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on Labour Economics |
| By: | Petrongolo, Barbara (London School of Economics) |
| Abstract: | This paper investigates long-term returns from unemployment compensation, exploiting variation from the UK JSA reform of 1996, which implied a major increase in job search requirements for eligibility and in the related administrative hurdle. Search theory predicts that such changes should raise the proportion of non-claimant nonemployed, with consequences on search effort and labor market attachment, and lower the reservation wage of the unemployed, with negative effects on post-unemployment wages. I test these ideas on longitudinal data from Social Security records (LLMDB). Using a difference in differences approach, I find that individuals who start an unemployment spell soon after JSA introduction, as opposed to six months earlier, are 2.5-3% more likely to move from unemployment into Incapacity Benefits spells, and 4-5% less likely to have positive earnings in the following year. This latter employment effect only vanishes four years after the initial unemployment shock. Also, annual earnings for the treated individuals are lower than for the non-treated. These results suggest that while tighter search requirements were successful in moving individuals off unemployment benefits, they were not successful in moving them onto long-lasting or better jobs, with fairly long lasting unintended consequences on a number of labor market outcomes. |
| Keywords: | unemployment compensation, job search, post-unemployment earnings |
| JEL: | J31 J64 J65 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3856&r=lab |
| By: | Fernando Munoz-Bullon |
| Abstract: | This paper analyzes wage differentials between male and female workers in the Spanish tourism industry, using a large, administratively matched employer-employee data set obtained from a representative sample of companies. This allows us to control for unobserved firm-specific factors likely to affect the magnitude of the gender wage gap. Our findings indicate that male workers earn on average 6.7% higher monthly wages than their socially comparable female counterparts. In particular, the type of contract held, the qualifications required for the job and the specific sub-sector of employment are very important variables in explaining this gender wage difference. We also find that only around 12% of the mean wage difference in the tourism industry cannot be explained by differences in observable characteristics, which is well below the average for the rest of the industries in Spain (87%). Our interpretation is that minimum wage legislation provides a particularly effective protection to women in the tourism industry, which is characterized by a large number of low-wage earners. |
| Keywords: | Spanish tourism industry, Wage discrimination, Blinder-Oaxaca decomposition, Censored models |
| JEL: | C34 J16 J31 J71 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wbrepe:wb085713&r=lab |
| By: | António Afonso (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Pedro Gomes (London School of Economics & Political Science; STICERD – Suntory and Toyota InternationalCentres for Economics and Related Disciplines, Houghton Street, London WC2A 2AE, U.K..) |
| Abstract: | We analyse the interactions between public and private sector wages per employee in OECD countries. We motivate the analysis with a dynamic labour market equilibrium model with search and matching frictions to study the effects of public sector employment and wages on the labour market, particularly on private sector wages. Our empirical evidence shows that the growth of public sector wages and of public sector employment positively affects the growth of private sector wages. Moreover, total factor productivity, the unemployment rate, hours per worker, and inflation, are also important determinants of private sector wage growth. With respect to public sector wage growth, we find that, in addition to some market related variables, it is also influenced by fiscal conditions. JEL Classification: E24, E62, H50. |
| Keywords: | public wages, private wages, employment. |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20080971&r=lab |
| By: | Chéron, Arnaud (University of Le Mans); Hairault, Jean-Olivier (University of Paris 1); Langot, François (University of Le Mans) |
| Abstract: | This paper examines the age-related design of firing taxes by extending the theory of job creation and job destruction to account for a finite working life-time. We first argue that the potential employment gains related to employment protection are high for older workers, but higher firing taxes for these workers increase job destruction rates for the younger generations. On the other hand, age-decreasing firing taxes can lead to lower job destruction rates at all ages. Furthermore, from a normative standpoint, because firings of older (younger) workers exert a negative (positive) externality on the matching process, we find that the first best age-dynamic of firing taxes and hiring subsidies is typically hump-shaped. Taking into account distortions related to unemployment benefits and bargaining power shows the robustness of this result, in contradiction with the existing policies in most OECD countries. |
| Keywords: | foo |
| JEL: | J22 J26 H55 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3851&r=lab |
| By: | Du Caju, Philip (National Bank of Belgium); Rycx, Francois (Free University of Brussels); Tojerow, Ilan (Free University of Brussels) |
| Abstract: | This paper investigates inter-industry wage differentials in Belgium, taking advantage of access to a unique matched employer-employee data set covering all the years from 1999 to 2005. Findings show the existence of large wage differentials among workers with the same observed characteristics and working conditions, employed in different sectors. These differentials are persistent and no particular downward or upward trend is observed. However, the dispersion of inter-industry wage differentials appears to show a cyclical pattern over time. Further results indicate that ceteris paribus, workers earn significantly higher wages when employed in more profitable firms. The time dimension of our matched employer-employee data allows us to instrument firms' profitability by its lagged value. The instrumented elasticity between wages and profits is found to be quite stable over time and varies between 0.034 and 0.043. It follows that Lester's range of pay due to rent sharing fluctuates between about 24 and 37 percent of the mean wage. This rent-sharing phenomenon accounts for a large fraction of the industry wage differentials. We find indeed that the magnitude, dispersion and significance of industry wage differentials decreases sharply when controlling for profits. |
| Keywords: | industry wage differentials, rent-sharing, matched employer-employee data |
| JEL: | D31 J31 J41 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3844&r=lab |
| By: | Clausen, Jens (AKF, Danish Institute of Governmental Research); Heinesen, Eskil (AKF, Danish Institute of Governmental Research); Hummelgaard, Hans (AKF, Danish Institute of Governmental Research); Husted, Leif (AKF, Danish Institute of Governmental Research); Rosholm, Michael (Aarhus School of Business) |
| Abstract: | We analyse the effect of active labour-market programmes on the hazard rate into regular employment for newly arrived immigrants using the timing-of-events duration model. We take account of language course participation and progression in destination country language skills. We use rich administrative data from Denmark. We find substantial lock-in effects of participation in active labour-market programmes. Post programme effects on the hazard rate to regular employment are significantly positive for wage subsidy programmes, but not for other types of programmes. For language course participants, improvement in language proficiency has significant and substantial positive effects on the hazard rate to employment. |
| Keywords: | programme evaluation, duration analysis, language skills |
| JEL: | J64 J24 J68 J61 C41 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3849&r=lab |
| By: | Kamila Fialová (Komerční Banka, Prague; Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | This paper concerns the labour market differences among the 77 districts of the Czech Republic. There was a remarkable trend of increasing regional labour market differentiation in the 1990’s, however, the patterns of differentiation have stabilised since then. The first part of the paper aims to describe the regional differentiation in wages and unemployment on the descriptive method basis. The other part of the study attempts to explain the differences in wages by an econometric model. We focus on the effect of unemployment rate, representing an exogenous factor of the region itself. The model’s specification arises out of the general concept of wage differentiation and the concept of the wage curve. According to our analysis there were several factors of influence on the regional wage differentiation in 2001: educational structure of the population, employment structure of the regional economy, degree of economic concentration, and district rate of unemployment. The coefficient of the unemployment elasticity of wages equals –0.08, which can be considered as evidence of the existence of the wage curve in the districts of the Czech Republic. Moreover, the relationship is stronger in the low-unemployment districts. |
| Keywords: | regional disparities, wages, unemployment, wage curve |
| JEL: | E24 J31 J64 R23 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2008_33&r=lab |
| By: | Aleš Ahcan; Sašo Polanec |
| Abstract: | In this paper we analyse old-age retirement decisions of Slovenian men and women eligible to retire in the period 1997-2003. In comparison to established market economies, we find relatively high hazard rates of retirement that decline with age. This peculiar pattern can be partly attributed to weak incentives to work inherent in the design of Social Security, and is reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relativily high pensions of less productive (skilled) workers and vice versa. We also find that the probability of retirement increases with social security wealth and decreases with net wages, although the response to option value to work, when controlling for wage differences, is rather weak. Our results also imply that less educated persons, persons with greater private wealth, and persons entitled to severance payment are more likely to retire. |
| Keywords: | retirement, option value, social security wealth, transition |
| JEL: | J26 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:22108&r=lab |
| By: | van den Berg, Gerard J. (VU University Amsterdam); Bergemann, Annette (VU University Amsterdam); Caliendo, Marco (IZA) |
| Abstract: | Labor market programs may affect unemployed individuals' behavior before they enroll. Such ex ante effects are hard to identify without model assumptions. We develop a novel method that relates self-reported perceived treatment rates and job-search behavioral outcomes, like the reservation wage, to each other, among newly unemployed workers. Job search theory is used to derive theoretical predictions. To deal with effect heterogeneity and selectivity, the effects of interest are estimated by propensity score matching. We apply the method to the German ALMP system, using a novel data set including self-reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes, and past outcomes. We find that the system generates a negative ex ante effect on the reservation wage and a positive effect on search effort. |
| Keywords: | Policy evaluation; reservation wage; search effort; expectations; unemployment duration; program evaluation; active labor market policy; identification |
| JEL: | J64 |
| Date: | 2008–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2008_026&r=lab |
| By: | Vogel, Lukas |
| Abstract: | Abstract: This note investigates the interaction between nominal and real labour market rigidities. It shows nominal wage rigidity to have little effect on the welfare loss from labour adjustment costs under a labour supply shock. This implies that the second best effect of nominal price stickiness under real wage persistence studied in Duval and Vogel (2007) does not apply to the propagation of supply shocks under nominal wage rigidity and labour adjustment costs. |
| Keywords: | Labour adjustment costs; wage stickiness; rigidity interaction |
| JEL: | E32 E24 J23 J30 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11798&r=lab |
| By: | Leila Maron (DULBEA, Université libre de Bruxelles, Brussels); Danièle Meulders (DULBEA, Université libre de Bruxelles, Brussels); Sîle O'Dorchai (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | All over Europe, parental leaves are essentially taken by women which leads to perpetuate gender inequalities in the labour market. The economic literature illustrates the issues at stake and is presented in this article to contextualise the analysis of the Belgian parental leave system. The Belgian parental leave system has two strong features: it is individualised and it offers a relatively short leave. The system could be improved by the implementation of a wage-related payment. However, priority should be given to sufficient provision of quality childcare given that this policy does not entail any negative effects on women’s employment. |
| Keywords: | parental leave, family friendly policies, gender wage gap, women’s employment |
| JEL: | J16 J71 J78 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:08-24rs&r=lab |
| By: | Philip De Caju (National Bank of Belgium); François Rycx (DULBEA, Université libre de Bruxelles, Brussels); Ilan Tojerow (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | This paper investigates inter-industry wage differentials (IWD) in Belgium, taking advantage of a unique matched employer-employee dataset covering the years 1999-2005. Findings show the existence of large wage differentials among workers with the same observed characteristics and working conditions, employed in different sectors. These differentials are persistent and no particular trend is observed. However, their dispersion appears to show a cyclical pattern over time. Further results indicate that the instrumented elasticity between wages and profits is found to be quite stable over time and varies between 0.034 and 0.043. This rent-sharing phenomenon accounts for a large fraction of IWDs. |
| Keywords: | Industry wage differentials, Rent-sharing, Matched employer-employee data. |
| JEL: | D31 J31 J41 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:08-23rs&r=lab |
| By: | Ayako Kondo (Columbia University - Department of Economics) |
| Abstract: | Slack labor market conditions for women relative to men increase marriage rates for young women. One reason is that this increase may be from marginal marriages due to some females lowering their reservation match quality, and so lead to future divorces and possibly to increases in female headship and poverty. This paper examines the long-term consequences of such marriages using data from the Survey of Income and Program Participation and the Panel Study of Income Dynamics. I find that the marriages induced by relatively poor economics conditions for women reflect shifts in the timing of marriage among young women who would eventually marry anyway. Labor market conditions at age 18-20 do not affect the fraction of women who will marry by age 30. Further, labor market conditions at marriage are uncorrelated with the probability of divorce or with spouses' characteristics, and marrying young in response to labor market shocks does not significantly affect a woman's fertility or labor supply. These findings are consistent with a model in which economic conditions affect women's search intensity without affecting their reservation match quality. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0809-08&r=lab |
| By: | Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Franco Peracchi (University of Rome “Tor Vergata”) |
| Abstract: | This paper shows that the “lump of labor” assumption fails in Italy. The direct relationship between the unemployment rate of the young and the labor force participation of the old is pro-cyclical, i.e. a higher labor force participation of the old is related to a lower unemployment rate of the young. Hence both vary with the business cycle. In order to overcome endogeneity problems in explaining unemployment of the young, we resort to a simulated variable: “the inducement to retire”, which is constructed by simulating the social security benefits. We related the unemployment rate of the young to this incentive measure and find that a higher inducement to retire is associated to a higher unemployment rate – quite the opposite of the “young-in-old-out” story. |
| Keywords: | lump of labour, youth unemployment, early retirement |
| JEL: | H3 J2 J6 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:45_2008&r=lab |
| By: | Nabi, Mahmoud Sami; Suliman, Mohamed Osman |
| Abstract: | The theoretical model delves into the relationship between labor market institutions and unemployment by proving two propositions: (1) allowing informal activity bolsters job creation, and (2) if the institutional environment is initially, sufficiently, weak, then mitigating it will lower unemployment. Simulating the model with the GCC’s unemployment for the period 1990-2007 allows us to decipher the validity of the model. The institutional environment is represented in this simulation by social insurance which is captured through oil prices. Hence, an increase in oil prices is assumed to lead to higher social insurance and, therefore ,to higher cost of hiring labour . The parameters are selected with the objective of minimizing the error gap between the effective unemployment rate and the simulated unemployment rate . The effective unemployment rate is constructed as a weighted average of the unemployment rate of nationals and non-nationals. The weights are the shares of national and non-national labour-force in the GCC countries. Expositional simulations verified the second proposition. Thus, improving labor market institutions, that are initially weak may discernibly alleviate unemployment problems in the GCC. |
| Keywords: | Unemployment; institutions; GCC |
| JEL: | J4 J0 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11858&r=lab |
| By: | Langot, François (University of Le Mans); Moreno-Galbis, Eva (University of Le Mans) |
| Abstract: | This paper seeks to gain insights on the relationship between growth and unemployment, when considering heterogeneous agents in terms of age. We introduce life cycle features in the endogenous job destruction framework à la Mortensen and Pissarides (1998). We show that, under the assumption of homogeneous productivity among workers, firms tend to fire older workers more often than young ones, when deciding whether to update or not a technology: there is an equilibrium where the creative destruction effect dominates over the capitalization effect for old workers, whereas the capitalization effect dominates for young workers. This discrimination against older workers can be moderated when we introduce heterogeneity (in terms of productivity) among workers. We also provide empirical support for these theoretical findings using OECD panel data and numerical simulations of the model. |
| Keywords: | TFP growth, unemployment by age, old workers' employment rate, capitalization, creative destruction effect |
| JEL: | J14 J24 J26 O33 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3841&r=lab |
| By: | Gustafsson, Björn (Göteborg University); Sai, Ding (Chinese Academy of Social Sciences) |
| Abstract: | While some workers in China attain senior professional level and senior cadre level status (Chuzhang and above), others attain middle rank including middle rank of professional and cadre (Kezhang). This aspect of the Chinese labor force has attracted surprisingly little attention in the literature, a fact which this paper aims to rectify. We define various segments of the urban population in work-active ages and use data from the Chinese Income Project (CHIP) covering eastern, central and western China for 1995 and 2002. For 2002, persons of high rank make up 3 percent and persons of middle rank make up 14 percent of persons in work-active ages. Factors that affect a person's likelihood of having high or middle rank are investigated by estimating a multinomial probit model. We find that education, age and gender strongly affect the probability of being employed as a worker of high rank. There is relatively little income inequality among workers of high rank as well as among workers of middle rank. Mean income and household wealth per capita of highly-ranked workers developed more favorably than for other segments of the population studied, and personal income is more polarized by segment in 2002 than in 1995. Workers of high rank, and to a lesser degree, workers of middle rank, are among the winners in economic terms while the increasingly large category of non-workers are the losers. Rates of return to education have increased but income function analysis indicates that this provides only a partial explanation for the increased favorable income situation for workers of high and middle ranks. |
| Keywords: | China, rank, income, income inequality |
| JEL: | J21 J31 J41 P31 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3843&r=lab |
| By: | Crépon, Bruno (CREST-INSEE); Ferracci, Marc (CREST-INSEE); Jolivet, Grégory (University of Bristol); van den Berg, Gerard J. (Free University of Amsterdam) |
| Abstract: | This paper implements a method to identify and estimate treatment effects in a dynamic setting where treatments may occur at any point in time. By relating the standard matching approach to the timing-of-events approach, it demonstrates that effects of the treatment on the treated at a given date can be identified although non-treated may be treated later in time. The approach builds on a "no anticipation" assumption and the assumption of conditional independence between the duration until treatment and the counterfactual durations until exit. To illustrate the approach, the paper studies the effect of training for unemployed workers in France, using a rich register data set. Training has little impact on unemployment duration. The contamination of the standard matching estimator due to later entries into treatment is large if the treatment probability is high. |
| Keywords: | propensity score, training, unemployment duration, program participation, treatment, matching, contamination bias |
| JEL: | J64 C21 C31 C41 C14 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3848&r=lab |
| By: | John Schmitt |
| Abstract: | This report uses national data from the Current Population Survey (CPS) to show that unionization raises the wages of the typical woman worker by 11.2 percent compared to their non-union peers. The study goes on to show that unionization also increases the likelihood that a woman worker will have health insurance and a pension. The study also notes that union membership results in health care and pension gain on par with the gains of a college education. |
| Keywords: | unions, women, wages, benefits, pension |
| JEL: | J J1 J3 J31 J32 J41 J5 J58 J6 J68 J88 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2008-32&r=lab |
| By: | Agar Brugiavini (Department of Economics, University Of Venice Cà Foscari); Axel Börsch-Supan (MEA Mannheim Research Institute for the Economics of Aging, University of Mannheim); Enrica Croda (Department of Economics, University Of Venice Cà Foscari) |
| Abstract: | This paper uses the Survey of Health, Ageing and Retirement in Europe (SHARE) to investigate the role of pension and social security institutions in shaping the European patterns of work and retirement. We provide evidence on the extent of “unused capacity” in labor force, on pathways to retirement and on the relationship between actual health status and disability take up. We find that institutional differences between countries explain much of the cross-national differences in work and retirement, while differences in health and demographics play only a minor role. |
| Keywords: | Aging, employment, retirement, health, disability, social security institutions, SHARE |
| JEL: | J14 J18 J26 J68 I12 C81 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:44_2008&r=lab |
| By: | Machin, Stephen (University College London); Pelkonen, Panu (London School of Economics); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration) |
| Abstract: | We show that the length of compulsory education has a causal impact on regional labour mobility. The analysis is based on a quasi-exogenous staged Norwegian school reform, and register data on the whole population. Based on the results, we conclude that part of the US-Europe difference, as well as the European North-South difference in labour mobility, is likely to be due to differences in levels of education in the respective regions. |
| Keywords: | labour market, mobility, education |
| JEL: | I28 J24 J61 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3845&r=lab |
| By: | Zamo-Akono, C. Zamo-Akono |
| Abstract: | Many studies report empirical relationship either between fertility and labour supply or, between health and labour market outcomes. In this paper, an extension of these ideas involves explicitly considering how fertility and health affect each other, and how they interrelate with labour force participation. A unifying framework is provided and a simultaneous three equations model developed to capture the interdependence between these variables as well as their respective determinants. The model is estimated using a cross-section data set obtained from a survey of the urban Cameroon population. The results indicate that: (i) fertility and health status are significantly interrelated, thus separate estimations of fertility (or health status) and participation will produce misleading results; (ii) working in either sector of the labour market significantly reduces fertility but, unlike many previous studies, fertility has a positive impact on the probability of labour force participation; (iii) there is strong evidence that health and disability status is a significant determinant of employment, but the reverse depend on the labour market sector and on the health indicator used. |
| Keywords: | Fertility; self-reported health; disability; labour supply; limited dependent variable |
| JEL: | J2 I1 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10839&r=lab |
| By: | Langot, François (University of Le Mans); Quintero Rojas, Coralia (University of Le Mans) |
| Abstract: | Europeans have worked less than Americans since the 1970s. In this paper, we quantify the relative importance of the extensive and intensive margins of aggregate hours of market work on the observed differences. Our counterfactual exercises show that the two dimensions of the extensive margin, the employment rate and the participation rate, explain the most of the total-hours-gap between regions. Moreover, both ratios have similar weight. Conversely, the intensive margin, measured by the number of hours worked per employee, has the smallest role. |
| Keywords: | hours of market work, participation, employment, intensive and extensive margins |
| JEL: | E2 J2 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3846&r=lab |
| By: | Bachan, Ray (University of Brighton) |
| Abstract: | The pay determining process of CEOs of UK higher education institutions is modelled using three econometric methodologies applied to a large and unique dataset for the academic years 1997/98 through to 2005/06. A gender differential in pay is detected and this differential remains robust across the specifications reported and across higher education sub-sectors. There is evidence that CEOs with industrial work experience and those who have been employed by a higher education body earn more than their counterparts without these attributes. We also find that CEOs are rewarded favourably on the termination of their contracts. There is little evidence that institutional characteristics influence pay after controlling for institution fixed effects. There is only limited evidence that they are rewarded for the 'performance' of the institutions they manage, but are rewarded favourably by increasing the volume of tuition fees. There is some support for 'tournament theory' as an explanation for the determination of CEO pay in this labour market. |
| Keywords: | CEO, pay, performance, public sector, higher education, fixed effects |
| JEL: | J45 M5 M12 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3858&r=lab |
| By: | Zheng Liu; Louis Phaneuf |
| Abstract: | A commonly held view is that nominal rigidities are important for the transmission of monetary policy shocks. We argue that they are also important for understanding the dynamic effects of technology shocks, especially on labor hours, wages, and prices. Based on a dynamic general equilibrium framework, our closed-form solutions reveal that a pure sticky-price model predicts correctly that hours decline following a positive technology shock, but fails to generate the observed gradual rise in the real wage and the near-constance of the nominal wage; a pure sticky-wage model does well in generating slow adjustments in the nominal wage, but it does not generate plausible dynamics of hours and the real wage. A model with both types of nominal rigidities is more successful in replicating the empirical evidence about hours, wages and prices. This finding is robust for a wide range of parameter values, including a relatively small Frisch elasticity of hours and a relatively high frequency of price reoptimization that are consistent with microeconomic evidence. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2008-30&r=lab |
| By: | Grönqvist, Erik (IFAU - Institute for Labour Market Policy Evaluation); Vlachos, Jonas (Department of Economics, Stockholm University) |
| Abstract: | Teachers are increasingly being drawn from the lower parts of the general ability distribution, but it is not clear how this affects student achievement. We track the position of entering teachers in population-wide cognitive and non-cognitive ability distributions using school grades and draft records from Swedish registers. The impact on student achievement caused by the position of teachers in these ability distributions is estimated using matched student-teacher data. On average, teachers’ cognitive and non-cognitive social interactive abilities do not have a positive effect on student performance. However, social interactive ability turns out to be important for low aptitude students, whilst the reverse holds for cognitive abilities. In fact, while high performing students benefit from high cognitive teachers, being matched to such a teacher can even be detrimental to their lower performing peers. Hence, the lower abilities among teachers may hurt some students, whereas others may even benefit. High cognitive and non-cognitive abilities thus need not necessarily translate into teacher quality. Instead, these heterogeneities highlight the importance of the student-teacher matching process. |
| Keywords: | Cognitive and non-cognitive ability; teacher quality; student achievement |
| JEL: | I21 |
| Date: | 2008–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2008_025&r=lab |
| By: | Hassan Essop (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch) |
| Abstract: | Before the introduction of the Quarterly Labour Force Survey (QLFS) in 2008, Statistics South Africa (Stats SA) has been using the same methodology to derive the informal sector employment throughout the years, focusing on the enterprise registration status to classify workers (which include both self-employed and employees) as either formal or informal sector workers. Although there are difficulties with attempting to provide any consistent trend data (Yu, 2007 & Essop & Yu, 2008), it is generally accepted that informal sector employment grew relatively more rapidly in the late 1990s, and then stabilized at about 2 million in the early 2000s before it increased (albeit more slowly) again since 2005. Nonetheless, recent papers by Devey, Skinner & Valodia (2006) as well as Heintz & Posel (2008) argue that the current classifications used by Stats SA hide a significant degree of informality in the formal economy, as some formal jobs are characterized by conditions that are typical of informal work. Therefore, they propose alternative definitions of informal sector employment, focusing on worker characteristics instead of enterprise characteristics. This paper aims to address the reliability or otherwise of these recent approaches, as well as to suggest better ways to define informal sector employment. |
| Keywords: | South Africa, Household survey, Labour market trends, Informal sector |
| JEL: | J00 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers69&r=lab |
| By: | Xiaoyun Liu (China Agricultural University); Terry Sicular (University of Western Ontario) |
| Abstract: | Non-agricultural income has become an important source of rural household income and has brought with a wide inequality in rural China. This paper investigates the determinants of non-agricultural employment as well as non-agricultural income and then assesses the contribution of these determinants to income inequality with the Chinese Academy of Social Science 2003 survey data and a three-step decomposition approach. Our results indicate that education inequality accounts for 9% and 36% wage and self-employment income inequality respectively which implies that education inequality plays substantial roles in non-agricultural income inequalities. The community characteristics collectively accounts for 46% and 32% of the wage and self-employment income inequality respectively which in turn suggests that regional development is of great importance in the determination of non-agricultural income inequality. |
| Keywords: | non-agricultural income; employment; inequality |
| JEL: | J23 J43 D63 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:epuwoc:20086&r=lab |
| By: | Hanes, Niklas (Department of Economics, Umeå University); Norlin, Erik (Department of Economics, Umeå University); Sjöström, Magnus (Department of Economics, Umeå University) |
| Abstract: | The purpose of this paper is to study the effect of military training on earnings for young men in Sweden. The analysis is based on the cohort of men born in 1973. The 1973 cohort was conscripted during a time of rapid change in the Swedish security policy and substantial cutdowns of the armed forces. As a consequence, a relatively large part of the cohort was assigned a service category after the enlistment test but one third of these individuals were never conscripted. We argue that these organizational changes along with the set of important background variables that are available makes it possible to rely on selection on observables. A strong result is that military training has a positive effect on annual earnings at the age of 30 for the group in the private category that subsequently do not obtain an high educational level. |
| Keywords: | Earnings; Conscription; Enlistment test; Military training |
| JEL: | H56 J01 J30 |
| Date: | 2008–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0760&r=lab |
| By: | Mario Fiorini (School of Finance and Economics, University of Technology, Sydney) |
| Abstract: | In this paper we build a dynamic structural model of educational choices in which cognitive skills shape decisions. The model is estimated by maximum likelihood using cohort data where individuals are observed from birth onwards. These data are unique in that they include cognitive skills test scores collected as early as age 7. We then simulate the e?ect of two educational subsidies equal in cost but different in the timing of disbursement. The ?rst consists of grants assigned directly to individuals aged between 16 and 18. The second is assigned to the parents earlier on, when the cohort is still in its childhood. The latter subsidy affects cognitive skills accumulation and in turn educational choices. Our results suggest that a direct grant in the form of a tuition subsidy might be more efficient even in the absence of short term ?nancial constraints. Although cognitive skills accumulated during childhood play a key role in the educational decisions, an unconditional ?nancial subsidy to parents is not the best policy. The results do not call a halt to investments in cognitive skill accumulation during childhood, but recommend that such investments should be well structured and ensure a high return. |
| Keywords: | educational decisions; dynamic structural estimation; tuition subsidy; parental income subsidy |
| JEL: | I21 I28 J24 J31 |
| Date: | 2008–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:uts:wpaper:157&r=lab |
| By: | Anna M. Falzoni (Università degli Studi di Bergamo and CESPRI, Bocconi University, Milan - Italy); Lucia Tajoli (Politecnico di MIlano and CESPRI, Bocconi University, Milan -Italy) |
| Abstract: | In this paper, we assess the extent of offshoring in the Italian manufacturing industries, and we study how this phenomenon is affecting the skill composition of employment. Measuring offshoring using the import-use matrices of input-output tables, firstly we estimate the impact of offshoring on the general level of employment, and we don’t find any significant relationship. Then, we examine the relationship between offshoring and employment composition by skills. Our results show that the use of offshoring is not restricted to the search for cheaper unskilled labor, and its impact on the composition of employment seems to be quite different in different industry groups. |
| Keywords: | offshoring, employment, skills |
| JEL: | F14 F16 J23 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp219&r=lab |
| By: | Jasso, Guillermina (New York University) |
| Abstract: | This paper proposes a new model of wage determination and wage inequality. In this model, wage-setters set workers' wages; they do so either directly, as when individuals vote in a salary committee, or indirectly, as when political parties, via the myriad of social, economic, fiscal, and other policies, generate wages. The recommendations made by wage-setters (or arising from their policies) form a distribution, and all the wage-setter-specific distributions are combined into a single final wage distribution. There may be any number of wage-setters; some wage-setters count more than others; and the wage-setters may differ among themselves on both the wage distribution and the amounts recommended for particular workers. We use probability theory to derive initial results, including both distribution-independent and distribution-specific results. Fortuitously, elements of the model correspond to basic democratic principles. Thus, the model yields implications for the effects of democracy on wage inequality. These include: (1) The effects of the number of wage-setters and their power depend on the configuration of agreements and disagreements; (2) Independence of mind reduces wage inequality, and dissent does so even more; (3) When leaders of democratic nations seek to forge an economic consensus, they are unwittingly inducing greater economic inequality; (4) Arguments for independent thinking will be more vigorous in small societies than in large societies; (5) Given a fixed distributional form for wages and two political parties which either ignore or oppose each other's distributional ideas, the closer the party split to 50-50, the lower the wage inequality; and (6) Under certain conditions the wage distribution within wage-setting context will be normal, but the normality will be obscured, as cross-context mixtures will display a wide variety of shapes. |
| Keywords: | wage-setter, power, consensus, independence of mind, dissent, form of government, probability distributions, shifted exponential distribution, shifted general Erlang distribution, shifted mirror-exponential distribution, Gini coefficient |
| JEL: | C02 C16 D31 D6 J31 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3850&r=lab |
| By: | Leslie Shiell (Department of Economics, University of Ottawa); Justin Stuart (Department of Economics, University of Ottawa) |
| Abstract: | We compare the choice between granting subsidies to the automotive industry and using the funds instead to implement a permanent reduction in the sales tax on capital goods, one of Ontario’s most distortionary taxes. Our results depend critically upon how workers respond to the withdrawal of subsidies. Either workers agree to reduce their wages to offset the lost subsidies or they refuse to adjust. Our cost-benefit analysis shows the best outcome for the economy is to eliminate the subsidies, have workers adjust, and reduce the deadweight loss of taxation. The second-best outcome is to subsidize, maintain high wage levels in the industry, but forgo the benefits of tax reform. The worst outcome would be to withdraw subsidies, have workers refuse to adjust, and then experience lost employment and production. In contrast, the best outcome for the affected workers is to maintain high wages through subsidies. Therefore workers have an incentive to act strategically, by refusing to adjust their wages. For this reason, the government’s openness to subsidies likely contributes to an environment in which subsidies become inevitable. |
| Keywords: | subsidies, Ontario, automotive sector |
| JEL: | H2 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:0812e&r=lab |
| By: | Raquel Carrasco (Departamento de Economía, Universidad Carlos III de Madrid); José Ignacio García Pérez (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | This paper studies whether the unemployment dynamics of immigrants differ from those of natives, paying special attention to the impact of accounting for unobserved heterogeneity among individuals. Using a large administrative data set for Spain, we estimate multiple-spell discrete duration models which disentangle unobserved heterogeneity from duration dependence. Specifically, we estimate random effects models assuming that the distribution of the effects is discrete with finite support, and fixed effects models in which the distribution of the unobserved effects is left unrestricted. Our results show the importance of accounting for unobserved heterogeneity and that mistaken policy implications can be derived due to improper treatment of unmeasured variables. We find that lack of control for unobserved heterogeneity leads to the conclusion that immigrant males have a higher probability of leaving unemployment than natives and that the negative effect of unemployment benefits for immigrants lasts longer than for natives. Nonetheless, the estimates which do control for unobserved heterogeneity show the opposite results. |
| Keywords: | Duration models; Discrete choice; Multiple spells; Unobserved heterogeneity; Unemployment; Immigration. |
| JEL: | J64 J61 C23 C41 J65 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:08.13&r=lab |
| By: | Daniel O. Beltran; Kuntal K. Das; Robert W. Fairlie |
| Abstract: | Although computers are universal in the classroom, nearly twenty million children in the United States do not have computers in their homes. Surprisingly, only a few previous studies explore the role of home computers in the educational process. Home computers might be very useful for completing school assignments, but they might also represent a distraction for teenagers. We use several identification strategies and panel data from the two main U.S. datasets that include recent information on computer ownership among children--the 2000-2003 CPS Computer and Internet Use Supplements (CIUS) matched to the CPS Basic Monthly Files and the National Longitudinal Survey of Youth 1997--to explore the causal relationship between computer ownership and high school graduation and other educational outcomes. Teenagers who have access to home computers are 6 to 8 percentage points more likely to graduate from high school than teenagers who do not have home computers after controlling for individual, parental, and family characteristics. We generally find evidence of positive relationships between home computers and educational outcomes using several identification strategies, including controlling for typically unobservable home environment and extracurricular activities in the NLSY97, fixed effects models, instrumental variables, and including future computer ownership and falsification tests. Home computers may increase high school graduation by reducing non-productive activities, such as truancy and crime, among children in addition to making it easier to complete school assignments. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:958&r=lab |
| By: | Dohmen Thomas; Falk Armin; Huffman David; Sunde Uwe (ROA rm) |
| Abstract: | This paper complements the experimental literature that has shown theimportance of reciprocity for behaviour in stylized labour markets or otherdecision settings. We use individual measures of reciprocal inclinations in alarge, representative survey, and relate reciprocity to real world labour marketbehaviour and life outcomes. We find that reciprocity matters, and we find thatthe way in which it matters is very much in line with the experimental evidence.In particular, positive reciprocity is associated with receiving higher wages andworking harder. Negatively reciprocal inclinations tend to reduce effort. Firmsdo not pay lower wages to individuals with strong negatively reciprocalinclinations. Instead, negative reciprocity increases the likelihood of beingunemployed. Looking at broader measures of success, in terms of number ofclose friends, and subjective well-being, we find that positively reciprocalinclination are associated with greater happiness and ability to sustain friendshiprelations, with the opposite being true for negative reciprocity. |
| Keywords: | education, training and the labour market; |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2008007&r=lab |
| By: | Aronsson, Thomas (Department of Economics, Umeå University); Koskela, Erkki (Department of Economics) |
| Abstract: | This paper concerns optimal redistributive income taxation and provision of a public input good in a two-type model with a minimum wage policy implemented for the low-ability type, where firms may use some of their resources for outsourcing by locating part of the production process abroad. Our results show that the incentive to relax the self-selection constraint and the incentive to increase employment among the low-skilled reinforce each other in terms of marginal income taxation. In addition, the appearance of equilibrium unemployment also provides an incentive for the government to directly tax outsourcing. Without a direct instrument for taxing outsourcing, the government may reduce the amount of resources spent on outsourcing by increased provision of the public input good, which is desirable in the sense that reduced outsourcing contributes to less wage inequality and increased employment. |
| Keywords: | outsourcing; optimal nonlinear taxation; public goods; unemployment |
| JEL: | H21 H25 J31 J62 |
| Date: | 2008–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0759&r=lab |
| By: | Annu Kotiranta |
| Abstract: | ABSTRACT : According to EVA´s annual attitude and value survey, two out of three Finns believe that globalization means loosing increasing amounts of jobs to low-cost-countries. However, 70 percent of the respondents think that their job is not easily transferrable and only 8 % are afraid that their own job is going to be offshored. As both national and international research indicates that the employment effects of globalization are rather modest, who is afraid of globalization and why? In this analysis it is found that highly educated, service sector, and male employees are the least afraid of globalization. Additionally, it is noticed that attitudes are more important than actual labour market experiences, when it comes to the expectations and perceptions of globalization. |
| Keywords: | globalization, internationalization, attitudes, prejudice |
| JEL: | F02 Z10 |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1167&r=lab |
| By: | von Below, David (Institute for International Economic Studies); Thoursie, Peter (Department of Economics, Stockholm University) |
| Abstract: | In this paper we investigate whether a relaxation in seniority rules (the ‘last-in-first-out’ principle) had any effect on firms’ employment behaviour. Seniority rules exist in several countries and, like Sweden, most European countries have a more lenient employment protection for firms below a certain size. Despite the fact that small firms represent a large share of all firms and stand for a substantial share of total employment, there is limited knowledge of how such exemption rules affect firms’ employment behaviour — the consequences of seniority rules on firms’ employment behaviour have not been examined at all. Using data including the population of firms matched with the population of workers for the period 1999–2002, we do not find any general effects on worker flows or on hires and separations. The only exception is a tendency of an increase in the share of separations for older workers and workers with longer seniority. The result points to the importance of considering in detail how legislation is formulated and how it works in practice. |
| Keywords: | Employment protection; employment change; hires; separations; regression discontinuity |
| JEL: | E24 J63 J65 |
| Date: | 2008–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2008_027&r=lab |
| By: | Michaud, Pierre-Carl (RAND); Tatsiramos, Konstantinos (IZA) |
| Abstract: | We investigate the direct and long-run effects of fertility on employment in Europe estimating dynamic models of labor supply under different assumptions regarding the exogeneity of fertility and modeling assumptions related to initial conditions, unobserved heterogeneity and serial correlation in the error terms. We find overall large direct and long-run effects of giving birth on employment probabilities, and these effects differ considerably across countries. We find that within countries the results are sensitive to the statistical assumption made on initial conditions, the inclusion of serial correlation and the assumption of strict exogeneity of children. However, the pattern across countries is robust to these assumptions. We show that such patterns are largely consistent with prevailing institutional differences related to the flexibility of the labor markets and family policies. |
| Keywords: | intertemporal labor supply, female employment, fertility, dynamic binary choice models, initial conditions |
| JEL: | C23 C25 D91 J22 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3853&r=lab |
| By: | Fernando Alexandre (Universidade do Minho - NIPE); Miguel Portela (Universidade do Minho - NIPE and IZA); Carla Sá (Universidade do Minho - NIPE and CIPES) |
| Abstract: | We evaluate the information content of admission conditions for study programs’ quality by investigating its relationship with graduates’ employability. We find that study programs with larger numeri clausi are associated with a higher probability of finding a job. Additionally, compulsory admission exams seem to be informative about study programs’ quality. Namely, study programs requiring the Math exam appear to be linked with lower unemployment propensity. Cardoso et al. (2008), however, found that those programs face lower demand when compared to other studies. These paradoxical results suggest that students’ choices may be based on insufficient information on returns to higher education investment. That information failure indicates that a Government intervention may be due. |
| Keywords: | Higher education; unemployment propensity; fractional models |
| JEL: | C21 I21 J23 J64 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:16/2008&r=lab |
| By: | Steve Bradley; Jim Taylor; Giuseppe Migali |
| Abstract: | This paper estimates the impact of two flagship education policies, the Specialist Schools initiative and the Excellence in Cities programme, on the attainment of secondary school pupils in England. The focus is on their relative impact across gender, ethnic and socio-economic groups. Using pupil-level data, we find, first, that the EiC programme has been substantially more effective than the specialist schools initiative in raising the attainment of ethnic minority pupils, particularly Asians. Second, the Specialist Schools initiative has favoured pupils from economically advantaged families whereas the EiC programme has been more effective in raising the attainment of pupils from poor families. Third, both policies have been more effective for girls than for boys, thereby contributing to the educational gender gap. |
| Keywords: | Ethnicity, Gender, Test scores, Excellence in Cities, Specialist schools |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005801&r=lab |
| By: | Stephane Pallage (Universite du Quebec a Montreal); Lyle Scruggs (University of Connecticut); Christian Zimmermann (University of Connecticut) |
| Abstract: | In this paper, we develop a methodology to summarize the various policy parameters of an unemployment insurance scheme into a single generosity parameter. Unemployment insurance policies are multdimensional objects. They are typically defined by waiting periods, eligibility duration, benefit levels and asset tests when eligible, which makes intertemporal or international comparisons difficult. To make things worse, labor market conditions, such as the likelihood and duration of unemployment matter when assessing the generosity of different policies. We build a first model with such complex characteristics. Our model features heterogeneous agents that are liquidity constrained but can self-insure. We then build a second model that is similar, except that the unemployment insurance is simpler: it is deprived of waiting periods and agents are eligible forever with constant benefits. We then determine which level of benefits in this second model makes agents indifferent between both unemployment insurance policies. We apply this strategy to the unemployment insurance program of the United Kingdom and study how its generosity evolved over time. |
| Keywords: | unemployment insurance, labor market policy, measurement |
| JEL: | J65 E24 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2008-42&r=lab |
| By: | Trudo Dejonghe (Department of Business Studies, Lessius University College); Wim Van Opstal (Higher Institute for Labour Studies – Catholic University of Leuven) |
| Abstract: | Ever since the Bosman case opened the labour market for players in European professional football, competitive balance has reduced in favour of the Big 5 leagues (England, Spain, Italy, Germany and France). In this article we show that changing structures towards an open labour market in a closed product market resulted in a migration of player talents towards the major leagues and teams and in a competitive disadvantage for the smaller market leagues and their teams. Next to a theoretical argumentation, we provide empirical evidence and assess future options for the structure of European professional football. |
| Keywords: | Bosman case, competitive balance, international labour mobility, professional team sports, stepping stone league |
| JEL: | J61 L52 L83 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0830&r=lab |
| By: | Manoj Atolia (Department of Economics, Florida State University); Yoshinori Kurokawa (Department of Economics, SUNY, Buffalo) |
| Abstract: | It can be theoretically shown that variety trade can be a possible source of increased skill premium in wages. No past studies, however, have empirically quantified how much of the increase in skill premium can be accounted for by the increase in variety trade. This paper now formulates a static general equilibrium model and then calibrates it to the Mexican input-output matrix for 1987. In the calibrated model, our numerical experiments show that the increase in U.S.-Mexican variety trade can explain approximately 12 percent of the actual increase in skill premium in Mexico from 1987 to 2000. |
| Keywords: | Variety Trade, Skill Premium, Variety-Skill Complementarity, Calibrated General Equilibrium Model, Mexico |
| JEL: | F12 F16 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2008_11_03&r=lab |
| By: | Zhao Chen; Shiqing Jiang; Ming Lu; Hiroshi Sato |
| Abstract: | In this paper, we use the “2002 Chinese Household Income Project Survey” (CHIPS2002) data to examine how heterogeneous social interactions affect the peer effect in the rural–urban migration decision in China. We find that the peer effect, measured by the village migration ratio, significantly increases the individual probability of outward migration. We also find that the magnitude of the peer effect is nonlinear, depending on the strength and type of social interactions with other villagers. Interactions in information sharing can increase the magnitude of the peer effect, while interactions in mutual help in labor activities, such as help in housing construction, nursing and farm work in busy seasons, will impede the positive role of the peer effect. Being aware of the simultaneity bias caused by the two-way causality between social interaction strengths and migration, we utilize “historical family political identity in land reform” as an instrumental variable for social interactions. However, the hypothesis that probit and instrumental-variable probit results are not significantly different is not rejected. The existence of a nonlinear peer effect has rich policy implications. For policy makers to encourage rural–urban migration, it is feasible to increase education investment in rural areas or increase information sharing among rural residents. However, only an increase in the constant term in the regression, i.e. a “big push” in improving institutions for migration, can help rural Chinese residents escape the low equilibrium in migration. |
| Keywords: | labor migration, urbanization, peer effect, social integration, social multiplier |
| JEL: | J61 O15 R23 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:22408&r=lab |
| By: | Marte Rønning (Statistics Norway) |
| Abstract: | Using Dutch data on pupils in elementary school this paper is the first empirical study that analyzes whether assigning homework has an heterogeneous impact on pupil achievement. Addressing potential biases that arise from unobserved school quality, pupil selection by exploiting different methods, I find that the test score gap is larger in classes where everybody gets homework than in classes where nobody gets homework. More precisely pupils belonging to the upper part of the socioeconomic status scale perform better when homework is given, whereas pupils from the lowest part are unaffected. At the same time more disadvantaged children get less help from their parents with their homework. Homework can therefore amplify existing inequalities through complementarities with home inputs. |
| Keywords: | pupil performance; school inputs; home-environment |
| JEL: | I20 I21 I29 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:566&r=lab |
| By: | Stephane Pallage (Universite du Quebec a Montreal); Lyle Scruggs (University of Connecticut); Christian Zimmermann (University of Connecticut) |
| Abstract: | The goal of this paper is to establish if unemployment insurance policies are more generous in Europe than in the United States, and by how much. We take the examples of France and one particular American state, Ohio, and use the methodology of Pallage, Scruggs and Zimmermann (2008) to find a unique parameter value for each region that fully characterizes the generosity of the system. These two values can then be used in structural models that compare the regions, for example to explain the differences in unemployment rates. |
| Keywords: | unemployment insurance, labor market policy, measurement, France |
| JEL: | J65 E24 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2008-43&r=lab |
| By: | Dahlberg, Matz (Department of Economics); Johansson, Kajsa (Department of Economics); Mörk, Eva (IFAU) |
| Abstract: | This paper investigates whether mandatory activation programs for welfare receivers have effects on welfare participation, employment and disposable income. In contrast to earlier studies we are able to capture both entry and exit effects. The empirical analysis makes use of a Swedish welfare reform in which the city districts in Stockholm gradually implemented mandatory activation programs for individuals on welfare. The reform is well suited for investigating effects of such programs for several reasons. First, the reform was not combined with any other policy instruments, like time limits or tax credits, making sure that we will capture effects of mandatory activation policies and nothing else. Second, the reform was initiated at different points of time in different city districts, which ease identification. Third, using data from city districts within a single local labor market we can control for confounding macro economic shocks. Overall, we find that mandatory activation of welfare receivers reduce overall welfare participation and increases employment. We also find that mandatory activation programs appear to work best for young people and for people born in non-Western countries. For disposable income, we do not find a statistically significant effect. |
| Keywords: | Welfare reform; Mandatory activation programs; Welfare participation; Employment; Difference-in-differences |
| JEL: | H31 I38 |
| Date: | 2008–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2008_013&r=lab |
| By: | Baharom, A.H.; Habibullah, M.S. |
| Abstract: | This paper examines the causality between income, unemployment and crime in 11 European countries employing the panel data analysis for the period 1993-2001 for both aggregated (total crime) and disaggregated (subcategories) crime data. Fixed and random effect models are estimated to analyze the impact of income and unemployment on total crime and various disaggregated categories of criminal activities. Hypothesis tests show that random effect model should be used for all (namely total crime, motor vehicle crime, domestic burglary, and violent crime) except for drug trafficking. Our results indicate that both income and unemployment have meaningful relationship with both aggregated and disaggregated crime. Crime exhibits positive significant relationship with income for all the categories except for domestic burglary, whereby it is significantly negative relationship. Crime also shows positive significant relationship with unemployment except for violent crime, whereby it is significantly negative relationship. The results also show strong country specific effect in determining the crime level. |
| Keywords: | income; unemployment; crime; Europe; panel data analysis |
| JEL: | E24 E26 |
| Date: | 2008–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11927&r=lab |
| By: | Anil Nathan (Department of Economics, College of the Holy Cross) |
| Abstract: | This paper finds the effect of having friends of a similar race and who are involved in similar activities. It explores data which allows a peer group to be defined openly through self nominations. Using a strategy that corrects for the endogeneity of peer effects by instrumenting using variables at the "grade within school" level, it is shown that friendship diversity can help whites increase achievement. Although not much significance was found with other races, most of the strategies pushed towards the direction of racial diversity aiding achievement. Regarding extracurricular activities, it is found that there is a benefit in having friends in common individual academic activities, conditional on the respondent only belonging to academic or scholastic clubs. There are insignificant effects in havingfriends in common sports, conditional on the respondent only participating in sports. |
| Keywords: | National Longitudinal Study of Adolescent Health, Add Health, friendship formation, returns to diversity, scholastic achievement, school redistribution |
| JEL: | J15 I2 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:0816&r=lab |
| By: | Buurman, Margaretha (Erasmus University Rotterdam); Dur, Robert (Erasmus University Rotterdam) |
| Abstract: | Many street-level bureaucrats (such as caseworkers) have the dual task of helping some clients, while sanctioning others. We develop a model of such a street-level bureaucracy and study the implications of its personnel policy on the self-selection and allocation decisions of agents who differ in altruism towards clients. When bureaucrats are paid flat wages, they do not sanction, and the most altruistic types sort into bureaucracy. Pay-for-performance induces some bureaucrats to sanction, but necessitates an increase in expected wage compensation, which can result in sorting from both the top and bottom of the altruism distribution. We also show how client composition affects sorting and why street-level bureaucrats often experience an overload of clients. |
| Keywords: | street-level bureaucracy, sorting, altruism, personnel policy, pay-for-performance |
| JEL: | J3 J4 L3 M5 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3847&r=lab |
| By: | Saccone Donatella (University of Turin) |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:200813&r=lab |
| By: | Jeroen de Jong; Deanne Den Hartog |
| Abstract: | Although both scientists and practitioners emphasize the importance of innovative work behavior (IWB) of individual employees for organizational success, the measurement of employees' IWB is still in evolution. Here, we present two multi-source studies that aimed to develop and validate a measure of IWB. Four related dimensions of IWB are distinguished: opportunity exploration, idea generation, championing and application. We derived a tenitem measure of these IWB dimensions from a pilot survey among matched dyads of 81 professionals in a research institute and their supervisors. Next, a survey among a matching sample of 703 knowledge workers and their supervisors from 94 different firms was done. We used confirmatory factor analyses to examine convergent and discriminant validity, and hierarchical multilevel regression to test hypothesized relationships of IWB with participative leadership, external work contacts and innovative output (proposed as an initial nomological network). Results demonstrate strong convergent validity of the IWB measure as all four dimensions contribute to an overall measure of IWB. Support for discriminant validity is weaker as correlations between some dimensions are relatively high. Finally, IWB is positively related with participative leadership, external work contacts and innovative output, providing first evidence for nomological validity. |
| Date: | 2008–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h200820&r=lab |
| By: | Mario Fortin (GREDI, Département d'économique, Université de Sherbrooke); Michael Doyen (Bureau de la Surveillance et de la Sécurité Financières du Mouvement des caisses Desjardins) |
| Abstract: | Il est bien connu dans la littérature relative à l’offre de travail que négliger les phénomènes d’hétérogénéité individuelle inobservée et de biais de sélection dans la modélisation, peut conduire à une estimation biaisée et non convergente des paramètres d’intérêt. Afin de corriger ces problèmes, Kyriazidou (2001) propose une estimation en deux étapes, tenant compte de la présence de biais de sélection, d’hétérogénéité individuelle non observable et d’une structure autorégressive. Dans un premier temps, une estimation convergente des paramètres inconnus de l’équation de participation au marché du travail est obtenue. Dans un deuxième temps, les coefficients estimés sont intégrés à la construction d’une pondération Kernel appliquée aux instruments de l’estimateur GMM asymptotiquement normal et convergent à un taux près de la racine de n. Les résultats de l’estimateur GMM proposé sont comparés à un estimateur « naïf » et ceux-ci concluent en la présence significative d’un biais de sélection et d’une structure autorégressive dans l’équation de l’offre de travail des femmes au Canada. De plus, ignorer la présence de l’effet de sélection tend à sous-estimer l’impact des variables liées au ménage, soit le nombre d’enfants et le revenu de travail du conjoint, et à surestimer l’effet positif du salaire sur l’offre de travail. |
| Keywords: | Sample selection, semiparametric models, labour supply, Generalized Method of Moments (GMM) |
| JEL: | J21 J22 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:08-23&r=lab |
| By: | Steve Bradley; Jim Taylor |
| Abstract: | This paper investigates the extent to which exam performance at the end of compulsory education has been affected by three major education reforms: the introduction of a quasimarket following the Education Reform Act (1988); the specialist schools initiative introduced in 1994; and the Excellence in Cities programme introduced in 1999. We use panel data for all state-funded secondary schools in England over 1992-2006. Using a panel of schools for all state-funded secondary schools in England (1992-2006), we find that about one-third of the improvement in school exam scores is directly attributable to the combined effect of the education reforms. The distributional consequences of the policy, however, are estimated to have been favourable, with the greatest gains being achieved by schools with the highest proportion of pupils from poor families. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005802&r=lab |
| By: | Fatma Gul Unal |
| Abstract: | This paper examines the relationship between farm size and yield per acre in Turkey using heretofore untapped data from a 2002 farm-level survey of 5,003 rural households. After controlling for village, household, and agroclimatic heterogeneity, a strong inverse relationship between farm size and yield is found to be prevalent in all regions of Turkey. The paper also investigates the impact of land fragmentation on productivity and labor input per acre, and finds a positive relationship. These results favor labor-centered theories that point to higher labor input per decare as the source of the inverse size-yield relationship. |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_551&r=lab |
| By: | Kang, Qiang (University of Miami); Mitnik, Oscar A. (University of Miami) |
| Abstract: | There is a debate on whether executive pay reflects rent extraction due to "managerial power" or is the result of arms-length bargaining in a principal-agent framework. In this paper we offer a test of the managerial power hypothesis by empirically examining the CEO compensation of U.S. public companies that were ever in financial distress between 1992 and 2005. Using a bias-corrected matching estimator that estimates the causal effects of financial distress, we find that, for the distressed firms, CEO turnover rates increase markedly and their CEOs, both incumbents and successors, experience significant reductions in total compensation. The bulk of the reduction in total compensation derives from the decline in value of stock option grants, which we argue is due to a change in the opportunistic timing of option grants. We define "lucky" grants as those with grant prices below or at the lowest stock price of the grant month, and we find that the proportion of lucky grants for financially distressed firms is higher before insolvency and lower upon and after insolvency, while the proportion for similar but solvent firms remains stable throughout the period. We interpret this evidence as consistent with a decrease in managerial power induced by a tightening in the "outrage" constraint due to the episode of financial distress. |
| Keywords: | CEO compensation, CEO turnover, financial distress, lucky grants, bias-corrected matching estimators |
| JEL: | G30 J33 M52 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3857&r=lab |
| By: | Azevedo, Susana; Pereira , Madalena; Ferreira, João; Pedroso, Vilma |
| Abstract: | Consumer behaviour research is the scientific study of the processes consumers use to select, secure, use and dispose of products and services that satisfy their needs. Firms can satisfy those needs only to the extent that they understand their customers. The main objective of this paper is to study the gender differences in consumer buying behaviour of a Portuguese population when they go shopping to buy apparel products. To attain this objective a survey was developed and administered across Portugal. The findings confirm the differences between women and men especially in terms of What, Where, When, and How they buy. |
| Keywords: | Consumer buying behaviour; Apparel; Gender. |
| JEL: | M00 M3 L81 |
| Date: | 2008–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11908&r=lab |
| By: | Edgar Cudmore (University of Western Ontario); John Piggott (University of New South Wales); John Whalley (University of Western Ontario) |
| Abstract: | In this paper we analyze income tax design in a two member household labor supply model where time spent on consumption together by the two household members is valued differently from time spent apart. We treat consumption as a non excludable public good to members of the household; one example would be where all household members or one alone can watch TV. When jointly consumed, however, TV services are valued more highly than the same consumption undertaken separately. We use this model to numerically investigate the welfare implications of different tax structures. In sharp contrast to existing literature, our results suggest the desirability of subsidizing secondary worker's labor supply. We also relate our discussion to existing individual-household tax unit literature. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:epuwoc:20084&r=lab |
| By: | Marcel Boyer |
| Abstract: | I characterize the performance of the Québec economy over the last quarter century: 1981-2007. Many indicators are presented: GDP, GDP per capita, population, job creation, employment rates, average weekly earnings, private investments, exports, debt, R&D. In spite of some strong sectors, the global economic performance of Québec has been significantly lower than that of the rest of Canada and the United States. Many challenges are confronting us. We are in a certain sense condemned to be more efficient and more innovative than our main competitors and partners in order to reverse the current trend towards marginality. We need a new quiet revolution capable of both reaffirming the social-democratic goals and principles that have become synonymous with modern Québec and emerging from a radically different set of ways, means and policies, that is, a new quiet revolution to implement a competitive social-democracy. <P>Je caractérise dans ce rapport la performance économique du Québec de 1981 à 2007 (26 ans). Plusieurs indicateurs sont présentés : PIB, PIB par habitant, population, création d’emplois, taux d’emploi, rémunération hebdomadaire moyenne, investissements privés, exportations, dette et R&D. Malgré la présence de secteurs en plein développement, la performance économique globale du Québec traîne dangereusement derrière celle du reste du Canada et des États-Unis. Plusieurs défis doivent être relevés. Nous sommes d’une certaine manière condamnés à être plus efficaces et plus innovateurs que nos principaux concurrents et partenaires afin de renverser la tendance actuelle vers la marginalité. Nous avons besoin d’une véritable nouvelle révolution tranquille incarnant les mêmes principes sociaux-démocrates que ceux qui ont présidé à l’avènement du Québec moderne mais s’appuyant sur des moyens, modalités et politiques radicalement différents, c’est-à-dire une nouvelle révolution tranquille pour implémenter une social-démocratie concurrentielle. |
| Keywords: | performance indicators, competitive social-democracy, indicateurs de performance, social-démocratie concurrentielle |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2008s-29&r=lab |
| By: | Fabrizio Onida (CESPRI, Bocconi University- Italy) |
| Abstract: | The paper starts with a brief recollection of International Labor Office (ILO)’s historical milestones – ILO being the only tripartite international organization with representatives of labour, industry and governments - covering the main Conventions on labour standards (including the four “core labour standards”). Then the paper focuses on ILO’s main duties as a supervisor of labour markets conditions and as an agent and direct player with local governments: designing appropriate policies for a “decent work” agenda in the world, pushing for the widest possible adoption of the Conventions themselves by member countries, monitoring compliance of those standards, promoting bilateral and multilateral actions with governments aimed at correcting major violations of these standards. Special emphasis is given to possible improvements in the effectiveness of ILO’s procedures and initiatives, under the assumption that actions based on positive incentives are far more plausible and effective than negative sanctions, especially in view of greater coherence between ILO and WTO mission in promoting a better governance of globalization. Examples of such actions are moral suasion on policy makers aimed at affecting labour legislation, design of unilateral trade concessions and/or regional trade liberalization agreements conditional on actual commitment to improve labour and social conditions in the target country (such as GSP+), joint initiatives with multinational companies and local government in developing countries so as to diffuse school attendance and eradicate worst forms of child labour , training of public administrators-legal experts-union leaders trough the ILO’s special training office in Turin (Italy). Summary references are made to the ongoing debate about globalization, inequalities, “race to the bottom”, quality of institutions. The final section summarizes major conclusions and recommendations that have been approved by CNEL’s general assembly on June 5, 2008, also in view of the annual meeting of AICESIS (International Association of Economic and Social Councils) held in Rome on June 12, 2008. |
| Keywords: | Labour standards, ILO, WTO, globalization |
| JEL: | F16 I28 J5 J78 K33 O19 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp218&r=lab |
| By: | Calvó-Armengol, Antoni (Universitat Autònoma de Barcelona); Patacchini, Eleonora (University of Rome La Sapienza); Zenou, Yves (Stockholm University) |
| Abstract: | This paper studies whether structural properties of friendship networks affect individual outcomes in education. We first develop a model that shows that, at the Nash equilibrium, the outcome of each individual embedded in a network is proportional to her Katz-Bonacich centrality measure. This measure takes into account both direct and indirect friends of each individual but puts less weight to her distant friends. We then bring the model to the data by using a very detailed dataset of adolescent friendship networks. We show that, after controlling for observable individual characteristics and unobservable network specific factors, the individual's position in a network (as measured by her Katz-Bonacich centrality) is a key determinant of her level of activity. A standard deviation increase in the Katz-Bonacich centrality increases the pupil school performance by more than 7 percent of one standard deviation. |
| Keywords: | centrality measure, peer influence, network structure, school performance |
| JEL: | A14 C31 C72 I21 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3859&r=lab |
| By: | Young-Bae Kim (University of Surrey) |
| Abstract: | The paper theoretically and empirically investigates the effect of changes in national labourmarket conditions on regional growth from the point of view of local economies. The mechanism of efficiency wage is introduced to a growth model and it is argued that local regions belonging to richer countries would experience slower economic growth than those in poorer countries, ceteris paribus. The model emphasises the process of interregional wage dependence in which national average wage or income plays an important role in determining regional wages and growth. The empirical findings from EU regional data also suggest that national income is significantly and negatively associated with regional growth. The adverse effect of national income on regional growth is also observed to be stronger among richer regions whose income is above the national average. |
| Keywords: | Artificial Neural Networks; Forecasting; Inflation |
| JEL: | C51 C52 C53 E31 E37 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:1008&r=lab |
| By: | Valentino Dardanoni (University of Palermo); Mario Fiorini (School of Finance and Economics, University of Technology, Sydney); Antonio Forcina (University of Perugia) |
| Abstract: | The aim of this paper is to test for stochastic monotonicity in intergenerational socio-economic mobility tables. In other words we question whether having a parent from a high socio-economic status is never worse than having one with a lower status. We ?rst test a set of 149 intergenerational mobility tables in 35 different countries and ?nd that monotonicity cannot be rejected in hardly any table. We then explain how a number of covariates such as education, cognitive and non-cognitive skills can be used to investigate whether monotonicity still holds after conditioning on these variables. Based on the NCDS cohort data from the UK, our results provide evidence that monotonicity holds even conditionally. |
| Keywords: | intergenerational mobility; stochastic monotonicity |
| Date: | 2008–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:uts:wpaper:156&r=lab |
| By: | Shiqing Jiang; Ming Lu; Hiroshi Sato |
| Abstract: | This paper studies the impact of income inequality on the subjective well-being of different social groups in urban China. We classify urban social groups according to their hukou status: rural migrants, “born” urban residents, and “acquired” urban residents who once changed their hukou identity from rural to urban. We focus on how the horizontal inequality—income disparity between migrants and urban residents—affects individual happiness. The main results are as follows. First, migrants suffer from unhappiness when the horizontal inequality increases, but urban residents show a much smaller aversion to the horizontal inequality. Second, migrants will not be happier if their relative incomes within their migrant group increase, while urban residents do become happier when their incomes increase within their group’s income distribution. Third, “acquired” urban residents have traits of both migrants and “born” urban residents. They have an aversion to the horizontal inequality like migrants, and they also favor higher relative income among urban residents. Fourth, “born” urban residents have lower happiness scores when they are old. People who are Communist Party members strongly dislike the horizontal inequality. Our findings suggest that migrants, “acquired” urban residents, elderly people and Party members from “born” urban residents are the potential proponents of social integration policies in urban China. |
| Keywords: | Horizontal inequality, Happiness, Hukou identity, Migration, Social integration; horizontal inequality, happiness, Houku identity, migration, social integration |
| JEL: | I31 O15 R23 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:22308&r=lab |
| By: | Pablo Selaya; Rainer Thiele |
| Abstract: | The paper examines empirically the proposition that aid to poor countries is detrimental for external competitiveness, giving rise to Dutch disease type effects. At the aggregate level, aid is found to have a positive effect on growth of labour productivity. A sectoral decomposition shows that the effect is significant and positive both in the tradables and the nontradables sectors. The paper thus finds no empirical support for the hypothesis that aid reduces external competitiveness in developing countries. Possible reasons are the existence of large idle labour capacity and high levels of dollarization in financial liabilities at the firm level |
| Keywords: | Foreign aid, sectoral labour productivity, Dutch disease |
| JEL: | F35 O47 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1468&r=lab |
| By: | Bugarin, Maurício; Portugal, Adriana; Sakurai, Sérgio |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_150&r=lab |
| By: | John K. Dagsvik, Torbjørn Hægeland and Arvid Raknerud (Statistics Norway) |
| Abstract: | In this paper we develop likelihood based methods for statistical inference in a joint system of equations for the choice of length of schooling and earnings. The model for schooling choice is assumed to be an ordered probit model, whereas the earnings equation contains variables that are flexible transformations of schooling and experience, with corresponding coefficients that are allowed to be heterogeneous across individuals. Under the assumption that the distribution of the random terms of the model can be expressed as a particular finite mixture of multinormal distributions, we show that the joint probability distribution for schooling and earnings can be expressed on closed form. In an application of our method on Norwegian data, we find that the mixed Gaussian model offers a substantial improvement in fit to the (heavy-tailed) empirical distribution of log-earnings compared to a multinormal benchmark model. |
| Keywords: | Schooling choice; earnings equation; normal mixtures; treatment effects; self-selection; random coefficients; full information maximum likelihood |
| JEL: | C31 I20 J30 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:567&r=lab |
| By: | Thomas Masterson |
| Abstract: | Gender affects household spending in two areas that have been widely studied in the literature. One strand documents that greater female bargaining power within households results in a variety of shifts in household production and consumption. An important source of intrahousehold bargaining power is ownership of assets, especially land. Another strand examines gender bias in spending on children. This paper addresses both strands simultaneously. In it, differences in spending on education are examined empirically, at both the household and the individual level. Results are mixed, though the balance of evidence weighs toward pro-male bias in spending on education at the household level. Results also indicate that the relationship between asset ownership and female bargaining power within the household is contingent on the type of asset. |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_550&r=lab |
| By: | Aslihan Arslan |
| Abstract: | Economic models of land allocation may lead to expectations for farmer response that “surprisingly" do not materialize, if market prices fail to reflect the value of farmers' product. “Shadow prices" rather than market prices explain resource allocation better for farmers who attach significant non-market values to their own crops. I extend the theoretical model in Arslan and Taylor (2008) to explain why the land allocation of such farmers may not respond to market signals even if transaction costs are not binding. I estimate the proportion of land subsistence maize farmers allocate to traditional versus modern maize varieties using nationally representative rural household data from Mexico – the center of diversity of maize. I conclude that shadow prices explain land allocation better than market prices and discuss the importance of non-market values in understanding both farmers' supply response and on-farm conservation of traditional crops with non-market values |
| Keywords: | Land allocation, shadow prices, non-market values, traditional crops, on-farm, conservation, Mexico |
| JEL: | O12 O13 Q12 Q39 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1469&r=lab |
| By: | Jože P. Damijan; Crt Kostevc |
| Abstract: | Present paper studies the within-country regional effects of trade liberalization in transition countries. We argue that FDI inflows can be an important factor to accelerate the regional adjustment process in the home country. In order to underspin this theoretically, we first augment the new economic geography models by breaking the implied regional symmetry and by introducing capital as a second factor of production. Major contribution of our approach is that it allows for inter-regional as well as international capital mobility while labor is assumed to be immobile. Numerical simulations of our model indicate that this should contribute to faster convergence of relative regional wages in the smaller region. In addition, we examine the exact adjustment pattern of relative regional wages in five transition countries in the period 1990-2004 after they have liberalized their trade with the EU. First, we show that in four out of five transition countries there is a significant u-shaped adjustment pattern of regional wages after they opened up to foreign trade. And second, we find robust econometric confirmation that in three of the five countries FDI has contributed significantly to faster adjustment of relative regional wages. |
| Keywords: | economic geography, trade costs, wages, transition countries, foreign direct investment |
| JEL: | F16 P23 R13 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:22208&r=lab |
| By: | Rosario Crinò (Bocconi University, Milan - Italy) |
| Abstract: | Using comparable industry-level data for nine Western European countries, this paper finds that the international relocation of service activities (service offshoring) exerts positive and economically large effects on domestic productivity. A one percentage point increase in the proxy for service offshoring (i.e., the share of imported private services in total non-energy input purchases) is found to raise Total Factor Productivity by about 0.5%. |
| Keywords: | Service Offshoring; Total Factor Productivity |
| JEL: | F1 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp220&r=lab |
| By: | Hans-Georg Petersen; Markus Kirchner |
| Abstract: | The paper sheds some light on the education returns in Germany in the post war period. After describing higher education in Germany the current stand of higher education financing within the single states is presented. In six states tuition fees will be introduced in 2007/08 and discussions are going on in even some more. In the second part of the paper an empirical analysis is done using longitudinal data from the German social pension system. The analysis over the whole lifecycle renders results which proof that the higher education advantages are quite remarkable and might be a justification for more intensified financing by tuition fees. But all this has to be embedded into an encompassing strategy of tax and social policy, especially to prevent a strengthened process of social selection, which would be counterproductive for an increased and highly qualified human capital in Germany. |
| Keywords: | education return, tuition fees, tertiary education, vocational education, human capital, lifetime income, income contingent loans |
| JEL: | J26 J24 J13 I28 I22 I21 H81 D14 D1 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:pot:fiwidp:55&r=lab |
| By: | Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Noseleit, Florian (Friedrich-Schiller-University Jena) |
| Abstract: | We use longitudinal data over a decade on start-ups and employment in Swedish regions and analyze the effect of start-ups on subsequent employment growth. We extend previous analyses by examining the influence of regional start-ups in a sector on regional employment growth in the same sector and on other sectors. We find differences between different types of start-ups. Knowledge-intensive start-ups seem to have larger effects on the regional economy. In particular, start-ups in high-end services have significant negative impacts on employment in other sectors but a positive long-run impact. This is consistent with the idea that start-ups are a vehicle for changes in the composition of regional industry. Moreover, our results illustrate that the known S-shaped pattern can be attributed to different effects that start-ups in a sector have on employment change in the same sector and in others. |
| Keywords: | Entrepreneurship; Employment Growth; Regional; Development; Start-ups |
| JEL: | J23 M13 O52 |
| Date: | 2008–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0155&r=lab |
| By: | Katja Rost; Margit Osterloh |
| Abstract: | The financial crisis made apparent the fact that managers and the boards of banks had failed to see the implications of irrational behavior and had ignored the risk associated with group think. Taking data from Switzerland our study shows that there is an increasing homogeneity of management and board teams. Most committees mainly consist of males with a managerial background. We derive from the existing literature the hypotheses that in radically changing environments women and individuals without a managerial background are less affected by systematic forecasting errors. Using a dataset collected shortly before the peak of the financial crisis we demonstrate that the groups which are highly underrepresented in most boards and management teams were significantly more capable of giving correct forecasts than the groups generally best represented in boards and management teams. To mitigate corporate governance failures we argue that firms should use simple social mechanisms in order to increase the diversity of their management and board teams while at the same time avoiding the danger of time consuming team conflicts. They should therefore include criss-cross individuals, i.e. individuals with no clear-cut group affiliation such as males with a nonmanagerial background as well as women with a management-related background. |
| Keywords: | Board diversity; psychological economics; forecasting predictions; gender; expert knowledge; uncertainty |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2008-28&r=lab |
| By: | Venditto, Bruno; Caruso , Immacolata |
| Abstract: | The expansion and the rooting of non European immigrants which is taking place in the more advanced European countries, mirror a world context which is marked by imbalances both in terms of growth and welfare. A correct analysis of migration, of its structural characteristics and of the new dynamics of migration flows must consider the globalisation process as well as the effect that this is having with regard to the movement of people, in this context the pull and push factors mutually reinforce a phenomenon which can influence either in a positive or in a negative way the international relationships among countries. In the last quarter of the century, a steady increase of migrants have crossed Europe; this has generated a complex relationship made of integration and rejection, adaptation and conflicts, which has influenced all aspect of both economic and social life, producing new phenomenon, giving birth to new problems which require new approaches and solutions. Italy is part of such depiction since has witnessed in the last decades, a solid influx of immigrants which have increased with a high rate of growth. In fact in 2006 Italy with 2,938,922 legal immigrants, appears to be among the major destination of migrants in Europe, following Germany, Spain and France with 7,287,980, 3,371,394 and 3,263,186 immigrants respectively and just before Great Britain with 2,857,000 immigrants. Using the available statistical data, disaggregated at national, regional and provincial level, it will be possible to have an overall picture of the phenomenon described above and to compare the Italian case with the events in the other European countries. In this way we can have a better understanding of the process underlying migration in order to identify future scenarios |
| Keywords: | International Migration; Europe; Italy |
| JEL: | F22 O15 N30 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11820&r=lab |
| By: | Rick Harbaugh (Department of Business Economics and Public Policy, Indiana University Kelley School of Business); Ted To (Bureau of Labor Statisics) |
| Abstract: | When can you cheat some people without damaging your reputation among others? In a trust game between a firm and a series of individuals from two groups of different sizes, the firm has more incentive to cheat minority individuals because trade with the minority is less frequent and the long-term benefits of a reputation for fairness toward the minority are correspondingly smaller. If the majority is sufficiently large it gains nothing from a solidarity strategy of punishing opportunism against the minority, so the firm can continue doing business with the majority even if it cheats the minority. When some firms have a preference-based bias against the minority, the interaction with reputation effects gives all firms a stronger incentive to cheat the minority, and discrimination is the unique equilibrium for firms of intermediate patience. |
| Keywords: | discrimination, trust, social capital, opportunism, reputation spillover |
| JEL: | J71 J24 D63 L14 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:iuk:wpaper:2008-07&r=lab |
| By: | Burkhard Heer (Free University of Bolzano-Bozen, School of Economics and Management,); Andreas Irmen (University of Heidelberg, Department of Economics) |
| Abstract: | We study the effect of a declining labor force on the incentives to engage in labor-saving technical change and ask how this effect is influenced by institutional characteristics of the pension scheme. When labor is scarcer it becomes more expensive and innovation investments that increase labor productivity are more profitable. We incorporate this channel in a new dynamic general equilibrium model with endogenous economic growth and heterogeneous overlapping generations. We calibrate the model for the US economy. First, we establish that the net effect of a decline in population growth on the growth rate of per-capita magnitudes is positive and quantitatively significant. Second, we find that the pension system matters both for the growth performance and for individual welfare. Third, we show that the assessment of pension reform proposals may be different in an endogenous growth framework as opposed to the standard framework with exogenous growth. |
| Keywords: | Growth, Demographic Transition, Capital Accumulation, Pension Reform |
| JEL: | O41 C68 O11 D91 D31 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0479&r=lab |