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on Labour Economics |
| By: | Arne Uhlendorff |
| Abstract: | This study analyzes the mobility between three labor market states: working in low paid jobs, working in higher paid jobs and not working. Using German panel data I estimate dynamic multinomial logit panel data models with random effects taking the initial conditions problem and potential endogeneity of panel attrition into account. In line with results from other countries, this first study on Germany finds true state dependence in low pay jobs and confirms previous results of state dependence in non-employment. Moreover, I find evidence for a "low pay no pay cycle", i.e. being low paid or not employed itself increases the probability of being in one of these states in the next year. However, compared to non working, being low paid does not have adverse effects on future employment prospects: the employment probability increases with low pay employment and the probability of being high paid seems to be higher for previously low paid workers. I find no evidence for endogenous panel attrition. |
| Keywords: | low pay dynamics, unemployment dynamics, dynamic random effects models, state dependence, panel attrition, unobserved heterogeneity |
| JEL: | J64 J62 J31 C33 C35 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp648&r=lab |
| By: | Bart, COCKX (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Stéphane, ROBIN; Christian, GOEBEL |
| Abstract: | We verify whether an income support policy for part-time workers in Belgium increases the transition from unemployment to non-subsidised, “regular” employment. Using a sample of 8630 long-term unemployed young women, whose labour market history is observed from 1998 to 2001, we implement the “timing of events approach proposed byAbbring et Van den Berg (2003) to control for selection effects. Our results suggest that the policy has a significantly positive effect on the transition to non-subsidised employment when one does not control for unobserved heterogeneity. This effect remains positive, but becomes insignificant, when one corrects for selection on unobservable characteristics. |
| Keywords: | Active labour markets policies, Evaluation, Mixed Proportional Hazard Models |
| JEL: | J64 J68 C41 |
| Date: | 2006–19–15 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2006050&r=lab |
| By: | Weinberg, Bruce A. (Ohio State University and NBER); Borghans, Lex (ROA, University of Maastricht); Weel, Bas ter (UNU-MERIT) |
| Abstract: | This paper develops a framework to understand the role of interpersonal interactions in the labor market including task assignment and wages. Effective interpersonal interactions involve caring, to establish cooperation, and at the same time directness, to communicate in an unambiguous way. The ability to perform these tasks varies with personality and the importance of these tasks varies across jobs. An assignment model shows that people are most productive in jobs that match their style and earn less when they have to shift to other jobs. An oversupply of one attribute relative to the other reduces wages for people who are better with the attribute in greater supply. We present evidence that youth sociability affects job assignment in adulthood. The returns to interpersonal interactions are consistent with the assignment model. |
| Keywords: | Interpersonal Interactions, Wage Level, Wage Structure |
| JEL: | J21 J24 J31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2006045&r=lab |
| By: | Guillaume Horny; Rute Mendes; Gerard J. Van den Berg |
| Abstract: | We study job mobility using a multivariate hazard model in discrete time. It involves two correlated random effects, one at the firm level and another at the worker level. Bayesian estimates are based on a Portuguese matched employer-employee dataset. Our results confirm the importance of unobserved heterogeneity at the individual level and at the firm level. Furthermore, the model performs better when allowing for an assortative matching mecanism in terms of employers’ and employees’ unobservables. |
| Keywords: | Job transitions, assortative matching, Gibbs sampling, frailties, dynamic models, matched employer-employee data. |
| JEL: | C11 C15 C41 J20 J41 J62 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2006-32&r=lab |
| By: | Carlos Medina; José Escobar |
| Abstract: | We estimate the effect on hourly wages and hours of work, of an increase in the number of hours of work, defined by law as daytime hours of work. To identify the parameter of interest, we estimate difference in difference models. Although we do not know the working hour schedule; we exploit the necessary conditions for the intervention to affect them, to define treatment and comparison groups. We find that wages of males older than 25 working in industry in metropolitan areas decreased more than 11% due to the reform, while females older than 25 working in industry in metropolitan areas reduced their hours of work per week in 3.6 hours. There is evidence, although weaker, of increases in hourly wages for male workers in the other sectors of the economy. This suggests that employers increased labor demand in those sectors. Overall, the reform would have had positive effects on all workers but those in industry. |
| Date: | 2006–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:001043:002745&r=lab |
| By: | Daniela Del Boca (University of Turin); Silvia Pasqua (University of Turin); Chiara Pronzato (Institute for Social and Economic Research) |
| Abstract: | In this paper, we aim to explore the impact of social policies and labour market characteristics on the woman’s joint decisions of working and having children, using data from the European Community Household Panel (ECHP). We include in the analysis, beyond personal characteristics, variables related to the childcare system, parental leave arrangements, and labour market flexibility. Results show that a non negligible portion of the differences in participation and fertility rates across women from different European countries can be attributed to the characteristics of these institutions. |
| Keywords: | employment, europe, fertility |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2006-55&r=lab |
| By: | Jonathan F. Pingle |
| Abstract: | This paper presents estimates of the impact of Social Security's Delayed Retirement Credit on the employment rates of older men. The credit raises lifetime social security benefit payments for recipients who delay receiving benefits after age 65 and offers a rare and important test of whether labor supply incentives built in to the program can promote work at older ages. The results suggest that the increased incentives raised employment among workers over age 65. In addition, the recent increases in social security's Normal Retirement Age also appear to be pushing up labor supply. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2006-37&r=lab |
| By: | Davis, Steven J. (The University of Chicago Graduate School of Business); Henrekson, Magnus (Dept. of Economics, Stockholm School of Economics) |
| Abstract: | Abstract: Following a severe contraction in the early 1990s, the Swedish economy accumulated a strong record of output growth coupled with a disappointing performance in the labor market. As of 2005, hours worked per person 20–64 years of age are 10.5 percent below the 1990 peak and a mere one percent above the 1993 trough. Employment rates tell a similar story. Our explanation for Sweden’s weak performance with respect to market work activity highlights the role of high tax rates on labor income and consumption expenditures, wage-setting arrangements that compress relative wages, business tax policies that disfavor labor-intensive industries and technologies, and a variety of policies and institutional arrangements that disadvantage younger and smaller businesses. This last category includes tax policies that penalize wealth accumulation in the form of owner-operated businesses, a pension system that steers equity capital and loanable funds to large incumbent corporations, and legally mandated job-security provisions that weigh more heavily on smaller and younger businesses. We describe these features of the Swedish institutional setup and provide evidence of their consequences based largely on international comparisons. |
| Keywords: | Business taxation; Industry structure; Swedish economic performance; Tax effects; Time allocation; Wage-setting institutions; Work activity |
| JEL: | D13 H30 J20 L52 O52 |
| Date: | 2006–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0647&r=lab |
| By: | Christian, GOEBEL |
| Abstract: | In this paper we estimate the impact of temporary employment subsidies for young long-)term unemployed workers in Belgium on the transition rate from employment to non-employment. We account for selective participation on the basis of a multivariate duration model with correlated unobserved heterogeneity. Our estimates indicate that the policy decreases the transition rate from employment to non-employment in the first year of participation. There is no signification effect on the transition rates in the second year and after participation. |
| Keywords: | Evaluation, Subsidised employment, MMPH, employment duration |
| JEL: | J64 J68 C41 H43 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2006035&r=lab |
| By: | Fatih Guvenen; Burhanettin Kuruscu |
| Abstract: | In this paper we present an analytically tractable general equilibrium overlapping-generations model of human capital accumulation, and study its implications for the evolution of the U.S. wage distribution from 1970 to 2000. The key feature of the model, and the only source of heterogeneity, is that individuals differ in their ability to accumulate human capital. Therefore, wage inequality results only from differences in human capital accumulation. We examine the response of this model to skill-biased technical change (SBTC) theoretically. We show that in response to SBTC, the model generates behavior consistent with the U.S. data including (i) a rise in overall wage inequality in both the short run and long run, (ii) an initial fall in the education premium followed by a strong recovery, leading to a higher premium in the long run, (iii) the fact that most of this fall and rise takes place among younger workers, (iv) stagnation in median wage growth (and a slowdown in aggregate labor productivity), and (v) a rise in consumption inequality that is much smaller than the rise in wage inequality. These results suggest that the heterogeneity in the ability to accumulate human capital is an important feature for understanding the effects of SBTC, and interpreting the transformation that the U.S. economy has gone through since the 1970s. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmem:144&r=lab |
| By: | Wang, Iris J Y (Dalarna University, Economics and Society); Carling, Kenneth (Institute for Labour Market Policy Evaluation); Nääs, Ola (Dalarna University, Economics and Society) |
| Abstract: | This paper seeks to determine the effect of summer jobs offered by the public sector on high-school students’ labour market achievement by use of quasi-experimental data. Many municipalities in Sweden offer summer jobs within their organizations to high-school students. The municipality of Falun randomly allocates about 200 such summer jobs per year by a lottery. Because of this, the effect of a summer job might be determined while the issue of self-selection bias is controlled. Our study finds that summer jobs slightly improve the earnings immediately after graduation from high school, but the effect does not persist. |
| Keywords: | intention-to-treat; on-treatment; Wilcoxon-Mann-Whitney test |
| JEL: | C41 C93 J68 |
| Date: | 2006–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2006_014&r=lab |
| By: | Davide Castellani (University of Urbino,Italy.); Ilaria Mariotti (DIG-Polytechnic University of Milano, Italy.); Lucia Piscitello (DIG-Polytechnic University of Milano, Italy.) |
| Abstract: | The present paper investigates the effect of outward investments by Italian manufacturing firms on the domestic employment level and on its skill composition, as measured by the increase in the aggregate share of skilled workers (managers and clerks) in total employment. In doing so, the paper extends the existing empirical literature on the Italian case that has so far provided evidence on the changes in the employment intensity but not on the composition of the domestic employment. We carry out an analysis at the firm level based on the the behaviour of 108 Italian firms, which became multinational for the first time in 1998-2003, investing in either developed countries, CEECs or other developing economies, compared with the behaviour of a counterfactual group of firms constituted by 2,500 national firms that never invested abroad in the considered period. The econometric analysis supports that the internationalisation of activities by manufacturing firms does not reduce their domestic employment, independently of the destination of the investment, and that it may change the division of labour within the firm, thus leading to a higher share of skilled labour intensive activities, especially as a result of investments in CEECs. |
| Keywords: | Foreign direct investment, Employment, Skill-upgrading. |
| JEL: | F2 J21 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp185&r=lab |
| By: | Mathias Kuepie (DIAL,CEPS/INSTEAD); Christophe Nordman (DIAL, IRD, Paris); François Roubaud (DIAL, IRD, Paris) |
| Abstract: | (english) The purpose of this paper is to study the effects of education on urban labour market participation and earnings in seven major West African cities. Our results show that although education does not always guard against unemployment, it does increase individual earnings in Abidjan, Bamako, Cotonou, Dakar, Lome, Niamey and Ouagadougou and opens the door to get into the most profitable niches, which are found in the formal private and public sectors. We shed light on convex returns to education in all the cities considered. Besides, not controlling for the endogeneity of education leads to biased estimated returns (either upward or downward depending on the city) which stresses the complexity of the mechanisms linking education and earnings across cities and sectors. We also bring some support to the idea according to which social capital may largely be at work in this relationship. Finally, a major contribution of this paper is to provide evidence of significant effects of education on individual earnings in the informal sectors of the major WAEMU cities, even at high levels of schooling. _________________________________ (français) L'objectif de ce papier est d’étudier les effets de l’éducation sur la participation au marché du travail urbain et la rémunération du travail dans sept capitales d’Afrique de l’Ouest francophones. Nous montrons que si l’éducation ne constitue pas toujours un rempart contre le chômage, elle est un facteur incontestable d’accroissement des gains sur les marchés du travail d’Abidjan, Bamako, Cotonou, Dakar, Lomé, Niamey et Ouagadougou. Elle permet notamment aux individus les mieux dotés de s’insérer dans les créneaux les plus rentables à savoir les secteurs formels privé et public. Les rendements marginaux de l’éducation estimés sont convexes dans toutes les villes considérées. Nous montrons également que ne pas prendre en compte l’endogénéité supposée de la variable d’éducation dans les fonctions de gains conduit à surestimer ou à sous-estimer les rendements de l’éducation suivant les cas. Ce résultat rend compte de la complexité du lien entre éducation et revenus en fonction de la ville et du secteur d’affiliation des individus. De plus, nos estimations corroborent l’idée selon laquelle le capital social des travailleurs interférerait de façon significative dans ce mécanisme. Finalement, l’apport de notre étude est aussi de montrer que le capital éducatif, y compris à des niveaux élevés, permet un accroissement substantiel des gains dans le secteur informel de la plupart de ces grandes villes de l’UEMOA. |
| Keywords: | Returns to education, earnings, endogeneity, selectivity, informal sector, Sub-Saharan West Africa, Rendements de l’éducation, revenus, endogénéité, effet de sélection, secteur informel, Afrique de l’Ouest. |
| JEL: | J24 J31 O12 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt200616&r=lab |
| By: | Emilia Del Bono (Institute for Social and Economic Research); Fernando Galindo-Rueda (Department of Trade and Industry) |
| Abstract: | This paper investigates a unique feature of the English educational system to estimate the causal effect of compulsory schooling on labour market outcomes. We examine school leaving rules that allow for discrete variation in exit dates by date of birth within school cohorts. This natural experiment enables a regression discontinuity design that differences out confounding factors discussed in the literature. Individuals compelled to stay in school for as little as three months longer than their classmates tend to achieve significantly higher qualification levels and experience better labour market outcomes. Our analysis of variation of impacts by age of compulsory schooling allows us to provide valuable new insights on the role of education credentials in the labour market. |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2006-44&r=lab |
| By: | Edith Archambault |
| Abstract: | In France, like in other Western European countries, the third sector has been on a steady increase during the last decade as the results of the Johns Hopkins comparative project shows it. Today nonprofit organisations play also an increasing role in labour market policies. In a country with a corporatist welfare state, the access to the labour-market represents the key for social rights. |
| Keywords: | nonprofit sector; labour market policies; welfare mix; corporatist welfare state; cross-country comparison |
| Date: | 2006–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00120005_v1&r=lab |
| By: | Grip Andries de; Sieben Inge; Jaarsveld Danielle van (ROA wp) |
| Abstract: | Employment in the call centre sector in the Netherlands, similar to the trend in other European countries, is expanding greatly. In 2001, Datamonitor (2002) estimated that 1,266 call centres were operating in the Netherlands. This number is expected to have risen to roughly 2,000 in 2006. An estimated 188,000 people work in this sector at the moment, representing 2.5% of the entire working population in the Netherlands. This represents the highest percentage in Europe with the exception of Ireland. The call centre workforce is employed by in-house and subcontractor call centres. In-house call centres are part of the firm for which they handle customer contacts, whereas subcontractor call centres, which provide customer contact services for other firms or institutions. The call centre sector features a large number of employees working in so-called atypical employment contracts, in particular ‘agents’ who handle the actual customer contacts (De Grip, Hoevenberg & Willems, 1997). Agents are often hired into temporary appointments, part-time contracts, irregular shifts, stand-by contracts, et cetera. The use of such atypical contracts is closely related to the great need for flexibility in the deployment of staff (Kalleberg, 2000). Such workforce flexibility is necessary in order to negotiate peaks and valleys in call volumes. In addition, many call centres prioritize on cost reduction, and this approach constrains investment in personnel. Call centres are therefore often classified as ‘electronic sweatshops’ offering only ‘dead-end jobs’ (Taylor, et al., 2002; Deery & Kinnie, 2004).The labour market for call centre agents could thus be characterised as a ‘secondary labour market’ of insecure, poorly paid jobs without any career opportunities (see e.g. Dekker, De Grip & Heijke, 2002). However, the call centre sector is heterogeneous with respect to employment conditions. For example, agents who work in in-house call centres have better employment conditions than their counterparts in subcontractor call centres. The Dutch industrial relations system offers one explanation for this difference. Agents working in in-house call centres have protections defined by the collective labour agreement (CLA) of the firm the call centre agents work in. In contrast, the subcontractor call centres did not have any comparable protections or their own CLA until 2003. The establishment of a CLA that covers agents employed in Dutch subcontractor call centres in 2003 is a unique phenomenon in the European call centre market (Roland, 2000b).The difference in working conditions between in-house and subcontractor call centres raises the following research question addressed in this paper: To what extent is the labour market for call centre agents a dual labour market, with a secondary segment in the subcontractor call centres, and a primary segment in the form of a ‘professional labour market’ in the in-house call centres?To answer this question, we analyze survey data collected from a national survey of call centre managers in the Netherlands. Moreover, we investigate whether the aforementioned need for workforce flexibility may provide an explanation for the labour market segmentation in the call centre sector and if this segmentation is embedded in Dutch industrial relations. We begin with a brief overview of labour market segmentation theory. Next, we describe the dataset, and provide some brief background about the Dutch call centre sector and its workforce. Then, we investigate the differences between employment conditions in in-house and subcontractor call centres, to determine whether there is a segmented labour markets. Finally, we assess the influence of industrial relations in the call centre sector, and determine whether these reflect the labour market segmentation. |
| Keywords: | education, training and the labour market; |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umarow:2006007&r=lab |
| By: | Kvaløy, Ola (Norsk hotellhøgskole, Institutt for økonomi og ledelse, University of Stavanger); Olsen, Trond E. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | Why does individual performance pay seem to prevail in human-capital-intensive industries where teamwork is so common? We present a model that aims to explain this. In a repeated game model of relational contracting, we analyze the conditions for implementing peerdependent incentive regimes when agents possess indispensable human capital. We show that the larger the share of values that the agents can hold-up, the lower is the implementable degree of peer-dependent incentives. In a setting with team effects - complementary tasks and peer pressure, respectively - we show that while group-based incentives are optimal if agents are dispensable, it may be costly, and in fact suboptimal, to provide team incentives once the agents become indispensable. |
| Keywords: | Relational contracts; multiagent moral hazard; indispensable human capital |
| JEL: | D23 J33 L14 |
| Date: | 2006–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2006_022&r=lab |
| By: | Bernard Gazier (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Hélène Zajdela (CEPN - Centre d'économie de l'Université de Paris Nord - [CNRS : UMR7115] - [Université Paris-Nord - Paris XIII], CEE - Centre d'Etudes de l'Emploi - [Ministère de la Recherche - Ministère chargé de l'Emploi]) |
| Abstract: | The aim of this paper is to discuss the relevance of «making work pay» policies from within. We first discuss the various justifications of the motto and then connect them to the existing variety of implementation experiences in Europe. We compare the classical organization of arguments behind the motto "making work pay" to an hourglass, the diversity of national institutions regarding work and social protection being one of its top parts ; work incentives constitute the narrow part ; lastly, the variety of implementations corresponds to its other wide end. We show that this unifying reasoning is not relevant and propose a model which corresponds to a more complex logic : the diversity of national institutions and implementations being matched by a set of different and conflicting objectives regarding work, whose dynamic dimension is gaining more and more importance. The policy debate should then be summed up by another motto : «Making transitions pay». |
| Keywords: | Social protection, labour market policies, work incentives. |
| Date: | 2006–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00119155_v1&r=lab |