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on Labour Economics |
| By: | Iga Magda (Warsaw School of Economics) |
| Abstract: | In this paper I study the earnings mobility in Poland and in the UK. Using both transition matrices and a wage mobility index I first document changes in the overall wage mobility in Poland across time, then compare mobility patterns among Polish and British employees. I focus in particular on low wage workers and analyze their transitions within the earnings distribution and between different labour market states. Finally, I demonstrate that changes in the earnings mobility in Poland do not seem to be linked to changes in the overall wage dispersion. |
| Keywords: | earnings, mobility, wages |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-10&r=lab |
| By: | Mark L Bryan (Institute for Social and Economic Research); Almudena Sevilla Sanz (Department of Economics, University of Oxford) |
| Abstract: | Women working full-time in the UK earn on average about 18% per hour less than men (EOC, 2005). Traditional labour economics has focussed on gender differences in human capital to explain the gender wage gap. Although differences in male and female human capital are recognized to derive from different household responsibilities over the life cycle, there is also a lesser-studied and more direct effect of household activities on wages. In a broad economic sense, household activities require effort, which decrease labour market productivity and thus wages. This paper first documents the relationship between housework and wages in the UK and applies a variety of econometric techniques to pin down the effect of housework on wages. It further explores what dimensions of housework are at the root of the relationship between housework and wages. After controlling for unobserved heterogeneity and possible endogeneity of housework and wages, we find a negative effect of housework on wages for married male and female workers, but not for single workers. This differential effect across marital statuses suggests that the factors behind the relationship between housework and wages are the type and timing of housework activities as much as the actual time devoted to housework. |
| Keywords: | gender wage gap, housework, marriage, wages |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-03&r=lab |
| By: | Simonetta Longhi (Institute for Social and Economic Research) |
| Abstract: | The wage curve literature suggests a negative relationship between regional unemployment rates and regional wages; the most widely accepted explanations are efficiency wage and labour turnover costs theories in which the unemployment rate is a measure of job competition. Since it fails to correctly measure labour supply and demand, however, the unemployment rate is likely to be a biased measure of job competition. This paper analyses the robustness of the wage curve to different ways of measuring job competition using data for the UK over the period 1997-2005 and concludes that efficiency wage and labour turnover costs theories do not seem to offer satisfactory explanations of the wage curve phenomenon. |
| Keywords: | job search, unemployment, wages |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-24&r=lab |
| By: | Lasse Brune (World Bank) |
| Abstract: | This work investigates the effect of smoking on wages for male workers using panel data from Britain for the period of 1991–2005. The strong negative correlation of smoking and wages found in a cross- sectional analysis reduces substantially when accounting for unobserved individual heterogeneity using Fixed Effects estimation. I find a statistically significant wage penalty that is causally due to smoking of about –2% for smokers over those who quit. Further analysis indicates, however, that the negative effect might be underestimated when comparing with those who never started smoking or quit a long time ago. |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-31&r=lab |
| By: | Nils Braakmann (Institute of Economics, Leuphana University of Lüneburg) |
| Abstract: | their first job and five to six years into their careers. We find that women earn about 30% less than men at their first job and about 35% less after five to six years. Results from standard decomposition techniques show that 80% of the earnings gap in the first job can be attributed to differences in endowment of which between 74 and 78% are related to different fields of studies. Adding employer information leads to an explained share of about 90% of the earnings gap with fields of study still accounting for about half of the gap. These also play a dominant role in a model without employer information after five to six years, directly explaining between 26 and 33% of the earnings gap. Adding employer information, however, leads to insignificant results. Together with detailed information on experiences after graduation, these variables account for about 44 to 50% of the earnings gap later in the graduates careers. |
| Keywords: | Gender wage gap, decomposition, field of study |
| JEL: | J24 J31 J71 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:85&r=lab |
| By: | Kai-Uwe Müller; Viktor Steiner |
| Abstract: | We analyze the effect of imposed benefit sanctions on the unemployment-to-employment transition of unemployed people entitled to unemployment compensation on the basis of register data from the German Federal Employment Agency. We combine propensity score matching with a discrete-time hazard rate model which accounts for the dynamic nature of the treatment. We find positive short- and long-term effects of benefit sanctions which are robust for men and women in East and West Germany. The effects diminish with the elapsed unemployment duration until a sanction is imposed. The limited use of benefit sanctions can thus be an effective activation tool if they take place not too late in an individual's unemployment spell. |
| Keywords: | benefit sanctions, unemployment transitions, German labor market reform, ex-post evaluation, propensity score matching, hazard rate model, unobserved heterogeneity |
| JEL: | J64 J65 H31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp792&r=lab |
| By: | Alison L. Booth (Department of Economics, University of Essex); Jan Van Ours (Tilburg University) |
| Abstract: | Using fixed effects ordered logit estimation, we investigate the relationship between part-time work and working hours satisfaction; job satisfaction; and life satisfaction. We account for interdependence within the family using data on partnered men and women from the British Household Panel Survey. We find that men have the highest hours-of-work satisfaction if they work full-time without overtime hours but neither their job satisfaction nor their life satisfaction are affected by how many hours they work. Life satisfaction is influenced only by whether or not they have a job. For women we are confronted with a puzzle. Hours satisfaction and job satisfaction indicate that women prefer part-time jobs irrespective of whether these are small or large. In contrast, female life satisfaction is virtually unaffected by hours of work. Women without children do not care about their hours of work at all, while women with children are significantly happier if they have a job regardless of how many hours it entails. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-20&r=lab |
| By: | Ian Walker (University of Warwick and the Institute for Fiscal Studies); Yu Zhu (University of Kent and Centre for the Economics of Education) |
| Abstract: | This paper provides findings from the UK Labour Force Surveys from 1993 to 2003 on the financial private returns to a degree – the “college premium”. The data covers a decade when the university participation rate doubled – yet we find no significant evidence that the mean return to a degree dropped in response to this large increase in the flow of graduates. However, we do find quite large falls in returns when we compare the cohorts that went to university before and after the recent rapid expansion of HE. The evidence is consistent with the notion that new graduates are a close substitute for recent graduates but poor substitutes for older graduates. There appears to have been a very recent increase in the number of graduates getting “non-graduate” jobs but, conditional on getting a graduate job the returns seem stable. Our results are consistent across almost all degree subjects – the exception being maths and engineering where we find that, especially for women, there is a large increase in the proportion with maths and engineering degrees getting graduate jobs and that, conditional on this, the return is rising. |
| Keywords: | human capital, higher education, college premium |
| JEL: | I20 J30 |
| Date: | 2007–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200720&r=lab |
| By: | Kai-Uwe Müller; Viktor Steiner |
| Abstract: | In view of rising wage inequality and increasing poverty, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of the introduction of a nationwide legal minimum wage of ¿ 7.5 per hour on the basis of a microsimulation model which accounts for the complex interactions between individual wages, the tax-benefit system and net household incomes. Simulation results show that the minimum wage would be rather ineffective in reducing poverty, even if it led to a substantial increase in hourly wages at the bottom of the wage distribution and had no negative employment effects. The ineffectiveness of a minimum wage in Germany is mainly due to the existing system of meanstested income support. |
| Keywords: | minimum wage, wage distribution, working poor, poverty reduction, microsimulation |
| JEL: | I32 H31 J32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp791&r=lab |
| By: | Emilia Del Bono (Institute for Social and Economic Research); Andrea Weber (Institute of Advanced Studies, Vienna); Rudolf Winter-Ebmer (Johannes Kepler Universität Linz) |
| Abstract: | In this paper we investigate how fertility decisions respond to unexpected career interruptions which occur as a consequence of job displacement. Using an event study approach we compare the birth rates of displaced women with those of women unaffected by job loss after establishing the pre-displacement comparability of these groups. Our results reveal that job displacement reduces average fertility by 5 to 10% in both the short and medium term (3 and 6 years) and that these effects are largely explained by the response of white collar women. Using an instrumental variable approach we provide evidence that the reduction in fertility is not due to the income loss generated by unemployment but arises because displaced workers undergo a career interruption. These results are interpreted in the light of a model in which the rate of human capital accumulation slows down after the birth of a child and all specific human capital is destroyed upon job loss. |
| Keywords: | fertility, firm separations, human capital, unemployment |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-33&r=lab |
| By: | Chiara Pronzato (Institute for Social and Economic Research) |
| Abstract: | The aim of this paper is to investigate the role of the extended parental leave in the return to work for mothers of newborn children. Parental leaves have been introduced in the last 30 years in all European countries in order to extend the period of job-protection, allowing both parents to care for the child after the maternity leave period has expired. In this paper, I exploit the variability in policies offered by the EU countries, in terms of length of the leave and payments, and I study the influence of statutory leaves on the probability of staying at home with the child during the leave, and on the probability of working in the period of time following the leave. Using data from ECHP, I select women who have a child in the years of the survey, who have worked before, and I follow them over time. After studying the determinants of the return to work in each country separately, I generalize the results, matching women with similar human capital characteristics and fertility history from different countries and, consequently, under different parental leave regulations. Results suggest that the right to long and paid leaves gives mothers the opportunity to remain at home with the child at a lower cost, and that lengthy statutory leaves are associated with being more likely to be at work in the period following the leave. |
| Keywords: | childcare, europe, women and employment |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-30&r=lab |
| By: | Florence Kondylis (Columbia University) |
| Abstract: | The 1992/95 war in Bosnia and Herzegovina (BiH) drove about 1.3 Million people into displacement (UNHCR). This study uses a longitudinal data source to document the nature of individual selection into conflict-induced displacement and the effects of displacement on labor market outcomes for Bosnians in post-war BiH. To account for endogeneity in the displacement status, I exploit the fact that the level of violence in the pre-war residence likely affected the displacement decision for Bosnians and yet is not associated to economic performance. I find evidence of positive selection into displacement, i.e. more "able" individuals in terms of labor market outcomes are more likely to be displaced, and that displaced Bosnian men and women are less likely to be in work relative to stayers. Interestingly, whereas worklessness translates into higher unemployment for men, it decreases the women’s participation with no effect on unemployment once selection is accounted for. The informality of the labor market in BiH and the destruction of networks are not only the most plausible candidates to explain the negative effect of displacement on labor market performance, but also help rationalise the lack of an effect on participation for displaced men. |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:45&r=lab |
| By: | Maria Concetta Chiuri; Daniela Del Boca |
| Abstract: | While several social, economic and financial indicators point to a growing convergence among European countries, striking differences still emerge in the timing of leaving home for adult children. In Southern countries (as Spain, Italy or Portugal) in 2001 more than 70 percent of young adults between 18 and 34 years of age live with their parents, whereas the corresponding number for Northern countries (like Denmark or the UK) is well below 40 percent. Existing literature highlights several factors explaining the different patterns in Europe: preferences and culture, labor market conditions, housing market as well as differences across the welfare states. In our work, we consider living arrangements of people 18-34 years old from 14 European countries (ECHP). We augment the informational content with indicators of labor, housing and marriage markets characteristics as well as proxy for the welfare states and culture. We investigate how they are intertwined with gender differences |
| Keywords: | coups, Living arrangements,duration analysis, government expenditures. |
| JEL: | J13 C41 H53 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:75&r=lab |
| By: | Pedro S. Martins |
| Abstract: | Many biases plague the analysis of whether employers share rents with their employees, unlike what is predicted by the competitive labour market model. Using a Portuguese matched employer-employee panel, these biases are addressed here in three complementary ways: 1) Controlling directly for the fact that firms that share more rents will, ceteris paribus, have lower net-of-wages profits. 2) Instrumenting profits via interactions between the exchange rate and the share of exports in firms’ total sales. 3) Considering firm or firm/worker spell fixed effects and highlighting the role of downward wage rigidity. These approaches clarify conflicting findings in the literature and result, in our preferred specifications, in significant evidence of rent sharing (a Lester range of pay dispersion of 56%), also shown to be robust to a number of competitive interpretations. |
| Keywords: | Rent Sharing, Instrumental Variables, Matched Employer-Employee Data, Fixed Effects. |
| JEL: | C33 J31 J41 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:12&r=lab |
| By: | Paul Bingley (Department of Economics, Aarhus School of Business, 8000 Aarhus, Denmark); Kaare Christensen (Author-Name: Department of Epidemiology, University of Southern Denmark, 5000 Odense, Denmark); Ian Walker (Department of Economics, University of Warwick, Coventry) |
| Abstract: | This paper provides estimates of the private financial return to education based on large samples of monozygotic (MZ) and dizygotic (DZ) twins which we obtain from Danish population registers. Our estimation exploits the fact that our data is a long panel. We show that the rising inequality, which we observe in the raw data, is due to rising returns to observable skills. Indeed, our results suggest that the inequality associated with unobservable skills appears to have fallen since the late 1980’s. The fact that we have both MZs and DZs allows us to separate the rising residual variance into changes in returns to unobservables and changes in the variance in unobservables across successive cohorts. Measurement error has been a concern in the twins literature since the usual methodology is based on within-twin differences. We exploit two instruments that provide additional measures of the within twin schooling difference, differences in when the twins first join the labour force on a full-time basis, which comes from a register that is independent of the education registers; and the strong assortative mating in the data which allows us to use twins spouse’s education as an instrument. We also address a further concern in the literature, that differencing between twins fails to remove individual fixed effects as opposed to family fixed effects resulting in schooling differences being correlated with the residual. This would induce the within twin schooling difference coefficient to be biased. Here we exploit the Danish equivalent of Maimonides’ rule which generates potential variation in education within twin pairs associated with being placed in different classes if they attended a small school in a larger than average cohort. This different experience across twin pairs is shown to generate differences in within twin schooling. Our baseline estimates suggests that correcting for selfselection in schooling, and measurement error, gives returns that are about two fifths higher than OLS for men and about one fifth higher for women. |
| Keywords: | wage inequality, schooling, twins, education returns, ability bias |
| JEL: | I20 J31 |
| Date: | 2007–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200723&r=lab |
| By: | Wolff, Joachim (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Nivorozhkin, Anton (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In recent years activation of means-tested unemployment benefit recipients has become a major issue of European labour market policy. We study the effect of participation in a new business start-up scheme for needy unemployed people in Germany. The programme was introduced at the beginning of the year 2005 together with a new means-tested benefit system. We used data from administrative records to draw a sample of needy participants who entered the programme from February to April 2005 and of an adequate control group. Even though these data are quite rich in terms of information on the labour market performance and individual and household characteristics, they do not provide information on unsubsidised self-employment. Therefore, using matching methods we estimate the impact of the programme participation on the outcomes 'neither being registered as unemployed nor as a job-seeker' and 'no receipt of unemployment benefit II'. Our estimates imply that even by the time when nearly no participant receives the start-up subsidy any longer treatment reduces considerably the proportion of registered job-seekers and of means-tested benefit recpients among the treated. Moreover, there is no substantial variation of these effects over different population groups." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | berufliche Selbständigkeit, Hilfebedürftige, Sozialgesetzbuch II, Arbeitslosengeld II-Empfänger, Gründungszuschuss, arbeitsmarktpolitische Maßnahme - Erfolgskontrolle |
| JEL: | C13 H43 J68 |
| Date: | 2008–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200820&r=lab |
| By: | Ali Béjaoui; Claude Montmarquette |
| Abstract: | The labour market’s ability to adjust to the current demographic shock is a central concern for labour market policies. An aging population could affect the economy’s ability to adjust, not only to the aging population shock itself, but also to those associated with the business cycle, international trade and technological changes (Kuhn, 2003). This study contributes to discussions about the ways in which organizations adjust to such an increasingly turbulent environment. Among others, seniority-based pay has been identified as a factor that could potentially hinder an organization’s ability to adjust to the market, within the context of an aging workforce. This study focuses on the use of non-standard jobs (or numerical flexibility) and variable compensation as strategies to avoid seniority-based pay. Using unique data that match employers and employees at the micro level, we investigated the link between the demographic composition of workplaces and the adoption of either or both « flexibilization » strategies. Consequently, we conclude that there is no link between workplace demographics and the adoption of variable compensation. However, a high proportion of older workers (45 years and older) in the workplace is positively related to the use of numerical flexibility. Moreover, a complementarity in the use of both strategies emerged from our study. The implications of these results on policies are numerous. If organizations continue experiencing difficulties in resorting to flexible compensation, they will likely continue to adjust by relying on numerical flexibility. While this type of flexibility allows older workers to ease into retirement gradually, women to cope with both working and caring for children or aging parents, and youths to combine work and studies, it can also have detrimental effects. Over time, this flexibilization strategy can lead to an underinvestment in training, a lack of savings for retirement and an increase in wage inequalities. The main challenge of the new generation of public policies lies in the identification of an effective compromise between incentives and activation programs that would allow a balance between economic imperatives (flexibility) and social aspirations (security). <P>La manière dont le marché du travail s’ajuste au choc démographique est au centre des préoccupations des politiques du marché du travail. En effet, le vieillissement de la population pourrait affecter la capacité de l’économie à s’ajuster, non seulement au choc de vieillissement lui-même, mais aussi aux chocs engendrés par les cycles économiques, le commerce international et les changements technologiques (Kuhn, 2003). La présente étude contribue au débat portant sur la manière dont les entreprises s’ajustent à un environnement devenu de plus en plus turbulent. Entre autres, le salaire à l’ancienneté a été identifié comme l’un des facteurs qui pourraient freiner la capacité des entreprises à s’ajuster au marché, dans un contexte de vieillissement de la main-d’œuvre. Cette étude se penche sur le recours aux emplois non standards (ou la flexibilité numérique) et l’adoption de la rémunération variable comme stratégies d’évitement du salaire à l’ancienneté. En utilisant des données uniques qui apparient les employeurs et les employés au niveau des établissements, nous avons estimé l’impact de la composition démographique des établissements sur le recours à l’une ou l’autre des stratégies de flexibilisation. Nous concluons que la composition démographique des établissements n’est pas associée à la probabilité de recours à la rémunération variable. Par contre, la proportion des travailleurs âgés (45 ans et plus) dans un établissement est associée positivement à la probabilité de recourir à la flexibilité numérique. De même, une complémentarité entre les deux stratégies de flexibilisation a été mise en évidence. Les implications politiques de ces résultats sont multiples. Si les entreprises continuent à avoir des difficultés à instaurer des systèmes de rémunération flexible, elles continueront de s’ajuster en recourant à la flexibilité numérique. Bien que cette flexibilité ait permis aux travailleurs âgés de combiner le travail avec une retraite progressive, aux femmes de combiner le travail avec les soins des enfants et des parents, et aux jeunes de combiner le travail et les études, elle peut avoir des effets néfastes à long terme. Cette stratégie de flexibilisation peut entraîner, à long terme, un sous investissement dans la formation, un manque d’épargne-retraite ainsi qu’une accentuation des inégalités salariales. Le défi de la nouvelle génération des politiques publiques consiste à identifier le compromis entre les incitatifs et les programmes d’activation qui permettrait d’atteindre un équilibre entre les impératifs économiques (la flexibilité) et les aspirations sociales (la sécurité). |
| Keywords: | labour market, remuneration, flexibility and security, aging population, marché du travail, rémunération, flexibilité et sécurité, vieillissement |
| JEL: | J26 J33 J81 |
| Date: | 2008–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2008s-10&r=lab |
| By: | Francesco Figari (Institute for Social and Economic Research); Herwig Immervoll (Organisation for Economic Co-operation and Development); Horacio Levy (European Centre for Social Welfare Policy and Research); Holly Sutherland (Institute for Social and Economic Research) |
| Abstract: | In spite of there being few elements of tax or cash benefit systems in developed countries that are any longer explicitly gender-biased in a discriminatory sense, it is well recognised that they have significant gender effects. To the extent that women earn less than men on average under tax-benefit systems that are progressive, there is some redistribution from men to women overall. However, an aggregate perspective is insufficient for understanding how earning opportunities and public policies affect living arrangements at the family level in general and the circumstances of men and women in particular. Arguably, it is within the household that a gendered division of labour is most relevant. It is difficult to observe how income and other resources get allocated within households. We can, however, observe the incomes brought into the household and to what extent taxes and benefits mitigate (or indeed exacerbate) any inequality of income between men and women. We explore the effects of tax and benefit systems on differences in income and in incentives to earn income between men and women within couples in a selection of the member countries of the European Union (EU) using EUROMOD, the EU tax-benefit microsimulation model. This comparative perspective allows us to establish the relative effects of different policy regimes, given the underlying characteristics of each national population, using a consistent approach and set of incidence assumptions across countries. |
| Keywords: | europe, gender, inequality, taxation |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-28&r=lab |
| By: | ; ; ; Sutherland H (Institute for Social & Economic Research) |
| Abstract: | In spite of there being few elements of tax or cash benefit systems in developed countries that are any longer explicitly gender-biased in a discriminatory sense, it is well recognised that they have significant gender effects. To the extent that women earn less than men on average under tax-benefit systems that are progressive, there is some redistribution from men to women overall. However, an aggregate perspective is insufficient for understanding how earning opportunities and public policies affect living arrangements at the family level in general and the circumstances of men and women in particular. Arguably, it is within the household that a gendered division of labour is most relevant. It is difficult to observe how income and other resources get allocated within households. We can, however, observe the incomes brought into the household and to what extent taxes and benefits mitigate (or indeed exacerbate) any inequality of income between men and women. We explore the effects of tax and benefit systems on differences in income and in incentives to earn income between men and women within couples in a selection of the member countries of the European Union (EU) using EUROMOD, the EU tax-benefit microsimulation model. This comparative perspective allows us to establish the relative effects of different policy regimes, given the underlying characteristics of each national population, using a consistent approach and set of incidence assumptions across countries. |
| Keywords: | within-household inequality, tax-benefit systems, Europe, gender |
| JEL: | D31 H31 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em6/07&r=lab |
| By: | Magne Mogstad (Statistics Norway); Chiara Pronzato (Institute for Social and Economic Research) |
| Abstract: | This study evaluates a Norwegian single parent benefit reform, in which work and educational requirements were introduced, time limits imposed, and the maximum benefit level increased. We propose to identify the impact of the reform by taking the difference between a pre-reform difference-in-difference estimator and a post-reform difference-in-difference estimator of the effects of becoming single mother on earnings, education, and poverty. This estimator will, unlike the commonly applied difference-in-difference estimator, capture the effects of policy changes when the institutional setup involves a phase-in period from the time a reform is introduced to it is fully implemented. The main findings of this study are that the reform had an overall positive effect on earnings as well as on education of single mothers. Furthermore, we find that the reform led to remarkable decrease in poverty, especially for single mothers with young children. This was driven both by increased earnings and higher benefit amounts. Our findings also demonstrate substantial heterogeneity in the responses of single mothers to the reform by age and educational level. Altogether, the results from this paper undermine the argument in favour of generous out-of-work benefits to support individuals prone to poverty, rather than encouraging self-sufficiency by strengthening the incentives to work and undertake education. |
| Keywords: | labour supply, poverty, single parents |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-15&r=lab |
| By: | Annette Jäckle (Institute for Social and Economic Research) |
| Abstract: | For some domains, panel surveys collect information about the period between interviews. Such data are typically affected by “seam effects”: transition rates from one month (or week) to the next are typically far higher if the months were covered in two different interviews, than if they were covered in the same interview. The causes of seam effects are not well understood. As a result, data collection methods designed to reduce the problem appear to work for some types of items, but not for others. This paper presents a theoretical framework of the causes of seam effects that unifies existing theories and evidence. The predictions from the framework are tested using data from the British Household Panel Survey and find support. |
| Keywords: | longitudinal data quality, measurement error, recall error |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-14&r=lab |
| By: | Raimundo Soto (Instituto de Economía. Pontificia Universidad Católica de Chile.) |
| Abstract: | Dollarization brought economic stability to Ecuador and higher economic growth. The labor market has not reacted accordingly and unemployment rates remain stubbornly around 10%. I use a simple econometric model of the labor market to disentangle the impact on employment of GDP growth, real wages, the cost of capital, and the real exchange rate. I found two opposing effects at work. On one hand, vigorous economic growth has led to a substantial expansion of labor demand (scale effect). On the other hand, changes in relative factor prices brought about by the dollarization process have played against employment creation (substitution effects): real minimum wages have increased while at the same time the real price of imported intermediate goods and the cost of capital have declined steadily. Together, these price changes indicate that labor is becoming a more expensive factor of production and, thus, signal for substituting labor away. |
| Keywords: | Dollarization, employment, economic growth |
| JEL: | E24 E27 E65 C5 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:338&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. |
| Keywords: | Life-cycle labor supply, Involuntary unemployment, In-work credits |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp790&r=lab |
| By: | Jesús Fernández-Huertas Moraga |
| Abstract: | This paper examines the extent to which Mexican emigrants to the United States are negatively selected, that is, have lower skills than individuals who remain in Mexico. Previous studies have been limited by the lack of nationally representative longitudinal data. This one uses a newly available household survey, which identifies emigrants before they leave and allows a direct comparison to non-migrants. I find that, on average, US bound Mexican emigrants from 2000 to 2004 earn a lower wage and have less schooling years than individuals who remain in Mexico, evidence of negative selection. This supports the original hypothesis of Borjas (AER, 1987) and argues against recent findings, notably those of Chiquiar and Hanson (JPE, 2005). The discrepancy with the latter is primarily due to an under-count of unskilled migrants in US sources and secondarily to the omission of unobservables in their methodology. |
| Keywords: | international migration, selection, household survey |
| JEL: | F22 O15 J61 D33 |
| Date: | 2008–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:742.08&r=lab |
| By: | Mario Fiorini (School of Finance and Economics, University of Technology, Sydney) |
| Abstract: | In this paper we build a dynamic structural model of educational choices in which cognitive skills shape decisions. The model is estimated by maximum likelihood using cohort data where individuals are observed from birth onwards. These data are unique in that they include cognitive skills test scores collected as early as age 7. We then simulate the e?ect of two educational subsidies equal in cost but different in the timing of disbursement. The ?rst consists of grants assigned directly to individuals aged between 16 and 18. The second is assigned to the parents earlier on, when the cohort is still in its childhood. The latter subsidy affects cognitive skills accumulation and in turn educational choices. Our results suggest that a direct grant in the form of a tuition subsidy might be more efficient even in the absence of short term ?nancial constraints. Although cognitive skills accumulated during childhood play a key role in the educational decisions, an unconditional ?nancial subsidy to parents is not the best policy. The results do not call a halt to investments in cognitive skill accumulation during childhood, but recommend that such investments should be well structured and ensure a high return. |
| Keywords: | educational decisions; dynamic structural estimation; tuition subsidy; parental income subsidy |
| JEL: | I21 I28 J24 J31 |
| Date: | 2008–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:uts:wpaper:154&r=lab |
| By: | Tristan Klein; Christine le Clainche |
| Abstract: | In the 1990’s, France introduced different subsidised contracts to create jobs targeted at long-term unemployment. These programs were supposed to help the beneficiaries to enhance their employability. It is then interesting to use the “capabilities” approach to assess their impact. From the panel of the Research and Statistical Department of the French Ministry of labour and social affairs (Dares) concerning employment policy beneficiaries, an initial analysis explored the beneficiaries’ refined functionings and a second how they subjectively perceive their standard of living. Comparing beneficiaries’ perceptions to those of a control group provided the necessary data to evaluate the real impact of these employment schemes on beneficiaries. Globally, subsidised employment contracts provide beneficiaries’ with an increased number of opportunities or choices that can be achieved and thus can be said to improve their quality of life. Furthermore, the private sector employment contract to the long-term unemployed (the so-called “CIE”) is generally viewed more positively than the fixed-term contract in the public sector (the so-called “CES”) although the latter is viewed as more successful in allowing beneficiaries to “feel useful” and “regain self-esteem”. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:08-07&r=lab |
| By: | Ron Boschma; Rikard Eriksson; Urban Lindgren |
| Abstract: | This paper analyses the impact of skill portfolios and labour mobility on plant performance by means of a unique database that connects attributes of individuals to features of plants for the whole Swedish economy. We found that a portfolio of related competences at the plant level increases significantly productivity growth of plants, in contrast to plant portfolios consisting of either similar or unrelated competences. Based on the analysis of 101,093 job moves, we found that inflows of skills that are related to the existing knowledge base of the plant had a positive effect on plant performance, while the inflow of new employees with skills that are already present in the plant had a negative impact. Our analyses show that inflows of unrelated skills only contribute positively to plant performance when these are recruited in the same region. Labour mobility across regions only has a positive effect on productivity growth of plants when this concerns new employees with related skills. |
| Keywords: | labour mobility, related variety, skill portfolio, plant performance, geographical proximity |
| JEL: | R11 R12 O18 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0809&r=lab |
| By: | Sandra E. Black; Paul Devereux; Kjell G. Salvanes |
| Keywords: | example keyword,example keyword, example keyword |
| Date: | 2007–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200718&r=lab |
| By: | Hanes, Niklas (Department of Economics, Umeå University); Norlin, Erik (Department of Economics, Umeå University) |
| Abstract: | The purpose of this study is to analyse the impact of psychological traits on earnings differentials between second-generation immigrants and individuals with native-born parents. The study is based on the cohort of men born in 1973 and residing in Sweden in December 1990. In this paper we use an indicator of psychological ability measured in connection to the military enrolment test in Sweden. The results show that the measure of psychological traits is an important determinant of earnings at the age of 30. Using an Oaxaca-Blinder decomposition we find that the earnings differences between second-generation immigrants and individuals with native born parents to a large part are explained by differences in endowments of psychological traits. |
| Keywords: | Earnings differentials; psychological traits; military enrolment test; secondgeneration immigrants; Oaxaca-Blinder decomposition |
| JEL: | J15 J24 J61 J71 |
| Date: | 2008–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0741&r=lab |
| By: | Stephen P. Jenkins (Institute for Social and Economic Research) |
| Abstract: | What happens to people’s incomes when their or their parents’ marital union dissolves? Using data from waves 1–14 (survey years 1991–2004) of the British Household Panel Survey, I show that marital splits are associated with short-term declines in income for separating wives and children relative to separating husbands, but the size of the decline has declined over time markedly for women with children and this most likely reflects the effects of secularly rising employment rates and, related, the introduction of Working Families Tax Credit in 1998. Analysis of income trajectories suggests that in the five years following a marital split, incomes for separating wives recover but not to their previous levels. |
| Keywords: | benefits, divorce, family, income dynamics, poverty dynamics, programme participation, single parents, welfare to work, women, women and employment |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-07&r=lab |
| By: | Helmut Rainer (School of Economics and Finance, University of St Andrews); Geethanjali Selvaretnam (University of St. Andrews); David Ulph (University of St. Andrews) |
| Abstract: | This paper provides a simple theoretical framework to discuss the relationship between assisted reproductive technologies and the microeconomics of fertility choice. Individuals make choices of education and work along with decisions about whether and when to have children. Decisions regarding fertility are influenced by policy and labor market factors that affect the earnings opportunities of mothers and the costs of raising children. We show how observed differences in these economic factors across countries explain observed different fertility and childbearing age patterns. We then use the model to predict behavioral responses to biomedical improvements in assisted reproductive technologies, and hence the impact of these technologies on fertility. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-02&r=lab |
| By: | Helmut Rainer (School of Economics and Finance, University of St Andrews); Thomas Siedler (DIW Berlin) |
| Abstract: | Using probabilistic expectations data from the German Socio-Economic Panel, we establish a link between self-reported expectations of occupational mobility and preferences for redistribution. Our results provide new evidence on the validity of the "prospect of upward mobility" hypothesis. |
| Keywords: | Germany, redistribution |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-21&r=lab |
| By: | João Coelho (Faculdade de Economia e Gestão - Universidade Católica Portuguesa (Porto)); Carlos Santos (Faculdade de Economia e Gestão - Universidade Católica Portuguesa (Porto)) |
| Abstract: | In this paper, the first panel on sources of funding for Portuguese publicly owned museums is explored. There has been little work in this field worldwide, and none for Portugal. Evidence in this paper seems contrary to that relating to the UK and to the US. We find that incremental budgeting still plays a major role on the funding of Portuguese museums, allowing for inefficient management and moral hazard: the interests of museums’ management may diverge clearly from those of the authorities ruling them and from those of the general public. We also find that the ability to generate their own revenues plays no role in the funding allocated to museums every year. Budgeting is mainly determined by past operating costs. Policy changes seem to be advisable. The scarce relevance of museum patronage by the private sector makes a discussion of possible crowding out effects irrelevant in the current Portuguese context. |
| Keywords: | museums; incremental budgeting; moral hazard; dynamic panel data; |
| JEL: | Z11 Z19 D73 C33 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cap:wpaper:032008&r=lab |
| By: | Lorenzo Cappellari (Department of Economics, Università Cattolica di Milano) |
| Abstract: | We use survey data on cohorts of high school graduates observed before and after the Italian reform of tertiary education implementing the ‘Bologna process’ to estimate the impact of the reform on the decision to go to college. We find that individuals leaving high school after the reform have a probability of going to college that is 10 percent higher compared to individuals making the choice under the old system. We show that this increase is concentrated among individuals with good high-school performance and low parental (educational) background. We interpret this result as an indication of the existence of constraints (pre-reform) -- for good students from less affluent household -- on the optimal schooling decision. For the students who would not have enrolled under the old system we also find a small negative impact of the reform on the likelihood to drop-out from university. |
| Keywords: | education, policy reform, school drop-out |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-16&r=lab |
| By: | Stefanescu, Razvan |
| Abstract: | This paper examines, in the tradition of descriptive approaches of decision-making, how Romanian executives actually make decisions. It is based on an investigation in which managers from Romania were interrogated about some aspects of the decision-making. The conclusion of this study is that the Romanian managers don’t follow all the recommendations of classical decision theory when they make decisions. That situation is caused not only by the high instability of business environment, but also by some elements of the managerial culture. |
| Keywords: | descriptive approaches of decision-making; business environment; investigation among executives; transition countries; |
| JEL: | D21 D81 M10 |
| Date: | 2004–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8791&r=lab |
| By: | Mario García Molina; Eleonora Herrera |
| Date: | 2008–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:col:000178:004685&r=lab |
| By: | Ian Walker (University of Warwick and Institute for Fiscal Studies); Yu Zhu (University of Kent and Centre for the Economics of Education) |
| Abstract: | The widely held view that separation has adverse effects on children has been the basis of important policy interventions. While a small number of analyses have been concerned with selection into divorce, no studies have attempted to separate out the effects of one parent (mostly the father) leaving, from the effects of that parent's money leaving, on the outcomes for the child. This paper is concerned with early school leaving and educational attainment and their relationship to parental separation, and parental incomes. While we find that parental separation has strong effects on these outcomes this result seems not to be robust to adding additional control variables. In particular, we find that when we include income our results then indicate that father’s departure appears to be unimportant for early school leaving and academic achievement, while income is significant. This suggests that income may have been an important unobservable, that is correlated with separation and the outcome variables, in earlier research. Indeed, this finding also seems to be true in our instrumental variables analysis – although the effect of income is slightly weakened. |
| Keywords: | parental separation, parental incomes, early school leaving, educational attainment |
| JEL: | D13 D31 J12 J13 J16 J22 |
| Date: | 2007–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200722&r=lab |
| By: | Morten Blekesaune (Norwegian Social Research) |
| Abstract: | Have some European countries been more successful at employing disabled people than others? Answering this question requires data about disability that are comparable across countries. This paper investigates three possible sources of survey data. Altogether, the European Social Survey (ESS) appears to be the most suitable data source for comparing disabled people between European countries. Employment rates among disabled people vary a lot between these countries. This variation is investigated in relation to several country-level characteristics: the number of people reporting disability, employment rates among non-disabled people, general unemployment rates, some characteristics of disability policies as well as some general employment policies. It is difficult to explain why particular countries are more or less successful at employing disabled people. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2007-23&r=lab |
| By: | Waller, Marie |
| Abstract: | "One out of five participants of further training programs in Germany drops out of the program. Studies on the employment effects of these measures usually consider the start of a program as the treatment and do not deal with the question if the program has been completed. By contrast, this paper focuses on the distinction between dropping out and completing a program. It first discusses how to identify dropouts in the German Integrated Employment Biographies Sample, which is possible after having corrected measurement error in the registered end of participation. Second, the occurrence of dropouts is studied - how often and when do people drop out and what makes a dropout more likely. Third, the employment prospects of dropouts are analyzed descriptively." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Integrierte Erwerbsbiografien, Trainingsmaßnahme, arbeitsmarktpolitische Maßnahme, Wirkungsforschung, Abbrecher, Absolventen, Beschäftigungseffekte |
| JEL: | J68 I28 C23 |
| Date: | 2008–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabfme:200804_en&r=lab |
| By: | Francisco Gallego (Instituto de Economía. Pontificia Universidad Católica de Chile.); Robert Woodberry |
| Abstract: | Using cross-country data for about 70 countries and regional data for about 180 African provinces, we show that competition between Protestant and Catholic missionaries increased schooling in former colonies. Our evidence implies that Protestant missionaries increased schooling in Catholic countries by more than Catholic missionaries, but we cannot reject the hypothesis that the e ect of Protestant and Catholic missionaries on educational outcomes was similar when missionaries of both denominations faced the same legal and institutional treatment. We interpret these results in the context of an economic rationale in which di erent institutions created di erences in competitive pressures faced by Catholic and Protestant missionaries. |
| Keywords: | Education, Missionaries, Colonialism, Institutions, State Religions |
| JEL: | I20 N30 N37 N40 O15 O43 Z12 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:339&r=lab |
| By: | Arnestein Aassve (Institute of Quantitative Methods, Bocconi University); A Busetta (Università di Palermo); D Mendola (Università di Palermo) |
| Abstract: | Previous studies suggest that Scandinavian countries are the ones with the highest rates of youth poverty in Europe. This somewhat unexpected finding prompts the question whether the incidence of poverty is an appropriate measure of youth disadvantage. Instead of considering poverty rates we define here youth disadvantage in terms of the number of periods an individual is recorded to be below the poverty line. Using the European Community Household Panel, individuals are classified into different groups of poverty permanence, each reflecting severity of social disadvantage. Based on these categories we implement a generalized ordinal logit model to assess the various factors associated with social disadvantage among youth. In contrast to previous research, we find little evidence to suggest that young individuals in Scandinavian countries suffer higher levels of social disadvantage. Moreover there is no significant gender difference in Conservative and Social Democratic welfare regimes, but significant difference in Mediterranean and Liberal countries. As previous studies suggests, young individuals’ living arrangements matter. |
| Keywords: | comparative research, panel data, poverty persistence, youth |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-04&r=lab |
| By: | Teresa Dieguez (MIETE, Faculdade de Engenharia, Universidade do Porto, Portugal); Aurora A.C.Teixeira (INESC Porto, CEMPRE, Faculdade de Economia, Universidade do Porto, Portugal) |
| Abstract: | In the present paper we provide a quantitative assessment of ICTs role in Family Physicians/General Practitioners (GPs) medical daily practice and scientific performance. It focus on the Portuguese underexplored context, where the Health Sector has been under pressure for wide and profound reforms. These reforms have been extensively relying on ICTs, namely on the Internet. Based on the responses of 342 GPs, we concluded that 94% uses the Internet and 57% agrees that the Internet is essential to their medical daily practice. This is a slightly lower percentage than that observed for other European physicians (62%). GPs tend to use the Internet mainly for professional purposes. On average, they spend 10 hours/week on the Internet for professional purposes. Further data shows that to have or to be enrolled in advanced training fosters the use of the Internet for professional purposes, which in its turn, tends to grant GPs access to more and up-to-date information and knowledge on these matters. A worrisome evidence is that at the workplace, a substantial proportion of GPs (over 70%) do not use the Internet or other related ICTs, namely Telemedicine. Although Electronic Prescription is used by roughly 60% of the respondent GPs, for all other activities – teleconsultation, telediagnosis, and telemonitoring – only a meagre percentage of physicians (10%) claim to use such technologies. Thus, Telemedicine at the workplace is still a chimera. Notwithstanding such dishearten scenario, our data shows that the Internet for the respondent GPs has a critical role on updating and improving their professional knowledge basis. They recognise, however, that the vast majority of GPs lack specific and general training in ICT-related technologies. In fact, half of them agree that they need to attend specific training actions on ICTs. A large percentage of GPs admitted that in the previous year they did not take any professional training targeting ICTs and those who did undertook rather short-term (less than one week) courses: Because of that, such training handicap uncovers that a large part of Portuguese GPs may be unable to reap the benefits of ICTs in their daily medical practice. |
| Keywords: | GPs; Human Capital; Information and Communication Technologies (ICTs) |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:275&r=lab |
| By: | Arnaud Chevalier (Dept. of Economics, Royal Holloway, University of London, Egham, TW20 OEX + Geary Institute, University College Dublin); Steve Gibbons (Department of Geography, London School of Economics + Centre for Economics Performance, London School of Economics); Andy Thorpe (Department of Economics, University of Portsmouth, Portsmouth); Sherria Hoskins (Department of Psychology, University of Portsmouth, Portsmouth) |
| Abstract: | Participation rates in higher education differ persistently between some groups in society. Using two British datasets we investigate whether this gap is rooted in students’ misperception of their own and other’s ability, thereby increasing the expected costs to studying. Among high school pupils, we find that pupils with a more positive view of their academic abilities are more likely to expect to continue to higher education even after controlling for observable measures of ability and students’ characteristics. University students are also poor at estimating their own test-performance and over-estimate their predicted test score. However, females, white and working class students have less inflated view of themselves. Self-perception has limited impact on the expected probability of success and expected returns amongst these university students. |
| Keywords: | Test performance, self-assessment, higher education participation, academic selfperception |
| JEL: | I21 J16 Y80 |
| Date: | 2007–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200729&r=lab |
| By: | Jesús Fernández-Huertas Moraga |
| Abstract: | The productive characteristics of migrating individuals, emigrant selection, affect welfare. The empirical estimation of the degree of selection suffers from a lack of complete and nationally representative data. This paper uses a new and better dataset to address both issues: the ENET (Mexican Labor Survey), which identifies emigrants right before they leave and allows a direct comparison to non-migrants. This dataset presents a relevant dichotomy: it shows on average negative selection for Mexican emigrants to the United States for the period 2000-2004 together with positive selection in Mexican emigration out of rural Mexico to the United States in the same period. Three theories that could explain this dichotomy are tested. Whereas higher skill prices in Mexico than in the US are enough to explain negative selection in urban Mexico, its combination with network effects and wealth constraints is required to account for positive selection in rural Mexico. |
| Keywords: | international migration, selection, wealth constraints, household survey |
| JEL: | F22 O15 J61 D33 |
| Date: | 2008–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:741.08&r=lab |
| By: | Christophe Hachon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | A growing empirical literature shows that life expectancy depends on the wage level. Using an overlapping generations model with a small open economy, we explain why this result can change the<br />redistributive properties of unfunded pension systems. We use the concept of "net contribution" to measure this redistributivity of pension systems. We show that Beveridgian pension systems remain<br />progressive. However, the poorest do not necessarily benefit the most from pension systems. For Bismarkian pension systems, net contributions are regressive. It means that poor agents pay more<br />for the pension system than they receive from it. Conversely, rich agents receive more from the pension system than they pay for it. For mixed pension systems, it is possible that collected resources are redistributed in favour of the ends of the distribution of wages. |
| Keywords: | Pension system; inequality; length of life; net<br />contribution |
| Date: | 2008–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00279651_v1&r=lab |