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on Labour Economics |
| By: | Haefke, Christian (IHS - Institute for Advanced Studies, Vienna); Sonntag, Marcus (University of Bonn); van Rens, Thijs (Universitat Pompeu Fabra) |
| Abstract: | Standard macroeconomic models underpredict the volatility of unemployment fluctuations. A common solution is to assume wages are rigid. We explore whether this explanation is consistent with the data. We show that the wage of newly hired workers, unlike the aggregate wage, is volatile and responds one-to-one to changes in labor productivity. In order to replicate these findings in a search model, it must be that wages are rigid in ongoing jobs but flexible at the start of new jobs. This form of wage rigidity does not affect job creation and thus cannot explain the unemployment volatility puzzle. |
| Keywords: | wage rigidity, search and matching model, business cycle |
| JEL: | E24 E32 J31 J41 J64 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3714&r=lab |
| By: | Mario Larch; Wolfgang Lechthaler |
| Abstract: | In the presence of increasing specialization of workers it becomes more and more difficult for firms to find the most suitable workers. In such an environment a multinational corporation has an advantage because it can exchange workers between plants in different countries. In this way it can draw on a larger labor market pool, reducing the mismatch of its workforce. This paper analyzes the consequences of this advantage for production, employment and, most prominently, wages. We are able to disentangle the effects of worker heterogeneity and firm heterogeneity on wages and show that the latter is important to explain why multinationals typically pay higher wages |
| Keywords: | Heterogeneous labor; Multinational, firms; Intra-wage distribution; Heterogeneous firms |
| JEL: | F23 F12 J41 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1454&r=lab |
| By: | Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University); Papps, Kerry L. (Nuffield College, Oxford) |
| Abstract: | We use 1980, 1990 and 2000 Census data to study the impact of source country characteristics on the labor supply assimilation profiles of married adult immigrant women and men. Women migrating from countries where women have high relative labor force participation rates work substantially more than women coming from countries with lower relative female labor supply rates, and this gap is roughly constant with time in the United States. These differences are substantial and hold up even when we control for wage offers and family formation decisions, as well as when we control for the emigration rate from the United States to the source country. Men's labor supply assimilation profiles are unaffected by source country female labor supply, a result that suggests that the female findings reflect notions of gender roles rather than overall work orientation. Findings for another indicator of traditional gender roles, source country fertility rates, are broadly similar, with substantial and persistent negative effects of source country fertility on the labor supply of female immigrants except when we control for presence of children, in which case the negative effects only become evident after ten years in the United States. |
| Keywords: | immigration, labor supply, fertility, assimilation, gender |
| JEL: | D10 J16 J22 J24 J61 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3725&r=lab |
| By: | Indraneel Dasgupta |
| Abstract: | We examine how group-specific differences in reservation wage, arising due to asymmetries in social entitlements, impact on distribution via the joint determination of class conflict between workers and employers, and ‘ethnic’ conflict among workers. We model a two-dimensional contest, where two unions, representing different sections of workers, jointly but non-cooperatively invest resources against employers in enforcing an exogenously given rent, while also contesting one another. The rent arises from a ‘living’ wage, set above reservation wage rates via labour regulations. We show that high reservation wage workers gain, and employers lose, from better social entitlements for low reservation wage workers. The latter however benefit, with employers and against the former, from weak labour regulations. When minority/immigrant workers are marginalized both in the labour market and in non-wage entitlements, improving job access and expanding ‘social support’ has contradictory effects on class and ethnic conflicts. ‘Trade unionism’, i.e. political articulation of shared economic interests alone, appears insufficient to temper ethnic conflicts among workers. |
| Keywords: | Class conflict, Ethnic conflict, Living wage, Labour regulation, Social entitlement, Affirmative action, Distribution. |
| URL: | http://d.repec.org/n?u=RePEc:not:notcre:08/08&r=lab |
| By: | Raposo, Pedro (Tilburg University); van Ours, Jan C. (Tilburg University) |
| Abstract: | December 1, 1996 Portugal introduced a new law on working hours which gradually reduced the standard workweek from 44 hours to 40 hours. We study how this mandatory working hours reduction affected employment and earnings of workers involved. We find for workers who were affected by the new law that working hours decreased, while hourly wages increased, keeping monthly earnings approximately constant. We also find that the working hours reduction did not lead to an increased job loss of workers directly affected. Finally, we find that workers who themselves were not directly affected were influenced by the working hours reduction indirectly. If they worked in a firm with many workers working more than 40 hours before the change in law was introduced. |
| Keywords: | workweek reduction, policy reform, employment dynamics, earnings |
| JEL: | J22 J31 J63 J81 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3723&r=lab |
| By: | Kaas, Leo (University of Konstanz); Zink, Stefan (University of Konstanz) |
| Abstract: | We study human capital accumulation in an environment of competitive search. Given that unemployed workers can default on their education loans, skilled individuals with a larger debt burden prefer riskier but better paid careers than is socially desirable. A higher level of employment risk in turn depresses the skill premium and the incentives to invest in education. The equilibrium allocation is characterized by too much unemployment, underinvestment by the poor, and too little investment in skill-intensive technologies. A public education system funded by graduate taxes can restore efficiency. More generally, differences in education funding can account for cross-country variations in wage inequality. |
| Keywords: | directed search, investment, education finance |
| JEL: | I22 J24 J31 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3722&r=lab |
| By: | Chris SAKELLARIOU (Division of Economics, Nanyang Technological University, Singapore) |
| Abstract: | In this paper I take a detailed look into the returns to schooling in Cambodia using the 1997 and 2003-04 Socioeconomic Surveys of Households and alternative estimation techniques (OLS vs. Family Fixed Effects and Instrumental Variables). The main focus of the analysis has to do with differences by sector (public vs. private). In Cambodia, the average educational attainment of workers in the public sector is significantly higher compared to the private sector. Without considering issues of selection into the public vs. the private sector, the wage premium for one additional year of schooling in the private sector is about twice that in the public sector for both men and women. Furthermore, the average return to one additional year of potential labor market experience is higher in the private sector. This raises questions about the reasons for the self-selection of more educated workers in the public sector in Cambodia. The picture changes drastically, especially in the case of female employment, once the assumption that the location of individuals in the public and private sectors is the outcome of a random process. However, after correcting for selection bias using Heckman's correction, one additional year of schooling still increases earnings by more in the private sector for men, but the spread between sectors narrows. However for women, one additional year of schooling increases earnings in the public sector by more than in the private sector. Furthermore, now the return to one additional year of potential labor market experience is significantly higher in the public sector, for both men and women. Other findings indicate that the supply of more educated workers has outstripped demand, resulting in a decline in the return to tertiary education and a stable return to secondary education. The dynamics of the demand and supply of skills and their changes over the time suggest that the supply of post-primary skills is adequate, except perhaps in the private sector. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:0805&r=lab |
| By: | Carsten Ochsen (University of Rostock) |
| Abstract: | This study examines the effects of parental labor market activities on children's education attainment. In contrast to the existing literature we consider parental experiences until the children graduate from school. In addition, the effects of the regional economic environment during teacher's decision about the secondary school track are analyzed. Using data drawn from the German Socio-Economic Panel an ordered probit estimator is used to model children's education attainment. With respect to parental labor market participation we find that father's full-time and mother's part-time employment have significant positive effects on children's education attainment. Furthermore, we obtain evidence that the regional GDP growth rate and the regional unemployment rate when children are 10 years old are significantly related to the education that these children ultimately achieve. Our interpretation is that regional economic conditions affect teachers'recommendations for the secondary school track, which are given during the last year of primary school. The results reveal the less successful parents are on the labor market, the lower the average education level of their children. A second important conclusion is that children who live in regions which experience a poor economic performance over a longer period are, on average, less educated than children who live in more affluent regions. |
| Keywords: | education attainment, parental labor supply, macroeconomic uncertainty, family structure, intergenerational link |
| JEL: | I21 J22 E24 J10 J24 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:95&r=lab |
| By: | Moretti, Enrico (University of California, Berkeley) |
| Abstract: | A large literature has documented a significant increase in the return to college over the past 30 years. This increase is typically measured using nominal wages. I show that from 1980 to 2000, college graduates have increasingly concentrated in metropolitan areas that are characterized by a high cost of housing. This implies that college graduates are increasingly exposed to a high cost of living and that the relative increase in their real wage may be smaller than the relative increase in their nominal wage. To measure the college premium in real terms, I deflate nominal wages using a new CPI that allows for changes in the cost of housing to vary across metropolitan areas and education groups. I find that half of the documented increase in the return to college between 1980 and 2000 disappears when I use real wages. This finding does not appear to be driven by differences in housing quality and is robust to a number of alternative specifications. The implications of this finding for changes in well-being inequality depend on why college graduates sort into expensive cities. Using a simple general equilibrium model, I consider two alternative explanations. First, it is possible that the relative supply of college graduates increases in expensive cities because college graduates are increasingly attracted by amenities located in those cities. In this case, higher cost of housing reflects consumption of desirable local amenities, and there may still be a significant increase in well-being inequality even if the increase in real wage inequality is limited. Alternatively, it is possible that the relative demand of college graduates increases in expensive cities due to shifts in the relative productivity of skilled labor. In this case, the relative increase in skilled workers' standard of living is offset by higher cost of living. The empirical evidence indicates that relative demand shifts are more important than relative supply shifts, suggesting that the increase in well-being inequality between 1980 and 2000 is smaller than the increase in nominal wage inequality. |
| Keywords: | return to college, general equilibrium, cost of living |
| JEL: | J01 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3706&r=lab |
| By: | Blau, Francine D. (Cornell University); Kahn, Lawrence M. (Cornell University); Liu, Albert Yung-Hsu (Cornell University); Papps, Kerry L. (Nuffield College, Oxford) |
| Abstract: | Using 1995–2006 Current Population Survey and 1970–2000 Census data, we study the intergenerational transmission of fertility, human capital and work orientation of immigrants to their US-born children. We find that second-generation women's fertility and labor supply are significantly positively affected by the immigrant generation's fertility and labor supply respectively, with the effect of mother's fertility and labor supply larger than that of women from the father's source country. The second generation's education levels are also significantly positively affected by that of their parents, with a stronger effect of father's than mother's education. Second-generation women's schooling levels are negatively affected by immigrant fertility, suggesting a quality-quantity tradeoff for immigrant families. We find higher transmission rates for immigrant fertility to the second generation than we do for labor supply or education: after one generation, 40-65% of any immigrant excess fertility will remain, but only 12-18% of any immigrant annual hours shortfall and 18-36% of any immigrant educational shortfall. These results suggest a considerable amount of assimilation across generations toward native levels of schooling and labor supply, although fertility effects show more persistence. |
| Keywords: | immigration, second generation, gender, labor supply, fertility, human capital |
| JEL: | D10 J16 J22 J24 J61 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3732&r=lab |
| By: | Wolfgang Lechthaler |
| Abstract: | Although wage rigidity is among the most prominent subjects in modern economics, its effects on wage compression and firm training have thus far not been considered. This paper is trying to bridge this gap by using a simple two period model which can still by analyzed analytically. I am able to show that wage rigidity increases wage compression. However, contrary to previous work this is not sufficient to increase firms' training investments. The reason lies in the endogeneity of separations, which become more frequent |
| Keywords: | Human Capital, Wage Rigidity, Training |
| JEL: | J24 J31 M53 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1452&r=lab |
| By: | Autor, David (MIT) |
| Abstract: | Labor Market Intermediaries (LMIs) are entities or institutions that interpose themselves between workers and firms to facilitate, inform, or regulate how workers are matched to firms, how work is accomplished, and how conflicts are resolved. This paper offers a conceptual foundation for analyzing the economic role played by these understudied institutions, and to develop a qualitative and, in some cases, quantitative sense of their significance to market operation and welfare. Though heterogeneous, I argue that LMIs share a common function, which is to redress – and in some cases exploit – a set of endemic departures of labor market operation from the efficient neoclassical benchmark. At a rudimentary level, LMIs such as online job boards reduce search frictions by aggregating and reselling disparate information at a cost below which workers and firms could obtain themselves. Beyond passively supplying information, a set of LMIs forcibly redress adverse selection problems in labor markets by compelling workers and firms to reveal normally hidden credentials, such as criminal background, academic standing, or financial integrity. At their most forceful, LMIs such as labor unions and centralized job matching clearinghouses resolve coordination and collective action failures in markets by tightly controlling – even monopolizing – the process by which workers and firms meet, match and negotiate. A unifying observation of the analytic framework is that participation in the activities of a given LMI are typically voluntary for one side of the market and compulsory for the other; workers cannot, for example, elect to suppress their criminal records and firms cannot opt out of collective bargaining. I argue that the nature of participation in an LMI’s activities – voluntary or compulsory, and for which parties – is dictated by the market imperfection that it addresses and thus tells us much about its economic function. |
| Keywords: | intermediation, unions, job search, internet, temporary-help, adverse selection, collective action |
| JEL: | J2 J4 J5 J6 J8 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3705&r=lab |
| By: | Susanna Stén |
| Abstract: | ABSTRACT : This review maps out the labour market situation of PhDs employed in the private sector. To begin with, the theoretical motives for employing PhDs and the supporting empirical evidence are examined. The potential benefits of companies from employing PhDs can be divided into productivity and innovation effects as well as knowledge contributions from networking, and external effects. Next, the international empirical literature on PhDs in the private sector is surveyed. The mostly US based research focuses primarily on PhDs in the fields of science and engineering. It provides no synoptic picture of the employment situation of the PhDs in the private sector and leaves a need for further research. A more detailed review of the Finnish literature shows that the private sector employs only about 15% of all PhDs in the Finnish labour market. There is, however, large variation between different fields of study, genders and age groups. The rapid increase in graduating PhDs in recent years indicate that the employment patterns of PhDs might be changing. Further research is needed to answer questions like : How has the increased supply changed the labour market situation of PhDs? Has the role of the private sector as an employer of PhDs changed? And is the allocation of PhDs between fields of study efficient? Another issue that has earned only very little attention is the mobility of PhDs in the labour market. Mobility within and between sectors is very important for both the diffusion of knowledge in the economy and the development of the career and wage profiles of PhDs. Because of the recent development, the existing knowledge gaps and the rapidly ageing research conducted up to this day, there is, thus, an urgent need for further research in this field. |
| Keywords: | PhDs, private sector, career, wages, employment |
| JEL: | J24 J44 J6 |
| Date: | 2008–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1155&r=lab |
| By: | B.Minne; H.D. Webbink |
| Abstract: | A shortage of teachers in primary and secondary schools in the Netherlands is expected in the near future as a large part of the current workforce will retire. Recently, the Dutch government has decided to increase wages of teachers. This paper qualitatively assesses the impact of three options for increasing teaching wages on teacher supply in the medium term: increasing wages at the start of the career, increasing wages at mid career or increasing wages at the end of the career.<BR> The first option, spending the whole additional budget on raising wages at the start of the career, is likely to lead to the largest increase in the supply of teachers. The main advantage of allocating the whole additional budget to the starting salaries of teachers is that a large share of the budget can be used for the ‘new supply’ of teachers. The current number of teachers in this group is relatively small and the wage level at the start of the career is low. As a consequence, there is budget for a relatively large increase of wages (more than for the two other options). In addition, the wage elasticity of teacher supply seems relatively large at the start of the career. However, the main effect will come from new enrolment in teacher studies and it takes a least four years before these new students can start in a teaching job. In addition, the wage elasticity of enrolment for teacher studies is unknown. Another disadvantage of this option is that the current level of teaching wages at the start of the career seems quite competitive as it equals the average level of starting wages in the market sector. At mid career teachers salaries are not competitive. Raising wages at the start of the career also has the disadvantage of making the age-wage profile less steep. This wage profile would stimulate enrolment in teacher studies and working in education at the start of the career but would not stimulate a long working career in education. Raising wages at the start of the career targets at only one source of new supply and is therefore more risky than the other options.<BR> The main advantage of the second option, raising teaching wages at mid career, is that it focuses on many different sources of teachers supply including the reservoir of young teachers. In addition, this option makes the age-wage profiles steeper, which increases the career opportunities for young teachers and makes it easier to keep them in a teaching job. Moreover, the relative wages of teachers at mid career are lower than at the start or the end of the career, which is another advantage of this option. However, the potential wage increase and the wage elasticity of teacher supply are probably smaller than in the case of the first option.<BR> For the third option, raising wages at the end of the career, the wage increase and wage elasticity of teacher supply will be even smaller than for the second option. We expect that raising wages at the end of the career is not very effective. However, policy measures that make working as a teacher more attractive compared to not working might be very effective for teachers at the end of their career. The reservoir of potential teachers is large at the end of the career and the wage elasticity might be large for this type of measures. |
| Keywords: | teacher; supply; wage |
| JEL: | I22 J45 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:memodm:194&r=lab |
| By: | Aydemir, Abdurrahman; Chen, Wen-Hao; Corak, Miles |
| Abstract: | We analyse the intergenerational education mobility of Canadian men and women born to immigrants. A detailed portrait of Canadians is offered, as are estimates of the degree of intergenerational mobility among the children of immigrants. Persistence in the years of schooling across the generations is rather weak between immigrants and their Canadian-born children, and one third as strong as for the general population. Parental earnings are not correlated with years of schooling for second-generation children and, if anything, are negatively correlated. Finally, we find that the intergenerational transmission of education has not changed across the birth cohorts of the post-war period. |
| Keywords: | Education, training and learning, Population and demography, Ethnic diversity and immigration, Educational attainment, Mobility and migration, Ethnic groups and generations in Canada |
| Date: | 2008–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2008316e&r=lab |
| By: | Cobus Burger (Department of Economics, University of Stellenbosch) |
| Abstract: | Conventional wage analyses suffers from a debilitating ailment: since there are no observable market wages for individuals who do not work, findings are limited to the sample of the population that are employed. Due to the problem of sample selection bias, using this subsample of working individuals to draw conclusions for the entire population will lead to inconsistent estimates. Remedial procedures have been developed to address this issue. Unfortunately, these models strongly rely on the assumed parametric distribution of the unobservable residuals as well as the existence of an exclusion restriction, delivering biased estimates if either of these assumptions is violated. This has given rise to a recent interest in semi-parametric estimation methods that do not make any distributional assumptions and are thus less sensitive to deviations from normality. This paper will investigate a few proposed solutions to the sample selection problem in an attempt to identify the best model of earnings for South African data. |
| Keywords: | Semiparametric and nonparametric methods; Simulation methods; Truncated and censored models; Labour force and employment, Size, and structure |
| JEL: | C14 C15 C34 J21 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers66&r=lab |
| By: | Fevang, Elisabeth (Ragnar Frisch Centre for Economic Research); Kverndokk, Snorre (Ragnar Frisch Centre for Economic Research); Roed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Based on Norwegian register data we show that having a lone parent in the terminal phase of life significantly affects the offspring's labor market activity. The employment propensity declines by around 1 percentage point among sons and 2 percentage points among daughters during the years just prior to the parent's death, ceteris paribus. Long-term sickness absence increases sharply. The probability of being a long-term social security claimant (defined as being a claimant for at least three months during a year) rises with as much as 4 percentage points for sons and 2 percentage points for daughters. After the parent's demise, earnings tend to rise for those still in employment while the employment propensity continues to decline. The higher rate of social security dependency persists for several years. |
| Keywords: | elderly care, labor supply, ageing, inheritance |
| JEL: | J14 J22 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3717&r=lab |
| By: | Lacroix, Guy (Université Laval); Radtchenko, Natalia (University of Paris 1) |
| Abstract: | During the transition toward a market economy, Russian workers have had to face important structural changes in the labour market as well as dramatic changes in their real earnings. In the process, the wage gap between men and women has varied wildly over that period. In recent years, young women have embraced professional careers, are more mobile on the labour market, and tend to delay the birth of their first child. All these trends are likely to influence intra-household relations and consequently the family decision process. To investigate this matter, we estimate a household collective labour supply model. We generalize the specification so as to allow the sharing rule to change in a discrete manner between the pre and post 1998 financial crisis periods. The parameters of the sharing-rule indicate that the households have shifted to a new equilibrium in the post-1998 period. Indeed, husbands have become more egotistic and wives more altruistic: An increase in their relative wage translates into a smaller/larger transfer to their spouse. |
| Keywords: | collective model, sharing rule, Russian economic crisis |
| JEL: | D1 J22 C5 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3733&r=lab |
| By: | Aaberge, Rolf (Statistics Norway); Flood, Lennart (Göteborg University) |
| Abstract: | The purpose of this paper is to evaluate a recent Swedish in-work tax credit reform where we pay particular attention to labor market exclusion; i.e. individuals in as well as outside the labor force are included in the analysis. To highlight the importance of the joint effects from the tax and the benefit systems it appears particular relevant to analyze the labor supply behavior of single mothers. To this end, we estimate a structural microeconometric model of labor supply and welfare participation. The model accounts for heterogeneity in consumption-leisure preferences as well as for constraints in job opportunities. The results of the evaluation show that the reform generates welfare-gains for virtually every single mother, and moreover benefits low-income households. Finally, due to increased labor supply and decline in welfare participation we find that this reform is almost self-financing. |
| Keywords: | labor supply, single mothers, in-work tax credit, social assistance, random utility model |
| JEL: | J22 I38 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3736&r=lab |
| By: | Ejarque, Joao (University of Essex); Nilsen, Øivind Anti (Norwegian School of Economics and Business Administration) |
| Abstract: | A relatively unexplored question in dynamic labour demand regards the source of adjustment costs, whether they depend on net or gross changes in employment. We estimate a structural model of dynamic labour demand where the firm faces adjustment costs related to gross and net changes in its workforce. We focus on matching quarterly moments of hiring and of net changes in employment from a panel of establishments. The main component of adjustment costs in our panel is quadratic adjustment costs to gross changes in employment. We also estimate that adjustment costs have a large economic cost, roughly cutting the value of our establishments in half. |
| Keywords: | employment, adjustment costs, establishment level data, structural estimation |
| JEL: | C33 C41 E24 J23 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3703&r=lab |
| By: | Couch, Kenneth A. (University of Connecticut); Fairlie, Robert W. (University of California, Santa Cruz) |
| Abstract: | Past studies have tested the claim that blacks are the last hired during periods of economic growth and the first fired in recessions by examining the movement of relative unemployment rates over the business cycle. Any conclusion drawn from this type of analysis must be viewed as tentative because the cyclical movements in the underlying transitions into and out of unemployment are not examined. Using Current Population Survey data matched across adjacent months from 1989 to 2004, this paper provides the first detailed examination of labor market transitions for prime-age black and white men to test the last-hired, first-fired hypothesis. Considerable evidence is presented that blacks are the first fired as the business cycle weakens. However, no evidence is found that blacks are the last hired. Instead, blacks appear to be initially hired from the ranks of the unemployed early in the business cycle and later are drawn from non-participation. The narrowing of the racial unemployment gap near the peak of the business cycle is driven by a reduction in the rate of job loss for blacks rather than increases in hiring. |
| Keywords: | race, unemployment, business cycle |
| JEL: | J15 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3713&r=lab |
| By: | Fairlie, Robert W. (University of California, Santa Cruz); Robb, Alicia M. (University of California, Santa Cruz) |
| Abstract: | Using confidential microdata from the U.S. Census Bureau, we investigate the performance of female-owned businesses making comparisons to male-owned businesses. Using regression estimates and a decomposition technique, we explore the role that human capital, especially through prior work experience, and financial capital play in contributing to why female-owned businesses have lower survival rates, profits, employment and sales. We find that female-owned businesses are less successful than male-owned businesses because they have less startup capital, and business human capital acquired through prior work experience in a similar business and prior work experience in family business. We also find some evidence that female-owned businesses work fewer hours and may have different preferences for the goals of their business. |
| Keywords: | female entrepreneurship, business outcomes |
| JEL: | J15 L26 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3718&r=lab |
| By: | Heinz Hollenstein (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | Firstly, we investigated the determinants of a) the propensity of Swiss firms to provide apprenticeship training, and b) the intensity of training (measured by the employment share of apprentices). We primarily were interested in the relevance as explanatory factors of the three constituent elements of the “new firm paradigm” that emerged in the course of the last twenty years: intensive usage of ICT; redesign of workplace organisation; shift from lower to higher skills. We found that the skill composition of the workforce (including further training), ICT intensity and, to a lesser extent, workplace organisation are important drivers of apprenticeshipbased skill formation, with stronger effects on training propensity than on training intensity. Secondly, we analysed the relationship between apprenticeship training and firm performance. It turned out that productivity and apprenticeships (training propensity or intensity) are negatively correlated. The study is relevant for training policy in advanced economies where the new firm paradigm plays a large and growing role. |
| Keywords: | Firm-based training, Apprenticeship, Workplace organisation, ICT, Skill formation, Human capital |
| JEL: | J2 L2 O3 M5 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:08-205&r=lab |
| By: | Geraint Johnes; Siew Ching Goy |
| Abstract: | Data from the ISSP are used to evaluate Oaxaca decompositions of the gender wage gap for a group of 38 countries. The component attributable to different 'prices' in the gender-specific wage equations is then modelled as a function of macroeconomic variables. It is established that increased development and openness lead to reductions in discrimination. |
| Keywords: | discrimination |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005706&r=lab |
| By: | Pierre Lefebvre; Philip Merrigan |
| Abstract: | This paper exploits the panel feature of the Canadian National Longitudinal Survey of Children and Youth (NLSCY) and the large diversity of measures collected on the children ad their families over 6 cycles (1994-1995 to 2004-2005) to explain high school graduation and postsecondary education (PSE) choices of Canadian youth aged 18 to 21 observed in the most recent wave of the survey. In estimating how family background, family income, cognitive abilities, non-cognitive abilities and behavioural scores influence schooling choices they can be used as markers for identifying children at risk of not pursuing PSE. We focus on the impact of measures that are specific to the NLSCY which contains a host of scores on several dimensions such as the cognitive achievement of children (reading and math test scores); behavioural scores that measure the levels of hyperactivity, aggression, and pro-sociality; scores that measure self-esteem and self-control (non-cognitive abilities); and, family scores that measure the quality of parenting, family dysfunction, of neighbourhoods and schools quality. The math and reading scores are particularly interesting because they are computed from objective tests and are not based on any type of recall, as compared, for example, with the Youth in Transition Survey (YITS) data set. Despite the fact that income, as measured as the mean income ($2002) of the family during cycles 1 to 4, does not seem to be a key player for PSE attendance or high school graduation, the sign of its effect is generally positive and non-linear, increases for children in very low income will have a large effect that those with higher levels. More importantly, several variables that are characteristics of low-income families play a key role for schooling attainment. For example, being from a single-parent/guardian home with a poorly educated PMK and with less than (perceived) excellent/very good health or with high levels of hyperactivity for males or high levels of aggression for young teenage females will almost negate any chance of attaining the level of PSE. |
| Keywords: | High school graduation, postsecondary education, schooling transition, gender, youth, longitudinal data |
| JEL: | I21 J13 J16 J24 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0830&r=lab |
| By: | Di Bartolomeo Anna |
| Abstract: | This paper aims to study the rationale of women’ political participation in Great Britain. In particular, we focus on the impact of family orientations about gender inequalities as people’s attitudes can often predict behavior patterns; we also consider other factors related to gender issues, e.g. employment status, job satisfaction and household structure. Specifically, by using the British Household Panel Survey, we evaluate the impact of these determinants on the transition of women from a politically active life to the abandon of it. We use panel data methodology by considering both fixed and random effect models and discriminate among them by the Hausman test. We found evidence that gender inequality-oriented women have a higher probability to abandon an active support to a political party than others; while women who declare “neutrality” in gender equality opinions tends to become more likely to be not political engaged than gender equality-oriented women. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:ter:wpaper:0045&r=lab |
| By: | Carsten Ochsen (University of Rostock) |
| Abstract: | While the 2006 Progress in International Reading Literacy Study assesses the average ability of German primary school students as being higher than average, the Programme for International Student Assessment studies (2000, 2003, 2006) ranks German secondary school students at a considerably lower level. Using data from the German Socio-Economic Panel, this paper examines whether a teacher's recommendation for the secondary school track and class repeating are causes for these ability differences. According to the estimates, failures as a result of teachers'recommendations given at the end of primary school are an important reason for the differences between the two types of studies. Being required to repeat a school class amplifies the inefficient management of children's abilities. In addition, we find evidence that regional economic performance at the time the recommendation is made affects the decision for the tracking path. |
| Keywords: | education attainment, school system, educational tracking |
| JEL: | I21 I28 J1 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:96&r=lab |
| By: | Fairlie, Robert W. (University of California, Santa Cruz); London, Rebecca A. (Stanford University) |
| Abstract: | Using matched data from the 1996 to 2004 Current Population Survey (CPS), we examine racial patterns in annual transitions into and out of health insurance coverage. We first decompose racial differences in static health insurance coverage rates into group differences in transition rates into and out of health insurance coverage. The low rate of health insurance coverage among African-Americans is due almost entirely to higher annual rates of losing health insurance than whites. Among the uninsured, African-Americans have similar rates of gaining health insurance in the following year as whites. Estimates from the matched CPS also indicate that the lower rate of health insurance coverage among Asians is almost entirely accounted for by a relatively high rate of losing health insurance. In contrast to these findings, differences in health insurance coverage between Latinos and whites are due to group differences in both the rate of health insurance loss and gain. Using logit regression estimates, we also calculate non-linear decompositions for the racial gaps in health insurance loss and gain. We find that two main factors are responsible for differences in health insurance loss between working-age whites and minorities: job loss and education level. Higher rates of job loss account for 30 percent of the health insurance gap for African-Americans and Asians, and 16 percent of the health insurance gap for Latinos. Lower levels of education explain roughly 15 percent of the gap for African-Americans and Latinos (Asians' higher levels of education serve to close the gap). Higher rates of welfare and SSI participation among African-Americans also serve to widen the gap in health insurance loss by 8 percent. |
| Keywords: | race, health insurance, insurance dynamics |
| JEL: | I1 J15 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3708&r=lab |
| By: | Diego Restuccia; Guillaume Vandenbroucke |
| Abstract: | Between 1940 and 2000 there has been a substantial increase of educational attainment in the United States. What caused this trend? We develop a model of schooling decisions in order to assess the quantitative contribution of technological progress in explaining the evolution of education. We use earnings across educational groups and growth in gross domestic product per worker to restrict technological progress. These restrictions imply substantial skill-biased technical change (SBTC). We find that changes in relative earnings through SBTC can explain the bulk of the increase in educational attainment. In particular, a calibrated version of the model generates an increase in average years of schooling of 48 percent compared to 27 percent in the data. This strong effect of changes in relative earnings on educational attainment is robust to relevant variations in the model and is consistent with empirical estimates of the long-run income elasticity of schooling. We also find that the substantial increase in life expectancy observed during the period contributes little to the change in educational attainment in the model. |
| Keywords: | educational attainment, schooling, skill-biased technical progress, human capital |
| JEL: | E1 O3 O4 |
| Date: | 2008–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-339&r=lab |
| By: | Nilsen, Øivind Anti (Norwegian School of Economics and Business Administration); Vaage, Kjell (University of Bergen); Aakvik, Arild (University of Bergen); Jacobsen, Karl (Statistics Norway) |
| Abstract: | Using Norwegian intergenerational data with a substantial part of the life-cycle earnings of children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility. Extending the length of the fathers' earnings windows from 5 to 30 years increases the estimated elasticities. Increasing the age of father at observation has the opposite effect. Our findings indicate that intergenerational earnings mobility may have been strongly overstated in many earlier studies with shorter earnings histories. Biases in the estimated elasticities appear to be related to age and/or life-cycle measurement errors more than persistency in the transitory innovations. |
| Keywords: | intergenerational mobility, measurement error |
| JEL: | J62 C23 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3709&r=lab |
| By: | Brouillette, Dany (Université Laval); Lacroix, Guy (Université Laval) |
| Abstract: | The Self-Sufficiency Project (SSP) is a research and demonstration project that offered a generous time-limited income supplement to randomly selected welfare applicants under two conditions. The first, the eligibility condition, required that they remain on welfare for at least twelve months. The second, the qualification condition, required that they find a full-time job within twelve months after establishing eligibility. In this paper we focus on a neglected and important feature of the program, namely that the financial reward for becoming qualified is inversely related to the expected wage rate. Under very simple assumptions we show that those who have a low expected wage rate have a clear incentive to establish eligibility. Empirical non-parametric evidence strongly suggests that individuals self-select into eligibility. We jointly estimate a participation equation and a wage equation that are correlated through individual random effects. Our results show that the omission of self-selectivity into qualification translates into slightly overestimated treatment effects. |
| Keywords: | SSP Applicant Study, heterogeneous treatment, self-selection |
| JEL: | I38 J31 J64 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3738&r=lab |
| By: | Del Bono, Emilia (ISER, University of Essex); Ermisch, John (University of Essex); Francesconi, Marco (University of Essex) |
| Abstract: | This paper estimates a model of dynamic intrahousehold investment behavior which incorporates family fixed effects and child endowment heterogeneity. This framework is applied to large American and British survey data on birth outcomes, with focus on the effects of antenatal parental smoking and maternal labor supply net of other maternal behavior and child characteristics. We find that maternal smoking during pregnancy reduces birth weight and fetal growth, while paternal smoking has virtually no effect. Mothers' work interruptions of up to two months before birth have a positive effect on birth outcomes, especially among British children. Parental behavior appears to respond to permanent family-specific unobservables and to child idiosyncratic endowments in a way that suggests that parents have equal concerns, rather than efficiency motives, in allocating their prenatal inputs across children. Evidence of equal concerns emerges also from the analysis of breastfeeding decisions, although the effects in this case are weaker. |
| Keywords: | birth outcomes, smoking, mother's work, sibling estimators, instrumental variables, child health production functions |
| JEL: | C33 D13 I12 J13 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3704&r=lab |
| By: | sivakumar, marimuthu |
| Abstract: | Gender is a common term where as gender discrimination is meant only for women, because females are the only victims of gender discrimination. Females are nearly 50 percent of the total population but their representation in public life is very low. Recognizing women’s right and believing their ability are essential for women’s empowerment and development. This study deals with gender discrimination in India, its various forms and its causes. Importance of women in development, legislation for women and solution for gender discrimination are also discussed in this paper. |
| Keywords: | gender discrimination; women’s development; legislation for women; education; employment; economic independence; empowerment; decision making and self confidence. |
| JEL: | A13 A14 |
| Date: | 2008–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10950&r=lab |
| By: | Xiujian Peng; Yinhua Mai |
| Abstract: | The dramatic fertility decline since the beginning of 1970s has decelerated the growth of China's working age population. From 2015, this growth will turn sharply negative, resulting declining labour force in China. This has caused concerns about the sustainability of China's economic growth. This paper sheds lights on the view that a more efficient allocation of labour between sectors is likely counter balance the negative effect of populating ageing. Using a dynamic CGE model of China, we analyse the effects of removing labour market distortions that hinder the movement of labour from agricultural to manufacturing and services sectors over the period 2008 to 2020 in the context of declining growth of labour supply in China. Simulation results shows that removing the discriminations against rural workers in urban area will increase the labour shift from agricultural to non-agricultural sectors. The resulting increase in the movement of rural labour will mitigate the adverse effects of population ageing by raising not only the growth rate of total output but also household living standard. China can enjoy continued growth in its manufactured exports even with a slower growth in its labour force. |
| Keywords: | population ageing, labour market reform, rural migration, CGE model, China |
| JEL: | J21 J61 E17 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-174&r=lab |
| By: | Carsten Ochsen (University of Rostock) |
| Abstract: | This study examines whether the distribution of aggregate unemployment by duration affects individual well-being. Two hypotheses are provided to explain how the shares of short-term (up to 3 months) and long-term (more than 1 year) unemployed people could affect the well-being of the employed and unemployed: The severity hypothesis and the flow hypothesis. Using data from almost 300,000 individuals from 11 EU countries, an ordered probit estimator is used to analyze the impact of the distribution of aggregate unemployment by duration on individual well-being. We find significant evidence in favor of both the severity and the flow hypotheses. Hence, the fear of losing (or not finding) a job is more detrimental when the prospect is to remain unemployed for a longer time. At some point, however, both the employed and unemployed adapt to unemployment at the macro level. Using an alternative specification that allows for a duration-specific risk of becoming/being unemployed, we arrive at similar conclusions. What seems to bother people is thus not just the risk of becoming/remaining unemployed, but more so the risk of being out of work for 4 to 12 months. |
| Keywords: | unemployment, unemployment duration, life satisfaction, happiness |
| JEL: | J64 I31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:97&r=lab |
| By: | Richard Rogerson |
| Abstract: | This paper uses a simple model of labor supply extended to allow for home production to understand the extent to which differences in taxes can account for differences in time allocations between the US and Europe. Once home production is included, the elasticity of substitution between consumption and leisure is almost irrelevant in determining the response of market hours to higher taxes. But to account for observed differences in leisure and time spent in home production, one requires a large elasticity of substitution between consumption and leisure, and a small elasticity of substituion betwen time and goods in home production. |
| JEL: | E60 H20 J22 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14400&r=lab |
| By: | CARMEN AINA; GIORGIA CASALONE; PAOLO GHINETTI (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont) |
| Abstract: | This paper aims at analysing the educational outcomes of a cohort of youths living in an Italian province (Novara), which was interested by large migration phenomenon during the last decades and, therefore, it is particularly suited to study inter-regional mobility issues. In particular we aim at establishing if, once controlled for parental educational background, family origin affects human capital accumulation. We find that non native youths on average have a higher probability of early leaving educational system. If the 1st generation migrants are the less advantaged as for educational attainment, even 2nd generation migrants, that in principle should be completely integrated, perform worse than the native born. This evidence calls into question the integration of internal migrants, for whom education plays a crucial role, even in a period in which foreign immigration seems to be of major concern. |
| Keywords: | Internal migration; Education; Survival analysis; Unobserved heterogeneity. |
| JEL: | J24 R23 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:upo:upopwp:120&r=lab |
| By: | Karanassou, Marika (University of London); Sala, Hector (Universitat Autònoma de Barcelona) |
| Abstract: | The evolution of Spanish unemployment has been quite idiosyncratic. The full employment levels of the early seventies were followed by unemployment rates that were the highest within the OECD countries in the aftermath of the oil price shocks. While unemployment was extremely persistent in most of the eighties and nineties, it experienced its sharpest decline in recent years. We investigate the determinants of this unemployment trajectory using the analytical framework of the chain reaction theory (CRT). We show that unemployment may not gravitate towards its natural rate due to frictional growth, a phenomenon that arises from the interplay of lagged adjustment processes and growing exogenous variables in a dynamic system with spillovers. The empirical analysis distinguishes four periods: (i) 1978–1985, (ii) 1986–1990, (iii) 1991–1994, (iv) 1995–2005, and finds that capital accumulation is a crucial driving force of unemployment. Thus, our theoretical and empirical results question the key role of the natural rate in policy making. |
| Keywords: | labour market dynamics, frictional growth, chain reaction theory, capital accumulation, impulse response function |
| JEL: | E22 E24 J21 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3712&r=lab |
| By: | Paul Winters; Vera Chiodi |
| Abstract: | By focusing on human capital investment, the Mexican Oportunidades program will inuence the economic choices of the rural poor. To understand how bene_ciaries may alter their behaviour as a result of this intervention, this paper uses administrative data to analyze the economic activities of the Mexican rural poor. Results indicate that investments in education are likely to shift recipients from agricultural wage employment toward non-farm wage employment. The magnitude of this impact will be inuenced by household assets and by the location of the household. The results suggest the need for policies that complement the government's focus on human capital investment. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-51&r=lab |
| By: | Jonathan Chaloff |
| Abstract: | Italy has an aging population which is placing a strain on the public health system and on families. At the same time, it has a distorted market of supply of health professionals. Past over enrolment in medical faculties has produced a current glut of doctors, although shortages will appear as this cohort retires. It is difficult for foreign-trained doctors, and Italian-trained foreigners, to practice medicine in Italy. In nursing, the situation is more critical, with far fewer graduates of nursing schools than necessary even to meet replacement needs. Care for the aged, which was traditionally borne by families, has increasingly been delegated to informal immigrant workers. In the absence of major changes in the care industry, recruitment efforts for nurses and other health technicians has expanded to include other source countries. Obstacles to international recruitment of nurses have been reduced, both by simplifying recognition of foreign qualifications and by exempting nurses from limits on labour migration to Italy. However, a ban on permanent employment in the public sector has relegated foreign nurses largely to private sector and shorter-term contract work. National and local health authorities have also become involved in supporting international recruitment of nurses, often through private agencies. In the home-care sector, families have been granted more opportunities to hire care workers from abroad legally, and many local authorities are attempting to integrate this spontaneous private care into their eldercare system through skill upgrades and support. Nonetheless, international migration will not be sufficient to solve Italy’s health care professional needs. <BR>Le vieillissement de la population en Italie pèse lourdement sur le système de santé public et les familles. Parallèlement, l’offre de professionnels de la santé sur le marché du travail est déséquilibré. Dans le passé, le nombre excessif d’inscriptions dans les facultés de médecine a entrainé une surabondance de médecins, mais des pénuries apparaîtront au fur et à mesure qu’ils partiront à la retraite. Il est difficile pour les médecins ayant étudié à l’étranger et les immigrés qui se sont qualifiés en Italie d’exercer la médecine dans ce pays. En ce qui concerne les infirmières, la situation est plus critique, avec un trop petit nombre de diplômés des écoles d’infirmières, même pour satisfaire uniquement les besoins de remplacement. Les soins aux personnes âgées, incombant traditionnellement aux familles, ont été de plus en plus délégués aux immigrés du secteur informel. En l’absence de changements majeurs dans les politiques de la santé, des efforts ont été faits pour recruter des infirmières et personnels de santé dans d’autres pays d’origine. La simplification de la reconnaissance des qualifications acquises à l’étranger et l’exemption de quotas d’infirmières étrangères sur le marché du travail en Italie ont réduit les obstacles au recrutement international d’infirmières. Cependant, l’interdiction de les employer de façon permanente dans le secteur public a relégué la majorité des infirmières étrangères dans le secteur privé et dans les contrats de travail à court terme. L’administration sanitaire nationale et locale a aussi contribué au recrutement international des infirmières souvent par le biais d’agences privées. Dans le secteur des soins à domicile, les familles se sont vu octroyer plus d’opportunités pour recruter légalement à l’étranger du personnel de soins à domicile. Beaucoup d’autorités locales s’efforcent d’intégrer ce type de soins privés dans leurs systèmes de soins aux personnes âgées en assistant les personnels soignants privés et en renforçant leurs compétences. Néanmoins, les migrations internationales ne seront pas suffisantes pour répondre aux besoins de l’Italie en professionnels de la santé. |
| JEL: | I19 J61 |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:34-en&r=lab |
| By: | Blomeyer, Dorothea (ZI Mannheim); Coneus, Katja (ZEW Mannheim); Laucht, Manfred (ZI Mannheim); Pfeiffer, Friedhelm (ZEW Mannheim) |
| Abstract: | This paper investigates the role of self-productivity and home resources in capability formation from infancy to adolescence. In addition, we study the complementarities between basic cognitive, motor and noncognitive abilities and social as well as academic achievement. Our data are taken from the Mannheim Study of Children at Risk, an epidemiological cohort study following the long-term outcome of early risk factors. Results indicate that initial risk conditions cumulate and that differences in basic abilities increase during development. Self-productivity rises in the developmental process and complementarities are evident. Noncognitive abilities promote cognitive abilities and social achievement. There is remarkable stability in the distribution of the economic and socio-emotional home resources during the early life cycle. This is presumably a major reason for the evolution of inequality in human development. |
| Keywords: | initial conditions, intelligence, persistence, home resources, social competencies, school achievement |
| JEL: | D87 I12 I21 J13 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3734&r=lab |
| By: | Gevrek, Deniz (University of Southern Mississippi); Gevrek, Zahide Eylem (University of Arizona) |
| Abstract: | This study investigates the role of self-employed parents on their children's post-graduation plans and college success by using a unique data set from a private university in Turkey. We assembled data set by matching college students' administrative records with their responses to a survey we designed. Self-employed parents have a strong negative effect on college success even after accounting for possible ability bias, intergenerational human capital transfers and controlling for various individual characteristics. This suggests that the changing importance of self-employment can alter the amount and mix of human capital flows. The children of self-employed parents are also more likely to have entrepreneurial intent, and are less likely to plan to attend graduate school. |
| Keywords: | academic success, self-employment, post-graduation plans |
| JEL: | J24 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3711&r=lab |
| By: | Riis, Christian |
| Abstract: | In their seminal contribution Lazear and Rosen (1981) show that wages based upon rank induce the same e¢ cient e¤ort as incentive-based reward schemes. They also show that this equivalence result is not robust towards heterogeneity in worker ability, as long as ability is private information, as it is not possible to structure contests to simultaneously satisfy self-selection constraints and first best incentives. This paper demonstrates that efficiency is achievable by a simple modification of the prize scheme in a mixed (heterogenous) contest. In the L&R contest, the winner's prize as well as the loser's prize are fixed in advance. In this paper I demonstrate that efficiency is restored by a modification of contest design, in which contestants choose from a menu of prizes. |
| Keywords: | Tournaments; Labor Contracts |
| JEL: | J33 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10906&r=lab |
| By: | Aydemir, Abdurrahman; Chen, Wen-Hao; Corak, Miles |
| Abstract: | Nous analysons la mobilité intergénérationnelle du niveau de scolarité des hommes et des femmes canadiens nés d'immigrants. Nous traçons un portrait détaillé des Canadiens et nous fournissons des estimations du degré de mobilité intergénérationnelle chez les enfants d'immigrants. La persistance intergénérationnelle du nombre d'années de scolarité est assez faible entre les immigrants et leurs enfants nés au Canada, se situant au tiers de celle de la population en général. Les gains des parents ne sont pas corrélés avec les années de scolarité pour les enfants de deuxième génération, ou encore comportent une corrélation négative. Enfin, nous déterminons que la transmission intergénérationnelle du niveau de scolarité n'a pas changé pour les cohortes de naissance de la période d'après guerre. |
| Keywords: | Éducation, formation et apprentissage, Population et démographie, Diversité ethnique et immigration, Niveau de scolarité, Mobilité et migration, Groupes ethniques et générations au Canada |
| Date: | 2008–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3f:2008316f&r=lab |
| By: | Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Florian Noseleit (Friedrich Schiller University Jena, School of Economics and Business Administration); Yvonne Schindele (Friedrich Schiller University Jena, School of Economics and Business Administration) |
| Abstract: | We analyze different types of effects that new businesses may have on regional employment. We introduce different measures for employment change by separating employment change in incumbent businesses and employment change in new businesses. There are pronounced differences between regions with regard to the different employment effects. The average indirect employment effects of new business formation on incumbent employment are positive and are considerably larger than the employment that is directly generated in the new businesses. |
| Keywords: | Entrepreneurship, new business formation, regional development, direct and indirect effects |
| JEL: | L26 M13 O1 O18 R11 |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-074&r=lab |
| By: | Kaas, Leo (University of Konstanz) |
| Abstract: | This paper provides a novel microeconomic foundation for pecuniary human capital externalities in a labor market model of monopsonistic competition. Multiple equilibria arise because of a strategic complementarity in investment decisions. |
| Keywords: | externalities, human capital, multiple equilibria |
| JEL: | D43 J24 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3729&r=lab |
| By: | Pruksapong, Mutarika |
| Abstract: | Based on the literatures of organizational learning and change, this research continues to focus on the individual level of learning in organization. Individual learning comprises of at least the cognitive and behavioral aspects as the two represent two different phenomenon and complementary to each other. A questionnaire survey was conducted with employees of corporations in Thailand with an attempt to seek for factors in which influence the level of learning in individuals in both cognitive and behavioral contexts. Among the three influential factors, perceived negative impact from change hinders the cognitive buy-in of change initiative the most, while the general understanding of the necessity of organizational learning and change depicted as the strongest factor in inducing individual’s participative cooperation to change projects. Additionally, the overall results suggest that organizations in which are involved in organizational change movement should pay attention in educating their employees to be highly aware of the importance of organizational learning and change in general, as well as, creating more of the direct positive impact and less of the direct negative impact from any specific change movement, in order to be able to gain employees’ cognitive understanding of and behavioral cooperation to the change. |
| Keywords: | Organizational Member Learning; Organizational Learning; Organizational Change; Thailand |
| JEL: | M19 M12 M10 |
| Date: | 2008–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10946&r=lab |
| By: | Wolfgang Lechthaler; Dennis Snower |
| Abstract: | We build quadratic labor adjustment costs into an otherwise standard New-Keynesian model of the business cycle and show that this is sufficient to increase both, output and inflation persistence |
| Keywords: | Monetary Persistence, Labor Adjustment Costs |
| JEL: | E24 E32 E52 J23 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1453&r=lab |
| By: | Matthias Sutter (Department of Public Finance, University of Innsbruck, and Department of Economics, University of Gothenburg.) |
| Abstract: | Charness et al. (2007) have shown that group membership has a strong effect on individual decisions in strategic games when group membership is salient through payoff commonality. In this comment I show that their findings also apply to non-strategic decisions, even when no outgroup exists, and I relate the effects of group membership on individual decisions to joint decision making in teams. I find in an investment experiment that individual decisions with salient group membership are largely the same as team decisions. This finding bridges the literature on team decision making and on group membership effects. |
| Keywords: | Individual behavior, group membership, team decision-making, experiment |
| JEL: | C91 C92 D71 |
| Date: | 2008–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-075&r=lab |
| By: | Lindquist, Matthew J. (Dept. of Economics); Sjögren Lindquist, Gabriella (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | The purpose of this paper is to study (empirically) the dynamics of child poverty in Sweden, the quintessential welfare state. We find that 1 out of every 5 children is disposable income poor at least once during his or her childhood, while only 2 percent of all children are chronically poor. We also document a strong life-cycle profile for child poverty. Just over 20 percent of all children are born into poverty. The average poverty rate then drops dramatically to about 7.5 percent among 1-year old children. After which, it declines (monotonically) to about 3.9 percent among 17-year olds. Children in Sweden are largely protected (economically) from a number of quite serious events, such as parental unemployment, sickness and death. Family dissolution and longterm unemployment, however, do push children into poverty. But for most of these children, poverty is only temporary. Single mothers, for example, are overrepresented among the poor, but not among the chronically poor. Children with immigrant parents are strongly overrepresented among the chronically poor; as are children whose parents have unusually low educations. We argue that information about the dynamics of child poverty may help policy makers to construct more salient policies for fighting child poverty. |
| Keywords: | child poverty; chronic poverty; poverty dynamics |
| JEL: | I32 J13 |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2008_004&r=lab |
| By: | Chiswick, Barry R. (University of Illinois at Chicago); Houseworth, Christina A. (University of Illinois at Chicago) |
| Abstract: | This paper analyzes the determinants of interethnic marriages among immigrants in the United States. The dependent variable is intermarriage across ethnic groups and the inclusion of the explanatory variables is justified by a simple rational choice economic model. A binomial logistic regression is estimated using data from the 1980 US Census, the last Census where post-migration marriages can be identified. Results show that the probability of intermarriage increases the longer a migrant resides in the U.S. and the younger the age at arrival. Both relationships can be attributable to the accumulation of US-specific human capital and an erosion of ethnic-specific human capital. Inter-ethnic marriages are more likely between individuals with similar education levels, providing evidence of positive assortative mating by education for immigrants. Construction of the availability ratio for potential spouses and group size are unique to this study, providing a more accurate measure of the marriage market by using data from several Censuses. Intermarriage is lower the greater the availability ratio and the larger the size of the group. Linguistic distance indirectly measures the effect of English language ability at arrival and is found to be a significant negative predictor of intermarriage. Those who report multiple ancestries and who were previously married are more likely to intermarry. |
| Keywords: | immigrants, marriage, ethnicity/ancestry |
| JEL: | J12 J15 J61 F22 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3740&r=lab |
| By: | Linda H. Aiken; Robyn Cheung |
| Abstract: | The United States has the largest professional nurse workforce in the world numbering close to 3 million but does not produce enough nurses to meet its growing demand. A shortage of close to a million professional nurses is projected to evolve by 2020. An emerging physician shortage will further exacerbate the nurse shortage as the boundaries in scope of practice necessarily overlap. Nurse immigration has been growing since 1990 and the U.S. is now the world’s major importer of nurses. While nurse immigration is expected to continue to grow, the shortage is too large to be solved by recruitment of nurses educated abroad without dramatically depleting the world’s nurse resources. Moreover, the domestic applicant pool for nursing education is very strong with tens of thousands of qualified applicants turned away annually because of faculty shortages and capacity limitations. The national shortage could be largely addressed by investments in expanding nursing school capacity to increase graduations by 25 percent annually and the domestic applicant pool appears sufficient to support such an increase. A shortage of faculty and limited capacity for expansion of baccalaureate and graduate nurse education require public policy interventions. Specifically public subsidies to increase production of baccalaureate nurses are required to enlarge the size of the pool from which nurse faculty, advanced practice nurses in clinical care roles, and managers are all recruited. Retention of nurses in the workforce is critical and will require substantial improvements in human resource policies, the development of satisfying professional work environments, and technological innovations to ease the physical burdens of caregiving. Because of the reliance of the U.S. on nurses educated abroad as well as the benefits to the U.S. of improving global health, the nation should invest in nursing education as part of its global agenda. <BR>Les États-Unis comptent le plus grand nombre d’infirmiers(ères) diplômés au monde – près de 3 millions – mais ils n’en forment pas suffisamment pour répondre à une demande en augmentation. Il devrait manquer près d’un million d’infirmiers(ières) diplômés, aux États-Unis, d’ici 2020. Et le déficit de médecins qui commence d’apparaître ne fera qu’exacerber le problème car les deux pratiques professionnelles sont nécessairement interdépendantes. L’immigration d’infirmiers(ères) n’a cessé d’augmenter depuis 1990 et les États-Unis sont désormais le premier pays d’accueil d’infirmiers(ères) étrangers au monde. Cette vague d’immigration devrait se poursuivre mais la pénurie est trop importante pour pouvoir être résorbée par des recrutements à l’étranger sans que cela ponctionne gravement les ressources en personnel infirmier au niveau mondial. Par ailleurs, les personnes désireuses de suivre une formation d’infirmier(ère) dans le pays sont nombreuses mais des dizaines de milliers de postulants qualifiés sont refusés chaque année en raison du manque de personnel enseignant et de l’insuffisance des capacités d’accueil dans les écoles d’infirmiers(ères). On pourrait largement pallier ces insuffisances en intensifiant les investissements consacrés aux écoles d’infirmiers(ières) de façon à accroître de 25 % par an le nombre des diplômés, ce qui paraît réaliste au regard du nombre actuel de candidats. Le manque de personnel enseignant et l’insuffisance des capacités de formation appellent l’intervention des pouvoirs publics. Précisément, des subventions publiques doivent aider à accroître le nombre d’infirmiers(ières) diplômés, ce qui élargira l’effectif au sein duquel on pourra recruter du personnel enseignant, des infirmiers(ères) cliniciens de haut niveau et des gestionnaires. Inciter les infirmiers(ères) à rester dans la profession est fondamental et cela nécessitera une amélioration significative des politiques de gestion des ressources humaines, la garantie d’un environnement de travail satisfaisant et des innovations technologiques pour alléger la charge physique que représente l’activité de soins. Compte tenu de l’importance des personnels infirmiers formés à l’étranger pour les États-Unis et des avantages qui résulteraient d’une amélioration générale de la santé publique, le pays devrait faire de l’investissement dans la formation d’infirmiers(ères) un des objectifs de l’action publique. |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:35-en&r=lab |
| By: | Sayema H. Bidisha |
| Abstract: | The fact that members of an immigrant community may have different demographic characteristics, or may have different tastes, to the indigenous population, may manifest itself in differences in saving behaviour. In addition, depending on their ethnic background, there could be differences among the immigrants themselves. Using household level panel data for the UK, this paper analyzes the saving behaviour of the immigrants of different ethnicities vis a vis the natives. Our estimation results provide evidence of diverse saving behaviour among British households, which depends on both immigration status as well as ethnic background. Decomposition analysis indicates that these differences are primarily attributable to unobservable rather than to the differences in observed characteristics. |
| Keywords: | Immigrant, Ethnicity, Household Savings, Decomposition Analysis |
| URL: | http://d.repec.org/n?u=RePEc:not:notecp:08/08&r=lab |
| By: | Paulus, Alari (ISER, University of Essex); Peichl, Andreas (IZA) |
| Abstract: | The flat income tax has become increasingly popular recently, yet its implementation is limited to Eastern Europe. We analyse the distributional and efficiency effects of flat tax scenarios for Western European countries. Our simulations show that flat tax rates required to attain revenue neutrality with existing basic allowances improve labour supply incentives. However, they result in higher inequality and polarisation. Flat rates necessary to keep the inequality levels unchanged allow for some scope for flat taxes to increase both equity and efficiency. Our analysis suggests that Mediterranean countries are more likely to benefit from flat taxes. |
| Keywords: | flat tax reform, income distribution, work incentives, microsimulation |
| JEL: | C81 D31 H24 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3721&r=lab |
| By: | Lorenzo Cappellari; Stephen P. Jenkins |
| Abstract: | We model the dynamics of social assistance benefit receipt in Britain using data from the British Household Panel Survey, waves 1–15. First, we discuss definitions of social assistance benefit receipt, and present information about the trends between 1991 and 2005 in the receipt of social assistance benefits, and in annual rates of transition into and out of receipt. Second, we review potential multivariate modelling approaches especially the dynamic random effects probit models that are used in our empirical analysis and, third, discuss sample selection criteria and explanatory variables. Fourth, we present our regression estimation estimates and interpret them. The final section contains a summary of the substantive results, and highlights some lessons concerning application of the analysis for other countries and some methodological issues. |
| JEL: | C33 C35 I38 |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:67-en&r=lab |
| By: | Louis Kaplow |
| Abstract: | Ever since Corlett and Hague (1953), it has been understood that it tends to be optimal on second-best grounds to (relatively) tax complements to leisure and subsidize substitutes because doing so helps to offset the distorting effect of taxation on labor supply. Yet in the context of simultaneous optimization of a nonlinear income tax and commodity taxes, Atkinson and Stiglitz (1976) claim to have demonstrated the opposite, that goods complementary with leisure should "face lower tax rates, whereas substitutes face higher tax rates." Derivations in leading texts on optimal taxation seem to yield opposing conclusions regarding the sign of optimal deviation of commodity taxes from uniformity. It is demonstrated that the optimality of relatively taxing leisure complements is indeed correct, and conflicting results are explained. |
| JEL: | H21 H24 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14397&r=lab |
| By: | Raj Chetty |
| Abstract: | The debate between "structural" and "reduced-form" approaches has generated substantial controversy in applied economics. This article reviews a recent literature in public economics that combines the advantages of reduced-form strategies -- transparent and credible identification -- with an important advantage of structural models -- the ability to make predictions about counterfactual outcomes and welfare. This recent work has developed formulas for the welfare consequences of various policies that are functions of high-level elasticities rather than deep primitives. These formulas provide theoretical guidance for the measurement of treatment effects using program evaluation methods. I present a general framework that shows how many policy questions can be answered by identifying a small set of sufficient statistics. I use this framework to synthesize the modern literature on taxation, social insurance, and behavioral welfare economics. Finally, I discuss topics in labor economics, industrial organization, and macroeconomics that can be tackled using the sufficient statistic approach. |
| JEL: | C1 H0 J0 L0 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14399&r=lab |
| By: | Siddique, Zahra (IZA) |
| Abstract: | Caste-based quotas in hiring have existed in the public sector in India for decades. Recently there has been debate about introducing similar quotas in private sector jobs. This paper uses an audit study to determine the extent of caste-based discrimination in the Indian private sector. On average low-caste applicants need to send 20 percent more resumes than high-caste applicants to get the same callback. Differences in callback which favor high-caste applicants are particularly large when hiring is done by male recruiters or by Hindu recruiters. This finding suggests that the differences in callback between high and low-caste applicants are not entirely due to statistical discrimination. High-caste applicants are also differentially favored by firms with a smaller scale of operations, while low-caste applicants are favored by firms with a larger scale of operations. This finding is consistent with taste-based theories of discrimination and with commitments made by large firms to hire actively from among low-caste groups. |
| Keywords: | field experiments, discrimination, public policy, human resources |
| JEL: | C93 J71 J78 O15 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3737&r=lab |
| By: | Marina E. Adshade (Dalhousie University); Brooks A. Kaiser |
| Abstract: | Standard economic theories of household formation predict the rise of institutionalized polygyny in response to increased resource inequality among men. We propose a theory, within the framework of a matching model of marriage, in which, in some cases, institutionalized monogamy prevails, even when resources are unequally distributed, as a result of agricultural externalities that increase the presence of pair-bonding hormones. Within marriage, hormone levels contribute to the formation of the marital pair bond, the strength of which determines a man's willingness to invest in his wife's children. These pair bonds are reinforced through physical contact between the man and his wife and can be amplified by externalities produced by certain production technologies. Both the presence of additional wives and the absence of these externalities reduce the strength of the marital bond and, where the fitness of a child is increasing in paternal investment, reduce a woman's expected lifetime fertility. Multiple equilibria in terms of the dominant form of marriage (for example, polygyny or monogamy) are possible, if the surplus to a match is a function of reproductive success as well as material income. Using evidence from the Standard Cross Cultural Sample and Murdock's Ethnographic Atlas, we find that agricultural production externalities that affect neurological pair-bonding incentives significantly reduce the tendency to polygyny, even when resource inequality is present. |
| Keywords: | Oxytocin, Vasopressin, Neurohormones, Marriage, Monogamy, Polygamy, Development of Institutions, Family structure |
| JEL: | J12 O43 N30 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1180&r=lab |
| By: | Zaman, Asad |
| Abstract: | How do we arrest the decline of the social sciences in Pakistan? Is it a matter of money or one of sending more students to the West who might then return to teaching at the local universities? In this article I argue that the solution lies elsewhere. Borrowing frames, concepts, and analytical techniques based on the concept of universalism runs a serious risk of imposing alien views on local problems. Moreover, attempts to become ‘scientific’ requires side stepping value judgments of good and bad. The current Western domination of the intellectual scene favours a single route for social science development, and kills all diversity. However, whilst we may borrow as much as we choose, we need to build our own frames that would underpin the social sciences, and this is possible only by reconnecting with our own past. |
| Keywords: | Eurocentricism; Western Universalism; Positive Science; History of Social Science; Western Social Science; |
| JEL: | A12 B29 B59 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10477&r=lab |
| By: | Federico Biagi; Maria Laura Parisi; Lucia Vergano |
| Abstract: | We study determinants of the probability of introducing an organizational innovation using three large cross sections of Italian manufacturing firms in the period 1995-2003. We analyze the effect and complementarity of other types of investments, like ICT, R&D, human and physical capital and the adoption of product or process innovations. Furthermore, we estimate the effect of introducing organizational innovations and indirectly technical innovations on the growth rate of labor productivity for the unbalanced panel of firms. Disembodied technological change is well represented by OIs, while product innovations seem to heve an effect on the efficiency of capital inputs only (capital stock-embodied technical change). Process innovations do not have a statistical impact as an indirect input-efficiency driving force, in our data. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ubs:wpaper:0813&r=lab |
| By: | Kato, Takao (Colgate University); Long, Cheryl (Colgate University) |
| Abstract: | The promotion tournament as a potentially important incentive mechanism for top management in transition economies has not been examined by the emerging literature on managerial incentives in transition economies. This paper is the first attempt to fill this important gap in the literature. The paper begins with modifying the previously-derived empirical predictions from the tournament theory to the context of transition economies in which state ownership still plays a significant role in publicly-traded firms. Specifically, we test the following two hypotheses. First, the winner's prize will need to increase in order to prevent each contestant from lowering his/her effort level in the face of expanding contestant pool. Such an optimal response of the winner's prize to the size of the contestant pool is more evident for China's listed firms that are less controlled by the state. Second, the winner's prize will also need to rise in order to prevent each contestant from reducing his/her effort level in the face of greater market volatility (or more noise in performance measure used to decide on the tournament winner). Using comprehensive financial and accounting data on China's listed firms from 1998 to 2002, augmented by unique data on executive compensation and ownership structure, we find evidence in support of both hypotheses. Finally, we also find evidence suggesting that an increase in the winner's prize will result in enhanced managerial effort and hence improved firm performance, and that the performance effect of the winner's prize is greater for China's listed firms that are less controlled by the state. As such this paper provides yet another piece of evidence that ownership restructuring may be needed for China to successfully transform its SOEs to efficient modernized corporations and reform its overall economy. |
| Keywords: | tournaments, managerial incentives, ownership structure, China, transition economies |
| JEL: | M51 P3 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3730&r=lab |
| By: | Dauphin, Anyck (Université du Québec en Outaouais); El Lahga, AbdelRahmen (Institut Supérieur de Gestion, Tunis); Fortin, Bernard (Université Laval); Lacroix, Guy (Université Laval) |
| Abstract: | Children are seldom accounted for in household behavioural models. They are usually assumed to have neither the capacity nor the power to influence the household decision process. The literature on collective models has so far incorporated children through the "caring preferences" of their parents or has treated them as household public goods [Bourguignon (1999); Blundell et al. (2005)]. This paper seeks to determine whether children of a certain age are decision-makers. We focus on the decision-making process within households composed of two adults and one child of at least 16 years of age. We first summarize the main restrictions that have been proposed to test the collective model in the context of multiple decision-makers [Chiappori and Ekeland (2006)]. We also show how a minimal number of decision-makers can be inferred from parametric constraints. Second, we apply these tests on data drawn from a series of U.K. Family Expenditure Surveys. Our results show clear evidence that it may be incorrect to assume that daughters and children aged between 16 and 21 are not full members influencing the household decision-making process. |
| Keywords: | intra-household allocation, collective household models, children, demand analysis, Pareto efficiency, rank tests |
| JEL: | D11 D12 D79 J13 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3728&r=lab |
| By: | Dimitri B. Papadimitriou |
| Abstract: | To put an economy on an equitable growth path, economic development must be based on social efficiency, equity, and job creation. It has been shown that unemployment has far-reaching effects, all leading to an inequitable distribution of well-being. But many economists assume that unemployment tends toward a natural rate below which it cannot go without creating inflation. The paper considers a particular employment strategy: a government job creation program, such as an employment guarantee or employer-of-last-resort scheme, that would satisfy the noninflationary criteria. The paper analyzes the international experience of government job creation programs, with particular emphasis on the cases of Argentina and India. We conclude by considering the application of an employer-of-last-resort policy to the developing world and as a vehicle to meeting the Millennium Development Goals. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_545&r=lab |