|
on Labour Economics |
| By: | Jean-Pierre DANTHINE; André KURMANN |
| Abstract: | We develop a reciprocity-based model of wage determination and incorporate it into a modern dynamic general equilibrium framework. We estimate the model and find that, among potential determinants of wage policy, rent-sharing (between workers and firms) and a measure of wage entitlement are critical to fit the dynamic responses of hours, wages and inflation to various exogenous shocks. Aggregate employment conditions (measuring workers' outside option), on the other hand, are found to play only a negligible role in wage setting. These results are broadly consistent with micro-studies on reciprocity in labor relations but contrast with traditional efficiency wage models which emphasize aggregate labor market variables as the main determinant of wage setting. Overall, the empirical fit of the estimated model is at least as good as the fit of models postulating nominal wage contracts. In particular, the reciprocity model is more successful in generating the sharp and significant fall of inflation and nominal wage growth in response to a neutral technology shock. |
| Keywords: | efficiency wages; reciprocity; estimated DSGE models |
| JEL: | E24 E31 E32 E52 J50 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:07.12&r=lab |
| By: | Manuel A. Hidalgo (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | We estimate the demand for education in Spain, and use the estimated demand curve to analyze whether the evolution of the education wage premium in the 1980s and 1990s can be explained by a demand-supply framework. We find that growth in the demand for education in the 1980s was very similar to growth in the 1990s. Our empirical results show that difference in the evolution of the education wage premium between the two decades can be explained by combining observed changes in labor supply with steady labor demand growth. |
| Keywords: | wage premium, relative demand, relative supply |
| JEL: | J24 J31 O33 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:08.01&r=lab |
| By: | Rosario Crinò (CESPRI - Bocconi University, Milan, Italy.) |
| Abstract: | This paper studies the e¤ects of service offshoring on the skill composition of labor demand in Western Europe, using comparable data for nine economies during the 1990s. A short-run translog cost function allows derivation of demand elasticities for three labor inputs. Potential endogeneity and measurement error in service offshoring are accounted for by using instruments based on EBRD indexes of telecommunication reform in Eastern Europe. Results show that service offshoring is skill-biased, because it raises relative labor demand for high skilled workers. |
| Keywords: | Service Offshoring, Labor Demand, Instrumental Variable Estimation. |
| JEL: | F16 J23 J31 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp205&r=lab |
| By: | Jayoti Das (Department of Economics, Elon University); Stephen B. DeLoach (Department of Economics, Elon University) |
| Abstract: | It is well-known that physical appearance affects wages. What is unclear is how much workers control the perception others have of them based on their looks. While the social science literature suggests that certain personality traits can be accurately inferred on the basis of personal grooming, labor economists have yet to measure the impact of grooming on wages. The purpose of this paper is to do just that. Our results show that while grooming time significantly affects wages for both men and women, the marginal effect is considerably larger for men. |
| JEL: | J3 J7 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:elo:wpaper:2008-01&r=lab |
| By: | Claudia Geist |
| Abstract: | Despite much recent changes in gender relations, housework remains an area where women bear primary responsibility. This paper examines the role of policy and employment context on housework, not only for women who live with partners, but also for single women. I study German women’s housework in the decade after unification, which allows me to simultaneously assess the impact of the ideological legacies of the FRG and the GDR, while also studying the role of different levels of labor market participation. I find that women with partners do more housework than singles, and that part-time employees do more housework than those working full-time. The results show no regional differences in singles’ housework performance. However, among women with partners, West German women do significantly more housework. The analyses reveal that differences in the housework levels of full-time and part-time workers can be explained by the differences in mechanisms for the two groups. Full-time workers reduce their housework in response to their paid labor involvement to a lesser extent than part-time workers, in particular in East Germany, where women’s full-time employment has long been normative. |
| Keywords: | Business taxation, tax reform, tax competition |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp15&r=lab |
| By: | Richard Disney (Institute for Fiscal Studies and University of Nottingham); Carl Emmerson (Institute for Fiscal Studies); Gemma Tetlow (Institute for Fiscal Studies) |
| Abstract: | <p><p>We measure accruals in defined benefit (DB) pension plans for public and private sector workers in Britain, using typical differences in scheme rules and sector-specific lifetime age-earnings profiles by sex and educational group. We show not just that coverage by DB pension plans is greater in the public sector, but that median pension accruals as a % of salary are almost 5% higher among DB-covered public sector workers than covered private sector workers. This is largely driven by earlier normal pension (retirement) ages. For workers of different ages in the two sectors, marginal accruals also vary as a result of differences in earnings profiles across the sectors. The differences in earnings profiles across sectors should induce caution in using calculated coefficients on wages from cross sections of data in order to estimate sectoral wage effects. </p></p> |
| JEL: | H55 J32 J63 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:07/17&r=lab |
| By: | Gianmarco I.P. Ottaviano (University of Bologna, FEEM and CEPR); Giovanni Peri (UC Davis and NBER) |
| Abstract: | In this paper we document a strong positive correlation of immigration flows with changes in average wages and average house rents for native residents across U.S. states. Instrumental variables estimates reveal that the correlations are compatible with a causal interpretation from immigration to wages and rents of natives. Separating the effects of immigrants on natives of different schooling levels we find positive effects on the wages and rents of highly educated and small effects on the wages (negative) and rents (positive) of less educated. We propose a model where natives and immigrants of three different education levels interact in production in a central district and live in the surrounding region. In equilibrium the inflow of immigrants has a positive productive effect on natives due to complementarieties in production as well as a positive competition effect on rents. The model calibrated and simulated with U.S.-states data matches most of the estimated effects of immigrants on wages and rents of natives in the period 1990-2005. This validation suggests the proposed model as a useful tool to evaluate the impacts of alternative immigration scenarios on U.S. wages and rents. |
| Keywords: | Immigration, Wages, Rents, Housing Prices, U.S. States |
| JEL: | F22 J61 R23 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0713&r=lab |
| By: | Adriana Sánchez Hugalde (Grup de Recerca en Federalisme Fiscal i Economia Regional (Institut d'Economia de Barcelona - IEB), Departament Economia Política i Hisenda Pública. Facultat de Ciències Econòmiques i Empresarials de la Universitat de Barcelona.) |
| Abstract: | This empirical work studies the influence of immigrant students on individuals’ school choice in one of the most populated regions in Spain: Catalonia. It has estimated, following the Poisson model, the probability that a certain school, which immigrant students are already attending, may be chosen by natives as well as by immigrants, respectively. The information provided by the Catalonia School Department presents school characteristics of all the primary and secondary schools in Catalonia during the 2001/02 and 2002/03 school years. The results obtained support the evidence that Catalonia native families avoid schools attended by immigrants. Natives certainly prefer not to interact with immigrants. Private schools are more successful in avoiding immigrants. Finally, the main reason for non-natives’ choice is the presence of other non-natives in the same school. |
| Keywords: | School choice, immigration |
| JEL: | I21 J15 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2007-15&r=lab |
| By: | Randall Kekoa Quinones Akee (IZA); David A. Jaeger (College of William and Mary, University of Bonn, and IZA); Konstantinos Tatsiramos (IZA) |
| Abstract: | Using recently-available data from the New Immigrant Survey, we find that previous self-employment experience in an immigrant’s country of origin is an important determinant of their self-employment status in the U.S., increasing the probability of being self-employed by about 7 percent. Our results improve on the previous literature by measuring home-country self-employment directly rather than relying on proxy measures. We find little evidence to suggest that home-country selfemployment has a significant effect on U.S. wages in either paid employment or self employment. |
| Keywords: | Self-employment, entrepreneurship, New Immigrant Survey |
| JEL: | J61 J21 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0717&r=lab |
| By: | Philippe Belley (University of Western Ontario); Lance Lochner (University of Western Ontario) |
| Abstract: | This paper uses data from the 1979 and 1997 National Longitudinal Survey of Youth cohorts (NLSY79 and NLSY97) to estimate changes in the effects of ability and family income on educational attainment for youth in their late teens during the early 1980s and early 2000s. Cognitive ability plays an important role in determining educational outcomes for both NLSY cohorts, while family income plays little role in determining high school completion in either cohort. Most interestingly, we document a dramatic increase in the effects of family income on college attendance (particularly among the least able) from the NLSY79 to the NLSY97. Family income has also become a much more important determinant of college 'quality' and hours/weeks worked during the academic year (the latter among the most able) in the NLSY97. Family income has little effect on college delay in either sample. To interpret our empirical findings on college attendance, we develop an educational choice model that incorporates both borrowing constraints and a 'consumption' value of schooling -- two of the most commonly invoked explanations for a positive family income -- schooling relationship. Without borrowing constraints, the model cannot explain the rising effects of family income on college attendance in response to the sharply rising costs and returns to college experienced from the early 1980s to early 2000s: the incentives created by a 'consumption' value of schooling imply that income should have become less important over time (or even negatively related to attendance). Instead, the data are more broadly consistent with the hypothesis that more youth are borrowing constrained today than were in the early 1980s. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20081&r=lab |
| By: | David C. Maré (Motu Economic and Public Policy Research); Steven Stillman (Motu Economic and Public Policy Research) |
| Abstract: | This paper uses data from the New Zealand Census to examine how the supply of recent migrants in particular skill groups affects the geographic mobility of the New Zealand-born and earlier migrants. We identify the impact of recent migration on mobility using the ‘area-analysis’ approach, which exploits the fact that immigration is spatially concentrated, and thus a change in the local supply of migrants in a particular skill group should have an impact on the mobility of similarly skilled nonmigrants in that local labour market. Overall, our results provide little support for the hypothesis that migrant inflows displace either the NZ-born or earlier migrants with similar skills in the areas that new migrants are settling. If anything, they suggest that there are positive spillovers between recent migrants and other individuals that encourage individuals to move to or remain in the areas in which similarly skilled migrants are settling. Thus, it appears unlikely that internal mobility moderates any potential impacts of immigration on labour or housing markets in New Zealand. |
| Keywords: | Immigration, Mobility, New Zealand, Labour Market Areas |
| JEL: | J61 R23 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0714&r=lab |
| By: | Paul A. Grout; In-Uck Park; Silvia Sonderegger |
| Abstract: | The glass ceiling is one of the most controversial and emotive aspects of employment in organisations. This paper provides a model of the glass ceiling that exhibits the following features that are frequently thought to characterise the problem: (i) there is a lower number of female employees in higher positions, (ii) women have to work harder than men to obtain equivalent jobs, (iii) women are then paid less than men when promoted, and (iv) some organisations are more female friendly than others. These features emerge as an equilibrium phenomenon, when identical firms compete in "Bertrand-like" fashion. Furthermore, they also occur even when offering women the same contract as men in higher positions would be sufficient to ensure that women in those positions would always prefer permanent career over non-market alternatives. |
| Keywords: | Glass Ceiling, Promotions, Career Options |
| JEL: | J16 D86 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:07/183&r=lab |
| By: | Mike Brewer (Institute for Fiscal Studies) |
| Abstract: | <p><p><p><p>This paper, written at the request of the Economic Council of Sweden, presents a tour of welfare reform in the UK since the last change of government, summarising the most important changes in active labour market policies, and in measures intended to strengthen financial incentives to work. It argues that developments in the UK's active labour market policies occurred in two broad phases: first, the Government sought to strengthen ALMPs for those individuals deemed to be unemployed, through the New Deal programme. Second, the Government has reformed benefits for individuals traditionally viewed as inactive and thus excused job search activity, such as lone parents, and the sick and disabled. Accompanying these have been changes to direct taxes, tax credits and welfare benefits aiming to strengthen financial work incentives. However, financial work incentives have been strengthened by less than might be expected given the early rhetoric: the expansion in family-based tax credits have weakened the financial work incentives of (potential) second earners in families with children, many more workers now face combined marginal tax and tax credit withdrawal rates in excess of 60% than a decade ago, and a desire to achieve broad reductions in relative child poverty has led the Government to increase substantially income available to non-working families with children. We also summarise evaluations of three important UK welfare-to-work reforms (WFTC, NDYP and Pathways to Work), but without comparing their efficacy.</p></p></p></p> |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:07/20&r=lab |
| By: | Delia Furtado (University of Connecticut); Nikolaos Theodoropoulos (University of Cyprus) |
| Abstract: | This paper examines the effect of education on intermarriage and specifically, whether the mechanisms through which education affects intermarriage differ by immigrant generation and race. We consider three main paths through which education affects marriage choice. First, educated people may be better able to adapt to different customs and cultures making them more likely to marry outside of their ethnicity. Second, because the educated are less likely to reside in ethnic enclaves, meeting potential spouses of the same ethnicity may involve higher search costs. Lastly, if spouse-searchers value similarities in education as well as ethnicity, then they may be willing to substitute similarities in education for ethnicity when evaluating spouses. Thus, the effect of education will depend on the availability of same-ethnicity potential spouses with a similar level of education. Using U.S. Census data, we find evidence for all three effects for the population in general. However, assortative matching on education seems to be relatively more important for the native born, for the foreign born that arrived at a fairly young age, and for Asians. We conclude by providing additional pieces of evidence suggestive of our hypotheses. |
| Keywords: | Ethnic intermarriage, Education, Immigration |
| JEL: | J12 I21 J61 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0716&r=lab |
| By: | Mika Maliranta; Pierre Mohnen; Petri Rouvinen |
| Abstract: | ABSTRACT : An employer-employee panel is used to study whether the movement of workers across firms is a channel of unintended diffusion of R&D-generated knowledge. Somewhat surprisingly, hiring workers from others’ R&D labs to one’s own does not seem to be a significant spillover channel. Hiring workers previously in R&D to one’s non-R&D activities, however, boosts both productivity and profitability. This is interpreted as evidence that these workers transmit knowledge that can be readily copied and implemented without much additional R&D effort. |
| Keywords: | labor mobility, R&D spillovers, profitability, linked employer-employee data |
| JEL: | D62 J24 J62 L25 O31 |
| Date: | 2008–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1116&r=lab |
| By: | Pedro Carneiro (Institute for Fiscal Studies and University College London); Costas Meghir (Institute for Fiscal Studies and University College London); Matthias Parey (Institute for Fiscal Studies) |
| Abstract: | <p>There is a striking increase in inequality in children's home environments over the last 50 years (McLanahan, 2004). These are measured as differences in age of mothers of young children (below 5), maternal employment, single motherhood, divorce during the first 10 years of marriage, father's involvement, and family income, for mothers with different levels of education. This trend is cause for great concern because the home environment is probably the best candidate for explaining inequality in child development. </p><p> </p><p>Proposals to address this problem often rely on changes to the welfare system. However, given that home environments are rooted in the experiences of each family, they are probably difficult to change if we rely only the welfare system, while more direct interventions require invading family autonomy and privacy and are notoriously difficult to enforce. Therefore, one possible alternative is to target future parents in their youth, by affecting their education, before they start forming a family. In this paper we assess the potential for such a policy, by estimating the impact of maternal education on home environments and on child outomes. </p><p> </p><p>We provided a unified analysis of different aspects of child development, including cognitive, noncognitive, and health outcomes, across ages. We also estimate the impact of maternal education not only on parental characteristics like employment, income, marital status, spouse's education, age at first birth, but also on several aspects of parenting practices. Our paper provides a detailed analysis of the possible mechanisms mediating the relationship between parental education and child outcomes. Finally, we compare the relative roles of maternal education and ability, and we show how the role of maternal education varies with the gender and race of the child, and with the cognitive ability of the mother. </p><p> </p><p>We show that maternal education has positive impacts both on cognitive skills and behavioral problems of children, but the latter are more sustained than the former. This is perhaps because behavior is more malleable than cognition. Especially among whites, there is considerable heterogeneity in these impacts, which are larger for girls, and for mothers with higher cognition. </p><p> </p><p>More educated mothers are more likely to work and work for longer hours, especially among blacks. This is true independently of the child being in its infancy, childhood, and adolescence. Nevertheless, there is no evidence that more educated mothers do less breastfeeding, spend much less time reading to their children, or even taking them on outings. This is important because some studies suggest that maternal employment may be detrimental for child outcomes if it leads to reduced (quality) time with children. </p><p> </p><p>Due to the nature of the data, this paper focuses on the effect of maternal, but not paternal, schooling. Due to assortative mating, part of the effects we find may be driven by the father's schooling through a mating effect. However, unless the effect of partner's schooling is incredibly large, assortative mating cannot fully explain our main results, as suggested in some of the literature. </p><p></p> |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:07/15&r=lab |
| By: | Gabriel Romero (Universidad de Alicante) |
| Abstract: | In the brain drain literature models with heterogeneous agents typically predict that all agents who get tertiary education will try to migrate. Hence, the skill composition of the migration flow is the same as that of the skilled population left behind. This result, however, may not represent the migration pattern of some source countries. In this paper I present and analyze a model of heterogeneous agents where immigrants go through an assimilation process upon arriving to the host country. I start by studying the skill composition of the migration flow of a less advanced country. Then, I characterize conditions that lead a benevolent government to promote migration among the skilled population. I show that the government may promote skilled migration despite the fact that the brain drain decreases per capita income. |
| Keywords: | Assimilation process, brain drain, and migration pattern. |
| JEL: | F22 I28 J24 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2007-25&r=lab |
| By: | Ciro Avitabile (University College London, IFS, University of Salerno and CSEF); Tullio Jappelli (Università di Napoli, CSEF and CEPR); Mario Padula (Università di Venezia, and CSEF) |
| Abstract: | The association between health outcomes and education – the health-education gradient - is widely documented but little is known about its source. Using microeconomic data on a sample of individuals aged 50+ in eight European countries, we find that education and cognitive skills (such as numeracy, fluency, and memory) are associated with a greater propensity for standard screening tests (mammography and colonoscopy). However, the association is much weaker for people who have access to good health quality information, as proxied by a direct measure of the quality of general practitioners. We interpret this result as evidence in favor of the hypothesis that the positive health-education gradient is driven, at least in part, by information barriers rather than such other factors, as individual resources or preferences. |
| Keywords: | Health, education, information |
| JEL: | I0 I1 I2 |
| Date: | 2008–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:187&r=lab |
| By: | Mette Christensen (Institute for Fiscal Studies and University of Manchester) |
| Abstract: | <p>All micro studies of demand are based on using time series cross sectional data. Because in such data each household is only observed once, it is only under strong identifying restrictions that one can interpret the coefficients on consumer behavior. For example, if tastes are correlated with income, the usual estimates of income elasticities from cross sectional data are biased. In contrast, panel data allows identification of the coefficients on consumer behavior in the presence of unobservable correlated heterogeneity. In this paper we make use of a unique Spanish panel data set on household expenditures to test whether unobservable heterogeneity in household demands (taste) is correlated with total expenditures (income). We find that tastes are indeed correlated with income for half of the goods considered.</p> |
| JEL: | C33 D12 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:07/16&r=lab |
| By: | Francesco FURLANETTO |
| Abstract: | In this paper we study the impact of a government spending shock on aggregate consumption, building on the GLV (Gali, Lopez-Salido and Valles (2007)) model. We show that the GLV model implies a counterfactual increase in the real wage, the interest rate and the in.ation rate. The introduction of sticky wages solves these problems and preserves the main result of the model, i.e. the positive response of consumption. Moreover, once we relax the common wage assumption, sticky wages are even essential to reproduce the positive response of consumption. |
| Keywords: | sticky wages; rule-of-thumb consumers; fiscal shocks; firm-specific capital |
| JEL: | E32 E62 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:07.11&r=lab |
| By: | Tiron Tudor, Adriana; Blidisel , Rodica |
| Abstract: | The purpose of this paper is to present experiences from the use of accrual accounting information in the public higher education sector in Romania and, thus, to contribute to our understanding of the prospects for using that kind of accounting in public organizations. |
| Keywords: | Public Sector, Accrual Accounting, Profession |
| JEL: | M41 |
| Date: | 2007–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6378&r=lab |