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on Labour Economics |
| By: | Bruno Decreuse (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); André Zylberberg |
| Abstract: | We propose a search equilibrium model in which homogenous firms post wages along with a vacancy to attract job-seekers, while homogenous unemployed workers invest in costly search. The key innovation relates to the organisation of the search market and the search behaviour of the job-seekers. The search market is segmented by wage level, and unlike the rest of the literature individuals are ubiquitous in the sense they can choose the amount of search effort spent on each (sub-)market. We show that there exists a non-degenerate equilibrium wage distribution. Remarkably, the density of this wage distribution is hump-shaped, and it can be right-skewed. Our results are illustrated by an example originating a Beta wage distribution. |
| Keywords: | "Search effort"; "Segmented markets"; "Monopsony"; "Wage dispersion" |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00255780_v1&r=lab |
| By: | Pieter A. Gautier (Vrije Universiteit Amsterdam, and CEPR); José Luis Moraga-González (University of Groningen); Ronald P. Wolthoff (Vrije Universiteit Amsterdam) |
| Abstract: | We present a structural framework for the evaluation of public policies intended to increase job search intensity. Most of the literature defines search intensity as a scalar that influences the arrival rate of job offers; here we treat it as the number of job applications that workers send out. The wage distribution and job search intensities are simultaneously determined in market equilibrium. We structurally estimate the search cost distribution, the implied matching probabilities, the productivity of a match, and the flow value of non-labor market time; the estimates are then used to derive the socially optimal distribution of job search intensities. From a social point of view, too few workers participate in the labor market while some unemployed search too much. The low participation rate reflects a standard hold-up problem and the excess number of applications result is due to rent seeking behavior. Sizable welfare gains (15% to 20%) can be realized by simultaneously opening more vacancies and increasing participation. A modest binding minimum wage or conditioning UI benefits on applying for at least one job per period, increases welfare. |
| Keywords: | job search; search costs; labor market frictions; wage dispersion; welfare; structural estimation |
| JEL: | J64 J31 J21 E24 C14 |
| Date: | 2007–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070071&r=lab |
| By: | Ioana Marinescu |
| Abstract: | Job security legislation in most countries causes firing costs to rise with job duration. I analyze a 1999 British policy change that lowered from two to one year the tenure necessary for a worker to be able to sue their employer for unfair dismissal. Empirical results show a 29% decrease in the firing hazard for workers with one to two years of tenure relative to workers with higher tenure. The firing hazard for workers with zero to one year of tenure also decreased, which is consistent with better recruitment. Unemployment duration decreased after the policy change, training increased, and wages were unaffected. |
| Keywords: | job security, economics, British, unemployment |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:har:wpaper:0803&r=lab |
| By: | A. Kugler, M. Kugler (Wilfird Laurier University) |
| Abstract: | We use a panel of manufacturing plants from Colombia to analyze how the rise in payroll tax rates over the 1980s and 1990s affected the labor market. Our estimates indicate that formal wages fall by between 1.4% and 2.3% as a result of a 10% rise in payroll taxes. This “less-than-full-shifting” is likely to be the result of weak linkages between benefits and taxes and the presence of downward wage rigidities in Colombia. Because the costs of taxation are only partly shifted from employers to employees, employment also falls. Our results indicate that a 10% increase in payroll taxes lowered formal employment by between 4% and 5%. In addition, we find some evidence of less shifting and larger disemployment effects for production than for non-production workers. These results suggest that policies aimed at boosting the relative demand of less-skill workers by reducing social security taxes may be effective in Latin American countries, where minimum wages bind and benefits are often not directly linked to contributions. |
| Keywords: | Payroll Taxes, Shifting, Wage Rigidities, Minimum Wages |
| JEL: | J31 J32 H23 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:wlu:wpaper:eg0056&r=lab |
| By: | Melissa Boyle (Department of Economics, College of the Holy Cross); Joanna N. Lahey (Texas A&M University) |
| Abstract: | This paper exploits a major mid-1990s expansion in the U.S. Department of Veterans Affairs health care system to provide evidence on the labor market effects of expanding health insurance availability. Using data from the Current Population Survey, we compare the labor market behavior of older veterans and non-veterans before and after the VA health benefits expansion to test the impact of public health insurance on labor supply. We find that older workers are significantly more likely to decrease work both on the extensive and intensive margins after receiving access to non-employer based insurance. Older workers are also more likely to leave self-employment, a result inconsistent with "job-lock" effects of employer-based insurance, but consistent with a positive income effect from new access to public insurance. Some relatively disadvantaged subpopulations, however, may increase their labor supply after gaining greater access to public insurance, consistent with complementary positive health effects of health care access for these groups. We conclude that this reform has affected employment and retirement decisions, and suggest that future moves toward universal coverage or expansions of Medicare are likely to have significant labor market effects. To illustrate, we calculate that as much as 10% of the difference in retirement rates in the US and Canada may be due to Canada's provision of universal health care. |
| Keywords: | labor supply, job-lock, retirement, older workers, health insurance, VA, Medicare, veteran |
| JEL: | J2 I18 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:0801&r=lab |
| By: | Julie L. Hotchkiss; Myriam Quispe-Agnoli |
| Abstract: | Using administrative data from the state of Georgia, the authors find that a greater share of undocumented workers in an industry has a statistically significant negative impact on the wages of documented workers. The practical impact, however, is small, given the size of the undocumented workforce. In addition, undocumented workers have significantly lower labor supply elasticity, likely as a result of their limited employment and grievance opportunities. Furthermore, the inflow of undocumented workers does more to displace earlier hired undocumented workers than it does to displace documented workers. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2008-07&r=lab |
| By: | Pierre Cahuc (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); André Zylberberg (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper analyzes the consequences of compulsory reductions in working time on employment. The first part of the paper is devoted to the analysis of labor demand when the firm chooses the number of jobs and hours. This framework allows us to show that compulsory reductions in standard hours can increase employment only if wage compensation is sufficiently low. Then, the second part of the paper looks at the determinants of wages, hours and employment in different frameworks: perfect competition, collective bargaining, monopsony. It is shown that regulation of hours is justified and can even increase employment when competition is imperfect. However, compulsory reductions in working hours cannot systematically improve employment and welfare. |
| Keywords: | "working time";"work sharing" |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00255770_v1&r=lab |
| By: | Asadul, Islam |
| Abstract: | This paper examines the substitutability or complementarity between Canadian-born and immigrant workers. These are examined by estimating a set of wage equations using a Generalized Leontief Production Function. The paper finds that, in general, there is no displacement of Canadian-born workers by immigrants. Recent immigrants affect the native-born positively, while older immigrants are neither substitute nor complement for natives. However, the effects differ across industries. Overall the evidence that immigrants harm the opportunities of native-born workers is scant. |
| Keywords: | Immigration; substitutability; complementarity; displacement |
| JEL: | C39 J6 |
| Date: | 2008–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7164&r=lab |
| By: | Islam, Asadul; Fausten, Dietrich |
| Abstract: | This paper investigates the impact of the relative growth of skilled migration on the structure of Australian wages. Unlike conventional approaches, the present study uses macro data to examine the response of wages to immigration flows. We use instrumental variable (IV) techniques to deal with the potential endogeneity of immigration. Results from alternative estimation strategies support the many prevailing empirical findings. There is no robust evidence that a relative increase in skilled immigrants exerts discernible adverse consequences on the wage structure in Australia. |
| Keywords: | Immigration; wage; endogeneity; instrumental variable. |
| JEL: | J61 |
| Date: | 2008–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7138&r=lab |
| By: | Sebastian Buhai (Aarhus School of Business, University of Aarhus, Denmark, and Erasmus University Rotterdam); Miguel Portela (University of Minho, Portugal); Coen Teulings (CPB Netherlands Bureau for Economic Policy Analysis, The Hague, and University of Amsterdam); Aico van Vuuren (VU University Amsterdam) |
| Abstract: | This study documents two empirical regularities, using data for Denmark and Portugal. First, workers who are hired last, are the first to leave the firm (Last In, First Out; LIFO). Second, workers’ wages rise with seniority (= a worker’s tenure relative to the tenure of her colleagues). We seek to explain these regularities by developing a dynamic model of the firm with stochastic product demand and hiring cost (= irreversible specific investments). There is wage bargaining between a worker and its firm. Separations (quits or layoffs) obey the LIFO rule and bargaining is efficient (a zero surplus at the moment of separation). The LIFO rule provides a stronger bargaining position for senior workers, leading to a return to seniority in wages. Efficiency in hiring requires the workers’ bargaining power to be in line with their share in the cost of specific investment. Then, the LIFO rule is a way to protect their property right on the specific investment. We consider the effects of Employment Protection Legislation and risk aversion. |
| Keywords: | irreversible investment; efficient bargaining; seniority; LIFO; matched employer-employee data; EPL |
| JEL: | J31 J41 J63 |
| Date: | 2008–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080010&r=lab |
| By: | Del Bono, Emilia (ISER, University of Essex and IZA, Bonn); Weber, Andrea (UC Berkeley and IHS Vienna, IZA, Bonn and CESifo); Winter-Ebmer, Rudolf (University of Linz and IHS Vienna, IZA, Bonn and CEPR) |
| Abstract: | In this paper we investigate how fertility decisions respond to unexpected career interruptions which occur as a consequence of job displacement. Using an event study approach we compare the birth rates of displaced women with those of women unaffected by job loss after establishing the pre-displacement comparability of these groups. Our results reveal that job displacement reduces average fertility by 5 to 10% in both the short and medium term (3 and 6 years) and that these effects are largely explained by the response of white collar women. Using an instrumental variable approach we provide evidence that the reduction in fertility is not due to the income loss generated by unemployment but arises because displaced workers undergo a career interruption. These results are interpreted in the light of a model in which the rate of human capital accumulation slows down after the birth of a child and all specific human capital is destroyed upon job loss. |
| Keywords: | Fertility, Unemployment, Plant closings, Human capital |
| JEL: | J13 J64 J65 J24 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:222&r=lab |
| By: | Ioana Marinescu |
| Abstract: | In the UK, dismissed workers can sue their ex-employers for unfair dismissal. This paper investigates whether judges deciding on such cases are sensitive to economic conditions faced by firms and workers. In bad times, getting fired is more costly for workers, while at the same time firms find firing costs harder to bear. How do judges decide? I use British data on individual unfair dismissal and redundancy payment cases brought to Employment Tribunals in 1990-1992. Controlling for case selection, I find that, when the dismissed worker has found a new job, higher unemployement and bankruptcy rates both have a negative impact on the worker’s probability of pervailing at trial. However, when dismissed workers are still unemployed, a higher unemployment rate has a positive impact on their probability of winning. On the whole population of cases brought to trial, a one point increase in the unemployment rate leads to a 7 points decrease in the probability of judges deciding in favour of dismissed employees. An increase in the bankruptcy rate has a similar effect. These findings are consistent with the idea that judges maximize the joint welfare of the dismissed worker and the firm, tailoring firing costs to local and individual economic circumstances. |
| Keywords: | judges, economics, British, unemployment |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:har:wpaper:0802&r=lab |
| By: | De Winter, C.; Dewilde, T.; Buyens, D. (Vlerick Leuven Gent Management School) |
| Abstract: | The objective of this study is to gain insight in which organisation-specific information job seekers attach importance to, in order to determine whether they fit in an organisation. Our labour market is facing difficulties with inflow of labour forces. On the one hand our tight labour market situation causes that companies are unable to fill in their vacancies. On the other hand a high percentage of unemployed job seekers do not manage to find a job. In his selection-attraction-attrition theory Schneider (1995) states that people do not randomly come and work in an organisation, but that they select themselves in or out of an organisation. A good person-organisation fit can be considered as one of the critical success factors for attracting and retaining employees in a competitive and tight labour market (Kristof, 1997). Building on the above mentioned theories we propose that if organisations clearly communicate about their organisation-specific characteristics in beforehand, job seekers can form a better image of organisations. For organisations this can result in more effective selection processes, whereas for job seekers it can result in more effective application processes. Research until now has not covered this issue. To gain insight into the organisation-specific aspects job seekers attach importance to, a qualitative research was conducted consisting of 27 homogeneously composed focus groups. In a first stage unemployed job seekers were addressed, with special attention for those individuals who are unable or less able to search for a job independently. Next also employees and employment officers were involved in this research. Applying the Delphi-method and other discussion group moderating techniques, we found that clear communication of organisation-specific information plays an important role in the job search process of individuals. Based on the qualitative input throughout the different focus groups, we developed a typology of organisation-specific information items job seekers attach importance to in their search for a job. |
| Keywords: | job search, labour market |
| Date: | 2008–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2008-01&r=lab |
| By: | Ana Flávia Machado (Center for Development and Regional Planning (Cedeplar), UFMG); Rafael Perez Ribas (International Poverty Centre) |
| Abstract: | The objective of this Working Paper is to estimate the likelihood of the exit of households from poverty and identify the determinants of this transition, taking into consideration the length of time that households have spent in poverty. Our focus is to analyze whether short-term changes in the labour market affect the probability of exiting or remaining in poverty. We use the only panel data that are available in Brazil for carrying out this kind of analysis: the Monthly Employment Survey (PME), which was conducted from March 2002 to May 2007. However, since this survey follows households for a very short period of time, we had to adopt estimation techniques that control for cases of right- and left-censoring. The most important results in this Working Paper are: 1) the longer the spell of poverty, the lower the probability of exiting it; 2) households that entered into poverty with zero income (namely, their poverty income gap was equal to one) are not those with the lowest probability of exiting this condition; 3) changes in the unemployment rate of household members do not directly affect the duration of the household?s poverty; and 4) the increase of the average wage of informal workers has a significant, positive effect on the probability of the exit of poor households from poverty. |
| Keywords: | Duration of poverty spell; Poverty exit; Labour market; Survival models for left-censored data. |
| JEL: | C41 I32 J64 R23 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:wpaper:44&r=lab |
| By: | Hohmeyer, Katrin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Jozwiak, Eva (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In 2005 major reforms of the means-tested unemployment benefit system were implemented in Germany. One element of the reforms was to activate benefit recipients by a workfare programme, the so-called One-Euro-Job programme. More than 600,000 benefit recipients entered this programme in the year 2005. This paper investigates for a sample of means-tested unemployment benefit recipients the selection into One-Euro-Jobs in spring 2005 with the help of binary probit models. As there are substantial gender and regional effects, we estimate the selection equations for men and women in East and West Germany separately. Women have a lower probability of participating if they have a child under the age of three, whereas this makes no difference for men. Then, we find that young adults below 25 years begin a One-Euro-Job with a higher probability than other age groups. Moreover, special target groups such as individuals with migration background are not promoted with One-Euro- Jobs. They participate with a lower probability than Germans without migration background. Overall, we conclude that a concentration on defined target groups cannot be observed. To analyse the sizable differences in participation probabilities of women in East and West Germany a Blinder-Oaxaca decomposition of effects is applied. It turns out that the differences can partly be traced back to characteristics such as qualification and employment history and to the availability of child care facilities." (author's abstract, IAB-Doku) ((en)) |
| JEL: | D78 J16 J68 |
| Date: | 2008–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200808&r=lab |
| By: | Raghbendra Jha; Raghav Gaiha; Shylashri Shankar |
| Abstract: | This paper presents results on the participation of rural workers in the National Rural Employment Guarantee Program based on a pilot survey of three villages in Udaipur district, Rajasthan, India. Three villages (Dhundiya, Karanpur and Prithvisingh Ji Ka Khera) were covered. Total number of households interviewed in December, 2007, was 340. Here the focus is on participation in NREG of different socio-economic groups and the determinants of the participation of these groups. It is discovered that the mean participation was 59 days and that targeting was efficient with other labour, self employed in agriculture, SC and ST as well as those with smaller landholdings benefiting the most from the program. Thus the performance of the National Rural Employment Guarantee program has been far from dismal. |
| Keywords: | National Rural Employment Guarantee Program |
| JEL: | C25 C81 D69 I38 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2008-01&r=lab |
| By: | Godbertha Kinyondo (Department of Economics, University of Pretoria); Margaret Mabugu (Department of Economics, University of Pretoria) |
| Abstract: | This study utilises a computable general equilibrium (CGE) model to examine the effects of economy-wide (SIM 1) and partial (SIM 2) productivity increases on the economy, gender employment, wages, income and welfare in South Africa. The model has 49 sectors, 14 household categories, and 2 primary inputs. SIM 1 results in ‘output’ led employment demand and increased earnings for all skill types of men and women. Skilled men benefits more than others in most sectors. Under SIM 2, productivity has negative employment impact of all skills mostly in labour-intensive sectors. Some displaced labour relocates to expanded export-orientation and service sectors resulting in increased economy-wide jobs and earnings. Unskilled women earnings, however, decline because they are concentrated in low-paying positions. In addition, productivity improves household’s welfare due to reduced commodity prices and improved earnings. |
| Keywords: | CGE, FDI, South Africa, Gender, Productivity |
| JEL: | D24 F11 F14 F21 J16 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:200801&r=lab |
| By: | Laszlo Goerke; Markus Pannenberg |
| Abstract: | In an open-shop model of trade union membership with heterogeneity in risk attitudes, a worker's relative risk aversion can affect the decision to join a trade union. Furthermore, a shift in risk attitudes can alter collective bargaining outcomes. Using German panel data (GSOEP) and three novel direct measures of individual risk aversion, we find evidence of a significantly positive relationship between risk aversion and the likelihood of union membership. Additionally, we observe a negative correlation between bargained wages in aggregate and average risk preferences of union members. Our results suggest that an overall increase in risk aversion contributes to wage moderation and promotes employment. |
| Keywords: | Employment, membership, risk aversion, trade union |
| JEL: | J |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp88&r=lab |
| By: | Lans Bovenberg (CentER, Tilburg University, and Netspar); Coen Teulings (CPB Netherlands Bureau for Economic Policy Analysis, and University of Amsterdam) |
| Abstract: | We argue in favour of the shareholder model of the firm for three main reasons. First, serving multiple stakeholders leads to ill-defined property rights. What sounds like a fair compromise between stakeholders can easily evolve in a permanent struggle between the stakeholders about the ultimate goal of the company. In many cases, the vague Rhineland principles no longer offer much protection to workers. Second, giving workers a claim on the surplus of the firm raises the cost of capital for investments in jobs, which harms the position of job seekers, including new entrants to the labour market. Third, and most importantly, making shareholders the ultimate owner of the firm provides the best possible diversification of firm-specific risks. Whereas globalisation has increased firm-specific risk by intensifying competition, globalisation of capital markets has also greatly increased the scope for diversification of firm-specific risk. Diversification of this risk on the capital market is an efficient form of social insurance. Reducing the claims of workers on the surplus of the firm can be seen as the next step in the emancipation of workers. Workers derive their security not from the firm that employs them but from the value of their own human capital. In such a world, global trade in corporate control, global competition and creative destruction associated with these developments are more legitimate. Coordination in wage bargaining and collective norms on what is proper compensation play an important role in reducing the claim of workers on the firm’s surplus, thereby protecting workers against firm-specific risks. Indeed, in Denmark, workers bear less firm-specific risk than workers in the United States do. Collective action thus has an important role to play. Politicians, however, also face the temptation to please voters and incumbent workers with short-run gains at the expense of exposing workers to firm-specific risks and reducing job creation. This is why corporate governance legislation that gives moral legitimacy to the claim of insiders on the surplus of the firm is damaging. The transition from the Rhineland model (in which management serves the interests of all stakeholders) towards the shareholder model is fraught with difficulties. While society reaps long-run gains in efficiency, in the short run a generation of insiders has to give up their rights without benefiting from increased job creation and higher starting wages. Whereas the claims of older workers on the surplus of a firm may thus have some legitimacy, younger cohorts should be denied such moral claims. These problems require extreme political skill to solve. In particular, they may require some grandfathering provisions or temporary explicit transfers from younger to older generations. |
| Keywords: | wagesetting; optimal risk sharing; employment protection; corporate governance |
| JEL: | E24 G32 G34 |
| Date: | 2007–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070101&r=lab |
| By: | Khanam, Rasheda |
| Abstract: | Purpose – The objective of this paper is to understand better the determinants of child labour and schooling in Bangladesh. Design/methodology/approach – This paper uses data from a survey based in rural Bangladesh and considers the children aged 5-17 years living in rural households in which the mother and father are both present. The sample size is 1,628 children. A multinomial logit model is used to estimate the determinants of schooling and working, combining schooling and work, or doing nothing for 5-17 years old children. Findings – The results show that the education of parents significantly increases the probability that a school-age child will specialise in study. The presence of very young children (aged 0-4) in the household increases the likelihood that a school-age child will combine study with work. The significant and positive gender coefficient suggests that girls are more likely than boys to combine schooling with work. The children who are sons and daughters of the household-head, as opposed to being relatives living in the household are more likely to combine study and work but less likely to specialise in work. Originality/value – The existing anti-child labour policies mainly focus on the lowering of the demand for child labour in Bangladesh. The focus of this paper is, however, on the supply side of child labour, particularly on the use of child labour in the agricultural sector and the household sector where children are mainly employed by their parents. Unlike most of the existing studies on child labour, this paper considers housework and non-market works in the definition of child labour |
| Keywords: | Child labour; School Attendance; Multinomial Logit Model; Asia; Bangladesh. |
| JEL: | O1 I2 I3 J1 J2 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6990&r=lab |
| By: | Pascalau, Razvan |
| Abstract: | This paper applies a set of unit root and cointegration tests with non-linear error-correction mechanisms to a subset of the OECD countries to investigate the empirical conclusions of some of the labor market models in the literature. I generally find that the unemployment rate, productivity, and real wages have a unit root even if one controls for threshold effects. This finding justifies the use of a cointegration approach to assess the existence of a long-run equilibrium among the variables of interest. For roughly half of the OECD countries in the sample, the unemployment rate, real wages, and productivity trend together over time. For four countries (i.e, Germany, Japan, Sweden, and the US) the adjustment to the long run relationship appears mostly asymmetric. Also, an impulse response function analysis suggests that real wages and productivity adjust faster to the long-run equilibrium, while shocks to unemployment take longer to extinguish. Also, according to the sign of the shocks, the unemployment rates respond differently. These findings suggest that a proper analysis of the behavior of productivity, real wages, and unemployment should consider non-linear adjustment mechanisms to long-run equilibrium since a liner approach would be biased. |
| Keywords: | Unemployment; Wages; Collective bargaining; Hysteresis |
| JEL: | E24 J52 |
| Date: | 2007–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7222&r=lab |
| By: | Sheikh Selim (Cardiff University, UK) |
| Abstract: | We show that in an imperfectly competitive economy, if the government cannot use wage subsidy, in a steady state and in the initial period the optimal labour income tax rate is zero. In an imperfectly competitive economy, since investment is primarily triggered by the motive to earn higher profits, over accumulation of capital induces suboptimal level of working hours. We argue that if the government is restricted to subsidize wage, the optimal policy should set zero tax on labour income which will encourage workers to increase working hours back to the optimal level. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:aiu:abewps:25&r=lab |
| By: | Thomas F. Crossley (Faculty of Economics, University of Cambridge, Department of Economics, McMaster University); Jeremiah Hurley (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University); Sung-Hee Jeon (Department of Economics, McMaster University, Melbourne Institute of Applied Economic and Social Research, University of Melbourne) |
| Abstract: | This paper employs cohort analysis to examine the relative importance of different factors in explaining changes in the number of hours spent in direct patient care by Canadian general/ family practitioners (GP/FPs) over the period 1982 to 2002. Cohorts are defined by year of graduation from medical school. The results for male GP/FPs indicate that: there is little age effect on hours of direct patient care, especially among physicians aged 35 to 55; there is no strong cohort effect on hours of direct patient care; but there is a secular decline in hours of direct patient care over the period. The results for female GP/FPs indicate that: female physicians on average work fewer hours than male physicians; there is a clear age effect on hours of direct patient care; there is no strong cohort effect; there has been little secular change in average hours of direct patient care. The changing behaviour of male GP/FPs accounted for a greater proportion of the overall decline in hours of direct patient care from the 80’s through the mid 90’s than did the growing proportion of female GP/FPs in the physician stock. |
| JEL: | I11 J24 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hpa:wpaper:0604&r=lab |
| By: | Eriksson, Rickard (Swedish Institute for Social Research, Stockholm University); Nermo, Magnus (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | Swedish parents are entitled to government paid benefits to take care of sick children. In this paper we show that the gender distribution of paid care for sick children is a good proxy for the gender division of household work. Using two examples we show that registry data on care for sick children is a useful data source for studies on gender equality. Our first example shows that increased effort at work by one spouse leads to a lower effort in household work for this spouse, and a higher effort at home for the other spouse. Our second example provides some evidence for a procyclical pattern in gender equality. |
| Keywords: | gender equality; time use; household work; unemployment; business cycles |
| JEL: | E32 J12 J16 |
| Date: | 2008–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2008_001&r=lab |
| By: | Dutta, Jayasri; Horsewood, Nicholas; Vasilakos, Nicholas |
| Abstract: | We use panel data for fourteen Indian states to assess the influence of public infrastructure on industrial activity, namely productivity, employment, real wages and investment, at the state level and over the period 1974-1998. Our results indicate that the length of national highways has on average the greatest impact on each of the four measures of industrial activity. While the length of national highways and electricity generating capacity are found to be important determinants of state real wages and productivity, total highway length is a key variable in determining the level of investment in fixed capital in each state. |
| Keywords: | Industrial activity; productivity; infrastructure; wages; investment |
| JEL: | H54 R12 D24 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7184&r=lab |
| By: | Fabel, Oliver; Pascalau, Razvan |
| Abstract: | We analyze a standard employee selection model given two institutional constraints: First, professional experience perfectly substitutes insufficient formal education for insiders while this substitution is imperfect for outsiders. Second, in the latter case the respective substitution rate increases with the advertised minimum educational requirement. Optimal selection implies that the expected level of formal education is higher for outsider than for insider recruits. Moreover, this difference in educational attainments increases with lower optimal minimum educational job requirements. Investigating data of a large US public employer confirms both of the above theoretical implications. Generally, the econometric model exhibits a good fit. |
| Keywords: | employee selection; overeducation; adverse impact; insiders vs outsiders |
| JEL: | I21 J78 M51 J53 |
| Date: | 2007–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7218&r=lab |
| By: | F. Rosati; M. Rossi |
| Abstract: | This paper focuses on the impact that two different types of policy interventions, namely enhancing school quality and contingent cash transfers , have on child labour and school attendance in Mexico. While there are many studies on the impact of Oportunidades on schooling outcomes, little evidence is available on whether school quality programs such as CONAFE also reduce child labour and help keep children in school. To carry out the analysis, we merge the Oportunidades panel dataset for the years 1997 to 2000 to the CONAFE dataset containing detailed information on the school quality program components. The econometric strategy involves a bivariate probit model for child labor and schooling, both for primary school aged children and adolescents. In this way, we are able to control whether the impact of the program on schooling differs according to the age of the targeted child. Our findings suggest that school quality programs are not only effective in increasing school attendance, but also act as derrents to child labor, especially for children of secondary school age. |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:36&r=lab |
| By: | Annamaria Lusardi |
| Abstract: | Individuals are increasingly in charge of their own financial security after retirement. But how well-equipped are individuals to make saving decisions; do they possess adequate financial literacy, are they informed about the most important components of saving plans, do they even plan for retirement? This paper shows that financial illiteracy is widespread among the U.S. population and particularly acute among specific demographic groups, such as those with low education, women, African-Americans, and Hispanics. Moreover, close to half of older workers do not know which type of pensions they have and the large majority of workers know little about the rules governing Social Security benefits. Notwithstanding the low levels of literacy that many individuals display, very few rely on the help of experts or financial advisors to make saving and investment decisions. Low literacy and lack of information affect the ability to save and to secure a comfortable retirement; ignorance about basic financial concepts can be linked to lack of retirement planning and lack of wealth. Financial education programs can help improve saving and financial decision-making, but much more can be done to improve the effectiveness of these programs. |
| JEL: | D14 D91 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13824&r=lab |
| By: | Paul A. Grout; Sebastien Mitraille; Silvia Sonderegger |
| Abstract: | Much of the literature on diversity assumes that individuals have an exogenous "taste for discrimination". In contrast with this approach, we build a model where preferences over the nature of one's community are derived indirectly, and arise because the composition of the community determines the behavior of its members. This allows us to gain a far deeper understanding of the forces that underpin the desirability of diversity or homogeneity within communities. Our main contribution is to show that there are always counteracting forces (heterogeneity involves both costs and benefits), and that, although people prefer to live in communities where their type is majoritarian, they always benefit from having some heterogeneity in the composition of their community. |
| Keywords: | heterogeneity, social interactions, value of information, complementarities. |
| JEL: | C7 D82 Z1 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:07/191&r=lab |
| By: | F. Blanco |
| Abstract: | This report provides an overview of the child labour phenomenon in Angola, its extent, characteristics and determinants. It is based on the analysis of UNICEF Multiple Cluster Indicators Survey (MICS) 2001. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:39&r=lab |
| By: | G. Toniolo; G. Vecchi |
| Abstract: | This paper quantifies the extent and the main characteristics of child work in Italy during the years 1881-1961. From population censuses, we created a new database of the economically active population aged 10-14 by gender, region, and economic sector. We find that child work incidence declined sharply over time, from 64.3 percent in 1881 to 3.6 percent in 1961. This pattern holds true both nationally and within regions. The new body of evidence we provide casts serious doubts on international comparisons which portray post-war Italy as a country with peculiarly high employment rates for children. Our findings also challenge the view that the initial phases of industrialization had a negative impact on the living standards of Italian children. We show that, in the case of Italy, industrialization coincided with a decline in the employment of children. Our analysis of the determinants of child work suggests that (i) changes in the allocation of total active population among productive sectors explain only a small amount of changes in the employment of children; (ii) changes in labor and compulsory-schooling legislation indicates that the impact of institutions on child labor was modest until the late 1930s. Overall, the increasing GDP per head was probably the main, but not the only, driving force behind declining child work incidence. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:35&r=lab |
| By: | L. Guarcello; I. Kovrova; F. C. Rosati |
| Abstract: | The paper analyzes the effect of different shocks on household decisions concerning children’s involvement in work and school in rural Cambodia. We assess the differential impact of three different types of shocks using propensity score matching and double difference estimates extended to the case of multiple treatments. The findings indicate that household responses to shocks depend considerably on the specific type of shock encounterered. Of the three shocks considered, crop failure is the most damaging in terms of school attendance and child labour in the Cambodian context. Droughts appear far less relevant, while flooding does not seem to have any significant impact on children’s work and school attendance. The findings argue for the targeting of risk management policies to the specific types of shocks most damaging to children. |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:38&r=lab |
| By: | Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels); Michael Rusinek (DULBEA, Université libre de Bruxelles, Brussels); François Rycx (DULBEA, Université libre de Bruxelles, Brussels, and IZA, Bonn); Ilan Tojerow (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | Sinds vrijwel twintig jaar, spits het debat over de verloning van arbeid zich in grote mate toe op de probematiek van de concurrentiekracht. De loonkostenproblematiek is uiteraard belangrijk, maar men vergeet daarbij soms dat niet alle Belgische werknemers over dezelfde kam geschoren mogen worden waar het hun bezoldiging betreft. Aanzienlijke ongelijkheden bestaan inderdaad tussen bepaalde werknemerscategorieën. Dit rapport identificeert de factoren die tot die ongelijkheden leiden. De resultaten werpen achtereenvolgens een licht op het loon in specifieke situaties van loontrekkenden die veband houden met hun geslacht, hun statuut als werknemer of als werkloze, hun leeftijd en het effect van de structuur en de kenmerken van de ondernemingen, van de activiteitssectoren en van het collectief overleg op de loonvershillen. Elk hoofdstuk van dit rapport word afgesloten met een reeks aanbevelingen voor het economisch beleid. |
| Keywords: | Wage structure, Belgium, Collective bargaining |
| JEL: | D31 J31 J41 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:08-04rr&r=lab |
| By: | Hans van Kippersluis (Erasmus University Rotterdam); Tom Van Ourti (Erasmus Universiteit Rotterdam); Owen O'Donnell (University of Macedonia, Thessaloniki, Greece); Eddy van Doorslaer (Erasmus University Rotterdam) |
| Abstract: | An age-cohort decomposition applied to panel data identifies how the mean, overall inequality and income-related inequality of self-assessed health evolve over the life cycle and differ across generations in 11 EU countries. There is a moderate and steady decline in mean health until the age of 70 or so and a steep acceleration in the rate of health deterioration beyond that age. In southern European countries and in Ireland, which have experienced the greatest changes in economic and social development, the average health of younger generations is significantly better than that of older generations. This is not observed in the northern European countries. In almost all countries, health is more dispersed among older generations indicating that Europe has experienced a reduction in overall health inequality over time. Although there is no consistent evidence that health inequality increases as a given cohort ages, this is true in the three largest countries – Britain, France and Germany. In the former two countries and the Netherlands, at least for males, the income gradient in health peaks around retirement age, as has been found for the US, but this pattern is not observed in the other countries. In most European countries, unlike the US, there is no evidence that income-related health inequality is greater among younger than older generations. |
| Keywords: | Health; Health inequality; Life cycle; Cohort |
| JEL: | D30 D31 I10 I12 |
| Date: | 2008–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080009&r=lab |
| By: | Amelie Constant; Elena D'Agosto |
| Abstract: | This paper studies the major determinants that affect the country choice of the talented Italian scientists and researchers who have at least a bachelor's from Italy and live abroad. There are three alternative country choices: the US/Canada, the UK, and other EU countries. On average, the brainy Italians exhibit a higher predicted probability to go to the US. Ceteris paribus, both push and pull factors are important. While having a Ph.D. from outside Italy predicts the UK choice, having extra working experience from outside Italy predicts migration to other EU countries. Those who stay abroad temporarily for two to four years are definitely more likely to go to the UK. Specialization in the fields of humanities, social sciences, and health are strong determinants of migration to the UK. For the move to the US, while the humanities area is a significant deterrent, health is a positive deciding factor. Lack of funds in Italy constitutes a significant push to the US. |
| Keywords: | Brain drain, skilled migration, Italy, push-pull factors |
| JEL: | J61 J24 F22 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp763&r=lab |
| By: | Tom Buchmueller (University of Michigan, National Bureau of Economic Research); Michel Grignon (Centre for Health Economics and Policy Analysis, Department of Economics, McMaster University); Florence Jusot (Institut de Recherche et de Documentation en Economie de la Santé (IRDES), Paris, France) |
| Abstract: | This study uses aggregate panel data on 96 French départements for the period from 1982 to 2002 to investigate the relationship between macroeconomic conditions and mortality, controlling for local area and time fixed effects. Consistent with research using data from other countries, we find that increases in the local unemployment rates are associated with significant reductions in mortality. Models of mortality by source indicate that the negative relationship between unemployment and mortality is strongest for deaths due to cardiovascular disease and accidents. A finding that mortality among the elderly fluctuates with the unemployment rate suggests the possible importance of externalities associated with economic upturns. |
| Keywords: | unemployment, macroeconomic conditions, mortality, health |
| JEL: | E32 I12 J2 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hpa:wpaper:0704&r=lab |
| By: | Mark Ziegler; Daniel Kurz |
| Abstract: | Changes in the way education is delivered has contributed to the evolution of school architecture in Zurich, Switzerland. The City of Zurich has revised its guidelines for designing school buildings, both new and old. Adapting older buildings to today’s needs presents a particular challenge. The authors explain what makes up a good school building and provide a set of design recommendations. |
| Keywords: | school building design, learning environment, educational buildings, school infrastructure |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaaa:2008/3-en&r=lab |
| By: | Ed Hopkins |
| Abstract: | This paper briefly and informally surveys different theoretical models of relative concerns and their relation to inequality. Models of inequity aversion in common use in experimental economics imply a negative relation between inequality and happiness. In contrast, empirical studies on happiness typically employ models of relative concerns that assume that increases in others’ income always have a negative effect on own happiness. However, in these latter models, the relation between inequality and happiness can be positive. One possible solution is a rivalry model where a distinction is made between endowment and reward inequality which have respectively a negative and positive effect on happiness. These different models and their contrasting results may clarify why the empirical relationship between inequality and happiness has been difficult to establish. |
| Keywords: | : inequality, relative position, social preferences, tournaments, evolution. |
| Date: | 2008–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:180&r=lab |
| By: | Milo Bianchi; Paolo Buonanno; Paolo Pinotti |
| Abstract: | In this paper we examine the empirical relationship between immigration and crime across Italian provinces during the period 1990-2003. Drawing on police administrative data, we first document that the size of immigrant population is positively correlated with the incidence of most types of crime, as well as with the overall number of criminal offenses. However, using changes of immigrant population in other European countries to identify exogenous shifts of immigrant population in Italy, the causal effect seems limited to some categories of crime: murders, robberies and, to a lesser extent, thefts. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-05&r=lab |
| By: | L. Guarcello; S. Lyon; F. C. Rosati; C. A. Valdivia |
| Abstract: | The UN Convention on the Rights of the Child and ILO Convention No. 182, two of the main international legal instruments relating to child labour, both recognise children’s right to be protected from forms of work that adversely affect their health and development, regardless of whether this activity is economic or non-economic, market or non-market, in nature. But these norms have not been translated into a universally-accepted statistical definition of child labour. Widely differing positions prevail among researchers about what kind of activities performed by children should be classified as children’s work, and progressively, as child labour. The current study forms part of a broader research effort directed towards arriving eventually at an internationally acceptable consensus on the statistical definition of child labour. It looks specifically at children’s non-market activity, its classification (i.e., economic or non- economic), its impact on health and education outcomes, and at some of the issues linked to the inclusion of non-market activity in the definition of child labour. The study should be seen as an initial contribution to the discussion, aimed at raising key measurement questions requiring further investigation and deliberation. |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:ucw:worpap:37&r=lab |
| By: | Takhtamanova, Yelena (Reserve Bank of San Francisco); Sierminska, Eva (CEPS/INSTEAD and DIW Berlin) |
| Abstract: | In many countries, the focus of monetary policy is increasingly shifting to low and stable inflation as it provides many benefits to the economy. However, there is evidence that costs of inflation reduction are inequitably distributed by gender in developing countries. This paper addresses employment costs of inflation reduction in developed countries. Using quarterly data for 1980-2006, we examine gender and country differences in the effects of interest rate on employment in nine OECD countries. We look at total employment, as well as employment dis-aggregated by three sectors: agriculture, industry and services. We find that the link between monetary policy instruments (short-term interest rates) and employment in the industrial countries under investigation is neither strong nor varies by gender. |
| Keywords: | employment; IS curve ; interest rates ; monetary policy inflation ; compensation |
| JEL: | E4 E5 J2 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:irs:iriswp:2008-04&r=lab |
| By: | W. Scott-Watson |
| Abstract: | Scotland’s Building Excellence programme is exploring the implications of curriculum reform for school building design. It includes events which bring together teachers, designers, school managers and local authorities. |
| Keywords: | school building design, learning environment, educational buildings |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaaa:2008/5-en&r=lab |
| By: | Bruce Sheerin |
| Abstract: | The government of New Zealand delegates property expenditure decisions to each individual school. Such a decentralised environment creates a challenge for school boards and principals to obtain advice on the complex issues around designing schools. To inform schools, the Ministry of Education provides numerous publications related to design and selected best practice samples via its website. |
| Keywords: | decentralisation, learning environment, educational buildings, school infrastructure |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaaa:2008/2-en&r=lab |
| By: | C. Mirjam van Praag (University of Amsterdam); Peter H. Versloot (University of Amsterdam) |
| Abstract: | This paper examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e. the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important – but specific – function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations. |
| Keywords: | entrepreneur; entrepreneurship; self-employment; productivity; economic development; growth; employment; innovation; patents; R&D; research; development; utility; remuneration; income |
| JEL: | J01 L26 |
| Date: | 2007–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070066&r=lab |
| By: | André van Stel; Roy Thurik; Ingrid Verheul (Erasmus University Rotterdam, and EIM, Zoetermeer); Lendert Baljeu (Erasmus University Rotterdam) |
| Abstract: | This paper examines the relationship between entrepreneurship (as measured by fluctuations in the business ownership rate) and unemployment in Japan for the period between 1972 and 2002. We find that, although Japan’s unemployment rate has been influenced by specific exogenous shocks, the effects of entrepreneurship on unemployment are not different when compared to other OECD countries. In the past, small firms in Japan benefited from the protective environment of the keiretsu structure. This secure environment no longer exists, and a new market environment conducive to new venture creation and growth has not yet been established. We argue that the Japanese government should actively stimulate an entrepreneurial culture. |
| Keywords: | entrepreneurship; business ownership; unemployment; Japan |
| JEL: | J23 J64 L26 O11 O53 |
| Date: | 2007–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070080&r=lab |
| By: | Jeremiah Hurley (Department of Economics, Centre for Health Economics and Policy Analysis, Department of Clinical Epidemiology and Biostatistics, McMaster University); Diana Pasic; John Lavis (Centre for Health Economics and Policy Analysis, Department of Clinical Epidemiology and Biostatistics, McMaster University); Cameron Mustard (Institute of Work and Health, Toronto, Department of Public Health Sciences, University of Toronto); Tony Culyer (Institute of Work and Health, Toronto, Department of Economics and Related Studies, University of York, UK, Cancer Care Ontario, Department of Health Policy, Management, and Evaluation, University of Toronto); William Gnam (Institute of Work and Health, Department of Pschiatry, University of Toronto) |
| Abstract: | This paper uses a case study approach to document and analyze the interactions that arise between two health care payers in Canada: the provincial public health care insurance plans and the provincial Workers Compensation Boards. Through a documentary review and semistructured key-respondent interviews, the study identified a set of policy events and decisions undertaken by each payer that had consequences for the other. These events, which included changes to governance, funding, and service delivery within each system, generated interactions transmitted through the political environment, the institutional environment , the economic environment (primarily through competition for the same resources) and cross-system learning. The two payers currently lack a formalized process by which to consider such spillover effects and to coordinate policy between them. These interactions and their associated consequences for both payers raise important policy challenges and provide insight into the dynamics of a parallel system of health care finance more generally. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hpa:wpaper:0703&r=lab |