White |
| Abstract: | Using data from the Workplace Employment Relations Survey 1998, this paper shows thatunionisation increased the probability of within-workplace job cuts and the incidence of jobsecurity guarantees. As theory predicts, both are more prevalent among market-sectorworkplaces with higher union density and multi-unionism. Expectations that these effectswould be more muted in the public sector were also confirmed. |
| Keywords: | Job cuts, trade unions, job guarantees |
| JEL: | J23 J45 J51 J63 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0733&r=lab |
| By: | M Manacorda; Carolina Sanchez-Paramo; Norbert Schady |
| Abstract: | Changes in the relative wages of workers with different amounts of education have profound implications fordeveloping countries, where initial levels of inequality are often very high. In this paper we use micro data forfive Latin American countries over the 1980s and 1990s to document trends in men's returns to education, andto estimate whether the changes in skill premia we observe can be explained by supply or demand factors. Wepropose a model of demand for skills with three production inputs, and we allow the elasticity of substitutionbetween the different educational inputs to be different using a nested CES function. Using this model, weshow that the dramatic expansion in secondary school in many countries in Latin America depressed the wagesof workers with secondary school. We also show that there have been sharp increases in the demand for moreskilled workers in the region. |
| Keywords: | returns to education, demand and supply of skills |
| JEL: | J23 J24 O15 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0712&r=lab |
| By: | Hill Kulu (Max Planck Institute for Demographic Research, Rostock, Germany); Andres Vikat (Max Planck Institute for Demographic Research, Rostock, Germany); Gunnar Andersson (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | There is a growing body of literature that looks at the causes of below-replacement fertility in developed countries. While the variation in childbearing patterns across countries and between socio-economic groups within a country has been studied in detail, little is known about the differences in fertility patterns across settlements within a country. A few recent studies suggest that there are persistent differentials between high- and low-fertility settlements in contemporary Europe. This study examines fertility variation across settlements in four Nordic countries: Denmark, Finland, Norway and Sweden. We base our study on aggregate and individual-level register data. We first examine annual total and parity-specific fertility across settlement type from the mid-1970s to the early twenty-first century. We proceed to study the relative contribution of the socio-economic characteristics of the local populations and the characteristics of the settlements to this variation, using hazard regression models. |
| Keywords: | Denmark, Finland, Norway, Sweden, event history analysis, fertility, urbanization |
| JEL: | J1 Z0 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2006-024&r=lab |
| By: | Simeon Djankov (the World Bank); Yingyi Qian (UC Berkeley and NBER); Gerard Roland (UC Berkeley and CEPR); Ekaterina Zhuravskaya (New Economic School/CEFIR and CEPR) |
| Abstract: | We study the determinants of the decision to become an entrepreneur in Russia, China, and Brazil, using unique survey data at the individual level. We find that entrepreneurs have many common characteristics relative to non-entrepreneurs in all three countries. They are more likely to have entrepreneurs among their relatives and friends, place a higher value on work, are happier and perceive themselves as more successful. There are also a few important differences. Russian and Chinese entrepreneurs are more mobile geographically and across jobs. In Brazil, on the contrary, entrepreneurs are less mobile across jobs and industries. Brazil entrepreneurs have higher trust than non-entrepreneurs, while in Russia and China this is not the case. Finally, we confirm that perceptions of institutional environment are an important determinant of individual decisions to expand business. |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0066&r=lab |
| By: | Hilary Steedman |
| Abstract: | This paper sets out the extent and defining characteristics of apprenticeship in Europe. Apprenticeship is thensituated within the wider context of European provision for education and training of 16-19 year olds and asimple typology is proposed and explained. The German-speaking dual system countries are characterised ashigh employer commitment countries with minimal integration of apprenticeship into full-time 16-19 provisionand weak links with tertiary education. The UK, the Netherlands and France are characterised as havingrelatively low levels of employer commitment but greater integration of apprenticeship into full-time provisionand stronger links between apprenticeship and tertiary level provision. Recent evidence on the extent to whichboth apprenticeship models improve employment probabilities is reviewed and pressures on the twoapprenticeship models resulting from increasingly competitive global markets and consequent changing skillneeds are examined. A final section discusses whether apprenticeship in Europe can adapt to and survive thesepressures. |
| Keywords: | apprenticeship, dual system, school to work transition |
| JEL: | I J24 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0710&r=lab |
| By: | Alex Bryson |
| Abstract: | The percentage of workers who choose not to join the union available to them at their workplace has been rising in Britain and New Zealand. Social custom, union instrumentality, the fixed costs of joining, employee perceptions of management attitudes to unionization and employee problems at work all influence the propensity to free-ride. Ideological convictions regarding the role of unions also play some role, as do private excludable goods. There is little indication of employer-inspired policies substituting for unionization where unions are already present. Having accounted for all these factors, free-riding remains more common in New Zealand than in Britain. |
| Keywords: | Free-riding, trade union, New Zealand, Britain |
| JEL: | J50 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0713&r=lab |
| By: | Bläs, Barno |
| Abstract: | Dieser Beitrag analysiert die Existenz und das Ausmaß nach unten starrer Nominallöhne, sowie deren realwirtschaftliche Implikationen für den deutschen Arbeitsmarkt. Unter Verwendung von drei alternativen Modellvarianten für die proportionale Abwärtsnominallohnrigidität wurde auf Grundlage der IABS-Regionalstichprobe (1975-2001) nachgewiesen, dass das Ausmaß der Abwärtsnominallohnrigidität in Deutschland erheblich ist. Die realen Implikationen der nach unten starren Nominallöhne sind bei konstantem Rigiditätsgrad umso höher, je geringer die Inflationsrate ist. Für Inflationsraten unter zwei Prozent sind diese realen Effekte nicht mehr vernachlässigbar. Andererseits konnte im Rahmen dieses Beitrags nachgewiesen werden, dass das Ausmaß der Abwärtsnominallohnrigidität selbst vom inflationären Umfeld abhängt und in Jahren mit niedriger Inflation sinkt. |
| Keywords: | nominal wage rigidity, equilibrium unemployment, Phillips Curve, Lucas Critique, Germany |
| JEL: | J30 E24 E31 |
| Date: | 2006–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:bay:rdwiwi:691&r=lab |
| By: | Viktor Steiner; Katharina Wrohlich |
| Abstract: | We analyze the effects of three alternative proposals to reform the taxation of families relative to the current German system of joint taxation of couples and child allowances: a French-type family splitting and two full family splitting proposals. The empirical analysis of the effects of these proposals on the income distribution and on work incentives is based on a behavioral micro-simulation model which integrates an empirical household labor supply model into a detailed tax-benefit model based on the German Socio Economic Panel. Our simulation results show that under each reform the lion's share of the reduction in taxes would accrue to families with children in the upper part of the income distribution, and that expected labor supply effects are small for all analyzed family tax splitting reforms, both in absolute terms and relative to the implied fiscal costs. |
| Keywords: | Household Taxation, Income Distribution, Work Incentive, Microsimulation |
| JEL: | H24 H31 J22 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp612&r=lab |
| By: | Philippe Aghion; Robin Burgess; Stephen Redding; Fabrizio Zilibotti |
| Abstract: | This paper investigates whether the effects, on registered manufacturing out- put,employment, entry and investment, of dismantling the .license raja system of central controlsregulating entry and production activity in this sector .vary across Indian states with differentlabor market regulations. The effects are found to be unequal depending on the institutionalenvironment in which industries are embedded. In particular, following de-licensing,industries located in states with pro-employer labor market institutions grew more quicklythan those in pro-worker environments. Our results emphasize how local institutions matterfor whether industry in a region benefits or is harmed by the nationwide delicensing reform. |
| Keywords: | delicensing, economic development, labour regulation |
| JEL: | O14 O18 O21 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0728&r=lab |
| By: | Saul Lach; Mark Schankerman |
| Abstract: | Using data on U.S. universities, we show that universities that give higher royalty shares to facultyscientists generate greater license income, controlling for other factors including university size,quality, research funding, and local demand conditions. We use pre-sample data on universitypatenting to control for the endogeneity of royalty shares. The incentive effects are larger in privateuniversities than in public ones, and we provide survey evidence on performance-based pay,government constraints and objectives of Technology License Offices that helps explain this finding.Royalty incentives work through two channels — raising faculty effort and sorting scientists acrossuniversities. The effect of incentives is mainly to increase the quality rather than the quantity ofinventions. |
| Keywords: | royalty incentives, invention, technology licensing |
| JEL: | O31 O34 L2 L3 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0729&r=lab |
| By: | Ignacio Zubriri (University of the Basque Country) |
| Abstract: | The purpose of this paper is to analyze social protection in Spain and its financing, paying special attention to the possible relationship between social protection and unemployment. I will first describe the evolution of the social insurance system in Spain and compare it with that of other countries (section 2). Section 3 describes the evolution of unemployment in Spain and explores its causes. In section 4, I analyze Social Security contributions and their possible impact on unemployment. Finally section 5 contains the conclusions. |
| Keywords: | Social Protection,Social Security, Social security Contributions, Spain, social insurance |
| Date: | 2006–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper0608&r=lab |