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on Labour Economics |
| By: | Black, Sandra E.; Spitz-Oener, Alexandra |
| Abstract: | The closing of the gender wage gap is an ongoing phenomenon in industrialized countries. However, research has been limited in its ability to understand the causes of these changes, due in part to an inability to directly compare the work of women to that of men. In this study, we use a new approach for analyzing changes in the gender pay gap that uses direct measures of job tasks and gives a comprehensive characterization of how work for men and women has changed in recent decades. Using data from West Germany, we find that women have witnessed relative increases in nonroutine analytic tasks and non-routine interactive tasks, which are associated with higher skill levels. The most notable difference between the genders is, however, the pronounced relative decline in routine task inputs among women with little change for men. These relative task changes explain a substantial fraction of the closing of the gender wage gap. Our evidence suggests that these task changes are driven, at least in part, by technological change. We also show that these task changes are related to the recent polarization of employment between low and high skilled occupations that we observed in the 1990s. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5692&r=lab |
| By: | Verhoogen, Eric A. |
| Abstract: | This paper proposes a new mechanism linking trade and wage inequality in developing countries --- the quality-upgrading mechanism --- and investigates its empirical implications in panel data on Mexican manufacturing plants. In a model with heterogeneous plants and quality-differentiated goods, only the most productive plants in a country like Mexico enter the export market, they produce higher-quality goods to appeal to richer Northern consumers, and they pay high wages to attract and motivate a high-quality workforce. An exchange-rate devaluation leads initially more-productive, higher-wage plants to increase exports, upgrade quality, and raise wages relative to initially less-productive, lower-wage plants within each industry. Using the late-1994 peso crisis as a source of variation and a variety of proxies for plant productivity, I find that initially more-productive plants increased the export share of sales, white-collar wages, blue-collar wages, the relative wage of white-collar workers, and ISO 9000 certification more than initially less-productive plants during the peso crisis period, and that these differential changes were greater than in periods without devaluations before and after the crisis period. A factor-analytic strategy that relies more heavily on the theoretical structure and avoids the need to construct proxies finds similar results. These findings support the hypothesis that differential quality upgrading induced by the exchange rate shock tended to increase within-industry wage inequality. |
| Keywords: | exchange-rate shock; quality upgrading; trade and wages; wage inequality |
| JEL: | F16 J31 L11 O12 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6385&r=lab |
| By: | Leah Platt Boustan; Price V. Fishback; Shawn E. Kantor |
| Abstract: | During the Great Depression, as in the modern era, in-migrants were accused of taking jobs and crowding relief rolls. Unlike today, the targets of protest during the Depression were typically American citizens from other parts of the country, rather than the foreign born. Using aggregate data on internal migration flows matched to individual records from the 1940 Census, we analyze the impact of internal migration on various labor market outcomes. To control for the likely endogeneity bias that would arise if migrants were attracted to areas with high wages or plentiful work opportunities, we instrument for migration flows. The instrument predicts out-migration from local areas using extreme weather events and variations in the generosity of New Deal programs and assigns these flows to destinations based on geographic distance. As in many contemporary studies of immigration, our results indicate that residents of metropolitan areas with high in-migration rates did not experience a drop in hourly earnings. Instead, longer term residents of high in-migration areas experienced three types of economic dislocation. A significant number moved away. Many of those who stayed experienced either a drop in annual weeks of work and/or reductions in access to work relief jobs. During a Depression with extraordinary unemployment and an extensive amount of job sharing, these lost work opportunities were costly to existing residents. |
| JEL: | J61 N32 R23 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13276&r=lab |
| By: | McFarlane, Adian; Tedds, Lindsay |
| Abstract: | We control for demographic changes to document trends in the allocation of time using time diary data for Canada (1986 to 2005) and the United States (1985 to 2005). We find that (1) in 2005, average weekly hours spent on market work is higher in Canada than in the U.S. (37.29 vs. 33.29) , (2) between 1986 and 2005 market work increased by an average of 3.75 hours per week in Canada, but in the U.S it remained relatively stable, and (3) over the sample period, leisure time increased in the U.S., but fell in Canada. In addition, the least educated enjoy more leisure relative to the most highly educated in both countries but this inequality is narrowing for Canadian men. |
| Keywords: | Market Work; Home Production; Leisure; Time Use |
| JEL: | O57 J22 D13 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4211&r=lab |
| By: | Tatom, John |
| Abstract: | A popular and highly politicized theme today is that US workers are falling behind as their real wages fall and income gets redistributed to the rich. This article looks at some reasons that income inequality could rise, and then explores whether, in fact, workers are losing out. It looks at the suggestion that workers are falling behind relative to the wealthy, and at evidence on whether workers real wages have been falling, or perhaps only manufacturing wages. It also examines whether there is a growing ÃÂâÃÂÃÂÃÂÃÂwealth gapÃÂâÃÂÃÂÃÂàand whether it is due to falling labor compensation relative to wealth. Finally it examines the hypothesis that relatively inexperienced or unskilled workers are falling behind by fixing a skill level and seeing how real wages are changing over the recent past. The evidence here provides a perspective on why some analysts might believe that there is rising inequality or an emerging wealth gap, or that workers are falling behind, but generally it is not favorable to these pessimistic views of how well workers are doing. While inequality may have risen in recent decades, and there are strong reasons to think that the evidence for this is weak, there is also a strong reason to think that it would be a normal function of an aging population and nothing more. Short of population control or unexplainable and unfair redistribution from the old to the young, there may be nothing that can or should be done to reverse the rise in inequality. Finally the paper argues that there is a wealth gap, but it is due to falling real interest rates and a decline and not due to declining compensation, either absolutely or relative to overall income. |
| Keywords: | inequality; wealth gap; wages |
| JEL: | E25 J3 J11 |
| Date: | 2007–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4116&r=lab |
| By: | Gourdon, Julien |
| Abstract: | The relationship between trade liberalization and inequality has received considerable attention in recent years. The primary purpose of this paper is to present new results on the sources of wage inequalities in manufacturing taking into account South-South (S-S) trade. Globalization not only leads to increasing North-South (N-S) trade, but the direction and composition of trade has also changed. More trade is carried out between developing countries. We observe increasing wage inequality is more due to the South-South trade liberalization than to the classical trade liberalization with northern countries. The second purpose is to elucidate the link between the direction of trade and technological change, arguing that it might explain why we obtain different results for South-South trade and North-South trade on wage inequality. A part of this increasing wage inequality due to S-S trade comes from the development of N-S trade relationship in S-S trade which increases wage inequality in middle income developing countries. However the fact that S-S trade is more skill intensive sector oriented increase wage inequality for all developing countries. |
| Keywords: | International Trade; Wage Inequality; Skill-biased technical change |
| JEL: | O3 J3 F1 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4177&r=lab |
| By: | Lykke E. Andersen (Institute for Advanced Development Studies); Beatriz Muriel (Maestrias para el Desarrollo, Universidad Catolica Boliviana) |
| Abstract: | The urban labor market in Bolivia can be divided into 4 main sectors: 1) the public sector, 2) the formal private sector, 3) self-employed informals, and 4) informal workers. Although incomes are generally higher in the public sector and in the formal private sector, there is a strong preference in Bolivia for being informally self-employed. Two thirds of both men and women in urban areas respond that they would prefer to be self-employed rather than a salaried employee, and few see any advantage of becoming formal under the current institutional set-up. Currently, half of all economically active women in urban areas are informally self-employed, while this is the case for only one third of men. This implies that women are actually closer to the desired state than men, according to their own preferences. The real problem for women is not that they are informally self-employed, but rather that the profitability of their informal enterprises is low. On average, monthly profits of female micro-entrepreneurs is about 40% lower than those of male micro-entrepreneurs. This report uses quantitative information from about 600 micro and small enterprises to break down and understand this gender gap in profitability, and the results show that almost the whole gap is due to the fact that women operate their businesses on a much smaller scale (with less productive capital and fewer employees) than men. Why do female entrepreneurs operate on a smaller scale? One partial explanation is that they do not want to grow, because the business then would loose some of the features that make a micro-business particularly attractive for women (not to depend on others, to be able to care for children simultaneously, flexible working hours, and daily revenues). More important, however, is the lack of access to capital. Micro and small businesses operated by women have only a third of the operating capital of male operated businesses. There are two main reasons for this. First, women generally have fewer opportunities to accumulate capital, both because their household and reproductive work takes time away from paid work, and because they tend to earn less than men when they do work for money. Second, they do not have access to credit on reasonable terms. Access by itself is not the problem, as there is a very active micro-credit industry in Bolivia, but the terms are so unattractive that women try to avoid it if at all possible. The interest rates are high (20-40% per year); the group-lending practices increases the risk for the borrower, as they may end up paying other group membersÃÂâÃÂÃÂÃÂàdebt also; and they are typically required to assist at compulsory training courses twice a month, which is demanding for busy women running both a business and a household. Banks offer loans at more reasonable terms, but the requirements are difficult for micro-entrepreneurs to comply with (especially proof of a monthly pay check) and the risk is large as an entire house is often put up as collateral for even a small loan. Capital and credit is not a binding constraint in all sectors, however. On average, returns to additional capital investments are estimated to be relatively high (internal rates of return of over 20%) in the food sales sector, the textile clothing sector, and the camelid clothing sector. In contrast, they are estimated to be negative for grocery stores and the transport sector, which have experienced overinvestment to the extent that the returns to both capital and labor in these two sectors have been severely depressed. Even in the sectors where returns to capital are relatively high, a doubling of productive capital would not lead to a doubling of monthly profits. In fact, estimation results show strongly diminishing returns to scale, which means that micro-enterprises have little incentive to grow. Under the current institutional setup in Bolivia, it makes more economic sense to have several identical micro-enterprises in the family rather than one larger enterprise, and this is indeed often observed in practice. This is partly due to the characteristics of the sectors (for example, several small stores can capture a larger market due to the geographical dispersion), but it is mostly due to the tax-system, which becomes very demanding, both in terms of bureaucratic procedures and in terms of tax burden, as soon as an enterprise grows past a certain threshold. Under the current institutional set up, micro-entrepreneurs perceive no benefits from becoming formal, and indeed estimation results confirm that formality would lower the monthly profits of micro-enterprises (less than 3 workers and less than $1000 in operating capital) by 30-40%. Slightly bigger firms (3-5 workers), however, may benefit from getting a NIT and thus be able to offer facturas to the clients. |
| Keywords: | Informality, Productivity, Gender, Bolivia |
| JEL: | J21 J24 J31 J42 J48 J78 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:200707&r=lab |
| By: | Gottlieb, Daniel |
| Abstract: | The Haredi (Jewish ultra-orthodox) population in Israel is an idiosyncratic community. Its members are committed to the observance of the Bible and its commandments, as interpreted by its sectarian religious leaders. Haredi poverty is exceptionally high, with a share of 20% of the Israeli poor and a population share half that size. Its major causes are very high Haredi fertility (a population growth of 6% p.a.), reducing household income per capita and the motherÃÂâÃÂÃÂÃÂÃÂs earning capacity; its independent education systemÃÂâÃÂÃÂÃÂÃÂs neglect (particularly among boys) of materially important subjects for future earning capacity such as Mathematics, English and digital skills; and low labor-force participation of Haredi men, due to prolonged learning in religious seminars (Yeshiva), often deeply into the prime working age. A further cause for the sharp increase in poverty in the short term has been the recent large cuts in child benefit payments. The estimation of the size and composition of the Haredi population is based on data from the Israeli Social Survey. Poverty calculations are based on an innovative way of optimally matching data on Haredi group membership from that source with data in the Household Expenditure Survey, thus allowing for improved identification of poor Haredi households compared to previous studies. Poverty is calculated both on a needs-based approach and on the (official) relative approach. The share of Haredi children up to age 4 is nearly 3 times higher than in the Jewish non-Haredi society. This, together with the empirical regularity of a negative relationship between poverty and age, implies an upward trend for Haredi and overall Israeli poverty over time. Haredi Poverty, as measured by the distribution-sensitive Sen-poverty index, nearly doubled over the last three years after a previous significant improvement. This deterioration stands in contrast to developments in the rest of the Israeli-Jewish society, whose poverty intensity increased only slightly over the last couple of years. In 2004 the Haredi menÃÂâÃÂÃÂÃÂÃÂs labor force participation of 37% only slightly exceeded one half that of the general Jewish population, mainly due to the high enrollment of Haredi men in religious seminars (Yeshiva) during their prime working age. Despite their much higher fertility, women function as the familyÃÂâÃÂÃÂÃÂÃÂs main providers, with a participation rate of 48%, compared to 58% of non-Haredi women. |
| Keywords: | Poverty; Religion; Israel; Ethnic groups; Ultra-Orthodox; Alternative Poverty Measures; |
| JEL: | I32 J15 |
| Date: | 2007–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4024&r=lab |
| By: | Bertocchi, Graziella |
| Abstract: | We offer a rationale for the decision to extend the franchise to women within a politico-economic model where men are richer than women, women display a higher preference for public goods, and womenÃÂâÃÂÃÂÃÂÃÂs disenfranchisement carries a societal cost. We first derive the tax rate chosen by the male median voter when women are disenfranchised. Next we show that, as industrialization raises the reward to mental labour relative to physical labour, womenÃÂâÃÂÃÂÃÂÃÂs relative wage increases. When the cost of disenfranchisement becomes higher than the cost of the higher tax rate which applies under universal enfranchisement, the male median voter is better off extending the franchise to women. A consequent expansion of the size of government is only to be expected in societies with a relatively high cost of disenfranchisement. We empirically test the implications of the model over the 1870-1930 period. We proxy the gender wage gap with the level of per capita income and the cost of disenfranchisement with the presence of Catholicism, which is associated with a more traditional view of womenÃÂâÃÂÃÂÃÂÃÂs role and thus a lower cost. The gender gap in the preferences for public goods is proxied by the availability of divorce, which implies marital instability and a more vulnerable economic position for women. Consistently with the modelÃÂâÃÂÃÂÃÂÃÂs predictions, women suffrage is affected positively by per capita income and negatively by the presence of Catholicism and the availability of divorce, while women suffrage increases the size of government only in non-Catholic countries. |
| Keywords: | culture; divorce; family; inequality; public goods; welfare state; women suffrage |
| JEL: | H50 J16 N40 O11 P16 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6396&r=lab |
| By: | GuzmÃÂÃÂÃÂán, Ricardo AndrÃÂÃÂÃÂés |
| Abstract: | The shift from hunting and gathering to agriculture, some 10,000 years ago, triggered the first demographic explosion in history. Along with population, working time increased, while food consumption remained at the subsistence level. For that reason, most anthropologists regard the adoption of agriculture as an economical puzzle. I show, using a neoclassical economic model, that there is nothing puzzling about the adoption of agriculture. Agriculture brings four technological changes: an increase in total factor productivity, a stabilization of total factor productivity, less interference of children on production, and the possibility of food storage. In my model, each of those changes induces free, rational and self-interested hunter-gatherers to adopt agriculture. As a result, working time increases while consumption remains at the subsistence level, and population begins to grow until diminishing returns to labor bring it to a halt. Welfare, which depends on consumption, leisure, and fertility, rises at first; but after a few generations it falls below its initial level. Still, the adoption of agriculture is irreversible. The latter generations choose to remain farmers because, at their current levels of population, reverting to hunting and gathering would reduce their welfare. |
| Keywords: | Paleoeconomics; economic anthropology; Neolithic Revolution; hunter-gatherers; agriculture; original affluent society. |
| JEL: | J22 J13 A12 O13 A14 D1 Z1 D71 I31 D6 |
| Date: | 2007–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4148&r=lab |
| By: | Sprietsma, Maresa |
| Abstract: | In this paper, we estimate the effect of pupilÃÂâÃÂÃÂÃÂÃÂs relative age within the first grade of primary school on math and reading test scores at age 15. The main objective is to evaluate the long-term causal effect of relative age in the first grades of primary school on pupilÃÂâÃÂÃÂÃÂÃÂs test in 16 different countries. We use the national rule for admission to primary school to construct the predicted relative age of each pupil. We find that relative age at the start of primary school has a significant positive effect on test scores in most countries. Moreover, we identify some of the channels through which the effect occurs. |
| Keywords: | pupil performance, relative age, international comparison |
| JEL: | I21 I29 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5696&r=lab |
| By: | Simeon Djankov (the World Bank); Yingyi Qian (UC Berkeley and CERP); Gerard Roland (UC Berkeley and CEPR); Ekaterina Zhuravskaya (New Economic School/CEFIR and CEPR) |
| Abstract: | We report the results of a new survey on entrepreneurship in Brazil. In September 2006, we interviewed 400 entrepreneurs and 550 non-entrepreneurs of the same age, gender, education and location in 7 Brazilian cities. The data are used to test three competing hypotheses on entrepreneurship: the role of economic and legal institutions (security of property rights; access to credit); the role of sociological characteristics (family background, social networks); and the role of individual features (attitude towards risk, I.Q., self-confidence) in becoming an entrepreneur. In line with our previous research in China and Russia, we find that sociological characteristics have the strongest influence on becoming an entrepreneur. In contrast, success as an entrepreneur is primarily determined by the individualÃÂâÃÂÃÂÃÂÃÂs smartness and higher education in the family. Entrepreneurs are not more self-confident than non-entrepreneurs; and overconfidence is bad for business success. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0104&r=lab |
| By: | Aldashev, Alisher; Gernandt, Johannes; Thomsen, Stephan L. |
| Abstract: | Less than half of the people with migration background living in Germany possess foreign citizenship. Hence, using citizenship to analyze economic issues of immigration may be problematic for two reasons. On the one hand, a quite substantial share of persons with migration background is neglected in the group of interest, and, on the other hand, the reference group (native Germans) may be contaminated by effects from naturalized immigrants. This paper utilizes a wider definition covering all persons with migration background to analyze the earnings prospects. To shed light on differences to the common use of citizenship, estimates are presented in comparison to foreigner and German citizens. The results show that persons with migration background have similar earnings prospects to foreigners. Moreover, earnings prospects for native Germans do not differ much from those of German citizenship. Therefore, using citizenship to approximate natives and non- natives when analyzing earnings issues seems to be reasonable. A second question of the paper is whether degrees obtained in Germany lead to better earnings prospects compared to degrees obtained abroad for persons with migration background. Independently of gender and skill level, the estimates affirm higher earnings to educational attainment in Germany. |
| Keywords: | Migration background, earnings prospects, education, Germany |
| JEL: | I12 J15 J61 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5690&r=lab |
| By: | Elizabeth Cascio; Nora Gordon; Ethan Lewis; Sarah Reber |
| Abstract: | An extensive literature debates the causes and consequences of the desegregation of American schools in the twentieth century. Despite the social importance of desegregation and the magnitude of the literature, we have lacked a comprehensive accounting of the basic facts of school desegregation. This paper uses newly assembled data to document when and how Southern school districts desegregated as well as the extent of court involvement in the desegregation process over the two full decades after Brown. We also examine heterogeneity in the path to desegregation by district characteristics. The results suggest that the existing quantitative literature, which generally either begins in 1968 and focuses on the role of federal courts in larger urban districts or relies on highly aggregated data, often tells an incomplete story of desegregation. |
| JEL: | H00 I20 I28 J15 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13279&r=lab |