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on Labour Economics |
| By: | Moshe Buchinsky (UCLA, CREST-INSEE and NBER); Denis Fougère (CNRS, CREST-INSEE, CEPR and IZA); Francis Kramarz (CREST-INSEE, CEPR and IZA); Rusty Tchernis (Indiana University Bloomington) |
| Abstract: | In this paper, we follow on the seminal work of Altonji and Shakotko (1987) and Topel (1991) and reinvestigate the returns to seniority in the U.S. These papers specify a wage function, in which workers’ wages can change through two channels: (a) returns to their seniority; and (b) returns to their labor market experience. We start from the same wage equation as in previous studies, and, following our theoretical model, we explicitly include a participation-employment equation and an interfirm mobility equation. The employment and mobility decisions define the individual’s experience and seniority. Because experience and seniority are fully endogenized, we introduce into the wage equation a summary of the workers’ entire career and past jobs. The three-equation system is estimated simultaneously using the Panel Study of Income Dynamics (PSID). For all three education groups that we study, returns to seniority are quite high, even higher than what was previously obtained by Topel. On the other hand, the returns to experience appear to be similar to those previously found in the literature. |
| Keywords: | wage mobility, interfirm mobility, returns to seniority, panel data, Markov Chain, Monte Carlo methods |
| JEL: | C11 C15 J31 J63 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2008-006&r=lab |
| By: | Mason, Robin; Välimäki, Juuso |
| Abstract: | We propose a simple model of optimal stopping where the economic environment changes as a result of learning. A primary application of our framework is an optimal job search problem when the worker's labour market opportunities are initially uncertain. We distinguish between two interpretations of the model. In the first, a worker learns about common market conditions, such as the number of potential employers, that affect all searchers. In the second, the worker learns about her idiosyncratic productivity distribution across firms. For the first model, we show that learning leads to higher wage demands by the workers. In the second model, we give sufficient conditions so that learning leads to higher wage demands for optimistic workers and lower demands for pessimistic workers due to learning. |
| Keywords: | learning; stopping |
| JEL: | D83 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6623&r=lab |
| By: | Luojia Hu; Christopher Taber |
| Abstract: | In a seminal paper Gibbons and Katz (1991; GK) develop and empirically test an asymmetric information model of the labor market. The model predicts that wage losses following displacement should be larger for layoffs than for plant closings, which was borne out by data from the Displaced Workers Survey (DWS). In this paper, we take advantage of many more years of DWS data to examine how the difference in wage losses across plant closing and layoff varies with race and gender. We find that the differences between white males and the other groups are striking and complex. The "lemons" effect of layoff holds for white males as in the GK model, but not for the other three demographic groups (white females, black females, and black males). These three all experience a greater decline in earnings at plant closings than at layoffs. This results from two reinforcing effects. First, plant closings have substantially more negative effects on minorities than on whites. Second, layoffs seem to have more negative consequences for white men than the other groups. These findings suggest that the GK asymmetric information model is not sufficient to explain all of the data. We augment the model with heterogeneous human capital and show that this model can explain the findings. We also provide some additional evidence suggestive that both asymmetric information and heterogeneous human capital are important. In support of both explanations, we demonstrate that the racial and gender effects are surprisingly robust to region, industry and occupation controls. To look at the asymmetric information, we make use of the Civil Rights Act of 1991 which induced employers to lay off "protected" workers in mass layoffs rather than fire them for cause. As a result, relative to whites, a layoff would be a more negative signal for blacks after 1991 than before. If information is important, this would in turn imply that blacks experience a relatively larger loss in earnings at layoffs after 1991 than prior; and that's what we find in the data. In addition, as further evidence for heterogeneous human capital, we document for the first time in the literature that the two types of layoffs reported in the DWS data, namely layoffs due to "slack work" and "position abolished" have very different features when compared to plant closings. Finally, we simulate our model and show that it can match the data. |
| Keywords: | Displaced workers ; Discrimination in employment |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-08-02&r=lab |
| By: | K. SUNDARAM (Department of Economics, Delhi School of Economics, Delhi, India) |
| Abstract: | Analysing the Unit Record Data from the NSS 55th and 61st Round Employment-Unemployment Surveys, the Organized Sector Workforce in non-agriculture is shown to be larger than the corresponding DGE&T estimates by 16.5 million in 2004-05 and to have increased by 5.4 million between 2000 and 2005 instead of the 1.6 decrease indicated by the corresponding DGE&T estimates. Examining some features of employment contracts of the regular wage/salary workers who account for 88 percent of the organized sector workforce, it is shown that between 14 to 27 million of the 41.5 million workers in organized non-agriculture are perhaps better labeled as Informal Workers who are without access to a set of social security benefits though they are located in the formal sector. Also presented are our estimates of workforce in the unorganized segment of non-agriculture in the country as a whole as also those in urban India who constitute the Urban Informal Sector. An analysis of labour productivity in the organized-unorganized segments of broad industry groups for 1999-2000 and 2004-05 is followed by an examination of differences across the organized-unorganized divide in average daily earnings and in the poverty status of adult workers in non-agricultural activities for 2004-05 |
| Keywords: | Employment in organized sector, Urban Informal Sector, Labour Productivity, Wage Differentials, Poverty status of workers. |
| JEL: | I32 J21 J31 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:cde:cdewps:165&r=lab |
| By: | Hall, Emma; Propper, Carol; Van Reenen, John |
| Abstract: | Labour market regulation can have harmful unintended consequences. In many markets, especially for public sector workers, pay is regulated to be the same for individuals across heterogeneous geographical labour markets. We would predict that this will mean labour supply problems and potential falls in the quality of service provision in areas with stronger labour markets. In this paper we exploit panel data from the population of English acute hospitals where pay for medical staff is almost flat across the country. We predict that areas with higher outside wages should suffer from problems of recruiting, retaining and motivating high quality workers and this should harm hospital performance. We construct hospital-level panel data on both quality - as measured by death rates (within hospital deaths within thirty days of emergency admission for acute myocardial infarction, AMI) - and productivity. We present evidence that stronger local labour markets significantly worsen hospital outcomes in terms of quality and productivity. A 10% increase in the outside wage is associated with a 4% to 8% increase in AMI death rates. We find that an important part of this effect operates through hospitals in high outside wage areas having to rely more on temporary “agency staff” as they are unable to increase (regulated) wages in order to attract permanent employees. By contrast, we find no systematic role for an effect of outside wages of performance when we run placebo experiments in 42 other service sectors (including nursing homes) where pay is unregulated. |
| Keywords: | hospital productivity; hospital quality; labour market regulation; skills |
| JEL: | F12 I18 J31 J45 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6643&r=lab |
| By: | del Bono, Emilia; Weber, Andrea; Winter-Ebmer, Rudolf |
| 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; human capital; plant closing; unemployment |
| JEL: | J13 J24 J64 J65 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6719&r=lab |
| By: | Nicole Bosch; Anja Deelen; Rob Euwals |
| Abstract: | To balance work and family responsibilities, the Netherlands have chosen a rather unique model that combines a high female employment rate with a high part-time employment rate. The model is likely to be the result of (societal) preferences as the removal of institutional barriers, like lower marginal tax rates for partners and better childcare facilities, has not led to more working hours. It is, however, an open question whether the model is here to stay or whether younger generations of women will choose full-time jobs in the near future. In this study, we investigate the development of working hours over successive generations of women using the Dutch Labour Force Survey 1992-2005. We find evidence of an increasing propensity to work part-time over the successive generations, and a decreasing propensity to work full-time for the generations born after the early 1950s. Our results are in line with results of studies on social norms and attitudes as they find a similar pattern over the successive generations. It therefore seems likely that without changes in (societal) preferences the part-time employment model is indeed here to stay for some more time. |
| Keywords: | female labour supply; working hours |
| JEL: | J16 J22 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:100&r=lab |
| By: | Doepke, Matthias; Hazan, Moshe; Maoz, Yishay D |
| Abstract: | We argue that one major cause of the U.S. postwar baby boom was the increased demand for female labour during World War II. We develop a quantitative dynamic general equilibrium model with endogenous fertility and female labour-force participation decisions. We use the model to assess the long-term implications of a one-time demand shock for female labour, such as the one experienced by American women during wartime mobilization. For the war generation, the shock leads to a persistent increase in female labour supply due to the accumulation of work experience. In contrast, younger women who turn adult after the war face increased labour-market competition, which impels them to exit the labour market and start having children earlier. In our calibrated model, this general-equilibrium effect generates a substantial baby boom followed by a baby bust, as well as patterns for age-specific labour-force participation and fertility rates that are consistent with U.S data. |
| Keywords: | baby boom; female labour-force participation; fertility; World War II |
| JEL: | D58 E24 J13 J20 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6628&r=lab |
| By: | Combes, Pierre-Philippe; Duranton, Gilles; Gobillon, Laurent; Roux, Sébastien |
| Abstract: | Does productivity increase with density? We revisit the issue using French wage and TFP data. To deal with the ‘endogenous quantity of labour’ bias (i.e., urban agglomeration is consequence of high local productivity rather than a cause), we take an instrumental variable approach and introduce a new set of geological instruments in addition to standard historical instruments. To deal with the ‘endogenous quality of labour’ bias (i.e., cities attract skilled workers so that the effects of skills and urban agglomeration are confounded), we take a worker fixed-effect approach with wage data. We find modest evidence about the endogenous quantity of labour bias and both sets of instruments give a similar answer. We find that the endogenous quality of labour bias is quantitatively more important. |
| Keywords: | agglomeration economies; instrumental variables; TFP; wages |
| JEL: | R12 R23 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6728&r=lab |
| By: | Micklewright, John; Nagy, Gyula |
| Abstract: | The administration of benefits is a relatively neglected aspect of the analysis of disincentive effects of unemployment benefit systems. We investigate this issue with a field experiment in Hungary involving random assignment of benefit claimants to treatment and control groups, a method of policy evaluation that is still rare in Europe. Treatment, involving a tightening of claim administration, has quite a large effect on durations on benefit of women aged 30 and over, while we find no effect for younger women or men. |
| Keywords: | field experiment; Hungary; job search; unemployment insurance |
| JEL: | J64 J65 P23 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6711&r=lab |
| By: | Wim Koevoets |
| Abstract: | This paper presents estimates of union wage differentials and explores to what extent they are affected by the degree of unionisation. For this purpose, data at the individual level obtained from the British Household Panel Survey (BHPS) are used. Our results support the hypothesis that the union wage premium is mainly a recognition premium. For the period 1995-1997 our estimate of the recognition premium is about 4%. This result takes into account unobserved worker heterogeneity and is obtained by using a more efficient panel data estimator compared to earlier studies. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0124&r=lab |
| By: | Kristian Orsini |
| Abstract: | During the last decade, several EU countries have tried to tackle unemployment and low activity rates through extensive tax cuts. In an effort to encourage the taking up of work – especially amongst the less productive workers – policymakers have shown increasing interest in targeted tax and social security contribution rebates as well as in benefits conditional on being in employment. This paper surveys recent tax-benefit reforms in Germany, the Netherlands, Italy, the UK, France and Belgium, focussing in particular on the reforms carried out in the latter. The potential labor supply effect of the Belgian reforms are assessed via a discrete hours labor supply model. The results are then compared to similar evaluations of reforms implemented in the aforementioned countries. Results suggest than: (i) generalized tax cut are not always effective in stimulating labor supply; (ii) in several central continental Europe, social security contributions play a major role in determining the incentives to take up work; (iii) joint assessment of income for both purposes of taxation and benefit eligibility has unambiguous negative effects on the labor supply of secondary earners (i.e. mostly women); (iv) targeted reductions in taxes and social security contributions, as well as benefits conditioned on employment are effective means to promote employment, but (v) efficient design of these policies is of greatest importance in order to counter potential negative incentive effects on the population already in employment. |
| Keywords: | Tax-benefit Systems – Microsimulation – Household Labour Supply – Multinomial Logit. |
| JEL: | D31 H21 H23 H24 H31 J22 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0606&r=lab |
| By: | Julie L. Hotchkiss; M. Melinda Pitts; Mary Beth Walker |
| Abstract: | Recent trends in the labor force participation of women have brought much public attention to the issue of women opting out. This paper explores the decision of working women to exit the labor market at a time of major transition—the birth of a child—utilizing linked vital statistics, administrative employer, and state welfare records. The results indicate that, consistent with utility maximization theory, women are not just opting out but rather are accurately assessing the potential opportunity and direct labor market costs of their exit decisions and are making workforce exit decisions based on measurable costs and benefits. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2008-08&r=lab |
| By: | Bovenberg, A Lans; Teulings, Coen N |
| 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 about the ultimate goal of the company. Second, giving workers a claim on the surplus of the firm raises the cost of capital for investments in jobs. Third, making shareholders the ultimate owner of the firm provides the best possible diversification of firm-specific risks. Diversification of firm-specific risk on capital markets is an efficient form of social insurance. Hence, firms should bear the full cost of specific investment, while workers should be paid only their outside option. Empirical results for Denmark, Portugal and the United States show that Denmark is closest to the first-best outcome, while Portugal and the United States deviate in different ways. Coordination in wage bargaining and collective norms help reduce the claim of workers on the firm’s surplus. Collective action, however, is a mixed blessing because politicians also face the temptation to please incumbent workers with short-run gains at the expense of exposing workers to firm-specific risks and reducing job creation. The transition from the Rhineland 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. |
| Keywords: | Corporate Governance; Employment Protection; Optimal Risk Sharing; Wage setting |
| JEL: | E24 G32 G34 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6645&r=lab |
| By: | Petrongolo, Barbara; Pissarides, Christopher |
| Abstract: | In this paper we study the contribution of inflows and outflows to the dynamics of unemployment in three European countries, the United Kingdom, France and Spain. We compare performance in these three countries making use of both administrative and labour force survey data. We find that the impact of the 1980s reforms in Britain is evident in the contributions of the inflow and outflow rates. The inflow rate became a bigger contributor after the mid 1980s, although its significance subsided again in the late 1990s and 2000s. In France the dynamics of employment are driven virtually entirely by the outflow rate, which is consistent with a regime with strict employment protection legislation. In Spain, however, both rates contribute significantly to the dynamics, very likely as a consequence of the prominence of fixed-term contracts since the late 1980s. |
| Keywords: | Job finding rates; Job separation rates; Unemployment dynamics |
| JEL: | E24 E32 J6 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6681&r=lab |
| By: | Filip Verwimp |
| Abstract: | I use an extended version of Mincer's original model to estimate the returns to schooling in rural Ethiopia. In a first step, a multinomial logit model is applied to distinguish between four groups of people, (1) full-time farmers, (2) part-time farmers, part time wage workers, (3) part-time farmers, part time traders and (4) full-time non-farmers. In a second step, a correction for sample selectivity is made using the Lee-Heckman method and the returns are estimated. The results show that returns on schooling are high in group (4) and lower in groups (2) and (3). Entry in well-paid jobs is constrained for non educated people. Women are particularly well represented in the third group but strongly underrepresented in the fourth group. The estimation shows that education is a worthwile investment in rural Ethiopia and the fact that households underinvest in education can be attributed to the lack of resources at the household level. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces9903&r=lab |
| By: | Maarten Goos; Jozef Konings |
| Abstract: | This paper is the first which provides evidence for rent-sharing in Belgium using firm level data. It uses a panel of annual firm level data and shows that a rise in the firm’s profitability leads after some years to an increase in worker’s income. The profit-per-head elasticity of wages is about 0.1 and Lester’s range of wages is estimated at approximately 60 percent of the mean wage. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0019&r=lab |
| By: | Jeffrey A. Groen (U.S. Bureau of Labor Statistics); Anne E. Polivka (U.S. Bureau of Labor Statistics) |
| Abstract: | We use data from the Current Population Survey collected both before and after Hurricane Katrina to estimate the impact of Katrina on the labor market outcomes of evacuees. Our estimates are based on a difference-in-differences strategy that compares evacuees to all residents of Katrina-affected areas prior to Katrina, with a control group consisting of individuals who originally resided outside the areas affected by the storm. We estimate that Katrina had substantial effects on the labor market outcomes of evacuees over the 13-month period immediately following Katrina. However, our estimates suggest that the effects of Katrina diminished substantially over time as evacuees recovered from the hurricane and adjusted to new economic and social conditions. Evacuees who did not return to their pre-Katrina areas have fared much worse in the labor market than have those who returned. Differences in individual and family characteristics account for some of the differences in outcomes between returnees and non-returnees. We present evidence that non-returnees have fared much worse in the labor market primarily because they came from areas that experienced greater housing damage due to the storm and thus were more likely to have had their lives severely disrupted. |
| Keywords: | Hurricane Katrina, Job Displacement, Geographic Mobility, Employment |
| JEL: | J61 J21 Q54 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec080010&r=lab |
| By: | Traag Tanja; Velden Rolf K.W. van der (ROA rm) |
| Abstract: | The role of student-, family- and school factors for early school-leaving in lower secondary educationMost studies on early school-leaving address only partial causes of why some students leave school early. This study aims to develop a more elaborate model to explain early school-leaving in lower secondary education, taking into account individual, family and school factors at the same time. By using a longitudinal dataset we are able to attribute clear causal relations between the different factors. We distinguish four groups of school-leavers, separating ‘dropouts’ (those without any qualification) from those who left school after attaining a diploma in lower secondary education (‘low qualified’), those who pursued education as an apprentice (‘apprentices’) and the ones who continued education and received a full upper secondary qualification (‘full qualification). Discerning these four groups shows clear differences in the background of different types of early school-leavers and in the effects of school factors. |
| Keywords: | labour market entry and occupational careers; |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2008003&r=lab |
| By: | Raquel Fonseca (RAND, 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138, USA); Lise Patureau (THEMA Université de Cergy-Pontoise, 33, boulevard du Port 95011 Cergy-Pontoise Cedex, France); Thepthida Sopraseuth (EPEE Université d’Evry and PSE, 4 Bd F. Mitterand, 91025 Evry Cedex, France) |
| Abstract: | This paper investigates the sources of business cycle comovement within the New Open Economy Macroeconomy framework. It sheds new light on the business cycle comovement issue by examining the role of cross-country divergence in labor market institutions. We first document stylized facts supporting that heterogeneous labor market institutions are associated with lower cross-country GDP correlations among OECD countries. We then investigate this fact within a two-country dynamic general equilibrium model with frictions on the good and labor markets. On the good-market side, we model monopolistic competition and nominal price rigidity. Labor market frictions are introduced through a matching function à la Mortensen and Pissarides (1999). Our conclusions disclose that heterogenous labor market institutions amplify the crosscountry GDP differential in response to aggregate shocks. In quantitative terms, they contribute to reduce cross-country output correlation, when the model is subject to real and/or monetary shocks. Our overall results show that taking into account labor market heterogeneity improves our understanding of the quantity puzzle. |
| Keywords: | International business cycle, Search, Labor market institutions, Wage bargaining |
| JEL: | E24 E32 F41 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2008-14&r=lab |
| By: | Nicolas R. Ziebarth; Markus M. Grabka |
| Abstract: | The positive association between moderate alcohol consumption and wages is well documented in the economic literature. Positive health effects as well as networking mechanisms serve as explanations for the "alcohol-income puzzle". Using individual-based microdata from the GSOEP for 2006, we confirm that this relationship exists for Germany as well. More importantly, we shed light on the alcohol-income puzzle by analyzing, for the first time, the association between beverage-specific drinking behavior and wages. In our analysis, we disentangle the general wage effect of drinking into diverse effects for different types of drinkers. Mincerian estimates reveal significant and positive relationships between wine drinkers and wages as well as between beverage-unspecific drinkers and wages. We are unable to detect endogeneity problems with the drinking variables, which speaks in favor of OLS regressions. When splitting the sample into age groups, the "wine gain" disappears for employees under the age of 35 and increases in size and significance for higher age groups. We also find a "beer gain" for residents of rural areas and a "cocktail gain" for residents of urban areas. Several explanations for our empirical results are discussed in view of the likelihood that the alcohol-income puzzle is a multicausal phenomenon. |
| Keywords: | "alcohol-income puzzle"; beverage-specific drinking behavior; wages; wine |
| JEL: | I10 I12 J30 J31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp93&r=lab |
| By: | Moser, Christoph; Urban, Dieter M; Weder di Mauro, Beatrice |
| Abstract: | This study investigates the impact of international competitiveness on net employment, job creation, job destruction, and gross job flows for a representative sample of German establishments from 1993 to 2005. We find a statistically significant but economically small effect of real exchange rate shocks on employment, comparable to the one found in studies for the United States. However, contrary to the United States, the employment adjustment (among surviving firms) operates mainly through the job creation rather than the job destruction rate. Job destruction occurs essentially through discrete events such as restructuring, outsourcing and bankruptcy. We suggest that these findings are consistent with a highly regulated labour market, in which smooth adjustment is costly and possibly delayed. |
| Keywords: | attrition estimator; gross worker flows; international competitiveness; inverse probability weighted GMM; real exchange rate |
| JEL: | F16 F40 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6745&r=lab |
| By: | Filip Abraham |
| Abstract: | Multinational companies and national governments pay considerable attention to labor cost and labor productivity differentials across countries. This paper analyzes total and unit labor differentials for a group of European and non-European countries in the 1960-1998 period. It deals with (i) the magnitude of total labor cost differences (ii) the developments in unit labor cost and labor productivity (iii) the convergence process between countries with higher and lower labor costs. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0113&r=lab |
| By: | Kalenkoski, Charlene Marie (Ohio University); Sabrina Wulff Pabilonia (U.S. Bureau of Labor Statistics) |
| Abstract: | Using nationally representative data from the NLSY97 and a simultaneous equations model, this paper analyzes the financial motivations for and the effects of employment on U.S. college students’ academic performance. The data confirm the predictions of the theoretical model that lower parental transfers and greater costs of attending college increase the number of hours students work while in school, although students are not very responsive to these financial motivations. They also provide some evidence that greater hours of work lead to lower grade point averages (GPAs). |
| Keywords: | employment, transfers, GPA |
| JEL: | D1 I2 J2 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec080020&r=lab |
| By: | Bernardo L. Queiroz (Cedeplar-UFMG); André B. Golgher (Cedeplar-UFMG) |
| Abstract: | In this paper, we investigate the distribution of more educated and skilled people in Brazilian municipalities and states. Previous evidence shows a high concentration of college educated and high skilled workers in some areas of the country. We investigate whether the increase in the number of high skill workers is faster in municipalities with high initial levels of human capital than in municipalities with lower initial levels. We develop a theoretical model to explain the convergence/divergence of regional skill levels In Brazil. We estimate OLS models based on the theoretical model to explain empirically wage differentials in Brazil. Last, we compute standard segregation and isolation measures to show the trends in the distribution of skilled workers across states and cities in Brazil. We find that educated and qualified workers are concentrated in some areas of the country and recent decades show a higher concentration of them across states and cities. |
| Keywords: | human capital, segregation, regional differences, Brazil |
| JEL: | J21 J24 R23 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td330&r=lab |
| By: | Kristian Orsini |
| Abstract: | In the period 2001-2004 two major reforms followed in Belgium: a personal income tax reform (2001) and a reform of social security contributions for low skilled employees (2004). Using a discrete hours labor supply model, this paper assesses the impact of these reforms on aggregate labor supply of males and females in couples. Results suggest that the reforms had a positive (but moderate) effect on both participation and hours worked. Targeted reductions in social security contributions, however, proved to be more effective than the newly introduced tax credit on low earnings. |
| Keywords: | Tax-benefit Systems – Microsimulation – Household Labour Supply – Multinomial Logit. |
| JEL: | D31 H21 H23 H24 H31 J22 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0605&r=lab |
| By: | Devereux, Paul J.; Hart, Robert A |
| Abstract: | Do students benefit from compulsory schooling? Researchers using changes in compulsory schooling laws as instruments have typically estimated very high returns to additional schooling that are greater than the corresponding OLS estimates and concluded that the group of individuals who are influenced by the law change have particularly high returns to education. That is, the Local Average Treatment Effect (LATE) is larger than the average treatment effect (ATE). However, studies of a 1947 British compulsory schooling law change that impacted about half the relevant population have also found very high instrumental variables returns to schooling (about 15%), suggesting that the ATE of schooling is also very high and higher than OLS estimates suggest. We utilize the New Earnings Survey Panel Data-set (NESPD), that has superior earnings information compared to the datasets previously used and find instrumental variable estimates that are small and much lower than OLS. In fact, there is no evidence of any positive return for women and the return for men is in the 4-7% range. These estimates provide no evidence that the ATE of schooling is very high. |
| Keywords: | compulsory schooling; return to education |
| JEL: | J01 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6679&r=lab |
| By: | Simona E. Cociuba; Alexander Ueberfeldt |
| Abstract: | This paper analyses the Canadian economy for the post 1960 period. It uses an accounting procedure developed in Chari, Kehoe, and McGrattan (2006). The procedure identifies accounting factors that help align the predictions of the neoclassical growth model with macroeconomic variables observed in the data. The paper finds that total factor productivity and the consumption-leisure trade-off - the productivity and labor factors - are key to understanding the changes in output, labor supply and labor productivity observed in the Canadian economy. The paper performs a decomposition of the labor factor for Canada and the United States. It finds that the decline in the gender wage gap is a major driving force of the decrease in the labor market distortions. Moreover, the milder reduction in the labor market distortions observed in Canada, compared to the US, is due to a relative increase in effective labor taxes in Canada. |
| Keywords: | Economic conditions - Canada ; Productivity - Canada ; Labor productivity ; Labor supply |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddgw:06&r=lab |
| By: | Belot, Michèle; Hatton, Timothy J. |
| Abstract: | The selection of immigrants by skill and education is a central issue in the analysis of immigration. Since highly educated immigrants tend to be more successful in host country labour markets and less of a fiscal cost it is important to know what determines the skill-selectivity of immigration. In this paper we examine the proportions of highly educated among migrants from around 80 source countries who were observed as immigrants in each of 29 OECD countries in 2000/1. We develop a variant of the Roy model to estimate the determinants of educational selectivity by source and destination country. We also estimate the determinants of the share of migrants from different source countries in each destination country’s immigrant stock. Two key findings emerge. One is that the effects of the skill premium, which is at the core of the Roy model, can be observed only after we take account of poverty constraints operating in source countries. The other is that cultural links and distance are often more important determinants of the proportion of high educated immigrants in different OECD countries than wage incentives or policy. |
| Keywords: | Immigration; Skill Selection |
| JEL: | F22 J15 J61 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6675&r=lab |
| By: | Dinand Webbink; Nicholas G. Martin; Peter M. Visscher |
| Abstract: | The prevalence of overweight and obesity is growing rapidly in many countries. Education policies might be important for reducing this increase. This paper analyses the causal effect of education on the probability of being overweight by using longitudinal data of Australian identical twins. The data include self-reported and clinical measures of body size. Our crosssectional estimates confirm the well-known negative association between education and the probability of being overweight. For men we find that education also reduces the probability of being overweight within pairs of identical twins. The estimated effect of education on overweight status increases with age. Remarkably, for women we find no negative effect of education on body size when fixed family effects are taken into account. Identical twin sisters that differ in educational attainment do not systematically differ in body size. This finding is robust to differences in employment and number of children. |
| Keywords: | education; overweight; body size |
| JEL: | I12 I18 I20 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:102&r=lab |
| By: | Bertola, Giuseppe; Navaretti, Giorgio Barba; Sembenelli, Alessandro |
| Abstract: | We propose and solve a simple model of firm-level decisions to offshore production stages of lower skill intensity than that of activities that remain in the domestic location. In theory, offshoring is optimal only for the more productive among heterogeneous firms if it entails a fixed cost. In a large sample of Italian firms, offshoring - especially of intermediate production stages - is indeed more prevalent among firms that are larger and more productive, and is predicted by arguably relevant firm-level characteristics. We also document that offshoring decreases the share of unskilled employment in domestic production facilities as well as firms’ propensity to employ immigrant workers, and we discuss the possible determinants and policy implication of the latter finding. |
| Keywords: | Foreign Direct Investment; Migration; Outsourcing; Skilled Labour |
| JEL: | F2 J61 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6743&r=lab |
| By: | van Ours, Jan C; Veenman, Justus |
| Abstract: | The allocation of Moluccan immigrants across towns and villages at arrival in the Netherlands and the subsequent formation of interethnic marriages resemble a natural experiment. The exogenous variation in marriage formation allows us to estimate the causal effect of interethnic marriages on the educational attainment of children from such marriages. We find that children from Moluccan fathers and native mothers have a higher educational attainment than children from ethnic homogeneous Moluccan couples or children from a Moluccan mother and a native father. |
| Keywords: | Educational Attainment; Interethnic marriages |
| JEL: | I21 J15 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6688&r=lab |
| By: | Koellinger, Ph.D; Minniti, M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Analyzing a cross-country panel of 16 OECD countries from 2002 to 2005, we find that higher unemployment benefits crowd out nascent entrepreneurial activity. Our results hold regardless of entrepreneurial motivation (necessity or opportunity) and entrepreneurial type (imitative or innovative). |
| Keywords: | entrepreneurship;business startups;unemployment benefits |
| Date: | 2008–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765011808&r=lab |
| By: | Gary-Bobo, Robert J.; Jaaidane, Touria |
| Abstract: | We model cooperation between an employer and a workers' union as an equilibrium in an infinitely repeated game with discounting and imperfect monitoring. The employer has private information about firm profitability. The model explains the incidence and duration of strikes, as well as the employer's outsourcing (or partial lock-out) decisions. By means of an effort variable, it also extends the theory to account for worker resistance phenomena, taking the form of low effort on the part of employees. Strikes appear as random equilibrium phenomena, during finite-duration, but recurrent phases of play, triggered by the occurrence of a low-profitability state. We show that high-effort and high-pay cooperative agreements between the union and the employer can be supported as perfect public equilibria of the repeated game, if players are patient enough, but only at the cost of random reversions to noncooperative equilibrium in which strikes, low effort, low pay, and outsourcing take place. |
| Keywords: | Imperfect Monitoring; Industrial Relations; Mechanism Design; Public Employment; Repeated Games; Theory of Strikes |
| JEL: | C73 D2 J45 J5 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6644&r=lab |
| By: | Dew-Becker, Ian; Gordon, Robert J |
| Abstract: | Throughout the post-war era until 1995 labour productivity grew faster in Europe than in the United States. Since 1995, productivity growth in the EU-15 has slowed while that in the United States has accelerated. But Europe’s productivity growth slowdown was largely offset by faster growth in employment per capita, leaving little difference in growth of output per capita between the EU and US going back to 1980. This paper is about the strong negative trade-off between productivity and employment growth within Europe. We document this trade-off in the raw data, in regressions that control for the two-way causation between productivity and employment growth, and we show that there is a robust negative correlation between productivity and employment growth across countries and time. Our primary explanatory variables to explain both the revival of EU employment growth and the slowdown in productivity growth include six policy and institutional variables. We find that several of these variables have significant negative effects on employment per capita, with policy changes that raised labour costs reducing employment both before and after 1995. These variables, together with employment per capita, are then used to explain productivity growth, using several alternative treatments with instrumental variables. We also find a significant time effect, and we link this to an increase in labour force participation by women, particularly in southern European countries. We find that the negative effect of changes in employment per capita on changes in productivity is robust to alternative instruments and to the inclusion or exclusion of particular countries like the US or Spain. We conclude by suggesting that evaluations of alternative policy reforms in Europe should take into account any offsetting effects on employment and productivity by examining the ultimate impact on changes in income per capita. |
| Keywords: | Effects of tax wedge on employment; Employment protection legislation; European employment growth; European productivity growth; labour force participation of women; Product market regulation |
| JEL: | D24 E20 E23 J20 J30 N34 O47 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6722&r=lab |
| By: | Duflo, Esther; Hanna, Rema; Ryan, Stephen |
| Abstract: | This paper combines a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning. In 57 schools in India, randomly chosen out of 113, a teacher’s daily attendance was verified through photographs with time and date stamps, and his salary was made a non-linear function of his attendance. The teacher absence rate changed from 42 percent in the comparison schools to 21 percent in the treatment schools. To separate the effects of the monitoring and the financial incentives, we estimate a structural dynamic labour supply model that allows for heterogeneity in preferences and auto-correlation of external shocks. The teacher response was almost entirely due to the financial incentives. The estimated elasticity of labour with respect to the incentive is 0.306. Our model accurately predicts teacher attendance in two out-of-sample tests on the comparison group and a treatment group that received different financial incentives. The program improved child learning: test scores in the treatment schools were 0.17 standard deviations higher than in the comparison schools. |
| Keywords: | education; financial incentives; India |
| JEL: | I20 I21 J13 J30 O10 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6682&r=lab |
| By: | Federico S. Mandelman; Francesco Zanetti |
| Abstract: | Recent empirical evidence suggests that a positive technology shock leads to a decline in labor inputs. However, the standard real business cycle model fails to account for this empirical regularity. Can the presence of labor market frictions address this problem without otherwise altering the functioning of the model? We develop and estimate a real business cycle model using Bayesian techniques that allows but does not require labor market frictions to generate a negative response of employment to a technology shock. The results of the estimation support the hypothesis that labor market frictions are responsible for the negative response of employment. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2008-10&r=lab |
| By: | Ian McCarthy (Indiana University Bloomington); Rusty Tchernis (Indiana University Bloomington) |
| Abstract: | There is increasing evidence suggesting that Medicare beneficiaries do not make fully informed decisions when choosing among alternative Medicare health plans. To the extent that deciphering the intricacies of alternative plans consumes time and money, the Medicare health plan market is one in which search costs may play an important role. To account for this, we split beneficiaries into two groups--those who are informed and those who are uninformed. If uninformed, beneficiaries only use a subset of covariates to compute their maximum utilities, and if informed, they use the full set of variables considered. In a Bayesian framework with Markov Chain Monte Carlo (MCMC) methods, we estimate search cost coefficients based on the minimum and maximum statistics of the search cost distribution, incorporating both horizontal differentiation and information heterogeneities across eligibles. Our results suggest that, conditional on being uninformed, older, higher income beneficiaries with lower self-reported health status are more likely to utilize easier access to information. |
| Keywords: | Search, Medicare Health Plan Choice, Discrete Choice Models, Bayesian Methods |
| JEL: | C11 C21 D21 D43 M31 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2008-004&r=lab |