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on Labour Economics |
| By: | Karsten Kohn; Alexander C. Lembcke |
| Abstract: | Using linked employer-employee data from the German Structure of Earnings Survey 2001,this paper provides a comprehensive picture of the wage structure in three wage-settingregimes prevalent in the German system of industrial relations. We analyze wagedistributions for various labor market subgroups by means of kernel density estimation,variance decompositions, and individual and firm-level wage regressions. Unions' impactthrough collective and firm-level bargaining mainly works towards a higher wage level andreduced overall and residual wage dispersion. Yet observed effects are considerablyheterogeneous across different labor market groups. There is no clear evidence for wagefloors formed by collectively bargained low wage brackets which would operate as minimumwages for different groups of workers. |
| Keywords: | Collective wage bargaining, wage structure, kernel density estimation, variancedecomposition, wage equations, German Structure of Earnings Survey |
| JEL: | J31 J51 J52 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0813&r=lab |
| By: | Christopher A. Pissarides |
| Abstract: | I study the cyclical behavior of an equilibrium search model with endogenous job creationand destruction, with focus on the model's failure to match the observed cyclical volatility ofunemployment. Job creation in the model is influenced by wages in new matches. Isummarize microeconometric evidence on wages in new matches and show that the keymodel elasticities are consistent with the evidence. Therefore explanations of theunemployment volatility puzzle have to preserve the cyclical volatility of wages. I discusssome extensions of the model that can increase cyclical unemployment volatility throughmechanisms other than wage stickiness. |
| Keywords: | wages, unemployment, wage stickiness, job creation |
| JEL: | J63 J64 E3 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0839&r=lab |
| By: | Ebru Kongar; Mark Price |
| Abstract: | Since the mid-1990s, offshore production has become increasingly important in white-collar, service sector activities in the U.S. economy. This development coincided with a stagnant gender wage gap over this period. This paper categorizes white-collar service sector occupations into two groups based on whether or not an occupation is at risk of being offshored and assesses the relative contribution of these two groupings, through their employment and wages, to the stagnation of the gender wage gap between 1995 and 2005. Applying standard decomposition methods to Current Population Survey and Displaced Workers Survey data shows that in at-risk occupations, low-wage women’s employment declined, leading to an artificial increase in the average wage of remaining women thereby narrowing the gender wage gap. This improvement in the gender wage gap was offset by the relative growth of high-wage male employment in at-risk occupations and the widening of the gender wage gap within not-at-risk occupations. |
| Keywords: | Gender, Wages, Offshoring |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2007_06&r=lab |
| By: | Amynah Gangji (DULBEA, Université libre de Bruxelles, Brussels); Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | Better understand the consequences of unemployment in terms of labour market opportunities as well as psychological well-being is of primary importance for any policies aimed at reducing unemployment. One way by which unemployment may impact on future labour market outcomes is through a reduction of subsequent earnings. This study therefore investigates the effects of the incidence and duration of unemployment on re-entry wages in Belgium using the Panel Study on Belgian Households for the period 1994-2002. The methodology used is based on a fixed effects model controlling for unobserved heterogeneity and sample selection bias. Results suggest that unemployment most often has a detrimental effect in terms of future labour market prospects. In other words, it can hardly be seen as an investment period allowing the unemployed to find a better match afterwards. The unemployment penalty may vanish if the unemployed find a stable job. However they are most often characterized by smaller average number of tenure years than individuals who did not go through such an experience. Consequently there is a risk that individuals having experienced unemployment will never be able to eliminate the wage penalty if they do not enter into stable job. Finally, we have found robust evidence that the wage penalty increases as the unemployment spell lengthens. This result is particularly alarming given the high proportion of long term unemployment in Belgium. These conclusions imply that unemployment costs go beyond the simple loss of income and human capital associated with job loss. This implies a substantial leeway for public intervention. |
| Keywords: | unemployment incidence and duration, wage penalty, fixed effects model, sample selection bias. |
| JEL: | C23 J64 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:07-19rs&r=lab |
| By: | David Lempert (U.S. Bureau of Labor Statistics) |
| Abstract: | This paper first utilizes annual surveys between the 1981 and 2000 waves of the National Longitudinal Survey of Youth to estimate the effect of being overweight on hourly wages. Previous studies have shown that white women are the only race-gender group for which weight has a statistically significant effect on wages. This paper finds a statistically significant continual increase in the wage penalty for overweight and obese white women followed throughout two decades. A supporting analysis from a cross-sectional dataset, comprised of the 1987 National Medical Expenditure Survey and the 2000 and 2004 waves of the Medical Expenditure Panel Survey, also shows an increasing wage penalty. The bias against weight has increased, despite drastic increases in the rate of obesity in the United States. Alternatively, the increasing rarity of thinness has led to its rising premium. |
| Keywords: | Obesity, Wages, Women, Beauty Premium |
| JEL: | I12 J71 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec070130&r=lab |
| By: | Ronny Freier; Viktor Steiner |
| Abstract: | "Marginal Employment", i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In addition to average treatment effects, we calculate dynamic and cumulative treatment effects accounting for total time spent in various labor market states and related earnings over a period of three years. We find that marginal employment (i) does not affect time spent in regular employment within a three-years' observation period, (ii) reduces future unemployment, (iii) slightly increases cumulated future earnings, on average, and (iv) is associated with a small negative cumulative earnings effect for older workers in west Germany. |
| Keywords: | Marginal employment, social security contributions, wage subsidies, labour market policy, evaluation of treatment effects |
| JEL: | J23 J64 H43 C35 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp744&r=lab |
| By: | Mendes, Rute (Free University Amsterdam, Department of Economics); van den Berg, Gerard J (Free University Amsterdam, Department of Economics); Lindeboom, Maarten (Free University Amsterdam, Department of Economics) |
| Abstract: | In labor markets with worker and firm heterogeneity, the matching between firms and workers may be assortative, meaning that the most productive workers and firms team up. We investigate this with longitudinal population-wide matched employer-emplyee data from Portugal. Using dynamic panel data methods, we quantify a firm-specific productivity term for each firm, and we relate this to the skill distribution of workers in the firm. We find that there is positive assortative matching, in particular among long-lived firms. Using skill-specific estimates of an index of search frictions, we find that the results can only to a small extent be explained by heterogeneity of search frictions across worker skill groups. |
| Keywords: | Positive assortative matching; matched employer-employee data; productivity; skill; unobserved heterogeneity; sorting; fixed effects |
| JEL: | D24 J21 J24 J63 |
| Date: | 2007–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2007_030&r=lab |
| By: | Lundborg, Per (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | Research on wage dispersion and firm performance focuses on intra-firm and inter firm effects irrespective of workers’ profession. We extend the analysis by considering dispersion within professions, within and across firms and within professions economy-wide. We find that the intra-firm dispersion of wages, which research so far has focused on, has limited effects on productivity compared to the economy-wide wage dispersion within the professions. As Swedish firms have differentiated wages among employees during the last 10-15 years also the economy-wide dispersion within professions has increased thus contributing considerably to the strong performance of the Swedish economy in the late 1990's. |
| Keywords: | - |
| Date: | 2007–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2007_012&r=lab |
| By: | Ingo Geishecker (Georg-August-Universität Göttingen); Ingo Geishecker (University of Nottingham); Jakob Roland Munch (Department of Economics, University of Copenhagen) |
| Abstract: | This paper studies the impact of outsourcing on individual wages in three European countries with markedly different labour market institutions: Germany, the UK and Denmark. To do so we use individual level data sets for the three countries and construct comparable measures of outsourcing at the industry level, distinguishing outsourcing by broad region. Estimating the same specification on different data show that there are some interesting differences in the effect of outsourcing across countries. We discuss some possible reasons for these differences based on labour market institutions. |
| Keywords: | international outsourcing; individual wages; labour market institutions |
| JEL: | F16 J31 C23 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:kud:epruwp:07-03&r=lab |
| By: | Ana Rute Cardoso (Institute for the Study of Labor (IZA)); Rudolf Winter-Ebmer (Department of Economics, Johannes Kepler University Linz, Austria) |
| Abstract: | We explore the impact of mentoring of females and gender segregation on wages using a large longitudinal data set for Portugal. Female managers can protect and mentor female employees by paying them higher wages than male-led firms would do. We find that females can enjoy higher wages in female-led firms, the opposite being true for males. In both cases is a higher share of females reducing the wage level. These results are compatible with a theory where job promotion is an important factor of wage increases: if more females are to be mentored, less promotion slots are available for males, but also the expected chance of a female to be promoted is lower. |
| Keywords: | female entrepreneurs; wages; gender gap; matched employer-employee data |
| JEL: | M52 D21 J31 J16 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2007_20&r=lab |
| By: | Marisa Bucheli (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Rodrigo Ceni (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | In this paper we define informal workers as those who are not contributing to the social security system. We analyse the likelihood of being informal and we estimate the differentials in earnings between sectors using both the OLS estimation and a switching regression model. We assess the premium for being formal by predicting five different proxies of the average gap. We use the crosssection data reported in a 2005 household survey. We find that formality is more likely among the better-educated, women, people residing in the capital city, heads of households and full-time workers. In addition, we find that according to the five measures of the gap, earnings are higher in the formal than in the informal sector. |
| Keywords: | informal sector, wage differential |
| JEL: | J31 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:2007&r=lab |
| By: | Espen R. Moen; A Rosen |
| Abstract: | This paper analyses the interaction between internal agency problems within firms andexternal search frictions when workers have private information. We show that the allocationof resources is determined by a modified Hosios Rule. We then analyze the effect of changesin the macro economic variables on the wage contract and the unemployment rate. We findthat private information may increase the responsiveness of the unemployment rate tochanges in productivity. The incentive power of the wage contracts is positively related tohigh productivity, low unemployment benefits and high search frictions. |
| Keywords: | Private information, incentives, search, unemployment, wage rigidity |
| JEL: | E30 J30 J60 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0832&r=lab |
| By: | Giulia Faggio; Kjell Salvanes; John Van Reenen |
| Abstract: | There has been a remarkable increase in wage inequality in the US, UK and many othercountries over the past three decades. A significant part of this appears to be withinobservable groups (such as age-gender-skill cells). A generally untested implication of manytheories rationalizing the growth of within-group inequality is that firm-level productivitydispersion should also have increased. Since the relevant data do not exist in the US we utilizea UK longitudinal panel dataset covering the manufacturing and non-manufacturing sectorssince the early 1980s. We find evidence that productivity inequality has increased. Existingstudies have underestimated this increased dispersion because they use data from themanufacturing sector which has been in rapid decline. Most of the increase in individual wageinequality has occurred because of an increase in inequality between firms (and withinindustries). Increased productivity dispersion appears to be linked with new technologies assuggested by models such as Caselli (1999) and is not primarily due to an increase intransitory shocks, greater sorting or entry/exit dynamics. |
| Keywords: | wage inequality, productivity dispersion, technology |
| JEL: | D24 J24 J31 O31 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0821&r=lab |
| By: | Akay, Alpaslan (Department of Economics, School of Business, Economics and Law, Göteborg University); Tezic, Kerem (SLI, Swedish Institute for Food and Agricultural Economics) |
| Abstract: | The earnings-assimilation of first-generation immigrant men in Sweden was analyzed using eleven waves of panel-data, 1990-2000. Employment-probabilities and earnings were estimated simultaneously in a random-effects model, using a quasifixed effects to control for both individual effects and panel-selectivity due to missing earnings-information. Assuming equal-period effects produced bias which could distort the findings. To correct the bias, local unemployment-rates were used to proxy for changing economy-wide conditions. Labour-market outcomes differed consider- ably across immigrant arrival cohorts, region and country of origin, and educational levels.<p> |
| Keywords: | Immigrants; earnings-assimilation; unbalanced panel; selection-bias; random-effects; Mundlak's formulation; local unemployment-rates |
| JEL: | C33 J15 J61 |
| Date: | 2007–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0277&r=lab |
| By: | Eran Yashiv |
| Abstract: | The picture of U.S. labor market dynamics is opaque. Empirical studies have yielded contradictoryfindings and debates have emerged regarding their implications. This paper aims at clarifying the picture,which is important for the understanding of the operation of the labor market, for the study of businesscycles, for the explanation of wage behavior, and for the formulation of policy. The paper determineswhat facts can be established, what are their implications, and what remains to be further investigated.The main contributions made here are: (i) Listing of data facts that can be agreed upon. These indicatethat there is considerable cyclicality and volatility of both accessions to employment and separations fromit. Hence, both are important for the understanding of the business cycle. (ii) Presenting the business cyclefacts of key series. (iii) Pointing to specific gaps in the data picture: disparities in the measurement of thesizeable flows between employment and the pool of workers out of the labor force, disagreements aboutthe relative volatility of job finding and separation rates across data sets, and the fact that the fit of thegross flows data with net employment growth data differs across studies and is not high. The definitecharacterization of labor market dynamics depends upon the closing of these data gaps. |
| Keywords: | labor market dynamics, gross worker flows, job finding, separation, hiring, business cycles |
| JEL: | E24 J63 J64 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0831&r=lab |
| By: | Robert Pollin (Univ. of Massachusetts); Mwangi we Githinji (Department of Economics and Political Economy Research Institute (PERI) University of Massachusetts-Amherst); James Heintz (Univ. of Massachusetts) |
| Keywords: | Wage Cutting in Kenya Will Expand Poverty, Not Decent Jobs |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:46&r=lab |
| By: | Jean-Baptiste Michau |
| Abstract: | This paper is about the labour market consequences of creative destruction with on-the-jobsearch. We consider a matching model in an economy with embodied technological progressand show that its dynamics are profoundly affected by allowing on-the-job search. We obtainthat the elasticity of unemployment with respect to growth shrinks from 1.63 to 0.13.Moreover, the underlying transmission channels change as the flow of obsolete jobspractically disappears and is replaced by a flow of job-to-job transitions. These effects persisteven if employed job seekers are significantly less efficient in the search process than theunemployed. Thus, we show that, rather than contributing to unemployment, creativedestruction induces a direct reallocation of workers from low to high productivity jobs. Theseresults could be strengthened by assuming that search efforts are unobservable by firmswhich induces more on-the-job search. However, the action of worker is no longer surplusmaximizing and, hence, the worker's welfare is increasing in the cost of search which acts asa commitment device. Finally, we show that the model could be extended by allowing forvariable search intensity. |
| Keywords: | commitment device, creative destruction, job flows, obsolescence, on-the-jobsearch, search equilibrium, unemployment |
| JEL: | E24 J41 J63 J64 O39 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0835&r=lab |
| By: | Akay, Alpaslan (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | The employment- and earnings-assimilation of first-generation immigrant men in Sweden was estimated using a dynamic random-e¤ects sample-selection model with eleven waves of unbalanced panel-data during 1990-2000. Endogenous initial values were controlled for using the simple Wooldridge method. Local market unemployment-rates were used as a proxy in order to control for the effect of changing macroeconomic conditions. Significant structural (true) state-dependence was found both on the employment-probabilities and on the earnings of both immigrants and native Swedes. The size of structural state-dependence differed between immigrants and Swedes. Failure to control for the structural state-dependence could have caused bias not only in the assimilation measures but also in the cohort-effects. For example, standard (classic) assimilation model seriously overestimates short-run marginal assimilation-rates and underestimates long-run marginal assimilation- rates. The model controlling for structural state-dependence shows that the earnings of all immigrants in Sweden (except Iraqies) eventually converge to those of native Swedes, but only Nordics and Westerners are able to reach the employment- probability of native Swedes.<p> |
| Keywords: | Dynamic random-e¤ects sample-selection model; employment and earnings assimilation; initial values problem; wage-curve method |
| JEL: | C33 J15 J61 |
| Date: | 2007–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0279&r=lab |
| By: | Buyens, D.; Van Dijk, H.; Dewilde, T.; Vlaminckx, A.; De Vos, A. (Vlerick Leuven Gent Management School) |
| Abstract: | Purpose - The purpose of this study is twofold. The first is to relate the negative image of older workers to stereotype threat and propose that effective retention management should start with the replacement of this negative image. The second is to assess the needs, perceptions and preferences of older workers regarding their career-ending. Design/methodology/approach - 266 employer questionnaires and 1290 older worker questionnaires identified the employers’ perceptions of older workers and the career-ending needs and preferences of older workers. Findings - The results provide indirect support for the hypothesis that the negative image of older workers forms a self-fulfilling prophecy due to mechanisms of stereotype threat. Furthermore, the results indicate that job involvement plays a crucial role in the preference to retire or keep on working. Research limitations/implications – Stereotype threat promises to be of significant relevance for the career-ending measures of older workers. However, the empirical design of the study limits the possibility to draw direct inferences about the effects of stereotype threat on older workers. Practical implications - Measures and policies aimed at prolonging the participation of older workers at the labor market should be tailored to the specific needs, perceptions and preferences of older workers. Originality/value – The concept of stereotype threat has never been connected with popular perceptions of older workers. Further, the assessment of the needs, perceptions and preferences related to the career-ending of older workers has never been done in European studies. |
| Keywords: | Retention management, Stereotype threat, Older workers |
| Date: | 2007–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2007-29&r=lab |
| By: | Andrew E. Clark; Yannis Georgellis; Richard E. Lucas |
| Abstract: | We look for evidence of habituation in twenty waves of German panel data: do individuals, after lifeand labour market events, tend to return to some baseline level of well-being? Although the strongestlife satisfaction effect is often at the time of the event, we find significant lag and lead effects. Wecannot reject the hypothesis of complete adaptation to marriage, divorce, widowhood, birth of child,and layoff. However, there is little evidence of adaptation to unemployment. Men are somewhat moreaffected by labour market events (unemployment and layoffs) than are women, but in general thepatterns of anticipation and adaptation are remarkably similar by sex. |
| Keywords: | life satisfaction, anticipation, adaptation, baseline satisfaction, labour market and lifeevents |
| JEL: | I31 J12 J13 J63 J64 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0836&r=lab |
| By: | Maloney, William; Bosch, Mariano |
| Abstract: | This paper discusses a set of statistics for examining and comparing labor market dynamics based on the estimation of continuous time Markov transition processes. It then uses these to establish stylized facts about dynamic patterns of movement using panel data from Argentina, Brazil and Mexico. The estimates suggest broad commonalities among the three countries, and establish numerous common patterns of worker mo bility among sectors of work and inactivity. As such, we offer some of the first comparative work on labor dynamics. The paper then particularly focuses on the role of the informal sector, both for its intrinsic interest, and as a case study illustrating the strengths and limits of the tools. The results suggest that a substantial part of the informal sector, particularly the self-employed, corresponds to voluntary entry although informal salaried work may correspond more closely to the standard queuing view, especially for younger workers. |
| Keywords: | Labor Markets,Labor Policies,,Work & Working Conditions,Labor Standards |
| Date: | 2007–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4429&r=lab |
| By: | Eric Maskin (School of Social Science, Institute for Advanced Study) |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ads:wpaper:0080&r=lab |
| By: | Régis Barnichon |
| Abstract: | Shimer (2005a) claims that the Mortensen-Pissarides search model of unemployment lacks anampiflication mechanism because it cannot generate the observed business cycle fluctuationsin unemployment given labor productivity shocks of plausible magnitude. This paper arguesthat part of the problem lies with the correct identification of productivity shocks. Because ofthe endogeneity of measured labor productivity, filtering out the trend component as inShimer (2005a) may not correctly identify the shocks driving unemployment. Using a New-Keynesian framework with search unemployment, this paper estimates that close to 50% ofthe Shimer puzzle is due to the misidentification of productivity shocks. In addition, I showthat extending the search model with an aggregate demand side remarkably improves theability of the standard search model to match the moments of key labor market variables. |
| Keywords: | unemployment fluctuations, labor productivity, search and matching model, New-Keynesian model |
| JEL: | E32 E37 J63 J64 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0823&r=lab |
| By: | Bokenblom, Mattias (Department of Business, Economics, Statistics and Informatics); Ekblad, Kristin (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | Social interactions and social norms are more and more acknowledged to play a vital role in economic decision making. In this study we test if work group absence behaviour influences the individual behaviour. Using detailed employment records of a large Swedish municipality each individual’s colleagues are identified down to the work group level. We find a positive and significant peer effect on the level of sickness absence among co-workers. The results suggest that peer effects are an intra gender and intra age-group phenomenon. Consequently, we cannot rule out the possibility of social norms being a reason for otherwise similar work groups developing different patterns of sickness absence. |
| Keywords: | Peer effects; sickness absence; social norms |
| JEL: | C31 D12 J22 |
| Date: | 2007–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2007_011&r=lab |
| By: | Amynah Gangji (DULBEA, Université libre de Bruxelles, Brussels); Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | This study investigates the causes of unemployment persistence among the Belgian labour force. The underlying issue was to determine the impact of past unemployment spells on future labour market opportunities. Some European studies have demonstrated the existence of a true causal relationship between successive unemployment spells implying a stigmatisation effect for the unemployed. This so-called state dependence can occur through a reduction in human capital or through employer recruitment and labour retention practices. The model used is a dynamic random effects probit model controlling for unobserved heterogeneity and the initial condition problem. It was applied on the Panel Study on Belgian Households, covering the years 1994 to 2002. The results suggest that while observed and unobserved heterogeneity explain between 57% and 82% of unemployment persistence, the remainder is induced by the presence of state dependence. All else equal, an individual unemployed this year will be between 11.4 and 33 percentage points more likely to be unemployed next year as compared with an employed person. The presence of a stigmatisation effect of unemployment involves that the costs of unemployment are much higher than the simple loss of income and human capital associated to the current job loss. The study demonstrates the importance to concentrate the efforts on the prevention of unemployment. |
| Keywords: | unemployment persistence, state dependence, dynamic random effects probit model, unobserved heterogeneity, initial condition, Belgium |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:07-20rs&r=lab |
| By: | Peters, Michael |
| Abstract: | This paper studies Bayesian equilibrium in a worker firm matching problem in which workers choose their human capi- tal investment and firms choose wages before the matching process occurs. Symmetric equilibrium exists, and supports assortative matching. However, when the number of traders is large, low types tend to invest too much, while higher types invest in a way that is bilaterally efficient. In this sense the upper end of the market be- haves in a manner that is similar to the way they would behave in a competitive (hedonic) equilibrium. The lower end of the market, however, does not. All types end up investing more and being paid higher wages than they are in a simple hedonic equilibrium. In the limit, the Bayesian game supports and outcome that looks like a Truncated Hedonic Equilibrium as described in Peters (2006). |
| Date: | 2007–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:pmicro:peters-07-12-10-02-47-06&r=lab |
| By: | Régis Barnichon |
| Abstract: | This paper presents new empirical evidence on the cyclical behavior of US unemploymentthat poses a challenge to standard search and matching models. The correlation betweencyclical unemployment and the cyclical component of labor productivity switched sign at thebeginning of the Great Moderation in the mid 80s: from negative it became positive, whilestandard search models imply a negative correlation. I argue that the inconsistency arisesbecause search models do not allow output to be demand determined in the short run. Ipresent a search model with nominal rigidities that can rationalize the empirical findings, andI document two new facts about the Great Moderation that can account for the large and swiftincrease in the unemployment-productivity correlation in the mid-80s. |
| Keywords: | Unemployment Fluctuations, Labor productivity, Search and matching model, New-Keynesian model |
| JEL: | J64 E32 E37 E52 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0819&r=lab |
| By: | Gerardo Jacobs |
| Abstract: | Most occupational choice models introduce only two options for agents: entrepreneurial activities or wage-employment. However, these models represent inadequately the labor force distribution from developing countries, where an important proportion of the total work force are self-employed workers. Some models introduce self-employment as an occupational choice. These works have a common feature : at equilibrium, wage earners belong to the lower end of the income distribution. However, for a large set of developing countries, peasants and small proprietors are part of a self employment sector that can mostly be found in the lower end of the income distribution. In this work, in contrast with previous efforts, self-employment formation is consistent with data from most developing countries. We pay special attention to the conditions under which either the economy ends in a low income equilibrium, where self-employment is the only form of production; or alternatively, a high income equilibrium with a well developed labor market. We study some public policy issues, paying special attention to role of capital markets and the efficiency of schooling. |
| Keywords: | Occupational Choice, Human Capital, Economic Development, General Equilibrium |
| JEL: | J24 O12 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec07:6538&r=lab |
| By: | Guy Michaels |
| Abstract: | Since Adam Smith's time, the division of labor in production has increased significantly, whileinformation processing has become an important part of work. This paper examines whether the needto coordinate an increasingly complex division of labor has raised the demand for clerical office workers, who process information that is used to coordinate production. In order to examine this question empirically, I introduce a measure of the complexity of an industry's division of labor that uses the Herfindahl index of occupations it employs, excluding clerks and managers. Using US data I find that throughout the 20th century more complex industries employed relatively more clerks, andrecent Mexican data shows a similar relationship. The relative complexity of industries is persistent over time and correlated across these two countries. I further document the relationship between complexity and the employment of clerks using an early information technology (IT) revolution that took place around 1900, when telephones, typewriters, and improved filing techniques were introduced. This IT revolution raised the demand for clerks in all manufacturing industries, but significantly more so in industries with a more complex division of labor. Interestingly, recent reductions in the price of IT have enabled firms to substitute computers for clerks, and I find that more complex industries have substituted clerks more rapidly. |
| Keywords: | information processing, division of labor, technological change, organization of production |
| JEL: | J44 M54 D73 O33 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0811&r=lab |
| By: | Priscila Pereira Deliberalli |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2007:153&r=lab |
| By: | Ricardo da Silva Freguglia; Naercio Aquino Menezes-Filho |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2007:168&r=lab |
| By: | Bandick, Roger (Department of Business, Economics, Statistics and Informatics); Karpaty, Patrick (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | This paper investigates the employment effects of foreign acquisitions in acquired firms in Swedish manufacturing during the 1990s, a period characterized by a dramatic increase in foreign ownership. To handle likely endogeneity problems, we evaluate the effects of foreign acquisitions on the targeted firms’ employment by combining propensity score matching with difference-in-difference estimation. We find some evidence of positive employment effects in firms taken over by foreigners and it seems that the employment of skilled labor increases more than the employment of less-skilled labor. Moreover, we examine whether the employment impact of foreign ownership differs between takeovers of Swedish MNEs and non-MNEs. Our results indicate that the positive employment effects only appear in acquired non-MNEs. Furthermore, we observe shifts in skill intensities toward higher shares of skilled labor in non-MNEs taken over by foreign MNEs but not in acquired Swedish MNEs |
| Keywords: | Foregin acquisitions; labor demand; matching; difference-in difference; multinational enterprices |
| JEL: | F16 F23 J23 |
| Date: | 2007–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2007_010&r=lab |
| By: | Dewilde, T.; Dewettinck, K.; De Vos, A. (Vlerick Leuven Gent Management School) |
| Abstract: | In this study, we propose and empirically test a model in which we explore the role of individual and organizational antecedents on reported levels of workaholism and we investigate the relationship between workaholism and some important employee outcome variables. Using data from a sample of 2759 full-time employed Belgian workers, our findings indicate that strongly engaged and ambitious employees (in terms of career progress) show higher levels of workaholism. Organizational work-life balance support shows to inhibit workaholism. Furthermore, we found workaholism to be important in explaining work-life conflict and employees’ commitment to flexibility and performance. Theoretical and managerial implications are discussed. |
| Keywords: | Workaholism, structural equation modelling, antecedents and outcomes |
| Date: | 2007–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2007-33&r=lab |
| By: | Chakraborty, Lekha S. (National Institute of Public Finance and Policy) |
| Abstract: | Theory of allocation of time revealed that historically market-time has never consistently been greater than the non-market time and therefore the allocation and efficiency of latter may be equally important, if not more, to economic growth than that of former. The time budget data challenged the existing theories on allocation of time where nonmarket time aggregates leisure and work at home. The time budget findings revealed that unpaid work at home and leisure are not affected in the same way by changes in socio-economic variables. Tricotomising the allocation of time into work in market, unpaid work at home and leisure has important policy implications; in integrating the care economy into economic modeling and in turn in macropolicy making. This is particularly important in the context of developing countries, where public infrastructure deficit induces locking of time in unpaid work spurting a trade off with the time otherwise spent in the market economy activities or eroding leisure. Against this backdrop, this paper examined the link between public infrastructure investment and time allocation across gender in the context of selected states in India. The direction of regression coefficients suggests that public infrastructure investment affects market work, non-market work and leisure time in different ways with evident gender differentials. The time allocation in SNA activity of women is found significant and inversely related to the public infrastructure related to water supply. But there is no evidence that the release of time locked up in unpaid SNA work through better infrastructure can have substitution effect towards market work. This gets reinforced by the significant positive link between infrastructure and time allocation in Non-SNA activity, which manifests forced leisure. This in turn implies that though infrastructure investment lessens the time stress in unpaid SNA activity; complementary employment policies are required along with infrastructure investment to ensure substitution effect of unpaid work with market work, which in turn can have impact on household poverty. In particular, the analysis of time budget statistics enables the identification of the complementary fiscal services required for better gender sensitive human development. The overall conclusion of the paper is that fiscal policies designed to redress income poverty can be partial if it does not take in to account aspects of time poverty. |
| Keywords: | Public infrastructure ; Investment |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:npf:wpaper:47&r=lab |
| By: | Soiliou Namoro; Rania Rousdhy |
| Abstract: | . . . |
| JEL: | J13 J16 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:331&r=lab |
| By: | Mara Grasseni |
| Abstract: | This paper, dealing with heterogeneity among multinationals, examines the performance differences between and within foreign owned firms and domestic multinationals in Italy. For the empirical analysis a non-parametric approach based on the concept of first order stochastic dominance has been applied. Results indicate a higher level of labour productivity and a higher average wage for foreign owned firms in respect to domestic multinational firms, which dominate in terms of return on sales and leverage. Robust results are found within domestic multinationals, the parent firms investing only in developed countries show a better performance than those investing only in less developed countries and are characterised by lower leverage. With respect to foreign owned firms, the evidence in favour of US owned firms, in respect to European owned firms, is not so clear. Finally, using a linear regression analysis, it is found that domestic multinationals investing both in developed and less developed countries seem to be the more productive firms. |
| Keywords: | FDI, Multinationals, Productivity, Profitability, Firm heterogeneity |
| JEL: | F23 D21 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:brg:wpaper:0706&r=lab |
| By: | María Gabriela Farfán (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS) - Universidad Nacional de La Plata); María Florencia Ruiz Díaz (Universidad Nacional de La Plata) |
| Abstract: | The aim of this paper is to evaluate the existence of gender wage discrimination in Argentina. The methodology used is the one proposed by Gradín, Del Río y Cantó (2006), which emphasizes the importance of considering the individual wage gap when analyzing discrimination and follows an analogy with the poverty and deprivation literature. Two alternative estimation methods are used (OLS and QR), and the hypotheses of “glass ceiling” and “sticky floor” are evaluated on the groups with higher and lower education respectively. El siguiente trabajo intenta evaluar el fenómeno de la discriminación salarial por género en la Argentina. Se utiliza la metodología presentada en Gradín, Del Río y Cantó (2006), que enfatiza la dimensión individual del fenómeno de discriminación y propone una metodología de análisis haciendo una analogía con la literatura de pobreza. Se utilizan dos métodos de estimación alternativos para la ecuación de salarios (MCO y QR) y se evalúa la presencia de los fenómenos conocidos como “Glass ceiling” y “Sticky floor” en los grupos de individuos calificados y no calificados respectivamente. |
| Keywords: | discriminación salarial por género, análisis distributivo, “glass ceiling”, “sticky floor” |
| JEL: | J1 J3 D3 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0060&r=lab |
| By: | Marcelo Cortes Neri; Nanak Kakwani; Hyun H. Son |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2007:096&r=lab |
| By: | Barry Reilly (University of Sussex); Robert Witt (University of Surrey) |
| Abstract: | This paper examines pay determination in the labor market of a professional team sport hitherto neglected by researchers in the U.S. Using data on 361 Major League Soccer (MLS) players for one recent league season, mean and median regression models are exploited to investigate salary determinants. In comport with the available empirical evidence on racial pay discrimination in other professional team sports in the U.S., this study finds no overall evidence of pay disadvantage for non-white players. However, there is tentative evidence that black players who are not U.S. citizens actually fare worse than some other groups in salary terms. |
| JEL: | J31 J44 J71 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:1907&r=lab |
| By: | Kvaløy, Ola (Norwegian School of Hotel Management, Dept. of Business Administration, University of Stavanger); Olsen, Trond E. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | The extent to which a knowledge-intensive firm should induce cooperation between its employees is analyzed in a model of relational contracting between a firm (principal) and its employees (two agents). The agents can cooperate by helping each other, i.e. provide effort that increases the performance of their peer without affecting their own performance. We extend the existing literature on agent-cooperation by analyzing the implications of incomplete contracts and agent hold-up. A main result is that if the agents' hold-up power is sufficiently high, then it is suboptimal for the principal to implement cooperation, even if helping effort is productive per se. This implies, contrary to many property rights models, that social surplus may suffer if the investing parties (here the agents) are residual claimants. The model also shows that long-term relationships facilitate cooperation even if the agents cannot monitor or punish each others effort choices. |
| Keywords: | Relational contracts; multiagent moral hazard; endogenous hold-up |
| JEL: | D23 J33 L14 |
| Date: | 2007–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2007_027&r=lab |
| By: | Dave Rae; Marte Sollie |
| Abstract: | Globalisation can be a threat or an opportunity, depending on a country’s trade mix and its economic and regulatory structure. This paper assesses which EU countries are most exposed to globalisation using, among other indicators, measures of revealed comparative advantage. It then looks at which countries are best placed to cope. This depends on labour and product market flexibility, the average skill level of the workforce, the innovation framework, the quality of the education system and the level and type of support, such as job-search assistance, that is given to those who are harmed by globalisation. This paper relates to the 2007 Economic Survey of the European Union(www.oecd.org/eco/surveys/eu). <P>Mondialisation et Union européenne : quels sont les pays les mieux placés pour y faire face ? <BR>La mondialisation peut être une menace ou une opportunité, selon la composition des échanges des pays, leur structure économique et leur réglementation. Cet article évalue les pays de l’UE qui sont les plus exposés à la mondialisation en utilisant, parmi d’autres indicateurs, des mesures des avantages comparatifs révélés. Il examine ensuite quels sont les pays les mieux placés pour faire face à ce défi. Ceci dépend de la flexibilité des marchés du travail et des produits, du niveau de qualification moyenne de la main-d’oeuvre, du cadre concernant l’innovation, de la qualité du système éducatif et des niveaux et types de soutien, comme les aides à la recherche d’un emploi, qui sont mises à la disposition de ceux qui ont subi des préjudices à cause de la mondialisation. |
| Keywords: | globalisation, réglementation, trade, regulation, commerce, mondialisation, labour market flexibility |
| JEL: | E60 F10 F43 |
| Date: | 2007–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:586-en&r=lab |
| By: | Walmsley, Terrie; Alan Winters; Syud Amer Ahmed |
| Abstract: | The economics literature increasingly recognizes the importance of migration and its ties with many other aspects of development and policy. Examples include the role of international remittances (Harrison et al, 2003) or those immigrant-links underpinning the migration-trade nexus (Gould, 1994). More recently Walmsley and Winters (2005) utilised their Global Migration model (GMig) to demonstrate that lifting restrictions on the movement of natural persons would significantly increase global welfare with the majority of benefits accruing to developing countries. Although an important result, the lack of bilateral labor migration data forced Walmsley and Winters (2005) to make approximations in important areas and naturally precluded their tracking bilateral migration agreements. In this paper we incorporate bilateral labor flows into the GMig model developed by Walmsley and Winters (2005) to examine the impact of liberalizing the temporary movement of natural persons. Quotas on both skilled and unskilled temporary labor in the developed economies are increased by 3% of their labor forces. This additional labor is supplied by the developing economies. The results confirm that restrictions on the movement of natural persons impose significant costs on nearly all countries, and that those on unskilled labor are more burdensome than those on skilled labor. Developed economies increasing their skilled and unskilled labor forces by 3% raise the real incomes of their permanent residents. Most of those gains arise from the lifting of quotas on unskilled labor. On average the permanent residents of developing countries also gain in terms of real incomes from sending unskilled and skilled labor, albeit the gains are lower for skilled labor. While results differ across developing economies, most gain as a result of the higher remittances sent home. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:gta:techpp:2529&r=lab |
| By: | Andersson, Linda (Department of Business, Economics, Statistics and Informatics); Karpaty, Patrik (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | The objective of this paper is to analyze relative employment effects in Sweden due to offshoring. In contrast to most previous studies in this field, our analysis is based on firm level data. More specifically the dataset contains Swedish manufacturing firms, 1997-2002. In addition we have access to actual firm level import data on intermediate goods and services, respectively. The results show that the relative demand for high skilled labor is positively affected by service offshoring and offshoring of goods to Asia, but negatively affected by offshoring to high income countries. The relative demand for medium skilled labor is negatively affected by offshoring of goods to Eastern Europe, but positively affected by offshoring to high income countries. In contrast to expectations, the results show that the relative demand for low skilled labor is positively affected by offshoring of goods to Eastern Europe. However, these results are related to very small elasticities, which in turn translates into a small number of jobs affected. |
| Keywords: | Offchoring; firm level; data relative employment; translog cost function |
| JEL: | F14 F23 L23 |
| Date: | 2007–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2007_005&r=lab |
| By: | Frank Oskamp; Dennis J. Snower |
| Abstract: | This paper examines the interactions between employment and training policies. Their effectiveness in stimulating income may be interdependent for various important reasons. For example, the more employment policies stimulate the employment rate, the greater the length of time over which workers use the human capital generated by training policies. Moreover, the greater the government expenditures on employment and training subsidies, the higher the taxes required to finance these expenditures and these higher taxes reduce aggregate income. On account of such effects, employment and training policies may be complementary or substitutable with respect to aggregate income. To analyze these interactions, we construct a simple, dynamic model of hiring decisions, derived from microfoundations. The model is calibrated with German data. Surprisingly, the simulation shows that, for reasonable parameter values, the complementarities are weak or absent. The analysis provides a methodology for examining policy interactions which may be useful well beyond the bounds of employment and training policies. |
| Keywords: | complementarities; hiring subsidies; training subsidies; vocational training; employment; unemployment |
| JEL: | J21 J23 J24 J64 J68 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1389&r=lab |