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on Labour Economics |
| By: | Richard W. Johnson; Janette Kawachi (Urban Institute); ; |
| Abstract: | One potential way to manage the rapidly growing costs of supporting older Americans is to increase labor supply at older ages. However, questions persist about the quality of available jobs. This study examines older Americans’ employment opportunities by studying job changes at older ages. Using data from the Health and Retirement Study, it compares wages, benefits, and other job attributes on new and former jobs for adults ages 45 to 75 who changed employers between 1986 and 2004. Because older people who choose to work after retiring voluntarily from long-term jobs may face different employment prospects than displaced older workers, the analysis considers how employment changes vary by the reasons workers give for job separations. Most people who switched employers at older ages moved to jobs that differed substantially from their previous jobs. The vast majority of older job changers moved into different occupations and industries. They were more likely to be self-employed, work part-time, and keep flexible hours at their new jobs than their old jobs. The new jobs generally involved less stress, less physical effort, and fewer managerial responsibilities. More older job changers enjoyed their new jobs than their old jobs. However, most older workers experienced sharp hourly wage reductions when they switched employers. They were also less likely to receive pension coverage or health benefits after they moved to new jobs. Although the findings do not raise concerns about the quality of post-retirement jobs, they suggest that older displaced workers face special challenges in the labor market. |
| Keywords: | labor supply, older ages, increase, employment, opportunities, wages, benefits, employer change, job changers |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2007-04&r=lab |
| By: | Silke Anger (German Institute for Economic Research (DIW Berlin), German Socio-Economic Panel Study (SOEP), Königin-Luise-Str. 5, 14195 Berlin, Germany.) |
| Abstract: | Using individual based micro-data from the German Socio-Economic Panel Study (SOEP), I analyze the cyclicality of real wages for male workers within employer-employee matches over the period 1984–2004, and compare different wage measures: the standard hourly wage rate, hourly wage earnings including overtime and bonus payments, and the effective wage, which takes into account not only paid overtime, but also unpaid working hours. None of the hourly wage measures is shown to exhibit cyclicality except for the group of salaried workers with unpaid overtime. Their effective wages react strongly to changes in unemployment in a procyclical way. Despite acyclical wage rates, salaried workers without unpaid hours but with income from extra payments, such as bonuses, experienced procyclical earnings movements. Monthly earnings were also procyclical for hourly paid workers who received overtime payments. The procyclicality of earnings revealed for Germany is of comparable size with the one in the U.S. JEL Classification: E32, J31. |
| Keywords: | Wage cyclicality, effective wages, unpaid overtime, bonus payments, firm stayers. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070783&r=lab |
| By: | Anne C. Gielen (Tilburg University, CentER, Institute for Labor Studies (OSA) and IZA) |
| Abstract: | This paper studies the presence of hours constraints on the UK labor market and its effect on older workers labor supply, both at the extensive and the intensive margin. Using panel data for the period 1991-2004, the results from a competing risks model show that over-employed male workers can freely reduce working hours with their current employer before retiring completely. However, some over-employed women are observed to leave the labor market early due to hours constraints. Despite the fact that more flexibility in hours may increase labor market participation of older women, this paper presents some explorative results which illustrate that increasing working hours flexibility does not seem to increase older workers total labor supply as has often been suggested. |
| Keywords: | labor supply, hours constraint, mobility, retirement |
| JEL: | J22 J26 J63 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2946&r=lab |
| By: | Pedro S. Martins (Queen Mary, University of London, CEG-IST Lisbon and IZA) |
| Abstract: | This paper presents evidence that real wage cyclicality can be a particularly heterogeneous parameter, depending on different worker characteristics and also on the specific stage of the business cycle. Using matched employer-employee panel data for Portugal covering the period 1986-2004, real wages are shown to be considerably more procyclical during recessions than during expansions, resulting in relatively moderate overall levels of cyclicality (about -0.6). However, most of the procyclicality during downturns is shown to be driven by the younger employees, as older workers appear to be insulated from the business cycle. Moreover, movers between firms typically display higher cyclicality than workers that stay in the same firm, regardless of whether the latter move or not between job levels. Most results also hold when considering basic wages instead of total wages, except that the procyclicality of movers during downturns is substantially higher. |
| Keywords: | matched employer-employee data, worker mobility, wage rigidity |
| JEL: | J31 E24 E32 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2929&r=lab |
| By: | Fenglian Du; Jian-chun Yang; Xiao-yuan Dong |
| Abstract: | This paper provides the first systematic analysis of the reasons why women endure longer unemployment durations than men in post-restructuring urban China using data obtained from a national representative household survey. Rejecting the view that women are less earnest than men in their desire for employment, the analysis shows that women's job search efforts are handicapped by lack of access to social networks, social stereotyping (that married women are unreliable employees), unequal access to social reemployment services stemming from sex segregation prior to the displacement, and wage discrimination in the post-restructuring labor market. |
| Keywords: | Gender inequality, unemployment duration, Oaxaca-decomposition |
| JEL: | J16 J21 J64 J71 R20 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2007-23&r=lab |
| By: | Ulrich Kaiser (University of Southern Denmark); Nikolaj Malchow-Møller (Department of Economics, University of Copenhagen) |
| Abstract: | We estimate the effects of past self-employment experience on subsequent earnings in wage work using the population of Danish citizens between 16 and 65 years of age that we observe between 1980 and 1996. Specifically, we analyze how the effects of previous self-employment experience are affected by age, success in self-employment and the employment status prior to self-employment. We also take a long-term perspective and test whether wage-effects of self-employment are nonlinear and if they depreciate over time. We find that an additional year of self-employment experience reduces subsequent wage earnings by 4.7%-8.2% compared to continued wage-work experience. Young and successful formerly self-employed benefit, however, from their self-employment experience. Moreover, formerly self-employed who were non-employed or unemployed prior to their self-employment experience receive only slightly lower wages than individuals that never entered self-employment. We also find that the negative self-employment effects decrease with longer spells of self-employment and that they depreciate over time in subsequent wage work. |
| Keywords: | self-employment; entrepreneurship; wages; experience |
| JEL: | L26 C21 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieci:2007-04&r=lab |
| By: | Alicia H. Munnell; Steven A. Sass (Center for Retirement Research, Boston College); Mauricio Soto (Center for Retirement Research, Boston College); |
| Abstract: | Today men on average retire at 63 and women at 62, and they can expect to spend 20 years in retirement. But if Americans continue to retire as early as they do today, many will not have adequate income once they stop working. Social Security will provide less relative to pre-retirement earnings as the normal retirement age rises from 65 to 67 and those lucky enough to have a 401(k) plan are likely to find their balances inadequate. One solution to the retirement security challenge is for people to work longer. Working longer directly increases a person’s current income; it avoids the actuarial reduction in Social Security benefits; it allows people to contribute more to their 401(k) plans; it allows their assets more time to accumulate investment earnings; and it shortens the period over which people have to support themselves with their retirement assets. So it stands to reason that workers would choose to extend their careers. But will they find employment? Some evidence suggests that employers have not been especially fond of older workers. For example, older workers who lose a job have had a much harder time finding another. And many employers actually use sweetened early retirement incentives to get older workers to leave. On the other hand, today’s older workers are far better educated than older workers just a decade ago; they are more physically fit; and the shift from goods-producing to services-producing jobs has reduced the physical demands of work, which should enhance the employment prospects of older workers. To get a better understanding of the employment prospects of older workers, the Center for Retirement Research at Boston College (CRR) conducted a survey of 400 private sector employers. These employers were asked to evaluate the relative productivity and cost of white-collar and rank-and-file workers age 55 and older and whether, on balance, older employees or job candidates were more or less attractive than their younger counterparts. |
| Keywords: | older workers, employer attitudes, normal retirement age, working longer, actuarial reductions, social security benefits, 401(k) plans, survey, private sector employers, relative productivity, white collar, preference, attractive |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2006-3&r=lab |
| By: | Michael Bognanno and Ryo Kambayashi |
| Abstract: | We examine the period from 1991 to 2005 to document the effects of a changing Japanese labor market on trends in the cost of job change. During this period, job change penalties and the extent to which they were age-related grew. Evidence is also found of a diminishing specificity in human capital (in industry, occupation and firm size) for job changers in the Japanese labor market. As might be expected, older workers and workers leaving the largest firms suffered the largest wage losses from job change. Older workers were also harmed more by involuntary job separations. In percentage terms, young females have larger wage losses than young males but older females have smaller losses than older males. This pattern is masked in considering only the overall effect of gender on the cost of job change. |
| Keywords: | Displacement |
| JEL: | J31 J41 J63 J6 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:hst:hstdps:d07-218&r=lab |
| By: | Alicia H. Munnell; Steven Sass (Center for Retirement Research, Boston College); Mauricio Soto (Center for Retirement Research, Boston College); Natalia Zhivan |
| Abstract: | The employment of older workers into their mid-60s will be critical to their ability to ensure a secure retirement. One of the risks threatening the ability to work to older ages is being “displaced,” with displacement defined as the elimination of the worker’s job due to a shift in the demand for labor. Displacement can easily throw 50-year-old workers off course, disrupt their retirement saving plans, and lead to premature retirement. This paper explores the relationship between job loss and age over the period 1984-2004 using the biennial Displaced Worker Supplement to the Current Population Survey. It finds that no major trends in the displacement of older workers have occurred over the 11 Displaced Worker Surveys conducted during the period. Re-employment rates for older workers appear to have improved. And the earnings loss associated with the displacement of older workers has not changed significantly. Two other significant findings relate to tenure and education. First, the historical protection that older workers appeared to have against displacement was due to tenure not to age per se. Controlling for tenure, the probability of displacement increases with age. Second, college education is no longer a source of significant protection in the world of displacement, and its importance has declined sharply for re-employment. |
| Keywords: | older workers, displacement, retirement, saving plans, job loss, tenure, education, re-employment, earnings loss |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2006-17&r=lab |
| By: | Steinar Holden (University of Oslo, Norges Bank and CESifo, Department of Economics, University of Oslo, Box 1095 Blindern, 0317 Oslo, Norway.); Fredrik Wulfsberg (Norges Bank and Federal Reserve Bank of Boston, Box 1179 Sentrum, 0107 Oslo, Norway.) |
| Abstract: | Recent micro studies have documented extensive downward nominal wage rigidity (DNWR) for job stayers in many OECD countries, but the effect on aggregate variables remains disputed. Using data for hourly nominal wages, we explore the existence of DNWR on wages at the industry level in 19 OECD countries, over the period 1973–1999. Based on a novel method, we reject the hypothesis of no DNWR. The fraction of wage cuts prevented due to DNWR has fallen over time, from 61 percent in the 1970s to 16 percent in the late 1990s, but the number of industries affected by DNWR has increased. DNWR is more prevalent when unemployment is low, union density is high, and employment protection legislation is strict. JEL Classification: E3, J3, J5. |
| Keywords: | Downward nominal wage rigidity, oecd, employment protection legislation, wage setting. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070777&r=lab |
| By: | Mamiko Takeuchi (Japan Society for the Promotion of Science (JSPS) Fellow) |
| Abstract: | This paper re-examines the evidence of the positive effect of job seniority and education on wage using endogeneous switching regression. And our analysis shows that the correlation of seniority and education with an omitted variable representing such as the quality of the worker, job, or worker-employer match. In addition, conditional expectations of our analysis assuming the labor mobility confirm the exist of dual labor market. |
| Keywords: | Employer size wage differencial@Dual market |
| JEL: | J21 J22 J23 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:07j006&r=lab |
| By: | Gabriella Sjögren Lindquist (SOFI, Stockholm University); Eskil Wadensjö (SOFI, Stockholm University, SULCIS and IZA) |
| Abstract: | The Swedish labour market and social policy is aimed at facilitating flexibility in the labour market. The active labour market policy and the design of the social security pension system are two frequently mentioned examples of that policy. This does not necessarily mean that all policy programs are in accordance with the goal of enhancing flexibility. In this paper we analyze one part of the social and occupational (collectively bargained) security system - the compensation at unemployment with special emphasis on the schemes complementing compensation from the unemployment insurance scheme. We focus on the effects of those systems on labour market flexibility. Some parts of these complementing systems support mobility and return to work after layoffs, other parts of the systems may lead to that workers avoid job mobility and to prolonged periods of unemployment. Of special interest is that those complementing systems differ between different sectors of the labour market and that many, especially young people, are not covered. |
| Keywords: | unemployment, unemployment insurance, occupational insurance, severance pay |
| JEL: | J65 J64 J32 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2943&r=lab |
| By: | Antoniya Owens |
| Abstract: | This paper estimates the potential economic impact of New Hampshire’s new state minimum wage law on the state’s aggregate employment and wages. According to the analysis, the minimum wage increase would raise the wages of 26,000 workers in the state and would have a negative impact on employment ranging from 300 to 1,500 jobs, which is between 1 percent and 6 percent of workers directly affected by the law. On net, the combined impact of both stages of the increase would raise aggregate wages by approximately $17.4 million. The analysis here focuses on workers with hourly wages between $5.15 and $7.25 and does not examine the impact of the bill on tipped employees, whose new hourly wage rate will be set at 45 percent of the state minimum wage. |
| Keywords: | Minimum wage - New Hampshire |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbce:07-2&r=lab |
| By: | Alicia H. Munnell; Steven Sass (Center for Retirement Research, Boston College); Mauricio Soto (Center for Retirement Research, Boston College); Natalia Zhivan |
| Abstract: | The employment of older workers into their mid-60s will be critical to ensuring that they enjoy a secure retirement. Continued employment provides current income while working, avoids the actuarial reduction in Social Security benefits, allows 401(k) accumulations to increase, and shortens the period of retirement those assets must support. One of the risks threatening the ability to work to older ages is being “displaced,” with displacement defined as the elimination of the worker’s job due to a shift in the demand for labor. Displacement can easily throw 50-year-old workers off course, disrupt their retirement saving plans, and possibly lead to premature retirement. This brief explores the displacement of older workers over the period 1984-2004 using the biennial Displaced Worker Supplement to the Current Population Survey. The first section summarizes why continued employment is important. The second section introduces key factors that could affect displacement trends. The third section describes the Displaced Worker Survey and reports the raw data. The fourth section reports regression results aimed at isolating the impact of age, tenure, and other variables on the probability of being displaced. The fifth section reports the results from a similar analysis using the Health and Retirement Study. The bottom line is good news and bad news. The good news is that the data from the Displaced Worker Surveys show that older workers have a lower risk of displacement than younger workers, with no trend toward increasing displacement or worsening outcomes. The bad news is that the lower probability of displacement for older workers is based on the correlation between job tenure and age. Controlling for tenure, age does not protect workers from being displaced. And tenure appears to be declining, which may suggest a greater risk of displacement in the future. |
| Keywords: | older workers, displacement, secure retirement, actuarial reductions, social security benefits, working longer, at older ages, displacement trends, tenure, protection |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2006-53&r=lab |
| By: | Anne C. Gielen (Tilburg University, CentER, Institute for Labor Studies (OSA) and IZA) |
| Abstract: | Market imperfections may cause firms and workers to under-invest in specific training. This paper shows that profit sharing may be a suitable instrument to enhance specific training investments, either by enhancing wage flexibility or by increasing the returns to training. As a result, profit sharing not only increases productivity by means of an effort effect, but also by increased training investments. Furthermore, the results suggest that older workers' employability can be improved if a profit-related remuneration is paid. |
| Keywords: | profit-related pay, training, labor productivity, labor mobility |
| JEL: | M52 M53 J24 J62 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2932&r=lab |
| By: | Simon D. Woodcock (Simon Fraser University) |
| Abstract: | We present an empirical model of earnings that controls for observable and unobservable characteristics of workers (person effects), unmeasured characteristics of their employers (firm effects), and unmeasured characteristics of worker-firm matches (match effects). The distinction between these components is important, because they have different implications for the persistence of individual earnings and the returns to employment mobility. We find that match effects, which have been ignored in previous work, are an important determinant of log earnings. They explain about 16 percent of observed variation, and much of the change in earnings when workers change employer. Specifications that omit match effects over-estimate the returns to experience by as much as 30 percent, attribute too much variation to person effects and little to firm effects, and underestimate the correlation between person and firm effects. Overall, our results suggest that some of the returns previously attributed to general human capital actually reflect the returns to sorting into higher-paying firms and better worker-firm matches. |
| Keywords: | linked employer-employee data, earnings dispersion, person and firm effects, fixed effects, random effects, labor market sorting, human capital |
| JEL: | C23 J24 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp07-13&r=lab |
| By: | Joanna Lahey; (National Bureau of Economic Research); ; |
| Abstract: | As the baby boom cohort reaches retirement age, demographic pressures on public programs such as Social Security may cause policy makers to cut benefits and encourage employment at later ages. This prospect raises the question of how much employer demand exists for older workers. This paper reports on a labor market experiment to determine the hiring conditions for older women in entry-level jobs in Boston, MA and St. Petersburg, FL. Differential interviewing by age is found for these jobs. A younger worker is more than 40 percent more likely to be offered an interview than is an older worker. No evidence is found to support taste-based discrimination as a reason for this differential, and some suggestive evidence is found to support statistical discrimination. |
| Keywords: | baby boomers, older workers, women, hiring, entry-level jobs, discrimination, taste-based, statistical |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2006-23&r=lab |
| By: | Marco Leonardi (University of Milan and IZA, via Festa del Perdono 7, 20122 Milan, Italy.); Giovanni Pica (University of Salerno and CSEF, via Ponte don Melillo, 84084 Fisciano, Italy.) |
| Abstract: | In a perfect labor market severance payments can have no real effects as they can be undone by a properly designed labor contract (Lazear 1990). We give empirical content to this proposition by estimating the effects of EPL on entry wages and on the tenure-wage profile in a quasi-experimental setting. We consider a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for bigger firms. Estimates which account for the endogeneity of the treatment status due to workers and firms sorting around the 15 employees threshold show no effect of the reform on entry wages and a decrease of the returns to tenure by around 20% in the first year and by 8% over the first two years. We interpret these findings as broadly consistent with Lazear’s (1990) prediction that firms make workers prepay the severance cost. JEL Classification: E24, J63, J65. |
| Keywords: | Costs of Unjust Dismissals, Severance Payments, Regression Discontinuity Design. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070778&r=lab |
| By: | Truman F. Bewley (Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281, USA.) |
| Abstract: | I describe insights into wage dynamics and downward wage rigidity obtained from more than two hundred interviews with businesspeople, labor leaders, and various labor market intermediaries and made in the early 1990s in the Northeast of the United States. I explain the morale explanation for downward rigidity of the pay of existing employees and discuss what morale is, why businesspeople care about it, and why pay cuts damage it. I discuss the origin and nature of pay structures internal to an establishment, the relation between pay at different establishments, and why firms tend to lay off workers rather than cut pay. The findings of the study to be discussed are reported in detail in Truman Bewley, Why Wages Don’t Fall during a Recession. Cambridge, MA - Harvard University Press (1999). JEL Classification: E24, J31, J41. |
| Keywords: | Wage rigidity, wage determination. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070776&r=lab |
| By: | Eric T. Swanson |
| Abstract: | Previous studies of real wage cyclicality have made only sparing use of the microdata detail that is available in the Panel Study of Income Dynamics (PSID). The present paper brings to bear this additional detail to investigate the robustness of previous results and to examine whether there are important cross-sectional and demographic differences in wage cyclicality. Although real wages were procyclical across the entire distribution of workers from 1967 to 1991, the wages of lower-income, younger, and less-educated workers exhibited greater procyclicality. However, workers' straight-time hourly pay rates have been acyclical, suggesting that more variable pay margins such as bonuses, overtime, late shift premia, and commissions have played a substantial if not primary role in generating procyclicality. |
| Keywords: | Wages ; Labor market |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2007-15&r=lab |
| By: | Per Engström (Uppsala University); Bertil Holmlund (Uppsala University and IZA) |
| Abstract: | The paper presents a general equilibrium model of search unemployment that incorporates absence from work as a distinct labor force state. Absenteeism is driven by random shocks to the value of leisure that are private information to the workers. Firms maximize profits while recognizing that the compensation package may affect the queue of job applicants and the absence rate. The analysis provides results concerning the effects of social insurance benefits and other determinants of workers’ and firms’ behavior. The normative anlysis identifies externalities associated with firm-provided sick pay and examines the welfare implications of alternative policies. |
| Keywords: | absenteeism, search, unemployment, social insurance |
| JEL: | J21 J64 J65 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2947&r=lab |
| By: | Romain Aeberhardt (CREST-INSEE); Denis Fougère (CNRS, CREST-INSEE, CEPR and IZA); Julien Pouget (CREST-INSEE and IZA); Roland Rathelot (CREST-INSEE) |
| Abstract: | Our study proposes an econometric decomposition of the wage gap and of the difference in employment probabilities between French workers whose both parents had French citizenship at birth and French workers whose at least one parent had the citizenship of an African country at birth. For that purpose, we use data coming from the Formation Qualification Professionnelle (FQP) survey conducted by INSEE (Paris) in 2003. Our study is the first to estimate both employment and wage differentials between "native" French workers and children of African migrants. We find that one half of the employment gap and one third of the wage gap is not explained by differences in observable covariates between the two groups. This result is obtained by using a new method yielding more precise results when the sample size of the potentially discriminated group is small. |
| Keywords: | discrimination, wage differentials, second-generation migrants |
| JEL: | C24 J31 J71 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2898&r=lab |
| By: | Alan B. Krueger (Princeton University and NBER); 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. |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:63&r=lab |
| By: | Joanna Lahey; (Bush School of Government and Public Service); ; |
| Abstract: | The federal Age Discrimination in Employment Act (ADEA) prohibits age-based discrimination against older workers through hiring, firing, layoffs, compensation and other conditions of employment. The law covers most workers age 40 and older in firms with 20 or more employees. The question is whether the ADEA and similar state laws have helped or hurt older workers. On the one hand, the legislation may have prevented companies from unfairly dismissing older workers. On the other hand, the fear of lawsuits may have dissuaded employers from hiring older workers. If so, the law would benefit "insiders" who already have jobs but harm "outsiders" seeking employment. This brief discusses the history, mechanics, and impact of age protection laws in the United States. It summarized previous research and presents new findings using data from the Current Population Survey. |
| Keywords: | age discrimination laws, older workers, insiders, outsiders, hurt, helped, history, mechanics |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2006-5&r=lab |
| By: | Myeong-Su Yun (Tulane University and IZA) |
| Abstract: | This paper shows how difficult it is to study the roles of discrimination and unobserved skills when studying changes in racial and gender wage gaps over time by examining merits and shortcomings of a popular decomposition method by Juhn, Murphy and Pierce (1991). The JMP method shows that wage dispersion can offer a compelling explanation of the wage gap. However, JMP have to rely on a few strong assumptions in order to derive their decomposition equation which introduces wage inequality as the price of unobserved skills (the standard deviation of the residuals) into their decomposition equation. |
| Keywords: | decomposition analysis, wage differentials, discrimination, inequality |
| JEL: | J70 D30 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2937&r=lab |
| By: | Steinar Holden; Fredrik Wulfsberg |
| Abstract: | This paper explores the existence of downward real wage rigidity (DRWR) in 19 OECD countries, over the period 1973-1999, using data for hourly nominal earnings at the industry level. Based on a nonparametric statistical method, which allows for country- and year-specific variation in both the median and the dispersion of industry wage changes, we find evidence of some DRWR in OECD countries overall, as well as for specific geographical regions and time periods. There is some evidence that real wage cuts are less prevalent in countries with strict employment protection legislation and high union density. Generally, we find stronger evidence for downward nominal wage rigidity than for downward real wage rigidity. |
| Keywords: | Wages |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:07-6&r=lab |
| By: | Marcelo Medeiros (International Poverty Centre); Rafael Guerreiro Osório (International Poverty Centre); Joana Costa (International Poverty Centre) |
| Abstract: | This Working Paper analyzes paid and unpaid work-time inequalities among Bolivian urban adults using time use data from a 2001 household survey. We identified a gender-based division of labor characterized not so much by who does which type of work but by how much work of each type they do. There is a partial trade-off between paid and unpaid work, but such a substitution is only partial: women?s entry into the labor market tends to result in a double work shift of paid and unpaid work. We also find very high levels of within-group inequality in the distributions of paid and unpaid work-time for men and women, a sign that beyond the sexual division of labor, subgroup differentiation is also important. Using decompositions of the inequality in the distribution of total time spent at work, we show that gender is an important variable to explain how much paid and unpaid work is done by individuals, but not so important to explain why some people have a higher total workload than others. |
| Keywords: | Gender, Inequalities, poor, Bolivia |
| JEL: | J16 J22 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:34&r=lab |
| By: | Hans Gersbach (CER-ETH - Center of Economic Research, ETH Zurich); Armin Schmutzler (Socioeconomic Institute, University of Zurich) |
| Abstract: | To examine the impact of globalization on managerial compensation, we consider a matching model where a number of firms compete both in the product market and in the managerial market. We show that globalization, i.e. the simultaneous integration of product markets and managerial pools, leads to an increase in the heterogeneity of managerial salaries. Typically, while the most able managers obtain a wage increase, less able managers are faced with a reduction in wages. Hence our model can explain the increasing heterogeneity of CEO compensation that has been observed in the last few decades. |
| Keywords: | Globalization, manager remuneration, superstars |
| JEL: | D43 F15 J31 L13 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:soz:wpaper:0706&r=lab |
| By: | Alan S. Blinder (Princeton University) |
| Abstract: | Using detailed information on the nature of work done in over 800 BLS occupational codes, this paper ranks those occupations according to how easy/hard it is to offshore the work— either physically or electronically. Using that ranking, I estimate that somewhere between 22% and 29% of all U.S. jobs are or will be potentially offshorable within a decade or two. (I make no estimate of how many jobs will actually be offshored.) Since my rankings are subjective, two alternatives are presented—one is entirely objective, the other is an independent subjective ranking. It is found that there is little or no correlation between an occupation’s “offshorability” and the skill level of its workers (as measured either by educational attainment or wages). However, it appears that, controlling for education, the most highly offshorable occupations were already paying significantly lower wages in 2004. |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:60&r=lab |
| By: | Martina Zweimüller (University of Linz); Rudolf Winter-Ebmer (University of Linz, IHS Vienna, CEPR and IZA); Doris Weichselbaumer (University of Linz and IZA) |
| Abstract: | Two very different approaches are used to explore the relation between market orientation and gender wage differentials in international data. More market orientation might be related to gender wage gaps via its effects on competition in product and labor markets and the general absence of regulation in the economy. The first approach employs meta-analysis data and takes advantage of the fact that many studies already exist which use national data sources to the best possible extent. The second approach uses comparable micro data from the International Social Survey Programme (ISSP), which allows calculating internationally consistent gender wage residuals in the first place. By comparing these two very different methods of data collection we get a robust result relating higher levels of market orientation as proxied by the Economic Freedom Index with lower gender wage gaps. |
| Keywords: | gender wage gap, competition, market orientation |
| JEL: | J16 J31 J71 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2918&r=lab |
| By: | Eric A. Verhoogen (Columbia University, BREAD, CEPR and IZA) |
| 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: | trade and wage inequality, quality upgrading, exchange-rate shock |
| JEL: | F16 J31 O12 L11 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2913&r=lab |
| By: | Gerry Rodgers |
| Abstract: | This paper reviews evidence from both industrialized and developing countries on the re1ationship between labour market flexibility and employment. It is argued that the notion of flexibility and its impact is often oversimplified. The evidence, such as it is, does not provide much support for the view that greater flexibility results in higher employment. There is more evidence for an impact on the distribution of employment among different groups of the population, but also effects which vary widely between countries. Flexibility needs to be considered within a wider framework of policies and institutions to promote decent work. |
| Keywords: | labour market flexibility, labour institutions, decent work, employment, unemployment |
| JEL: | J20 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:une:wpaper:47&r=lab |
| By: | Mario Izquierdo (DG Economics, Statistics and Research, Banco de España, C/ Alcalá, n.º 48, 28014 Madrid, Spain.); Aitor Lacuesta (DG Economics, Statistics and Research, Banco de España, C/ Alcalá, n.º 48, 28014 Madrid, Spain.) |
| Abstract: | This paper analyses wage inequality in Spain from 1995 to 2002. Inequality has decreased slightly in this period although the fall has not been constant over the whole distribution. We use non-parametric techniques to distinguish the effect on inequality of changes in the composition of the labour force and changes in relative returns. We focus mainly on three factors that have varied substantially between 1995 and 2002 - female participation, educational attainment and changes in the tenure level. On one hand, changes in the composition of the labour force would have increased inequality had the structure of wages not changed in relation to the 1995 level. Changes in education and especially tenure would have been responsible for most of the higher dispersion. On the other, changes in relative returns between 1995 and 2002 are predominant and are responsible for the lower dispersion observed in the latter year. Changes in the returns to education are the main important factor underlying this decrease in inequality. JEL Classification: J30, J00. |
| Keywords: | Inequality, wage distribution, labour force composition. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070781&r=lab |
| By: | Heather Antecol (Claremont McKenna College and IZA); Anneke Jong (Unaffiliated); Michael Steinberger (Pomona College) |
| Abstract: | Using data from the 2000 U.S. Census, we document and explore three alternative explanations for the sexual orientation wage gap: occupational sorting, human capital differences, and discrimination. We find lesbian women earn more than their heterosexual counterparts irrespective of marital status while gay men earn less than their married heterosexual counterparts but more than their cohabitating heterosexual counterparts. Using a Oaxaca-Blinder decomposition we find that differences in human capital accumulation (particularly education) are the main reason behind the observed wage advantages, while discrimination and occupational sorting play a minimal role at best. Wage penalties, on the other hand, are largely explained by discrimination. Interestingly, while we do find there are some differences in the relative roles of our three alternative explanations across the wage distribution using a DiNardo, Fortin, Lemieux decomposition, the main conclusions from the Oaxaca-Blinder decomposition persist. |
| Keywords: | sexual orientation wage gap, occupational sorting, human capital, discrimination |
| JEL: | J24 J31 J71 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2945&r=lab |
| By: | Hannes Spengler; Sandra Schaffner |
| Abstract: | This paper presents a new approach to obtain unbiased estimates of the value of a statistical life (VSL) with labor market data. Investigating job changes, we combine the advantages of recent panel studies, which allow to control for unobserved heterogeneity of workers, and conventional cross-sectional estimations, which primarily exploit the variation of wage and risk between different jobs. We find a VSL of 6.1 million euros from pooled cross-sectional estimation, 1.9 million euros from the static first-differences panel model and 3.5 million euros from the job-changer specification. Thus, ignoring individual heterogeneity causes overestimates of the VSL, whereas identifying the wage-risk tradeoff not only by means of between job variation (job-changer model) but also on the basis of noisy variation on the job (panel models) may lead to underestimates of the VSL. Our results can be used to perform cost-benefit analyses of public projects aimed at reducing fatality risks, e.g., in the domains of health, environmental or traffic policy. |
| Keywords: | Value of a statistical life (VSL), compensating wage differentials, work accidents, job changes |
| JEL: | I10 J17 J28 K00 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp713&r=lab |
| By: | James A. Freeman (Wheaton College); Barry T. Hirsch (Trinity University and IZA) |
| Abstract: | College students select their majors for a variety of reasons, including expected returns in the labor market. This paper demonstrates an empirical method that links a census of U.S. degrees and fields of study with measures of the knowledge content of jobs. The study combines individual wage and employment data from the Current Population Survey (CPS) with ratings on 27 knowledge content areas from the Occupational Information Network (O*NET), thus providing measures of the economy-wide knowledge content of jobs. Fields of study and the corresponding BA degree data from the Digest of Education Statistics for 1976- 77 through 2001-02 are linked to these 27 content areas. We find that the choice of college major is responsive to changes in the knowledge composition of jobs and, more problematically, the wage returns to types of knowledge. Women’s degree responsiveness to knowledge content appears to be stronger than men’s, but their response to wage returns is weak. |
| Keywords: | college majors, job knowledge content, occupations, O*NET, returns to schooling |
| JEL: | J24 I21 J31 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2941&r=lab |
| By: | Michael U. Krause (Economic Research Center, Deutsche Bundesbank, Wilhelm-Epstein-Str. 14, D-60431 Frankfurt, Germany.); Thomas A. Lubik (Federal Reserve Bank of Richmond, 701 East Byrd Street, Richmond, VA 23261, USA.) |
| Abstract: | We show how on-the-job search and the propagation of shocks to the economy are intricately linked. Rising search by employed workers in a boom amplifies the incentives of firms to post vacancies. In turn, more vacancies increases job search. By keeping job creation costs low for firms, on-the-job search greatly amplifies shocks. In our baseline calibration, this allows the model to generate fluctuations of unemployment, vacancies, and labor productivity whose magnitudes are close to the data, and leads output to be highly autocorrelated. JEL Classification: E24, E32, J64. |
| Keywords: | Search and matching, job-to-job mobility, worker flows Beveridge curve, business cycle, propagation. |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070779&r=lab |
| By: | Marina Adshade (Dalhousie University) |
| Abstract: | This paper examines the endogenous interaction between the rise in female labor force participation and changes in both the method and mode of production that occurred during the early part of the 20th century. Within a dynamic general equilibrium framework, an exogenous expansion in the skill level of the population induces an organizational change at the firm level and a redirection of investment towards new technologies that complement the skills of the emerging workforce. In addition to allowing for a change in the method of production in a market with directed technical change, a framework is developed to explicitly examine the transitional dynamics as skilled workers become relatively abundant. The rise in the skill level explains the rise in female labor force participation, the increase in women's wages and the decline of the clerical wage relative to manufacturing. |
| Keywords: | female labor force participation, clerical work, organizational change, technological change |
| JEL: | O14 E23 N12 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1130&r=lab |
| By: | Thomas de Graaff; Michiel van Leuvensteijn |
| Abstract: | In this paper, we study the effects of housing market institutions on labour mobility. We construct durations for individuals leaving their current job for a different job, becoming unemployed or leaving the labour market, from a sample of households from 14 European countries in 1994–2001. We merge this data with country specific housing market institutions, such as transaction taxes, and language and religion diversity. Similar to previous studies, estimated hazards indicate that home-ownership reduces job-to-job mobility as well as the probability to become unemployed or economically inactive on a individual level. However, a comparison between countries reveals that countries with high levels of homeownership rates also have high levels of unemployment. Therefore, this paper is able to reconcile the seemingly contrasting empirical results from both the macroeconomic and the microeconomic level. |
| Keywords: | housing market; transaction costs; labor mobility; unemployment |
| JEL: | J60 J61 R23 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:82&r=lab |
| By: | Andrew D. Eschtruth; Steven A. Sass (Center for Retirement Research, Boston College); Jean-Pierre Aubry (Center for Retirement Research, Boston College); |
| Abstract: | Working longer has emerged as a major response to the coming retirement income challenge. Going forward, Social Security will replace a smaller portion of household earnings for retirement at any given age. Employer plans, now primarily 401(k)s, generally have modest balances, and the income they provide will be much less secure. And individuals save virtually nothing outside of 401(k)s. But workers can offset much of the projected decline and increased risk in their retirement income by remaining in the labor force two to four years longer. For this shift to occur, workers must be willing to extend their careers and employers must be willing to employ them. To gain perspective on the market for older workers, the Center for Retirement Research at Boston College conducted two surveys of 400 nationally representative employers. The first survey found that employers generally considered older workers at least as attractive as younger workers. The second survey found that employers expect that 1) half their employees over age 50 will lack the resources needed to retire at their organization’s traditional retirement age; and 2) half of those who lack resources will want to work at least two years longer than similar workers have in the past. In terms of retirement income security, the intention for many to work longer is clearly good news. This brief reports additional results from the second survey on whether employers will create opportunities for employees to work longer. The policy community generally thinks they will. Many observers say employers will face labor shortages and a loss of “institutional intelligence” when the Boomers exit the labor force, and these developments will push them to seek out older workers. However, our survey results raise a cautionary flag. |
| Keywords: | working longer, social security, employer plans, 401(k) plans, employer attitudes, survey of employers |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2007-10&r=lab |
| By: | Seamus McGuinness (MIAESR, University of Melbourne); Mark Wooden (MIAESR, University of Melbourne and IZA) |
| Abstract: | This paper uses longitudinal data from Australia to examine the extent to which overskilling - the extent to which work-related skills and abilities are utilized in current employment - is a transitory phenomenon. The results suggest that while overskilled workers are much more likely to want to quit their current job, they are also relatively unconfident of finding an improved job match. Furthermore, some of the greater mobility observed among overskilled workers is due to involuntary job separations, and even in instances where job separations are voluntary, the majority of moves do not result in improved skills matches. |
| Keywords: | overskilling, job insecurity, job mobility, HILDA Survey, Australia |
| JEL: | J62 J24 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2938&r=lab |
| By: | Mamiko Takeuchi (Japan Society for the Promotion of Science (JSPS) Fellow); Yoshiko Otani (Graduated From Master Course of Osaka University) |
| Abstract: | The number of full-time womenfs worker is increased in high income family for one decade from 1992 when child care leave policy began in Japan. We focus on this fact, and analysis the effect of children and career interruptions on the family gap and income gap is based on Japanese panel data. The results show that, the negative effect of children on mothersf and couplefs earnings is very small subsequently, when they take formal childcare leaves; apart from this, there is stronger negative effect on mothersf wage when they interrupt work during childcare period. In addition, we confirm that women who take childcare leave take high earnings (mean; 3800thousand yen per year) and their husband are also high (.about 5000thousand yen per year). These results indicate that womenfs employment decisions when they have children have long term effects on income gap among family. |
| Keywords: | Income gap Family gap Childcare leave |
| JEL: | J21 J22 J23 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:osp:wpaper:07j007&r=lab |
| By: | Laura Crespo (Universidad de Alicante) |
| Abstract: | This paper studies the link between wage differences and individual earnings inequality for a sample of Spanish continuously working males from the European Community Household Panel for the period from 1994 to 1998. We analyse and quantify the contribution of two labour market features that could affect this link: the role of permanent and transitory wage inequality, and the existence of a significant response in individuals¿ hours of work to shifts in their own wage rates. Based on Hyslop (2001), we propose a particular specification for wages and earnings that incorporates an intertemporal labour supply model and we obtain predictions on wage and earnings inequality using a covariance structure framework. En este trabajo se analiza la relación entre las diferencias salariales y la desigualdad en rentas laborales individuales para una muestra de hombres empleados de forma continua en España en el período comprendido entre 1994 y 1998 procedente del Panel de Hogares de la Unión Europea (PHOGUE). En concreto, se analiza y cuantifica la contribución de dos aspectos del mercado laboral que pueden afectar a dicha relación o transmisión: el papel de la desigualdad salarial permanente o transitoria, y la existencia de respuestas significativas de las horas de trabajo de los individuos a variaciones en sus propios salarios. Basándonos en Hyslop (2001), se propone una especificación particular para los salarios y las rentas laborales que incorpora un modelo de oferta de trabajo intertemporal. A través de la estimación de dicho modelo, se obtienen predicciones de la desigualdad salarial y la desigualdad en rentas laborales utilizando un enfoque de estructura de covarianza. |
| Keywords: | Desigualdad salarial, desigualdad en rentas laborales, oferta de trabajo individual, modelo de estructura de covarianza Wage inequality, individual earnings inequality, individual labour supply, covariance structure model. |
| JEL: | C23 J22 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasec:2007-05&r=lab |
| By: | Leora Friedberg; (University of Virginia); ; |
| Abstract: | A dramatic decline in work at older ages persisted over most of the twentieth century. Recently, however, retirement ages stabilized, prompting debate as to whether the early retirement trend had stopped or simply paused. This brief shows that the trend towards earlier retirement has not just leveled off but has apparently reversed, with especially large increases in labor supply of women in late middle age. It then offers some explanations for this apparent reversal. Many of the likely causes of delayed retirement could potentially have greater effects on successive birth cohorts nearing retirement, making it possible that the trend towards delayed retirement will continue. |
| Keywords: | older workers, decline in work, early retirement, delayed retirement, trend |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2007-9&r=lab |
| By: | Govert E. Bijwaard (Erasmus University Rotterdam and IZA); Justus Veenman (Erasmus University Rotterdam) |
| Abstract: | The emergence of a transitional labor market offers new opportunities to workers, but at the same time bears the risk of (new) inequalities. This paper deals with unequal chances on the transitional labor market in the Netherlands, in particular for workers from the four largest immigrant groups: Turks, Moroccans, Surinamese and Antilleans. The data used are from the SPVA, the survey `Social Position and Use of Public Utilities by Migrants' for the years 1998 and 2002. These are based on stock sampling. Since for some individuals labor market transitions occur at a very low rate, these individuals may stay in their current state till they reach the retirement age of 65. We estimate hazard rate models that account for both the stock-sampling and the possible maximum duration for the transitions from unemployment, household care and disability to employment. Then we decompose the difference in expected duration between the immigrant groups and the Dutch into the contribution of differences in observable characteristics, coefficient estimates and baseline hazard parameters. The main results of the analyses are that unequal chances exist, but to a different degree for the various groups and with variations per transition type. |
| Keywords: | transitional labor market, duration, Oaxaca-Blinder decomposition |
| JEL: | C41 J64 J7 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2908&r=lab |
| By: | Hyun H. Son (International Poverty Centre); Nanak Kakwani (International Poverty Centre) |
| Abstract: | . |
| Keywords: | Poverty, Women |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:20&r=lab |
| By: | Mamoon, Dawood |
| Abstract: | The aim of this paper is to examine whether the human capital accumulation, that is a result of increased trade, further exacerbates industrial wage differentials. We find that level of education is one of the key determinants in explaining wage inequalities. Though countries which have a higher level of human capital do well on the inequality front, our results suggest that post liberalization human capital accumulation is associated with higher premiums to skilled labor thus increasing wage gaps. In this context, governments in developing countries may need to increase the mean level of human capital to achieve equity in labor markets. |
| Keywords: | Integration; Trade Liberalization; Wage Inequality. |
| JEL: | J01 I20 F16 |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4319&r=lab |
| By: | Frenette, Marc |
| Abstract: | The high-tech sector was a major driving force behind the Canadian economic recovery of the late 1990s. It is well known that the tide began to turn quite suddenly in 2001 when sector-wide employment and earnings halted this upward trend, despite continued gains in the rest of the economy. As informative as employment and earnings statistics may be, they do not paint a complete picture of the severity of the high-tech meltdown. A decline in employment may result from reduced hiring and natural attrition, as opposed to layoffs, while a decline in earnings among high-tech workers says little about the fortunes of laid-off workers who did not regain employment in the high-tech sector. In this study, I use a unique administrative data source to address both of these gaps in our knowledge of the high-tech meltdown. Specifically, the study explores permanent layoffs in the high-tech sector, as well as earnings losses of laid-off high-tech workers. The findings suggest that the high-tech meltdown resulted in a sudden and dramatic increase in the probability of experiencing a permanent layoff, which more than quadrupled in the manufacturing sector from 2000 to 2001. Ottawa-Gatineau workers in the industry were hit particularly hard on this front, as the permanent layoff rate rose by a factor of 11 from 2000 to 2001. Moreover, laid-off manufacturing high-tech workers who found a new job saw a very steep decline in earnings. This decline in earnings was well above the declines registered among any other groups of laid-off workers, including workers who were laid off during the "jobless recovery" of the 1990s. Among laid-off high-tech workers who found a new job, about four out of five did not locate employment in high-tech, and about one out of three moved to another city. In Ottawa-Gatineau, many former high-tech employees found jobs in the federal government. However, about two in five laid-off high-tech workers left the city. |
| Keywords: | Labour, Information and communications technology, Employment and unemployment, Wages, salaries and other earnings, Information and communications technology sector |
| Date: | 2007–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2007302e&r=lab |
| By: | Robert Hutchens; (ILR School, Cornell University); ; |
| Abstract: | As baby boomers near traditional retirement ages, many express an intent to work longer. But older workers often look for greater flexibility that would allow them more time for non-work activities. Not surprisingly then, the notion of phased retirement — where an older full-time worker remains with the same employer and gradually reduces work hours — has considerable appeal for employees. Phased retirement may help employers as well by allowing them to keep experienced and productive workers. This brief begins by exploring the potential benefits of phased retirement. The next section documents the extent of phased retirement in today’s workplace and describes the types of people who take it. The following section discusses the problems that employers face when arranging phased retirements. The brief concludes that, while rare today, phased retirement may become more popular in the future. |
| Keywords: | baby boomers, traditional retirement ages, older workers, phased retirement, potential benefits |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2007-8&r=lab |
| By: | Michael Kosfeld (University of Zurich and IZA); Ferdinand von Siemens (University of Munich) |
| Abstract: | Teamwork and cooperation between workers can be of substantial value to a firm, yet the level of worker cooperation often varies between individual firms. We show that these differences can be the result of labor market competition if workers have heterogeneous preferences and preferences are private information. In our model there are two types of workers: selfish workers who only respond to monetary incentives, and conditionally cooperative workers who might voluntarily provide team work if their co-workers do the same. We show that there is no pooling in equilibrium, and that workers self-select into firms that differ in their incentives as well as their resulting level of team work. Our model can explain why firms develop different corporate cultures in an ex-ante symmetric environment. Moreover, the results show that, contrary to first intuition, labor market competition does not destroy but may indeed foster within-firm cooperation. |
| Keywords: | competition, conditional cooperation, asymmetric information, self-selection, corporate culture |
| JEL: | D23 D82 L23 M54 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2927&r=lab |
| By: | Gordon B.T. Mermin; Richard W. Johnson (Urban Institute); Dan Murphy (Urban Institute); |
| Abstract: | Recent changes in retirement trends and patterns have raised questions about the likely retirement behavior of baby boomers, the large cohort born between 1946 and 1964. This study compares the retirement expectations of workers ages 51 to 56 in 2004 (who were born between 1948 and 1953, the leading edge of the baby boom) and 1992 (born between 1936 and 1941). Data come from the Health and Retirement Study. Work expectations increased significantly over the period. Between 1992 and 2004, the mean expected probability of working full-time past age 62 among workers ages 51 to 56 increased from 47 percent to 51 percent. The increase was even more rapid for the expected mean probability of full-time work after age 65, which grew from 27 percent to about 33 percent over the period. Controlling for other factors, self employment, education, and earnings increased work expectations at older ages, while defined benefit pension coverage, employer-sponsored retiree health benefits, and household wealth reduced expectations. Lower rates of retiree health insurance offers from employers, higher levels of educational attainment, and lower rates of defined benefit pension coverage accounted for most of the increase between 1992 and 2004 in expected work probabilities after ages 62 and 65. These trends suggest that the boomers will remain at work longer than the previous generation. The recent uptick in average retirement ages appears to be the leading edge of a new long-term trend. Lengthier careers will likely promote economic growth, increase government revenue, and improve individual financial security at older ages. |
| Keywords: | baby boomers, retirement trends, defined benefit, pension coverage, retiree health benefits, household wealth, education |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2006-19&r=lab |
| By: | Jaume Garcia,; Sergi Jiménez-Martín |
| Abstract: | The initial works council’s wage claim and the initial firm’s (counter)offer as well as the fraction of the disputed wages the works council is able to capture conditional on initial disagreement are analyzed on the basis of a Spanish sample of wage settlements. After a given initial wage claim, the system forces the firm either to accept it or to make a counteroffer prior to a fixed (unknown to the econometrician) and short deadline. In this context signaling models predict that the wage claim should try to screen the firm’s level of profitability, while the offer is expected to reveal little information. Both hypotheses are tested using the Spanish data set and neither is rejected. The analysis of the fraction of the disputed wages the workers get after initial disagreement provides further evidence in favour of signalling models since we find it is to both observed and private information as well as to conflicting activity variables. Moreover, conditional on covariates, for a number of sectors, we cannot reject the parties “split the difference” between both initial offers. Note this solution coincides with the Rubinstein’s (1982) wage, the solution for the complete information game. |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2007-22&r=lab |
| By: | Alicia H. Munnell; Jerilyn Libby (Center for Retirement Research, Boston College); ; |
| Abstract: | As recently as the mid-1960s, the median retirement age for men — the age at which half of all men are no longer in the labor force — was 66. Today, it is 63. But given the scheduled decline in Social Security replacement rates, increased longevity, and the relatively low balances in 401(k) accounts, Americans risk serious income shortfalls, especially at older ages, if they continue to retire at age 63. A rational response is to move the average retirement age back to 66 or even older. A key consideration is whether people will be healthy enough to work longer. This brief compares the health status of older people today with those forty years ago and explores what happens to people’s health as they age. The bottom line is that the health of older people (those 65 and older), as opposed to older workers (those 50 to 64), showed little improvement in the 1970s, mixed results in the 1980s, and marked improvement since the 1990s. The marked improvement for older workers most likely began earlier, in the 1980s. Today, the health of older workers appears to be at least as good as it was forty years ago. Thus, if half of the male population were then healthy enough to work until age 66, the same percentage should be able to do so today. Two important issues not addressed in this brief are whether the jobs will be there for older workers and the challenge presented by the 15 to 20 percent of the older population for whom work will be impossible. |
| Keywords: | working longer, median retirement age, social security replacement rates, longevity |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2007-7-3&r=lab |
| By: | Lutz Bellmann (Institute for Employment Research (IAB), University of Hannover and IZA); Florian Janik (Institute for Employment Research (IAB)) |
| Abstract: | According to the Hutchens (1999) model, early retirement is not explained as a result of maximizing expected individual utility but rather as a demand-side phenomenon arising from a firm’s profit-maximizing behaviour. Firms enter into contracts with their employees that include clauses about early retirement. In response to demand or technological shocks, workers receive retirement offers from their employers which cannot be rejected by rational actors. Using the IAB Establishment Panel 2003-2006, the relationship between indicators of demand and technological shocks and the incidence and amount of early retirement is analysed. The results provide general support to the Hutchens model. |
| Keywords: | (involuntary) early retirement, labour demand, panel data |
| JEL: | J14 J21 J23 J26 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2931&r=lab |
| By: | Gary V. Engelhardt; Anil Kumar (Federal Reserve Bank of Dallas); ; |
| Abstract: | This paper examines the impact of the Senior Citizens Freedom to Work Act of 2000, which abolished the Social Security retirement earnings test for those aged 65-69, on the labor supply of older men using data from the 1996-2004 waves of the Health and Retirement Study (HRS). Based on reduced-form specifications, we find that the repeal of the earnings test increased labor supply on the intensive margin by 12-17%, the bulk of which was concentrated among men with a high-school degree, whose labor supply rose by 19-26%. We formulate a unique test for endogenous reporting of health status by examining how reported health changes with the repeal of the earnings test. We find some evidence of endogenous self-reported health status. In particular, older men were substantially less likely to have reported that health limits their ability to work after, relative to before the earnings test repeal, with the bulk of the effect concentrated among men with high-school degrees, who had the largest labor-supply response to the repeal. |
| Keywords: | retirement earnings test, labor supply, older men, aging |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2007-01&r=lab |
| By: | Barry T. Hirsch (Trinity University and IZA) |
| Abstract: | During the 1930s and 1940s, collective bargaining emerged as the workplace governance norm in much of the U.S. industrial sector. Following its peak in the 1950s, union density in the U.S. private sector fell steadily, to only 7.4 percent in 2006. Governance shifted from a formalized union norm to one of constrained managerial discretion. In competitive and dynamic economic environments, a union tax on company earnings and slow response to economic shocks combine to produce poor performance by union companies. Two industries - automotives and airlines - are used to illustrate these points. If worker-based institutions are to flourish, they must add value and permit companies to perform at levels similar to those obtained under evolving nonunion governance norms. |
| Keywords: | labor unions, workplace governance, wages, wage premium, economic performance, membership, density, airlines, motor vehicles |
| JEL: | J5 J31 J2 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2930&r=lab |
| By: | Jacques Silber; Joseph Deutsch |
| Abstract: | This paper extends the famous Blinder (1973) and Oaxaca (1973) discrimination analysis in several directions. First the wage difference breakdown is not limited to two groups. Second a decomposition technique is proposed that allows analyzing the determinants of the overall wage dispersion. The approach presented combines two techniques. The first one is popular in the field of income inequality measurement and concerns the breakdown of inequality by population subgroups. The second one, very common in the labor economics literature, uses Mincerian earnings functions to derive a decomposition of wage differences into components measuring respectively group differences in the average values of the explanatory variables, in the coefficients of these variables in the earnings functions and in the unobservable characteristics. This methodological novelty allows one to determine the exact impact of each of these three elements on the overall wage dispersion, on the dispersion within and between groups and on the degree of overlap between the wage distributions of the various groups. |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2007-19&r=lab |
| By: | L. Guarcello; S. Lyon; F.Rosati; C.Valdivia |
| Abstract: | In Georgia, the lack of employment opportunities and with it, the loss of positive motivation and hope in a better future, is among the critical challenges facing the current generation of young people. Many of the employment problems of Georgian young people are rooted in the critical period of transition from education to working life. Yet the routes that young people take from education to employment are poorly understood, and data relating to this transition period are scarce. There is therefore limited empirical basis for formulating policies and programmes promoting youth employment and successful school to work transitions. This paper constitutes a starting point for more detailed analysis on youth labour market status in the Georgian context and it study is aimed at contributing to fill the lack of information about the transition from education to working life. It therefore analyses a set of youth education and employment indicators based on 2002 Georgia Household Budget Survey. Particular emphasis is placed on measuring the initial transition from school to work for different groups of young people, and on identifying the factors affecting this transition. |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:23&r=lab |
| By: | Giovanni Mastrobuoni (Princeton University) |
| Abstract: | In response to a crisis in Social Security financing two decades ago Congress implemented an increase in the Normal Retirement Age (NRA) of two months per year for cohorts born in 1938 and after. These cohorts began reaching retirement age in 2000. This paper studies the effects of these benefit cuts on recent retirement behavior. The evidence strongly suggests that the mean retirement age of the affected cohorts has increased by about half as much as the increase in the NRA. If older workers continue to increase their labor supply in the same way, there will be important implications for the estimates of Social Security trust fund exhaustion that have played such a major role in recent discussions of Social Security reform. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:66&r=lab |
| By: | Örn B. Bodvarsson (St. Cloud State University and IZA); Joshua J. Lewer (Bradley University); Hendrik F. Van den Berg (University of Nebraska-Lincoln and IZA) |
| Abstract: | It is now well known that exogenous immigration shocks tend to have benign effects on native employment outcomes, thanks to various secondary adjustment processes made possible by flexible markets. One adjustment process that has received scant attention is that immigrants, as consumers of the goods they help produce, contribute to their own demand. We examine the effects of an immigration shock on labor demand by testing a general equilibrium model in which imperfectly substitutable native and immigrant workers spend their wages on a locally produced good. The shock induces three responses: (i) a substitution of immigrants for natives; (ii) out-migration; and (iii) stimulation of labor demand. According to (iii), native wages can fall, stay the same or rise, depending upon the strength of the shock and various product and factor market elasticities. As our test case, we reexamine the 1980 "Mariel Boatlift," using Wacziarg’s "Channel Transmission" methodology. Our data set includes approximately 6,600 observations for 1979-85 from the Current Population Survey on workers in 9 different retail labor markets and Survey of Buying Power data on retail spending by consumers in Miami and four comparison cities. Our results provide a more complete explanation for why the Boatlift’s overall effects on native wages in Miami were benign: Lower wages due to greater labor supply were offset by higher wages due to greater labor demand. We conclude that the demand-augmenting effect of an immigration shock is a significant secondary adjustment process that must be considered when assessing the distributional effects of immigration. |
| Keywords: | immigration, demand, wages, transmission channels |
| JEL: | J23 J61 F22 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2919&r=lab |
| By: | John B. Williamson; Masa Higo (Center for Retirement Research, Boston College); ; |
| Abstract: | As part of the search for answers to questions about what could be done to increase labor force participation rates among older workers in the United States, it makes sense to take a close look at evidence from Japan, one of the few industrial countries with a higher labor force participation rate among older workers than the United States. The gap is particularly large for male workers. The focus of this study is on six factors which help explain why Japanese workers remain in the labor force as long as they do: (1) perceived economic necessity; (2) the large fraction of workers who are self-employed; (3) a culture that puts a high value on being a productive member of the paid labor force, particularly for men; (4) the government’s role in facilitating the labor force participation of older workers; (5) the long healthy life expectancy; and (6) the distinctive corporate culture’s effects on marital dynamics among older generations. Based on the evidence from Japan, three policy suggestions are outlined for those seeking to increase labor force participation rates among older U.S. workers: (1) increase the financial incentive to workers who remain in the labor force; (2) increase the extent of government efforts to link older workers to prospective employers; and (3) improve public programs designed to foster efforts by older workers to become self-employed. |
| Keywords: | Japanese works, Japan, labor force, longevity, older workers |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2007-11&r=lab |
| By: | Brian Henry; Simon Kirby |
| Abstract: | Recent time series evidence favouring a supply-side interpretation of long-run unemployment in the UK is based on the finding of cointegration between unemployment and wage pressure variables. We show that this is necessary but not sufficient. The key assumptions in recent work, that a single relation exists between unemployment and wage pressure variables and that the causality is from these variables to unemployment, both appear to be invalid. In the light of this, and evidence of its serious parameter instability, this model of long-run UK unemployment seems flawed. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:293&r=lab |
| By: | Michael Lechner (Swiss Institute for International Economics and Applied Economic Research, University of St.Gallen.); Rosalia Vazquez-Alvarez (Swiss Institute for International Economics and Applied Economic Research, University of St.Gallen.) |
| Abstract: | This paper develops a life-cycle model of labour supply that captures endogenous human capital formation allowing for individual’s heterogeneous responses to stochastic labour market shocks. The shocks determines conditions in the labour market and sort individuals into three labour market regimes; employment, unemployment with and unemployment without participation in labour market programmes. The structural model entails time independent stochastic shocks that have transitory effects on monetary returns while the effect on human capital formation may be permanent. The permanent effect may justify the existence of active labour market programmes if these programmes imply non-depreciating human capital and human capital depreciation is detected for the non-participant unemployed. Using several years of the Swiss Labour Force Survey (SAKE, 1991 – 2004) the empirical section compares the dynamic formation of human capital between labour market regimes. The results are consistent with the assumptions of the structural model and suggest human capital depreciation for unemployment without programme participation. They further show that labour programmes may act as a buffer to reduce human capital loss while unemployed. |
| Keywords: | Human capital formation, life-cycle labour supply models, active labour market policies,search activities, productivity shocks, unemployment. |
| JEL: | D31 D91 J24 J68 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:iei:wpaper:0701&r=lab |
| By: | Barbara A. Butrica; (Urban Institute); ; |
| Abstract: | Most studies of retirement well-being have focused on outcomes for relatively young retirees. Few studies have considered how retirement security changes as older Americans age. Following older adults from age 67 (when most have stopped working) to age 80, this study uses projections of wealth and income to assess how their economic security changes during retirement. Results indicate that typical older adults experience a decline in retirement wealth and income between ages 67 and 80. More than two-fifths of retirees will have significantly less income at age 80 than they did at age 67, with the median decline in income being $16,000 for current retirees and $23,000 for boomers. Some older adults, however, will be better off later in retirement. Approximately two-fifths of retirees will have significantly more income at age 80 than they did at age 67, with the median increase in income being $14,000 for current retirees and $17,000 for boomers. At least some of the change in economic well-being during retirement is related to changes in marital status, health status, living arrangements, and work status. |
| Keywords: | retirement security, change, decline, increase, loss, gain, economic well-being, younger, older, retirees |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2007-06&r=lab |