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on Labour Economics |
| By: | Barth, Erling (Institute for Social Research, Oslo); Dale-Olsen, Harald (Institute for Social Research, Oslo) |
| Abstract: | Motivated by models of worker flows, we argue in this paper that monopsonistic discrimination may be a substantial factor behind the overall gender wage gap. On matched employer-employee data from Norway, we estimate establishment-specific wage premiums separately for men and women, conditioning on fixed individual effects. Regressions of worker turnover on the wage premium identify less wage elastic labour supply facing each establishment of women than that of men. Workforce gender composition is strongly related to employers' wage policies. The results suggest that 70-90 percent of the gender wage gap for low-educated workers may be attributed to differences in labour market frictions between men and women, while the similar figures for high-educated workers ranges from 20 to 70 percent. |
| Keywords: | gender wage gap, monopsony |
| JEL: | J16 J31 J42 J63 J71 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3930&r=lab |
| By: | Mukherjee, Dipa |
| Abstract: | Employment creation and wage security have been primary goals of developing countries. The present paper analyses the wage-employment scenario in India in the post-reform period. The workforce structure is exhibiting upward mobility across wage classes, moving towards regular employment, and shifting in favour of tertiary sector jobs – the pace decelerating in the second half of the study period. Thus expansion of employment has not been as distress a phenomenon as often apprehended. There is a shift of middle wage level jobs from regular to casual employment, leading to declining inequality among casual workers and increased inequality among regulars. However, availability of mandays is decreasing, especially among casual workers. Perhaps jobs are continuously and decisively getting transformed from regular to casual employment and then being outsourced to the self-employeds. Increasing disparity between workers of High and Low Income States, and between White collar and Blue Collar occupations are concerns that need to be addressed. Creating more mandays of work and facilitating capacity building through education and skill formation should be the policy focus. |
| Keywords: | Employment; Wages; Reforms; Inequality |
| JEL: | J31 J21 J23 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12753&r=lab |
| By: | Kyyrä, Tomi (VATT, Helsinki); Parrotta, Pierpaolo (Aarhus School of Business); Rosholm, Michael (Aarhus School of Business) |
| Abstract: | We consider the consequences of working part-time on supplementary unemployment insurance benefits in the Danish labour market. Following the "timing-of-events" approach we estimate causal effects of subsidized part-time work on the hazard rate out of unemployment insurance benefit receipt. We find evidence of a negative lock-in effect and a positive post-treatment effect, both of which vary across individuals. The resulting net effect on the expected unemployment duration is positive for some groups (e.g. married women) and negative for others (e.g. young workers). |
| Keywords: | unemployment benefits, part-time work, lock-in effect, treatment effect, duration analysis |
| JEL: | C41 J65 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3920&r=lab |
| By: | Clark, Andrew E. (PSE) |
| Abstract: | This paper uses repeated cross-section data ISSP data from 1989, 1997 and 2005 to consider movements in job quality. It is first underlined that not having a job when you want one is a major source of low well-being. Second, job values have remained fairly stable over time, although workers seem to give increasing importance to the more "social" aspects of jobs: useful and helpful jobs. The central finding of the paper is that, following a substantial fall between 1989 and 1997, subjective measures of job quality have mostly bounced back between 1997 and 2005. Overall job satisfaction is higher in 2005 than it was in 1989. Last, the rate of self-employment has been falling gently in ISSP data; even so three to four times as many people say they would prefer to be self-employed than are actually self-employed. As the self-employed are more satisfied than are employees, one consistent interpretation of the above is that the barriers to self-employment have grown in recent years. |
| Keywords: | employment, unemployment, self-employment, life satisfaction, job quality, job satisfaction |
| JEL: | J21 J28 J3 J6 J81 L26 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3940&r=lab |
| By: | Majumder, Rajarshi |
| Abstract: | Globalisation has proceeded at an unimagined pace in the last few decades. While it has resulted in high growth of global income, questions are raised about the equity of such growth. Disparity seems to be aggravating, as globalisation seems to be depressing the labour market. Unemployment is rising, both absolutely and as proportion of labour force, especially in developing regions. Elasticity of employment is low and falling further. Whatever little employment expansion is occurring is mostly vulnerable in nature, remuneration levels are scanty, and working poverty is substantially high. Using a Globalisation Index, it is observed that except the developed countries, pace and levels of globalisation are affecting the labour market negatively. Employment growth and elasticities are lower in regions that have had rapid globalisation. Institutional mechanism and improving social security for workers must therefore precede global integration of the economy. |
| Keywords: | Globalisation; Labour; Employment; Unemployment; Wages; Working Poverty; |
| JEL: | J60 F02 J21 J30 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12814&r=lab |
| By: | Mark Bils (University of Rochester); Yongsung Chang (University of Rochester); Sun-Bin Kim (Korea University) |
| Abstract: | We model worker heterogeneity in the rents from being employed in a Diamond-Mortensen-Pissarides model of matching and unemployment. We show that heterogeneity, reflecting differences in match quality and worker assets, reduces the extent of fluctuations in separations and unemployment. We find that the model faces a trade-off-it cannot produce both realistic dispersion in wages across workers and realistic cyclical fluctuations in unemployment. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:roc:rocher:543&r=lab |
| By: | Majumder, Rajarshi; Mukherjee, Dipa |
| Abstract: | State interventions into Labour policies in India are directed towards ensuring both job security and income security. In this paper we look at likely impact of such policies. The laws are found to serve the organised workers primarily while large masses of unorganised workers are without any security. To escape legislations, employers have substituted labour by capital, hired casual workers, and set up ancillary units. Consequently, output elasticity of employment has consistently declined and there is marked casualisation of workforce. Legislations have thus institutionalised and perpetuated labour market dualism. Reforms herein are necessary but should be implemented in a careful and phased manner to avoid deteriorating conditions in both the sectors in the name of uniformity. Linking retrenchment with Area Regeneration Programmes; upgrading employability quotient through training; allowing employers to transfer workers between units; providing easy credit and technical consultancy; and cooperative formation would help the workers. |
| Keywords: | Labour; State; Globalisation; Unorganised Sector; |
| JEL: | E24 J21 J38 I38 K31 J30 J23 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12409&r=lab |
| By: | Radowski, Daniel (Deutsche Bundesbank); Bonin, Holger (ZEW Mannheim) |
| Abstract: | The paper uses a new German employer survey on wage setting practices to analyze incidence and sources of nominal wage rigidity in services vs. manufacturing. We observe that wage freezes are significantly more frequent and wage cuts less frequent in services. Reasons preventing wage cuts reported by employers suggest that fear of excess worker turnover could explain this distinct behavior. |
| Keywords: | nominal wage rigidity, efficiency wages, manufacturing and services, Germany |
| JEL: | J31 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3923&r=lab |
| By: | Piracha, Matloob (University of Kent); Vadean, Florin (University of Kent) |
| Abstract: | This paper explores the impact of return migration on the Albanian economy by analysing the occupational choice of return migrants while explicitly differentiating between self-employment as either own account work or entrepreneurship. After taking into account the possible sample selection into return migration, we find that the own account workers have characteristics closer to non-participants in the labour market (i.e. lower education levels), while entrepreneurship is positively related to schooling, foreign language proficiency and savings accumulated abroad. Furthermore, compared to having not migrated, return migrants are significantly more likely not to participate in the labour market or to be entrepreneurs. However, after a one year re-integration period, the effect on non participation vanishes and that on entrepreneurship becomes stronger. As for non-migrants, the migration experience would have increased their probability to be entrepreneurs showing the positive impact of migration on job creating activities in Albania. |
| Keywords: | return migration, occupational choice, sample selection |
| JEL: | C35 F22 J24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3922&r=lab |
| By: | Karanassou, Marika (University of London); Sala, Hector (Universitat Autònoma de Barcelona) |
| Abstract: | The debate in Australia on the (constant-output) elasticity of labour demand with respect to wages has wrongly sidelined the role of capital stock as a determinant of employment (Webster, 2003). As far back as 1991, Pissarides had argued that the influence of capital stock on the performance of the labour market is crucial but not well understood, a research area which is particularly relevant for Australia. This paper attempts to fill this void by estimating a multi-equation labour market model comprising labour demand, wage setting and labour supply equations. The model is used to examine the causes of the unemployment upturn in 1973-1983 and the subsequent decline in 1993-2006. Our results show that (i) the main determinants of the unemployment rise in the 1970s and early 1980s were wage-push factors, the two oil price shocks and the increase in interest rates, and (ii) the acceleration in capital accumulation was the crucial driving force of unemployment in the 1990s and 2000s. Furthermore, although the recent boom in the terms of trade is equally important, its downward effect on unemployment was partially reversed by the resulting decrease in net foreign demand. |
| Keywords: | labour market dynamics, capital accumulation, chain reaction theory |
| JEL: | E22 E24 J21 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3924&r=lab |
| By: | Deng Quheng; Li Shi |
| Abstract: | Coupled with advances in enterprise reform and changes in the wage structure, earnings inequality in urban China has been increasing, and this has contributed significantly to rising income inequality. Using urban household survey data from the 1988, 1995 and 2002 waves of the China Household Income Project, in this paper, we decompose earnings inequality in urban China by using the regression-based decomposition methods developed by Fields (1998), Morduch and Sicular (2002) and Shorrocks (1999). The decomposition results indicate that the effects of gender and membership of the Communist Party of China on earnings inequality have changed little. While work experience had a reduced effect on earnings inequality, the effects of education and occupation have increased. The contributions of ownership status and industry to earnings inequality have increased. Regional effects have been the largest recent contributor to earnings inequality. |
| Keywords: | earnings inequality, regression-based decompositions, urban China |
| JEL: | D31 J31 O53 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd08-021&r=lab |
| By: | Brown, J. David (Heriot-Watt University, Edinburgh); Hotchkiss, Julie L. (Georgia State University); Quispe-Agnoli, Myriam (Federal Reserve Bank of Atlanta) |
| Abstract: | Do firms employing undocumented workers have a competitive advantage? Using administrative data from the state of Georgia, this paper investigates the incidence of undocumented worker employment across firms and how it affects firm survival. Firms are found to engage in herding behavior, being more likely to employ undocumented workers if competitors do. Rivals' undocumented employment harms firms' ability to survive, while firms' own undocumented employment strongly enhances their survival prospects. This suggests that firms enjoy cost savings from employing lower-paid undocumented workers at wages less than their marginal revenue product. The herding behavior and competitive effects are found to be much weaker in geographically broad product markets, where firms have the option to shift labor-intensive production out of state or abroad. |
| Keywords: | undocumented workers, firm dynamics, monopsony, immigration policy |
| JEL: | L1 J23 J61 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3936&r=lab |
| By: | Nayak, Purusottam; Mahanta, Bidisha |
| Abstract: | The present paper is an attempt to analyze the status of women empowerment in India using various indicators like women’s household decision making power, financial autonomy, freedom of movement, political participation, acceptance of unequal gender role, exposure to media, access to education, experience of domestic violence etc based on data from different sources. The study reveals that women of India are relatively disempowered and they enjoy somewhat lower status than that of men in spite of many efforts undertaken by government. Gender gap exists regarding access to education and employment. Household decision making power and freedom of movement of women vary considerably with their age, education and employment status. It is found that acceptance of unequal gender norms by women are still prevailing in the society. More than half of the women believe wife beating to be justified for one reason or the other. Fewer women have final say on how to spend their earnings. Control over cash earnings increases with age, education and with place of residence. Women’s exposure to media is also less relative to men. Rural women are more prone to domestic violence than that of urban women. A large gender gap exists in political participation too. The study concludes by an observation that access to education and employment are only the enabling factors to empowerment, achievement towards the goal, however, depends largely on the attitude of the people towards gender equality. |
| Keywords: | Women Empowerment; Gender |
| JEL: | O15 |
| Date: | 2009–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12685&r=lab |
| By: | Iga Magda (The Polish Ministry of Labour and Social Policy); François Rycx (Centre Emile Bernheim, DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and IZA-Bonn.); Ilan Tojerow (DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and NBB and IZA-Bonn.); Daphné Valsamis (DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels.) |
| Abstract: | This study compares the structure and determinants of inter-industry wage differentials in Eastern and Western European countries (namely Belgium, Italy, the Netherlands, Norway, Portugal and Spain compared with Latvia, Lithuania, the Czech Republic, Poland and Slovakia). To do so, we use a unique harmonised, linked employer–employee data set, the 2002 European Structure of Earnings Survey. Findings show substantial differences in earnings across sectors in all countries, even when controlling for a wide range of employee, job and employer characteristics. The hierarchy of sectors in terms of wages appears to be quite similar in Eastern and Western European countries. Among high-wage sectors, we find the energy (coke, petroleum, gas, electricity and nuclear power), chemical, financial and computer industries. In contrast, it is in the traditional sectors (wood and cork industry, textile, clothing and leather industry, hotels and restaurants, and retailing) that wages are lowest. Further results suggest that the dispersion of inter-industry wage differentials fluctuates considerably across countries. It is relatively small in Norway and Belgium, large in the Netherlands, Italy, Spain, Poland and the Czech Republic, and very large in Portugal, Latvia, Lithuania and Slovakia. Our findings support the hypothesis of a negative relationship between the dispersion of inter-industry wage differentials and a country’s degree of corporatism. |
| Keywords: | Inter-industry wage differentials, Collective bargaining, Europe, Matched employer-employee data. |
| JEL: | J31 J51 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-003&r=lab |
| By: | Antonio Merlo (Department of Economics, University of Pennsylvania); Kenneth I. Wolpin (Department of Economics, University of Pennsylvania) |
| Abstract: | In this paper, we study the relationship among schooling, youth employment and youth crime. The framework, a multinomial discrete choice vector autoregression, provides a comprehensive analysis of the dynamic interactions among a youth’s schooling, work and crime decisions and arrest and incarceration outcomes. We allow for observable initial conditions, unobserved heterogeneity, measurement error and missing data. We use data from the NLSY97 on black male youths starting from age 14. The estimates indicate important roles both for heterogeneity in initial conditions and for stochastic events that arise during one’s youth in determining outcomes as young adults. |
| Keywords: | crime, schooling, work, VAR |
| JEL: | K42 J24 J15 |
| Date: | 2008–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:09-002&r=lab |
| By: | Gimpelson, Vladimir (CLMS, Moscow Higher School of Economics); Lukiyanova, Anna (CLMS, Moscow Higher School of Economics) |
| Abstract: | The paper starts with discussing institutional framework for public sector wage setting in Russia. Given that individual choice of the sector is endogenous to wages, the authors recommend alternative econometric techniques for the public-private wage gap estimation. Applying switching regression that allows correcting for non-random sector selection, the paper provides wage gap estimates for various demographic, occupational, and territorial population subgroups. As it is shown, there is significant cross-group variation in the wage gap. The paper concludes that to eliminate the negative gap wages in the public sector should be linked to the private sector wages at the regional level. |
| Keywords: | public sector |
| JEL: | J31 J45 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3941&r=lab |
| By: | Andrew Sharpe; Jean-François Arsenault; Peter Harrison |
| Abstract: | The most direct mechanism by which labour productivity affects living standards is through real wages, that is, wages adjusted to reflect the cost of living. Between 1980 and 2005, the median real earnings of Canadians workers stagnated, while labour productivity rose 37 per cent. This report analyzes the reasons for this situation. It identifies four factors of roughly equal importance: rising earning inequalities; falling terms of trade for labour; a decrease in labour’s share of GDP; and measurement issues. This report also explores the relationship between labour productivity and real wages by province and by sector, as well as in the United States and in other high-income countries. |
| Keywords: | Productivity, Real Wages, Earnings, Labour Share, Inequalities |
| JEL: | E20 E25 O51 O40 J38 J39 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:0808&r=lab |
| By: | Stephen Taylor (Department of Economics, University of Stellenbosch); Derek Yu (Department of Economics, University of Stellenbosch) |
| Abstract: | The needs to find ways of lifting people out of poverty and to transform the existing patterns of inequality in South Africa are high on the country’s development agenda. Much hope is often vested in education as an opportunity for children from poor households to overcome the disadvantage of their background and escape poverty. The logic of this is often conceived of in terms of the human capital model, according to which education improves an individual’s productivity, which in turn is rewarded on the labour market by higher earnings. However, there is a circularity in the relationship between socio-economic status (SES) and education, in that it is well known that a student’s SES has an important influence their educational achievement. Drawing on data from the recent Progress in International Reading Literacy Study (PIRLS 2006), this paper investigates the extent to which SES affects educational achievement in the case of South Africa, and moves on to consider the implications of this for the ability of the education system to be an institution that transforms existing patterns of inequality rather than reproducing such patterns. |
| Keywords: | South Africa, socio-economic status, education, educational achievement, educational inequality, economic development |
| JEL: | I20 I21 I30 O15 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers73&r=lab |
| By: | Enrico Moretti (University of California, Berkeley, USA and The Rimini Centre of Economic Analisys, Italy) |
| Abstract: | A large literature has documented a signi cant increase in the return to college over the past 30 years. This increase is typically measured using nominal wages. I show that from 1980 to 2000, college graduates have increasingly concentrated in metropolitan areas that are characterized by a high cost of housing. This implies that college graduates are increasingly exposed to a high cost of living and that the relative increase in their real wage may be smaller than the relative increase in their nominal wage. To measure the college premium in real terms, I de ate nominal wages using a new CPI that allows for changes in the cost of housing to vary across metropolitan areas and education groups. I nd that half of the documented increase in the return to college between 1980 and 2000 disappears when I use real wages. This nding does not appear to be driven by di erences in housing quality and is robust to a number of alternative speci cations. The implications of this nding for changes in well-being inequality depend on why college graduates sort into expensive cities. Using a simple general equilibrium model, I consider two alternative explanations. First, it is possible that the relative supply of college graduates increases in expensive cities because college graduates are increasingly attracted by amenities located in those cities. In this case, higher cost of housing re ects consumption of desirable local amenities, and there may still be a signi cant increase in well-being inequality even if the increase in real wage inequality is limited. Alternatively, it is possible that the relative demand of college graduates increases in expensive cities due to shifts in the relative productivity of skilled labor. In this case, the relative increase in skilled workers' standard of living is o set by higher cost of living. The empirical evidence indicates that relative demand shifts are more important than relative supply shifts, suggesting that the increase in well-being inequality between 1980 and 2000 is smaller than the increase in nominal wage inequality. I thank David Card, Tom Davido , Ed Glaeser, Chang-Tai Hsieh, Pat Kline, Douglas Krupka and David Levine for insightful conversations, and seminar participants at Berkeley Economics, Berkeley Haas, Collegio Carlo Alberto in Torino, IZA, San Francisco Federal Reserve and UC Merced for many useful comments. I thank Emek Basker for generously providing the Accra data on consumption prices. Issi Romen, Mariana Carrera, Justin Gallagher, Jonas Hjort, Max Kasy and Zach Liscow provided excellent research assistance. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:34-08&r=lab |
| By: | Bredemeier, Christian (University of Dortmund); Juessen, Falko (University of Dortmund) |
| Abstract: | We propose a new explanation for differences and changes in labor supply by gender and marital status, and in particular for the increase in married women's labor supply over time. We argue that this increase as well as the relative constancy of other groups' hours are optimal reactions to outsourcing labor in home production becoming more attractive to households over time. To investigate this hypothesis, we incorporate heterogeneous agents into a household model of labor supply and allow agents to trade home labor. This model can generate the observed patterns in US labor supply by gender and marital status as a reaction to declining frictions on the market for home services. We provide an accounting exercise to highlight the role of alternative explanations for the rise in hours in a model where home labor is tradable. |
| Keywords: | labor supply, gender, home production, heterogeneity |
| JEL: | J22 J16 E13 D13 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3944&r=lab |
| By: | Vicente Cuñat; Maria Guadalupe |
| Abstract: | This paper studies the effect of changes in foreign competition on the structure of compensation and incentives of U.S. executives. We measure foreign competition as import penetration and use tariffs and exchange rates as instrumental variables to estimate its causal effect on pay. We find that higher foreign competition leads to more incentive provision in a variety of ways. First, it increases the sensitivity of pay to performance. Second, it increases whithin-firm pay differentials between executive levels, with CEOs typically experiencing the largest wage increases, partly because they receive the steepest incentive contracts. Finally, higher foreign competition is also associated with a higher demand for talent. These results indicate that increased foreign competition can explain some of the recent trends in compensation structures. |
| Keywords: | Incentives, Performance-related-pay, Wage Structure, Promotions, Demand for talent, Globalization, Product Market Competition |
| JEL: | M52 L1 J31 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1134&r=lab |
| By: | Nikolaj Malchow-Møller (University of Southern Denmark); Bertel Schjerning (Department of Economics, University of Copenhagen); Anders Sørensen (Copenhagen Business School) |
| Abstract: | This paper analyses the importance of entrepreneurs for job creation and wage growth. Relying on unique data that cover all establishments, firms and individuals in the Danish private sector, we are able to distil a number of different subsets from the total set of new establishments – subsets which allow us to more precisely capture the "truly new" or "entrepreneurial" establishments than in previous studies. Using these data, we find that while new establishments in general account for one third of the gross job creation in the economy, entrepreneurial establishments are responsible for around 25% of this, and thus only account for about 8% of total gross job creation in the economy. However, entrepreneurial establishments seem to generate more additional jobs than other new establishments in the years following entry. Finally, the jobs generated by entrepreneurial establishments are to a large extent low-wage jobs, as they are not found to contribute to the growth in average wages. |
| Keywords: | job creation; entrepreneurial establishments; wage growth |
| JEL: | L26 J21 J31 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieca:2009_01&r=lab |
| By: | Nikolaj Malchow-Møller (University of Southern Denmark); James R. Markusen (University of Colorado, Boulder); Bertel Schjerning (Department of Economics, University of Copenhagen) |
| Abstract: | Many papers have documented a wage premium in foreign-owned and large firms. However, there is very little formal theory in the literature and empirical analyses are typically not based on hypotheses which are rigorously derived from theory. This paper contributes to the theory-empirics gap by developing a model that allows for two “pure” explanations for the wage premium. The first is a heterogenous-worker explanation along the lines of Yeaple (2005), where firms that select more scaleintensive technologies select ex-ante more productive workers. In this case, the wage premium is a pure selection phenomenon. The second explanation builds on the heterogeneous-firm model of Melitz (2003) combined with on-the-job learning as in Markusen (2001). Productivity differences between firms are internalized by ex-ante homogeneous workers, so the wage premium is a pure learning phenomenon due to ex-post higher productivity in foreign firms. Our model yields a number of precise empirical hypotheses. When these predictions are tested on Danish matched employer-employee data, we find that both explanations play a role in explaining the observed wage premium. Specifically, the foreign- and large-firm premiums explained by selection are in the neighborhood of 30-65% of the total premium, with the remainder consistent with learning. There is also considerable support for a number of other predictions specific to the worker-learning explanation. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuieca:2009_02&r=lab |
| By: | Brigitte Dormont (LEGOS - Université Paris Dauphine - Paris IX, IEMS - Université de Lausanne); Anne-Laure Samson (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre) |
| Abstract: | This article examines the link between restrictions on the number of physicians and general practitioners' earnings. Using a representative panel of 6,016 French self-employed GPs over the years 1983 to 2004, we show that the policies aimed at manipulating the number of places in medical schools strongly affect physicians' permanent level of earnings.We estimate an earnings function to identify experience, time and cohort effects. The cohort effect is very large: the estimated gap in earnings between "good" and "bad" cohorts may reach 25%. GPs beginning during the eighties have the lowest permanent earnings: they belong to the baby-boom numerous cohorts and faced the consequences of an unlimited number of places in medical schools. Conversely, the decrease in the number of places in medical schools led to an increase in permanent earnings of GPs who began their practice in the mid nineties. A stochastic dominance analysis shows that unobserved heterogeneity does not compensate for average differences in earnings between cohorts. These findings suggest that the first years of practice are decisive for a GP. If competition between physicians is too intense at the beginning of career, she will suffer from permanently lower earnings. To conclude, our results show that the policies aimed at reducing the number of medical students succeeded in buoying up physicians' permanent earnings. |
| Keywords: | General Practitioners; self-employed; longitudinal data; earnings; stochastic dominance |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00351781_v1&r=lab |
| By: | Mukherjee, Dipa; Majumder, Rajarshi |
| Abstract: | Tertiarisation of labour market has globally been associated with economic progress. But in developing countries, labour market deformities may push people into service economy out of distress also. This paper examines the tertiarisation process in Indian labour market to bring out the reasons behind such trends and the likely impact of such movements. It is observed that the employment growth in the tertiary sector had been dynamic and growth-induced during the eighties, but in the recent times has turned distress-driven. Sub-sectors within the tertiary sector are behaving differently indicating the heterogeneity of this sector. Policymakers should note these issues and take appropriate steps not only to boost high-end jobs but also to improve productivity and returns in low-end jobs. Then only tertiary sector revolution in India will be beneficial to the workers en masse and be sustainable. |
| Keywords: | Tertiary sector; labour; sectoral transformation; inequality; India |
| JEL: | J62 E24 J21 J24 O14 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12755&r=lab |
| By: | Michael Rusinek (DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels); François Rycx (Centre Emile Bernheim, DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and IZA-Bonn.) |
| Abstract: | In many European countries, the majority of workers have their wages directly defined by industry-level agreements. In addition, for some workers, industry agreements are complemented by firm-specific agreements. Yet, the relative importance of firm and industry agreements (in other words, the degree of centralization) differs drastically across industries. The authors of this paper use unique linked employer-employee data from a 2003 survey in Belgium to examine how these bargaining features affect the extent of rent-sharing. Their results show that there is substantially more rent-sharing in decentralized than in centralized industries, even when controlling for the endogeneity of profits, for heterogeneity among workers and firms and for differences in characteristics between bargaining regimes. Moreover, in centralized industries, rent-sharing is found only for workers that are covered by a firm agreement. Finally, results indicate that within decentralized industries, both firm and industry bargaining generate rent-sharing to the same extent. |
| Keywords: | Rent-sharing, collective bargaining, propensity score matching. |
| JEL: | J31 J51 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-004&r=lab |
| By: | Gimpelson, Vladimir (CLMS, Moscow Higher School of Economics); Kapeliushnikov, Rostislav (CLMS, Moscow Higher School of Economics); Lukiyanova, Anna (CLMS, Moscow Higher School of Economics) |
| Abstract: | In order to remain competitive, firms need to keep the quantity and composition of jobs close to the optimal for their given output. Since the beginning of the transition period, Russian industrial firms have been widely reporting that the quantity and composition of hired labor is far from being close to optimal. This paper discusses what kinds of firms in the Russian manufacturing sector are not able to optimize their employment and why. Do they suffer from a labor shortage induced by rapid growth, or are they still struggling with employment overhang? What are the occupations and skills in which there is a supposed surplus or shortage? What factors affect the probability that a firm will report non-optimal employment and be unable to solve this difficulty? Where is the labor excess/shortage concentrated and what makes it persistent? Finally, we discuss the costs of non-optimal employment. The analysis presented in this article is based on the data from a large-scale survey of Russian manufacturing firms. |
| Keywords: | labour shortage, skills, training, transition economies, Russia |
| JEL: | J23 J24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3934&r=lab |
| By: | Johan H.L. Oud (Radboud University Nijmegen, The Netherlands); Henk Folmer (University of Groningen and University of Wageningen, The Netherlands); Roberto Patuelli (University of Lugano, Switzerland and The Rimini Centre for Economic Analysis, Italy); Peter Nijkamp (VU University Amsterdam, The Netherlands) |
| Abstract: | This paper analyzes patterns of regional labour market development in Germany over the period 2000-2003 by means of a spatial-dependence continuous-time model. (Spatial) panel data are routinely modelled in discrete time. However, there are compelling arguments for continuous time modelling of (spatial) panel data. Particularly, most social processes evolve in continuous time such that analysis in discrete time is an oversimplification, gives a distorted representation of reality and leads to misinterpretation of estimation results. The most compelling reason for continuous time modelling is that, in contrast to discrete time modelling, it allows for adequate modelling of dynamic adjustment processes (see, for example, Special Issue 62:1, 2008, of Statistica Neerlandica). We introduce spatial dependence in a continuous time modelling framework and apply the unified framework to regional labour market development in Germany. The empirical results show substantial autoregressive effects for unemployment and population development, as well as a negative effect of unemployment development on population development. The reverse effect is not significant. Neither are the effects of the development of regional average wages and of the manufacturing sector on the development of unemployment and population. |
| Keywords: | Continuous time modelling, structural equation modelling, spatial dependence, panel data, disattenuation, measurement errors, Germany. |
| JEL: | C33 E24 O18 R11 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:39-08&r=lab |
| By: | David Grubb; Shruti Singh; Peter Tergeist |
| Abstract: | In Ireland the placement function of the Public Employment Service (PES) is primarily within FÁS, the Training and Employment Authority, which is supervised by the Department of Enterprise, Trade and Employment (DETE). But employment counselling services are also provided by the “Local Employment Service” (which has partly-separate funding and management arrangements); Facilitators within the Department of Social and Family Affairs (who implement an “Activation Programme”, which however lacks participation requirements); and the “Services to the Unemployed” activity within the Local Development Social Inclusion Programme (which is managed through a third Department). The number of staff in FÁS Employment Services and the Local Employment Service, relative to the number of wage and salary earners in the economy, appears to be relatively low, about half the average level of staffing of institutions responsible for the placement function in Australia and Northern and Western Europe (countries which also have high benefit coverage rates for unemployment). |
| JEL: | H53 H83 I38 J08 J63 J65 J68 |
| Date: | 2009–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:75-en&r=lab |
| By: | Thierry Lallemand (DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels); François Rycx (Centre Emile Bernheim, DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and IZA-Bonn.) |
| Abstract: | This paper investigates the effects of the workforce age structure on the productivity of large Belgian firms. More precisely, it examines different scenarios of changes in the proportion of young (16-29 years), middle-aged (30-49 years) and old (more than 49 years) workers and their expected effects on firm productivity. Using detailed matched employer-employee data, we find that a higher share of young (old) workers within firms is favourable (harmful) for firm value added per capita. Results also show that age structure effects on productivity are stronger in ICT than in non-ICT firms. |
| Keywords: | Firm performance, Workforce age structure, Demographic changes |
| JEL: | J21 J31 L25 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-002&r=lab |
| By: | Nayak, Purusottam; Mahanta, Bidisha |
| Abstract: | The present paper is an attempt to analyze the status of women and their empowerment in terms of various indicators such as access to education, employment, household decision making power, financial autonomy, freedom of movement, exposure to media, political participation, experience of domestic violence etc in the state of Assam using secondary data obtained from various sources. The study reveals that development process in the state is not gender neutral; women enjoy quite inferior status as compared to the average women in India. Percentage of women in the government services and their political participation is quite low and does not show any sign of significant improvement. Sex ratio though not in favor of women is improving over time. Women enjoy better status in the state as compared to women in India in terms of decision making power at the household level while the situation is reverse in case of their financial autonomy and sexual violence. Inter district disparity is rampant in the state. Districts like Kamrup and Tinisukia in spite of having high per capita DDP have not been able to transform the development effort to bridge the gender gap. Districts with high literacy rates are having high proportion of female main and marginal workers and low proportion of non-workers. Higher the literacy higher is the female workforce participation rate. Female enrolment rate is below fifty per cent in spite of universalisation of primary education and provision of mid day meal schemes. Although Government has undertaken a number of steps the situation has remained gloomy mainly because the educated women are not forward looking and cherish the baseless age old customs. There is a need to create awareness towards achieving the desired goal of women empowerment in the state. |
| Keywords: | Women Empowerment; Gender |
| JEL: | O15 |
| Date: | 2009–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12684&r=lab |
| By: | Han, Wen-Jui (Columbia University); Ruhm, Christopher J. (University of North Carolina, Greensboro); Waldfogel, Jane (Columbia University); Washbrook, Elizabeth (University of Bristol) |
| Abstract: | This paper examines how the public policy environment in the United States affects work by new mothers following childbirth. We examine four types of policies that vary across states and affect the budget constraint in different ways. The policy environment has important effects, particularly for less advantaged mothers. There is a potential conflict between policies aiming to increase maternal employment and those maximizing the choices available to families with young children. However, this tradeoff is not absolute since some choice-increasing policies (generous child care subsidies and state parental leave laws) foster both choice and higher levels of employment. |
| Keywords: | public policies, maternal employment, childbearing |
| JEL: | J13 J18 J22 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3937&r=lab |
| By: | Chen, Yu-Fu (BOFIT); Funke, Michael (BOFIT) |
| Abstract: | In January 2008, China adopted a new labour contract law. This new law represents the most significant reform to the legislation on employment relations in mainland China in more than a decade. The paper provides a theoretical framework on the inter-linkages between labour market regulation, option value and the choice and timing of employment. All in all, the paper demonstrates that the Labour Contract Law in its own right will have only small impacts upon employment in the fast-growing Chinese economy. Rather, induced increasing unit labour costs represent the real issue and may reduce employment. |
| Keywords: | China; labour contract law; real options; employment |
| JEL: | C61 D81 D92 J23 |
| Date: | 2009–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2008_029&r=lab |
| By: | Furtado, Delia (University of Connecticut) |
| Abstract: | A common perception about immigrant assimilation is that association with natives necessarily speeds the process by which immigrants become indistinguishable from natives. Using 2000 Census data, this paper casts doubt on this presumption by examining the effect of an immigrant's marriage to a native, a measure of social integration, on dropout rates of children from these marriages. Although second-generation immigrants with one native parent generally have lower dropout rates than those with two foreign-born parents, the relationship reverses when steps are taken to control for observable and unobservable background characteristics. That is, immigrants that marry natives have children that are more likely to dropout of high school than immigrants that marry other immigrants. Moreover, gender differences in the effect of marriage to a native disappear in specifications which control for the endogeneity of the marriage decision. |
| Keywords: | intermarriage, immigration, education |
| JEL: | J12 J61 Z13 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3931&r=lab |
| By: | Chen, Li-Ju (Dept. of Economics, Stockholm University) |
| Abstract: | This paper tests the growth model of distance to the technological frontier, which states that the closer an economy is to the frontier, the higher the relative importance of innovation relative to imitation as a source of productivity growth. Hence, an economy closer to the technological frontier should invest more in skilled labor since innovation is a skill-intensive activity. I use the proportion of female legislators as an instrument for skilled labor, in contrast to Vandenbussche, Aghion, and Meghir (2006) who used lagged educational expenditures. The results with the new instrument are consistent with the theoretical prediction and the previous results of Vandenbussche, Aghion, and Meghir (2006). |
| Keywords: | distance to the technological frontier; women in politics |
| JEL: | H52 I20 J16 O30 O40 |
| Date: | 2009–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2009_0002&r=lab |
| By: | Hunt, Jennifer (McGill University); Gauthier-Loiselle, Marjolaine (Princeton University) |
| Abstract: | We measure the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behavior as well as state-level determinants of patenting. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 6%. This could be an overestimate of immigration's benefit if immigrant inventors crowd out native inventors, or an underestimate if immigrants have positive spill-overs on inventors. Using a 1940-2000 state panel, we show that immigrants do have positive spill-overs, resulting in an increase in patents per capita of 9-18% in response to a one percentage point increase in immigrant college graduates. We isolate the causal effect by instrumenting the change in the share of skilled immigrants in a state with the state's predicted increase in the share of skilled immigrants. We base the latter on the 1940 distribution across states of immigrants from various source regions and the subsequent national increase in skilled immigrants from these regions. |
| Keywords: | immigration, innovation |
| JEL: | J61 D24 O32 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3921&r=lab |
| By: | Mörk, Eva (IFAU); Sjögren, Anna (IFAU); Svaleryd, Helena (Research Institute of Industrial Economics) |
| Abstract: | We study the effect of child care costs on the fertility behavior of Swedish women and find that reductions in child care charges influence fertility decisions, even when costs are initially highly subsidized. Exploiting the exogenous variation in child care costs caused by a Swedish child care reform, we are able to identify the causal effect of child care costs on fertility in a context in which child care enrolment is almost universal and the labor force participation of mothers is very high. A typical household planning another child experienced a reduction in expected future child care costs of SEK 106,000 (USD 17,800). This reduction resulted in 3-5 more child births per 1,000 women during an 18 month period, which corresponds to a 4-6 per cent increase in the birth rate. |
| Keywords: | child care, cost of children, fertility, quasi-experiment, difference-in-differences |
| JEL: | H31 J13 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3942&r=lab |
| By: | Chen, Li-Ju (Dept. of Economics, Stockholm University) |
| Abstract: | This paper investigates the effect of applying gender quotas on policy decisions. I first examine the effect of gender quotas on the representation of female legislators, study the correlation between gender quotas and different types of government expenditures, and then use quotas as an instrument for the proportion of female legislators to investigate the effect of female legislators on policy outcomes. The results show that an increase in the share of female legislators by one percentage point increases the ratio of government expenditure on health and social welfare to GDP by 0.18 and 0.67 percentage points, respectively. The robustness check supports that the effect of quotas on female legislators is likely to be translated into the influence of female policymakers on social welfare. |
| Keywords: | female legislator; gender quotas; policy outcomes |
| JEL: | D78 H50 J16 |
| Date: | 2009–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2009_0003&r=lab |
| By: | Marco Francesconi; Helmut Rainer; Wilbert van der Klaauw |
| Abstract: | This paper formulates a model to examine the effects of changes in tax-benefit policy on the behavior of divorced parents and the well-being of children in single-parent households. Noncustodial parents choose the level of a child support payment to transfer to custodians. These, in turn, decide over child good expenditures and the allocation of time between market work and parenting. In general, ex-spouses fail to achieve an efficient allocation of their resources. On the custodial side, there are inefficiently high levels of labor supply and inefficiently low levels of expenditures on child goods, while on the noncustodial side child support payments are suboptimally low. Our results rationalize the adverse effects that welfare reforms might have on divorced parents and their children. Such adverse effects may arise because an increase in the custodian’s effective wage, either through lower marginal income tax rates or higher childcare subsidies, reinforces the inefficiencies of divorced parents’ decisions; that is, such an increase further depresses child support transfers from noncustodial parents and induces custodial parents to work even more. We explore several extensions of this model, link our findings to the existing empirical literature on the impacts of welfare reform, and discuss the implications of our results for policy and further economic analysis. |
| Keywords: | Non-intact families; In-work benefit reform; Child care; Child support; Noncooperation |
| JEL: | D13 H31 J22 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:san:crieff:0901&r=lab |
| By: | Sébastien LaRochelle-Côté; John Myles; Garnett Picot |
| Abstract: | Post-war policies and subsequent debates had two policy targets: reducing old-age poverty and enhancing income security for the “average worker” after retirement. While we know a lot about the first issue, the second has received less attention as a result of data limitations. We take advantage of unique longitudinal data based on Canadian tax files (the LAD) to examine income replacement rates of older Canadians relative to their economic status when they were in their mid-fifties. In 2005, the replacement income of retired individuals in their mid-seventies who were in the middle of the income distribution at age 55 (in the early 1980s) was between 70 and 80 percent of their previous incomes some 20 years earlier This figure is at the high end of the range (65 to 75 percent) that experts generally consider “adequate” for middle-income retirees to maintain their pre-retirement living standards. However, we also show that there is considerable variation in replacement rates. By age 75, about a quarter of middle-income persons had retirement incomes of less than 60 percent of the income they were receiving in their mid-fifties, a result of differential access to private pension income. We also ask whether income replacement rates have been rising or falling among more recent cohorts of retirees but find little change. Finally, we report results about the stability of incomes in the retirement years. We conclude that year to year instability in family income declines for both high and low income earners as they age, largely because of the stabilizing effect of public pension income sources. |
| Keywords: | retirement, income security |
| JEL: | J14 J26 D60 D63 H19 H55 I30 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:236&r=lab |
| By: | Riccardo Fiorito; Giulio Zanella |
| Abstract: | In this paper we compare “micro” and “macro” labor supply elasticities in a MaCurdy-type equation. Using PSID data, we obtain the micro elasticity from standard panel techniques, and the macro elasticity from the time series generated by aggregating individuals every year. This procedure relies on the exact aggregation of first-order conditions in a life-cycle model with home production. We find an individual elasticity of about 0.1, a low value in line with mainstream microeconometric studies, and an aggregate elasticity of about 1, a much larger value often assumed in calibration studies. This discrepancy is not due to aggregation bias: it is due to the fact that individual and total hours are different variables, with the extensive margin that empirically dominates. A broader implication of our result is that micro evidence is not always appropriate for calibrating an aggregate model economy |
| Keywords: | elasticity of labor supply, aggregation, calibration |
| JEL: | E13 E32 J22 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:547&r=lab |
| By: | Rod Hick (The Centre for Analysis of Social Exclusion, London School of Economics and Political Science) |
| Abstract: | This paper examines changes to value of the state pensions and poverty rates for older men and women during the two terms of the Fianna Fáil – Progressive Democrat coalition government in Ireland between 1997 and 2007. It is shown that despite consistent increases in the value of the state pensions relative to earnings, poverty increased during the initial years of the period only to fall dramatically thereafter. While the increase in poverty at the 50 per cent median income rate between 1997 and 2001 was experienced disproportionately by women, there has also been an important gender dimension to the reduction in poverty amongst the over 65s since 2001. Since 2003, women have been no more likely than men to fall below the 50 per cent of median income poverty line or to fall below the 60 per cent line since 2004. However, analysis of data from the 2006 Irish release of the EU Survey of Income and Living Conditions shows that older women remained more likely than men to experience poverty as measured at 70 per cent of median income. A logistic regression model is used to identify underlying differences in poverty rates between men and women after adjusting for other independent variables. The results show that after adjusting for differences in occupation, household composition, geography and health status, the odds of a woman falling below the 70 per cent median income line remained 1.25 times that of a man. |
| Date: | 2009–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:200902&r=lab |
| By: | Diana Chisholm; Robert L. Brown |
| Abstract: | In Canada, there are three main sources of government-provided retirement income: the Canada/Quebec Pension Plans (C/QPP), which have benefits and contributions based on earnings up to the Yearly Maximum Pensionable Earnings; Old Age Security (OAS), which is a fixed amount for most but does include a ‘clawback’ of benefits for high-income individuals; and the Guaranteed Income Supplement (GIS), which is designed to supplement those with extremely low income. The annual GIS benefit is reduced, or clawed back, by 50 cents for every dollar of annual income the person has in retirement, including C/QPP and income from Registered Retirement Savings Plans (RRSPs) and other savings. OAS benefits are not included in determining the GIS clawback. The result of this is that low-income individuals who attempt to enhance their retirement replacement ratio actually see a decrease in government-provided support the more they save for retirement. In fact, savings in an RRSP can effectively be taxed at more than 100% through corresponding reductions in the GIS, social housing, home care, GAINS (Ontario's Guaranteed Annual Income Supplement), and other benefits which are based on one's personal retirement income. This paper explores alternatives to the 50% GIS clawback, including: a basic GIS exemption, a GIS clawback rate lower than 50%, and a combination of the two. The goal is to improve the fairness of the GIS and reduce the disincentive to save for retirement, without increasing the overall cost of the program significantly. |
| Keywords: | Social security, welfare, tax incentives |
| JEL: | H55 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:239&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, gbornh urban residents, and gacquiredh 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 groupfs income distribution. Third, gacquiredh urban residents have traits of both migrants and gbornh urban residents. They have an aversion to the horizontal inequality like migrants, and they also favor higher relative income among urban residents. Fourth, gbornh 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, gacquiredh urban residents, elderly people and Party members from gbornh urban residents are the potential proponents of social integration policies in urban China. |
| Keywords: | Horizontal inequality, Happiness, Hukou identity, Migration, Social integration |
| JEL: | I31 O15 R23 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd08-020&r=lab |
| By: | Vicente Royuela (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona) |
| Abstract: | We explore the relationship between quality in work and aggregate productivity in regions and sectors. Using recent Spanish aggregate data for the period 2001-2006, we find that quality in work may be an important factor to explain productivity levels in sectors and regions. We use two alternatives definitions of quality in work: one from survey data and the other from a social indicators approach. We also use two different measurements of labour productivity to test the robustness of our results. The estimates are run using a simultaneous equation model for our panel of data, and find important differences between high tech and low tech sectors: a positive relationship between quality in work and productivity in the former case, and a negative relationship in the latter. Consequently, on the one hand we see that quality in work is not only an objective per se,but may also be a production factor able to increase the wealth of regions; on the other hand, at the aggregate level, we may also find that high productivity levels coincide with lower quality in work conditions. |
| Keywords: | Productivity, Quality in Work, Simultaneous, Equation Models. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:200901&r=lab |
| By: | Pi Alperin, Maria Noel (CEPS/INSTEAD (Luxembourg) and LAMETA (Unversité Montpellier I)) |
| Abstract: | This paper applies a multidimensional approach to poverty measurement based on fuzzy set theory, and its decomposition properties, in order to measure the deprivation level in Luxembourg and to identify the different characteristics of poverty between natives and immigrants (knowing that almost 40% of the population in Luxembourg are immigrants). The database used in this study is the 2006 wave of the Panel Socio-Economique Liewen zu Lëtzebuerg (PSELL-3) survey. |
| Keywords: | Decomposition; Immigrants ; Luxembourg ; Multidimensional Poverty ; Fuzzy Set Theory |
| JEL: | D31 D63 I32 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:iriswp:2008-14&r=lab |
| By: | Heller, Claudia |
| Abstract: | This paper focuses on Keynes’s exposition of the Principle of Effective Demand and its generalised mathematical representation – the basis of a Z-D type model. It elaborates on Keynes’s algebraic formulation in the General Theory, relying on interpreters who contributed to the generalisation of his most restrictive hypotheses on competition and returns to scale as well as on those who developed the algebraic argumentation that Keynes left only indicated. Instead of correcting Keynes’s mathematics (which is right), the paper concludes that there has been a “slip of the pen” in his own description of these concepts on the footnote to page 55 of the General Theory. Keynes’s employment function, the inverse of his aggregate supply curve is not the same thing as his aggregate supply function. Therefore, in the controversial footnote, it is not the aggregate supply function but the employment function that is linear with a slope given by the reciprocal of the money-wage. |
| Keywords: | Principle of effective demand; D/Z-mode´; Aggregate demand; Aggregate supply |
| JEL: | B31 B22 B2 |
| Date: | 2009–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12837&r=lab |
| By: | Herrmann, Michael; Svarin, David |
| Abstract: | Bangladesh, like other least developed countries (LDC), has a large rural population and agricultural labor force. At the turn of the Millennium 75 percent of the LDCs’ population still lived in rural areas and 71 percent of the LDCs’ labor force was involved in agriculture. Yet, even the least developed countries are affected by rapidly accelerating rural-to-urban migration. This decade, 2001-2010, is the first ever in which the urban population grows faster than the rural population in the LDCs. And this change is also associated with a historic employment transition, where the agricultural sector gradually loses importance. Both the population and the employment transition that can be observed for the group of least develops countries, are largely attributable to LDC's in Asia, and in particular Bangladesh. The very large rural-urban migration in Bangladesh, in comparison with other least developed countries, is attributable to relatively strong push factors on the one hand, and strong pull factors on the other. The principle factor that encourages people to leave their homes in the country side is the frequent recurrence of natural disasters, which undermine agricultural development and cause food crisis. By contrast, the principle factor that attracts people to urban centers is the expansion of the non-agricultural sectors, industry and services, which promises jobs and higher household incomes. |
| Keywords: | Bangladesh; climate change; rural-urban migration; agricultural development; urban planning; dual-dual model; employment; poverty |
| JEL: | O18 J31 R0 J21 J61 Q54 I32 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12879&r=lab |
| By: | Li Shi; Ding Sai |
| Abstract: | Based on the urban survey data of Ningxia Hui Autonomous Region in 2006, this paper studies the impact of ethnic characteristics on the income determination mechanism in the same economic region. Using the decomposition methods of Blinder and Oaxaca, Fields, and Morduch and Sicular, we analyze income gap between employed Hui and Han as well as income inequality within the two ethnic groups. The main conclusions are, first, that there is almost no income gap between Han and Hui in Ningxia. But different ethnic characteristics have effects on the income determination mechanism. Ethnic factors such as religion and social capital have no obvious effect on the income determination. |
| Keywords: | Minority, Majority, Income Inequality |
| JEL: | D33 J15 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd08-022&r=lab |
| By: | Seebens, Holger (University of Göttingen) |
| Abstract: | This paper is concerned with patterns of expenditure and child welfare among female headed (FHH) and male headed households (MHH) in Tanzania as well as with the underlying cause of potentially different patterns. I estimate semiparametric Engel curves to investigate household expenditure patterns while controlling for household characteristics and find that FHH spend significantly more money on the welfare of children and less on consumption of adult goods. In an attempt to explain this observed difference, I further investigate the empirical content of the old-age security hypothesis, which states that persons lacking the financial means to rely on themselves during old-age invest more in children who care for them in later periods. The results lend support to the idea that old-age security might be the driving force behind the observed differences of expenditure allocated towards the welfare of children. FHH having access to alternative means of old-age security, spend significantly less on child welfare. Furthermore, food expenditure levels of FHH and MHH with access to alternative old-age security become the same. |
| Keywords: | demand, female headed households, child welfare, old age security |
| JEL: | D12 J12 J13 J14 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3929&r=lab |
| By: | Dreger, Christian (DIW Berlin); Erber, Georg (DIW Berlin); Glocker, Daniela (DIW Berlin) |
| Abstract: | The accumulation of the human capital stock plays a key role to explain the macroeconomic performance across regions. However, despite the strong theoretical support for this claim, empirical evidence has been not very convincing, probably because of the low quality of the data. This paper provides a robustness analysis of alternative measures of human capital available at the level of EU NUTS1 and NUTS2 regions. In addition to the univariate measures, composite indicators based on different construction principles are proposed. The analysis shows a significant impact of construction techniques on the quality of indicators. While composite indicators and labour income measures point to the same direction of impact, their correlation is not overwhelmingly high. Moreover, popular indicators should be applied with caution. Although schooling and human resources in science and technology explain some part of the regional human capital stock, they cannot explain the bulk of the experience. |
| Keywords: | human capital indicators, regional growth |
| JEL: | I20 O30 O40 O52 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3919&r=lab |
| By: | Nattavudh Powdthavee; |
| Abstract: | There is a long tradition of psychologists finding small income effects on life satisfaction (or happiness). Yet the issue of income endogeneity in life satisfaction equations has rarely been addressed. This paper aims to do just that. Instrumenting for income and allowing for unobserved heterogeneity result in an estimated income effect that is almost twice as large as the estimate in the basic specification. The results call for a reexamination on previous findings that suggest money buys little happiness, and a reevaluation on how the calculation of compensatory packages to various shocks in the individual's life events should be designed. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:09/02&r=lab |
| By: | Sergio Cesaratto |
| Abstract: | The controversial saving-investment relationship is central to macroeconomics, but in this capacity – perhaps less evidently – it is also central to the macroeconomics of pension reforms. Bearing this in mind, in this paper we shall review the main issues concerning these reforms and examine the recent attempt to enlarge the fully funded component of the pension system in Italy by employing the resources accumulated by firms on behalf of workers within the ‘Trattamento di Fine Rapporto’ scheme (a sort of severance pay scheme). |
| JEL: | E11 G23 H55 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:549&r=lab |
| By: | Christian A. Ruzzier (Harvard Business School) |
| Abstract: | It is often argued that competition forces managers to make better choices, thus favoring managerial autonomy in decision making. I formalize and challenge this idea. Suppose that managers care about keeping their position or avoiding interference, and that they can make strategic choices that affect both the expected profits of the firm and their riskiness. Even if competition at first pushes the manager towards profit maximization as commonly argued, I show that further increases in competitive forces might as well lead him to take excessive risks if the threat on his position is strong enough. To curb this possibility, the principal-owner optimally reduces the degree of autonomy granted to the manager. Hence higher levels of managerial autonomy are more likely for intermediate levels of competition. |
| Keywords: | product-market competition, authority, decision making, delegation, autonomy |
| JEL: | D23 L22 M12 M21 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:09-082&r=lab |
| By: | Christiane Schwieren (University of Heidelberg); Doris Weichselbaumer |
| Abstract: | In this paper we experimentally test whether competing for a desired reward does not only affect individuals’ performance, but also their tendency to cheat. Recent doping scandals in sports as well as forgery and plagiarism scandals in academia have been partially explained by „competitive pressures“, which suggests a link between competition and cheating. In our experiment subjects conduct a task where they have the possibility to make use of illegitimate tools to better their results. We find that women react much stronger to competitive pressure by increasing their cheating activity while there is no overall sex difference in cheating. However, the effect of competition on women’s cheating behavior is entirely due to the fact that women, on average, are doing worse with respect to the assigned task. Indeed we find that it is the ability of an individual to conduct a particular task and not sex that crucially affects the reaction to competition. Poor performers significantly increase their cheating behavior under competition which may be a face-saving strategy or an attempt to retain a chance of winning. |
| Keywords: | competition, tournament, piece rate, cheating, experiment |
| JEL: | C91 J24 J31 M52 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2008_05&r=lab |