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on Labour Economics |
| By: | Fitzenberger, Bernd; Kohn, Karsten |
| Abstract: | This paper studies the relationship between employment and wage structures in West Germany based on the IAB employment subsample 1975{1997. It extends the analytical framework of Card and Lemieux (2001) which simultaneously includes skill and age as important dimensions of heterogeneity. After having identified cohort effects in skill wage premia and in the evolution of relative employment measures, we estimate elasticities of substitution between employees in three different skill groups and between those of different age, taking account of the endogeneity of wages and employment. Compared to estimates in the related literature, we find a rather high degree of substitutability. Drawing on the estimated parameters, we simulate the magnitude of wage changes within the respective skill groups that would have been necessary to halve skill-specific unemployment rates in 1997. The required nominal wage reductions range from 8.8 to 12.2% and are the higher the lower the employees' skill level. |
| Keywords: | Labor Demand, Heterogeneity, Age, Skill, Wage Structure, Employment, Cohort Effects, Unemployment |
| JEL: | E24 J21 J31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5434&r=lab |
| By: | Cristina Barceló (Banco de España) |
| Abstract: | This paper studies housing tenure and labour mobility using individual data from the ECHP for five European countries. First, the effect of housing tenure on the unemployed workers' labour mobility is studied using a discrete unemployment duration model with two alternative exits to employment, depending on whether they are associated with a residential change or not. Ownership is found to affect geographical mobility negatively. Second, the results are robust to potential endogeneity of the ownership status and institutional differences across countries. Third, post-unemployment wages are studied. We do not find any effects of the unemployment spell duration and the geographical mobility on wages after controlling for the self-selection bias. |
| Keywords: | labour mobility, housing tenure, duration models, self-selection bias, wage equation |
| JEL: | J61 R20 J31 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0603&r=lab |
| By: | Michael Reiter |
| Abstract: | The paper shows that a matching model where technological change is partially embodied in the job match is successful in explaining the variability of unemployment and vacancies. If we incorporate long-term wage contracts into the model, it also explains a number of stylized facts on the dynamics of real wages, which have been found in the empirical labor literature. |
| Keywords: | Unemployment, wage dynamics, embodied technical change |
| JEL: | E24 E32 J64 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:980&r=lab |
| By: | Pietro Garibaldi; Lia Pacelli |
| Abstract: | This paper analyzes the effect of severance payments on the probability of separation at given tenure, wages and other individual and firm characteristics. It studies a mandatory deferred wage scheme of the Italian labour market (Trattamento di Fine Rapporto, TFR). Deferred wages increase job duration if two conditions hold: wages are rigidly set outside the employer-employee relationship, and past provisions are accumulated at interest rates that are below market rates. Under such circumstances, workers who withdraw from their accumulated stock of unpaid wages should experience, at given tenure, a subsequent increase in the probability of separation. This prediction appears empirically robust and quantitatively sizeable. A withdrawal of 60% of the TFR stock 60% of the TFR stock (the median observed withdrawal) increases the instantaneous hazard rate by almost 20%. In other words, an individual with at least ten years of tenure that experiences an early withdrawal increases his/her hazard rate from 10% to about 12%. The empirical result takes into account the existence of unobserved heterogeneity and a variety of further robustness tests. |
| Keywords: | labor markets, severance payments, wage schemes, job tenure, job separation. |
| JEL: | J0 J3 J6 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:39&r=lab |
| By: | Zenou, Yves |
| Abstract: | We develop a search matching model in which blacks and whites are totally identical, except for the fact that they use different transport modes. We find that whites, who use faster transport modes (i.e. cars) than blacks (who use public transport), do search more intensively and extensively, and experience lower unemployment rate. Indeed, when deciding their optimal search intensities, all workers trade off short-run losses with long-run gains. However, because they use a faster transport mode, white job-seekers anticipate that they can reach jobs located further away so they can increase their maximal distance of search. This, in turn, induces firms to create more jobs, which finally motivate white workers to search more because of better opportunities. We also show that whites obtain higher wages. Indeed, in our model, each worker negotiates his/her wage with the firm using the Nash-bargaining rule. Because white workers have better outside options than blacks since their labour market tightness as well as the maximal distance of search are higher, they obtain a higher wage. |
| Keywords: | ethnic minorities; job search; multiple job centres; spatial labour markets |
| JEL: | D83 J15 J64 R1 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6155&r=lab |
| By: | Carlene van der Westhuizen; Sumayya Goga; Liberty Ncube; Morné Oosthuizen (Development Policy Research Unit,University of Cape Town) |
| Abstract: | Abstract: Recent research has found that changing policies and attitudes and improved economic performance have impacted on the labour market dynamics for women and the increased feminisation of the South African labour force since the mid-1990s has been well documented. While employment has increased more rapidly for women than for men over the period, it has been suggested that women are overrepresented in low-income, less secure employment. In addition, insufficient jobs were created to absorb the additional entrants to the labour market and as a result women are also overrepresented amongst the unemployed. The objective of this report is to provide an overview of the changes in the status of women in the South African labour market between 1995 and 2005. The report finds that the feminisation of the South African labour force between 1995 and 2005 has been driven specifically by greater numbers of African women entering the labour force. Women benefited more from the increased demand for labour over the period than men, accounting for more than half of the increase in employment, with the bulk accruing to African women. In line with previous research it is found that the majority of women find jobs as unskilled and low-paid Elementary Workers. Female unemployment rates increased for all covariates, but African women and young women in particular struggled to find employment. When returns to employment are considered, it is clear that discrimination by gender and race remains. When real mean monthly earnings in 2001 and 2005 are compared it is found that women of all race groups earned less than men in both years, with the exception of Coloureds in 2005. African women, specifically, are undoubtedly the most vulnerable participants in the labour force, particularly if they are young and poorly educated. Even those African women who did find employment continue to earn considerably less than their White counterparts, with very large differences especially at the lower skills levels. |
| Keywords: | South African labour force, discrimination by gender and race, labour market dynamics for women |
| JEL: | A1 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:9610&r=lab |
| By: | Rulof Burger; Derek Yu (Department Of Economics, Stellenbosch University) |
| Abstract: | 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 provide strong evidence of decreasing wages in the informal economy. The paper also investigates changes 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: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:9609&r=lab |
| By: | Skedinger, Per (Research Institute of Industrial Economics) |
| Abstract: | Minimum wages in Sweden are collectively agreed and differ by industry. Within agreements, the rates are also highly differentiated. Minimum wages are higher in Sweden than in any of the countries with statutory rates considered in this study. This is line with the view that minimum wages are higher than otherwise when unions are involved in minimum wage setting. The reported results for Sweden do no support the suggestion that adverse employment effects are modest in systems with collectively agreed rates. This runs counter to the hypothesis that unions and employers have a good sense of what constitutes a relevant market wage for unskilled workers and use this information to set minimum wages at appropriate levels. |
| Keywords: | Minimum Wages; Collective Bargaining |
| JEL: | J31 J51 J52 |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0700&r=lab |
| By: | Ira N. Gang (Rutgers University); John Landon-Lane (Rutgers University); Ralitza Dimova (Brunel University) |
| Abstract: | With the use of panel data constructed from the 1995 and 1997 Bulgarian Integrated Household Surveys, this paper explores the sectoral reallocation of labour by gender. In Bulgaria, men and women started the transition on an almost equal standing, allowing us to concentrate our attention on the impact of individual and household characteristics in explaining gender differences in the labour market. We find that household characteristics, rather than alternative explanations such as differences in individual characteristics or pure gender discrimination, better explain the observed gender differences in labour market outcomes. |
| Keywords: | employment, gender, household, mobility |
| JEL: | J21 |
| Date: | 2006–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:200623&r=lab |
| By: | Steven F. Lehrer; Nuno Sousa Periera |
| Abstract: | This article introduces an empirical strategy to the compensating differentials literature that i) allows both individual observed and unobserved characteristics to be rewarded differently in firms based on health insurance provision, and ii) selection to jobs that provide benefits to operate on both sides of the labor market. Estimates of this model are used to directly test empirical assumptions that are made with popular econometric strategies in the health economics literature. Our estimates reject the assumptions underlying numerous cross sectional and longitudinal estimators. We find that the provision of health insurance has influenced wage inequality. Finally, our results suggest there have been substantial changes in how displaced workers sort to firms that offer health insurance benefits over the past two decades. We discuss the implications of our findings for the compensating differentials literature. |
| JEL: | I11 J30 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12951&r=lab |
| By: | Marco Caliendo; Ludovica Gambaro; Peter Haan |
| Abstract: | This paper extends previous research about the determinants of reservation wages by analysing the effect of progressive income taxation on the ratio between reservation and net market wages. Based on micro data for Germany (SOEP) we show that joint income taxation in Germany which discriminates by marital status, has a strong and highly significant impact on the reservation/market wage ratio. Relative to single filers, this leads to strong negative labour supply incentives for secondary earners and to positive incentives for first earners in married couples. |
| Keywords: | Reservation/market wage ratio, income taxation, labour supply, microsimulation |
| JEL: | J22 H24 H31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp670&r=lab |
| By: | Marie Cottrell (MATISSE - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - [CNRS : UMR8595] - [Université Panthéon-Sorbonne - Paris I], SAMOS - Statistique Appliquée et MOdélisation Stochastique - [Université Panthéon-Sorbonne - Paris I]); Patrice Gaubert (MATISSE - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - [CNRS : UMR8595] - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | This study focuses on recurring unemployment, that is people with two or more spells of unemployment during the period of observation (July 1993 – August 1996). First, a classification is obtained which is then used to examine the specific role of occasional jobs during a spell of unemployment and, in this context, the influence of the received unemployment benefits on the duration of this spell. This paper is a continuation of previous analyses of unemployment in France, based on long-term data from the unemployed register held by ANPE (National Employment Bureau). The present analysis conducted using additional information about unemployment benefits received by the unemployed from UNEDIC (Unemployment Benefits Office). |
| Keywords: | Unemployment, Labor Market, Kohonen Maps |
| Date: | 2007–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:hal-00134148_v1&r=lab |
| By: | Andreas P. Georgiadis |
| Abstract: | In this paper we exploit a natural experiment provided by the 1999 introduction and 2001 increase of the UK National Minimum Wage (NMW) to investigate the relationship between wages and supervision and to test for efficiency wages considerations in a low-wage labour market, the UK residential care homes sector. We also provide evidence of the effects of the UK National Minimum Wage introduction and increase on the main labour market outcomes in the sector. We find evidence supporting a wage-supervision trade-off for the 1999 NMW introduction but no evidence of a trade-off for the 2001 NMW increase. We also find that the 1999 NMW introduction caused significant growth in average home hourly wages but only moderate negative employment effects and no significant effect on other outcomes as prices and profits. Finally, we find that the 2001 NMW increase generated higher wage growth than the 1999 introduction but had no employment effect, which can be possibly explained by the fact that homes increased the price of care to offset the increased wage costs generated by the NMW increase. |
| Keywords: | Efficiency Wages, National Minimum Wage, Difference-in-Differences, Insrumental Variables. |
| JEL: | J38 J41 J48 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:06/160&r=lab |
| By: | Mario Izquierdo (Banco de España); Aitor Lacuesta (Banco de España) |
| Abstract: | This paper analyses wage inequality in Spain from 1995 to 2002. Inequality has decreased slightly in this period although the fall has not been constant over the whole distribution. We use non parametric techniques to distinguish the effect on inequality of changes in the composition of the labour force and changes in relative returns. We focus mainly on three factors that have varied substantially between 1995 and 2002: female participation, educational attainment and changes in the tenure level. On one hand, changes in the composition of the labour force would have increased inequality had the structure of wages not changed in relation to the 1995 level. Changes in education and especially tenure would have been responsible for most of the higher dispersion. On the other, changes in relative returns between 1995 and 2002 are predominant and are responsible for the lower dispersion observed in the latter year. Changes in the returns to education and age are important factors underlying this decrease in inequality. |
| Keywords: | wage inequality, labour force |
| JEL: | J30 J00 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0615&r=lab |
| By: | Patrice Gaubert (MATISSE - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - [CNRS : UMR8595] - [Université Panthéon-Sorbonne - Paris I]); Marie Cottrell (MATISSE - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - [CNRS : UMR8595] - [Université Panthéon-Sorbonne - Paris I], SAMOS - Statistique Appliquée et MOdélisation Stochastique - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | In France, for administrative reasons, unemployed workers may actually be involved in occasional work while remaining identified as unemployed (and receiving the corresponding benefit). This is due to the fact that the unemployed are deemed to be seeking full-time jobs and non-fixed term contracts of employment. This situation may be analysed as evidence of a special type of secondary segment of the labour market in a context of massive unemployment. The authors consider the effects of this situation both on the duration of unemployment and its recurrence may be usefully investigated. |
| Date: | 2007–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:hal-00134146_v1&r=lab |
| By: | Hägglund, Pathric (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | This paper investigates the impact of the unemployment insurance (UI) entrance re-quirement on employment duration among earlier unemployed in Sweden. I exploit changes in the rules taking place in 1994 and 1997 to study behavioural adjustments in the timing of job separation in 1992, 1996, and 1998 respectively. Performing across-year analyses with years involving different working requirements, I find evi-dence of clustering of job exits at the time of UI qualification. By using predicted hazard rates for each week, I calculate an approximate 2.9-week extension in average employment duration between 1996 and 1998, due to the 5-week prolonging of the entrance requirement. |
| Keywords: | - |
| JEL: | J22 J65 J68 |
| Date: | 2007–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2007_003&r=lab |
| By: | Patrice Gaubert (MATISSE - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - [CNRS : UMR8595] - [Université Panthéon-Sorbonne - Paris I]); Marie Cottrell (MATISSE - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - [CNRS : UMR8595] - [Université Panthéon-Sorbonne - Paris I], SAMOS - Statistique Appliquée et MOdélisation Stochastique - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | Using the Panel Study of Income Dynamics data on the period 1982-1992, this paper investigates some mechanisms of the labor market in the United States. This market is analyzed as a stable structure constituted of segments which present contrasted characteristics under the usual distinction between primary and secondary sectors. Using a neural network algorithm applied on quantitative variables measured at the level of heads of household, a broad classification in four classes of situations is constructed. It shows a clear hierarchy going from situations of very precarious work or no work at all, to situations of stable jobs with higher wages than the average. A Markov chain, constructed with the trajectories between the different situations of these workers, shows a very stable structure of this segmented labor market. Keywords: segmented labor market, unemployment, trajectories, Kohonen algorithm, Markov chain. |
| Keywords: | Keywords: segmented labor market, unemployment, trajectories, Kohonen algorithm, Markov chain. |
| Date: | 2007–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:hal-00134147_v1&r=lab |
| By: | Ángel Gavilán (Banco de España) |
| Abstract: | Some pieces of empirical evidence suggest that in the U.S., over the last few decades, (i) wage inequality between-plants has risen much more than wage inequality within-plants and (ii) there has been an increase in the segregation of workers by skill into separate plants. This paper presents a frictionless assignment model in which these two features can be explained simultaneously as the result of the decline in the relative price of capital. Additional implications of the model regarding the skill premium and the dispersion in labor productivity across plants are also consistent with the empirical evidence. |
| Keywords: | wage inequality, segregation by skill, assignment model, price of capital |
| JEL: | C78 J31 J24 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0613&r=lab |
| By: | Ira N. Gang (Rutgers University); Robert C. Stuart (Rutgers University); Myeong-Su Yun (Tulane University) |
| Abstract: | East Germany, a unique socialist command economy prior to the 1990s, underwent rapid transition to a market-oriented economic system. This transition has been of intense interest given the environment of Eastern Germany vis-a-vis Western Germany, a setting different from most other transition economies. However, changes in the Eastern wage structure during transition demonstrates considerable similarity to that occurring in other transition economies. During the course of this transition, East Germany experienced big increases in both its wage level and wage dispersion. From 1990 to 2000 real wages in East Germany for men aged 20-60 rose by 118%, while various inequality measures indicate an increase in wage inequality of 25 to 61%. This paper studies the causes of this growth in wages and the changes in wage inequality, the first two moments of the wage distribution. We find that changes in the wage structure due to the transition explains most of wage growth and inequality change in East Germany. Most of the increases occur at the beginning of the transition. We compare our 1990-2000 results for East Germany to West German wage earners during the same period in order to investigate whether convergences took place in terms of mean (level) and dispersion (inequality). |
| Keywords: | decomposition, transition, wages, inequality |
| JEL: | D30 J30 |
| Date: | 2006–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:200631&r=lab |