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on Labour Economics |
| By: | Gianmarco I. P. Ottaviano (University of Bologna); Francesco D’Amuri (Bank of Italy, ISER, University of Essex and FEEM); Giovanni Peri (University of California, Davis and NBER) |
| Abstract: | We adopt a general equilibrium approach in order to measure the effects of recent immigration on the Western German labor market, looking at both wage and employment effects. Using the Regional File of the IAB Employment Subsample for the period 1987-2001, we find that the substantial immigration of the 1990’s had no adverse effects on native wages and employment levels. It had instead adverse employment and wage effects on previous waves of immigrants. This stems from the fact that, after controlling for education and experience levels, native and migrant workers appear to be imperfect substitutes whereas new and old immigrants exhibit perfect substitutability. Our analysis suggests that if the German labor market were as ‘flexible’ as the UK labor market, it would be more efficient in dealing with the effects of immigration. |
| Keywords: | Immigration, Skill Complementarities, Employment, Wages |
| JEL: | E24 F22 J61 J31 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.16&r=lab |
| By: | Martins, Pedro S. (Queen Mary, University of London) |
| Abstract: | In the context of the debate on the labour-market consequences of globalisation, we examine worker mobility in order to identify the wage differences between foreign and domestic firms. Using matched employer-employee panel data for Portugal, we consider virtually all spells of interfirm mobility over a period of ten years. We find that foreign firms offer significantly more generous wage policies, although there is also a (smaller) selection effect. The results are robust to the consideration of wage growth differences, the case of displaced workers and different subsets of workers. |
| Keywords: | foreign direct investment, worker displacement, wage growth |
| JEL: | J31 J63 F23 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3607&r=lab |
| By: | Zwick, Thomas |
| Abstract: | This paper combines two strains of the literature on the employment effects of deferred compensation. The first strain separates seniority and job matching wage effects on the basis of individual data, but cannot look at employment consequences. The second strain explains the employment structure on the basis of establishment data, but cannot properly calculate seniority wages. This paper uses linked employeremployee data, aggregates individual seniority wages to the establishment level, and correlates them with the establishment employment structure. According to the deferred compensation hypothesis this paper finds that establishments with stronger seniority wages have a higher tenure but hire less older employees. |
| Keywords: | Seniority Wages, Employment Structure, Linked Employer-Employee Data |
| JEL: | J14 J21 J31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7311&r=lab |
| By: | David Albouy |
| Abstract: | The wage differential between Francophone and Anglophone men from 1970 to 2000 fell by 25 percentage points within Quebec, but only by 10 points Canada-wide, largely because the wages of Quebec Anglophones fell by 15 points relative to other Canadian Anglophones. Accordingly, the Canadian measure of the Francophone wage gap better reflects the changing welfare of Francophones than the Quebec measure. Over half of the reduction in the Canadian Francophone wage gap is explained by rising Francophone education levels. In Quebec, the declining number and relative wages of Anglophone workers is best explained by a falling demand for English-speaking labour. |
| JEL: | J2 J7 R23 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14203&r=lab |
| By: | Moritz, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Hardly noticed in Western Europe the fall of the Iron Curtain had also effects on the regional structures of the labour markets in the Central and Eastern European Countries (CEEC). I analyse whether during the undoubtedly increasing integration of markets the Czech border region close to the Western European high-wage countries benefited from its geographical position. Even without transnational free labour mobility, free trade and outsourcing of production activities can lead to shifts in the labour demand and wage structure with respect to different skill groups. These integration effects should be stronger in border regions. Using data from the Czech Microcensus and quarterly district level data, I investigate the impact of the fall of the Iron Curtain on the regional differences in unemployment, the skill structure of employment and wages in the Czech Republic. According to my results there are no indications of disproportionate shifts in the economic structure as well as in the skill structure in the Czech districts neighbouring Bavaria and Austria compared to non-border districts. However, regarding wage differentials between workers employed in the border region and workers in the rest of the country, I find evidence that between 1996 and 2002 the border region workers of the lowest skill category exhibit a positive wage differential of around 12% compared to their counterparts in non-border districts. For all other skill groups in the border region the spatial wage gap is negative and, in absolute value, increases with the skill level." (author's abstract, IAB-Doku) ((en)) |
| Date: | 2008–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200830&r=lab |
| By: | Marco J. van der Leij (University of Alicante); I. Sebastian Buhai (University of Alicante) |
| Abstract: | We develop a social network model of occupational segregation between different social groups, generated by the existence of positive inbreeding bias among individuals from the same group. If network referrals are important for job search, then expected homophily in the contact network structure induces different career choices for individuals from different social groups. This further translates into stable occupational segregation equilibria in the labor market. We derive the conditions for wage and unemployment inequality in the segregation equilibria and characterize first and second best social welfare optima. Surprisingly, we find that socially optimal policies involve segregation. |
| Keywords: | Social Networks, Homophily, Inbreeding Bias, Occupational Segregation, Labor Market Inequality, Social Welfare |
| JEL: | J24 J31 J70 Z13 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.31&r=lab |
| By: | Ingo Geishecker; Holger Görg |
| Abstract: | This paper investigates the effects of services offshoring on wages using individual level data combined with industry information on offshoring. Our results show that services ofsshoring affects the real wage of low and medium skilled individuals negatively. By contrast, skilled workers benefit from services offshoring in terms of higher real wages. Hence, offshoring has contributed to a widening of the wage gap between skilled and less skilled workers. This result is obtained while controlling for individual and sectoral observed and unobserved heterogeneity. In particular, our empirical model also controls for the impact of technological change and offshoring materials |
| Keywords: | Services offshoring, individual wages |
| JEL: | F16 J31 C23 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1434&r=lab |
| By: | Andriy Zapechelnyuk (Kyiv School of Economics); Ro'i Zultan (Hebrew University of Jerusalem) |
| Abstract: | The high cost of searching for employers borne by prospective employees increases friction in the labor market and inhibits formation of efficient employer-employee relationships. It is conventionally agreed that mechanisms that reduce the search costs (e.g., internet portals for job search) lower unemployment and improve overall welfare. We demonstrate that a reduction of the search costs may have the converse effect. We consider a labor market in which workers can either establish a long-term relationship with an employer by being productive, or shirk and move from one employer to the next. In addition, the workers can signal to a potential employer their intention to be productive. We show that lower search costs lead to fewer employees willing to exert effort and, in a separating equilibrium, to more individuals opting to stay completely out of the job market and remain unemployed. Furthermore, we show that lower search costs not only deteriorate the market composition, but also impair efficiency by leading to more expensive signaling in a separating equilibrium. |
| Keywords: | Signaling; job market; job search; separating equilibrium; unemployment; moral hazard |
| JEL: | D82 C72 C73 J64 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:kse:dpaper:10&r=lab |
| By: | Giovanni Peri (UC Davis and NBER) |
| Abstract: | Different U.S. states have been affected by immigration to very different extents in recent years. Immigration increases available workers in a state economy and, because of its composition across education groups, it also increases the relative supply of less educated workers. However, immigration is more than a simple labor supply shock. It brings differentiated skills and more competition to the labor market and it may induce efficient specialization and affect the choice of techniques. Immigrants also affect investments, capital accumulation, and the productivity of more and less educated workers. Using a production function-based procedure and data on gross state product, physical capital and hours worked we analyze the impact of immigration on production factors (capital, more and less educated labor), and productivity over the period 1960-2006 for 50 U.S. states plus D.C. We apply growth accounting techniques to the panel of states in order to identify the changes in factors and productivity associated with immigration. To identify a causal impact we use the part of immigration that is determined by supply shifts in countries of origin and the geographical location of U.S. states or historical immigrants’ settlements. We find that immigration significantly increased the relative supply of less educated workers, that it did not affect much the level of capital per worker and that it significantly increased the productivity of highly educated workers and, even more, less educated workers. These channels together explain the small effect of immigrants on wages of less educated workers and the significant positive effects on wages of more educated workers. |
| Keywords: | Immigration, Investment, Supply of skills, Productivity of workers, US States. |
| JEL: | F22 J61 R11 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0805&r=lab |
| By: | Rosholm, Michael (Aarhus School of Business) |
| Abstract: | This paper uses a social experiment in labour market policy – providing early and intensive monitoring and programme participation in unemployment spells – to assess the nature of labour market policy effectiveness. The experiment was conducted in two counties in Denmark during the winter of 2005-6. The treatment consisted of a dramatic intensification of labour market policies. The results show that the intensification of labour market policies is highly effective, leading to increases in the exit rate from unemployment ranging from 20 to 40%. When introducing time-varying indicators for the various specific treatments actually prescribed to the unemployed workers, none of those treatments have a positive effect on the exit rate from unemployment, neither during the week in which the activity takes place, nor after the activity is completed. However, when the estimated risk of participating in an activity is included as an explanatory variable, it removes the difference in job-finding rates between treatment and control groups completely in one of the counties, and reduces it dramatically and renders it insignificant in the other county. The interpretation we attach to these results is the following; since individual treatments do not appear to be effective per se, but the risk of treatment is, it must be that the intensification of the policy regime increases the job-finding rate of unemployed workers. |
| Keywords: | treatment effect, labour market policy regime, social experiment, threat effect, duration model |
| JEL: | J64 J65 J68 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3620&r=lab |
| By: | Christian Merkl; Dennis Snower |
| Abstract: | This paper indicates that East Germany’s unemployment originates primarily in the labor market, caused by the fast wage adjustment after German reunification. We model the resulting labor market traps in a search and matching framework, show that they are difficult to overcome, and provide empirical evidence. We argue that under these circumstances, demand-side policies are effective mainly when they increase the economy’s overall productivity and thereby help overcome the labor market traps |
| Keywords: | unemployment, labor market trap, East Germany |
| JEL: | E24 J30 J64 P20 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1435&r=lab |
| By: | Andriy Zapechelnyuk; Ro'i Zultan |
| Abstract: | The high cost of searching for employers borne by prospective employees increases friction in the labor market and inhibits formation of efficient employer-employee relationships. It is conventionally agreed that mechanisms that reduce the search costs (e.g., internet portals for job search) lower unemployment and improve overall welfare. We demonstrate that a reduction of the search costs may have the converse effect. We consider a labor market in which workers can either establish a long-term relationship with an employer by being productive, or shirk and move from one employer to the next. In addition, the workers can signal to a potential employer their intention to be productive. We show that lower search costs lead to fewer employees willing to exert effort and, in a separating equilibrium, to more individuals opting to stay completely out of the job market and remain unemployed. Furthermore, we show that lower search costs not only deteriorate the market composition, but also impair efficiency by leading to more expensive signaling in a separating equilibrium. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp488&r=lab |
| By: | Guillaume Destré (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Louis Lévy-Garboua (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Michel Sollogoub (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | A model of informal training which combines learning from own experience and learning from others is proposed in this paper. It yields a closed-form solution that revises Mincer–Jovanovic's [Mincer, J., Jovanovic, B., 1981. Labor mobility and wages. In: Rosen, S. (Ed.), Studies in Labor Markets. Chicago University Press, Chicago, pp. 21–64] treatment of tenure in the human capital earnings function. We estimate the structural parameters of this non-linear model on a large French cross-section with matched employer–employee data. We find that workers on average can learn from others 10% of their own human capital on entering one plant, and catch half of their learning from others’ potential in just 2 years. The private marginal returns to education are declining with education as more educated workers have less to learn from others and share the social returns of their own education with their less qualified co-workers. The potential for learning from others on the job varies across jobs and establishments, and this provides a new distinction between imitation jobs and experience jobs. Workers in imitation jobs, who learn most from others, tend to have considerably longer tenure than workers in experience jobs. Although workers in experience jobs can learn little from others, we find that they learn a lot by themselves. We document several analogies between the imitation jobs/experience jobs “dualism” and the primary/secondary jobs and firms’ dualism implied by the dual labor market theory. However, our binary classification of jobs depicts the data more closely than the dual theory categorization into primary-type and secondary-type establishments. Competition prevails between jobs and firms but jobs differ by their learning technology. |
| Keywords: | Human capital earnings functions; Matched employer–employee data; Informal training; Learning from others; Learning from experience; Returns to tenure; Social returns of education; Labor market dualism |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00304283_v1&r=lab |
| By: | Miles S. Kimball; Matthew D. Shapiro |
| Abstract: | Labor supply is unresponsive to permanent changes in wage rates. Thus, income and substitution effects cancel, but are they both close to zero or both large? This paper develops a theory of labor supply where income and substitution effects cancel, taking into account optimization over time, fixed costs of going to work, and interactions of labor supply decisions within the household. The paper then applies this theory to survey evidence on the response of labor supply to a large wealth shock. The evidence implies that the constant marginal utility of wealth (Frisch) elasticity of labor supply is about one. |
| JEL: | C42 E24 J22 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14208&r=lab |
| By: | Fitzenberger, Bernd; Orlyanskaya, Olga; Osikominu, Aderonke; Waller, Marie |
| Abstract: | Short–term training has recently become the largest active labor market program in Germany regarding the number of participants. Little is known on the effectiveness of different types of short–term training and on their long–run effects. This paper estimates the effects of short–term training programs in West Germany starting in the time period 1980 to 1992 and 2000 to 2003 regarding the two outcomes employment and participation in longer training programs. We find that short–term training shows mostly persistently positive and often significant employment effects. Short–term training focusing on testing and monitoring search effort shows slightly smaller effects compared to the pure training variant. The lock–in periods lasted longer in the 1980s and 1990s compared to the early 2000s. Short–term training results in higher future participation in longer training programs and this effect was much stronger for the earlier time period. |
| Keywords: | short–term training, employment effects, future training participation, administrative data, active labor market programs |
| JEL: | C14 H43 J68 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7310&r=lab |
| By: | Arntz, Melanie; Lo, Simon M. S.; Wilke, Ralf A. |
| Abstract: | This paper suggests an approach for analyzing a dependent competing risks model in presence of partly identi¯ed interval data. We apply our nonparametric bounds framework to empirically evaluate the e®ect of unemployment bene¯ts on the cumulative incidence of local job ¯nding and inter-regional migration of unemployed workers in Germany. Our ¯ndings indicate that reducing the entitlement length for unemployment bene¯ts has heterogenous e®ects depending on the household composition and the wage replacement ratio in absence of unemployment bene¯ts. |
| Keywords: | Arbeitslosenunterstützung, Leistungsanspruch - Dauer, Binnenwanderung, regionale Mobilität, Wanderungsmotivation, Mobilitätsbereitschaft, Arbeitslose, Hochqualifizierte, IAB-Beschäftigtenstichprobe |
| JEL: | C41 C14 J61 |
| Date: | 2008–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabfme:200706_en&r=lab |
| By: | Adele Bergin (Economics, National University of Ireland, Maynooth and ESRI, Dublin) |
| Abstract: | This paper investigates the factors that determine job-to-job mobility in Ireland over the period 1995 to 2001. It finds that labour market experience, working in the public sector, human capital, whether a person is overskilled and the sector they work in are important determinants of job change. In addition, the paper finds the rate of job mobility in Ireland practically doubled over the period. The sample is divided into two time periods and a decomposition technique is applied to ascertain how much of the increase in mobility is attributable to compositional changes and how much is due to other factors |
| Keywords: | Job Mobility |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n1940708.pdf&r=lab |
| By: | Gregory E. Givens |
| Abstract: | This paper studies the role of unemployment insurance in a sticky-price model that features an efficiency-wage view of the labor market based on unobservable effort. The risk-sharing mechanism central to the model permits, but does not force, agents to be fully insured. Structural parameters are estimated using a maximum-likelihood procedure on US data. Formal hypothesis tests reveal that the data favor a model in which agents only partially insure each other against employment risk. The results also show that limited risk sharing helps the model capture many salient properties of the business cycle that a restricted version with full insurance fails to explain. |
| Keywords: | Unemployment, Partial Insurance, Efficiency Wages, Sticky Prices. |
| JEL: | E31 E32 E52 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:200807&r=lab |
| By: | Stephan, Gesine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Pahnke, Andre (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "For Germany, our study estimates average effects of further vocational training, short training and job creation schemes on the employment prospects of participants. We compare participation in each programme with non-participation as well as with participation in one of the other programmes. Outcome variables are cumulated days spent in regular employment during the 3.5 years after programme start as well as the share in regular employment at the end of the observation period. First, our results show rather favourable effects of participation in further vocational training programmes and in short firm-internal training - but not of participation in job creation schemes - on the employment prospects of participants. Second, as a result of shorter lock-in effects, shorter programmes perform mostly better when estimating programme effects on days in cumulated employment. However, regarding shares in regular employment at the end of the observation period, in particular long retraining shows positive effects compared to shorter programmes." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | arbeitsmarktpolitische Maßnahme - Erfolgskontrolle, Weiterbildung, Trainingsmaßnahme, Arbeitsbeschaffungsmaßnahme, Umschulung, Arbeitsmarktchancen, Teilnehmer, Beschäftigungsdauer, arbeitsmarktpolitische Maßnahme - Dauer |
| JEL: | J68 J64 J65 |
| Date: | 2008–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200829&r=lab |
| By: | Rannenberg, Ansgar |
| Abstract: | Unemployment in the big continental European economies like France and Germany has been substantially increasing since the mid 1970s. So far it has been difficult to empirically explain the increase in unemployment in these countries via changes in supposedly employment unfriendly institutions like the generosity and duration of unemployment benefits. At the same time, there is some evidence produced by Ball (1996, 1999) saying that tight monetary policy during the disinflations of the 1980s caused a subsequent increase in the NAIRU, and that there is a relationship between the increase in the NAIRU and the size of the disinflation during that period across advanced OECD economies. There is also mounting evidence suggesting a role of the slowdown in productivity growth, e.g. Nickell et al. (2005), IMF (2003), Blanchard and Wolfers (2000). This paper introduces endogenous growth into an otherwise standard New Keynesian model with capital accumulation and unemployment. We subject the model to a cost push shock lasting for 1 quarter, in order to mimic a scenario akin to the one faced by central banks at the end of the 1970s. Monetary policy implements a disinflation by following a standard interest feedback rule calibrated to an estimate of a Bundesbank reaction function. About 40 quarters after the shock has vanished, unemployment is still about 1.7 percentage points above its steady state, while annual productivity growth has decreased. Over a similar horizon, a higher weight on the output gap increases employment (i.e. reduces the fall in employment below its steady state). Thus the model generates an increase in unemployment following a disinflation without relying on a change to labour market structure. We are also able to coarsely reproduce cross country differences in unemployment. A higher disinflation generated by a larger cost push shock causes a stronger persistent increase in unemployment, the correlation noted by Ball. For a given cost push shock, a policy rule estimated for the Bundesbank produces stronger persistent increase in unemployment than a policy rule estimated for the Federal Reserve. Testable differences in real wage rigidity between continental Europe and the United States, namely, as pointed out by Blanchard and Katz (1999), the presence of the labour share in the wage setting function for Europe with a negative coefficient but it's absence in the U.S. also imply different unemployment outcomes following a cost push shock: If the real wage does not depend on the labour share, the persistent increase in unemployment is about one percentage point smaller than in it's presence. To the extent that the wage setting structure is due to labour market rigidities, "Shocks and Institutions" jointly determine the unemployment outcome, as suggested by Blanchard and Wolfers (2000). The calibration of unobservable model parameters is guided by a comparison of second moments of key variables of the model with western German data. The endogenous growth model matches the moments better than a model without endogenous growth but otherwise identical features. This is particularly true for the persistence in employment as measured by first and higher order autocorrelation coefficients. |
| Keywords: | Monetary Policy; Endogenous Growth; NAIRU; Disinflation; Unemployment Persistence |
| JEL: | N1 J6 J01 |
| Date: | 2008–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:9753&r=lab |
| By: | Leman Yonca Gurbuzer (TEAM - Théories et Applications en Microéconomie et Macroéconomie - CNRS : UMR8059 - Université Panthéon-Sorbonne - Paris I); Ozge Nihan Koseleci (TEAM - Théories et Applications en Microéconomie et Macroéconomie - CNRS : UMR8059 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper provides the first empirical analysis on youth unemployment duration in Bosnia-Herzegovina. The study is based on micro data from the Household Survey Panel Series (2001-04). We formulate the problem within a duration model framework. Semi-parametric methods are used and compared to alternative approaches. The analyses are carried out separately for young men and women to take into account the traditional pattern of the domestic division of labour between genders. Our results indicate that the speed with which an unemployed young person finds employment is partly a function of his/her particular characteristics. We also find significant gender differences in factors affecting the prospects of access to employment. We further observe that for young men as well as young women there is strong evidence for non-monotonic duration dependence. These results turn out to remain robust to different specifications and to the introduction of unobserved heterogeneity. |
| Date: | 2008–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00308629_v1&r=lab |
| By: | Grazier, Suzanne (University of Wales, Swansea); O'Leary, Nigel C. (University of Wales, Swansea); Sloane, Peter J. (University of Wales, Swansea) |
| Abstract: | There is an apparent inconsistency in the existing literature on graduate employment in the UK. While analyses of rates of return to graduates or graduate markups show high returns, suggesting that demand has kept up with a rapidly rising supply of graduates, the literature on over-education suggests that many graduates are unable to find employment in graduate jobs and the proportion over-educated has risen over time. Using a simple supply and demand model applied to UK data that defines graduate jobs in terms of the proportion of graduates and/or the graduate earnings markup within occupations, we find that the employment of graduates in non-graduate jobs has declined over time. Hence, there is no evidence of an over-production of graduates in the UK. |
| Keywords: | employment, wages, education, graduates |
| JEL: | I2 J0 J3 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3618&r=lab |
| By: | Devereux, Paul (University College Dublin); Hart, Robert A. (University of Stirling) |
| Abstract: | In this paper, we compile a unique historical dataset that records strike activity in the British engineering industry from 1920 to 1970. These data have the advantage of containing a fairly homogenous set of companies and workers, covering a long period with varying labour market conditions, including information that enables the addition of union and company fixed effects, and providing geographical detail that allows a district-level analysis that controls for year and seasonal effects. We study the cyclicality of strike durations, strike incidence, and strike outcomes and distinguish between pay and non-pay strikes. Like the previous literature, we find evidence that strikes over pay have countercyclical durations. However, in the post-war period, the magnitude of this effect is much reduced when union and firm fixed effects are included. These findings suggest that it is important when studying strike durations to take account of differences in the composition of companies and unions that are involved in strikes at different points of the business cycle. We also find that strike outcomes tend to be more favourable to unions when the national unemployment rate is lower. |
| Keywords: | incidence, duration, cyclicality, strikes, outcome |
| JEL: | E32 J31 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3614&r=lab |
| By: | Simone Tuor (Institute for Strategy and Business Economics, University of Zurich); Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich) |
| Abstract: | This paper investigates the rates of return and the risks of different types of educational paths after compulsory education. We distinguish a purely academic educational path from a purely vocational path and a mixed path with loops through both systems. To study the labor market outcome we compare earnings and calculate net return rates as well as risk measures to investigate whether different educational paths are characterized by different risk-return trade-offs. We use Lazear’s jack-of-all-trades theory on entrepreneurship to derive testable predictions about the labour market outcome of different combinations of education for entrepreneurs and employees. Our empirical results are based on the Swiss Labor Force Survey (SLFS) and demonstrate that mixed educational paths are well rewarded in the labor market. However, a high return is also associated with a high income variance which is driven by those who end up as entrepreneurs. |
| Keywords: | risk-return trade-off, complete educational paths, occupational choice |
| JEL: | J24 I21 M53 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0031&r=lab |
| By: | Jante Parlevliet; Theodora Xenogiani |
| Abstract: | Informal employment is one of the key features of the Romanian labour market and the main concerns of the Romanian government. Informal employment is not new in Romania. This study attempts to shed light on the issue of informal work in Romania. |
| Keywords: | public policy, social protection, informal employment |
| JEL: | E26 J18 O17 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:devaaa:271-en&r=lab |
| By: | Alberto F. Alesina; Francesca Lotti; Paolo Emilio Mistrulli |
| Abstract: | The answer is yes. By using a unique and large data set on overdraft contracts between banks and microfirms and self-employed individuals, we find robust evidence that women in Italy pay more for overdraft facilities than men. We could not find any evidence that women are riskier then men. The male/female differential remains even after controlling for a large number of characteristics of the type of business, the borrower and the market structure of the credit market. The result is not driven by women using a different type of bank than men, since the same bank charges different rates to male and female borrowers. Social capital does play a role: high levels of trust loosen credit conditions by lowering interest rates, but this benefit is not evenly distributed, as women benefit from increased social capital less than men. |
| JEL: | G21 J16 J71 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14202&r=lab |
| By: | Haan, Peter (DIW Berlin); Myck, Michal (DIW Berlin) |
| Abstract: | The collective model of labour supply opened the household “black box” and allowed for individual treatment of partners in couples. However, the literature on labour supply has so far largely ignored a broader issue with special relevance to transition and developing countries – the distinction of single versus multi-family (“complex”) households. We propose a method to account for multi-family household structure by borrowing from recent applications of the collective model and combining estimation and calibration to identify the degree of resource sharing. We assume that each household is characterised by a between-family sharing parameter, which is calibrated on estimated preferences, the observed labour market status and other characteristics. The key identifying assumption is that preferences over income and leisure of specific family types living in single and multi-family households are the same conditional on observable characteristics. We apply the method to Polish labour market data. |
| Keywords: | labour supply, within-household sharing, work incentives, transition |
| JEL: | J22 I38 D13 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3611&r=lab |
| By: | Etienne Dumont (CIRPEE - Université Laval); Bernard Fortin (CIRPEE - Université Laval); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Bruce Shearer (CIRPEE - Université Laval) |
| Abstract: | We analyse how physicians respond to contractual changes and incentives within a multitasking<br />environment. In 1999 the Quebec government (Canada) introduced an optional mixed compensation<br />system, combining a xed per diem with a partial (relative to the traditional fee-for-service system)<br />fee for services provided. We combine panel survey and administrative data on Quebec physicians<br />to evaluate the impact of this change in incentives on their practice choices. We highlight the<br />dierentiated impact of incentives on various dimensions of physician behaviour by considering a<br />wide range of labour supply variables: time spent on seeing patients, time devoted to teaching,<br />administrative tasks or research, as well as the volume of clinical services and average time per<br />clinical service. Our results show that, on average, the reform induced physicians who changed<br />from FFS to MC to reduce their volume of (billable) services by 6.15% and to reduce their hours of<br />work spent on seeing patients by 2.57%. Their average time spent per service increased by 3.58%,<br />suggesting a potential quality-quantity substitution. Also the reform induced these physicians to<br />increase their time spent on teaching and administrative duties (tasks not remunerated under the<br />fee-for-service system) by 7.9%. |
| Keywords: | physician payment mechanisms; multitasking; mixed-payment systems; incentive con-<br />tracts; labour supply; self-selection; panel estimation. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00305308_v1&r=lab |
| By: | Ana Flávia Machado (Center for Development and Regional Planning (Cedeplar), UFMG); Rafael Perez Ribas (International Poverty Centre) |
| Abstract: | In Brazil?s urban areas, job opportunities determine economic mobility and poverty. But not every job provides enough earnings to take families out of poverty. Jobs for poor workers are scarce in the formal sector. To improve their income, the poor resort to informal, unregistered jobs that are highly vulnerable. The contribution of informal jobs to poverty reduction should not be neglected. |
| Keywords: | Where Are the Jobs that Take People Out of Poverty in Brazil? |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:61&r=lab |
| By: | Arnaud LEFRANC; Fumiaki OJIMA; Takashi YOSHIDA |
| Abstract: | The paper compares the extent of intergenerational earnings and educational correlation in Japan and France. It uses very similar repeated surveys that provide information on educational attainment and family background, conducted in Japan and France. To insure comparability, similar sample restrictions and specifications are imposed. For Japan, we use waves 1965, 1975, 1985, 1995 and 2005. For France, we use waves 1965, 1970, 1977, 1985, 1993 and 2003. Intergenerational elasticity in years of education can be readily estimated using available information. On the other hand, intergenerational earnings elasticity cannot be directly measured given the lack of information on parental income in both surveys. This leads us to apply Bjorklund and Jantti (1999) two sample instrumental variables estimation strategy. Lastly, we discuss to what extent differences in earnings mobility is related to differences in educational mobility and to differences in returns to education between the two countries. |
| Keywords: | intergenerational mobility; earnings education; Japan; France; education Japan France. |
| Date: | 2008–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2008/25&r=lab |
| By: | Kurucu, Gokce |
| Abstract: | Consider a firm advertising in a job matching agency with the aim of employing the most qualified workers. Its chances of success would be higher for a smaller number of competitor firms advertising in the same job matching agency, i.e. careerbuilder.com. How would the resulting competitive behavior among the firms which are advertising to this job matching agency affect the agency’s optimal pricing behavior? I analyze the optimal market structures and pricing strategies of a monopolist platform in a two-sided market setup in which the agents on each side prefer the platform to be less competitive on their side; that is, a market with negative intra-group network externalities. I find that the equilibrium market structure varies with the extent of negative externalities. If the market’s negative network externalities are substantial, that is, if an agent’s disutility given the size of the agent pool on his side is high (enough), then the profit-maximizing strategy for the matchmaker will be to match the highest types of one side with all of the agents on the other side, by charging a relatively high price from the former side and allowing free entrance for the agents of the latter side. However, if the network externalities on one side are not substantial, then the matchmaker will maximize profits by matching an equal number of agents from each side. This paper thus provides an explanation of the asymmetric pricing schedules in two-sided markets where the matchmaker uses a one-program pricing schedule. |
| Keywords: | two-sided market; externalities |
| JEL: | L11 D42 L12 |
| Date: | 2007–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:9746&r=lab |
| By: | Spiess, C. Katharina (DIW Berlin); Wrohlich, Katharina (DIW Berlin) |
| Abstract: | We analyze the role of distance from a university in the decision to attend higher education in Germany. Students who live near a university can avoid moving and the increased living expenses by commuting. Thus, transaction cost arguments would suggest that the greater the distance to the nearest university, the lower the participation in higher education. We analyze this hypothesis by combining data from the German Socio-Economic Panel Study (SOEP) with a database from the German Rectors’ Conference on university postal codes. Based on a discrete time hazard rate model we show that distance to the next university at the time of completing high school significantly affects the decision to enrol in tertiary education. Controlling for many other socio-economic and regional variables, we find that 1 kilometre distance decreases the probability to enrol in higher education by 0.2-0.3 percentage points. |
| Keywords: | competing risk model, distance to university, higher education |
| JEL: | I2 R1 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3615&r=lab |
| By: | Checchi, Daniele (University of Milan); Fiorio, Carlo V. (University of Milan); Leonardi, Marco (University of Milan) |
| Abstract: | In this paper we show that there is a reduction in the correlation coefficient between father and children schooling levels over time in Italy. However, focusing on equality of circumstances, we show that there is still a persistent difference in the odds of attaining a college degree between children of college educated parents and children of parents with lower secondary education attainment. The explanation of these trends lies in differential impact of liquidity constraints and risk aversion. Some descriptive evidence on the persistent differential in returns to college education depending on father’s education is also provided. |
| Keywords: | educational attainment, Italy, family background |
| JEL: | J62 I38 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3622&r=lab |
| By: | N Powdthavee; A Vignoles |
| Abstract: | It has been shown in the recent literature on widening participation that in England a disadvantaged pupil has as much a chance of attending a university as a more advantaged student, provided that s/he manages to reach a sufficient level of achievement at the secondary school level. This finding leads to an important conclusion of no genuine socio-economic gap in university participation once prior attainments have been taken into account. The current article investigates whether the same conclusion can be reached with respect to university drop-out. Using a combination of school and higher education administrative data sets, we are able to show that there is indeed a sizeable and statistically significant gap in the rate of withdrawal after the first year of university between the most advantaged and disadvantaged English students. This socio-economic gap in university drop-out remains even after allowing for their personal characteristics, prior achievement and institution choice. Our results thus suggest that the use of raw drop out rates in the English university 'league table' as one of the main indicators of university efficiency can be quite misleading given that the ranking of universities by drop out rate would change markedly if the prior attainment of students were taken fully into account. |
| Keywords: | Drop out rate; Higher Education; Prior achievement; Socio-economic gap. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:08/23&r=lab |
| By: | Burks, Stephen V. (University of Minnesota, Morris); Carpenter, Jeffrey P. (Middlebury College); Goette, Lorenz (Federal Reserve Bank of Boston); Rustichini, Aldo (University of Minnesota) |
| Abstract: | Economic analysis has said little about how an individual’s cognitive skills (CS's) are related to the individual’s preferences in different choice domains, such as risk-taking or saving, and how preferences in different domains are related to each other. Using a sample of 1,000 trainee truckers we report three findings. First, we show a strong and significant relationship between an individual’s cognitive skills and preferences, and between the preferences in different choice domains. The latter relationship may be counterintuitive: a patient individual, more inclined to save, is also more willing to take calculated risks. A second finding is that measures of cognitive skill predict social awareness and choices in a sequential Prisoner's Dilemma game. Subjects with higher CS's more accurately forecast others' behavior, and differentiate their behavior depending on the first mover’s choice, returning higher amount for a higher transfer, and lower for a lower one. After controlling for investment motives, subjects with higher CS’s also cooperate more as first movers. A third finding concerns on-the-job choices. Our subjects incur a significant financial debt for their training that is forgiven only after twelve months of service. Yet over half leave within the first year, and cognitive skills are also strong predictors of who exits too early, stronger than any other social, economic and personality measure in our data. These results suggest that cognitive skills affect the economic lives of individuals, by systematically changing preferences and choices in a way that favors the economic success of individuals with higher cognitive skills. |
| Keywords: | field experiment, risk aversion, ambiguity aversion, loss aversion, time preference, Prisoners Dilemma, social dilemma, IQ, MPQ, numeracy, U.S. trucking industry, for-hire carriage, truckload (TL), driver turnover, employment duration, survival model |
| JEL: | C81 C93 L92 J63 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3609&r=lab |
| By: | Addison, John T. (University of South Carolina); Bellmann, Lutz (IAB, Nürnberg); Pahnke, André (IAB, Nürnberg); Teixeira, Paulino (University of Coimbra) |
| Abstract: | Using German data from the Institute for Employment Research Establishment Panel, this paper constructs two main measures of outsourcing and examines their determinants and consequences for employment. There are some commonalities in the correlates of the two measures of outsourcing, as well as agreement on the absence of adverse employment effects across all industries. For one specification, however, some negative effects are reported for manufacturing industry, balanced by positive effects for the services sector for another. But there are no indications of survival bias. This is because the association between outsourcing and plant closings is predominantly negative, albeit poorly determined. |
| Keywords: | outsourcing, organizational change, employment change, plant closings, value added |
| JEL: | F16 J23 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3608&r=lab |
| By: | Jaison R. Abel; Todd M. Gabe |
| Abstract: | This paper examines the relationship between human capital and economic activity in U.S. metropolitan areas, extending the existing literature in two important ways. First, we utilize new data on metropolitan-area GDP to measure economic activity. Using educational attainment as an indicator of human capital, we find that a one-percentage-point increase in the proportion of residents with a college degree is associated with a 2.3 percent increase in metropolitan-area GDP per capita. Second, we move beyond the conventional proxy for human capital (educational attainment) to develop new measures that reflect the types of knowledge within U.S. metropolitan areas. Results show that knowledge associated with the provision of producer services and information technology are particularly important determinants of economic vitality in U.S. metropolitan areas. |
| Keywords: | Human capital ; Metropolitan areas - Statistics ; Gross domestic product ; Education - Economic aspects |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:332&r=lab |
| By: | Fabio Mariani (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper aims at explaining why countries with comparable levels of education still experience notable differences in terms of R&D and innovation. High-skilled migration, ultimately linked to differences in R&D costs, might be responsible for the persistence of such a gap. In fact, in a model where human capital accumulation and innovation are strategic complements, we show that allowing labor outflows may strengthen educational incentives in the lagging economy if migration is probabilistic in nature, but at the same time reduces the share of innovative production. Income (growth) might be consequently affected, and a positive migration chance is very unlikely to act as a substitute for educational subsidies. |
| Keywords: | Innovation; Education; Brain drain. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00308746_v1&r=lab |
| By: | Stevenson, Betsey (Wharton School, University of Pennsylvania); Wolfers, Justin (Wharton School, University of Pennsylvania) |
| Abstract: | This paper examines how the level and dispersion of self-reported happiness has evolved over the period 1972-2006. While there has been no increase in aggregate happiness, inequality in happiness has fallen substantially since the 1970s. There have been large changes in the level of happiness across groups: Two-thirds of the black-white happiness gap has been eroded, and the gender happiness gap has disappeared entirely. Paralleling changes in the income distribution, differences in happiness by education have widened substantially. We develop an integrated approach to measuring inequality and decomposing changes in the distribution of happiness, finding a pervasive decline in within-group inequality during the 1970s and 1980s that was experienced by even narrowly-defined demographic groups. Around one-third of this decline has subsequently been unwound. Juxtaposing these changes with large rises in income inequality suggests an important role for non-pecuniary factors in shaping the well-being distribution. |
| Keywords: | happiness, subjective well-being, inequality |
| JEL: | D3 D63 I3 J1 Y1 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3624&r=lab |
| By: | King, Elizabeth M; Orazem, Peter; Paterno, Elizabeth M |
| Abstract: | Many educators and policymakers have argued for lenient grade promotion policy – even automatic promotion – in developing country settings where grade retention rates are high. The argument assumes that grade retention discourages persistence or continuation in school and that the promotion of children with lower achievement does not hamper their ability or their peer’s ability to perform at the next level. Alternatively, promoting students into grades for which they are not prepared may lead to early dropout behavior. This study shows that in a sample of schools from the Northwest Frontier Province (NWFP) of Pakistan, students are promoted primarily on the basis of merit. An econometric decomposition of promotion decisions into a component that is based on merit indicators (attendance and achievement in mathematics and language) and another that is uncorrelated with those indicators allow a test of whether parental decisions to keep their child in school is influenced by merit-based or non-merit-based promotions. Results suggest that the enrollment decision is significantly influenced by whether learning has taken place, and that grade promotion that is uncorrelated with merit has a negligible impact on school continuation. |
| Keywords: | Grade repetition, grade retention, grade promotion, enrollment, achievement, dropout, Pakistan |
| JEL: | I2 |
| Date: | 2008–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12968&r=lab |
| By: | Debora Kusmerski Bilard (University of Amsterdam) |
| Abstract: | This paper addresses two related issues: the optimal intergenerational sharing of labor productivity risks, through a Pay-As-You-Go (PAYG) social security with contingent rates of benefits and contributions, and the optimal combination of PAYG and funded savings in a small open economy. It shows that partial contingency of the social security on the labor productivity is ex ante optimal, when the interest rate is above the expected growth rate of the economy, and when the government has a lifetime perspective of the risk exposure. In addition, the government may induce a higher saving rate, due to the expected lower PAYG return and the household's desire of smoothing consumption over time. |
| Keywords: | intergenerational risk sharing; PAYG social security; household's savings |
| JEL: | H55 H21 D91 |
| Date: | 2008–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080066&r=lab |
| By: | FRIEBEL, Guido; SCHNEDLER, Wendelin |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:9341&r=lab |
| By: | Horácio C. Faustino; Nuno Carlos Leitão |
| Abstract: | This article tests the relation between immigration and Portuguese bilateral trade, considering the fifteen European partners (EU15). Using a static and dynamic panel data analysis, the results show that the stock of immigrants has a positive effect on Portuguese exports, imports and bilateral intra-industry trade. These results suggest that immigration affects all types of trade in a positive way. The underlying assumption is that immigration contributes to decrease the costs of transactions, which in turn promotes all trade flows. The static and dynamic results do not confirm the hypothesis of a negative effect of immigration on Portuguese exports. In the static model, a 10% increase in immigration induces a 5.98 % increase in exports and a 5.55% increase in imports. The effect on the Portuguese trade balance is positive. However, the dynamic results for the export and import equations are more reliable, showing a smaller positive effect on exports. A 10% increase in bilateral immigration induces a 0.47% and 2.34% increase in exports and imports, respectively. Our findings also suggest that when immigrants to Portugal originate from a Latin partner-country, the effects on trade are stronger than in the case of immigrants from non-Latin countries. The study is based on an extended gravitational model, in order to incorporate the qualitative factors as control variables. |
| Keywords: | intra-industry trade; immigration; gravity model; panel data; Portugal. |
| JEL: | C33 F11 F12 F22 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp312008&r=lab |
| By: | Ekaterina Kalugina (HCE - Haut Collège d'Economie de Moscou); Natalia Radtchenko (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Catherine Sofer (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | Cette étude analyse l'inégalité intrafamiliale à l’aide de données subjectives. Nous utilisons une question relative au revenu individuel de chaque membre du ménage en faisant l’hypothèse que les réponses à cette question donnent une information pertinente sur le partage effectif du revenu au sein du ménage. A partir d’un modèle collectif incluant la production domestique, et en utilisant des données russes, le Russian Longitudinal Monitoring Survey, nous montrons que, conformément aux résultats du modèle, le rapport des taux de salaires entre les deux conjoints est un facteur déterminant dans l'explication des divergences dans les réponses quant au niveau de revenu entre les deux membres du couple. Nous trouvons également un effet significatif de la différence d’âge entre les conjoints. |
| Keywords: | Répartition intrafamiliale, données subjectives, RLMS |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00193481_v1&r=lab |