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on Labour Economics |
| By: | Emilia Del Bono (Institute for Social and Economic Research); Daniela Vuri (University of Florence) |
| Abstract: | This paper explores a newly available Italian panel dataset obtained from a 1:90 sample of social security administrative records (INPS) to investigate whether observed differences in the characteristics of workers and firms, and observed differences in job mobility are able to explain gender differences in log wage growth. We focus on the wage growth of individuals aged 15-30, a crucial period in the formation of lifetime earnings. We find that there is a significant and growing pay differential between men and women during their early careers, and that between-firm wage growth is substantially higher for men than for women. Controlling for individual observed and unobserved heterogeneity does not reduce, instead exacerbates the effect of a firm change on the gender wage growth gap. On the other hand, when we take into account the type of industry, occupation, and the size of the firm workers move to when changing employer we see a reduction of the unexplained gender differential. We also find that women are not always penalized with respect to men, but this occurs only for positive wage changes, for the highest wage increases, and when women move towards larger firms. These results suggest that job and firm characteristics, rather than across-the-board discrimination, are the most important determinants of the gender wage growth differential in the Italian labour market. |
| Keywords: | gender gap, wages |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2006-59&r=lab |
| By: | Pilar González (CETE, Faculdade de Economia, Universidade do Porto); Maria Clementina Santos (CETE, Faculdade de Economia, Universidade do Porto); Luís Delfim Santos (CEMPRE, Faculdade de Economia, Universidade do Porto) |
| Abstract: | Deep changes characterize the evolution of the Portuguese labor market concerning the average schooling of workers, particularly since the 1980s. The purpose of this paper is to investigate the consequences of those changes in the gender wage gap. In particular, we analyze and compare the way that this process has evolved in the groups of young workers and older workers. Our findings suggest that the major part of the pay gap refers to employer discrimination practices for both age group cohorts: in the case of the younger workers, discrimination plays an increasing role in explaining the wage gap whereas for the older workers discrimination remains stable overtime. Furthermore, the attributes related to the characteristics of jobs are the major sources of the explained pay gap. In particular, the different way men and women are distributed among the sectors of industry is the main reason of the gap for both cohorts. |
| Keywords: | Labor market; discrimination; salary wage differentials |
| JEL: | J71 C50 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:0701&r=lab |
| By: | Ronny Freier; Viktor Steiner |
| Abstract: | We develop a structural multi-factor labour demand model which distinguishes between eight labour categories including non-standard types of employment such as marginal employment. The model is estimated for both the number of workers and total working hours using a new panel data set. For unskilled and skilled workers in full-time employment, we find labour demand elasticities similar to previous estimates for the west German economy. Our new estimates of own-wage elasticities for marginal employment range between -.4 (number of male workers in west Germany) to -1 (working hours for women). We illustrate the implications of these estimates by simulating the likely labour demand effects of the recent increase of employers' social security contributions (SSC) on marginal employment in Germany. |
| Keywords: | Multi-factor labour demand for heterogenous labour, marginal employment |
| JEL: | J21 J23 C51 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp662&r=lab |
| By: | Pouliakas, Konstantinos; Theodossiou, Ioannis |
| Abstract: | The increasing interest in incentive pay schemes in recent years has raised concerns regarding their potential damaging effect on intrinsic job satisfaction, or the security of employment. This study explores the impact of both individual and gain-sharing incentives on the overall job satisfaction of workers in the UK, as well as their satisfaction with various facets of jobs, namely total pay, job security, and the actual work itself. Using data from six waves (1998-2003) of the British Household Panel Survey (BHPS), and after correcting for the sorting problem that arises, no significant difference in overall job utility is found between those receiving performance-related pay (PRP) and those on other methods of compensation. In addition, non-economic arguments that PRP crowds-out the intrinsic satisfaction of jobs are also not supported, as are popular concerns regarding the adverse impact of PRP schemes on job security. An important asymmetry in the manner in which individual and gain-sharing incentives affect the utility of employees is nonetheless unearthed, as the latter are consistently found to have a positive effect on employee well-being. |
| Keywords: | performance-related-pay; job security; intrinsic satisfaction; sorting; |
| JEL: | J33 J28 |
| Date: | 2004–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1629&r=lab |
| By: | Peter Skott (University of Massachusetts Amherst); Frederick Guy (Birkbeck College) |
| Abstract: | New information and communication technologies, we argue, have been 'power-biased': in many industries they have allowed firms to monitor workers more closely, thus reducing the power of these workers. An efficiency wage model shows that 'power-biased technical change' in this sense may generate rising inequality accompanied by an increase in both unemployment and work intensity. JEL Categories: J31, O33 |
| Keywords: | power-biased technical change, efficiency wages, inequality, work intensity. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2007-02&r=lab |
| By: | Susana Iranzo; Fabiano Schivardi; Elisa Tosetti |
| Abstract: | We study the relation between workers’ skill dispersion and firm productivity using a unique dataset of Italian manufacturing firms from the early eighties to the late nineties with individual records on all their workers. Our measure of skill is the individual worker’s effect obtained as a latent variable from a wage equation. Estimates of a generalized CES production function that depends on the skill composition show that a firm’s productivity is positively related to skill dispersion within occupational status groups (production and non-production workers) and negatively related to skill dispersion between these groups. Consistently, the variance decomposition shows that most of the overall skill dispersion is within and not between firms. We find no change over time in the share of each component, in contrast with some evidence from other countries, based on less comprehensive data. |
| Keywords: | Matched data, Skill distribution, Productivity, Segregation. |
| JEL: | D24 J24 L23 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:200617&r=lab |
| By: | Cowling, Marc |
| Abstract: | There is increasing evidence of a widening in the cross-country dispersion in general working hours. More recently, however, there has been considerable attention given to the “long hours culture” phenomenon identified in certain segments of the labour market, in particular amongst professional and managerial staff, and potential causes and impacts of such a culture. In this study we use a large-scale European worker survey to test the validity of several competing hypotheses of why people work long hours. Our results show that there is a labour – quality of leisure trade-off for women, but not for men. Other key determinants of long working hours are industry sector, occupational status, gender and job security proxied by employment contracts. |
| Keywords: | long hours work; labour-leisure trade-offs; labour supply |
| JEL: | J24 J22 |
| Date: | 2007–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1614&r=lab |
| By: | Mion, Giordano; Naticchioni, Paolo |
| Abstract: | Using a matched employer-employee database for Italy we look at the spatial distribution of wages across provinces. This rich database allows us to contribute at opening the black box of agglomeration economies exploiting the micro dimension of the interaction among economic agents, both individuals and firms. We provide evidence that firm size and particularly skills are sorted across space, and explain a large portion of the spatial wage variation that could otherwise be attributed to aggregate proxies of agglomeration externalities. Our data further support the assortative matching hypothesis, that we show not to be driven by co-location of "good" workers and firms. Finally, we point out that this assortative matching is negatively related to local market size. |
| Keywords: | Spatial Externalities; Panel-Data; Skills; Firms' Heterogeneity; Sorting; Matching. |
| JEL: | J31 R30 J61 R23 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1721&r=lab |
| By: | Malcolm Brynin (Institute for Social and Economic Research); Simonetta Longhi (Institute for Social and Economic Research) |
| Abstract: | Higher education has expanded considerably in recent years. Human capital theory implies that this expansion has been the result of a growth in demand for higher level technical and managerial skills – commonly known as the technology bias thesis. Evidence of a positive coefficient for higher education relative to lower educational levels in Mincer-type wage equations and the maintenance of this differential over time are treated as supportive of the technology bias thesis. A more sociological approach might take into account increased social demand for education, which should result in increased competition between graduates for jobs. Moreover, the jobs which face the most competition from graduates are likely to be those which already have a high proportion of graduates, as graduate density itself becomes a signal of status. Using British Labour Force Survey data spanning ten years, when a measure of graduate density within occupations is incorporated in a wage equation, it appears that the higher the proportion of graduates in an occupation the lower the salary each individual receives, even controlling for education. This suggests a social rather than a material explanation of the expansion of higher education. |
| Keywords: | education, labour supply, wages |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2006-58&r=lab |
| By: | John Forth, Alex Bryson; Alex Bryson |
| Abstract: | This review focuses on pay variance across workers, employers and across time and illustrates how theories of pay determination can shed light on this variance. We discuss the limitations of the orthodox economic approach to pay setting and emphasise the importance of labour market imperfections and the unique character of the labour contract in determining wage outcomes. Two broad conclusions emerge: first that no single theory of pay setting has an over-riding claim to virtue; and second that, in spite of the institutional knowledge generated by industrial relations, obtaining a greater understanding of the general pattern of wages remains one of the principal challenges to the discipline at the present time. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:285&r=lab |
| By: | John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Almos Telegdy (Central European University and Institute of Economics of the Hungarian Academy of Sciences) |
| Abstract: | How do state, domestic private, and foreign ownership of firms differ in average wages? We address these questions using linked employer-employee panel data containing 1.35 mln workeryear observations for 21,238 firms from 1986 to 2003 in Hungary. Our econometric methods exploit the long panel together with the presence of 3,700 switches of ownership type in the postsocialist Hungarian transition to estimate these wage differentials. |
| Keywords: | privatization, employment, wages, ownership, Hungary, firms |
| JEL: | D21 G34 J23 J31 L33 P31 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:07-134&r=lab |
| By: | Philip Oreopoulos; Till von Wachter; Andrew Heisz |
| Abstract: | The standard neo-classical model of wage setting predicts short-term effects of temporary labor market shocks on careers and low costs of recessions for both more and less advantaged workers. In contrast, a vast range of alternative career models based on frictions in the labor market suggests that labor market shocks can have persistent effects on the entire earnings profile. This paper analyzes the long-term effects of graduating in a recession on earnings, job mobility, and employer characteristics for a large sample of Canadian college graduates with different predicted earnings using matched university-employer-employee data from 1982 to 1999, and uses its results to assess the importance of alternative career models. We find that young graduates entering the labor market in a recession suffer significant initial earnings losses that eventually fade, but after 8 to 10 years. We also document substantial heterogeneity in the costs of recessions and important effects on job mobility and employer characteristics, but small effects on time worked. These adjustment patterns are neither consistent with a neo-classical spot market nor a complete scarring effect, but could be explained by a combination of time intensive search for better employers and long-term wage contracting. All results are robust to an extensive sensitivity analysis including controls for correlated business cycle shocks after labor market entry, endogenous timing of graduation, permanent cohort differences, and selective labor force participation. |
| JEL: | J0 J3 J6 E3 |
| Date: | 2006–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12159&r=lab |
| By: | Del Boca Daniela (University of Turin); Pasqua Silvia; Pronzato Chiara |
| 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. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:200608&r=lab |
| By: | Markus Pannenberg; Martin Spiess |
| Abstract: | We propose a generalized estimating equations approach to the analysis of the mean and the covariance structure of a bivariate time series process of panel data with mixed continuous and discrete dependent variables. The approach is used to jointly analyze wage dynamics and the incidence of profit-sharing in West Germany. Our findings reveal a significantly positive conditional correlation of wages and the incidence of profit-sharing. Furthermore, they indicate that permanent unobserved individual ability is comparatively more important in the profit-sharing than in the wage equation and show that shocks have a long-lasting effect on transitory wages but not on the incidence of profit-sharing. Hence, the results support theoretical predictions that selection into profit-sharing is mostly due to unobservable ability and that profit-sharing ties wages more closely to productivity. |
| Keywords: | Generalized estimating equations, covariance structure, longitudinal data, real wages, variable pay |
| JEL: | C33 C35 D31 J31 J33 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp663&r=lab |
| By: | David Card; Raj Chetty; Andrea Weber |
| Abstract: | In this paper, we review the literature on the "spike" in unemployment exit rates around benefit exhaustion, and present new evidence based on administrative data for a large sample of job losers in Austria. We find that the way unemployment spells are measured has a large effect on the magnitude of the spike at exhaustion, both in existing studies and in our Austrian data. Spikes are typically much smaller when spell length is defined by the time to next job than when it is defined by the time spent on the unemployment system. In Austria, the exit rate from registered unemployment rises by over 200% at the expiration of benefits, while the hazard rate of re-employment rises by only 20%. The difference between the two measures arises because many individuals leave the unemployment register immediately after their benefits expire without returning to work. The modest spike in re-employment rates implies that most job seekers do not wait until their UI benefits are exhausted to return to work: fewer than 1% of jobless spells have an ending date that is manipulated to coincide with the expiration of UI benefits. |
| JEL: | H0 J6 J64 J65 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12893&r=lab |