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on Labour Economics |
| By: | Alena Bicáková (Center for Economic Research and Graduate Eduction(CERGE-EI), Charles University, Politickych veznu 7, Praha 1, 111 21, Czech Republic.); Jiri Slacalek (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Michal Slavík (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | We extend the scarce evidence on labor supply in post-transition countries by estimating the wage elasticity of labor force participation in the Czech Republic. Using the household income survey data of 2002, we find that a one-percent rise in the gross wage increases the probability of working by 0.16 and 0.02 percentage points for women and men, respectively. Taking into account the tax and benefit system, these semi-elasticities fall to 0.06 for women and 0.01 for men. We interpret the difference between the estimates from the two specifications as a summary measure of the welfare system disincentives. The estimated wage elasticities lie at the lower end of the range of values reported for mature market economies. This finding is consistent with the stylized fact that the labor supply in countries with high labor force participation rates, such as in the Czech Republic, tends to be less sensitive to wages. JEL Classification: J22, J31, P30. |
| Keywords: | Labor supply, transition, welfare system. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080887&r=lab |
| By: | Eisenhauer, Philipp; Pfeiffer, Friedhelm |
| Abstract: | In this study we assess the relationship between father and son earnings among (West) German Workers. To reduce the lifecycle and attenuation bias a novel sampling procedure is developed and applied to the German Socio-Economic Panel (SOEP) 1984-2006. Our preferred point estimate indicates that about 1/3 of the earnings dierential in the labor market has been passed on from the generation of fathers to their sons. |
| Keywords: | Intergenerational Mobility, Lifecycle, Permanent Earnings, Wages |
| JEL: | J21 J31 J62 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7223&r=lab |
| By: | Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels); Michael Rusinek (DULBEA, Université libre de Bruxelles, Brussels); Ilan Tojerow (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | In Belgium, 2007 has been marked by long coalition negotiations over an agreement on a new government. The main bone of contention had been related to the reform of the Belgian Federal State. Among the suggested reforms, the regionalisation of the collective bargaining system turned out frequently. It relies on the assumption that the productivity differences between regions are not fully taken into account in a federal wage setting system. Our findings challenge this hypothesis by putting forward the current existence of wage differentials between regions and joint committees. We also show that regional wage differentials at the joint committee level are correlated to regional productivity differences. Finally, we find that the correlation between regional wage differentials and productivity is higher in decentralised joint committees. Hence, we conclude that productivity variations are already integrated in the Belgian wage setting system. |
| Keywords: | Wages, Collective bargaining, Federalism, Regions, Belgium. |
| JEL: | J31 J52 R11 H77 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:08-11rs&r=lab |
| By: | Fitzenberger, Bernd; Kohn, Karsten; Lembcke, Alexander C. |
| Abstract: | Collective bargaining in Germany takes place either at the industry level or at the firm level; collective bargaining coverage is much higher than union density; and not all employees in a covered firm are necessarily covered. This institutional setup suggests to explicitly distinguish union power as measured by net union density (NUD) in a labor market segment, coverage at the firm level, and coverage at the individual level. Using linked employer-employee data and applying quantile regressions, this is the first empirical paper which simultaneously analyzes these three dimensions of union influence on the structure of wages. Ceteris paribus, a higher share of employees in a firm covered by industry-wide or firm-level contracts is associated with higher wages. Yet, individual bargaining coverage in a covered firm shows a negative impact both on the wage level and on wage dispersion. A higher union density reinforces the effects of coverage, but the effect of union density is negative at all points in the wage distribution for uncovered employees. In line with an insurance motive, higher union density compresses the wage structure and, at the same time, it is associated with a uniform leftward movement of the distribution for uncovered employees. Tarifverhandlungen in Deutschland finden entweder auf Branchenebene oder auf Firmenebene statt; die Tarifbindung ist wesentlich höher als der Organisationsgrad der Gewerkschaften; und nicht alle Beschäftigten in einer tarifgebundenen Firma sind tarifgebunden. Diese institutionelle Aspekte legen es nahe, die Effekte der gewerkschaftlichen Macht – gemessen am Organisationsgrad in einem Arbeitsmarktsegment – von der Tarifbindung auf Firmenebene und der Tarifbindung auf individueller Ebene zu unterscheiden. Standardergebnisse in der Theorie und empirische Ergebnisse in der Literatur lassen erwarten, dass eine Tarifbindung mit höheren Löhnen und geringerer Lohndispersion einhergeht. Jedoch kann es auch Spillover-Effekte (Übertragungseffekte) aus dem tarifgebundenen Bereich in den nicht tarifgebundenen Bereich geben. Einerseits mögen nicht tarifgebundene Firmen höhere Löhne zahlen, um die Organisation einer Gewerkschaft zu verhindern (’union threat effect’). Andererseits mag die Reduktion der Beschäftigung durch höhere Löhne im tarifgebundenen Bereich zu einem erhöhten Arbeitsangebot im nicht tarifgebundenen Bereich führen. Letzteres mag dort einen Lohndruck nach unten auslösen. |
| Keywords: | Union density, collective bargaining coverage, wage structure, quantile regression, linked employer-employee data |
| JEL: | J31 J51 J52 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7255&r=lab |
| By: | Peri, Giovanni (Department of Economics, University of California, Davis); Sparber, Chad (Department of Economics, Colgate University) |
| Abstract: | In “Native Internal Migration and the Labor Market Impact of Immigration,” George Borjas (2006) identifies a strong negative correlation between immigration and native-born employment in the US using local area data. This relationship is particularly strong at the metropolitan area level, weaker but still significant at the state level, and weakest at the Census region level. In this note, we show that Borjas’s negative correlation arises due to the construction of the dependent and explanatory variables rather than from any true negative association between the employment growth of immigrants and natives. Borjas regresses log native employment, ln(N_t), on the share of foreign-born employment, p_t=M_t/(M_t+N_t), across skill-state-year cells. The specification therefore includes native employment in the numerator of the dependent variable and in the denominator of the explanatory variable. This builds a negative correlation into the model that is particularly strong if the variance of N_t relative to M_t is large. To illustrate, we first show that state and city level regressions of the standardized native employment change, (N_(t+10)-N_t)/(M_t+N_t), on standardized immigration, (M_(t+10)-M_t)/(M_t+N_t), always find a positive and mostly significant correlation between the two. Second, we randomly simulate changes in the native and foreign-born workforce with a data generating process that has zero or positive correlation between the shocks Change_M_t and Change_N_t (i.e., so that immigration is associated with either no change or an increase in native employment). Borjas specifications employing this simulated data estimate large and significantly negative coefficients as long as the variance of Change_N_t is larger than the variance of Change_M_t, which is true in observed data. |
| Keywords: | Immigration, Crowding Out, Employment Effects |
| JEL: | J61 R23 |
| Date: | 2008–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:cgt:wpaper:2008-01&r=lab |
| By: | Rossi, Lorenza; Mattesini, Fabrizio |
| Abstract: | This paper presents a New Keynesian model characterized by labor indivisibilities, unemployment and a unionized labor market. The bargaining process between unions and firms introduces real wage rigidity and creates an endogenous trade-off between inflation and output stabilization. Under an optimal discretionary monetary policy a negative productivity shock requires an increase in the nominal interest rate. Moreover, an operational instrument rule will satisfy the Taylor principle, but will also require that the nominal interest rate does not necessarily respond one to one to an increase in the efficient rate of interest. The model calibration studies the response of the unionzed economy to productivity shocks under different monetary policy rules. Download Info |
| JEL: | E24 E52 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8414&r=lab |
| By: | Maria Ana Lugo |
| Abstract: | Employment is the main source of income for most families in the world. While it is certainly not a new dimension of well-being, it is sometimes forgotten in human development studies and poverty reduction policies or, at least, not considered in the depth it deserves. This paper proposes seven indicators of employment to be added to multi-purpose household surveys which, we argue, are crucial to a comprehensive understanding of causes and implications of poverty around the world. Traditional approaches to labour market indicators present two main weaknesses. First, in most cases, they are not as relevant in the developing world as they are in developed economies, and hence do not provide an accurate picture of labour markets in these countries. Second, surveys that collect a broader set of questions on employment do not always include extensive questions on the household and its members. The indicators proposed are informal employment; income from employment (including self-employment earnings); occupational hazard; under/over employment; multiple activities; and discouraged unemployment. The aim is to complement ‘traditional’ indicators to provide a deeper understanding of both the quantity and quality of employment. |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:qeh:ophiwp:ophiwp003&r=lab |
| By: | Gianni Amisano (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Roberto Savona (Department of Business Studies, University of Brescia. Address: Dipartimento di Economia Aziendale, Università degli Studi di Brescia, c/da S. Chiara n° 50, 25122 Brescia, Italy.) |
| Abstract: | Suppose a fund manager uses predictors in changing portfolio allocations over time. How does predictability translate into portfolio decisions? To answer this question we derive a new model within the Bayesian framework, where managers are assumed to modulate the systematic risk in part by observing how the benchmark returns are related to some set of imperfect predictors, and in part on the basis of their own information set. In this portfolio allocation process, managers concern themselves with the potential benefits arising from the market timing generated by benchmark predictors and by private information. In doing this, we impose a structure on fund returns, betas, and benchmark returns that help to analyse how managers really use predictors in changing investments over time. The main findings of our empirical work are that beta dynamics are significantly affected by economic variables, even though managers do not care about benchmark sensitivities towards the predictors in choosing their instrument exposure, and that persistence and leverage effects play a key role as well. Conditional market timing is virtually absent, if not negative, over the period 1990-2005. However such anomalous negative timing ability is offset by the leverage effect, which in turn leads to an increase in mutual fund extra performance. JEL Classification: C11, C13, G12, G13. |
| Keywords: | Equity mutual funds, conditional asset pricing models, time-varying beta, Bayesian analysis. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080881&r=lab |
| By: | Alan Barrett (Economic and Social Research Institute (ESRI)); Seamus McGuinness (Economic and Social Research Institute (ESRI)); Martin O'Brien (Economic and Social Research Institute (ESRI)) |
| Abstract: | As the movement of population from the New Member States (NMS) of the EU to the older members is a relatively new flow, it is important to build up our knowledge of who is moving within Europe and how they are performing in their destinations. In this paper, we analyse the earnings of immigrants in Ireland from the NMS using a new large-scale dataset on employees in Ireland. In so doing, we add to the emerging strand in the literature on immigrant earnings that looks beyond average earnings differentials and considers variations in such differentials across the earnings and skills distributions. We do this partly by using quantile regressions and also by analyzing earnings differentials within educational categories. We find that the average earnings difference between immigrants from the NMS and natives is between 10 percent and 18 percent, depending on the controls used. However, the difference is found to be either non-existent or low for people with low skill levels and for people at the lower end of the earnings distribution. The difference is higher for those at the upper ends of the skills and earnings distributions. This suggests that the transferability of human capital is a crucial determinant of the immigrant-native earnings gap for NMS immigrants in Ireland. |
| Keywords: | Immigrant earnings; Ireland; New Member States; Quantile regression |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp236&r=lab |
| By: | John Hartwick (Queen's University) |
| Abstract: | We set out an open, monocentric city with residential structures and reflect on how changes to an amenity index affcts the city. On the production side, the shock is represented by a productivity improvement and a local wage increase and on the consumption side the shock is represented by an exogenous boost to the utility of a resident's current commodity bundle. In each case the city's population, land rent and footprint expand. In the second case there is an increase in density. |
| Keywords: | urban amenities, density, wages |
| JEL: | R14 J61 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1164&r=lab |
| By: | Devesh Kapur and; Megan Crowley |
| Abstract: | This paper analyzes a relatively neglected facet of the complex debate regarding human capital – higher (or tertiary) education. It addresses five broad questions examining higher education in developing countries. One, are the economic effects of higher education on developing countries different from those in industrialized countries, with its links with labor markets of lesser importance than its impact on institutional development? Two, how does the impact of higher education depend on the type of education and its beneficiaries? Three, with the state unable to meet growing demand pressures, what should be the proper role of the state to ensure not just quality but also equity and access? Four, how should countries rethink the provision of higher education in an “open economy” from seeking education abroad or encouraging foreign providers into the country or simply linking domestic institutions with foreign quality assurance mechanisms? And five, do new technologies offer developing countries a new paradigm to expand the provision of high quality but low cost higher education? The aim is not to provide categorical answers to these complex questions, but rather highlight the analytical and empirical lacuna with regard to each of these questions. |
| Keywords: | higher education, human capital |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:139&r=lab |
| By: | Christopher T. Whelan (Economic and Social Research Institute (ESRI)); Maitre, Bertrand (Economic and Social Research Institute (ESRI)) |
| Abstract: | In this paper we take advantage of the recent availability of EU-SILC data to contribute to the recent debate relating to the Europeanisation of reference groups. Our analysis addresses both weak and strong versions of the thesis. The former proposes that common standards of what is an acceptable level of participation in one’s own society emerge as a consequence of knowledge of conditions in other societies. The latter argues that people increasingly perceive themselves as part of a larger European stratification. Our analysis leads us to reject both versions of the thesis. Material deprivation rather than having a uniform effect is highly dependent on national context. In circumstances where the Europeanisation of inequality is raising issues relating to both national and transnational forms of legitimacy, it is important to understand that there is no necessary relationship between such Europeanisation and the Europeanisation of reference groups. |
| Keywords: | housing, Europeanisation of inequality, reference groups, deprivation, economic stress, legitimacy |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp235&r=lab |
| By: | Schuett, Florian |
| Abstract: | A widely used clause in license contracts -- the field-of-use restriction (FOUR) -- precludes licensees from operating outside of the specified technical field. When a technology has several distinct applications, FOUR allow the licensor to slice up his rights and attribute them to the lowest-cost producer in each field of use. This can improve production efficiency. However, with complex technologies, the boundaries of fields of use may be difficult to codify, entailing a risk of overlap of licensees' rights. We explore how this affects the optimal license contract in a moral hazard framework where the licensor's effort determines the probability of overlap. We show that depending on the contracting environment, the license agreement may include output restrictions and nonlinear royalty schemes. |
| JEL: | L24 |
| Date: | 2007–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8534&r=lab |
| By: | Jeffrey J. Green (Department of Economics, Ball State University); Courtenay C. Stone (Department of Economics, Ball State University); Abera Zegeye (Department of Economics, Ball State University); Thomas A. Charles (Department of Economics, Ball State University) |
| Abstract: | Because statistical analysis requires both familiarity with and the ability to use mathematics, students typically are required to take one or more prerequisite math courses prior to enrolling in the business statistics course. Despite these math prerequisites, however, students find it extremely difficult to learn business statistics. In this study, we use an ordered probit model to examine the effect of alternative prerequisite math course sequences on the grade performance of 1,684 business and economics statistics students at a large Midwestern university. In addition, we show how the imposition of a minimum grade requirement of C- for the math prerequisite course would impact student success in the business statistics course. Although several studies have examined the impact of different math skills on student success in business and economics statistics courses, our study is the first to provide a detailed analysis of the impact of different prerequisite math course sequences on student performance in business statistics. Our study shows that, other things the same, taking more math credit hours, taking math courses that emphasize calculus, and imposing a minimum grade of C- on the prerequisite math course have significantly positive impacts on student grade performance in the business and economics statistics course. |
| Keywords: | introductory business statistics; math prerequisites; math topics; student performance; minimum prerequisite math grade requirement. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:bsu:wpaper:200802&r=lab |
| By: | Oddvar Martin Kaarboe; Luigi Siciliani |
| Abstract: | We present a model of optimal contracting between a purchaser and a provider of health services when quality has two dimensions. We assume that one dimension of quality is contractible (dimension 1) and one dimension is not contractible (dimension 2). We show that the optimal incentive scheme for the contractible dimension depends critically on the extent to which quality 1 increases or decreases the marginal cost and marginal bene?t of quality 2 (i.e. substitutability or complementarity). If the two quality dimensions are substitutes, three possible solutions arise: a) the optimal incentive scheme is high powered: the incentive is equal to the marginal bene?t of quality dimension 1 and the optimal quality in dimension 2 is zero; b) the optimal incentive scheme is low powered: both quality dimensions are positive; the incentive is below the marginal bene?t of quality dimension 1; c) it is not optimal to introduce pay for performance as the gain of welfare from an increase in quality dimension 1 is lower than the loss of welfare from an increase in quality dimension 2. If the two quality dimensions are complements the incentive scheme is always high powered: the incentive is above the marginal bene?t of dimension 1 and both quality dimensions are positive. |
| Keywords: | quality, altruism, incentives |
| JEL: | D82 I11 I18 L51 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:08/06&r=lab |
| By: | Maskin, Eric S. (Institute for Advanced Studies); Myerson, Roger B. (University of Chicago) |
| Abstract: | Interview with the Laureates in Economics Eric S. Maskin and Roger B. Myerson, 6 December 2007. The interviewer is Adam Smith, Editor-in-Chief of Nobelprize.org. |
| Keywords: | Mechanism Design; |
| JEL: | D02 |
| Date: | 2007–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nobelp:2007_005&r=lab |
| By: | Stephen L. Ross (University of Connecticut) |
| Abstract: | A central purpose of this chapter is to assess whether the available empirical evidence supports the view that current levels of housing discrimination are a significant contributor to residential segregation in U.S. cities and metropolitan areas. Through the course of this chapter, the reader will find that the empirical patterns of racial segregation in the U.S. are often inconsistent the available evidence on housing discrimination. Admittedly, strong evidence exists that both housing discrimination exists today and that housing discrimination throughout much of the Twentieth Century was central to creating the high levels of segregation that we observe in U.S. metropolitan areas today, but the appropriate policy responses may differ dramatically depending upon how these two phenomena are currently interrelated. |
| Keywords: | Housing Discrimination, Residential Segregation, Neighborhood Quality |
| JEL: | J7 L85 R21 R30 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2008-15&r=lab |