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on Labour Economics |
| By: | Annette Bergemann (Free University Amsterdam, IFAU Uppsala and IZA Bonn); Gerard J. van den Berg (Free University Amsterdam, Princeton University, IFAU Uppsala, CEPR, IFS and IZA Bonn) |
| Abstract: | We survey the recent literature on the effects of active labor market policies on individual labor market outcomes like employment and income, for adult female individuals without work in European countries. We consider skill-training programs, monitoring and sanctions, job search assistance, and employment subsidies. The results are remarkably uniform across studies. We relate the results to the relevant level of female labor force participation. |
| Keywords: | job search, female labor supply, wages, unemployment, schooling, training, monitoring, participation |
| JEL: | J22 J16 J64 J68 J78 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2365&r=lab |
| By: | Guy Navon (Bank of Israel); Ilan Tojerow (Free University of Brussels (DULBEA) and IZA Bonn) |
| Abstract: | This paper analyzes the impact of workplace characteristics on individual wages based on a unique cross-section matched employer-employee dataset for the Israeli private manufacturing sector in 1995; especially, we examine the effects of the interaction between rent-sharing and wages on the gender wage gap. The empirical findings show that individual compensation is significantly and positively related to firms' profits-per-employee even when controlling for group effects in the residuals, individual and firms' characteristics, industry wage differentials and endogeneity of profits. Wage-profit elasticity is found to be 14 percent and it is insignificantly different between genders. With respect to the overall gender wage gap (on average women earn 28 percent less than men), the results show that within firms there is no gender discrimination and that 12 percent of this gap can be explained by the wage-profits profile and by the fact that women are more likely to be employed in less profitable firms than men. |
| Keywords: | wages, profits, rent sharing, gender |
| JEL: | D31 J16 J31 J70 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2361&r=lab |
| By: | Robert A. Hart (University of Stirling and IZA Bonn) |
| Abstract: | Based on the British New Earnings Survey Panel Data for 1975-2001, this paper investigates the real hourly wage cyclicality of part-time and full-time females. Relative degrees of wage responsiveness are estimated in respect of job stayers, movers between jobs (involving either retaining part-time or full-time job status or switching from one to the other), and movers within existing jobs (switching between part-time and full-time status within the same job). The work also incorporates separate estimates of the probabilities of changing jobs for the various mover categories. It is shown that distinguishing between private and public sector employment is important to work along these lines. |
| Keywords: | wage cycles, females, part-time jobs, full-time jobs, stayers, movers |
| JEL: | J30 J62 E32 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2364&r=lab |
| By: | van Ours, Jan C; Vodopivec, Milan |
| 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 post-unemployment jobs, or the wage earned in this job. |
| Keywords: | job separation rates; post-unemployment wages; potential benefit duration; unemployment insurance |
| JEL: | C41 H55 J64 J65 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5741&r=lab |
| By: | Ortega, Javier; Rioux, Laurence |
| Abstract: | A dynamic labour matching economy is presented, in which the unemployed are either entitled to unemployment insurance (UI) or unemployment assistance (UA), and the employees are either eligible for UI or UA upon future separations. Eligibility for UI requires a minimum duration of contributions and UI benefits are then paid for a limited duration. Workers are risk-averse and wages are determined in a bilateral Nash bargain. As eligibility for UI does not automatically follow from employment, the two types of unemployed workers have different threat points, which delivers equilibrium wage dispersion. Most of the variables and parameters of the model are estimated using the French sample of the European Community Household Panel (1994-2000). We show that extending the UI entitlement improves the situation of all groups of workers and slightly lowers unemployment, while raising UI benefits harms the unemployed on assistance and raises unemployment. Easier eligibility for UI also improves the situation of all groups of workers and favours relatively more the least well-off than longer entitlement. Unifying the French unemployment compensation system would raise both wages and unemployment by around 1.5%. The re-entitlement effect in France lowers by 8% the rise in the wage and by 13% the rise in unemployment following a 10% increase in UI benefits. |
| Keywords: | matching; re-entitlement effects; unemployment compensation |
| JEL: | J41 J65 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5826&r=lab |
| By: | Girma, Sourafel; Görg, Holger |
| Abstract: | This paper seeks to identify the causal effect of foreign acquisitions on wages of skilled and unskilled workers, using difference-in-differences propensity score matching estimators. Our results suggest that there is substantial heterogeneity in the post-acquisition wage effect depending on the nationality of the foreign acquirer and the skill group of workers. We find sizable post acquisition wage effects on skilled and unskilled wages following an acquisition by a US firm. No such impacts result from acquisitions by EU multinationals. Also we discern some positive wage effects for unskilled workers resulting from acquisitions by multinationals from the rest of the world. |
| Keywords: | acquisitions; difference-in-differences; matching estimator; multinationals; wages |
| JEL: | F23 J31 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5788&r=lab |
| By: | Gielen, Anne; van Ours, Jan C |
| Abstract: | In a dynamic labor market worker-firm matches dissolve frequently causing workers to separate and firms to look for replacements. A separation may be initiated by the worker (a quit) or the firm (a layoff), or may result from a joint decision. A dissolution of a worker-firm match may be inefficient if it can be prevented by wage renegotiation. In this paper we study worker separations in the Dutch labor market. From an analysis of matched worker-firm data we conclude that both quits and layoffs are less likely to occur in high quality matches. We also find that workers with a high propensity to quit are offered higher wages to prevent them to quit. Similarly, workers with a high layoff probability give up some of their wage to prevent them from being laid-off. Despite these wage renegotiations some inefficiency in separations remains. However, there is a clear difference between quits and layoffs. Whereas inefficient quits are rare inefficient layoffs occur frequently. These phenomena may be related to downward wage rigidity. While it is easy to renegotiate higher wages to prevent quits it is much more difficult to renegotiate lower wages to prevent layoffs even if that would overall be beneficial to the workers involved. |
| Keywords: | layoffs; matched worker-firm dataset; quits; separations |
| JEL: | J31 J63 M51 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5739&r=lab |
| By: | Helen Connolly (Northeastern University); Peter Gottschalk (Boston College and IZA Bonn) |
| Abstract: | This paper revisits the old question of whether wage growth differs by education level. Do more educated workers invest more than less educated workers in firm specific, sector specific or general human capital? Do they gain more from improved job match? The paper makes both a methodological and a substantive contribution by offering an alternative strategy for separately identifying returns to general experience, sector specific experience, firm tenure, and job match. Our empirical results, based on the Survey of Income and Program Participation, show that overall wage growth is higher for more-educated workers. This reflects higher returns to general experience for college graduates and higher returns to sector experience for high school graduates. Improvements in job match grow monotonically with education. |
| Keywords: | low wage workers, returns to tenure, sector experience, general experience, job match |
| JEL: | J30 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2331&r=lab |
| By: | Manfred Antoni (Institute for Employment Research (IAB), Nuremberg); Elke J. Jahn (Harvard University, IAB Nuremberg and IZA Bonn) |
| Abstract: | Over the past three decades Germany has repeatedly deregulated the law on temporary agency work by stepwise increasing the maximum period for hiring-out employees and allowing temporary work agencies to conclude fixed-term contracts. These reforms should have had an effect on the employment duration within temporary work agencies. Based on an informative administrative data set we use hazard rate models to examine whether the employment duration has changed in response to these reforms. We find that the repeated prolongation of the maximum period for hiring-out employees significantly increased the average employment duration while the authorization of fixed-term contracts reduced employment tenure. |
| Keywords: | temporary agency work, regulation, labor law, duration analysis, hazard rate models |
| JEL: | C41 J23 J40 J48 K31 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2343&r=lab |
| By: | Cronqvist, Henrik (The Ohio State University); Heyman, Fredrik (Research Institute of Industrial Economies); Nilsson, Mattias (Worcester Polytechnic Institute); Svaleryd, Helena (Research Institute of Industrial Economies); Vlachos, Jonas (SITE, Stockholm School of Economcs, and CEPR) |
| Abstract: | We present evidence on whether managerial entrenchment affects workers' pay, using a large panel dataset that matches public firms with detailed data on their subsidiaries and workers. We find that CEOs with a stronger grip on control pay their workers higher wages, but CEO ownership of cash flow rights mitigates such behavior. Unionized workers and executives are found to get a larger share of the higher pay. These findings do not seem to be driven by productivity differences or reverse causality, and are robust to a series of robustness checks. Our evidence is consistent with an agency model in which entrenched managers pay higher wages because they come with direct private benefits for the manager, such as lower-effort wage bargaining and better CEO-employee relations, and suggests more broadly an important link between the corporate governance of large public firms and labor market outcomes. |
| Keywords: | Corporate governance; agency problems; private benefits; matched employer-employee data; wages |
| JEL: | G32 G34 J31 |
| Date: | 2006–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sifrwp:0047&r=lab |
| By: | Olga M. Fuentes (Department of Economics, Boston University); Simon Gilchrist (Department of Economics, Boston University) |
| Abstract: | We examine the evolution of the demand for skilled workers relative to unskilled workers in the Chilean manufacturing sector following Chile’s liberalization of trade in the late 1970’s. Following such trade reforms, the standard Heckscher-Olin model predicts that a low labor-cost country like Chile should experience an increased demand for low skilled workers relative to high skilled workers. Alternatively, if trade liberalization is associated with the adoption of new technologies, and technology is skill-biased, the relative demand for skilled workers may rise. Using a newly available plant-level data set that spans the sixteen year period 1979-1995, we find that the relative demand for skilled workers rose sharply during the 1979-1986 period and then stabilized. The sharp increase in demand for skilled workers coincided with an increased propensity to adopt new technologies as measured by patent usage. Plant-level analysis of labor demand confirms a significant relationship between the relative demand for skilled workers and technology adoption as measured by patent usage and other technology indicators. Our results suggest that skill-biased technological change is a significant determinant of labor demand and wage structures in developing economies. |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2005-045&r=lab |
| By: | Andy Snell; Jonathan Thomas |
| Abstract: | This paper analyses a model in which .rms cannot pay discriminate based on year of entry to a .rm, and develops an equilibrium model of wage dynamics and unemployment. The model is developed under the assumption of worker mobility, so that workers can costlessly quit jobs at any time. Firms on the other hand are committed to contracts. Thus the model is related to Beaudry and DiNardo (1991). We solve for the dynamics of wages and unemployment, and show that real wages do not necessarily clear the labor market. Using sectoral productivity data from the post-war US economy, we assess the ability of the model to match actual unemployment and wage series. We also show that equal treatment follows in our model from the assumption of at-will employment contracting. |
| Keywords: | Labor contracts, business cycle, unemployment, equal treatment, cohort effects |
| JEL: | E32 J41 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:144&r=lab |
| By: | Leif Danziger (Ben-Gurion University, Central European University and IZA Bonn) |
| Abstract: | Contrary to widespread belief, we show that low-pay workers might not generally prefer that the minimum wage rate be increased to a level where the labor demand is unitary elastic. Rather, there exists a critical value of elasticity of labor demand such that increases in the minimum wage rate make low-pay workers better off for higher elasticities, but worse off for lower elasticities. We demonstrate that the critical value decreases with the workers’ incomeequivalent wage rate and increases with their risk aversion. It is also shown that there may not exist an optimal minimum wage rate, and if it does exist, may not be unique. |
| Keywords: | elasticity of labor demand, minimum wage, competitive labor market |
| JEL: | J38 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2360&r=lab |
| By: | Kevin Lang (Department of Economics, Boston University); Michael Manove (Department of Economics, Boston University) |
| Abstract: | We propose a model that combines statistical discrimination and educational sorting that explains why blacks get more education than do whites of similar cognitive ability. Our model explains the di¤erence between blacks and whites in the relations between education and AFQT and between wages and education. It cannot easily explain why, conditional only on AFQT, blacks earn no more than do whites. It does, however, suggest, that when comparing the earnings of blacks and whites, one should control for both AFQT and education in which case a substantial black-white wage di¤erential reemerges. We explore and reject the hypothesis that di¤erences in school quality between blacks and whites explain the wage and education di¤erentials. Our ?ndings support the view that some of the black-white wage di¤erential re?ects the operation of the labor market. |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2006-008&r=lab |
| By: | Fernandez, Cristina (IESE Business School); Ortega, Carolina (FEDEA) |
| Abstract: | Spain has traditionally been known as a country of emigrants. However, in the last decade, Spain has experienced an unprecedented boom of immigration from three localized areas: Latin America, Africa and East Europe. In this paper, we study the behaviour of recent immigrants in the Spanish labour market identifying the major differences with the native population and tracking whether these differences fade away as their years of residence in Spain increase. With this objective, we focus on four labour market outcomes: labour supply, unemployment, incidence of overeducation and incidence of temporary contracts. Results show that, compared to natives, immigrants face initially higher participation rates, higher unemployment rates, higher incidence of overeducation and higher incidence of temporary contracts. However, five years after their arrival we could broadly say that participation rates start to converge to native rates, unemployment rates decrease to levels even lower than those of natives, and the incidence of temporary contracts and overeducation remains constant: no reduction of the gap with Spanish workers is observed. Therefore, we conclude that the Spanish labour market is managing to absorb the so called, 'immigration boom ', but at the expense of allocating immigrants in bad job-matches. |
| Keywords: | immigration; assimilation; labor force participation; unemployment; overeducation; temporary contracts; |
| JEL: | J11 J21 J61 |
| Date: | 2006–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0644&r=lab |
| By: | Bandiera, Oriana; Barankay, Iwan; Rasul, Imran |
| Abstract: | We present evidence from a firm level experiment in which we engineered an exogenous change in managerial compensation from fixed wages to performance pay based on the average productivity of lower-tier workers. Theory suggests that managerial incentives affect both the mean and dispersion of workers’ productivity through two channels. First, managers respond to incentives by targeting their efforts towards more able workers, implying that both the mean and the dispersion increase. Second, managers select out the least able workers, implying that the mean increases but the dispersion may decrease. In our field experiment we find that the introduction of managerial performance pay raises both the mean and dispersion of worker productivity. Analysis of individual level productivity data shows that managers target their effort towards high ability workers, and the least able workers are less likely to be selected into employment. These results highlight the interplay between the provision of managerial incentives and earnings inequality among lower-tier workers. |
| Keywords: | earnings inequality; managerial incentives; selection; targeting |
| JEL: | J33 M52 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5649&r=lab |
| By: | Virve Ollikainen; Tomi Kyyrä |
| Abstract: | In Finland the older unemployed can collect unemployment insurance (UI) benefits until retirement, while the entitlement period for younger groups is two years. In 1997 the eligibility age of persons benefiting from extended benefits was raised from 53 to 55. This paper takes advantage of this quasi-experimental setting to identify the effect of extended UI benefits on transitions out of unemployment among the elderly unemployed. We apply a competing risks version of a split population duration model to account for multiple exit routes and the possibility that some of the elderly unemployed may not be active in the labour market due to pension rules. We estimate that roughly half of the workers with extended UI benefits have effectively withdrawn from the labour market. Those who remain active have a similar hazard rate to employment as individuals with the two-year entitlement period, but much lower hazard rates to non-participation and labour market programmes. |
| Keywords: | unemployment insurance, unemployment duration, early retirement, competing risks models |
| Date: | 2006–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:fer:dpaper:400&r=lab |
| By: | Marco Manacorda (Queen Mary, University of London, CEP, London School of Economics and CEPR); Alan Manning (CEP, London School of Economics); Jonathan Wadsworth (Royal Holloway, University of London, CEP, London School of Economics and IZA Bonn) |
| Abstract: | the wages of native-born workers in the UK have failed to find any significant effect. This is something of a puzzle since Card and Lemieux, (2001) have shown that changes in the relative supply of educated natives do seem to have measurable effects on the wage structure. This paper offers a resolution of this puzzle – natives and immigrants are imperfect substitutes, so that an increase in immigration reduces the wages of immigrants relative to natives. We show this using a pooled time series of British cross-sectional micro data of observations on male wages and employment from the mid-1970s to the mid-2000s. This lack of substitution also means that there is little discernable effect of increased immigration on the wages of native-born workers, but that the only sizeable effect of increased immigration is on the wages of those immigrants who are already here. |
| Keywords: | wages, wage inequality, immigration |
| JEL: | J6 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2352&r=lab |
| By: | Jakob Roland Munch (Department of Economics, University of Copenhagen); Jan Rose Skaksen (Copenhagen Business School) |
| Abstract: | This paper studies the link between a firms education level, export performance and wages of its workers. We argue that firms may escape intense competition in international markets by using high skilled workers to differentiate their products. This story is consistent with our empirical results. Using a very rich matched worker-firm longitudinal dataset we find that firms with high export intensities pay higher wages. However, an interaction term between export intensity and skill intensity has a positive impact on wages and it absorbs the direct effect of the export intensity. That is, we find an export wage premium, but it accrues to workers in firms with high skill intensities. |
| Keywords: | exports; wages; human capital; rent sharing; matched worker- firm data |
| JEL: | J30 F10 I20 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:06-10&r=lab |
| By: | Victoria Prowse (Nuffield College, University of Oxford and IZA Bonn) |
| Abstract: | Using data on a cohort of British women who were born in 1958, this paper investigates the effects of qualifications, household structure and family background on the occupational penalty suffered by women in part-time employment. The analysis is conducted using a dynamic multinomial modelling framework in which hours of work and occupational attainment are jointly determined. The results reveal that at the bottom of the occupational hierarchy degree level qualifications improve the occupational attainment of women in parttime employment relative to that of women working full-time. In contrast, at top of the occupational hierarchy, degree level qualifications benefit full-timers more than part-timers. Contrary to the conventional wisdom, women with children have higher occupational attainment than childless women thus suggesting that women with children are relatively selective in terms of the jobs they are willing to accept. Furthermore, women with children experience a smaller part-time occupational penalty than childless women. Family background effects are present but small. |
| Keywords: | occupational mobility, part-time employment |
| JEL: | C23 C25 J62 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2342&r=lab |
| By: | Garibaldi, Pietro |
| Abstract: | This paper proposes a matching model that distinguishes between job creation by existing firms and job creation by firm entrants. The paper argues that vacancy posting and job destruction on the extensive margin, i.e. from firms that enter and exit the labour market, represents a viable mechanism for understanding the cyclical properties of vacancies and unemployment. The model features both hiring freeze and bankruptcies, where the former represents a sudden shut down of vacancy posting at the firm level with labour downsizing governed by natural turnover. A bankrupt firm, conversely, shut down its vacancies and lay offs its stock of workers. Recent research in macroeconomics has shown that a calibration of the Mortensen and Pissarides matching model account for 10 percent of the cyclical variability of the vacancy unemployment ratio displayed by U.S. data. A calibration of the model that explicitly considers hiring freeze and bankruptcy can account for 20 to 35 percent of the variability displayed by the data. |
| Keywords: | matching models; unemployment dynamics |
| JEL: | J30 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5835&r=lab |
| By: | Bayoumi, Tamim; Sutton, Bennett; Swiston, Andrew J. |
| Abstract: | We analyze the flexibility of the Canadian labour market across provinces in both an inter- and intra-national context using macroeconomic data on employment, unemployment, participation, and (for Canada) migration and real wages. We find that Canadian labour markets respond in a similar manner to their U.S. counterparts and are more flexible than those in major euro area countries. Within Canada, the results indicate that labour markets in Ontario and provinces further west are more flexible, particularly with regard to migration, while those further east are less so. |
| Keywords: | economic flexibility; labour market; migration |
| JEL: | E24 J21 J61 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5847&r=lab |
| By: | Holmlund, Bertil (Department of Econoics, Uppsala University); Liu, Qian (Department of Economics, Uppsala University); Nordström Skans, Oskar (IFAU - Institute for Labour Market Policy Evaluation) |
| 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. Two years postponement reduces the present value of life time earnings by 40-50 percent of annual earnings at age 40. |
| Keywords: | timing of education; schooling interruptions; work experience |
| JEL: | I23 J24 J31 |
| Date: | 2006–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2006_011&r=lab |
| By: | Juanna Schrøter Joensen (University of Aarhus); Helena Skyt Nielsen (University of Aarhus and IZA Bonn) |
| Abstract: | Outsourcing of jobs to low-wage countries has increased the focus on the accumulation of skills – such as Math skills – in high-wage countries. In this paper, we exploit a high school pilot scheme to identify the causal effect of advanced high school Math on labor market outcomes. The pilot scheme reduced the costs of choosing advanced Math because it allowed for at more flexible combination of Math with other courses. We find clear evidence of a causal relationship between Math and earnings for the students who are induced to choose Math after being exposed to the pilot scheme. The effect partly stems from the fact that these students end up with higher education. |
| Keywords: | Math, high school curriculum, instrumental variable, local average treatment effect |
| JEL: | I20 J24 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2357&r=lab |
| By: | François Gourio (Department of Economics, Boston University); Pierre-Alexandre Noual (University of Chicago.) |
| Abstract: | This paper attempts to reconcile the high apparent aggregate elasticity of labor supply with small micro estimates. We elaborate on Rogerson’s seminal work (1988) and show that his results rely neither on complete markets nor on lotteries, but rather on the indivisibility of labor supply and the marginal homogeneity of the workforce. We derive two robust implications of a setup with indivisible labor but without lotteries, using either a complete markets model or an incomplete markets model. Implication (1) is that agents with reservation wages far above or below the market wage are less responsive (in labor supply) to the business cycle than agents whose reservation wage is around the market wage. Implication (2) is that the aggregate elasticity is given by the marginal homogeneity of the workforce. We test implication (1) using the PSID and find support for it. We build an incomplete market model and calibrate it to cross-sectional moments of hours worked. We show that it can reproduce the feature (1). This allows us to use the model to evaluate the importance of feature (2), i.e. to estimate the aggregate elasticity of labor supply implied by the marginal homogeneity. |
| Keywords: | indivisible labor, reservation wage distribution, labor supply, business cycles. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2006-009&r=lab |
| By: | Ana Rute Cardoso (IZA Bonn and University of Minho); Shoshana Neuman (Bar-Ilan University, CEPR and IZA Bonn); Adrian Ziderman (Bar-Ilan University and IZA Bonn) |
| Abstract: | Using a unique eight-year data set, merging population census and national insurance data, the paper examines and compares patterns of wage mobility in Israel. First, the public and the private sectors are compared. Second, within each of these sectors, a distinction is made between sub-sector groupings that exhibit a high level of concentration and those that are more diffuse and unregulated. Based on alternative measures of wage mobility, the central finding of the paper is that the extent of wage mobility in a given economic sector is negatively related to the degree of concentration in that sector. |
| Keywords: | wage mobility, concentration, economic sectors, Israel |
| JEL: | J3 J6 L5 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2335&r=lab |
| By: | Giorgio Brunello (University of Padua); Beatrice d'Hombres (European Commission Joint Research Centre) |
| Abstract: | We use data from the European Community Household Panel to investigate the impact of body weight on wages in 9 European countries. When we pool the available data across countries and years, we find that a 10% increase in the average body mass index reduces the real earnings of males and females by 3.27% and 1.86% respectively. Since European culture, society and labour market are heterogeneous, we estimate separate regressions for Northern and Southern Europe and find that the negative impact of the body mass index on earnings is larger - and statistically significant - in the latter area. |
| Keywords: | wages, body mass index, Europe |
| JEL: | I12 J3 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0027&r=lab |
| By: | Ichino, Andrea; Mealli, Fabrizia; Nannicini, Tommaso |
| Abstract: | The diffusion of Temporary Work Agency (TWA) jobs originated a harsh policy debate and ambiguous empirical evidence. Results for the US, based on quasi-experimental evidence, suggest that a TWA assignment decreases the probability of finding a stable job, while results for Europe, based on the Conditional Independence Assumption (CIA), typically reach opposite conclusions. Using data for two Italian regions, we use a matching estimator to show that TWA assignments can be an effective springboard to permanent employment. We also propose a simulation-based sensitivity analysis, which highlights that only for one of these two regions our results are robust to specific failures of the CIA. We conclude that European studies based on the CIA should not be automatically discarded, but should be put under the scrutiny of a sensitivity analysis like the one we propose. |
| Keywords: | matching estimators; temporary work agencies |
| JEL: | C2 C8 J6 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5736&r=lab |
| By: | C. Katharina Spiess (DIW Berlin and FU Berlin); Katharina Wrohlich (DIW Berlin and IZA Bonn) |
| Abstract: | Germany is known to have one of the lowest fertility rates among Western European countries and also relatively low employment rates of mothers with young children. Although these trends have been observed during the last decades, the German public has only recently begun discussing these issues. In order to reverse these trends, the German government recently passed a reform of the parental leave benefit system in line with the Scandinavian model. The core piece of the reform is the replacement of the existing meanstested parental leave benefit by a wage-dependent benefit for the period of one year. In this paper we simulate fiscal costs and expected labour market outcomes of this reform. Based on a micro-simulation model for Germany we calculate first-round effects, which assume no behavioural changes and second-round effects, where we take labour supply changes into account. Our results show that on average all income groups, couples and single households, benefit from the reform. The calculation of overall costs of the reform shows that the additional costs are moderate. As far as the labour market behaviour of parents is concerned, we find no significant changes of labour market outcomes in the first year after birth. However, in the second year, mothers increase their working hours and labour market participation significantly. Our results suggest that the reform will achieve one of its aims, namely the increase in the labour market participation of mothers with young children. |
| Keywords: | female labour supply, parental leave, micro simulation study |
| JEL: | J22 H31 I38 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2372&r=lab |
| By: | Dave E. Marcotte (University of Maryland Baltimore County and IZA Bonn) |
| Abstract: | In this paper, I make use of data from the 2000 follow-up of the National Education Longitudinal Survey (NELS) post-secondary education transcript files to extend what is known about the value of education at community colleges. I examine the effects of enrollment in community colleges on students’ subsequent earnings. I estimate the effects of credits earned separate from credentials because community colleges are often used as a means for students to engage in study not necessarily leading to a degree or certificate. I find consistent evidence of wage and salary effects of both credits and degrees, especially for women. There is no substantial evidence that enrollment in vocational rather than academic coursework has a particularly beneficial effect, however. |
| Keywords: | community college, training, earnings, human capital |
| JEL: | I2 J24 J31 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2334&r=lab |
| By: | Giorgio Brunello (University of Padova, Collegio Carlo lberto Torino, CESifo and IZA Bonn); Daniele Checchi (University of Milano and IZA Bonn) |
| Abstract: | This paper investigates whether at the interaction between family background and school tracking affects human capital accumulation. Our a priori view is that more tracking should reinforce the role of parental privilege, and thereby reduce equality of opportunity. Compared to the current literature, which focuses on early outcomes, such as test scores at 13 and 15, we look at later outcomes, including literacy, dropout rates, college enrolment, employability and earnings. While we do not confirm previous results that tracking reinforces family background effects on literacy, we do confirm our view when looking at educational attainment and labour market outcomes. When looking at early wages, we find that parental background effects are stronger when tracking starts earlier. We reconcile the apparently contrasting results on literacy, educational attainment and earnings by arguing that the signalling role of formal education – captured by attainment – matters more than actual skills – measured by literacy – in the early stages of labour market experience. |
| Keywords: | education, tracking, literacy, wages |
| JEL: | J24 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2348&r=lab |
| By: | Guiso, Luigi; Pistaferri, Luigi; Schivardi, Fabiano |
| Abstract: | This paper studies the costs of adjusting employment, distinguishing between firms' firing and workers' mobility costs. We construct a simple dynamic general equilibrium model of labour demand and supply and show that only the joint response of employment and wages to firm level shocks can discriminate between the two types of costs. We use matched employer-employees data for Italy to estimate the model and find that both types of costs are present, that they are sizeable (in the range of 19,000 euros in total) and that firing costs account for almost 90 percent of total adjustment costs. |
| Keywords: | adjustment costs; matched employer-employees data; mobility costs |
| JEL: | C33 D21 J63 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5787&r=lab |