|
on Labour Economics |
| By: | Vincenzo Caponi (Ryerson University, Rimini Center for Economic Analysis and IZA); Miana Plesca (University of Guelph) |
| Abstract: | Using the Canadian General Social Survey we compute returns to post-secondary education relative to high-school. Unlike previous research using Canadian data, our dataset allows us to control for ability selection into higher education. We find strong evidence of positive ability selection into all levels of post-secondary education for men and weaker positive selection for women. Since the ability selection is stronger for higher levels of education, particularly for university, the difference in returns between university and college or trades education decreases slightly after accounting for ability bias. However, a puzzling large gap persists, with university-educated men still earning over 20% more than men with college or trades education. Moreover, contrary to previous Canadian literature that reports higher returns for women, we document that the OLS hourly wage returns to university education are the same for men and women. OLS returns are higher for women only if weekly or yearly wages are considered instead, because university-educated women work more hours than the average. Nevertheless, once we account for ability selection into post-secondary education, we generally find higher returns for women than for men for all wage measures as a result of the stronger ability selection for men. |
| Keywords: | returns to university, returns to college, returns to trades, unobserved ability, selection bias |
| JEL: | J24 J31 I2 C31 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2784&r=lab |
| By: | Francesco Pastore (Seconda Università di Napoli and IZA); Alina Verashchagina (Università di Siena) |
| Abstract: | This paper suggests an analytical framework to analyse the joint evolution of female participation and wages across countries in Central and Eastern Europe (CEE) and the Former Soviet Union (FSU), of which Belarus is a particular case. In CEE, female participation has reduced relatively more than wages, due to greater wage rigidity; in the FSU, wages have reduced more than participation, due to labour hoarding practices. In Belarus, only wages adjust, since (mainly state owned) firms tend to largely maintain their entire workforce. Underneath slow transition and remarkably stable female participation rates (at over 80%), the unconditional gender gap in log hourly wages has increased by a half, while that in log of net and total monthly wages has more than doubled over almost a decade (1996-2004). The Juhn, Murphy and Pierce (1991) decomposition suggests that the deterioration of women wages is caused by negative changes in observed characteristics (due to horizontal segregation) and in the remuneration for those characteristics. Instead, very bland changes in the residual wage distribution tended to reduce (not to increase) the gender wage gap: in fact, women have benefited both of changes in the degree of wage inequality and of gains in the mean female rank in the male residual distribution. |
| Keywords: | evolution of the gender wage gap, decomposition analysis, wage inequality, economic transition, Belarus |
| JEL: | J16 J22 J31 P20 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2796&r=lab |
| By: | Barry Reilly & T. Hung Pham (Poverty Research Unit at Sussex, Department of Economics, University of Sussex) |
| Abstract: | This paper uses mean and quantile regression analysis to investigate the gender pay gap for the wage employed in Vietnam over the period 1993 to 2002. It finds that the Doi moi reforms have been associated with a sharp reduction in gender wage disparities for the wage employed. The average gender pay gap in this sector halved between 1993 and 2002 with most of the contraction evident by 1998. There has also been a contraction in the gender pay at most selected points of the conditional wage distribution with the observed effect most pronounced at the top end of the distribution. However, the decomposition analysis suggests that the treatment effect is relatively stable across the conditional wage distribution and little evidence of a ?glassceiling? is detected for Vietnamese women in the wage employment sector in any of the years examined. |
| Keywords: | Gender pay gap, Quantile regression, Vietnam |
| JEL: | J31 J71 C14 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:pru:wpaper:34&r=lab |
| By: | Malchow-Møller, Nikolaj; Markusen, James R.; Schjerning, Bertel |
| Abstract: | Foreign-owned firms are often hypothesized to generate productivity “spillovers” to the host country, but both theoretical micro-foundations and empirical evidence for this are limited. We develop a heterogeneous-firm model in which ex-ante identical workers learn from their employers in proportion to the firm’s productivity. Foreign-owned firms have, on average, higher productivity in equilibrium due to entry costs, which means that low-productivity foreign firms cannot enter. Foreign firms have higher wage growth and, with some exceptions, pay higher average wages, but not when compared to similarly large domestic firms. The empirical implications of the model are tested on matched employer-employee data from Denmark. Consistent with the theory, we find considerable evidence of higher wages and wage growth in large and/or foreign-owned firms. These effects survive controlling for individual characteristics, but, as expected, are reduced significantly when controlling for unobservable firm heterogeneity. Furthermore, acquired skills in foreign-owned and large firms appear to be transferable to both subsequent wage work and self-employment. |
| Keywords: | heterogeneous firms; knowledge transfer; multinationals; productivity; spillovers |
| JEL: | F16 F2 F23 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6292&r=lab |
| By: | Monojit Chatterji (University of Dundee); Karen Mumford (University of York and IZA) |
| Abstract: | Relative employment conditions have changed across the public and private sectors in Britain over the last decade with the former becoming a more attractive earnings option. Using new linked employee-employer data for Britain in 2004, this paper shows that, on average, full-time male public sector employees earn 11.7 log wage points more than their private sector counterparts. Decomposition analysis reveals that the majority of this pay premium is associated with public sector employees having individual characteristics associated with higher pay and to their working in higher paid occupations. Whilst there is some evidence of workplace segregation in the private sector, there is little indication that rates of return vary across the earnings distribution for either public or private sector employees. It no longer appears to be the case that the public sector provides a refuge for the low skilled at the expense of the highly educated. Furthermore, working conditions appear more uniform in the public sector and, unlike the private sector, there is no significant penalty associated with ethnic background. |
| Keywords: | public sector earnings, male, earnings-gap, interquantile, segregation |
| JEL: | J3 J7 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2781&r=lab |
| By: | Norberg-Schönfeldt, Magdalena (Department of Economics, Umeå University) |
| Abstract: | This thesis consists of three papers on the economics and structure of Swedish families. Paper [I] examines the determinants of children’s educational achievement in Sweden. Special attention is given to the labour market work by mothers and fathers in terms of its influence on the educational outcome of their children, measured as grade point average (GPA) in compulsory as well as upper sec-ondary school. The results show that there is a positive relationship between parental income and GPA. Regarding the number of hours worked in the la-bour market, the results differ between mothers and fathers. Having a mother that works less than full time has positive effects on the child’s grades throughout the schooling of the child, whereas significant effects of the hours of work that the father puts in are found during upper secondary school only. Paper [II] explores the role of financial surprises and match quality in the dis-solution of relationships. The analysis is carried out both for surprises in the short term earnings and surprises in the long-run earnings capacity. It is found that positive surprises in short term earnings have a destabilizing effect for a relationship. Generally, a negative surprise in long-run earnings capacity for males has a destabilizing effect. However, if it is combined with a female positive surprise, the effect is stabilizing. Commitments become more stable the older the spouses are at the start, and if young children are present. Paper [III] studies the role of unemployment in the dissolu¬tion of relationships by applying a two-step estimation method to an extensive data set, which con-tains information about young Swedish males and females. Unemployment is recognized as endogenous in the separation decision, and the results show that the effect of unemploy¬ment on separation is biased when unemployment is assumed to be exo¬genous in the separation equation. The probability of sepa-ration is found to be increasing with male unemployment, while female un-employment decreases the probability of dissolution. |
| Keywords: | Time allocation; labour-force participation; educational achievements; match quality; financial surprises; unemployment; divorce; family structure |
| JEL: | D10 I20 J12 J22 |
| Date: | 2007–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0708&r=lab |
| By: | Chen, Natalie; Conconi, Paola; Perroni, Carlo |
| Abstract: | Bargaining theory suggests that married women who experience a relative improvement in their labour market position should experience a comparative gain within their marriage. However, if renegotiation possibilities are limited by institutional mechanisms that achieve long-term commitment, the opposite may be true, particularly if women are specialized in household activities and the labour market allows comparatively more flexibility in their labour supply responses. Evidence from the German Socio-Economic Panel indeed shows that, as long as renegotiation opportunities are limited, comparatively better wages for women exacerbate their 'double burden' of market and household work. |
| Keywords: | Bargaining; Marriage; Renegotiation |
| JEL: | D1 J2 J3 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6269&r=lab |
| By: | Louis N. Christofides (University of Cyprus, University of Guelph, CLLRNet, CESifo and IZA); Paris Nearchou (University of Cyprus) |
| Abstract: | An earlier study of wage agreements, reached in the Canadian unionized sector between 1976-99, found that wage adjustment is characterized by downward nominal rigidity and significant spikes at zero. We extend this earlier approach to encompass the possibility of real as well as nominal wage rigidity. The addition of real wage rigidity variables enhances earlier results and suggests that real rigidity increases significantly the mass in the histogram bin containing the mean anticipated rate of inflation, as well as in adjacent bins. Downward nominal wage rigidities and spikes at zero remain important. |
| Keywords: | real, nominal wage rigidities |
| JEL: | J52 J31 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2799&r=lab |
| By: | Bas Jacobs (Universiteit van Amsterdam, Tilburg University, CentER, Netspar, and CESifo); Ruud A. de Mooij (CPB Netherlands Bureau for Economic Policy Analysis, Erasmus Universiteit Rotterdam, Netspar, and CESifo); Kees Folmer (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | A flat tax rate on income has gained popularity in European countries. This paper assesses the attractiveness of such a flat tax in achieving redistributive objectives with the least cost to labour market performance. We do so by using a detailed applied general equilibrium model for the Netherlands. The model is empirically grounded in the data and encompasses decisions on hours worked, labour force participation, skill formation, wage bargaining between unions and firms, matching frictions, and a wide variety of institutional details. The simulations suggest that the replacement of the current tax system in the Netherlands by a flat rate will harm labour market performance if aggregate income inequality is contained. This finding bolsters the notion that a linear tax is less efficient than a non-linear tax to obtain redistributive goals. |
| Keywords: | Flat tax; Labour market; General equilibrium; Equity; Optimal taxation |
| JEL: | D3 D5 H2 |
| Date: | 2007–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070029&r=lab |
| By: | Conny Wunsch (SIAW, University of St. Gallen); Michael Lechner (SIAW, University of St. Gallen, CEPR, ZEW, PSI and IZA) |
| Abstract: | We provide new evidence on the effectiveness of West German labour market programmes by evaluating training and employment programmes that have been conducted 2000-2002 after the first large reform of German labour market policy in 1998. We employ exceptionally rich administrative data that allow us to use microeconometric matching methods and to estimate interesting effects for different types of programmes and participants at a rather disaggregated level. We find that, on average, all programmes fail to improve their participants' chances of finding regular, unsubsidised employment. Rather, participants accumulate 2-13 more months of unemployment than nonparticipants over the 2.5 years following programme start, which, in addition to direct programme costs, induces net costs in terms of benefit payments and wage subsidies amounting to, on average, 1500-7000 EUR per participant. However, we show that there is some scope for improvements in mean employment rates as well as potential for considerable cost savings by a reallocation of participants and nonparticipants to the different programmes. |
| Keywords: | matching estimation, causal effects, programme evaluation, panel data |
| JEL: | J68 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2800&r=lab |
| By: | Sofia Pessoa e Costa; Stéphane Robin |
| Abstract: | This paper evaluates the impact of a widely-used French training programme for youth on earnings. This programme is designed to increase labour market experience and education, validated by a formal diploma. It is not sure, however, whether this diploma and a similar diploma acquired through initial training have the same effect on post-training wages. To answer this question, we contrast the 2003 net wages of a group of participants enrolled in 1998 (the “treatment” group) to the 2003 net wages of a control group. The controls are individuals who completed their initial training in 1998 with diplomas similar to those obtained by the treated at the end of the programme. Using propensity score matching, we find a significantly positive effect of the treatment on the treated: participants in the programme benefit, five years after participation, from a positive wage premium. This suggests that firms do not simply value education: they value it more if it is coupled with some degree of labour market experience. |
| Keywords: | active labour market policies; training programmes for youth; propensity score matching. |
| JEL: | J68 I28 C14 C21 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2007-18&r=lab |
| By: | Peter Rangazas; Alex Mourmouras |
| Abstract: | During the course of development, wages and labor productivity are much higher in the nonfarm sectors of the economy than in agriculture. In this paper, we examine the sources and consequences of wage and productivity gaps in the U.S. from 1800 to 2000. We build a quantitative general equilibrium model that closely matches the two-century long paths of farm and non-farm labor productivity growth, schooling, and fertility in the U.S. The family farm emerges as an important institution that contributes to differences in wages and labor productivity. Income from farm ownership compensates farm workers for the relatively low labor productivity and wages earned in agriculture. Farm ownership, along with the higher cost of raising children off the farm, generated a two-fold gap in labor productivity across the farm and nonfarm sectors in the 19th century US. Consequently, the reallocation of labor from farming to industry raised the average annual growth rate of output per worker by about half a percentage point over the 19th century. The paper also draws some lessons from the quantitative analysis of U.S. economic history for currently developing countries. |
| Date: | 2007–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/105&r=lab |
| By: | Lechner, Michael; Wunsch, Conny |
| Abstract: | We provide new evidence on the effectiveness of West German labour market programmes by evaluating training and employment programmes that have been conducted 2000-2002 after the first large reform of German labour market policy in 1998. We employ exceptionally rich administrative data that allow us to use microeconometric matching methods and to estimate interesting effects for different types of programmes and participants at a rather disaggregated level. We find that, on average, all programmes fail to improve their participants' chances of finding regular, unsubsidised employment. Rather, participants accumulate 2-13 more months of unemployment than nonparticipants over the 2.5 years following programme start, which, in addition to direct programme costs, induces net costs in terms of benefit payments and wage subsidies amounting to, on average, 1500-7000 EUR per participant. However, we show that there is some scope for improvements in mean employment rates as well as potential for considerable cost savings by a reallocation of participants and nonparticipants to the different programmes. |
| Keywords: | causal effects; Matching estimation; panel data; programme evaluation |
| JEL: | J68 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6306&r=lab |
| By: | Mirenitzia Cárdenas; Héctor J. Villarreal |
| Abstract: | We propose self-employment as an explanation for the observed reduction in inequality occurring after the Mexican economic crisis of 1995. The evidence appears as a contradiction to the labour-hoarding hypothesis, which states that inequality was expected to increase because the only asset of the poor was labour. Self-employment has been an escape to inflation and staggered wages bringing as a consequence reduced inequality. Therefore, individuals will be pushed into self employment as a means of survival if they lost their jobs in the formal sector, or pulled into self employment attracted by higher potential earnings if their wages were losing purchasing power. |
| Keywords: | self employment, self-employment, inequality, crisis of 1995, informality, labour-hoarding |
| JEL: | E31 E32 J21 J22 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:egb:wpaper:20072&r=lab |
| By: | Hou, Feng; Myles, John |
| Abstract: | Whether or not relative rates of assortative marriage have been rising in the affluent democracies has been subject to considerable dispute. First, we show how the conflicting empirical findings that have fueled the debate are frequently an artifact of alternative methodological strategies for answering the question. Then, drawing on comparable census data for Canada and the United States, we examine trends in educational homogamy and intermarriage with log-linear models for all marriages among young adults under 35 over three decades. Our results show that educational homogamy, the tendency of like to marry like, has unambiguously risen in both countries since the 1970s, with no sign of the U-turn in levels of intermarriage reported in some earlier comparative studies. Rising levels of marital homogamy were the result of declining intermarriage at both ends of the educational distribution. However, while trends for men and women were quite similar in Canada, they differed significantly in the United States. The overall rise in marital homogamy In the United States was partially offset by an increased tendency of women with some college education to marry `down¿ the educational hierarchy. In Canada, the only sign of abatement in the trend toward greater educational homogamy was a slight increase in intermarriage among university-educated men and women during the 1990s. |
| Keywords: | Families, households and housing, Education, training and learning, Household characteristics, Outcomes of education, Marriage and common-law unions |
| Date: | 2007–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2007299e&r=lab |
| By: | Dimitris Georgarakos (Goethe University Frankfurt and CFS); Konstantinos Tatsiramos (IZA) |
| Abstract: | Many studies have explored the determinants of entering into entrepreneurship and the differences in self-employment rates across racial and ethnic groups. However, very little is known about the survival in entrepreneurship of immigrants to the U.S. and their descendants. Employing data from the Survey of Income and Program Participation, we find a lower survival probability in entrepreneurship for Mexican and other Hispanic immigrants, which does not carry on to their U.S.-born descendants. We also find that these two immigrant groups tend to enter entrepreneurship from unemployment or inactivity and they are more likely to exit towards employment in the wage sector, suggesting that entrepreneurship represents for them an intermediate step from non-employment to paid employment. |
| Keywords: | entrepreneurship, business ownership, duration analysis, left truncation, immigrant status |
| JEL: | F22 J15 J82 C41 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2792&r=lab |
| By: | Daniel Münich (CERGE-EI, Prague); Jan Svejnar (University of Michigan, CEPR, CERGE-EI and IZA) |
| Abstract: | In this paper, we use 1991-2005 panel data on the unemployed, vacancies, inflow into unemployment, and outflow from unemployment in five former communist economies and in the western part of Germany (a benchmark western economy) to examine the evolution of unemployment together with that of inflows into unemployment and vacancies. The comparison of the transition economies with an otherwise similar and spatially close market economy is useful because it enables us to identify the main differences and similarities in the evolution of the key variables, and thus draw conclusions as to whether different or similar factors cause high unemployment. |
| Keywords: | unemployment, communism, transition, labor |
| JEL: | P2 J4 J6 C33 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2798&r=lab |
| By: | Changmin Lee (Indiana University Bloomington) |
| Abstract: | This paper develops a matching model in the director market with outside options to explain the equilibrium board quality. Based on Hermalin (2005) and Gabaix and Landier (2006), the board of directors has the function of monitoring and advising to affect the earning of firm assuming that the impact of a CEO's quality increases with the size of the firm under his control. This model shows that the big firms make board positions more attractive compared to outside options. Also, only when the impact of the advising by the board is strong, the more talented CEO can induce the high qualified outside directors. It follows that the board quality increases. Additionally, the model can explain the observed fact that the quality of directors on the same boards is dispersed. The estimations suggest that the talented ongoing CEOs and retired CEOs go to the firms which have the high market capitalization values and the large amount of sales. The evidence for the effect of the incumbent CEO's talent is mixed. I also find that the firms which have a large amount of sales pay more to outside directors. The compensation for directors, however, does not affect the quality of boards. |
| Keywords: | Corporate governance, Board of director, Job search, Matching |
| JEL: | D23 G34 G38 J41 J44 J64 L25 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2007006&r=lab |
| By: | Andrea Conte (University of Turin and Max Planck Institute of Economics Jena); Marco Vivarelli (Catholic University of Milan, CSGR Warwick, Max Planck Institute of Economics Jena and IZA) |
| Abstract: | This paper discusses the occurrence of Skill-Enhancing Technology Import (SETI), namely the relationship between imports of embodied technology and widening skill-based employment differentials in a sample of low and middle income countries (LMICs). In doing so, this paper provides a direct measure of technology transfer at the sector level from high income countries (HICs), namely those economies which have already experienced the occurrence of skill-biased technological change, to LMICs. GMM techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide robust evidence of the determinants of widening employment differentials in LMICs. In particular, capital-skill complementarity represents a source of relative skill-bias while SETI provides an absolute skill-bias effect on the employment trends of skilled and unskilled workers witnessed in these countries. |
| Keywords: | skill biased technological change, capital skill complementarity, GMM estimation, general industrial statistics, world trade analyzer |
| JEL: | F16 J23 J24 O33 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2797&r=lab |
| By: | Siv Gustafsson (Universiteit van Amsterdam); Seble Worku (Universiteit van Amsterdam) |
| Abstract: | Teenage motherhood is very high in South Africa. In 2001, 55 per thousand African South African women and 82 per thousand Coloured South African women were teenage mothers as compared to 8 among Indian South Africans and 3 among White South African women. In this paper we use the South African General Household Survey data of 2002 with complete retrospective fertility history to study teenage childbearing and a number of outcomes in 2002 such as completed high school and satisfaction with life. Our main findings are that teenage childbearing is negatively correlated with completing high school, but most other outcome measures do not show the negative effects from teenage motherhood as has been found in many previous US and UK studies. We estimate a bivariate probit model on the joint determination of the probability of teenage motherhood and completing high school, identifying by abortion rates and the numbers of doctors and nurses by region. |
| Keywords: | Teenage motherhood; high school completion; endogeneity; bivariate probit; South Africa |
| JEL: | D1 J1 |
| Date: | 2007–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070024&r=lab |
| By: | Morissette, Rene; Johnson, Anick |
| Abstract: | In this study, we assemble a wide variety of data sets in an attempt to produce a set of stylized facts regarding offshoring and the evolution of Canadian employment in recent years. Our main finding is that, in almost all of the data sets used, there is, so far, little evidence of a correlation between offshoring, however defined, and the evolution of employment and layoff rates. While our analyses are fairly simple, they all suggest that if foreign outsourcing has had an impact on Canadian employment and worker displacement so far, this impact is likely to be modest and thus, unlikely to be detected either with industry-level or occupation-level data. |
| Keywords: | International trade, Labour, Service imports, Employment and unemployment, Globalization and the labour market |
| Date: | 2007–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2007300e&r=lab |
| By: | Murat G. Kirdar (Department of Economics, METU) |
| Abstract: | In this paper I test the capital accumulation conjecture that is used to rationalize return migration decisions in the context of immigrants in Germany and examine how labor market outcomes influence return migration decisions, with particular attention to selection in these outcomes in return migration. I characterize the level and timing of return migration as well as the selection in it and derive a number of implications of these on the impact of immigrants on the host as well as source countries. Using a rich longitudinal dataset that has an over-sampled group of immigrants (German Socioeconomic Panel), I conduct a Cox proportional hazard analysis with alternative waiting-time concepts. That the sample contains immigrants from four different source countries allows me to utilize the variation in the source country characteristics as well as the time variation in them to identify the parameters of interest. I find evidence for the savings accumulation conjecture, in which return is motivated by higher purchasing power of accumulated savings in the home country. On the other hand, human capital accumulation conjecture is rejected. In the framework of savings accumulation, I examine the impact of an increase in German earnings whose theoretical impact on the return migration decision is ambiguous. In terms of labor market outcomes, both retirement and unemployment emerge as important determinants of return migration choices. Unemployment spell length determines the direction of selection with respect to unemployment in return migration. The data also reveal that the level of return migration is high and varies considerably across the source countries. The hazard function of Turkish immigrants displays a hump-shaped profile that peaks between the ages of 45 and 54 whereas EU immigrants are more likely to return at earlier ages and after retirement. |
| Keywords: | International Migration; Capital Accumulation; Unemployment; Duration Analysis |
| JEL: | C41 F22 J61 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:met:wpaper:0703&r=lab |
| By: | Gopi Shah Goda; John B. Shoven; Sita Nataraj Slavov |
| Abstract: | Implicit taxes in Social Security, which measure Social Security contributions net of benefits accrued as a percentage of earnings, tend to increase over the life cycle. In this paper, we examine the effects of three potential policy changes on implicit Social Security tax rates: extending the number of years used in the Social Security formula from 35 to 40; allowing individuals who have worked more than 40 years to be exempt from payroll taxes; and distinguishing between lifetime low-income earners and high-income earners who work short careers. These three changes can be achieved in a benefit- and revenue-neutral manner, and create a pattern of implicit tax rates that are much less distortionary over the life cycle, eliminating the high implicit tax rates faced by many elderly workers. The effects of these policies on progressivity and women are also examined. |
| JEL: | H5 J2 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13110&r=lab |
| By: | Arthur van Soest (RAND, Tilburg University and IZA); Arie Kapteyn (RAND and IZA); Julie Zissimopoulos (RAND) |
| Abstract: | Structural models explaining retirement decisions of individuals or households in an intertemporal setting are typically hard to estimate using data on actual retirement decisions, since choice sets are for a large part unobserved by the researcher. This paper describes an experiment in which both perceived retirement opportunities and preferences for retirement are measured. For the latter, respondents evaluate how attractive they find a number of hypothetical, simplified, retirement trajectories involving early retirement, late retirement, and gradual retirement, each with its own corresponding income path. The questions were fielded in the Dutch CentERpanel. The answers are used to estimate a stylized structural life-cycle model of retirement preferences. The results suggest that, for example, many respondents could be convinced to work part-time after age 65 before retiring completely at age 70 for a reasonable financial compensation. Simulations combining the information on perceived opportunities with estimated preferences illustrate the importance of employer imposed restrictions on retirement and the scope for increasing labor force participation of the elderly by creating opportunities for gradual retirement. |
| Keywords: | replacement rates, ratings, gradual retirement |
| JEL: | C81 J26 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2785&r=lab |
| By: | Frank Levy; Peter Temin |
| Abstract: | We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage -- all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story. |
| JEL: | J31 J53 N32 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13106&r=lab |