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on Labour Economics |
| By: | Thomas Cornelißen (University of Hannover); Olaf Hübler (University of Hannover, IAB and IZA) |
| Abstract: | We estimate wage and job tenure functions that include individual and firm effects capturing time-invariant unobserved worker and firm heterogeneity using German linked employeremployee data (LIAB data set). We find that both types of heterogeneity are correlated to the observed characteristics and that it is therefore warranted to include individual and firm fixed effects in both the wage and the job tenure equation. We look into the correlation of the unobserved heterogeneity components with each other. We find that high-wage workers tend to be low-tenure workers, i.e. higher unobserved ability seems to be associated with higher job mobility. At firm level, there seems to be a trade-off between wages and job stability: High-wage firms tend to be low-tenure firms, which suggests that low job stability may be compensated by higher wages. High-wage workers seem to sort into low-wage/high-tenure firms. They seem to forgo some of their earnings potential in favour of higher job stability. |
| Keywords: | linked employer-employee data, unobserved worker and firm heterogeneity, tenure, wages |
| JEL: | C23 J31 J62 J63 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2741&r=lab |
| By: | Smeets, Valérie (Department of Economics, Aarhus School of Business) |
| Abstract: | Using a dataset covering the population of Danish private-sector <p> workers, I analyze the relationship between job changes and wage <p> dynamics. I …nd that the number of past job changes is positively <p> related to wages. This result is consistent with the idea that workers <p> changing …rms end up with better matches than workers who do not <p> change …rms. The main …ndings are veri…ed using the U.S. NLSY panel <p> data, implying that they can not be attributed to the peculiarities of <p> the Danish labor market |
| Keywords: | Worker turnover; wages; matching; human capital; matched employer-employee data |
| JEL: | J24 J31 |
| Date: | 2006–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2006_009&r=lab |
| By: | Erzo F.P. Luttmer (Harvard University, NBER and IZA) |
| Abstract: | This paper investigates whether the minimum wage leads to inefficient job rationing. By not allowing wages to clear the labor market, the minimum wage could cause workers with low reservation wages to be rationed out while equally skilled workers with higher reservation wages are employed. This paper exploits the overlapping nature of the CPS panels to more precisely identify those most affected by the minimum wage, a group I refer to as the "unskilled." I test for inefficient rationing by examining whether the reservation wages of employed unskilled workers in states where the 1990-1991 federal minimum wage increase had the largest impact rose relative to reservation wages of unskilled workers in other states. I find that reservation wages of unskilled workers in high-impact states did not rise relative to reservation wages in other states, indicating that the increase in the minimum wage did not cause jobs to be allocated less efficiently. |
| Keywords: | rationing, minimum wage, job allocation, misallocation cost, allocative efficiency |
| JEL: | J30 J21 D61 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2713&r=lab |
| By: | Erkki Koskela (University of Helsinki and IZA); Rune Stenbacka (Göteborg University and Swedish School of Economics, Helsinki) |
| Abstract: | We evaluate the effects of outsourcing and wage solidarity on wage formation and equilibrium unemployment in a heterogeneous labour market, where wages are determined by a monopoly labour union. We find that outsourcing promotes the wage dispersion between the high-skilled and low-skilled workers. When the labour union adopts a solidaristic wage policy, it will magnify, and not dampen, this tendency. Further, higher outsourcing will increase equilibrium unemployment among the high-skilled workers, whereas it will reduce it among the low-skilled workers. Overall, outsourcing will reduce economy-wide equilibrium unemployment under the reasonable condition that the proportion of high-skilled workers is sufficiently low. |
| Keywords: | outsourcing, wage solidarity, labour market imperfections, equilibrium unemployment |
| JEL: | E23 E24 J31 J51 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2733&r=lab |
| By: | Michael Burda (Humboldt University of Berlin, CEPR and IZA); Daniel S. Hamermesh (University of Texas at Austin, NBER and IZA); Philippe Weil (Université Libre de Bruxelles (ECARES), Institut d’Études Politiques de Paris, CEPR and NBER) |
| Abstract: | Using time-diary data from 25 countries, we demonstrate that there is a negative relationship between real GDP per capita and the female-male difference in total work time per day - the sum of work for pay and work at home. In rich northern countries on four continents, including the United States, there is no difference - men and women do the same amount of total work. This latter fact has been presented before by several sociologists for a few rich countries; but our survey results show that labor economists, macroeconomists, the general public and sociologists are unaware of it and instead believe that women perform more total work. The facts do not arise from gender differences in the price of time (as measured by market wages), as women’s total work is further below men’s where their relative wages are lower. Additional tests using U.S. and German data show that they do not arise from differences in marital bargaining, as gender equality is not associated with marital status; nor do they stem from family norms, since most of the variance in the gender total work difference is due to within-couple differences. We offer a theory of social norms to explain the facts. The social-norm explanation is better able to account for within-education group and within-region gender differences in total work being smaller than inter-group differences. It is consistent with evidence using the World Values Surveys that female total work is relatively greater than men’s where both men and women believe that scarce jobs should be offered to men first. |
| Keywords: | time use, gender differences, household production, paid work |
| JEL: | J22 J16 D13 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2705&r=lab |
| By: | Hugo Ñopo (Inter-American Development Bank and IZA) |
| Abstract: | This paper analyzes the evolution of the gender wage gap in Chile during the period 1992 to 2003 using the decomposition approach developed in Ñopo (2004). This approach, which decomposes the wage gap into four additive elements, stresses the need for comparisons inside the common support for the distributions of observable characteristics of individuals. Also, it allows an analysis of the distribution of unexplained differences in wages (not only the averages). The results suggest that, besides the high educational attainment of females, there are noticeable gender wage gaps in Chile favoring males. These unexplained differences in wages, which move around 25 percent of average female wages, show no clear tendency during the period of analysis. The wage gaps are higher at the highest percentiles of the wage distribution, among those with higher educational attainment, among directors and among part-time workers. The technique also detects some evidence of a glass-ceiling effect in Chilean labor markets, such that for some occupations and particular combinations of observable characteristics, there are highly paid males but not females. |
| Keywords: | matching, non-parametric, gender wage gap, Latin America |
| JEL: | C14 D31 J16 O54 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2698&r=lab |
| By: | Yves Zenou (Research Institute of Industrial Economics, GAINS, CEPR and IZA) |
| Abstract: | We propose a spatial search-matching model where both job creation and job destruction are endogenous. Workers are ex ante identical but not ex post since their job can be hit by a technological shock, which decreases their productivity. They reside in a city and commuting to the job center involves both pecuniary and time costs. Thus, workers with high wages are willing to live closer to jobs to save on time commuting costs. We show that, in equilibrium, there is a one-to-one correspondence between the productivity space and the urban location space since high-productivity workers bid away low-productivity workers in order to occupy locations close to jobs. We also show that in the bargaining process, there is a spatial element in the wage setting since firms need to compensate workers for their spatial costs. Compared to the non-spatial model, the unemployment rate and the reservation productivity are lower and the job-creation rate is higher because the urban space through commuting costs and land rent create additional frictions in the labor market. |
| Keywords: | job search, commuting costs, wage distribution, urban land use |
| JEL: | D83 J41 J64 R14 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2695&r=lab |
| By: | Asma Hyder (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | This paper exploits responses on the stated preferences for public sector jobs among a sample of unemployed in Pakistan to inform on the existence of public sector job queues. The empirical approach allowed job preference to influence unemployment duration. The potential wage advantage an unemployed individual would enjoy in a public sector job was found to exert no independent influence on the stated preference indicating that fringe benefits and work conditions are perhaps more important considerations. The stated preference for a public sector job was found to be associated with higher uncompleted durations. The estimated effect suggests that, on average and controlling for education and other characteristics, those unemployed who stated a preference for public sector jobs had higher uncompleted durations of between four and six months. This finding was taken to confirm that there are long queues for public sector jobs in Pakistan. |
| Keywords: | Wage Differentials, Wage Structure, Unemployment: Models, Duration, Incidence, and Job Search |
| JEL: | J31 J64 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2007:20&r=lab |
| By: | Alan B. Krueger (Princeton University, NBER and IZA); David A. Schkade (University of California, San Diego) |
| 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. |
| Keywords: | equalizing differences, sort, attributes, theory, time-use |
| JEL: | J0 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2730&r=lab |
| By: | Martina Mysíková (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | This study is concerned with decomposing the gender pay gap in the Czech Republic. It aims not only to compare male and female wage-equations but also to uncover the gender pay gap structure. The decision of many women not to participate in the labor market can be influenced by potentially low wages. Their entry into the labor market could increase the gender pay gap in large measure. The advantage of this study is that it uses a selection method to estimate the male and female wage equations and this enables us to include the impact of nonparticipating individuals. The Oaxaca-Blinder decomposition divides the gender pay gap into several effects, which stem not only from discrimination but also from different male and female characteristics. The combination with the Heckman selection model enables one to separate the sample selection effect, which refers to the potential gender pay gap when nonparticipating individuals enter the labor market. The results of the decomposition confirm the hypothesis that the observed pay gap would increase if non-participating individuals enter the labor market. The study uses data from the new household survey Living Conditions 2005 (EU-SILC), which provides us with a large number of individual characteristics of working as well as non-working individuals, and therefore it enriches the existing empirical literature with new data. |
| Keywords: | gender pay gap, labor market participation, Heckman model, Oaxaca-Blinder decomposition, endowment effect, remuneration effect, sample selection effect |
| JEL: | J16 J31 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2007_13&r=lab |
| By: | Eran Yashiv (Tel Aviv University, CEPR, CEP (LSE) and IZA) |
| Abstract: | The labor search and matching model plays a growing role in macroeconomic analysis. This paper provides a critical, selective survey of the literature. Four fundamental questions are explored: how are unemployment, job vacancies, and employment determined as equilibrium phenomena? What determines worker flows and transition rates from one labor market state to another? How are wages determined? What role do labor market dynamics play in explaining business cycles and growth? The survey describes the basic model, reviews its theoretical extensions, and discusses its empirical applications in macroeconomics. The model has developed against the background of difficulties with the use of the neoclassical, frictionless model of the labor market in macroeconomics. Its success includes the modelling of labor market outcomes as equilibrium phenomena, the reasonable fit of the data, and - when inserted into business cycle models - improved performance of more general macroeconomic models. At the same time, there is evidence against the Nash solution used for wage setting and an active debate as to the ability of the model to account for some of the cyclical facts. |
| Keywords: | search, matching, macroeconomics, business cycles, worker flows, growth, policy |
| JEL: | E24 E32 E52 J23 J31 J41 J63 J64 J65 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2743&r=lab |
| By: | Yves Zenou (Research Institute of Industrial Economics, GAINS, CEPR and IZA) |
| Abstract: | We develop a standard search-matching model in which mobility costs are so high that it is too costly for workers to relocate when a change in their employment status occurs. We show that, in equilibrium, wages increase with distance to jobs and commuting costs because firms need to compensate the transportation cost difference between the employed and unemployed workers at each location in the city. We also show that the equilibrium land rent is negatively affected by the unemployment benefit because an increase in the latter induce firms to create less jobs, which, in turn, reduces the competition in the land market. We then use this model to provide a mechanism for the observed spatial mismatch between where black workers live and where jobs are. Because blacks and whites differ by their contact rate, we show that the former reside far away from jobs, have higher unemployment rates and lower wages. This is because the housing market amplifies the negative effects of the labor market by creating additional frictions. |
| Keywords: | search frictions, spatial frictions, efficiency, spatial mismatch hypothesis |
| JEL: | D83 J15 J64 R14 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2739&r=lab |
| By: | Arnaud Dupuy (ROA, Maastricht University and IZA); Daniel Fernández-Kranz (Saint Louis University, Madrid) |
| Abstract: | Using microdata for 35 countries over the period 1985-1994-2002 we find that labor market institutions traditionally associated to more compressed wage structures are associated to a higher family gap. Our results indicate that these policies reduce the price effect of having children but aggravate the human capital loss due to motherhood. We also find evidence that policies that help women continue in the same job after childbirth decrease the family gap. Of all the countries we study, mothers in Southern Europe suffer the biggest family gap and our analysis indicates that this is due to the bad combination of labor market policies in these countries. Our results are robust to specification changes and indicate that the main reason mothers lag behind other women in terms of earnings is the loss of accumulated job market experience caused by career breaks around childbirth. |
| Keywords: | family gap, institutions |
| JEL: | J31 J60 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2719&r=lab |
| By: | Alexandra Spitz-Oener (Humboldt University Berlin and IZA) |
| Abstract: | The increased diffusion of computers is one of the fundamental changes at workplaces in recent decades. While the majority of workers now spend a substantial fraction of their working day with a computer, research on the wage effect of computer use effectively came to a halt after DiNardo and Pischke [1997] found that wages were also positively associated with pencil use, calling into question the ability to distinguish the effect of computers from other confounding factors. Using the same data set as DiNardo and Pischke, but a more recent wave, this paper revitalizes the discussion by showing that the pencil effect disappeared in 1998/99, whereas the computer effect is still present. Computer users - but not pencil users - have experienced a pronounced shift towards analytical and interactive tasks, for which they are rewarded in the workplace. |
| Keywords: | computer wage differential, pencil wage differentials, changing skill requirements |
| JEL: | J31 C13 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2729&r=lab |
| By: | Mirco Tonin |
| Abstract: | The paper investigates the role of the minimum wage in a competi- tive economy in which there is underreporting of earnings by employed labour. The minimum wage induces higher compliance by some low- productivity workers and transforms a nominally neutral ?scal system into a regressive one. A spike in the wage distribution at the mini- mum wage level appears and a positive correlation between the size of the spike and the size of the informal economy is predicted and documented using cross-country data for Europe. A further result is that employees whose o¢ cially declared earnings appear to be boosted by a minimum wage hike actually experience a decline in their true income. This prediction ?nds support in an empirical test using the massive increase in the minimum wage that took place in Hungary in 2001 as a quasi-natural experiment. |
| Keywords: | MinimumWage, Tax Evasion,Wage Distribution, Hungary |
| JEL: | J38 H26 H32 P2 |
| Date: | 2007–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2007-865&r=lab |
| By: | Johannes Geyer (DIW Berlin); Viktor Steiner (Free University Berlin, DIW Berlin and IZA) |
| Abstract: | The employment behavior of mothers is strongly influenced by labor market regulations and certain institutional arrangements, which both vary greatly across European countries. Using the European Community Household Panel (ECHP) 1994-2001 for Denmark, Germany, Italy and the United Kingdom, which represent four distinct ‘institutional regimes’, we estimate the short-run and long-term effects of childbirth on married women’s employment and working hours. Estimation results show that these effects vary across the four countries in accordance with prevailing institutional regulations. |
| Keywords: | employment and working hours, labor supply, childbirth, European Community Household Panel, panel data models |
| JEL: | J22 J13 D12 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2693&r=lab |
| By: | Uta Schönberg (University of Rochester and IZA); Johannes Ludsteck (IAB, Nuremberg) |
| Abstract: | This paper analyzes the impact of expansions in leave coverage on mothers’ labor market outcomes after childbirth. The focus is on Germany, a country that underwent several changes in maternity leave legislation since the late 70s. We identify the causal impact of an expansion in maternity leave by comparing labor market outcomes of women who gave birth shortly (i.e. one month) before and after a change in maternity leave legislation. There is strong evidence that each expansion induced women to delay their return to work. Despite this strong short-term effect, the expansions had little impact on women’s labor supply in the long-run. The expansion from 2 to 6 months reduced women’s wages, even 8 years after childbirth. This effect is mostly explained by the delay in the return to work. The delay in the return to work caused by the expansions in leave from 6 to 10 months and 18 to 36 months also lowered wages. However, this negative effect is offset by a positive selection effect, resulting in a zero or even positive overall effect. |
| Keywords: | gender, human capital, parental leave |
| JEL: | J16 J18 J24 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2699&r=lab |
| By: | Kaushik Basu (Cornell University, Indian Statistical Institute and IZA); Gary S. Fields (Cornell University and IZA); Shub Debgupta (Corporate Executive Board) |
| Abstract: | Many countries have legislation which make it costly for firms to dismiss or retrench workers. In the case of India, the Industrial Disputes Act, 1947, requires firms that employ 50 or more workers to pay a compensation to any worker who is to be retrenched. This paper builds a theoretical model to analyze the effects of such anti-retrenchment laws. Our model reveals that an anti-retrenchment law can cause wages and employment to rise or fall, depending on the parametric conditions prevailing in the market. We then use this simple model to isolate conditions under which an anti-retrenchment law raises wages and employment. In a subsequent section we assume that the law specifies exogenously the amount of compensation, s, a firm has to pay each worker who is being dismissed. It is then shown that as s rises, starting from zero, equilibrium wages fall. However beyond a certain point, further rises in s cause wages to rise. In other words, the relation between the exogenously specified cost to the firm of dismissing a worker and the equilibrium wage is V-shaped. |
| Keywords: | labor laws, retrenchment, severance pay, unemployment |
| JEL: | O15 O17 J32 J63 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2742&r=lab |
| By: | Sumon Kumar Bhaumik; Manisha Chakrabarty |
| Abstract: | Few researchers have examined the nature and determinants of earnings differentials among religious groups, and none has been undertaken in the context of conflict-prone multi-religious societies like the one in India. We address this lacuna in the literature by examining the differences in the average (log) earnings of Hindu and Muslim wage earners in India, during the 1987-2004 period. Our results indicate that education differences between Hindu and Muslim wage earners, especially differences in the proportion of wage earners with tertiary education, are largely responsible for the differences in the average (log) earnings of the two religious groups across the years. By contrast, differences in the returns to education do not explain the aforementioned difference in average (log) earnings. Citing other evidence about persistence of educational achievements across generations, however, we argue that attempts to narrow this gap using quotas for Muslim households at educational institutions might be counterproductive from the point of view of conflict avoidance. |
| Keywords: | earnings gap, education, decomposition, religion |
| JEL: | J31 J15 I28 |
| Date: | 2007–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2007-858&r=lab |
| By: | Buhai, Sebastian (Department of Economics, Aarhus School of Business); van der Leij, Marco (Tinbergen Institute and Erasmus University) |
| Abstract: | We develop a social network model of occupational segregation between <p> different social groups, generated by the existence of positive inbreeding <p> bias among individuals from the same group. If network referrals <p> are important in getting a job, then expected inbreeding bias in the <p> contact network structure induces different career choices for individuals <p> from different social groups. This further translates into stable occupational <p> segregation equilibria in the labour market. We derive the conditions <p> for persistent wage and unemployment inequality in the segregation <p> equilibria. Our framework is proposed as complementary to existing theories <p> used to explain labour market inequalities between groups divided <p> by race, ethnicity or gender |
| Keywords: | Social Networks; Inbreeding Bias; Occupational Segregation; Labour Market Inequality |
| JEL: | A14 J31 Z13 |
| Date: | 2006–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2006_011&r=lab |
| By: | Sebastián Calónico (Inter-American Development Bank); Hugo Ñopo (Inter-American Development Bank and IZA) |
| Abstract: | The private provision of educational services has been representing an increasing fraction of the Peruvian schooling system, especially in recent last decades. While there have been many claims about the differences in quality between private and public schools, there is no complete assessment of the different impacts of these two type of providers on the labor markets. This paper is an attempt to provide such a comprehensive overview. We explore private-public differences in the individual returns to education in Urban Peru. Exploiting a rich pair of data sets (ENNIV 1997 and 2000) that include questions on type of education (public vs. private) for each educational level (primary, secondary, technical tertiary and university tertiary) to a representative sample of adults we are able to measure the differences in labor earnings for all possible educational trajectories. The results indicate higher returns to education for those who attended private schools than those who attended the public system. Nonetheless, these higher returns also show higher dispersion, reflecting wider quality heterogeneity within the private system. The private-public differences in returns are more pronounced at the secondary than at any other educational level. On the other hand, the private-public differences in returns from technical education are almost nonexistent. A cohort approach paired with a rolling-windows technique allows us to capture generational evolutions of the private-public differences. The results indicate that these differences have been increasing during the last two decades. |
| Keywords: | returns to schooling, wages |
| JEL: | J31 I2 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2711&r=lab |
| By: | David Dorn (University of St. Gallen); Alfonso Sousa-Poza (University of Hohenheim, University of St. Gallen and IZA) |
| Abstract: | Recent literature makes a distinction between 'voluntary' and 'involuntary' early retirement, where 'involuntary' early retirement results from employment constraints rather than from a preference for leisure relative to work. This paper analyzes 'voluntary' and 'involuntary' early retirement based on international microdata covering 19 industrialized countries. The results show that 'involuntary' early retirement is particularly widespread in Continental Europe. Countries facing economic recessions and having strict employment protection legislation have higher shares of 'involuntary' retirements among early retirees. Generous early retirement provisions of the social security system do not only make 'voluntary' early retirement more attractive for individuals, but also induce firms to push more employees into early retirement. |
| Keywords: | early retirement, involuntary early retirement, social security, pensions |
| JEL: | J14 J21 J22 J26 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2714&r=lab |
| By: | John M. Abowd (Cornell University, U.S. Census Bureau, CREST, NBER and IZA); John Haltiwanger (University of Maryland, U.S. Census Bureau, NBER and IZA); Julia Lane (NORC, University of Chicago and IZA); Kevin L. McKinney (LEHD, U.S. Census Bureau); Kristin Sandusky (LEHD, U.S. Census Bureau) |
| Abstract: | We estimate the effects of technology investments on the demand for skilled workers using longitudinally integrated employer-employee data from the U.S. Census Bureau’s Longitudinal Employer-Household Dynamics Program infrastructure files spanning two Economic Censuses (1992 and 1997). We estimate the distribution of human capital and its observable and unobservable components within each business for each year from 1992 to 1997. We measure technology using variables from the Annual Survey of Manufactures and the Business Expenditures Survey (services, wholesale and retail trade), both administered during the 1992 Economic Census. Static and partial adjustment models are fit. There is a strong positive empirical relationship between advanced technology and skill in a crosssectional analysis of businesses in both sectors. The more comprehensive measures of skill reveal that advanced technology interacts with each component of skill quite differently: firms that use advanced technology are more likely to use high-ability workers, but less likely to use high-experience workers. These results hold even when we control for unobservable heterogeneity by means of a selection correction and by using a partial adjustment specification. |
| Keywords: | technology, demand for skill, matched employer-employee data, older workers |
| JEL: | J21 J23 L23 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2707&r=lab |
| By: | Lutz Bellmann (IAB Nuremberg, University of Hannover and IZA); Martin Brussig (IAQ, University of Duisburg-Essen) |
| Abstract: | In the demographic change, a prolongation of individual employment and thus of beginning a new employment in later stages of the work life is of growing importance. On the base of microeconomic data (establishment panel of the IAB), this paper analyses firms’ characteristics correlating with their recruitment behaviour towards the elderly (age 50 and more). Special consideration is given to the labour supply, which is here observed as the existence of an application from job seekers of age 50 and more, and which is a condition for recruiting of older employees. The results show that about 75% of the firms did not have an application of older job seekers. Of the remaining firms, which reported to have applications from older job seekers, about half of the firms recruited older job seekers, and the other half did not so. However, there are remarkable differences between firms which received applications from older job seekers and firms which are willing to recruit older job candidates. Possible explanations point to the search behaviour of job seekers as well as to the signalling of firms on the labour market towards the elderly. |
| Keywords: | economics for the elderly, labour supply, labour demand, vacancies |
| JEL: | J14 J22 J23 J63 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2721&r=lab |
| By: | Trevisan, Elisabetta ((School of Advanced Studies in Venice) |
| Abstract: | This paper investigates the impact of the introduction of new restrictive permanent contracts on the perceived job security of the workers in Spain. The perceived job security is strongly influenced by the characteristics of individuals and their distribution within the groups. Comparing heterogeneous groups could make the traditional DID estimator biased. To address this issue I combine the propensity score matching with a fixed effect estimator. The analysis is conducted using data drawn from the ECHP Survey for Spain from 1995 to 2000. The result is that this reform has a positive impact only for one targeted group, i.e. the young workers and no effect for the others. Several robustness checks are performed. |
| Keywords: | Job Security; Firing Costs; Evaluation Policy; Fixed Effect Estimator |
| JEL: | C14 C33 J28 |
| Date: | 2007–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2007_003&r=lab |
| By: | Michael Rosholm (University of Aarhus and IZA); Rune M. Vejlin (University of Aarhus) |
| Abstract: | In this paper we estimate the causal effect of lowering the public income transfers administered to newly arrived refugee immigrants in Denmark - the so-called starthelp - using a competing risk mixed proportional hazard framework. The two competing risks are exit to job and exit out of the labour force. A standard search model predicts that lower benefits decrease the reservation wage and/or increase the search effort. However, newly arrived refugee immigrants may initially have a weak position in the labour market due to the fact that they do not know the language and typically have no education, or alternatively, their education is not recognized in Denmark. Hence, there may be no demand for their skills. The empirical question addressed here is whether lower benefits affect their job finding rate; if no employer wants to hire them at the going minimum wage, the fact that the reservation wage is lowered may have little effect. For identification we use a ‘quasi-natural’ experiment, in which the rules for welfare benefits in Denmark changed rather dramatically. Refugee immigrants obtaining residence permit before July 1st 2002 received and continue to receive larger income transfers than those obtaining their residence permit after July 1st. We find that lowering public income transfers has a small positive effect on the job finding rate, once calendar time effects are introduced into the model. However, introducing time-variation in the effect, we find that most of the positive effect stems from a large positive effect after two years in Denmark. We also find that the exit rate from the labour force is positively affected by lower transfers, but here the effect is large during the first year in the host country, and then it declines. Furthermore, we investigate heterogeneous treatment effects, and we find, generally, that those which we consider the weakest in the labour market are close to being immune to this treatment. |
| Keywords: | economic incentives, refugee immigrants, duration model, quasi-natural experiment |
| JEL: | E64 J18 J23 J38 J58 J65 J68 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2720&r=lab |