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on Labour Economics |
| By: | Sabine Bernabè; Marco Stampini |
| Abstract: | This paper deals with labour mobility in Georgia during economic transition. We use quarterly 1998-99 panel data to examine mobility across six labour market statuses (inactivity, unemployment, formal wage employment, informal wage employment, selfemployment and farming). Our findings are consistent with the hypothesis of labour market segmentation. Formal employment is preferred to informal employment. Unemployment is largely a queuing device for individuals with higher education waiting for formal jobs. Some self-employment is subsistence activities and consistent with a segmented labour market, while other is high risk and potentially high return activities. Age, gender and education are significant determinants of labour mobility. Finally, informal employment serves as a buffer in times of recession –with farming and informal wage employment absorbing labour shed by other statuses during the Russian financial crisis. |
| Keywords: | labour mobility, informal labour, transition, Georgia |
| JEL: | J21 P23 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:20608&r=lab |
| By: | Giovanni Peri (UC Davis and NBER); Chad Sparber (Colgate University) |
| Abstract: | Many workers with low levels of educational attainment immigrated to the United States in recent decades. Large inflows of less-educated immigrants would reduce wages paid to comparably-educated native-born workers if the two groups are perfectly substitutable in production. In a simple model exploiting comparative advantage, however, we show that if less-educated foreign and native-born workers specialize in performing different tasks, immigration will cause natives to reallocate their task supply, thereby reducing downward wage pressure. We merge occupational task-intensity data from the O*NET and DOT datasets with individual Census data across US states from 1960-2000 to demonstrate that foreign-born workers specialize in occupations that require manual and physical labor skills while natives pursue jobs more intensive in communication and language tasks. Immigration induces natives to specialize accordingly. Simulations show that this increased specialization might explain why economic analyses commonly find only modest wage and employment consequences of immigration for less-educated native-born workers across U.S. states. This is especially true in states with large immigration flows. |
| Keywords: | Immigration, Less-Educated Labor, Manual Tasks, Communication Skills, Comparative Advantages, US States. |
| JEL: | F22 J61 J31 R13 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0802&r=lab |
| By: | Paulo Bastos (ECFIN, European Commission); Natália P. Monteiro (Universidade do Minho - NIPE); Odd Rune Straume (Universidade do Minho - NIPE and University of Bergen (Health Economics Bergen, Department of Economics), Norway) |
| Abstract: | In many countries wages are set in two stages, where industry-level collective bargaining is followed by firm-specific arrangements determining actual paid wages as a mark-up on the industry wage floor. What explains the wage set in each of these stages? In this paper we show that both the industry wage floor and the average wage cushion are systematically associated with the degree of firm heterogeneity in the industry: The former (latter) is negatively (positively) associated with the productivity spread. Furthermore, since the response of the wage floor dominates that of the wage cushion, workers in more heterogeneous industries tend to get lower actual paid wages. These conclusions are reached in a model of Cournot oligopoly with firm productivity heterogeneity and a two-tiered wage setting system. They are then confirmed by administrative data covering virtually all workers, firms and collective bargaining agreements of the Portuguese private sector for the period 1991-2000. |
| Keywords: | Wage determination; Trade unions; Firm heterogeneity |
| JEL: | D21 J31 J51 L13 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:14/2008&r=lab |
| By: | Krishna Pendakur (Simon Fraser University); Simon Woodcock (Simon Fraser University) |
| Abstract: | We investigate whether immigrant and minority workers' poor access to high-wage jobs---that is, glass ceilings---is attributable to poor access to jobs in high-wage firms, a phenomenon we call glass doors. Our analysis uses linked employer-employee data to measure mean- and quantile-wage differentials of immigrants and ethnic minorities, both within and across firms. We find that glass ceilings exist for some immigrant groups, and that they are driven in large measure by glass doors. For some immigrant groups, the sorting of these workers across firms accounts for as much as half of the economy-wide wage disparity they face. |
| Keywords: | glass ceilings, wage differentials, immigration, visible minorities, quantile regression, linked employer-employee data |
| JEL: | J15 J71 J31 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp08-02&r=lab |
| By: | Harald Hagemann (Universitaet Hohenheim); Ralf Rukwid (Universitaet Hohenheim) |
| Abstract: | This paper gives a detailed analysis of the perspectives of workers with low qualifications in Germany under the twofold pressures of globalization and technological change. First, alter-native explanations for the skill-bias in the development of labour demand are discussed, with particular emphasis on the “trade versus technology” debate. The consequences of the demand shift away from low-skilled labour in Germany are examined in a detailed empirical analysis of the development of (un)employment problems differentiated for qualification groups. Compared to other advanced economies, Germany shows a higher unemployment rate among less-qualified workers which is generally associated with a lack of flexibility in the German wage structure. However, an analysis of German, U.S. and British wage data based on the Cross National Equivalent File (CNEF) does not confirm the assumption of a simple mono-causal relationship between wage disparity and the intensity of group-specific unemployment. Finally, some political approaches for an improvement of the job prospects of less-qualified persons in Germany are outlined briefly and evaluated against the background of the empiri-cal results. |
| Keywords: | low-skilled labour, unemployment, wage inequality, globalization, skill-biased technological change, CNEF |
| JEL: | J2 J3 F1 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:hoh:hohdip:291&r=lab |
| By: | Christian Dustmann (Department of Economics and Centre for Research and Analysis of Migration (CReAM), University College London); Tommaso Frattini (Department of Economics and Centre for Research and Analysis of Migration (CReAM), University College London); Ian Preston (Department of Economics and Centre for Research and Analysis of Migration (CReAM), University College London) |
| Abstract: | This paper analyses the effect immigration has on wages of native workers. Unlike most previous work, we estimate wage effects along the distribution of wages. We derive a flexible empirical strategy that does not rely on pre-allocating immigrants to particular skill groups. In our empirical analysis, we demonstrate that immigrants downgrade considerably upon arrival. As for the effects on native wages, we find that immigration depresses wages below the 20th percentile of the wage distribution, but leads to slight wage increases in the upper part of the wage distribution. The overall wage effect of immigration is slightly positive. The positive wage effects we find are, although modest, too large to be explained by an immigration surplus. We suggest alternative explanations, based on the idea that immigrants are paid less than the value of what they contribute to production, generating therefore a surplus, and we assess the magnitude of these effects. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0803&r=lab |
| By: | Hielke Buddelmeyer (Institute of Applied Economic and Social Research, The University of Melbourne); Mark Wooden (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) |
| Abstract: | A distinctive feature of the Australian labour market is a high incidence of casual employment. Almost 27 percent of Australian employees in 2006 were classified as employed on a casual basis, an alarmingly high proportion given the strong claims often made about the harmful effects that casual employment can have on future employment prospects. But are such claims justified? This paper uses longitudinal data from the HILDA Survey to examine the extent to which casual employees are able to access non-casual jobs in the future and to contrast the experiences of casual employees with that of other labour market participants. A dynamic MNL model of labour market states is estimated which reveals high annual rates of mobility from casual employment into non-casual employment. Further, among men, casual employees are found to be far more likely to make the transition into non-casual employment than otherwise comparable unemployed job seekers. For women, however, this is not the case. |
| Keywords: | Casual employment; HILDA Survey; Labour market transitions; Australia; Dynamic mixed multinomial logit |
| JEL: | J29 J69 C33 C35 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2008n07&r=lab |
| By: | Mirko Draca; Stephen Machin; John Van Reenen |
| Abstract: | Although there is a large literature on the economic effects of minimum wages on labour market outcomes (especially employment), there is much less evidence on their impact on firm performance. In this paper we consider a very under-studied area - the impact of minimum wages on firm profitability. The analysis exploits the changes induced by the introduction of a national minimum wage to the UK labour market in 1999, using pre-policy information on the distribution of wages to construct treatment and comparison groups and implement a difference in differences approach. We report evidence showing that firm profitability was significantly reduced (and wages significantly raised) by the minimum wage introduction. This emerges from separate analyses of two distinct types of firm level panel data (one on firms in a very low wage sector, UK residential care homes, and a second on firms across all sectors). We find that net entry rates have fallen, but that the changes in exit and entry rates are statistically insignificant. |
| JEL: | J23 L25 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13996&r=lab |
| By: | Anne Case; Christina Paxson; Mahnaz Islam |
| Abstract: | We use nine waves of the British Household Panel Survey (BHPS) to investigate the large labor market height premium observed in the BHPS, where each inch of height is associated with a 1.5 percent increase in wages, for both men and women. We find that half of the premium can be explained by the association between height and educational attainment among BHPS participants. Of the remaining premium, half can be explained by taller individuals selecting into higher status occupations and industries. These effects are consistent with our earlier findings that taller individuals on average have greater cognitive function, which manifests in greater educational attainment, and better labor market opportunities. |
| JEL: | I1 J3 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14007&r=lab |
| By: | David G. Blanchflower |
| Abstract: | n this paper I examine changes in self-employment that have occurred since the early 1980s in the United States. It is a companion paper to a recent equivalent paper that related to the UK. Data on random samples of approximately twenty million US workers are examined taken from the Basic Monthly files of the CPS (BMCPS), the 2000 Census and the 2006 American Community Survey (ACS). In contrast to the official definition of self-employment which simply counts the numbers of unincorporated self-employed, we also include the incorporated self-employed who are paid wages and salaries. The paper presents evidence on trends in self-employment for the US by race, ethnicity and gender. Evidence is also presented for construction which has self-employment rates roughly double the national rates and where there are strikingly high racial and gender disparities in self-employment rates. The construction sector is also important given the existence of public sector affirmative action programs at the federal, state and local levels directed at firms owned by women and minorities. I document the fact that disparities between the self-employment rates of white men and white women and minorities in construction narrowed in the 1980s, widened during the 1990s after the US Supreme Court's decision in Croson but then narrowed again since 2000 after a number of legal cases, which found such programs constitutional. Despite this substantial disparities remain, particularly in earnings. I also find evidence of discrimination in the small business credit market. Firms owned by minorities in general and blacks in particular are much more likely to have their loans denied and pay higher interest than is the case for white males. This is only partially explained by their lack of creditworthiness and is consistent with a finding of discrimination in the credit market by banks. |
| JEL: | J71 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13972&r=lab |
| By: | David Y. Albouy |
| Abstract: | In the United States, workers in cities offering above-average nominal wages – cities with high productivity, low quality-of-life, or inefficient housing sectors – pay 30 percent more in federal taxes than otherwise identical workers in cities offering below-average wages. According to simulation results, federal taxes lower long-run employment levels in high-wage areas by 15 percent and land and housing prices by 25 and 4 percent, leading to locational inefficiencies costing 0.28 percent of income, or $34 billion in 2005. Indexing taxes to local wage-levels eliminates these locational inefficiencies. Tax deductions index taxes partially to local cost-of-living and improve locational efficiency. |
| JEL: | H24 H5 H77 J61 R1 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13995&r=lab |
| By: | Richardson, Katarina (Swedish Ministry of Finance); van den Berg, Gerard J (Department of Economics, VU University Amsterdam) |
| Abstract: | The vocational employment training program is the most expensive training program in Sweden and a cornerstone of labor market policy. We analyze its causal effects on the individual transition rate from unemployment to employment by exploiting variation in the timing of treatment and outcome, dealing with selectivity on unobservables. We demonstrate the appropriateness of this approach in our context by studying the enrollment process. We develop a model allowing for duration dependence and unobserved heterogeneity (leading to spurious duration dependence) in the treatment effect itself, and we prove non-parametric identification. The data cover the population and include multiple unemployment spells for many individuals. The results indicate a large significantly positive effect on exit to work shortly after exiting the program. The effect at the inidividual level diminishes after some weeks. When taking account of the time spent in the program, the effect on the mean unemployment duration is small. |
| Keywords: | Vocational training; progam evaluation; duration analysis; selectivity bias; dynamic treatments; active labor policy; identification |
| JEL: | C14 C21 C41 J64 |
| Date: | 2008–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2008_007&r=lab |
| By: | Samuel Hill; Molly Lesher; Hildegunn Kyvik Nordas |
| Abstract: | This study describes developments in international trade and OECD labour markets and analyses possible linkages between them. It depicts recent developments in offshoring, trade in tasks and the integration of large emerging economies into the world market. The labour market in major OECD countries has been characterised by rising employment relative to the total population and declining unemployment rates during the past decade. Job security has not changed greatly between 1995 and 2005, but the wage share of national income has declined in many OECD countries. The report does not find evidence of a linkage between import penetration and overall employment or unemployment, but relatively small effects on productivity and employment patterns are found. A shift towards sourcing of imports from emerging markets slightly improves labour productivity and reduces labour demand in the importcompeting sectors or activities. Offshoring of services has a relatively strong positive marginal impact on labour productivity, but the scale of offshoring is still modest. The labour market impact of offshoring is stronger in countries with high employment protection and high barriers to entrepreneurship. The study finally argues that offshoring is motivated by the need for flexibility and lower costs and helps firms remain competitive. Thus, offshoring may well relax the pressure to move the entire manufacturing production chain to low-cost countries. |
| Keywords: | emerging economies |
| JEL: | F16 |
| Date: | 2008–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:64-en&r=lab |
| By: | Delia Furtado (University of Connecticut); Nikolaos Theodoropoulos (University of Cyprus) |
| Abstract: | This paper tests whether marriage to a native affects the probability that an immigrant is employed. We provide a theoretical background which explains how marriage to a native may positively or negatively affect an immigrant’s employment probability. Utilizing the 2000 U.S. Census, we first look at the effect of cross-nativity marriages on employment using a linear probability model. Then, we estimate a two stage least squares model instrumenting for cross-nativity marriages using local marriage market conditions. Results from a linear probability model controlling for the usual measures of human capital and immigrant assimilation suggest that marriage to a native increases the employment probability of an immigrant by approximately 5 percentage points. When controlling for the endogeneity of the intermarriage decision, marriage to a native increases the employment probability by about 11 percentage points. We provide alternative explanations and suggest policy implications. |
| Keywords: | Intermarriage, Employment, Immigration |
| JEL: | J12 I21 J61 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0801&r=lab |
| By: | Robert J. Gordon; Ian Dew-Becker |
| Abstract: | This paper provides a comprehensive survey of seven aspects of rising inequality that are usually discussed separately: changes in labor's share of income; inequality at the bottom of the income distribution, including labor mobility; skill-biased technical change; inequality among high incomes; consumption inequality; geographical inequality; and international differences in the income distribution, particularly at the top. We conclude that changes in labor's share play no role in rising inequality of labor income; by one measure labor's income share was almost the same in 2007 as in 1950. Within the bottom 90 percent as documented by CPS data, movements in the 50-10 ratio are consistent with a role of decreased union density for men and of a decrease in the real minimum wage for women, particularly in 1980-86. There is little evidence on the effects of imports, and an ambiguous literature on immigration which implies a small overall impact on the wages of the average native American, a significant downward effect on high-school dropouts, and potentially a large impact on previous immigrants working in occupations in which immigrants specialize. The literature on skill-biased technical change (SBTC) has been valuably enriched by a finer grid of skills, switching from a two-dimension to a three- or five-dimensional breakdown of skills. We endorse the three-way "polarization" hypothesis that seems a plausible way of explaining differentials in wage changes and also in outsourcing. To explain increased skewness at the top, we introduce a three-way distinction between market-driven superstars where audience magnification allows a performance to reach one or ten million people, a second market-driven segment consisting of occupations like lawyers and investment bankers, and a third segment consisting of top corporate officers. Our review of the CEO debate places equal emphasis on the market in showering capital gains through stock options and an arbitrary management power hypothesis based on numerous non-market aspects of executive pay. Data on consumption inequality are too fragile to reach firm conclusions. We introduce two new issues, disparities in the growth of price indexes and also of life expectancy between the rich and the poor. We conclude with a perspective on international differences that blends institutional and market-driven explanations. |
| JEL: | D12 D3 D31 D63 I3 J24 J31 J62 R10 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13982&r=lab |
| By: | Lundborg, Per (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | We derive a long-run Phillips curve that is negatively sloped at low inflation rates. Due to exogenous changes, unions want to redistribute wages across different members also in the long run. Wage stickiness, inflation targeting and union solidarity are central characteristics of our New Keynesian model. In the model, high enough inflation becomes the grease of the economy that allows wage redistribution across unions without causing unemployment to rise above NAIRU. We show that under nominal wage rigidity, long-run unemployment may rise drastically and at zero inflation, unemployment may be trapped at very high levels even if demands for wage redistribution tapers off. Under real wage rigidity, the economy may get trapped at high unemployment also at positive but low inflation rates irrespective of demand for wage redistribution has vanished or not. Thus, a period of wage redistribution may cause an economy of full real wage rigidity to get trapped at a high unemployment rate. A policy conclusion is that economies characterized by extensive wage rigidity should not target inflation at too low levels. |
| Keywords: | - |
| Date: | 2008–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2008_003&r=lab |
| By: | Lee, Chanyoung; Orazem, Peter |
| Abstract: | The health consequences of child labor may take time to manifest themselves. This study examines whether adults who worked as children experience increased incidence of illness or physical disability. The analysis corrects for the likely endogeneity of child labor and years of schooling using variation across localities in the number of schools and teachers per child, and in low skill wages dated back to the time when the adults were children. Results show that the effects of child labor on adult health are complex. When child labor and schooling are treated as exogenous variables, child labor appears to increase the likelihood of poor health outcomes in adulthood across a wide variety of health measures. However, when child labor and schooling are considered endogenous, they lose power to explain adverse adult health outcomes in almost all cases. When analyzed separately for subsamples of males and females, the explanatory power of schooling and child labor completely disappears. Failing to find a causal link between child labor and adverse adult health outcomes, we conclude that the correlation between the two is related to unobservable health and ability endowments that jointly affect child labor supply, schooling, and adult health. |
| Keywords: | child labor; health; wages; schooling; school quality; occupational choice |
| JEL: | I0 |
| Date: | 2008–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12933&r=lab |
| By: | Silvio Rendon (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM)); Alfredo Cuecuecha (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM)) |
| Abstract: | It is argued that migration from Mexico to the US and return migration are determined by international wage differentials and preferences for origin. We use a model of job search, savings and migration to show that job turnover is a crucial determinant of the migration process. We estimate this model by Simulated Method of Moments (SMM) and find that migration practically disappears if Mexico has American arrival rates while employed. Doubling migration costs reduces migration rates in half, while subsidizing return migration in $300 reduces migration rates of older migrants but increases migration rates of younger migrants. |
| Keywords: | International Migration, Job Search, Job Turnover, Savings, Structural Estimation |
| JEL: | F22 J64 E20 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cie:wpaper:0709&r=lab |
| By: | Rémi Bazillier (Centre d'Economie de la Sorbonne) |
| Abstract: | The goal of this paper is to determine the impact of the settings of labour standards on the level of dualism, employment and wages. Contrary to the "conventional wisdom", we show that the reinforcement of dualism due to the improvement of labour standards is not automatic. Under certain assumptions (impact of labour standards on productivity, initial level of labour standards and ratio capital/labour), the improvement of labour standards can improve employment in the formal sector, reduce the relative weight of traditional sector and increase the wage in this sector. We also study the effects of labour standards when these standards creates an additional incentive to migrate. We show that it can create a upward pressure on the level of urban unemployment if the gap between working conditions in the two sector is too large. |
| Keywords: | Labor norms, dualism, migration. |
| JEL: | J80 J88 O15 O17 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:bla08034&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 consumptionleisure 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: | Labour markets; Potential output; Productivity |
| JEL: | E65 E24 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:08-14&r=lab |
| By: | Mahuteau, Stephane; Junankar, Pramod |
| Abstract: | While the Coalition Government was in power in Australia from 1996 to 2007, new immigrants have had to face tougher selection criteria and increased financial pressure. Most studies so far have overlooked the issue of the quality of the jobs obtained by new immigrants to Australia and whether the policy change has contributed to improve or worsen job quality among immigrants and their ability to move upward. Job quality is thought to be related to the channels of information used by immigrants in their job search. Some studies suggest that jobs found via networks of same origin migrants are of lower quality. The aim of this paper is twofold. First, we investigate the effect of time since settlement on the ability of migrants to better their labour market outcomes. Second, we quantify the relationships between job quality and migrants’ job search methods and test whether they were affected by the policy changes. Using the Longitudinal Survey of Immigrants to Australia (LSIA), we estimate the probabilities for immigrants to find “good jobs”, controlling for their initial employability upon arrival in Australia. We test several models involving various definitions of “good job”, from objective conditions, based on the nature and status of the occupation, to more subjective conditions based on job satisfaction. We show that the sole effect of being a second cohort migrant is beneficial for the probability to both find a job and a “good job” within the first year and half after settlement. After this time, cohort two migrants who still have not found a good job experience more difficulty to improve. Moreover, informal channels of information on job prospects have been slightly more efficient in enabling second cohort migrants to find good jobs, even though they still provide individuals with a disadvantage compared to formal channels. |
| Keywords: | migrants; job quality; immigration policy; migrant networks; bivariate probit |
| JEL: | J61 J68 C25 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8703&r=lab |
| By: | Georg Wernhart (Austrian Institute for Family Studies, University of Vienna); Rudolf Winter-Ebmer (Department of Economics, Johannes Kepler University Linz, Austria) |
| Abstract: | We study the development of wage elasticity of labor supply for Austrian men and women over time using comparable and representative survey data for the 1980s and 1990s. The elasticity of men is relatively low and constant over time, similar to the behavior of single women. Most remarkable is the almost continuous reduction in the labor supply reactions of married women: while their elasticity was still several times larger at the beginning of the 1980s, they approached rapidly the much less elastic behaviour of men. These developments are important for the analysis of deadweight losses of taxation as well as the effects of tax reforms and wage subsidy programs. |
| Keywords: | Labor supply, gender, wage elasticity |
| JEL: | J21 J22 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2008_05&r=lab |
| By: | Araújo, Eurilton |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_110&r=lab |
| By: | Gerd Grözinger; Wenzel Matiaske; Verena Tobsch |
| Abstract: | Employee-friendly labour time: a key element to a sustainable pattern of production and consumption. Whereas preferences of consumers are a cornerstone of market economies, preferences of employees e.g. regarding the preferred amount of paid labour are mostly not. However, we find strong evidence that differences between aspired and actually worked weekly hours have a serious negative impact on all three dimensions of satisfaction considered: Life satisfaction, which in turn is strongly related to many dimensions of social life; satisfaction with work, which affects productivity directly and health satisfaction, which influences morbidity and mortality as shown by studies of the WHO. This paper investigates the gap between employees preferences and realities by means of the German Socio-Economic Panel (GSOEP) data. Although restricted to Germany, our basic findings are much in accordance with European-wide research projects, especially by the European Foundation for the Improvement of Living and Working Conditions. The central analyzed question is: How many hours one would like to work, taking into account that earnings would change accordingly. A majority of German employees wanted a labor time reduction and only a small minority prefers an enlargement. By combining both effects, more than 2,4 million additional employees could have been statistically brought into work again. In addition, satisfaction would have been improved, consumerism somewhat mellowed. And, since mainly persons with children wanted to reduce their working hours, family life would have gained significantly. |
| Keywords: | Labour market, workings hours, unemployment, happiness, satisfaction |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp103&r=lab |
| By: | Rozana Himaz |
| Abstract: | This paper uses demand analysis to explore whether intrahousehold allocation of education expenditure differs between boys and girls in rural Sri Lanka. Contrary to most countries in South Asia a significant bias favouring girls is found in 1990/91 for the 5-9 and 17-19 age groups and in 1995/96 for the 5-9 and 14-16 age groups. The 5-9 age group captures the run-up to the Year 5 scholarship exams that are used to gain entry into better performing secondary schools. The 14-16 and 17-19 age groups capture those who read for important National level qualifications vital in the job market. The paper argues that these household level decisions are rational because wage returns to junior and senior secondary education have been higher for females than for males through the 1980s and 1990s. |
| Keywords: | Intrahousehold Allocation, Returns to Education, Gender |
| JEL: | D13 I21 J16 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:393&r=lab |
| By: | Martina Gianecchini (University of Padua); Barbara Imperatori (SDA Bocconi School of Management); Anna Grandori (Bocconi University); Giovanni Costa (University of Padua) |
| Abstract: | The paper presents an organizational analysis of so-called 'atypical work contracts', the purpose being to gain better understanding of their variety and to provide useful indications for their assessment, considering not only the legal alternatives but also the organization of work. Exploratory research was conducted on two groups of Italian workers (flexible and permanent) and a group of firms. The Italian labour market has recently undergone a reform which introduced a number of flexible contracts, and it is therefore a good context for analyzing the use of these employment arrangements. Workers were requested to describe their 'ideal employment contract', ranking its characteristics and comparing it with their actual contract. At the same time, we interviewed a group of HR managers, asking them to make a similar evaluation. The results show that different legal contracts are sometimes used for jobs with the same contents. Hence, the 'atypical features' of some contracts are not confirmed in practice, and the choice of a flexible employment relationship appears to be the result of a complex evaluation, in which the contractual form is just one (but not the most important) element. Then identified are some 'critical' areas to be considered in designing effective employment relationships (flexibility; contract architecture; risk allocation). |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0075&r=lab |
| By: | Jung, Philip |
| Abstract: | Optimal labor tax results over the cycle are, quantitatively, typically driven by an estimate of the intratemporal elasticity of substitution that governs the reaction of hours worked to business cycle shocks and tax rate changes. A recent literature tries to decompose this intratemporal elasticity into its main components, the "Ins and Outs of Unemployment" (Shimer(2007)) to emphasize the importance of the extensive margin. This paper provides a model that a.) endogenizes all transition rates including firings and quits on the job as well as movements in and out of inactivity, b.) explains the fluctuations in these rates quantitatively while allowing for differences across gender and c.) remains tractable and open to Ramsey-optimal policy. We estimate the model on US-data for the years 1970:1 to 2004:4 and show that the model predicts all labor market flows very well. We apply our model to show that observed labor tax rates over the cycle correspond fairly closely to the implied Ramsey-optimal ones. |
| Keywords: | search theory; unemployment; hours worked |
| JEL: | E32 E31 E24 |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8744&r=lab |
| By: | Catalina Amuedo-Dorantes; Sara de la Rica |
| Abstract: | How immigration affects the labor market of the host country is a topic of major concern for many immigrant-receiving nations. Spain is no exception following the rapid increase in immigrant flows experienced over the past decade. We assess the impact of immigration on Spanish natives’ income by estimating the net immigration surplus accruing at the national level and at high immigrant-receiving regions while taking into account the imperfect substitutability of immigrant and native labor. Specifically, using information on the occupational densities of immigrants and natives of different skill levels, we develop a mapping of immigrant-to-native self-reported skills that reveals the combination of natives across skills that would be equivalent to an immigrant of a given self-reported skill level, which we use to account for any differences between immigrant self-reported skill levels and their effective skills according to the Spanish labor market. We find that the immigrant surplus amounts to 0.04 percent of GDP at the national level and it is even higher for some of the main immigrant-receiving regions, such as Cataluña, Valencia, Madrid, and Murcia. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-17&r=lab |
| By: | Vera Brusentsev (Department of Economics,University of Delaware); Wayne Vroman (The Urban Institute, Washington, DC) |
| Abstract: | Nearly twenty years have passed since the transition from a centrally-planned towards a market-oriented economy in the countries of Central and Eastern Europe and the Former Soviet Union (CEE-FSU). This paper documents the differing patterns of unemployment during the period 1990 to 2006 in the 28 countries that constitute the CEE-FSU group and outlines how unemployment protection programs developed in response. We also suggest some tentative explanations for the observed trends in unemployment and unemployment compensation. Our approach is novel in that we compare the performance of the CEE-FSU group to the worldwide average and to other major economies. In addition, we demonstrate important contrasts across the CEE-FSU sub-regions. Similar to other research in the area, this paper demonstrates significantly below-average income growth between 1990 and 1995 but then significantly above-average growth in the years since 1995 when compared with the worldwide average. We also show a significant link between output growth and employment growth for many individual countries from the region. The transition economies developed new institutions to measure and offset the effects of the new phenomenon of open unemployment. The majority instituted labor force surveys to measure unemployment and all but one (Tajikistan) established unemployment compensation (UC) programs. Our analysis of unemployment rates finds that they have been high in many of these countries but, when placed within a global context, the CEE-FSU averages during 1994-1996 and again during 2004-2006 were only somewhat higher than the average unemployment rates in other major countries with labor surveys. |
| Keywords: | transition economics, economic growth, unemployment, unemployment compensation |
| JEL: | C33 J4 J6 P2 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:08-15.&r=lab |
| By: | Angel de la Fuente; Juan Francisco Jimeno |
| Abstract: | This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under conditions that approximate general equilibrium. |
| Keywords: | returns to schooling |
| JEL: | I20 J31 H60 |
| Date: | 2008–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:737.08&r=lab |
| By: | John P. Haisken-DeNew; Matthias Vorell |
| Abstract: | The level of violence in the National Hockey League (NHL) reached its highest point in 1987 and has reduced somewhat since then, although to levels much larger than before the first team expansions in 1967. Using publicly available information from several databases 1996–2007, the incentives for violence in North American ice hockey are analyzed.We examine the role of penalty minutes and more specifically, fighting, during the regular season in determining wages for professional hockey players and team-level success indicators. There are substantial returns paid not only to goal scoring skills but also to fighting ability, helping teams move higher in the playoffs and showing up as positive wage premia for otherwise observed low-skill wing players. These estimated per-fight premia, depending on fight success ($10,000 to $18,000), are even higher than those for an additional point made. By introducing a “fight fine” of twice the maximum potential gain ($36,000) and adding this amount to salaries paid for the team salary cap (fines would be 6.7% of the team salary cap or the average wage of 2 players), then all involved would have either little or no incentives to allow fighting to continue. |
| Keywords: | Compensating wage differentials, health risk, violence, subjective indicators |
| JEL: | J31 J81 C23 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0047&r=lab |
| By: | Derek Yu (Department of Economics, Stellenbosch University) |
| Abstract: | Given the importance of the labour market to economic activity in any country, it is important to correctly infer trends from the available labour data. In South Africa, several researchers have compared selected household surveys with each other and then drew conclusions about the ‘trends’ in the labour market for the entire period between surveys. It is argued that such a methodology is imperfect and could give misleading results. A better methodology would entail looking at all the available surveys to ascertain the real trends over time. Therefore, this paper seeks to examine the trends of the labour force (LF), labour force participation rate (LFPR) and employment, as well as the working conditions of the employed, and the personal and household characteristics of the unemployed from 1995 to 2006, using the October Household Survey (OHS) data from 1995 to 1999, and the Labour Force Survey (LFS) data from 2000 to 2006. The paper finds that, with the exception of an unusual slight decrease between 1995 and 1996, the LF and LFPR in both narrow and broad terms experienced a rapid increase during the OHSs, followed by an abrupt increase during the changeover from OHS to LFS. The narrow LF and LFPR have since increased slightly, while the broad LF and LFPR have stabilized. The trends over the LFS period do not suggest any further “feminization of the LF” (Casale 2004; Casale, Muller & Posel 2005), and the abrupt break in this trend between the LFS and OHS periods may suggest that the observed trend over the former period could perhaps have been the result of improved capturing of participation rather than a real shift in LFPR. In addition, the number of employed clearly shows enormous fluctuations, and it is only since LFS2004b that employment growth enjoyed a stable and continuous increase. Therefore, it is possible to obtain contrasting conclusions on whether job creation or jobless growth has taken place in the South African economy, if different reference points are used for comparison. Finally, both the narrow and broad unemployment rates increased continuously from OHS1995 to LFS2003a, before this was replaced by a continuous downward trend since LFS2003b. Such a decline needs to be more rapid before the ASGISA goal of reducing the narrow unemployment rate to below 15% in 2014 could be achieved. |
| Keywords: | South Africa, Household survey, Labour market trends |
| JEL: | J00 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers53&r=lab |
| By: | Ximena Peña Parga; Camilo Mondragón-Vélez |
| Abstract: | We characterize entrepreneurship in developing economies through a case study for Colombia. We document self-employment and business ownership since the 1980s; while the relative size of these groups within the labor force is stable across time, they differ significantly in important observable dimensions such as education and business sector. We then study the motivations to become an entrepreneur. First, we analyze the transition into and out of potential forms of entrepreneurship by measuring the flows across occupations, and study the determinants of entry and exit into and out of self-employment and business ownership; there is surprisingly little transition between self-employment and business ownership. Second, we focus on the financial motivations by measuring the differences in earnings of self-employment and business ownership relative to salaried work, at the mean and along the distribution. There is a substantial earnings premium to become a business owner, but it is not financially attractive to become self-employed. The results of this paper suggest that while business ownership is what the literature associates with entrepreneurship, self-employment is basically a subsistence activity. |
| Date: | 2008–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:004672&r=lab |
| By: | Papahristodoulou, Christos |
| Abstract: | We formulate a non-linear integer programming model and use plausible parameters to examine: (i) the effects of wage differences between Super- and Normal- players in the performance of four teams which participate in the UEFA CL group matches; (ii) whether the expected qualification bonus received by UEFA and paid to the players of the non-qualified teams, enhances effort and the teams manage to qualify. When performance is measured by points’ maximization, higher wage equality seems to improve the performance of three teams, irrespectively if the elasticity of substitution between Super- and Normal- players is high or low, while the most efficient team of the tournament is not affected by the wage structure. The U-formed performance for that team is not excluded. When performance is measured by profits’ maximization, the performance depends on both the “production” technology and on wage differences. When all teams operate under increasing returns and all pay the same, but varying relative wages, or when they operate under decreasing returns and pay the marginal value product of their players, the most “balanced” team performs better. The most “unbalanced” team performs best under increasing returns to scale and egalitarian wages. In the last case, the non-qualified teams did not manage to improve their performance and qualify, even if their players should receive the expected qualification bonus that UEFA pays. |
| Keywords: | Players; Teams; Wages; Bonus; Performance; Tournament |
| JEL: | D0 C6 D7 L83 |
| Date: | 2008–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8719&r=lab |
| By: | Jusélius, Katarina; Ordóñez, Javier |
| Abstract: | This paper provides an empirical investigation of the wage, price and unemployment dynamics that have taken place in Spain during the last two decades. The aim of this paper is to shed light on the impact of the European economic integration process on Spanish labour market and the convergence to a European level of prosperity. We find some important lessons to be learnt from the Spanish experience that should be relevant for the new member states. Second, before fixing the real exchange rate it seems crucial that it is on its sustainable (competitive) purchasing power parity level. First, high competitiveness in the tradable sector seems crucial for the real and nominal convergence to be successful. The increase in consumption wages and consumer prices as a result of the Balassa-Samuelson effect should not be allowed to exceed the improvement in productivity. Second, before fixing the real exchange rate it seems crucial that it is on its sustainable (competitive) purchasing power parity level. Third, there does not seem to be a short-cut to a European level of standard of living: the path to sustainable prosperity seems to follow the path of productivity improvement. Forth, excessive real wage increases seem to lead to increasing unemployment, slowdown in productivity growth, higher interest rates, and loss of competitiveness. On the other hand, the access to the European market and the possibility of increased export demand is likely to speed up the convergence process as long as competitiveness is not eroded by excess wage increases. |
| Keywords: | Balassa-Samuelson effect, nominal and real convergence, unemployment dynamics, purchasing power parity, cointegrated VAR |
| JEL: | C32 E24 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:7265&r=lab |
| By: | Jeffrey S. DeSimone |
| Abstract: | This paper estimates the effect of paid employment on grades of full-time, four-year students from four nationally representative cross sections of the Harvard College Alcohol Study administered during 1993–2001. The relationship could be causal in either direction and is likely contaminated by unobserved heterogeneity. Two-stage GMM regressions instrument for work hours using paternal schooling and being raised Jewish, which are hypothesized to reflect parental preferences towards education manifested in additional student financial support but not influence achievement conditional on maternal schooling, college and class. Extensive empirical testing supports the identifying assumptions of instrument strength and orthogonality. GMM results show that an additional weekly work hour reduces current year GPA by about 0.011 points, roughly five times more than the OLS coefficient but somewhat less than recent estimates. Effects are stable across specifications, time, gender, class and age, but vary by health status, maternal schooling, religious background and especially race/ethnicity. |
| JEL: | I2 J22 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14006&r=lab |
| By: | Arnaud Chevalier (Department of Economics, University of Kent, Canterbury, CT2 7NP, England Associate at the Centre for Economics of Education, London School of Economics, Geary Institute, University College Dublin & Institute for the Study of Labour, IZA, Bonn); Leon Feinstein (Institute of Education, Centre for Research on the Wider Benefits of Learning, 20 Bedford Way, London WC1H OAL, England Associate at the Centre for the Economics of Education, London School of Economics, England) |
| Abstract: | Mental illness is associated with large costs to individuals and society. Education improves various health outcomes but little work has been done on mental illness. To obtain unbiased estimates of the effect of education on mental health, we rely on a rich longitudinal dataset that contains health information from childhood to adulthood and thus allow us to control for fixed effects in mental health. We measure two health outcomes: malaise score and depression and estimate the extensive and intensive margins of education on mental health using various estimators. For all estimators, accounting for the endogeneity of education augments its protecting effect on mental health. We find that the effect of education is greater at mid-level of qualifications, for women and for individuals at greater risk of mental illness. The effects of education are observed at all ages, additionally education also reduces the transition to depression. These results suggest substantial returns to education in term of improved mental health. |
| Keywords: | Returns to education, mental health |
| JEL: | I12 I29 |
| Date: | 2007–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200715&r=lab |
| By: | Francesc Dilme (Universitat de Barcelona) |
| Abstract: | This paper analyses the relation between parents earnings and their childrens education. In a context of perfect altruism, the model describes parents decisions on how much to consume and how much to invest in their childrens education. The model predicts that returns on education in terms of wages should be linear. Using this model in a competitive economy, we show how the outcome depends on government subsidies or taxes on education. The usual tradeoff equality-efficiency arises in this context. Finally, the model provides some insights into the relation between education and productivity. |
| Keywords: | intergenerational altruism, education returns |
| JEL: | E24 J26 I22 I28 I32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2008194&r=lab |
| By: | Valerie A. Ramey |
| Abstract: | This paper presents new estimates of time spent in home production in the U.S. during the 20th Century. Regressions based on detailed tabulations from early time diary studies are used to construct estimates for housewives that are closer to being nationally representative for the first half of the 20th Century. These estimates are then linked to estimates from individual-level data from 1965 to the present. Time diary studies of other groups such as employed women, men, and children are also compiled and analyzed. The new estimates suggest that time spent in home production by prime-age women fell by around six hours from 1900 to 1965 and by another 12 hours from 1965 to 2005. Time spent by prime-age men rose by 13 hours from 1900 to 2005. Considering the entire population, including children and older individuals, per capita time spent in home production increased slightly over the century. The new estimates are used to assess leading theories about long-run trends in home production. |
| JEL: | J22 N32 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13985&r=lab |
| By: | Ben Jann |
| Abstract: | The counterfactual decomposition technique popularized by Blinder (1973) and Oaxaca (1973) is widely used to study mean outcome differences between groups. For example, the technique is often used to analyze wage gaps by sex or race. The present paper summarizes the technique and addresses a number of complications such as the identification of effects of categorical predictors in the detailed decomposition or the estimation of standard errors. A new Stata command called -oaxaca- is introduced and examples illustrating its usage are given. |
| Keywords: | Stata, Blinder-Oaxaca decomposition, outcome differential, wage gap |
| JEL: | C49 C87 J31 J71 |
| Date: | 2008–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:ets:wpaper:5&r=lab |
| By: | Christopher Ferrall (Queen's University) |
| Abstract: | This paper models the Self-Sufficiency Project (SSP), a controlled randomized experiment concerning welfare. The model of household behavior includes stochastic labor market skill, job opportunities, and value of non-labor market time. All the variation within and between treatment groups, jurisdictions (provinces), demographic groups, and sub-experiments is derived from four underlying sources: policy variation, endogenous selection into the experimental samples, the SSP treatments themselves, and different mixtures over 4 underlying types. Using the variation within the treatment group is quantitatively important for identifying the complex model: Efficient GMM the parameters are estimated precisely and variation within the treatment group is much more important for identification than either variation within the control group or between treatment and control groups. The model tracks the primary moments well within sample and out-of-sample except for under-estimating the difference in the entry sample. Predictions of the estimated model are computed for different welfare reform experiments. The details of the design are critical for interpretation of the results and it appears that the small SSP+ treatment may have longer lasting impacts than the an in-sample impact analysis would suggest. |
| Keywords: | Dynamic Household Behavior, Welfare Policy, Controlled Experiments, GMM |
| JEL: | I3 C9 J0 C5 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1165&r=lab |
| By: | Sala, Luca; Söderström, Ulf; Trigari, Antonella |
| Abstract: | We study the design of monetary policy in an estimated model with sticky prices, search and matching frictions, and staggered nominal wage bargaining. We find that the estimated natural rate of unemployment is consistent with the NBER description of the U.S. business cycle, and that the inflation/unemployment trade-off facing monetary policymakers is quantitatively important. We also show that parameter uncertainty has a limited effect on the performance or design of monetary policy, while natural rate uncertainty has more sizeable effects. Nevertheless, policy rules that respond to the output or unemployment gaps are more efficient than rules responding to output or unemployment growth rates, also in the presence of uncertainty about the natural rates. |
| Keywords: | Labour market search; Monetary policy; Natural rate uncertainty; Parameter uncertainty; Unemployment |
| JEL: | E24 E32 E52 J64 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6826&r=lab |
| By: | Prema-chandra Athukorala; Raghav Gaiha; Shylashri Shankar |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2008-04&r=lab |
| By: | Benno Torgler; Markus Schaffner; Sascha L. Schmidt; Bruno S. Frey |
| Abstract: | Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data from two different disciplines, basketball and soccer. These sports tournaments take place in a controlled environment defined by the rules of the game. We find considerable support that positional concerns and envy reduce individual performance. In contrast, there does not seem to be any tolerance for income disparity, based on the hope that such differences signal that better times are under way. Positive behavioral consequences are observed for those who are experiencing better times. |
| Keywords: | Relative income; positional concerns; envy; social comparison; relative derivation; performance |
| JEL: | D00 D60 L83 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-12&r=lab |
| By: | Peter Haan; Victoria Prowse; Arne Uhlendorff |
| Abstract: | In this paper we develop a dynamic structural life-cycle model of labor supply behavior which fully accounts for the effects of income tax and transfers on labor supply incentives. Additionally, the model recognizes the demand side driven rationing risk that might prevent individuals from realizing their optimal labor supply state, resulting in involuntary unemployment. We use this framework to study the employment effects of transforming a traditional welfare state, as is currently in place in Germany, towards a more Anglo-American system in which a large proportion of transfers are paid to the working poor. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-25&r=lab |
| By: | Janet Currie |
| Abstract: | There are many possible pathways between parental education, income, and health, and between child health and education, but only some of them have been explored in the literature. This essay focuses on links between parental socioeconomic status (as measured by education, income, occupation, or in some cases area of residence) and child health, and between child health and adult education or income. Specifically, I ask two questions: What is the evidence regarding whether parental socioeconomic status affects child health? And, what is the evidence relating child health to future educational and labor market outcomes? I show that there is now strong evidence of both links, suggesting that health could play a role in the intergenerational transmission of economic status. |
| JEL: | I12 J24 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13987&r=lab |
| By: | Metiu, Anca (ESSEC Business School); Obodaru, Otilia (INSEAD) |
| Abstract: | We examine the formation of women’s professional identity in a particular type of male-dominated domain, the free and open source software development communities, and more broadly in information technology. Through an ethnographic analysis of interviews and online forums discussions, we find that women experience two types of discrepancies or gaps that constitute obstacles in the process of identity formation: an image gap and an identity gap. We show the strategies employed by women as they attempt to bridge these gaps; we also find that some of these strategies, while tackling one gap, may also deepen the other. |
| Keywords: | Gender; Identity Formation; Self-presentation |
| JEL: | Z13 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-08009&r=lab |
| By: | Madden, D |
| Abstract: | The General Health Questionnaire (GHQ) is frequently used as a measure of mental well-being. A consistent pattern across countries is that women report lower levels of mental well-being, as measured by the GHQ. This paper applies decomposition techniques to Irish data for 1994 and 2000 to examine the factors lying behind the gender differences in GHQ score. For both 1994 and 2000 about two thirds of the raw difference is accounted for by differences in characteristics, with employment status the single most important factor. |
| Keywords: | Mental Well-Being, decomposition, gender difference. |
| JEL: | I12 I31 I32 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:08/08&r=lab |
| By: | Andrew T. Young; Hernando Zuleta |
| Abstract: | Measuring labor's share of an economy's aggregate income seems straightforward, at least in principle. Count up wage and salary income, along with the value of benefits provided to employees, and divide it by total income. However, one fundamental concept of labor's share in macroeconomic theory is not the amount of aggregate income paid out to labor. Rather, it is the share of aggregate production that is attributable to "raw" units of labor. Or, otherwise stated, it is the share of aggregate income that would have been paid to laborers if they had no accumulated stocks of human capital.1 This share corresponds to an aggregate production function parameter: the elasticity of output with respect to physical (i.e. non-augmented or raw) units of labor (Robert Solow, 1957). In this paper we estimate annual raw labor’s share for the US, 1949 to 1996. |
| Date: | 2008–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:004674&r=lab |
| By: | Irene Y.H. Ng (Department of Social Work, National University of Singapore, Singapore); Kong Weng Ho (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore); K.C. Ho (Department of Sociology, National University of Singapore, Singapore) |
| Abstract: | Youth participation in social groups is important in developing skills and experience for successful transition to adulthood. What kinds of families do youth who are active in social groups and who take on leadership positions come from? Using data from the National Youth Survey 2005, this research studies the social participation of Singaporean youth aged 15 -18. Through probit regression analysis, it examines how youth participation in Singapore is associated with two types of family characteristics. First, it examines the role of maternal education. As a proxy for social class, maternal education represents the roles of cultural capital formation and concerted involvement by middle class parents. Second, it studies the role of family challenge and support. Maternal education is found to predict both high participation and leadership. While additional family challenge induces greater participation, family support increases participation only when the level of support is high. |
| Keywords: | youth participation; family challenge; family support; social class |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:0801&r=lab |
| By: | Marco LiCalzi; Paolo Pellizzari (Department of Applied Mathematics, University of Venice) |
| Abstract: | This paper studies the consequences of removing the resampling assumption from the zero-intelligence trading model in Gode and Sunder (1993). We obtain three results. First, individual rationality is no longer sufficient to attain allocative effciency in a continuous double auction; hence, the rules of the market matter. Second, the allocative effciency of the continuous double auction is higher than for other sequential protocols both with or without resampling. Third, compared to zero intelligence, the effect of learning on allocative effciency is sharply positive without resampling and mildly negative with resampling. |
| JEL: | D40 D51 C70 C92 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpaper:164&r=lab |
| By: | Emily Oster; Gang Chen |
| Abstract: | Earlier work (Oster, 2005) has argued, based on existing medical literature and analysis of cross country data and vaccination programs, that parents who are carriers of hepatitis B have a higher offspring sex ratio (more boys) than non-carrier parents. Further, since a number of Asian countries, China in particular, have high hepatitis B carrier rates, Oster (2005) suggested that hepatitis B could explain a large share { approximately 50% { of Asia's \missing women". Subsequent work has questioned this conclusion. Most notably, Lin and Luoh (2008) use data from a large cohort of births in Taiwan and find only a very tiny effect of maternal hepatitis carrier status on offspring sex ratio. Although this work is quite conclusive for the case of mothers, it leaves open the possibility that paternal carrier status is driving higher sex offspring sex ratios. To test this, we collected data on the offspring gender for a cohort of 67,000 people in China who are being observed in a prospective cohort study of liver cancer; approximately 15% of these individuals are hepatitis B carriers. In this sample, we find no effect of either maternal or paternal hepatitis B carrier status on offspring sex. Carrier parents are no more likely to have male children than non-carrier parents. This finding leads us to conclude that hepatitis B cannot explain skewed sex ratios in China. |
| JEL: | J1 J16 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13971&r=lab |
| By: | Alan Krause |
| Abstract: | This paper examines a two-period model of optimal nonlinear income taxation with learning-by-doing, in which second-period wages are an increasing function of first-period labour supply. We consider the cases when the government can and cannot commit to its second-period tax policy. In both cases, the canonical Mirrlees/Stiglitz results regarding optimal marginal tax rates no longer apply. In particular, if the government cannot commit and skill-type information is revealed, it is optimal to distort the high-skill consumer's labour supply downwards through a positive marginal tax rate to relax the incentive-compatibility constraint. Alternatively, if the government cannot commit and skill-type information is concealed, it is optimal to distort the high-skill consumer's labour supply upwards to relax the incentive-compatibility constraint, but due to some other factors at work the high-skill consumer's marginal tax rate cannot be signed. Our analysis therefore identifies a setting in which a positive marginal tax rate on the highest-skill individual can be justified, despite its depressing effect on labour supply and wages. |
| Keywords: | Income taxation, learning-by-doing, commitment. |
| JEL: | H21 H2 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:08/08&r=lab |
| By: | Vitor Marques (Entidade Reguladora dos Serviços Energéticos, Lisboa); Isabel Soares (CETE, Faculdade de Economia, Universidade do Porto); Adelino Fortunato (Faculdade de Economia da Universidade de Coimbra) |
| Abstract: | The existence of market power in the electricity market is a recurrent issue. Measuring and understanding market power practices in the Iberian electricity market turn out to be interesting: though a liberalized market, two integrated firms control 80% of total demand and there is a strong - often direct - intervention of government in the market. For various reasons, among which the difficulty in obtaining reliable, extensive data stands out, market power in the Iberian electricity market has rarely been measured. This work aims to contribute to a better knowledge of the way market power occurs. We calculate the elasticity of residual demand to evaluate the two dominant firm’s market power, using hourly bides in the Spanish spot market for the period July-August 2004 to 2006. Although our approach was highlighted by Frank Wolak work on the electricity sector, we extend it and discuss its constraints. We discuss the results obtained in the light of the evolution of the electricity sector during that period. |
| Keywords: | Market power, wholesale market, residual demand curve elasticity, government intervention |
| JEL: | L13 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:0801&r=lab |
| By: | Karin Mayr (Johannes Kepler University, Linz); Giovanni Peri (UC Davis and NBER) |
| Abstract: | Recent theoretical and empirical studies have emphasized the fact that the prospect of international migration increases the expected returns to skills in poor countries, linking the possibility of migrating (brain drain) with incentives to higher education (brain gain). If emigration is uncertain and some of the highly educated remain, such a channel may, at least in part, counterbalance the negative effects of brain drain. Moreover, recent empirical evidence seems to show that temporary migration is widespread among highly skilled migrants (such as Eastern Europeans inWestern Europe and Asians in the U.S.). This paper develops a simple tractable overlapping generations model that provides an economic rationale for return migration and which predicts who will migrate and who will return among agents with heterogeneous abilities. We use parameter values from the literature and the data on return migration to calibrate our model and simulate and quantify the effects of increased openness on human capital and wages of the sending countries. We find that, for plausible values of the parameters, the return migration channel is very important and combined with the incentive channel reverses the brain drain into significant brain gain for the sending country. |
| Keywords: | Skilled Migration, Return Migration, Returns to Education. |
| JEL: | F22 J61 O15 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0804&r=lab |
| By: | Hasan, Zubair |
| Abstract: | Over the past few decades Islamic finance has been the fastest growing segment of the global system. The fast growing market has necessitated corresponding expansion of education and training facilities to increase appropriately the supply of skilled manpower. This called for a stock taking of the adequacy and suitability of the existing educational and training facilities in several directions. IRTI has launched a project to accomplish this work. The present working paper looks at the range, sufficiency and quality of education in Islamic finance at the graduate level. It uses Malaysia as an illustrative case because the country is in the forefront of this development and has made several innovations and pioneering efforts in the field. This work finds that the graduate level finance education is not currently in a very satisfactory state. This is partly reflected in the increasing departure of financing expedients from the major goals of the Islamic system. The difference between the legality of transactions and their permissibility is usually ignored giving rise to perilous divisions at the juridical level. Validation of mixed banking opened the doors for convergence with the mainstream presumably to the disadvantage of Islamic finance long run, in education also. Some other points of significance that emanate from the foregoing discussion are in brief as under. 1. The unidirectional convergence of Islamic finance with the mainstream in practice is directing its educational approach and structure as well. In both cases it has some immediate advantages but has also potential to promote divisive and deviant tendencies in the area of Islamic finance. There already is some evidence on the point and has to be guarded against. 2. There is much diversity in the academic programmes and course structures in the area of Islamic finance within and between public institutions. Some degree of standardization with flexibility margins is desirable, feasible as well. Establishment of layered mutual consultation bodies and sharing of information may help. 3. Creation of research environment, foundational infrastructures based on positive filtering approach, sharing of knowledge and experience, cooperative teaching and ample funding may help build the critical mass to speed up research and build skills in the area of education. 4. Since the total number of students seeking doctoral degrees is not very large, their admission may be restricted to selected institutions where faculty and facilities could be strengthened to promote excellence. This will also allow pooling of teachers coupled with stricter screening of the students. The final product could thus be improved at reduced cost. 5. Academic administration must in general synchronize with academic hierarchy. Contribution to knowledge, research and supervision ought to be recognize and appropriately rewarded strictly on merit. 6. There should be arrangement for preparing reading material integrating mainstream positions and Islamic requirements. Classificatory approach that has mostly been followed so far has to go. Teachers should invariably be associated, rather lead such projects. The effort would produce Shari’ah literate economists. Advisory boards are today exclusively loaded with Shari’ah scholars who are often poor economists. Having both fuqha and economists on the boards would improve compliance. . This could have helped to avoid the controversy and confusion as is found today in the case of Sukuk markets. |
| Keywords: | Education; Islamic finance; Convergence consequences; Supervision; Curricula structures; Course designs; Private sector role; Critical mass; Western dominance |
| JEL: | I22 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8712&r=lab |
| By: | Nuno Garoupa; Natalia Jorgensen; Pablo Vázquez |
| Abstract: | Specialized courts have become a key component of the legal reform packages implemented in civil law countries, particularly, in the area of family law. One argument for this policy is that they are able to reach a decision faster than the regular courts, which are normally congested. We use data from a survey of Spanish family courts in the region of Madrid to test this claim. After controlling for other relevant variables, the econometric results did not provide strong support for specialized courts. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2008-16&r=lab |
| By: | Drakopoulos, Stavros A. |
| Abstract: | Theories of social comparison have a long presence in the social sciences and have provided many useful insights. In economics, the idea of comparison, aspiration or relative income belongs to this theoretical framework. The first systematic usages of this idea can be found in the works of Keynes and Duesenberry. After these works the concept was relatively ignored by orthodox theorists until its recent re-appearance mainly in the fields of labour and macroeconomics. To the contrary, however, income comparisons continued to play a role in much of Keynesian inspired and Behavioural economics literature. In the last few years it has made a strong comeback in the literature of job satisfaction and of the economics of happiness. This paper attempts to trace the development of the concept in the modern history of economic thought. It also discusses the main theoretical implications of adopting income comparisons and possible reasons for its relative disregard by orthodox economics. |
| Keywords: | Relative Income; History of Economic Thought; Wages |
| JEL: | D31 B20 J30 |
| Date: | 2008–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8713&r=lab |
| By: | Irene YH Ng (Department of Social Work, National University of Singapore, Singapore); Xiaoyi Shen (Department of Social Work, National University of Singapore, Singapore); Kong Weng Ho (Division of Economics, Nanyang Technological University, Singapore) |
| Abstract: | This study compared intergenerational earnings mobility in Singapore and the United States by replicating the limitations in the Singapore National Youth Survey on the U.S. Panel Study of Income Dynamics. The mean estimated earnings elasticities are almost identical: 0.26 in Singapore and 0.27 in the United States. Transformed to 0.45 and 0.47 respectively to reflect permanent status, mobility in the two countries is moderately low compared internationally. The finding of similar mobility is not surprising given that the economic realities, welfare systems, education regimes, and labor structures in the two countries are similar. Policy makers face the daunting challenge of overcoming immobility and inequality while maintaining global competitiveness. |
| Keywords: | Intergenerational earnings mobility; Singapore; United States |
| JEL: | J62 C81 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:0803&r=lab |
| By: | Jon H. Fiva and Lars J. Kirkebøen (Statistics Norway) |
| Abstract: | This paper analyzes housing market reactions to the release of previously unpublished information on school quality. Using the sharp discontinuity in the information environment allows us to study price changes within school catchment areas, thus controlling for neighborhood unobservables. We find a substantial housing market reaction to publication of school quality indicators, suggesting that households care about school quality, and may be willing to pay for better schools. The publication effect is robust to a number of sensitivity checks, but does not seem to be permanent as prices revert to prepublication levels after two to three months. We discuss this reversion in relation to the literature on behavioral finance and the concept of limited attention. |
| Keywords: | valuation of school quality; hedonic methods; price reversion |
| JEL: | I21 I28 R21 R23 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:541&r=lab |
| By: | Paula Armstrong (Department of Economics, Stellenbosch University); Bongisa Lekezwa (Department of Economics, Stellenbosch University); Krige Siebrits (Department of Economics, Stellenbosch University) |
| Abstract: | This paper provides a non-technical, snapshot-like profile of poverty in South Africa based on two surveys recently conducted by Statistics South Africa: the Income and expenditure survey of households 2005/06 (IES2005) and the General household survey 2006 (GHS2006). It uses various “poverty markers” (including geographical location, population group, gender, household structure, the age of the head of the household, and employment status) to identify key characteristics of poverty groups, and also highlights other important dimensions of poverty (deficient access to infrastructure services, high transport cost burdens, limited education attainments, and exposure to hunger). The paper further emphasises that the expansion of social grants since 1999 has significantly reduced extreme poverty. |
| Keywords: | Poverty, Poverty markers, Burden of poverty, Social grants, South Africa |
| JEL: | D31 I32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers52&r=lab |
| By: | Thomas Dee; Martin West |
| Abstract: | Although recent evidence suggests that non-cognitive skills such as engagement matter for academic and economic success, there is little evidence on how key educational inputs affect the development of these skills. We present a re-analysis of follow-up data from the Project STAR class-size experiment and find evidence that early-grade class-size reductions did improve subsequent student initiative. However, these effects did not persist into the 8th grade. Furthermore, the external and, possibly, the internal validity of these inferences is compromised by non-random attrition. We also present a complementary analysis based on nationally representative survey data and a research design that relies on contemporaneous within-student and within-teacher comparisons across two academic subjects. Our results indicate that smaller classes in 8th grade lead to improvements in measures of student engagement with effect sizes ranging from 0.05 to 0.09 and smaller effects persisting two years later. Using the estimated earnings impact of these non-cognitive skills and the direct cost of a class-size reduction, the implied internal rate of return from an 8th-grade class-size reduction is 4.6 percent overall, but 7.9 percent in urban schools. |
| JEL: | I20 I21 I28 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13994&r=lab |
| By: | Victor Hiller (Centre d'Economie de la Sorbonne et Paris School of Economics) |
| Abstract: | This article investigates the co-evolution of labor relationships and workers preferences. According to recent experimental economics findinggs on social preferences, the workforce is assumed to be heterogeneous. It is composed by both cooperative and non-cooperative workers. In addition, firms differ by the type of contract they offer (explicit or implicit). Finally, both the distribution of preferences and the degree of contractual completeness are endogeneized. Preferences evolve through a process of cultural transmission and the proportion of implicit contracts is driven by an evolutionary process. The complementarity between the transmission of cooperation and the implementation of implicit contracts leads to multiple equilibria which allow for path-dependence. This property is illustrated by the evolutions of American and Japanese labor contracts during the Twentieth century. |
| Keywords: | Explicit contract, implicit contract, cultural transmission, preferences for reciprocity, path dependence. |
| JEL: | D64 D86 Z10 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:v08028&r=lab |
| By: | Mishra, SK |
| Abstract: | Quality of higher education is a multi-dimensional concept. It lies in effectiveness of transmitting knowledge and skill; the authenticity, content, coverage and depth of information; availability of reading/teaching materials; help in removing obstacles to learning; applicability of knowledge in solving the real life problems; fruitfulness of knowledge in personal and social domains; convergence of content and variety of knowledge over space (countries and regions) and different sections of the people; cost-effectiveness and administrative efficiency. Information technology has progressed very fast in the last three decades; it has produced equipments at affordable cost and it has now made their wider application feasible. This technology has made search, gathering, dissemination, storing, retrieval, transmission and reception of knowledge easier, cheaper and faster. Side by side, a vast virtual library vying with the library in prints has emerged and continues growing rapidly. One may hold that the e-libraries are the libraries of tomorrow when the libraries in prints will be the antiques or the archival objects of the past. This paper discusses in details how information technology can be applied to enhance the quality of higher education at affordable cost. It also discusses the major obstacles to optimal utilization of information technology and measures to remove them. |
| Keywords: | Information Technology; Quality in Higher Education; e-library; e-book; e-journal |
| JEL: | A23 A20 I23 |
| Date: | 2008–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8705&r=lab |
| By: | Pierpaolo Benigno; Luca Antonio Ricci |
| Abstract: | Wage setters take into account the future consequences of their current wage choices in the presence of downward nominal wage rigidities. Several interesting implications arise. First, nominal wages tend to be endogenously rigid also upward, at low inflation. Second, a closed-form solution for a long run Phillips curve relates average unemployment to average wage inflation; the curve is virtually vertical for high inflation rates but becomes flatter as inflation declines. Third, macroeconomic volatility shifts the Phillips curve outward, implying that stabilization policies can play an important role in shaping the trade-off. Fourth, when inflation decreases, volatility of unemployment increases whereas the volatility of inflation decreases: this implies a long-run trade-off also between the volatility of unemployment and that of wage inflation. |
| JEL: | E0 E24 E30 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13986&r=lab |
| By: | Rolf Aaberge; Ugo Colombino |
| Abstract: | The purpose of this paper is to present an exercise where we identify optimal income tax rules according to various social welfare criteria, keeping fixed the total net tax revenue. To this end, we estimate a microeconomic model with 78 parameters that capture heterogeneity in consumption-leisure preferences for singles and couples as well as in job opportunities across individuals based on detailed Norwegian household data for 1994. For any given tax rule, the estimated model can be used to simulate the labour supply choices made by single individuals and couples. Those choices are therefore generated by preferences and opportunities that vary across the decision units. Differently from what is common in the literature, we do not rely on a priori theoretical optimal taxation results, but instead we identify optimal tax rules – within a class of 9-parameter piece-wise linear rules - by iteratively running the model until a given social welfare function attains its maximum under the constraint of keeping constant the total net tax revenue. The parameters to be determined are an exemption level, four marginal tax rates, three “kink points” and a lump sum transfer that can be positive (benefit) or negative (tax). We explore a variety of social welfare functions with differing degree of inequality aversion. All the social welfare functions turn out to imply an average tax rate lower than the current 1994 one. Moreover, all the optimal rules imply – with respect to the current rule – lower marginal rates on low and/or average income levels and higher marginal rates on relatively high income levels. These results are partially at odds with the tax reforms that took place in many countries during the last decades. While those reforms embodied the idea of lowering average tax rates, the way to implement it has typically consisted in reducing the top marginal rates. Our results instead suggest to lower average tax rates by reducing marginal rates on low and average income levels and increasing marginal rates on very high income levels. |
| Keywords: | Labour supply, optimal taxation, random utility model, microsimulation |
| JEL: | H21 H31 J22 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp06_08&r=lab |