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on Labour Economics |
| By: | Francisco M. Gonzalez; Shouyong Shi |
| Abstract: | We construct an equilibrium theory of learning from search in the labor market, which addresses the search behavior of workers, the creation of jobs, and the wage distribution as functions of unemployment duration. In the model, each worker has incomplete information about his job-finding ability and learns about it from his search outcomes. The theory formalizes a notion akin to that of discouragement: over the unemployment spell, unemployed workers update their beliefs about their job-finding abilities downward and reduce their desired wages. One contribution of the paper is to integrate learning from search into an equilibrium framework. We show that the equilibrium exhibits wage dispersion among homogeneous workers, and that workers with longer unemployment spells have lower permanent incomes. Another contribution is to apply lattice-theoretic techniques to analyze learning from experience, which is useful because learning generates convex value functions and, in principle, multiple solutions to a worker's optimization problem. |
| Keywords: | Learning; Wages; Unemployment; Directed search; Supermodularity. |
| JEL: | E24 D83 J64 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-328&r=lab |
| By: | Eric Strobl (Ecole Polytechnique Paris); Frank Walsh (University College Dublin) |
| Abstract: | We model a standard competitive labour market where firms choose combinations of workers and hours per worker to produce output. If one assumes that the scale of production has no impact on hours per worker, then the change in the number of workers and hours per worker resulting from a minimum wage are inversely related. We also demonstrate that total hours worked at the firm may rise if there are small fixed costs to hiring workers. |
| Keywords: | Minimum wages, hours, employment |
| JEL: | J22 J38 |
| Date: | 2007–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200714&r=lab |
| By: | Garloff, Alfred (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper analyses theoretical effects of minimum wages on employment and the wage distribution under a frictional setting. I review new developments in search theory and discuss the influence of minimum wages on wages and employment under each setting. Thereby, a major theoretical focus of the paper is the integration of heterogeneity on both sides of the market in equilibrium search models. In the homogeneous case minimum wages do not affect employment, while in the heterogenous case theoretical results are mixed. There is no unique connection between unemployment and minimum wages, and the effect can be positive, zero or negative. However, the most advanced models, integrating heterogeneity on both sides of the market, seem to support the hypothesis that an increase in the minimum wage generally leads to an increase in unemployment as well." (author's abstract, IAB-Doku) ((en)) |
| JEL: | E24 J21 J31 J64 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200833&r=lab |
| By: | Pouliakas, Konstantinos; Livanos, Ilias |
| Abstract: | This study investigates the extent to which differences in the subject of degree studied by male and female university graduates contributes to the gender pay gap in Greece. The case of Greece is interesting as it is an EU country with historically large gender discrepancies in earnings and one of the highest levels of occupational gender segregation among OECD economies. Using micro-data from the most recently available waves (2000-2004) of the Greek Labour Force Survey (LFS), the returns to academic disciplines are firstly estimated by gender. It is found that the subjects in which women are relatively over-represented (e.g. Education, Humanities) are also those with the lowest amortization in terms of wage returns. Oaxaca-Ransom decompositions subsequently imply that gender differences in the type of degree studied can explain an additional 22.5% of the male-female pay gap in Greece. Risk-augmented earnings functions also indicate that Greek women seek for less risky educations that consequently command lower wage premiums in the job market. The findings of the paper suggest that the promotion of gender equality in Greece should pay attention to the educational choices of men and women prior to them entering the labour market, via efficient career counselling and educational reforms that heed to the signals of the labour market. |
| Keywords: | Gender wage gap; subject of degree; returns; risk; Greece |
| JEL: | J31 J71 J24 J16 |
| Date: | 2008–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10036&r=lab |
| By: | Michael Clemens; Claudio Montenegro; Lant Pritchett |
| Abstract: | We compare the wages of workers inside the United States to the wages of observably identical workers outside the United States—controlling for country of birth, country of education, years of education, work experience, sex, and ruralurban residence. This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. We then use five independent methods to correct these estimates for unobserved differences between the productivity of migrants and non-migrants, as well as for the wage effects of natural barriers to international movement in the absence of policy barriers. We also introduce a selection model to estimate how migrants’ wage gains depend on their position in the distribution of unobserved wage determinants both at the origin and at the destination, as well as the relationship between these positions. For example, in the median wage gap country, a typical Bolivian-born, Bolivianeducated, prime-age urban male formal-sector wage worker with moderate schooling makes 4 times as much in the US as in Bolivia. Following all adjustments for selectivity and compensating differentials we estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). We document that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that imply allowing labor mobility can reduce a given household’s poverty to a much greater degree than most known in situ antipoverty interventions. |
| Keywords: | wage, migration, economic development |
| JEL: | F22 J61 J71 O15 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:148&r=lab |
| By: | Guido Menzio (Department of Economics, University of Pennsylvania); Shouyong Shi (Department of Economics, University of Toronto) |
| Abstract: | We build a directed search model of the labor market in which workers’ transitions between unemployment, employment, and across employers are endogenous. We prove the existence, uniqueness and efficiency of a recursive equilibrium with the property that the distribution of workers across employment states does not affect the agents’ values and strategies. Because of this property, we are able to compute the equilibrium outside the non-stochastic steady-state. We use a calibrated version of the model to measure the effect of productivity shocks on the US labor market. We find that productivity shocks generate procyclical fluctuations in the rate at which unemployed workers become employed and countercyclical fluctuations in the rate at which employed workers become unemployed. Moreover, we find that productivity shocks generate large countercyclical fluctuations in the number of vacancies opened for unemployed workers and even larger procyclical fluctuations in the number of vacancies created for employed workers. Overall, productivity shocks alone can account for 80 percent of unemployment volatility, 30 percent of vacancy volatility and for the nearly perfect negative correlation between unemployment and vacancies. |
| Keywords: | Directed Search, On the Job Search, Business Cycles |
| JEL: | E24 E32 J64 |
| Date: | 2008–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:08-029&r=lab |
| By: | Guido Menzio; Shouyong Shi |
| Abstract: | We build a directed search model of the labor market in which workers' transitions between unemployment, employment, and across employers are endogenous. We prove the existence, uniqueness and efficiency of a recursive equilibrium with the property that the distribution of workers across employment states does not affect the agents' values and strategies. Because of this property, we are able to compute the equilibrium outside the non-stochastic steady-state. We use a calibrated version of the model to measure the effect of productivity shocks on the US labor market. We find that productivity shocks generate procyclical fluctuations in the rate at which unemployed workers become employed and countercyclical fluctuations in the rate at which employed workers become unemployed. Moreover, we find that productivity shocks generate large countercyclical fluctuations in the number of vacancies opened for unemployed workers and even larger procyclical fluctuations in the number of vacancies created for employed workers. Overall, productivity shocks alone can account for 80 percent of unemployment volatility, 30 percent of vacancy volatility and for the nearly perfect negative correlation between unemployment and vacancies. |
| Keywords: | Directed search; On the Job Search; Business Cycles |
| JEL: | E24 E32 J64 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-327&r=lab |
| By: | Paula Armstrong (University of Stellenbosch); Janca Steenkamp |
| Abstract: | Trade unions played an important role in South Africa’s transition from apartheid in 1994 and continue to play a very public role in the South African economy. Trade unions are found to have had an increasingly positive effect on members’ wages, although it appears that this increase has resulted in part from changes in the composition of union membership. Unions also had an inequality-reducing character, with union premiums for workers at the lower end of the wage distribution being greater than those for workers at the higher end of the wage distribution. |
| Keywords: | Wage level and structure, Trade unions, Objectives, Structure and effect |
| JEL: | J31 J51 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers58&r=lab |
| By: | Douglas Kruse; Richard Freeman; Joseph Blasi |
| Abstract: | This paper examines how shared capitalism compensation systems - those that link employee pay to company performance - affect diverse employee outcomes. It uses two data sets: the national GSS survey that provides a broad representative view of the extent of the programs; and the NBER Shared Capitalism Project surveys of workers in 14 companies that use shared capitalism programs extensively. We find that greater involvement in the programs is generally linked to greater participation in decisions, higher quality supervision and treatment of employees, more training, higher pay and benefits, greater job security, and higher job satisfaction. We also find positive interactions of shared capitalism with high-performance policies in predicting participation in decisions and overall job satisfaction, and negative interactions of shared capitalism with close supervision in affecting almost all of the outcomes. Overall the results support the idea that workers can gain by sharing, but whether this happens is contingent on other workplace policies. |
| JEL: | J33 J54 L23 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14233&r=lab |
| By: | Richard Freeman; Douglas Kruse; Joseph Blasi |
| Abstract: | Group incentive systems have to overcome the free rider or 1/N problem, which gives workers an incentive to shirk, if they are to succeed. This paper uses new questions on responses to shirking from the General Social Survey and a special NBER survey of workers at over 300 worksites in 14 companies that have some form of group incentive pay to examine how well workers can monitor their peers and what they do when the peers are not working up to speed. The paper finds that: 1) most workers say that they can detect fellow employees who shirk; 2) many report that they would speak to the shirker or report the behavior or a supervisor, and many report that they did so in the past; 3) the proportion that takes action against shirkers is greatest among workers paid under group incentive systems, in smaller companies, and in companies with good employee-management relations; 4) group incentives interact with high-performance human resource policies such as employee involvement teams, training, task variety, low levels of supervision, and good fixed wages to induce more workers to act against shirking; 5) workers in workplaces where there is more anti-shirking behavior report that co-workers work harder, encourage other workers more, and report that their workplace facility is more effective in ways that should raise productivity and profits. |
| JEL: | J33 J54 L23 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14227&r=lab |
| By: | Joseph R. Blasi; Richard B. Freeman; Chris Mackin; Douglas L. Kruse |
| Abstract: | This paper uses data from NBER surveys of over 40,000 employees in hundreds of facilities in 14 firms and from employees on the 2002 and 2006 General Social Surveys to explore how shared compensation affects turnover, absenteeism, loyalty, worker effort, and other outcomes affecting workplace performance. The empirical analysis shows that shared capitalism has beneficial effects on all outcomes save for absenteeism and that it has its strongest effects on turnover, loyalty, and worker effort when it is combined with: a) high-performance work policies (employee involvement, training, and job security), b) low levels of supervision, and c) fixed wages that are at or above market level. Most workers report that cash incentives, stock options, ESOP stock, and ESPP participation motivate them to work harder. The interaction of the effects of shared capitalism with other corporate policies suggests that the various shared capitalist and other policies may operate through a latent variable, "corporate culture". |
| JEL: | J33 J54 L23 L25 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14230&r=lab |
| By: | Christian Schmitt |
| Abstract: | The aim of this paper is to investigate the hypothesis that after leaving the educational system, labour market integration has a causal effect on first-birth decisions. The analysis focuses on two major research questions: First, how is the timing of first parenthood associated with previous labour market performance? Second, can differences in first birth-risks be related to labour market performance? In other words, to what extent do the fertility decisions of successfully integrated individuals differ from those who are poorly integrated into the labour force? To account for the impact of cross-national differences in institutional settings, I contrast the continental conservative German welfare state with the liberal market economy of the UK. To account for gender-specific differences in opportunity costs, I distinguish between men and women in this analysis. Using longitudinal micro-data from the SOEP and BHPS, I apply a piecewise constant exponential hazard model. The results show a significantly reduced first-birth risk in the case of German men with weak occupational integration, as well as in the case of British and German women with pronounced labour market attachment. Furthermore, regarding the timing of family formation, a lengthy process of occupational integration tends to delay the transition to parenthood for both men and women, especially in Germany. |
| Keywords: | Fertilty, first-birth, occupational integration, cross-national comparison |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp119&r=lab |
| By: | Michael C. Burda; Bernd Fitzenberger; Alexander Lembcke; Thorsten Vogel |
| Abstract: | This paper establishes theoretical and empirical linkages between union wage setting and the structure of the wage distribution. Theoretically, we identify conditions under which a right-to-manage model implies compression of the wage distribution in the union sector relative to the nonunion sector as well as first-order stochastic dominance. These implications are investigated using quantile regressions on the 2001 GSES, a large German linked employer–employee data set which contains explicit information on coverage by collective agreements. The empirical results confirm that, in case of industry-wide collective agreements, log union wage effects decline in quantiles, implying union wage compression. This finding, however, cannot be corroborated for wages determined at the firm level. Stochastic dominance is confirmed, as predicted by the theoretical model, for both types of collective agreements. |
| Keywords: | Union wage effect, stochastic dominance, wage compression, quantile regressions, Machado-Mata decomposition |
| JEL: | J31 J51 J52 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2008-04&r=lab |
| By: | Pouliakas, Konstantinos |
| Abstract: | This paper attempts to test the non-monotonic effect of monetary incentives on job satisfaction. Specifically, 8 waves (1998-2005) of the British Household Panel Survey (BHPS) are used to investigate the ceteris paribus association between the intensity of bonus/profit-sharing payments and the utility derived from work. After controlling for individual heterogeneity biases, it is shown that relatively ‘small’ bonuses exert a significant negative effect on worker satisfaction. In contrast, job utility is found to rise only in response to ‘large’ bonus payments, primarily in skilled, non-unionized private sector jobs. The empirical evidence of the paper is therefore consistent with a ‘V-effect’ of incentives, suggesting that employers wishing to motivate their staff should indeed “pay enough or don’t pay at all”. |
| Keywords: | Incentives; intensity; job satisfaction; non-monotonic |
| JEL: | J28 C23 J33 |
| Date: | 2008–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10031&r=lab |
| By: | Costas Meghir (Institute for Fiscal Studies and University College London); David Phillips (Institute for Fiscal Studies) |
| Abstract: | <p><p>In this paper we provide an overview of the literature relating labour supply to taxes and welfare benefits with a focus on presenting the empirical consensus. We begin with a basic continuous hours model, where individuals have completely free choice over their hours of work. We then consider fixed costs of work, the complications introduced by the benefits system, dynamic aspects of labour supply and we place the analysis in the context of the family. The key conclusion of this work is that in order to estimate the impact of tax reform and be able to generalise results, a structural approach that takes account of many of these issues is desirable. We then discuss the 'new Tax Responsiveness' literature which uses the response of taxable income to the marginal tax rate as a summary statistic of the behavioural response to taxation. Underlying this approach is the unsatisfactory nature of using hours as a proxy for labour effort for those with high levels of autonomy on the job and who already work long hours, such as the self employed or senior executives. After discussing relevant theory we then provide a summary of empirical estimates and the methodology underlying the studies. Our conclusion is that hours of work are relatively inelastic for men, but are a little more responsive for married women and lone mothers. On the other hand, participation is quite sensitive to taxation and benefits for women. Within this paper we present new estimates form a discrete participation model for both married and single men based on the numerous reforms over the past two decades in the UK. We find that the participation of low education men is somewhat more responsive to incentives than previously thought. For men with high levels of education, participation is virtually unresponsive; here the literature on taxable income suggests that there may be significant welfare costs of taxation, although much of this seems to be a result of shifting income and consumption to non-taxable forms as opposed to actual reductions in work effort.</p></p> |
| Keywords: | Labour Supply, Income taxation, Welfare Benefits, Tax Credits, Incentive Effects |
| JEL: | J22 H24 H31 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:08/04&r=lab |
| By: | Alex Bryson; Richard Freeman |
| Abstract: | This paper uses nationally representative linked workplace-employee data from the British 2004 Workplace Employment Relations Survey to examine the operation of shared capitalist forms of pay--profit-sharing and group pay for performance, employee share ownership, and stock options--and their link to productivity. It shows that shared capitalism has grown in the UK, as it has in the US; that different forms of shared capitalist pay complement each other and other labor practices in the sense that firms use them together more than they would if they chose modes of pay and work practices independently; and that workplaces switch among schemes frequently, which suggests that they have trouble optimizing and the transactions cost of switching are relatively low. Among the single schemes, share ownership has the clearest positive association with productivity, but its impact is largest when firms combine it with other forms of shared capitalist pay and modes of organization. |
| JEL: | J33 L23 L25 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14235&r=lab |
| By: | Murray, Peter A.; Parr, Nick; Syed, Jawad |
| Abstract: | This paper tracks the representation of executive women at work. First, the paper discusses the significant deficit of female managers (ABS 2007a), and a marked decline of women professionals from their mid to late 30s. Significant differences in age and sex distributions are evident between different occupational groups, and discriminatory practices continue to play a role. We discuss the implications of these patterns. Second, the paper describes how labour management policies might address the more salient gender issues. Our findings suggest that while some common ‘old’ perceptions related to women apparently more suited to particular professions are slowly being reversed, better policies related to equal representation are required. |
| Keywords: | Gender; Executive women; Australia |
| JEL: | O15 J16 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10060&r=lab |
| By: | Laura Crespo (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | In this paper we estimate the causal effect of providing “intensive” informal care to elderly parents on labour market participation decisions for European women who are themselves approaching retirement. In particular, we consider the frequency or intensity of this help and we focus on informal care provided in a daily or weekly basis. We use two different but comparable samples drawn from the Survey of Health, Ageing and Retirement in Europe (SHARE) that provide complementary detailed information about daughters and parents. We obtain evidence about this question for two groups of European countries that strongly differ in terms of informal caregiving intensity within the immediate family and the use of formal care: the northern countries (Sweden, Denmark and The Netherlands), and the southern countries (Spain, Italy and Greece). The results show that the estimated effect of providing “intensive” informal care to elderly parents on the probability of labour participation is negative and large for both groups of countries. Furthermore, a substantially stronger effect is found when the “intensive” caregiving variable is treated as endogenous in the labour participation equation. This shows that the potential opportunity costs in terms of (reduced) employment associated with the provision of informal care by women are seriously underestimated under the exogeneity assumption of the caregiving regressor. |
| Keywords: | Binary choice, labour force participation decisions, parental informal caregiving, endogenous variables, simultaneous estimation. |
| JEL: | J2 C3 D1 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2006_0615&r=lab |
| By: | Joanne Lindley; Steven McIntosh (Department of Economics, The University of Sheffield) |
| Abstract: | This paper adds to the overeducation literature using panel data from the British Household Panel Survey. Much has been written about who is more likely to be overeducated, and the impact of being overeducated on wages, at particular points in time using cross-sectional data. Panel data allows us to control for unobserved individual heterogeneity in the determinants of incidence and impact of overeducation. The paper goes on to estimate the determinants of transitions out of overeducation, providing new information about its duration, and the factors that influence being in, and escaping from, this state. |
| Keywords: | Over-education, Skills |
| JEL: | J24 J31 I2 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2008009&r=lab |
| By: | David I. Levine (Haas School of Business, University of California,); Michael W. Toffel (Harvard Business School, Technology and Operations Management Unit) |
| Abstract: | Several studies have examined how the ISO 9001 Quality Management System standard affects organizational outcomes such as profits. This is the first large-scale study to examine its effects on employee outcomes such as employment, earnings, and health and safety. We analyzed a matched sample of nearly 1,000 companies in California. ISO 9001 adopters subsequently had far lower organizational death rates than a matched control group of non-adopters. Among surviving employers, ISO adopters realized higher rates of growth of sales, employment, payroll, and average annual earnings. Injury rates also declined slightly at ISO 9001 adopters, although total injury costs did not. These results have implications for organizational theory, managers, and public policy. |
| Keywords: | ISO 9001, quality management, standards, occupational health and safety, wages, labor, empirical, California |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:09-018&r=lab |
| By: | Douglas L. Kruse; Joseph R. Blasi; Rhokeun Park |
| Abstract: | Between one-third and one-half of employees participate directly in company performance through profit sharing, gainsharing, employee ownership, or stock options. This flies in the face of concerns about the free rider problem and worker risk aversion in group incentives, and raises many questions about the effects on firms and workers. This paper lays out the major reasons we may see such "shared capitalism" plans, and reviews recent nationally representative surveys on the prevalence of these plans. We also introduce the NBER shared capitalism data, based on questions added to the 2002 and 2006 General Social Surveys (GSS) and more than 40,000 employee surveys from 14 companies with different combinations of shared capitalism plans. We find that while shared capitalism exists broadly throughout the economy, it is more likely in larger establishments. The free rider effect may be countered by the use of other policies to create productive teamwork and a cooperative culture: shared capitalism is positively linked to workplace decision-making, training, job security, teamwork, the ability to easily observe co-worker performance, and low levels of supervision. Also, more risk-averse employees avoid participating in several types of shared capitalism, but two-thirds of even the most risk-averse employees in these companies say they want shared capitalism as part of their pay package. The effects of these plans for both workers and firms are more fully explored in accompanying papers. |
| JEL: | J33 J54 L23 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14225&r=lab |
| By: | Peter Nilsson |
| Abstract: | <p>This paper utilizes a Swedish alcohol policy experiment conducted in the late 1960s to identify the impact of prenatal alcohol exposure on educational attainments and labor market outcomes. The experiment started in November 1967 and was prematurely discontinued in July 1968 due to a sharp increase in alcohol consumption in the experimental regions, particularly among youths. Using a difference-in-difference-in-differences estimation strategy we find that around the age of 30 the cohort in utero during the experiment has substantially reduced educational attainments, lower earnings and higher welfare dependency rates compared to the surrounding cohorts. The results indicate that investments in early-life health have far-reaching effects on economic outcomes in later life.</p> |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:22/08&r=lab |
| By: | Eric A. Hanushek; Steven G. Rivkin |
| Abstract: | Sizeable achievement differences by race appear in early grades, but substantial uncertainty exists about the impact of school quality on the black-white achievement gap and particularly about its evolution across different parts of the achievement distribution. Texas administrative data show that the overall growth in the achievement gap between third and eighth grade is higher for students with higher initial achievement and that specific teacher and peer characteristics including teacher experience and peer racial composition explain a substantial share of the widening. The adverse effect of attending school with a high black enrollment share appears to be an important contributor to the larger growth in the achievement differential in the upper part of the test score distribution. This evidence reaffirms the major role played by peers and school quality, but also presents a policy dilemma. Teacher labor market complications, current housing patterns, legal limits in segregation efforts, and uncertainty about the overall effects of specific desegregation programs indicate that effective policy responses will almost certainly involve a set of school improvements beyond simple changes in peer racial composition and the teacher experience distribution. |
| JEL: | H4 I2 I28 J18 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14211&r=lab |
| By: | Pilegaard, Ninette; Fosgerau, Mogens |
| Abstract: | We examine the implications of search unemployment for the evaluation of a transport in-vestment in a conventional cost benefit analysis (CBA) assuming perfect competition. Lower transport costs induces search over a larger area and longer commuting distances. The ex-pected duration of vacancies is reduced with ensuing benefits outweighing the loss to in-creased transport. The search imperfection drives a wedge between the marginal product of labour and the wage, such that the final benefits of a transport improvement exceed those of a conventional CBA. Using a simulation model we find these additional benefits may be sub-stantial. |
| Keywords: | Cost-benefit; transport; search unemployment; welfare |
| JEL: | R42 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10037&r=lab |
| By: | Laura Hospido (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | In this paper I consider a model for the heterogeneity and dynamics of the conditional mean and the conditional variance of standarized individual wages. In particular, I propose a dynamic panel data model with individual effects both in the mean and in a conditional ARCH type variance function. I posit a distribution for earning shocks and I build a modified likelihood function for estimation and inference in a fixed- T context. Using a newly developed bias-corrected likelihood approach makes it possible to reduce the estimation bias to a term of order 1/ T2. The small sample performance of bias corrected estimators is investigated in a Monte Carlo simulation study. The simulation results show that the bias of the maximum likelihood estimator is substantially corrected for designs that are broadly calibrated to the PSID. The empirical analysis is conducted on data drawn from the 1968-1993 PSID. I find that it is important to account for individual unobserved heterogeneity and dynamics in the variance, and that the latter is driven by job mobility. I also find that the model explains the non-normality observed in logwage data. |
| Keywords: | Panel data, dynamic nonlinear models, conditional heteroskedasticity, fixed effects, bias reduction, individual wages. |
| JEL: | C23 J31 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2007_0717&r=lab |
| By: | Robert Bifulco (Syracuse University); Jason Fletcher (Yale University); Stephen Ross (University of Connecticut) |
| Abstract: | We use data from the National Longitudinal Study of Adolescent Health (Add Health) to examine the effects of classmate characteristics on economic and social outcomes of students. The unique structure of the Add Health allows us to estimate these effects using comparisons across cohorts within schools, and to examine a wider range of outcomes than other studies that have used this identification strategy. We find that increases in the percent of classmates whose mother is college educated has significant, desirable effects on educational attainment and substance use. We do not find much evidence that the percent of classmates who are black or Hispanic has negative effects on individual outcomes, on average, but increases in the percent black or Hispanic does increase drop out rates among black students. |
| Keywords: | Education, Peer Effects, Cohort Study, Substance Abuse |
| JEL: | I21 I19 J13 J15 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2008-21&r=lab |
| By: | Samuel Bentolila; Juan J. Dolado; Juan F. Jimeno (CEMFI, Centro de Estudios Monetarios y Financieros) |
| Abstract: | The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in Spain over this period. We show that the New Keynesian Phillips curve is shifted by immigration if natives’ and immigrants’ labor supply or bargaining power differ. Estimation of the curve for Spain indicates that the fall in unemployment since 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by immigration. |
| Keywords: | Phillips curve, immigration. |
| JEL: | E31 J64 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2007_0718&r=lab |
| By: | Lawless, Martina; Murphy, Alan |
| Abstract: | While growth in output and employment remains relatively strong in the Irish economy, there has been considerable focus recently on some high-profile job losses, particularly in the manufacturing sector. This paper places these developments within a broader context and shows that aggregate changes in the net number of jobs arise from large numbers of firms both increasing and decreasing employment simultaneously at all points in time. Even at the height of the Celtic Tiger boom when employment grew by 8 percent, this was the result of 15 percent growth in jobs by expanding firms offset by 7 percent of positions being eliminated in firms that were contracting their workforces. One important feature of job flows is that they may contribute to productivity growth by allowing movements from low to high productivity firms. To a degree, this reflects the re-allocation of jobs from declining sectors to expanding sectors, but this is not a comprehensive explanation. A significant factor underlying job flows is the reallocation within sectors from under-performing firms to expanding firms. This study also shows that productivity growth is, on balance, positive for employment growth, as it results, more often than not, in increased employment and higher earnings rather than job losses. On the other hand, these calculations also show how hard it is for policy-makers to identify firms that will be employment and productivity growth winners. |
| Keywords: | Job flows; productivity; Irish economy |
| JEL: | J21 J23 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10009&r=lab |
| By: | John Gibson (University of Waikato); John Tressler (University of Waikato); David L. Anderson (Queen's University) |
| Abstract: | Many countries have introduced research assessment exercises to help measure and raise the quality of research in their university sector. But there is little empirical evidence on how these exercises, such as the Quality Evaluation of the Performance Based Research Fund (PBRF) in New Zealand and the recently aborted Research Quality Framework (RQF) in Australia, affect the signals that researchers observe in the academic labour market. Since these assessments aim to raise research quality, individual academics should perceive rising returns to publication quality at the expense of the returns to quantity. Data we collected on the rank and publication records of New Zealand academic economists prior to the introduction of the PBRF and just after the second assessment round are used to estimate the changing returns to the quantity and quality of journal articles. |
| Keywords: | research assessment; PBRF; academic labor market; research quality |
| JEL: | I2 J5 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:08/11&r=lab |
| By: | Liam Delaney (University College of Dublin); Kevin Denny (University College of Dublin); Wen Zhang (University College of Dublin); Caroline Rawdon (National University of Ireland); Richard AP Roche (National University of Ireland) |
| Abstract: | The way people make decisions about future benefits – termed discounting - has important implications for both financial planning and health behaviour. Several theories assume that, when delaying gratification, the lower weight given to future benefits (the discount rate) declines exponentially. However there is considerable evidence that it declines hyperbolically with the rate of discount being proportionate to the delay distance. There is relatively little evidence as to whether neural areas mediating time- dependent discounting processes differ according to the nature of the task. The present study investigates the potential neurological mechanisms underpinning domain-specific discounting processes. We present high-density event-related potentials (ERPs) data from a task in which participants were asked to make decisions about financial rewards or their health over short and long time-horizons. Participants (n=17) made a button-press response to their preference for an immediate or delayed gain (in the case of finance) or loss (in the case of health), with the discrepancy in the size of benefits/losses varying between alternatives. Waveform components elicited during the task were similar for both domains and included posterior N1, frontal P2 and posterior P3 components. We provide source dipole evidence that differential brain activation does occur across domains with results suggesting the possible involvement of the right cingulate gyrus and left claustrum for the health domain and the left medial and right superior frontal gyri for the finance domain. However, little evidence for differential activation across time horizons is found. |
| Keywords: | Decision Making, Domain-Specific Discounting, Event-Related Potentials |
| Date: | 2008–04–21 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200810&r=lab |
| By: | Lindsay C. Page; Richard J. Murnane; John B. Willett |
| Abstract: | We decompose black-white achievement gap trends between 1971 and 2004 into trends in within- and between-school differences. We show that the previous finding that narrowing within-school inequality explains most of the decline in the black-white achievement gap between 1971 and 1988 is sensitive to methodology. Employing a more detailed partition of achievement differences, we estimate that 40 percent of the narrowing of the gap through the 1970s and 1980s is attributable to the narrowing of within-school differences between black and white students. Further, the consequences for achievement of attending a high minority school became increasingly deleterious between 1971 and 1999. |
| JEL: | I2 I21 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14213&r=lab |
| By: | Scott E. Carrell; Mark L. Hoekstra |
| Abstract: | It is estimated that between ten and twenty percent of children in the United States are exposed to domestic violence annually. While much is known about the impact of domestic violence and other family problems on children within the home, little is known regarding the extent to which these problems spill over to children outside the family. The widespread perception among parents and school officials is that these externalities are significant, though measuring them is difficult due to data and methodological limitations. We estimate the negative spillovers caused by children from troubled families by exploiting a unique data set in which children's school records are matched to domestic violence cases filed by their parent. To overcome selection bias, we identify the effects using the idiosyncratic variation in peers from troubled families within the same school and grade over time. We find that children from troubled families significantly decrease their peers' reading and math test scores and significantly increase misbehavior of others in the classroom. The effects are heterogeneous across income, race, and gender and appear to work primarily through troubled boys. The results are robust to within-sibling differences and we find no evidence that non-random selection is driving the results. |
| JEL: | I2 J24 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14246&r=lab |
| By: | Neil Conway; Simon Deakin; Suzzanne J. Konzelmann; Héloïse Petit; Antoine Rebérioux; Frank Wilkinson |
| Abstract: | We use data from REPONSE 2004 and WERS 2004 to analyse whether approaches to HRM differ according to whether an establishment is part of a company with a stock exchange listing. In both countries we find that listing is positively associated with teamworking and performance-related pay, while in France, but not in Britain, it is also linked to worker autonomy and training. Our findings are inconsistent with the claim that shareholder pressure operates as a constraint on the adoption of high-performance workplace practices. The pattern is similar in the two countries, but with a slightly stronger tendency for listing to be associated with high-performance workplace practices in France. |
| Keywords: | corporate governance, human resource management, employment relations |
| JEL: | G32 G38 K22 K31 J53 J88 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp366&r=lab |
| By: | Simon Deakin; Prabirjit Sarkar |
| Abstract: | Standard economic theory sees labour law as an exogenous interference with market relations and predicts mostly negative impacts on employment and productivity. We argue for a more nuanced theoretical position: labour law is, at least in part, endogenous, with both the production and the application of labour law norms influenced by national and sectoral contexts, and by complementarities between the institutions of the labour market and those of corporate governance and financial markets. Legal origin may also operate as a force shaping the content of the law and its economic impact. Time-series analysis using a new dataset on legal change from the 1970s to the mid-2000s shows evidence of positive correlations between regulation and growth in employment and productivity, at least for France and Germany. No relationship, either positive or negative, is found for the UK, and although the US shows a weak negative relationship between regulation and employment growth, this is offset by productivity gains. |
| Keywords: | labour law, employment, productivity, redistribution, complementarities, legal origins, varieties of capitalism |
| JEL: | K31 J83 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp367&r=lab |
| By: | Simon Deakin; Aristea Koukiadaki |
| Abstract: | The Major Projects Agreement (MPA) is a framework agreement designed to improve performance in large mechanical and electrical engineering projects. It is built on integrated team working and includes the trade union as a partner in strategic, organizational and employment decisions. The agreement was recently implemented in the construction of Heathrow Terminal 5 (T5). The use of the MPA at T5 illustrates how the promotion of a framework that legitimizes a role for unions in continuing dialogue with employers can positively affect organizational outcomes in large construction projects. While serving as a reminder that mechanisms exist within UK corporate governance for the representation and articulation of the interests of non-shareholder constituencies, T5 may be a unique case: the currently uncertain future of the MPA is indicative of wider constraints on the adoption of the partnership model in Britain. |
| Keywords: | corporate governance, labour-management relations, partnership, stakeholder theory |
| JEL: | J52 K12 K31 L14 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp368&r=lab |
| By: | John W. Budd |
| Abstract: | The potential of shared capitalism to improve individual and organizational performance through financial incentives depends on employees knowing about and participating in compensation plans that link rewards to performance. This paper therefore analyzes a survey of employees from multiple companies to assess the extent to which employees are ignorant about company, group, and individual-based incentive pay plans and ESOPs. The findings reveal significant amounts of employee ignorance in both under- and overstating the extent to which such plans apply to them individually. |
| JEL: | J33 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14236&r=lab |
| By: | Argentino Pessoa (Faculdade de Economia do Porto, Universidade do Porto) |
| Abstract: | The paper looks at recent changes in the role of government in the provision of education in Developing Countries. It begins with a reflection about the concept of public-private partnership (PPP), discusses the rationale that inspires the ‘contracting out’ of educational services and describes several cases of private sector involvement in education. After looking at the conditions for building PPPs and the necessary requirements for assuring an effective regulatory framework, the paper closes concluding that while contracting out needs not be made a priority there is a large room for other forms of private sector involvement in education in developing countries. |
| Keywords: | Contracting out, educational reform, market/government failure, NPM, public-private partnerships. |
| JEL: | H52 I28 L33 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:284&r=lab |