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on Labour Economics |
| By: | Rice, Patricia |
| Abstract: | This paper examines the responsiveness of the education and employment choices of young people in Great Britain to the level of wages currently available to them in the labour market. Our results show that among young males in particular, the probability of continued participation in full-time education declines significantly as the expected wage increases. The effects for young women are smaller and not statistically significant in general. In addition, we find that the probability of being inactive – not in education, employment or training – increases also with the level of expected wage, particularly in the case of young males of lower academic ability. In the light of these findings, we assess the impact of the recent introduction of a national minimum wage for 16 and 17 year olds on education and employment decisions of young men in Great Britain Keywords; Education, employment, wages, young people JEL Classification: I21, I28 |
| URL: | http://d.repec.org/n?u=RePEc:stn:sotoec:0612&r=lab |
| By: | Thomas Lemieux; W. Bentley Macleod; Daniel Parent |
| Abstract: | An increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using a bonus, a commission, or a piece rate. In this paper, we look at the effect of the growing incidence of performance pay on wage inequality. The basic premise of the paper is that performance pay jobs have a more "competitive" pay structure that rewards productivity differences more than other jobs. Consistent with this view, we show that compensation in performance pay jobs is more closely tied to both measured (by the econometrician) and unmeasured productive characteristics of workers. We conclude that the growing incidence of performance pay accounts for 25 percent of the growth in male wage inequality between the late 1970s and the early 1990s. |
| JEL: | D3 J31 J33 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:mcl:mclwop:2006-06&r=lab |
| By: | Rulof Burger (Department of Economics, Stellenbosch University); Derek Yu (Department of Economics, Stellenbosch University) |
| Abstract: | This paper examines South African wage earnings trends using all the available post-1994 household survey datasets. This allows us to identify and address the sources of data inconsistencies across surveys in order to construct a more comparable earnings time series. Taking account of the inconsistencies in questionnaire design and the presence of outliers, we find that it is possible to construct a fairly stable earnings series for formal sector employees. We find that claims that workers have on average experienced a substantial decrease in their real wage earnings in the post-apartheid era is based on choosing datasets on either side of Statistics South Africa’s changeover from October Household Surveys (OHS) to the more consistent Labour Force Surveys (LFS), which caused a discontinuous and inexplicably large drop in average earnings. The data actually show an increase in real wage earnings in the post-transition period for formal sector employees, and does not appear to provide strong evidence of decreasing wages in the informal economy. The paper also investigates the change in the distribution of earnings, as well as mean earnings trends by population group, gender and skill category. |
| Keywords: | South Africa, Earnings, Wages, Labour market trends |
| JEL: | J31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers24&r=lab |
| By: | Svantesson, Elisabeth (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | This study investigates conditions favouring early labor marketintegration for immigrants in Sweden. The study is based on a survey among immigrants just two and a half years after they received a permanent residence permit. Factors such as work experience; Swedish spouse and the local labor market conditions influence the likelihood in getting a job during the first years in Sweden. <p> The results also indicate gender differences. The level of education only matters for men while fluency in language is favourable only for women. Surprisingly,those participating in an introduction program organized by the local municipalities do not have a higher probability of getting work early after arrival. |
| Keywords: | Immigrants; employment; probability |
| JEL: | F22 J15 J24 |
| Date: | 2006–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2006_002&r=lab |
| By: | Gayle Allard; Peter H. Lindert |
| Abstract: | How have labor market institutions and welfare-state transfers affected jobs and productivity in Western Europe, relative to industrialized Pacific Rim countries? Orthodox criticisms of European government institutions are right in some cases and wrong in others. Protectionist labor-market policies such as employee protection laws seem to have become more costly since about 1980, not through overall employment effects, but through the net human-capital cost of protecting senior male workers at the expense of women and youth. Product-market regulations in core sectors may also have reduced GDP, though here the evidence is less robust. By contrast, high general tax levels have shed the negative influence they might have had in the 1960s and 1970s. Similarly, other institutions closer to the core of the welfare state have caused no net harm to European jobs and growth. The welfare state’s tax-based social transfers and coordinated wage bargaining have not harmed either employment or GDP. Even unemployment benefits do not have robustly negative effects. |
| JEL: | N13 N3 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12460&r=lab |
| By: | Kolm, Ann-Sofie (Department of Economics, Copenhagen Business School); Larsen, Birthe (Department of Economics, Copenhagen Business School) |
| Abstract: | While examining the macroeconomic effects of government tax and punishment policies, this paper develops a three-sector general equilibrium model featuring matching frictions and worker-firm wage bargaining. Workers are assumed to differ in ability, and the choice of education is determined endogenously. Job opportunities in an informal sector are available only to workers who choose not to acquire higher education. We find that increased punishment of informal activities increases the number of educated workers and reduces the number of unemployed workers. Considering welfare, we show it is optimal to choose punishment rates so to more than fully counteract the distortion created by the government’s inability to tax the informal sector. |
| Keywords: | Tax evasion; underground economy; education; matching; unemployment. |
| JEL: | H26 I21 J64 |
| Date: | 2006–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cbsnow:2003_012&r=lab |
| By: | Michele Mosca (University of Naples "Federico II"); Marco Musella (University of Naples "Federico II"); Francesco Pastore (Seconda Università di Napoli and IZA Bonn) |
| Abstract: | This paper investigates the nonprofit wage gap suggesting a theoretical framework where, like in Akerlof (1984), effort correlates not only with wages, but also with non-monetary compensations. These take the form of relational goods and services by-produced in the delivery of particular services. By paying higher non-pecuniary compensations, the nonprofit sector attracts intrinsically similarly skilled, but more motivated workers, able to provide in fact a higher level of effort than their counterparts in the forprofit sector. On an empirical ground, the paper provides a number of econometric tests that confirm the main predictions of the model in Italy’s case. It adds to the available empirical literature by introducing in the analysis direct measures of non-pecuniary compensations and job satisfaction. |
| Keywords: | relational goods, job satisfaction, wage determination, non-profit organisations, efficiency wages |
| JEL: | I00 J31 L31 L84 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2254&r=lab |
| By: | Hui He; Zheng Liu |
| Abstract: | Wage inequality between education groups in the United States has increased substantially since the early 1980s. The relative quantity of college-educated workers has also increased dramatically in the postwar period. This paper presents a unified framework where the dynamics of both skill accumulation and wage inequality arise as an equilibrium outcome driven by measured investment-specific technological change. Working through capital-skill complementarity and endogenous skill accumulation, the model is able to account for much of the observed changes in the relative quantity of skilled workers. The model also does well in replicating the observed rise in wage inequality since the early 1980s. Based on the calibrated model, we examine the quantitative effects of some hypothetical tax-policy reforms on skill formation, inequality, and welfare. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:0609&r=lab |
| By: | Tuomas Pekkarinen (Uppsala University and IZA Bonn); Chris Riddell (Queen's University) |
| Abstract: | This paper examines the effects of performance pay on earnings using linked employeeemployer panel data from Finland. These payroll data contain information on the exact share of earnings obtained and hours worked on a performance pay contract. Using these data, we estimate the effects of performance pay in the presence of both individual and firm-specific unobserved heterogeneity. Furthermore, we are able to estimate the effects of performance pay contracts in tasks of different complexity and for the subsample of workers who change jobs following an establishment closure. Unobservable firm characteristics explain 30-50% of the variance in performance pay. After controlling for unobservable individual and firm characteristics, performance pay workers earn substantially more than fixed rate workers. The effects persist when only workers who changed firms, and contracts, due to an establishment closure are used for identification. There is also a strong, negative relationship between job complexity and the incentive effects of performance pay. Finally, we exploit several ‘natural experiments’ where there was a compensation regime change in one plant of a given firm, but not in other plants. The plants are highly similar pre-regime change, and had a common trend in earnings pre-regime change. These experiments also yield substantial earnings premiums. |
| Keywords: | performance pay, piece rates, incentives |
| JEL: | J33 J41 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2253&r=lab |
| By: | Huang Fali (School of Economics and Social Sciences, Singapore Management University); Peter Cappelli (The Wharton School, University of Pennsylvania) |
| Abstract: | Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. This should be especially useful in work systems where monitoring by supervisors is more difficult, such as teamwork systems. We analyze the relationship between screening and monitoring in the context of a principal-agent model and test the theoretical results using a national sample of U.S. establishments, which includes information on employee selection. We find that employers screen applicants more intensively for work ethic where they make greater use of systems such as teamwork where monitoring is more difficult. This screening is also associated with higher productivity and higher wages and benefits, as predicted by the theory: The synergies between reduced monitoring costs and high performance work systems enable the firm to pay higher wages to attract and retain such workers. Screening for other attributes, such as cognitive ability, does not produce these results. |
| JEL: | J2 J3 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:11-2006&r=lab |
| By: | Bernard Hoekman; Alan L. Winters |
| Abstract: | The substantial literature investigating the links between trade, trade policy, and labour market outcomes has generated a number of stylized facts, but many open questions remain. A common finding is that much of the shorter-run impacts of trade and reforms involve reallocation of labour or wage impacts within sectors. Wage responses to trade and trade reforms are generally greater than employment impacts, but trade can only explain a small fraction of the general increase in wage inequality observed in recent decades. A priority area for future research is to study the employment effects of services trade and investment reforms. |
| Keywords: | trade liberalization, labour markets, trade and wages, trade and employment |
| JEL: | F16 J30 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:une:wpaper:7&r=lab |
| By: | M. Menon; F. Perali; F. Rosati |
| Abstract: | This paper estimates the contribution of child labour to the formation of household farm income in rural enterprises. The contribution to household income from the employment of children comes either from the employment on-farm at a shadow wage or off-farm in the agricultural or other sectors. The paper uses a cost function with household labour as a quasifixed factor in order to estimate the shadow wage for each component of the household labour force. The study also provides an estimate of contribution of child labour to household income in the rural sector, both at the household and national level. A set of simulation also highlight the role that child labour plays in insuring household subsistence and how it does affects income distribution. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:11&r=lab |
| By: | Antonello D’Agostino (Central Bank and Financial Service Authority of Ireland); Roberta Serafini (European Central Bank and ISAE); Melanie Ward (European Central Bank and IZA Bonn) |
| Abstract: | This paper investigates the determinants of the service sector employment share in the EU- 15, for the aggregate service sector, four sub-sectors and twelve service sector branches. Recently, both Europe and the US have experienced an increase in the share of servicerelated jobs in total employment. Although converging in all European countries, a significant gap in the share of service jobs in Europe relative to the US persists. Understanding the main factors behind this gap is key to achieving higher employment levels in Europe. This paper focuses on the role of barriers in the EU-15 which may have hindered its ability to absorb labour supply and therefore to adjust efficiently to the sectoral reallocation of labour. We find that a crucial role in this process has been played by the institutional framework affecting flexibility in the labour market and by the mismatch between workers’ skills and job vacancies. |
| Keywords: | services, sectoral adjustment, employment share, Europe, US, institutions in the labour and product market |
| JEL: | E24 J21 J23 J24 L80 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2257&r=lab |
| By: | Julio J. Rotemberg |
| Abstract: | This paper presents a complete general equilibrium model with flexible wages where the degree to which wages and productivity change when cyclical employment changes is roughly consistent with postwar U.S. data. Firms with market power are assumed to bargain simultaneously with many employees, each of whom finds himself matched with a firm only after a process of search. When employment increases as a result of reductions in market power, the marginal product of labor falls. This fall tempers the bargaining power of workers and thus dampens the increase in their real wages. The procyclical movement of wages is dampened further if the posting of vacancies is subject to increasing returns. |
| JEL: | E24 E37 J64 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12415&r=lab |
| By: | Thomas Bauer (RWI Essen, CEPR London and IZA Bonn); Silja Göhlmann (RWI Essen); Mathias Sinning (RWI Essen) |
| Abstract: | This paper investigates gender differences in smoking behavior using data from the German Socio-economic Panel (SOEP). We develop a Blinder-Oaxaca decomposition method for count data models which allows to isolate the part of the gender differential in the number of cigarettes daily smoked that can be explained by differences in observable characteristics from the part attributable to differences in coefficients. Our results reveal that the major part of the gender smoking differential is attributable to differences in coefficients indicating substantial differences in the smoking behavior between men and women rather than differences in characteristics. |
| Keywords: | Blinder-Oaxaca decomposition, count data models, SOEP, smoking, gender differences |
| JEL: | C25 I12 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2259&r=lab |
| By: | Gustavsson, Magnus (Department of Economics); Österholm, Pär (Department of Economics) |
| Abstract: | This paper investigates if conclusions regarding labour market hysteresis differ depending on whether employment or unemployment rates are studied. Applying a range of unit-root tests to monthly data from Australia, Austria, Canada, Finland, Sweden, the U.K. and the U.S., we find results for employment rates that contrast those based on unemployment rates. In particular, rather than the mixed evidence for hysteresis found using unemployment rates, employment rates result in unequivocal evidence of hysteresis in Australia, Canada and the U.S.. These findings cast doubt on previous conclusions in the literature. |
| Keywords: | Labour market; Persistence; Unit root test |
| JEL: | C22 E24 J21 |
| Date: | 2006–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2006_015&r=lab |
| By: | Holmlund, Bertil (Department of Economics); Liu, Qian (Department of Economics); Nordström Skans, Oskar (Institute for Labour Market Policy Evaluation (IFAU)) |
| Abstract: | This paper estimates the effects on earnings of “gap years” between high school and university enrollment. The effect is estimated by means of standard earnings functions augmented to account for gap years and a rich set of control variables using administrative Swedish data. We find that postponement of higher education is associated with a persistent and non-trivial earnings penalty. The main source of the persistent penalty appears to be the loss of work experience after studies. The reduction of lifetime earnings associated with two years postponement of higher education amounts to 40-50 percent of annual earnings at age 40. |
| Keywords: | timing of education; schooling interruptions; returns to work experience |
| JEL: | I23 J24 J31 |
| Date: | 2006–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2006_017&r=lab |
| By: | Eddy Lee |
| Abstract: | This paper reviews both multi-country and country studies on the impact of trade liberalization on growth and employment in developing countries. These studies reveal sharply contrasting effects of trade liberalization on employment, suggesting that country-specific and contingent factors are important. In particular, differences in how trade liberalization is implemented are particularly important. In order to be successful, trade liberalization needs to be embedded within a coherent set of macroeconomic, structural and social policies. |
| Keywords: | employment, wage differentials, trade liberalization, developing countries |
| JEL: | F16 E24 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:une:wpaper:5&r=lab |
| By: | Kevin Lang; Erez Siniver |
| Abstract: | We use a unique sample of Russian immigrants and natives in Israel to examine the return to English knowledge. In cross-section estimates there is a significant return to English knowledge for both immigrants and natives with high levels of education. Language acquisition is an important element in immigrant/native earnings convergence, but most of this convergence is explained by factors other than language acquisition. These results are confirmed using panel data on wages and knowledge of Hebrew and English over time. The benefits of English knowledge vary across occupations in ways that are largely consistent with past evidence on language-skill complementarity. Natives and immigrants with high levels of education benefit similarly from knowing English. While immigrants with low levels of education do not benefit from knowledge of English, there is some evidence that native Israelis do. Conditional on occupation, the rate at which immigrants learn English and Hebrew are largely orthogonal. Therefore earlier work on the importance of knowledge of the host-country language (Hebrew) does not appear to be significantly biased by the absence of measures of English knowledge. |
| JEL: | J15 J24 Z13 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12464&r=lab |
| By: | L.Guarcello; S.Lyon; F.Rosati; C. Valdivia |
| Abstract: | The study forms part of a broader research effort directed towards arriving eventually at an internationally acceptable consensus on the statistical definition of child labour. It looks specifically at children’s non-market activity, its classification (i.e., economic or non-economic), its impact on health and education outcomes, and at some of the issues linked to the inclusion of non-market activity in the definition of child labour. Study findings do not point to any clear causal relationship between hours in non-market activity and health status. But it was pointed out that the relationship between child work and health is very difficult to capture, both for theoretical reasons and because of lack of appropriate data, and that this finding should therefore be interpreted with caution. Findings based on panel data for China do, however, reveal a significant (negative) causal link between hours spend on non-market work and school attendance in the Chinese context. For additional countries where panel data was lacking, an experimental approach is presented for developing an "equivalence ratio", i.e., for combining hours spent on market and non-market activity based on the relative impact of each on children’s schooling. The equivalence ratio of the educational effect of market and non-market activity is found to vary substantially with the number of hours spent in each. It increased with the numbers of hours spent in non-market activity and decreased with the number of hours spent in market activities. This points to the complexity of using such an equivalence ratio for the purpose of a comprehensive definition of child labour. |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:16&r=lab |
| By: | Hans G. Bloemen (Free University Amsterdam, Tinbergen Institute, Netspar and IZA Bonn) |
| Abstract: | In the literature theoretical models have appeared that predict a positive impact of the level of individual wealth on the job exit probability. Empirically this prediction is most likely to be relevant for elderly workers who have been able to accumulate wealth throughout their working life and whose residual working life is relatively short. In the Netherlands, as in other European countries, there is a tendency of introducing more individual choice options in pension schemes. It is likely that the individual level of wealth will become an increasingly important factor in the retirement decision. Therefore it is interesting to know whether individuals with a different financial situation make different job exit decisions, given other factors. Empirical analysis of job exit behaviour of elderly workers so far has concentrated on properties of the pension system and the health situation. For a sample of elderly male workers in the Netherlands in the period 1995 through 2001, we analyse the impact of wealth, savings, and debt position on job exit rates. We find evidence for a positive effect of wealth on the probability to retire (early). |
| Keywords: | retirement, life cycle models, saving |
| JEL: | J26 D91 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2247&r=lab |
| By: | Anne Case; Christina Paxson |
| Abstract: | It has long been recognized that taller adults hold jobs of higher status and, on average, earn more than other workers. A large number of hypotheses have been put forward to explain the association between height and earnings. In developed countries, researchers have emphasized factors such as self esteem, social dominance, and discrimination. In this paper, we offer a simpler explanation: On average, taller people earn more because they are smarter. As early as age 3 — before schooling has had a chance to play a role — and throughout childhood, taller children perform significantly better on cognitive tests. The correlation between height in childhood and adulthood is approximately 0.7 for both men and women, so that tall children are much more likely to become tall adults. As adults, taller individuals are more likely to select into higher paying occupations that require more advanced verbal and numerical skills and greater intelligence, for which they earn handsome returns. Using four data sets from the US and the UK, we find that the height premium in adult earnings can be explained by childhood scores on cognitive tests. Furthermore, we show that taller adults select into occupations that have higher cognitive skill requirements and lower physical skill demands. |
| JEL: | I1 J3 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12466&r=lab |
| By: | Timothy J. Hatton; Jeffrey G. Williamson |
| Abstract: | Can history shed light on the modern debate about immigration’s labor market impact in high wage economies? This paper examines the relationship between migration and capital flows in the age of mass migration before 1914, the so-called first global century. It then assesses the effects of immigration on wages and employment with and without international capital mobility in first global century and today, that is, the second global century. The paper then explores the links between these economic relationships and immigration policy. It concludes with an explanation for the apparent difference in immigration’s impact in the two global centuries, and thus on policy. |
| JEL: | N3 F22 J3 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12414&r=lab |
| By: | Morten O. Ravn |
| Abstract: | This paper introduces a labor force participation choice into a labor market matching model embedded in a dynamic stochastic general equilibrium set-up with production and savings. The participation choice is modelled as a tradeoff between forgoing the expected benefits of being search active and engaging in costly labor market search. The model induces a symmetry in firms’ and workers’ search decision since both sides of the labor market vary search effort at the extensive margins. We show that this set-up is of considerable analytical convenience and that it gives rise to a linear relationship between labor market tightness and the marginal utility of consumption. We refer to the latter as the “consumption - tightness puzzle” because (a) it gives rise to a number of counterfactual implications, and (b) it is a robust implication of theory. Amongst the counterfactual implications are very low volatility of tightness, procyclical unemployment, and a positively sloped Beveridge curve. These implications all derive from procyclical variations in participation rates that follow from allowing for the extensive search margin. |
| JEL: | E24 E32 J20 J41 J64 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12421&r=lab |
| By: | Magdalena Muszynska (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | Drawing on data from new Russian retrospective surveys, this study examines the relationship between women’s employment and the risk of union disruption within both the centrally planned economy and transition period. Our results show that within the two periods, the risk of union dissolution was similar among women who worked and women who did not work. In the transition period, however, differences in the dissolution risk among women existed and were related to the characteristics of the job conducted: occupational status, hours worked and income from side employment activities. Since the collapse of communism, the most discriminating factor between women is the type of ownership of a company, with those who worked for newly established private companies having elevated risk of union dissolution. The results obtained in this study are interpreted in light of the independence effect of women’s employment. |
| Keywords: | Russia, employment, women |
| JEL: | J1 Z0 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2006-027&r=lab |
| By: | John Bound; Sarah Turner |
| Abstract: | Analyses of college attainment typically focus on factors affecting enrollment demand, including the financial attractiveness of a college education and the availability of financial aid, while implicitly assuming that resources available per student on the supply side of the market are elastically supplied. The higher education market in the United States is dominated by public and non-profit production, and colleges and universities receive considerable subsidies from state, federal, and private sources. Because consumers pay only a fraction of the cost of production, changes in demand are unlikely to be accommodated fully by colleges and universities without commensurate increases in non-tuition revenue. For this reason, public investment in higher education plays a crucial role in determining the degrees produced and the supply of college-educated workers to the labor market. Using data covering the last half of the twentieth century, we find strong evidence that large cohorts within states have relatively low undergraduate degree attainment, reflecting less than perfect elasticity of supply in the higher education market. That large cohorts receive lower public subsidies per student in higher education explains this result, indicating that resources have large effects on degree production. Our results suggest that reduced resources per student following from rising cohort size and lower state expenditures are likely to have significant negative effects on the supply of college-educated workers entering the labor market. |
| JEL: | I23 H52 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12424&r=lab |
| By: | Svantesson, Elisabeth (Department of Business, Economics, Statistics and Informatics); Aranki, Ted N. (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | Many immigrants who come to Sweden are offered an introduction program. This is supposed to allow the individual to develop the skills he or she needs to be able to enter the Swedish labor market. <p> With a unique Swedish dataset, containing information on introduction activities, we investigate the impact of different introduction activities on the immigrants’ employment probability, in a short-run perspective. Our basic findings are that some activities, such as labor market practice, have a positive effect, while other activities do not seem to have any impact or even negative effect on the individuals’ probabilities of getting a job. |
| Keywords: | Immigrants; labor market; introduction programs |
| JEL: | F22 J15 |
| Date: | 2006–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2006_003&r=lab |
| By: | Alan C. Monheit; Jessica Primoff Vistnes |
| Abstract: | The weak response by the uninsured to policy initiatives encouraging voluntary enrollment in health insurance has raised concerns regarding the extent to which the uninsured value health insurance. To address this issue, we use data from the 2001 Medical Expenditure Panel Survey to examine the association between health insurance preferences and coverage status. We also consider the role of such preferences in decisions to seek out and enroll in employment-based coverage. We find that adults with weak or uncertain preferences for health insurance are more likely than persons with strong preferences to be uninsured and less likely to acquire coverage. Our econometric work indicates that workers with weak or uncertain preferences are less likely to obtain job offers with insurance, reinforcing prior evidence that workers sort among jobs according to preferences for coverage. We also find that workers with weak or uncertain preferences are less likely to enroll in offered coverage and we estimate the subsidy necessary to compensate such workers for the utility loss were they to enroll. Our results suggest a dual approach to expanding coverage that includes both subsidies and educational efforts to inform targeted groups among the uninsured about the value of health insurance. |
| JEL: | I1 J3 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12429&r=lab |
| By: | Jayanta Bhattacharya; William B. Vogt |
| Abstract: | We construct and test a new model of employer-provided health insurance provision in the presence of adverse selection in the health insurance market. In our model, employers cannot observe the health of their employees, but can decide whether to offer insurance. Employees sort themselves among employers who do and do not offer insurance on the basis of their current health status and the probability distribution over future health status changes. We show that there exists a pooling equilibrium in which both sick and healthy employees are covered as long as the costs of job switching are higher than the persistence of health status. We test and verify some of the key implications of our model using data from the Current Population Survey, linked to information provided by the U.S. Department of Labor about the job-specific human capital requirements of jobs. |
| JEL: | I1 J10 J33 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12430&r=lab |
| By: | Michael Clemens |
| Abstract: | Raising school enrollment, like economic development in general, takes a long time. This is partly because, as a mountain of empirical evidence now shows, economic conditions and slowly- changing parental education levels determine children’s school enrollment to a greater degree than education policy interventions. A succession of international meetings has nevertheless adopted a litany of utopian international goals for universal school enrollment and gender parity in education based on the idea that a correct education policy backed by sufficient cash could achieve the goals in short order. The latest of these, the Millennium Development Goals, call for universal primary schooling and full gender parity by 2015. This work quantifies how long it has taken countries rich and poor to make the transition towards high enrollments and gender parity. There are three central lessons. First, there is a remarkable uniformity of experience in the rates of enrollment increases, a reality from which the various rounds of goals appear entirely detached. Second, many countries that have not raised enrollments fast enough to meet the goals have in fact raised enrollments extraordinarily rapidly by historical standards and deserve celebration rather than condemnation. The very few poor countries that have raised enrollment figures at the rates envisioned by the goals have done so in many cases by accepting dramatic declines in schooling quality, failing large numbers of students, or other practices that cast doubt on the sustainability or exportability of their techniques. Third, aid-supported education policies can help within limits, and their performance should be judged in the context of country-specific, historically-grounded goals. But a country’s broader development strategy outside the classroom matters much more than education policy. Length: 78 pages |
| Keywords: | school enrollment, parental education levels, Millennium Development Goals |
| JEL: | O15 I32 I21 I28 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:37&r=lab |
| By: | Tomi Kyyrä; Ralf A. Wilke |
| Abstract: | In several European countries the elderly unemployed are allowed to collect unemployment benefits up to a certain age limit, after which they can retire via some early retirement scheme. In Finland the eligibility age of persons benefiting from this kind of scheme was raised from 53 to 55 in 1997. We consider layoff risks, unemployment durations, and the exit states before and after the reform. In the duration analysis a flexible treatment design is adopted by allowing for quantile treatment effects. Since the reform the group aged 53-54 has had a lower risk of unemployment, shorter unemployment durations, and higher exit rates to employment, and it is almost indistinguishable from the group aged 50-52. We estimate that the amount of unemployment benefits saved due to the reform is close to 100 million euros for each age cohort turning 53. |
| Keywords: | Unemployment insurance reform, quantile treatment effect, duration analysis, Finnish register data |
| Date: | 2006–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:fer:dpaper:396&r=lab |
| By: | Viktor Steiner (DIW Berlin, Free University of Berlin and IZA Bonn); Katharina Wrohlich (DIW Berlin and IZA Bonn) |
| 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 incentives, microsimulation |
| JEL: | H24 H31 J22 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2245&r=lab |
| By: | F. Rosati; R. Straub |
| Abstract: | The diversity of potential relationships between child labor and health makes the empirical disentanglement of the causal relationship a difficult exercise. This paper examines the long run impact of child labour on health by controlling for unobserved household specific characteristics. In order to control for the unobserved households specific effect, we estimate a conditional fixed effect model using data on siblings constructed from the Guatemalan National Survey of Living Condition. The estimation results reinforce the conventional wisdom that child labor is harmful for health in the long run. The results can be interpreted as a lower bound of the true impact since healthier children are most likely to offer themselves for employment and to be appointed. |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:10&r=lab |
| By: | Heather Boushey; Christian E. Weller |
| Abstract: | Income inequality in the United States of America has increased over the past few decades. Along with this development, employee compensation as a share of national income has tended to decline, the profit share of national income has grown, and inequality within labour has risen. There is no empirical support for the argument that greater inequality has resulted in faster productivity growth, but there is some indication that rising inequality has been connected to slower demand growth. Increased access to credit may have temporarily muted the implications of greater income inequality. |
| Keywords: | wage inequality, income inequality |
| JEL: | D63 J3 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:une:wpaper:18&r=lab |
| By: | Christophe Kolodziejczyk (Department of Economics, University of Copenhagen) |
| Abstract: | In this paper we study consumption around the age of retirement. We consider a model where consumption and leisure are non-separable and retirement is endogenous. We consider the case where non-separabilities come from the existence of fixed costs to work. We show that the existence of unobserved heterogeneity related to these non-separabilities will lead to biases of the OLS estimators of structural parameters of demand systems conditioned on retirement. These estimates give bounds to the true fixed costs. We estimate the model with French data and compute the bounds of these structural parameters. |
| Keywords: | retirement; fixed costs to work; correlated random coefficient model; bias |
| JEL: | C13 C21 D12 J26 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieca:2006_09&r=lab |
| By: | Alan D. Viard |
| Abstract: | It is well known that pay-as-you-go retirement programs reduce steady-state welfare and the capital stock in dynamically efficient OLG economies. The common two-period OLG model obscures, however, the dependence of these effects on the ages at which taxes are paid and benefits are received. Program changes that shift taxes to older workers or benefits to younger retirees have effects similar to reductions in program size, yielding steady-state welfare gains and increases in capital accumulation while imposing transition costs on current generations. This analysis has policy implications for both tax and benefit timing.> |
| Keywords: | Social security ; Fiscal policy ; Taxation |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:0602&r=lab |
| By: | Fredrik Andersson; Matthew Freedman; John C. Haltiwanger; Julia Lane; Kathryn L. Shaw |
| Abstract: | Innovation in the U.S. economy is about employing and rewarding highly talented workers to produce new products. Using unique longitudinal matched employer-employee data, this paper makes a key connection between talent and firms in markets with risky product innovations. We show that software firms that operate in product markets with highly skewed returns to innovation, or high variance payoffs, are more likely to attract and pay for star workers. Thus, firms in high variance product markets pay more up-front—in starting salaries—to attract and motivate star employees, because if these star workers produce home-run innovations, the firm’s winnings will be huge. However, we also find these same firms pay highly for loyalty: star workers that stay with a firm have much higher earnings in firms with high variance product market payoffs. The large effects on earnings are robust to the inclusion of a wide range of controls for both workers and firm characteristics. One key control is that we also show that in firms that have actually hit home runs, with high revenues, the rewards for star talent are even greater. We also find that the dispersion of earnings is higher within firms with high variance product payoffs. |
| JEL: | J24 J31 L2 L86 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12435&r=lab |