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on Labour Economics |
| By: | Simonetta Longhi (Institute for Social and Economic Research) |
| Abstract: | In the literature job competition is often measured by the unemployment rate. By neglecting on-the-job search, however, the unemployment rate is likely to be a biased measure of job competition: various studies have suggested that on-the-job search varies over time and across groups of people, and might have a relevant impact on the outflow from unemployment. In the UK, for example, less than half of people who are actively looking for a job are unemployed; the other half already has a job. This paper estimates the direct impact of job competition on individual wages in the UK using data from the quarterly Labour Force Survey for the period 1993-2005. Measures of job competition based only on the unemployment rate are compared to measures that account for on-the-job search as well as regional accessibility. The results suggest that job competition has a negative impact on wages, and that this impact is not equally distributed across workers. |
| Keywords: | UK, labour market tightness, wages |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-06&r=lab |
| By: | J.Ignacio García Pérez (Centro de Estudios Andaluces. Universidad Pablo de Olavide); Yolanda Rebollo Sanz (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. |
| Keywords: | Difference-in-differences, Evaluation Analysis, Wage Subsidies, Competing risk |
| JEL: | J38 J68 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:cea:doctra:e2007_07&r=lab |
| By: | Lorenzo Cappellari (Department of Economics, Università Cattolica di Milano); Marco Leonardi (University of Milan) |
| Abstract: | This paper develops a tractable empirical approach to estimate the effect of on-the-job tenure on the permanent and the transitory variance of earnings. The model is also used to evaluate earnings instability associated with fixed-term contracts (short-tenure contracts) in Italy. Our results indicate that each year of tenure on the job reduces earnings instability on average by 15%. Workers on a fixed-term contract on average have an earnings instability 10% higher than workers on a permanent contract. Workers who spend their entire working life on fixed-term contracts can expect an earnings instability twice as high. |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-04&r=lab |
| By: | Schrage, Andrea |
| Abstract: | Most studies of the negative correlation between fertility and education treat education as exogenously raising wages and the cost of child rearing, thus reducing fertility. I relax these assumptions in two respects. First, child costs don't increase with the value of time when external child care is used. Second, over a lifetime, education is endogenous. I model women's choice of education, fertility, and form of child care, allowing for economies of scale in parental child care. Compatibility between work and family duties increases labor supply, the demand for children of educated women, and enhances incentives for obtaining education. |
| Keywords: | endogenous fertility, child care, education |
| JEL: | H31 D13 J22 J13 |
| Date: | 2007–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:bay:rdwiwi:789&r=lab |
| By: | Pierre Cahuc; Stephane Carcillo |
| Abstract: | This paper proposes an ex ante evaluation of the effects of new labor contracts such as the "Contrat Nouvelle Embauche" (CNE) introduced in France in 2005. The lessons we draw are of sufficiently general interest to be applicable to other countries or reforms of employment protection laws. Using a model that captures the characteristics of the French labor market, we simulate the effects of this reform on unemployment, employment, and welfare. We estimate that the CNE will lead to the creation of 70,000 additional jobs in the long run, but at the cost of a slight deterioration in welfare. |
| Keywords: | Employment protection , labor contract , reform , search models , |
| Date: | 2007–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/301&r=lab |
| By: | Anita Tuladhar; Philippe Egoumé-Bossogo |
| Abstract: | The labor participation rate in Slovenia has been lower than in the EU-15 (the members states prior to May 2004), particularly for the low-income and older individuals. Using simulations of tax and social benefits and public pensions, the paper shows how the current tax, welfare, and pension systems create disincentives to work among these groups. The paper finds that incentives to retire early are strong for men, especially low-wage earners. The marginal effective tax rates also make it costly for low-income individuals to work and negatively affect the probability of participating. The paper proposes reform measures to enhance work incentives and labor participation, which will be crucial for dealing with population aging and for achieving higher potential growth in Slovenia. |
| Keywords: | Labor particiaption , retirement , pensions , taxation , welfare , Slovenia , Labor supply , Slovenia , Labor policy , Tax reforms , Pensions , Early retirement incentives , |
| Date: | 2007–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/298&r=lab |
| By: | Lechner, Michael; Wiehler, Stephan |
| Abstract: | This paper investigates active labour market programs in Austria with a special emphasis on male-female effect heterogeneity. On average, we find only small effects, if any, for most of the programs. A crucial advantage of the large and informative administrative data we use is that it provides records about pregnancies and times of parental leave, in addition to the information that can typically be found in European administrative data sources used for evaluating active labour market policies. We show that these variables play a key role in removing selection bias and defining outcome variables which may explain why other similar studies found such programs to be more effective for women than for men. In particular for younger women a key effect of the programs is to reduce or postpone pregnancies and to increase the attachment to the labour force. After taking into account gender specific selection effects and the effects of the programs on pregnancies, gender differences (almost) disappear. |
| Keywords: | Active Labour market policy; matching estimation; panel data; program evaluation |
| JEL: | J68 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6267&r=lab |
| By: | Van Bui; Michael Stolpe |
| Abstract: | This paper studies the evolution of early retirement due to disease and injury in the German labor force between 1988 and 2004. Using data from the German Federation of Public Pension Providers, the IMS Health Drug Launches database and the WHO Mortality Database, we show that new drug launches have substantially helped to reduce the loss of labor at the disease-level over time. We employ a variety of econometric methods to exploit the pseudo-panel structure of our dataset and find that in Western Germany alone each new chemical entity has on average saved around 200 working years in every year of the observation period. Controlling for individual determinants of health-related retirement, such as worker’s age, sex and type of work, we also find evidence that the 2001 reform of pension laws has led to further reductions in the loss of labor from disease and injury. |
| Keywords: | Medical technology, Early retirement, Rehabilitation services, Pension reform, Pseudo-panel data |
| JEL: | I12 I18 J26 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1317&r=lab |
| By: | Shigeru Fujita |
| Abstract: | This paper establishes robust cyclical features of the U.S. labor market by estimating VAR models of the job loss rate, job finding rate, and vacancies. To identify the "aggregate business cycle shock," the author adopts the agnostic Bayesian identification approach developed by Uhlig (2005) and others. His approach traces not only responses of transition rates and vacancies but also those of gross job losses and hires and thereby the stock of unemployment in one unified framework. The author finds that when a negative shock occurs, (i) both the job loss rate and gross job losses rise quickly and remain persistently high, (ii) the job finding rate and vacancies drop in a hump-shaped manner, and (iii) gross hires respond little initially, but eventually rise. He argues that these results point to the importance of job loss in understanding U.S. labor market dynamics. The paper also considers the "disaggregate model," which uses data disaggregated by six demographic groups and incorporates transitions into and out of the labor force. The author finds that job loss continues to play a dominant role among prime-age male workers, while, for other groups, changes in the job finding rate are more important. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:07-12&r=lab |
| By: | Guiseppe Fiori (Boston College); Giuseppe Nicoletti (OECD); Stefano Scarpetta (OECD; IZA); Fabio Schiantarelli (Boston College; IZA) |
| Abstract: | This paper provides a systematic empirical investigation of the effect of product market liberalization on employment when there are interactions between policies and institutions in product and labor markets. Using panel data for OECD countries over the period 1980-2002, we present evidence that product market deregulation is more effective at the margin when labor market regulation is high. Moreover, there is evidence in our sample that product market deregulation promotes labor market deregulation. We show that these results are mostly consistent with the basic predictions of a standard bargaining model (e.g. Blanchard and Giavazzi (2003)), once one allows for a full specification of the fall back position of the unions. |
| Keywords: | Employment, Competition, Deregulation, Liberalization, Unions |
| JEL: | J23 J50 L50 |
| Date: | 2007–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:663&r=lab |
| By: | David Haardt (Institute for Social and Economic Research) |
| Abstract: | In this paper, I analyse how spouses in older couples react to 'shocks' or 'surprises' in their partner's labour income using data from the British Household Panel Survey, 1991-2004. Wives' labour supply proves to be much more sensitive to shocks than husbands'. After a divorce or separation, wives reduce their labour supply while the effect on husbands' labour supply is positive or not statistically significant. If a wife becomes unemployed, it does not affect her husband's labour supply while wives whose husband becomes unemployed reduce their labour supply, too. A decline in husband's health causes the wife to reduce her working hours while husbands tend to increase their labour supply when facing a decline in wife's health. Partner's death does not have statistically significant labour supply effects. Negative income shocks due to other reasons (such as choice) tend to reduce partner's labour supply and vice versa, but only slightly. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-08&r=lab |
| By: | Bernd Frick (Witten/Herdecke University); Robert Simmons (Lancaster University) |
| Abstract: | Although a considerable literature exists on determinants of managerial compensation, much of it focussing on the role of incentives, there is much less known about the im-pact of managerial remuneration and quality upon attainment of organizational goals. In this paper we use a novel panel data set from the German premier soccer league (Bundesliga) as a case to show how variations in managerial compensation impact posi-tively upon organizational (team) success. This positive impact is revealed using sto-chastic frontier production function estimation. Given a particular amount of spending on players relative to the rest of the Bundesliga, a team that hires a better quality coach can expect to achieve a higher points score by reducing technical inefficiency. However, our results also suggest that the market for head coaches may be allocatively inefficient in that coaches are paid below their marginal revenue products. |
| Keywords: | head coaches, soccer, efficiency, stochastic frontier analysis |
| JEL: | J44 L83 M50 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0708&r=lab |