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on Labour Economics |
| By: | Heather Boushey; Shawn Fremstad; Rachel Gragg; Margy Waller |
| Abstract: | Over 40 million jobs in the United States - about 1 in 3 - pay low wages ($11.11 per hour or less) and often do not offer employment benefits like health insurance, retirement savings accounts, paid sick days or family leave. These low-wage jobs are replacing jobs that have historically supported a broad middle class. This report provides a clear and sobering picture of the low-wage labor market through analysis of labor market data, including: downward wage trends over time, poor work conditions, largest occupations, and declining mobility. The authors used a social inclusion definition of low-wage work that allows for comparison among jobs in the United States. |
| JEL: | I32 J38 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2007-09&r=lab |
| By: | Bruno Contini; Roberto Leombruni; Lia Pacelli; Claudia Villosio |
| Abstract: | Inspite of the centralized nature of wage bargaining in Italy, we find some evidence suggesting the existence of firm-wage policies. Firstly, the ratio of the between-firm wage variability relative to total wage variability is sizeable, and not very dissimilar from that reported for other countries. Secondly, the tide raising all boats is quite suggestive: not only do individual wages throughout the whole distribution increase as average firm wages increases, but the spread increases too. Firm wage policy matters in shaping not only the wage level distribution but also the wage change distribution. The within-firm s.d. of wage change is almost as high as that of individual wage change, and much higher than between-firm variability of average change in wages. Worker-based statistics, on the other side, show that relative changes in individual wages follow the business cycle, although different parts of the distribution react in a different way to it, the upper tail having a higher responsiveness. Both facts are at odds with the often reported rigidity of Italian wages. Indeed, the detected flexibility is mainly driven by movers and short tenure workers. The cross-country comparison suggests that the relatively high degree of wage compression in Italy could be associated with higher entry and exit rates. |
| JEL: | J21 J3 J5 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13029&r=lab |
| By: | Tom Hertz (Department of Economics,American University) |
| Abstract: | Abstract: Minimum wages have been in place for South Africa’s one million domestic service workers since November of 2002. Using data from seven waves of the Labour Force Survey, this paper documents that the real hourly wages, average monthly earnings, and total earnings of all employed domestic workers have risen since the regulations came into effect, while hours of work per week and employment have fallen. Each of these outcomes can be linked econometrically to the arrival of the minimum wage regulations. The overall estimated elasticities suggest that the regulations should have reduced poverty somewhat for domestic workers, although this last conclusion is the least robust. |
| Keywords: | Minimum wages, domestic service workers, real hourly wage, average monthly earning |
| JEL: | A1 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ctw:wpaper:9623&r=lab |
| By: | Nicole Gürtzgen |
| Abstract: | Using a large linked employer-employee data set, this paper presents new evidence on the collective bargaining wage effect in western and eastern Germany. The novel feature of our analysis is that we use a longitudinal data set. Thus, in contrast to previous studies, we seek to assess the extent to which differences in wages between workers in covered and uncovered firms really represent an effect of collective bargaining coverage, rather than a consequence of the non-random selection of workers and firms into the different regimes. By measuring the relative wage gains or losses of workers employed in firms that change contract status, we obtain estimates that depart considerably from previous results relying on cross-sectional data. Industrylevel contracts in western Germany and firm-level contracts in eastern Germany are associated with a small, but statistically significant average wage premium of about 2 per cent. Moreover, wage decompositions indicate that the overall effect of collective bargaining coverage on the returns to observable attributes appears to be negligible once the selection into the regimes is accounted for. |
| Keywords: | Union Wage Premium, Collective Bargaining Coverage |
| JEL: | J31 J51 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5475&r=lab |
| By: | Yolanda Rebollo Sanz (Department of Economics, Universidad Pablo de Olavide); Jose Ignacio García Pérez (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | This paper evaluates the effect of regional wage subsidies to foster permanent employment for a sample of temporary and unemployed Spanish workers. We study the transition into permanent employment using a new dataset based on administrative Social Security registers named “La Muestra Continua de Vidas Laborales”, which is used for the first time to carry out policy evaluation exercises in the Spanish labor market. This dataset offers important advantages with respect to the Labour Force Survey, given it offers the complete labor history of the worker. Moreover, since we have individual, regional and time variation in our policy measure, we can apply a difference-in-differences estimator to identify the average treatment effect of this policy. Though, these regional policies have been implemented for almost ten years, as far as we know, this is the first attempt to evaluate them. Our main results are that, in average terms, this policy has positive but small effects on the transition rate into permanent employment either from a temporary contract or from unemployment. The incidence of these subsidies, however, is larger when the worker is in a temporary contract. It is also larger for young females while for old male workers do not have any effect. Measured at the average wage subsidy (5100 Euros) the total change in the entrance probability from a temporary to a permanent contract is around 26% for young women, 24% for middle age ones and 22% for middle age men, the most benefited workers. Nevertheless, since the transition rates to permanent contracts at the same firm are pretty low these relative changes hardly generate a change in the transition probability from a temporary to a permanent contract at the same firm. For instance, in the case of young women the estimated transition probability growths from 0.064% to 0.075% while for middle age men it changes from 0.039% to 0.041%. |
| Keywords: | Difference-in-Differences, Evaluation Analysis, Wage Subsidies, Competing Riks |
| JEL: | J38 J68 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:07.06&r=lab |
| By: | Andrew Sharpe; Jill Hardt |
| Abstract: | According to data collected by the Association of Workers’ Compensation Boards of Canada, 1,097 workplace fatalities were recorded in Canada in 2005, up from 758 in 1993. As Canadians work on average 230 days per year, this means that there were nearly five work-related deaths per work day in this country. The objective of this study is to provide a detailed analysis of the characteristics of persons who die on the job and the reasons they die, and to gain a better understanding of developments over time in this key indicator of job quality and labour market well-being. |
| Keywords: | Workplace fatalities, Worker's compensation, Dangerous industries, Occupational diseases, International comparisions. |
| JEL: | I10 J28 J30 J38 J81 J83 Z0 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:0604&r=lab |
| By: | Addison, John T.; Teixeira, Paulino; Zwick, Thomas |
| Abstract: | This paper provides the first full examination of the effect of German works councils on wages using matched employer-employee data (specifically, the LIAB for 2001). We find that works councils are associated with higher earnings. The wage premium is around 11 percent (and is higher under collective bargaining). This result persists after taking account of worker and establishment heterogeneity and the endogeneity of works council presence. Next, using quantile regressions, we find that the works council premium is decreasing with the position of the worker in the wage distribution. And it is also higher for women than for men. Finally, the works council wage premium is associated with longer job tenure. This suggests that some of the premium is a noncompetitive rent, even if works council voice may dominate its distributive effects insofar as tenure is concerned. |
| Keywords: | matched employer-employee data, rent seeking, tenure, wages, wage distribution, works councils |
| JEL: | J31 J50 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5479&r=lab |
| By: | Asma Hyder (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | This paper examines the magnitude of public/private wage differentials in Pakistan using data drawn from the 2001-02 Labour Force Survey. Pakistan Labour Force Survey is a nationwide survey containing micro data from all over the country containing demographic and employment information. As in many other countries, public sector workers in Pakistan tend to have higher average pay and educational levels as compared to their private sector counterparts. First, this paper presents the inter-sectoral earning equations for the three main sectors of the economy, i.e., public, private, and state-owned enterprises. These results are further decomposed into “treatment” and “endowment effect”. To examine the role of human capital in wage gap, the rate of return to different levels of schooling is calculated. These rates of return to education may be important for policy formulation. The relative earning share is also worked out to look into the distribution of wages across the occupational categories. The earning equations are estimated with and without correction for selectivity, which is also the main objective of the study, i.e., to find out if any non-random selection is taking place within these three sectors of employment |
| Keywords: | Wage Differentials, Rate of Return to Education, Public Sector Labour Markets |
| JEL: | J32 J45 J24 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2007:17&r=lab |
| By: | Fei Peng (University of Birmingham Business School); W. Stanley Siebert (University of Birmingham Business School and IZA) |
| Abstract: | This paper compares the cyclical behaviour of male real wages in Germany and the UK using the German Socio-Economic Panel 1984-2002 and the British Household Panel Survey 1991-2004. We distinguish between job stayers (remaining in the same job), and within- and between-company job movers. Stayers are the large majority in both countries. Using changes in the unemployment rate as the cyclical measure, we find real wages of stayers in the private sector in West Germany - but not East Germany - to be procyclical, and quite sensitive to unemployment, comparable to the US and the UK. We find cyclicality in the public sector in neither country. Thus real wage flexibility is similar in the two countries, apart from East Germany, despite apparent differences in wage-setting institutions. |
| Keywords: | real wage cyclicality, job stayers, Germany, United Kingdom, GSOEP, BHPS |
| JEL: | E32 J31 K31 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2688&r=lab |
| By: | Fitzenberger, Bernd; Wilke, Ralf A. |
| Abstract: | In light of nonstationary search theory (van den Berg, 1990), this paper estimates the effects of benefit entitlement periods and the size of unemployment benefits on unemployment durations and post{unemployment earnings in West Germany. For the unemployment duration, we estimate censored Box{Cox quantile regression, which is robust with respect to the specification of the unobserved error distribution and avoids the common proportional hazard assumption. Our results suggest that the length of benefit entitlement is only of minor importance for the duration of search unemployment and for post unemployment wages. A high wage replacement rate in the low wage sector seem to considerably elongate the duration of unemployment and it is associated with higher post unemployment wages. |
| Keywords: | Box Cox quantile regression, hazard rate, unemployment, wage |
| JEL: | C13 C14 J64 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5494&r=lab |
| By: | Alan B. Krueger; David Schkade |
| Abstract: | This paper tests a central implication of the theory of equalizing differences, that workers sort into jobs with different attributes based on their preferences for those attributes. We present evidence from four new time-use data sets for the United States and France on whether workers who are more gregarious, as revealed by their behavior when they are not working, tend to be employed in jobs that involve more social interactions. In each data set we find a significant and sizable relationship between the tendency to interact with others off the job and while working. People's descriptions of their jobs and their personalities also accord reasonably well with their time use on and off the job. Furthermore, workers in occupations that require social interactions according to the O'Net Dictionary of Occupational Titles tend to spend more of their non-working time with friends. Lastly, we find that workers report substantially higher levels of job satisfaction and net affect while at work if their jobs entail frequent interactions with coworkers and other desirable working conditions. |
| JEL: | J0 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13032&r=lab |
| By: | Marco Leonardi (University of Milan and IZA); Giovanni Pica (University of Salerno and CSEF) |
| Abstract: | In a perfect labor market severance payments can have no real effects as they can be undone by a properly designed labor contract (Lazear 1990). We give empirical content to this proposition by estimating the effects of EPL on entry wages and on the tenure-wage profile in a quasi-experimental setting. We consider a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for bigger firms. Estimates which account for the endogeneity of the treatment status due to workers and firms sorting around the 15 employees threshold show no effect of the reform on entry wages and a decrease of the returns to tenure by around 20% in the first year and by 8% over the first two years. We interpret these findings as broadly consistent with Lazear’s (1990) prediction that firms make workers prepay the severance cost. |
| Keywords: | costs of unjust dismissals, severance payments, regression discontinuity design |
| JEL: | E24 J63 J65 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2680&r=lab |
| By: | Shirley Dex; Jo Lindley (Department of Economics, The University of Sheffield) |
| Abstract: | The paper devises a new method of calculating whether individuals are over educated using a parametric model. This new method is applied to men and women from different ethnic groups using data drawn from 4 pooled cross-sections of the UK Labour Force Survey. Calibrated against existing mean-mode methods, the new approach leads to lower levels of over education, more so for men than women. The model is then extended to include non-qualification elements of human capital such as employment experience and job related skills. Model specifications are further varied by educational qualification measures, the presence of children and gender, as well as allowing for full gender segregation by estimating a single equation (pooled men and women) and separate equations (men and women separately). The results show that the while the overall extent of over education has similarities with earlier studies (eg. over-education is more prevalent amongst women than men), the differences between ethnic groups, as well as between minority ethnic groups and White employees, are far less than that found in some earlier studies. Black African men and women had the greatest amount of over education, followed by Chinese women. Bangladeshi women had the lowest rates among women. It is probably possible to explain almost all of the gap in over education rates between white and minority women and men by a combination of factors; differences in working part time, being temporarily over educated and by differences in the quality of educational qualifications. |
| Keywords: | Qualifications, discrimination, employment, ethnicity |
| JEL: | J15 J61 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2007003&r=lab |
| By: | Sara Connolly; Mary Gregory |
| Abstract: | The UK`s Equal Opportunities Commission has recently drawn attention to the `hidden brain drain` when women working part-time are employed in jobs below their level of educational attainment and/or previous experience. These inferences were based on self-reporting. We give an objective and quantitative analysis of the nature of occupational change as women make the transition between full-time and part-time work. In order to analyse down-grading we construct an occupational classification which supports a ranking of occupations by the average level of qualification of those employed there on a full-time basis. We note that the incidence (and by implication the availability) of part-time work differs across occupations, and that occupational concentration is more acute for part-time work. Using a large sample of panel observations over the period 1991-2001 we show that women moving from full- to part-time work are approximately twice as likely to move down as up the occupational ladder, while those moving from part-time back to full-time work are twice as likely to be moving up than down the ranking. These effects are particularly marked when a change of employer is involved. Not all women are equally at risk of downgrading. It is particularly likely among women in management positions; over one-third of women in managerial or high-skilled clerical/administrative jobs downgrade when they move into part-time employment. But women in some occupations with higher specific skill requirements and where employees may have a stronger sense of vocation, notably teaching and nursing, are much less likely to experience downgrading. Nonetheless, 20% of teachers and nurses who change employer and switch into part-time work move downwards. These findings indicate a loss of economic efficiency through the underutilisation of the skills of many of the women who work part-time. |
| Keywords: | Female Employment, Part-time Work, Occupation, Life-cycle, Downgrade |
| JEL: | C23 C25 C33 C35 J16 J22 J62 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:302&r=lab |
| By: | Gernandt, Johannes; Maier, Michael; Pfeiffer, Friedhelm; Rat-Wirtzler, Julie |
| Abstract: | This paper investigates the impact of a high school degree on the wage distribution in the period from 1984 to 2004 in Germany. In that period the share of male workers with a high school degree increased from 16 to 25 percent. An econometric evaluation estimator is used to analyze quantile treatment effects for the whole population of male workers and for the subpopulation of workers with a high school degree. It turns out that the impact of a high school degree on the wage distribution for all workers is positive, whereas its impact on the wage distribution of the workers with a high school degree does statistically not differ from zero. This suggests that the selection of students into grammer schools might have been too restrictive. For more workers higher education would have raised their productivity and wages. |
| Keywords: | Economic returns to secondary education, econometric evaluation, quantile treatment effects, educational expansion |
| JEL: | C14 C21 J31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5481&r=lab |
| By: | Bjoern Bruegemann; Giuseppe Moscarini |
| Abstract: | Recent findings have revived interest in the link between real wage rigidity and employment fluctuations, in the context of frictional labor markets. The standard search and matching model fails to generate substantial labor market fluctuations if wages are set by Nash bargaining, while it can generate fluctuations in excess of what is observed if wages are completely rigid. This suggests that less severe rigidity may suffice. We study a weaker notion of real rigidity, which arises only in frictional labor markets, where the wage is the sum of the worker's opportunity cost (the value of unemployment) and a rent. With wage rigidity this sum is acyclical; we consider rent rigidity, where only the rent is acyclical. We offer two contributions. First, we derive upper bounds on labor market volatility that apply if the model of wage determination generates weakly procyclical worker rents, and that are attained by rent rigidity. Quantitatively, the bounds are tight: rent rigidity generates no more than a third of observed volatility, an outcome that is closer to Nash bargaining than to wage rigidity. Second, we show that the bounds apply to a sequence of famous solutions to the bargaining problem under asymmetric information: at best they generate rigid rents but not rigid wages. |
| JEL: | E24 E32 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13030&r=lab |
| By: | Christian Dustmann (University College London, CEPR, IFS and IZA); Johannes Ludsteck (IAB, Nuremberg); Uta Schönberg (University of Rochester and IZA) |
| Abstract: | This paper challenges the view that the wage structure in West-Germany has remained stable throughout the 80s and 90s. Based on a 2 % sample of social security records, we show that wage inequality has increased in the 1980s, but only at the top of the distribution. In the early 1990s, wage inequality started to rise also at the bottom of the distribution. Hence, while the US and Germany experienced similar changes at the top of the distribution throughout the 80s and 90s, the patterns at the bottom of the distribution are reversed. We show that changes in the education and age structure can explain a substantial part of the increase in inequality, in particular at the top of the distribution. We further argue that selection into unemployment cannot account for the stable wage structure at the bottom in the 80s. In contrast, about one third of the increase in lower tail inequality in the 90s can be related to de-unionization. Finally, fluctuations in relative supply play an important role in explaining trends in the skill premium. These findings are consistent with the view that technological change is responsible for the widening of the wage distribution at the top. The widening of the wage distribution at the bottom, however, may be better explained by episodic events, such as changes in labour market institutions and supply shocks. |
| Keywords: | inequality, polarization, institutions |
| JEL: | J3 D3 O3 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2685&r=lab |
| By: | Oskar Nordström Skans; Per-Anders Edin; Bertil Holmlund |
| Abstract: | The paper describes the Swedish wage distribution and how it correlates with worker mobility and plant-specific factors. It is well known that wage inequality has increased in Sweden since the mid-1980s. However, little evidence has so far been available as to whether this development reflects increased dispersion between plants, between individuals in the same plant, or both. We use a new linked employer-employee data set and discover that a trend rise in between-plant wage inequality account for the entire increase in wage dispersion. This pattern, which remains when we control for observable individual human capital characteristics, may reflect increased sorting of workers by skill levels and/or increased scope for rent sharing in local wage negotiations. Our discussion suggests that both factors may have become more important. |
| JEL: | J31 J63 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13021&r=lab |
| By: | Chaudhuri, Sarbajit; Yabuuchi, Shigemi |
| Abstract: | The existing theoretical literature does not take into consideration the existence of non-traded goods and the nature of capital mobility between the traded and the non-traded sectors in analyzing the consequences of liberalized investment policies on the relative wage inequality in the developing countries. The present paper purports to fill in this gap using two four-sector general equilibrium models reasonable for a developing economy. We have found that inflows of foreign capital usually improve the wage inequality when the low-skill sector is capital-intensive. But, the relative wage gap may widen if the high-skill sector is capital-intensive. When the non-traded sector produces a non-traded final commodity wage inequality worsens if the low-skill sector is capital-intensive and employs only a very small proportion of the unskilled workforce and if the primary export sector is unskilled labour-intensive. Appropriate policy recommendations for improving the wage inequality have also been made. |
| Keywords: | Skilled labour; unskilled labour; wage inequality; foreign capital inflows; non-traded goods; intersectoral capital mobility; labour market imperfection |
| JEL: | F21 |
| Date: | 2007–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2645&r=lab |
| By: | Hendrik Schmitz (Ruhr Graduate School in Economics, Essen); Viktor Steiner (Free University Berlin, DIW Berlin and IZA) |
| Abstract: | We analyse benefit-entitlement effects and the likely impact of the recent reform of the unemployment compensation system on the duration of unemployment in Germany on the basis of a flexible discrete-time hazard rate model estimated on pre-reform data from the German Socioeconomic Panel (SOEP). We find (i) relatively strong benefit-entitlement effects for the unemployed who are eligible to means-tested unemployment assistance after the exhaustion of unemployment benefit, but not for those without such entitlement; (ii) nonmonotonic benefit-entitlement effects on hazard rates with pronounced spikes around the month of benefit-exhaustion, and (iii) relatively small marginal effects of the amount of unemployment compensation on the duration of unemployment. Our simulation results show that the recent labour market reform is unlikely to have a major impact on the average duration of unemployment in the population as a whole, but will significantly reduce the level of long-term unemployment among older workers. |
| Keywords: | unemployment duration, unemployment insurance, benefit-entitlement effects, German labour market reforms, ex-ante evaluation, hazard rate model |
| JEL: | J64 J65 H31 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2681&r=lab |
| By: | Pieter Bevelander (IMER, Malmö University and IZA); Sandra Groeneveld (Erasmus University Rotterdam) |
| Abstract: | Labor market participation is a central factor in the economic integration of migrants in their host country. Labor market integration of ethnic minority women is of special interest, as they may experience a double disadvantage: both as a woman and as a migrant. Since the late nineties this presumed double disadvantage has become more and more the focus of both Dutch integration and Dutch emancipation policy. To test several assumptions underlying Dutch policy this paper focuses on the employment patterns of ethnic minority and native women in the Netherlands. In particular, we analyze to what extent labor market participation of different groups of women and the hours they work are influenced by human capital and household characteristics. Our results show some remarkable differences in employment patterns between native Dutch and ethnic minority women. Controlling for educational level, partnership and the presence of children, native Dutch women are working more often in part time jobs than Mediterranean and Caribbean women. For all women the educational level is an important determinant of employment and the number of hours worked. Whereas the number of children influences both the employment decision and the number of hours worked of native Dutch women, for Mediterranean and Caribbean women there is only an effect of the number of children on the odds of having a full time job. |
| Keywords: | F22, J22, J61 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2684&r=lab |
| By: | David Holland; Sanjoy Bhattacharjee; Leroy Stodick (School of Economic Sciences, Washington State University) |
| Abstract: | Washington voters passed Initiative Measure No. 688 on November 3, 1998. This bill increased Washington’s minimum wage to $5.70 on January 1, 1999.and to $6.50 on January 1, 2000. The Initiative required that future annual changes in Washington’s minimum wage be indexed to inflation in the BLS Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). As of 2005, Washington had the highest minimum wage in the nation at $7.35 per hour. Eleven other states have minimum wages above the Federal minimum wage of $5.15 per hour; however, Oregon is the only other state with an inflation-indexed minimum wage, which was $7.05 per hour in 2004. A computable general equilibrium (CGE) model of the Washington economy was used to examine the economic impact of increases in Washington’s minimum wage. Results from the short-run model indicated that a five percent increase in Washington’s minimum wage would cause a loss of 1909 minimum wage jobs (2.5 percent of baseline minimum wage jobs) but the wage bill for minimum wage workers would increase by $22.61 million (2.38 percent of the baseline minimum wage bill). The loss in the total wage and capital bill for the state economy was $14.04 million. The predicted change in gross state product was roughly 0.007 percent. Tracing the impact of increases in the minimum wage across the size distribution of household income, low income households in Washington experienced an increase in welfare and there was a slight decrease in welfare for high income households. |
| Keywords: | Washington's minimum wage, the Washington CGE model, Two-level CES production functions, elasticity of labor-capital substitution, welfare change |
| JEL: | R13 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:holland-3&r=lab |
| By: | Rob Euwals (CPB, The Hague, Netspar and IZA); Jaco Dagevos (SCP, The Hague); Mérove Gijsberts (SCP, The Hague); Hans Roodenburg (CPB, The Hague) |
| Abstract: | On the basis of the German Socio-Economic Panel 2002 and the Dutch Social Position and Use of Provision Survey 2002, we investigate the importance of characteristics related to immigration for the labour market position of Turkish immigrants. We use regression techniques to correct for composition effects in employment rates, tenured job rates and job prestige scores (ISEI). First, we find that educational attainment and language proficiency have a higher return in the Netherlands than in Germany. Second, we find that second generation immigrants have improved their labour market position relative to the first generation of labour migrants and their partners. The improvement is largely due to an improvement in educational attainment and language proficiency. Third, for the Netherlands we find a positive relation between naturalisation and labour market position, while for Germany we find a negative relation with tenured employment. The contrasting results on tenured employment may be explained partly by differences in immigration rules. In Germany economic self-reliance is more important than in the Netherlands, and this may lead to a stronger incentive to naturalise for workers with a temporary contract. |
| Keywords: | immigration, labour market, naturalisation, language proficiency |
| JEL: | C25 F22 J15 J61 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2683&r=lab |
| By: | Yasuhiro Sato (Graduate School of Environmental Studies, Nagoya University (Japan)); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University, (Japan)) |
| Abstract: | In this paper, we focus on the skill formation when considering the trade impacts on labor markets. Although workers are identical as unskilled labor, they differ in their productivity as skilled. Workers become skilled by incurring the training costs. Introducing the above settings into a trade model with monopolistic competition, we show that trade opening enhances skill formation. This is because trade enriches the varieties of di?erentiated goods and raises the utility of a worker for a given income. This effect works stronger for the skilled than for the unskilled although it makes all agents better off, leading to higher skill formation. However, it may be accompanied by rises in the real wage disparity between skilled and unskilled workers and by rises in the skilled wage inequality. Finally, we examine the possible effects of foreign direct investment on the labor market structure as well. |
| Keywords: | test statistic; trade, skill formation, monopolistic competition, wage inequality, FDI |
| JEL: | F12 F16 F23 J24 J31 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0712&r=lab |
| By: | Gebel, Michael; Pfeiffer, Friedhelm |
| Abstract: | The paper examines the evolution of returns to education in the West German labour market over the last two decades. During this period, graduates from the period of educational expansion in the sixties and seventies entered the labour market and an upgrading of the skill structure took place. In order to tackle the issues of endogeneity of schooling and its heterogeneous returns we apply two estimation methods: Wooldridge’s (2004) approach that relies on conditional mean independence and Garen’s (1984) control function approach that requires an exclusion restriction. For the population of workers from the GSOEP, we find that both approaches produce estimates of average returns to education that decrease until the late 1990s and increase significantly afterwards. In the observation period, the gender gap in returns to education seems to vanish. Furthermore, we find that the so called “baby boomer” cohort has the lowest average return to education in young ages. However, this effect disappears when they become older. |
| Keywords: | Educational expansion, correlated random coefficient model, heterogeneous returns to education, conditional mean independence |
| JEL: | J21 J24 J31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5497&r=lab |
| By: | Mohamed Ben Halima (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]) |
| Abstract: | This paper tests the determinants of the transition out of short-term contracts by means of competing risk form of the semi-parametric Cox proportional hazard model. We use three labour market states distinguishing between exit into long-term contract, another short-term contract, and unemployment. For each type of exit, we define a separate hazard function that we'll call a type-specific hazard. The estimates are carried out from a dataset recording individual labour market histories, the French Labour Force Survey (LFS) collected by the<br />French National Statistical Institute (INSEE). The competing risk model is estimated for all the individual as well as separately for men and women. Our results show that, for men and women, the conditional probability of exiting STC into LTC decreases after 12th months. Moreover, staying in the same firm after a STC increases the chances of getting stable jobs in the future. |
| Keywords: | Short-Term Contracts ; Duration model ; Competing risk hazard model |
| Date: | 2007–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00140048_v1&r=lab |
| By: | Sara Connolly; Mary Gregory |
| Abstract: | Almost half the women in work in the UK work part-time, but views conflict: does this support a woman`s career or is it a dead-end trap? Cohort data on labour market involvement to age 42 show highly varied pathways through full/part-time/non-employment. Econometric estimation confirms that individual characteristics matter, but labour market history is particularly powerful. Part-time work serves two different functions. A history of full-time work even including spells in part-time or non-employment, tends to lead back to full-time work, so supporting a career. Part-time work combined with non-employment is unlikely to lead to full-time work, and is a trap. |
| Keywords: | Female Employment, Part-time Work, Persistence, Life-cycle, Dynamic Panel, Discrete Choice |
| JEL: | C23 C25 C33 C35 J16 J22 J62 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:301&r=lab |
| By: | Marcelo Medeiros (International Poverty Centre, United Nations Development Programme); Rafael Osorio (International Poverty Centre, United Nations Development Programme); Joana Costa (International Poverty Centre, United Nations Development Programme) |
| Abstract: | In this Working Paper Marcelo Medeiros, Rafael Osorio and Joana Costa analyze inequalities in paid and unpaid work-time among Bolivian urban adults using time use data from a 2001 household survey. They find very high levels of within-group inequality in the distributions of paid and unpaid work-time for both men and women. They show that gender is an important variable to explain how much paid and unpaid work is done by individuals, but not so important to explain why some people have a higher total workload than others. |
| Keywords: | Gender, Inequalities, poor, Bolivia |
| JEL: | J16 J22 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:0034&r=lab |
| By: | Shirley Dex; Joanne Lindley (Department of Economics, The University of Sheffield); Kelly Ward |
| Abstract: | This paper describes a number of alternative approaches to devising a vertical occupational scale and compares the outcomes of different scales on calculations of occupational mobility. The paper describes the conceptual issues relevant to calculating occupational mobility and documents the measurement error embedded in the choice of measure, as applied to different data sets. The ranking schemes used include SOC (9) major codes ranked by mean occupational hourly earnings, Hope-Goldthorpe collapsed 36-point scores, a 15-category SOC ranking based on educational qualifications, and a 77 category ranking based on 2-digit SOC90 occupations, wage rates, educational qualifications, training and job tenure. These ranking schemes are applied to data from the 1958 NCDS cohort between the ages of 23 to 33 and 33 to 42, and to 1.25 year transitions in the Quarterly Labour Force Survey panel data. The calculations carried out show that variations in the extent of vertical occupational mobility, both upward and downward, had systematic elements. The extent of mobility was found to vary by the composition of the individuals´ data particularly in terms of lifecourse stages and gender, the number of categories in the ranking scheme, attrition in the data and flows out of employment over the mobility period, and changes in labour market conditions over time. However, the sizes of these effects were very variable. |
| Keywords: | Labour mobility, Occupations, Measurement error, Careers |
| JEL: | J7 J6 J10 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2007006&r=lab |
| By: | Pamela Lenton (Department of Economics, The University of Sheffield) |
| Abstract: | This paper investigates the educational attainment of young people between the ages of sixteen and eighteen after having entered full-time post-compulsory education. In particular we focus on the educational attainment and labour market trajectory of `underachievers´: young people who have chosen to remain in full-time education at age sixteen, despite not gaining the widely recognised U.K. academic benchmark of five GCSE grades A*-C. Our results suggest that the best route to educational success for young people considered as of lower ability at age 16 is through the FE college where they catch-up with their `more able´ counterparts by age 18. |
| Keywords: | Attainment, Vocational Education |
| JEL: | I21 J24 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2006014&r=lab |
| By: | Dean Baker |
| Abstract: | This report makes a series of adjustments to the most common measure of U.S. productivity growth (i.e., non-farm business sector) as well as to measures of wage growth, to determine the extent to which lagging wages can be blamed on weak productivity growth vs. income redistribution. Weak wage growth between 1973 and 2006 has generally been attributed to a redistribution of income from typical workers to higher paid workers. However, the report shows that, along with a redistribution of income, lagging wage growth has also been caused by slow productivity growth. |
| JEL: | O40 O47 J30 J32 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2007-11&r=lab |
| By: | Beladi, Hamid; Chaudhuri, Sarbajit; Yabuuchi, Shigemi |
| Abstract: | We introduce international labor mobility in a three-sector general equilibrium model with rural-urban migration. We demonstrate that under some reasonable conditions an inflow of foreign skilled labor (capital) can reduce skilled-unskilled wage inequality. |
| Keywords: | Skilled-unskilled wage inequality; rural-urban migration; Unemployment; International factor movements |
| JEL: | F21 F22 |
| Date: | 2007–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2641&r=lab |
| By: | Boockmann, Bernhard; Zwick, Thomas; Ammermüller, Andreas; Maier, Michael |
| Abstract: | We estimate the effects of hiring subsidies for older workers on transitions from unemployment to employment in Germany. Using a natural experiment, our first set of estimates is based on a legal change extending the group of eligible unemployed persons. A subsequent legal change in the opposite direction is used to validate these results. Our data cover the population of unemployed jobseekers in Germany and was specifically made available for our purposes from administrative data. Consistent support for an employment effect of hiring subsidies can only be found for women in East Germany. Concerning other population groups, firms´ hiring behavior is hardly influenced by the program and hiring subsidies mainly lead to deadweight effects. |
| Keywords: | Hiring subsidies, older workers, evaluation, natural experiments |
| JEL: | C31 H24 J64 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5488&r=lab |
| By: | Pedro Albarran; Raquel Carrasco; Maite Martinez Granado |
| Abstract: | In this paper we study the evolution of income inequality for employees and self-employed workers. We highlight the importance of separately analyze these different sources of income to gain a broader understanding of inequality. Using Spanish panel data on income and consumption from the ECPF for the period 1987-96, we decompose income shocks into a permanent and a transitory component. We find that there are noticeable differences in the evolution of income inequality, as well as in the relative importance of the permanent and transitory components across these groups. Our results points that the evolution of inequality can be basically explained by movements in the transitory component of income for the self-employed, while for the employees it is mainly driven by the permanent component, specially at the end of the period. Given these disparities, it seems that these two sources of income should be studied separately and that different policies are suitable for each group. |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we072414&r=lab |
| By: | Christiane Schuppert |
| Abstract: | The present paper studies a multi-jurisdictional framework, in which, from a federal perspective, educational subsidies turn out to be efficiency enhancing. However, in the presence of mobile high-skilled labor, local jurisdictions might try to free-ride on other regions´education policies and abstain from subsidizing education. Social mobility is introduced as an additional dimension of labor mobility. Using this framework, it is shown that local governments abide by the optimal decision rule for subsidizing human capital investments. Hence, decentralized education policies remain to be efficient, although high-skilled workers are perfectly mobile. Only if one allows for high- and low-skilled mobility, local incentives to promote education vanish. |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:mik:wpaper:07_01&r=lab |
| By: | Nigel Rice; Jennifer Roberts (Department of Economics, The University of Sheffield); Andrew M. Jones |
| Abstract: | We follow individuals as they retire using discrete-time hazard models applied to a stock sample from 12 waves of the British Household Panel Survey. Results confirm that health shocks are a determinant of retirement age and are quantitatively more important than pension entitlement. This is the case for both men and women and is observed for both a measure of health limitations and a measure of latent health status obtained from a generalized ordered probit model. Further, our results provide evidence that, for women, the health status of their partner impacts on their retirement decisions; an effect that is not evident for men. |
| Keywords: | Health, Retirement, Discrete-time duration models |
| JEL: | H55 I12 J26 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2007002&r=lab |