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on Labour Economics |
| By: | Francesco D’Amuri (Bank of Italy and ISER, University of Essex); Gianmarco I. P. Ottaviano (Bocconi University, FEEM and CEPR); Giovanni Peri (University of California, Davis and NBER) |
| Abstract: | In this article we measure the effects of recent immigration on the Western German labor market looking at both wage and employment effects. Refining administrative data for the period 1987-2001 to account for ethnic German immigrants and immigrants from Eastern Germany, we find that the substantial immigration of the 1990’s had very little adverse effects on native wages and on their employment levels. Instead, it had a sizable adverse employment effect as well as a small adverse wage effect on previous waves of immigrants. These asymmetric results are partly driven by a higher degree of substitution between old and new immigrants in the labor market. In a simple calculation we show that the largest aggregate effect of new immigration on natives and old immigrants comes from the increased costs of unemployment benefits to old immigrants. Those costs could be eliminated in a world of wage flexibility and no unemployment insurance in which immigration would not have any negative employment effect but only moderate wage effects. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0910&r=lab |
| By: | Tomi Kyyrä; Parrotta Pierpaolo; Rosholm Michael |
| 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). JEL classification numbers: C41, 65 |
| Keywords: | Unemployment benefits, part-time work, lock-in effect, treatment effect, duration analysis |
| JEL: | C41 J65 |
| Date: | 2009–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:1&r=lab |
| By: | Benoît Mahy (Université Mons-Hainaut, WRC and DULBEA); François Rycx (Centre Emile Bernheim, DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels and IZA-Bonn.); Mélanie Volral (Université Mons-Hainaut and WRC) |
| Abstract: | This paper investigates the impact of wage dispersion on firm productivity in different working environments. More precisely, it examines the interaction with: i) the skills of the workforce, using a more appropriate indicator than the standard distinction between white- and blue collar-workers, and ii) the uncertainty of the firm economic environment, which has, to our knowledge, never been explored on an empirical basis. Using detailed LEED for Belgium, we find a hump-shaped relationship between (conditional) wage dispersion and firm productivity. This result suggests that up to (beyond) a certain level of wage dispersion, the incentive effects of “tournaments” dominate (are dominated by) “fairness” considerations. Findings also show that the intensity of the relationship is stronger for highly skilled workers and in more stable environments. This might be explained by the fact that monitoring costs and production-effort elasticity are greater for highly skilled workers and that in the presence of high uncertainty workers have less control over their effort-output relation and associate higher uncertainty with more unfair environments. |
| Keywords: | Wage dispersion, labour productivity, working environments, personnel economics, linked employer-employee data. |
| JEL: | J31 J24 M52 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-012&r=lab |
| By: | Blázquez, Maite (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Llorente, Raquel (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Moral Carcedo, Julian (Departamento de Análisis Económico: Teoría e Historia Económica. Universidad Autónoma de Madrid) |
| Abstract: | The existence of a universal minimum wage has been, and continues to be, an intensely debated issue. On the one hand, the controversy surrounding minimum wage appears to be partly justified because the effects of the introduction and increase of minimum wage may differ greatly depending on the labour market structure. On the other, the current academic literature on the subject do not provide clear evidence of which collectives are likely to be more affected in terms of employment by the introduction or increase of minimum wage. Using the data for the period 2000-2008, this study aims to examine the effect of minimum wage on the youth employment in Spain, taking into account both the existing regional differences and the dynamic behaviour of employment. Unlike other previous academic works on this subject, we are also going to consider the effect of seasonality on employment, a particularly wide-spread feature of youth employment in Spain. The results obtained in our analysis do not provide clear evidence about any negative effect of minimum wage on youth employment during the period under study. While this result may point out to the existence of a monopsonistic structure of the labour market, the coexistence of increases both in minimum wage and in youth employment rate during this period could also be explained in the light of a perfect competitive labour market with a high degree of dynamism and a structural change in employment demand. |
| Keywords: | Employment rate; minimum wage; Kaitz index |
| JEL: | J21 J31 J18 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:uam:wpaper:200902&r=lab |
| By: | Jan, Zilinsky |
| Abstract: | Legal origins, interpreted as "highly persistent systems of social control of economic life" have large economic consequences (La Porta, de Silanes, and Shleifer, 2008). This paper examines whether social outcomes (female education and labor participation in particular) are also influenced by the origin of legal institutions. I use two data sources (and time periods) and two measures of education to verify the suspected link between female labor market participation, education and legal origins. Controlling for average GDP in the last 10 years, barriers to starting a business, corruption, public spending on health and distinct measures of cultural attitudes to women, I find that women tend to participate in the labor market at significantly lower rates in countries with English and French legal origins and at higher rates in countries with the legal system of German origin (although this effect is generally not significant). Girls are more likely to finish primary education in German legal origin countries (and less likely in countries with the English legal origin). Female-to-male literacy ratios are lower in countries where abuse of women is widespread but I find that legal origins are poor predictors of the prevalence of abuse. |
| Keywords: | female education; labor force; legal origins; institutions |
| JEL: | O10 K00 J23 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13659&r=lab |
| By: | Anxo, Dominique (Centre for Labour Market Policy Research (CAFO)); Shukur, Ghazi (Centre for Labour Market Policy Research (CAFO)); Hussain, Shakir (University of Birmingham) |
| Abstract: | Part-time work is one of the most well-known <p> « atypical » working time arrangements in Europe, shaping working time regimes across countries and mapping work-life balance patterns. Comparative studies on part-time work across European countries have pointed to large differences in the development, extent and quality of part-time employment. To explain such differences, the focus has been mainly on labor supply consideration and on public policies and/or institutional arrangements pertaining to working-time combined with social practices in relation to gender conventions. In contrast to previous studies focusing on the supply side, the originality of our research is to investigate the demand-side of part-time work and to examine how and why companies use part-time work. The main objective of this paper is to analyze the impact of firms’ characteristics sector specificity and countries’ institutional arrangements on the use and intensity of part-time jobs at the establishment level. Based on a large and unique sample of European firms (more than 21 000 establishments) operating in 21 member states, we use multilevel multinomial modeling in a Bayesian environment. This approach has the advantage to identify and better disentangle the impact of institutional factors (country level), from industry specific factors (sector level) and firm specific factors (establishment level). Our results suggest that the observed variations in the extent of parttime workers at the establishment level is determined more by country-specific features, such as societal and institutional factors, than by industry specific factors. In other words, the institutional set-up or the overall working time regime seems to play a stronger role than organizational or productive constraints. |
| Keywords: | Part-time work; Laobur demand; Working time |
| JEL: | J23 J82 |
| Date: | 2009–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2009_008&r=lab |
| By: | Thapa, Sridhar |
| Abstract: | This study analyzes productivity differentials between men and women in the peasant agriculture in Nepal. Both Cobb-Douglas and translog production functions are estimated using data from the Nepal Living Standard Survey 2003/04. Evidence is found for higher value of marginal product of adult family male than adult female, while marginal products of other inputs are found to be relatively higher than the prevailing market wages and prices, implying that these inputs have become gradually a binding constraint in production. Male managed farms produce more output per hectare with higher command in market input use, obtaining credit, and receiving agricultural extension services than female managed farms. In contrast, the result does not clearly support the hypothesis of separability or aggregation of male and female labour, but there is little justification of weak separability. Moreover, head’s sex as proxy for farm manager does not show any difference between male and female managed farms. However, the coefficients of location and household characteristics show significant variations in farm output among ethnic and caste groups residing in different ecological belts of Nepal. Overall, adult male labour is found to contribute more in production process than adult female labour. |
| Keywords: | gender differentials; agriculture; production functions; marginal products; Nepal |
| JEL: | J24 Q12 J16 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13722&r=lab |
| By: | Zakharenko, Roman |
| Abstract: | Many people emigrating abroad eventually return home. Yet, little is known about the returnees: who are they and how do they compare to those who did not return? How does their decision to return depend on economic situation at home? In this paper, I empirically analyze the propensity of US immigrants to return. To identify return migration, I use the method adopted from Van Hook et.al. (2006). The method is based the U.S. Current Population Survey (CPS) which interviews households for two consecutive years. About a quarter of foreign-born individuals drop out of the sample between the first and the second years, due to various causes including return migration. After eliminating all other causes of dropout, I estimate the propensity of immigrants to return, depending on personal and home country characteristics. I find that the difference between recent immigrants and other immigrants is greater than the difference between men and women, or skilled and unskilled migrants. Thus, assimilation differentiates immigrants more in their decision to return than education or gender. In particular, distance to home country negatively affects return propensity of those who arrived over 10 years ago, and has no effect on recent immigrants. |
| Keywords: | return migration; panel attrition; assimilation |
| JEL: | F22 O15 J61 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13755&r=lab |
| By: | Carlsson, Magnus (Baltic Business School) |
| Abstract: | This paper contribute to the existing literature on ethnic discrimination of immigrants in hiring by addressing the central question of what employers act on in a job application. The method involved sending qualitatively identical resumes signalling belonging to different ethnic groups to firms advertising for labour. The results show that whether the applicant has a native sounding or a foreign sounding name explains approximately 77 per cent of the total gap in the probability of being invited to an interview between natives and immigrants, while having foreign qualifications only explains the remaining 23 per cent. This in turn, suggests a lower bound for statistical discrimination of approximately 23 per cent of total discrimination. The analysis indicates further that the 77 per cent are most likely driven by a mixture of preference-based and statistical discrimination. |
| Keywords: | ethnic discrimination; hiring; job search; preference-based discrimination; statistical discrimination; correspondence testing |
| JEL: | J64 J71 |
| Date: | 2008–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2009_002&r=lab |
| By: | Subha Mani (Fordham University, Department of Economics); John Hoddinott (International Food Policy Research Institute); John Strauss (University of Southern California, Department of Economics) |
| Abstract: | This paper examines the determinants of schooling outcomes - current enrollment status and relative grade attainment - among primary school children in rural Ethiopia. We use repeated cross-sectional data from 15 rural villages in Ethiopia to capture the impact of the changing socioeconomic environment on these outcomes between 1994 and 2004. We find that parental schooling is positively associated with schooling enrollment but its estimated effects declines over time. We observe a similar decline in the estimated impact of father’s schooling on relative grade attainment, while the impact of mother’s schooling increased during this period. OLS estimates of the impact of household income are biased downwards relative to IV results. Community characteristics are not associated with schooling enrollment. However, the provision of electricity is positively, and distance to primary school negatively, associated with relative grade attainment. These findings suggest that policies that address both supply and demand side constraints have the potential to improve the low levels of schooling attainments found in Ethiopia and elsewhere. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:frd:wpaper:dp2009-03&r=lab |
| By: | N. NGOC THANG; N. VAN THU; D. BUYENS |
| Abstract: | This study uses data from the Vietnam Employer survey to measure the impact of training programs on firm performance. From the survey of 196 companies, the major findings indicate that companies that implemented training in 2006 have increased sales and productivity of both manufacturing and non-manufacturing companies in 2006. However, manufacturing companies that implemented training programs after 2005 lead to an increase of 9 percent in total sales and 9.1 percent in productivity per year between 2005 and 2006 but has no statistically significant effect on 2005-2006 percent change in sales and productivity of non-manufacturing companies if these companies provided training after 2005 |
| Keywords: | Training; sales; productivity; firm performance. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:08/538&r=lab |
| By: | Antonio Nicita (University of Siena); Matteo Rizzolli (University of Milan - Bicocca) |
| Abstract: | In this paper we outline the economic rationale behind the virtual strike, and workers' incentives to use this bargaining solution rather than resorting to standard strike. We show that, from a welfare perspective, a virtual strike always dominates a standard strike and it would be most needed precisely when workers have weaker incentives to adopt it. We then discuss the pros and cons of legally regulating the virtual strike rather than leaving it to self-regulation. Finally, we apply our findings to the analysis of Italy’s draft legislation on virtual strikes. |
| Keywords: | stoppage strike, virtual strike, penal code, labor law and economics |
| JEL: | D74 D78 J52 J83 K31 M55 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp08&r=lab |
| By: | Luc Wathieu (ESMT European School of Management and Technology); Amir Grinstein (Guilford Glazer School of Business and Management, Ben Gurion University of the Negev) |
| Abstract: | This paper questions the notion that expatriates should adjust to their host country, by showing that adjustment and its consequences are affected by cosmopolitanism and expected assignment duration. A study of 260 expatriates in the U.S. reveals that cosmopolitans expecting shorter (longer) assignments adjust more (less) to both work and non-work aspects of their host country, and that this is associated with increased well-being. In contrast, for non-cosmopolitans, more well-being occurs when longer (shorter) expected assignments are accompanied by increased (decreased) work and non-work adjustment. Further, from the findings emerges a clash between two aspects of successful expatriation - well-being and professional success: while non-work adjustment is not always associated with well-being, work adjustment is positively related to assignment performance across conditions and subjects. |
| Keywords: | Expatriates, international assignment, cosmopolitanism, crossculture adjustment, multinational corporations, preference persistence, assignment duration, survey method |
| JEL: | D23 |
| Date: | 2008–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:esm:wpaper:esmt-08-011&r=lab |
| By: | Lall, Somik V.; Timmins, Christopher; Yu, Shouyue |
| Abstract: | How can policies improve the welfare of people in economically lagging regions of countries? Should policies help jobs follow people? Or should they enable people to follow jobs? In most countries, market forces have encouraged the geographic concentration of people and economic activities - policies that try to offset these forces to encourage balanced economic growth have largely been unsuccessful. However, policies that help people get closer to economic density have improved individual welfare. In this paper, the authors examine the migration decisions of working-age Brazilians and find that the pull of higher wages in leading regions has a strong influence on the decision to migrate. However, many people are also"pushed"to migrate, starved of access to basic public services such as clean water and sanitation in their hometowns. Although migration is welfare-improving for these individuals, the economy may end up worse off as these migrants are more likely to add to congestion costs in cities than to contribute to agglomeration benefits. Encouraging human capital formation can stimulate labor mobility for economic gain; and improving access to and quality of basic services in lagging regions will directly improve welfare as well as reduce the type of migration motivated by the search for life-supporting basic services. |
| Keywords: | Transport Economics Policy&Planning,Population Policies,Banks&Banking Reform,Labor Policies,Access to Finance |
| Date: | 2009–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4843&r=lab |
| By: | Ghazala Azmat; Nagore Iriberri |
| Abstract: | We study the effect of providing relative performance feedback information on performance under piece-rate incentives. A natural experiment that took place in a high school offers an unusual opportunity to test this effect in a real-effort setting. For one year only, students received information that allowed them to know whether they were above (below) the class average as well as the distance from this average. We exploit a rich panel data set and find that the provision of this information led to an increase of 5% in students’ grades. Moreover, the effect was significant for the whole distribution. However, once the information was removed the effect disappeared. To rule out the concern that the effect may be driven by teachers within the school, we verify our results using national level exams (externally graded) for the same students, and the effect remains. |
| Keywords: | School performance, relative performance, piece-rate, feedback, natural experiment, social comparison, self-perception, competitive preferences |
| JEL: | I21 M52 C30 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1148&r=lab |
| By: | Hein Roelfsema; Yi Zhang |
| Abstract: | This paper empirically investigates the relationship between institutional quality and outsourcing to developing economies. In contrast to cross-sectional studies on institutions, this paper uses panel data for 76 countries over 25 years (1980-2004). Employing panel data helps to show the causal relationship by controlling for the fixed effects and dynamic factors. Using within and IV estimations, we find that there is a positive effect of institutional quality on outsourcing in the lower-middle income countries. The quality of institutions is not an important determinant of outsourcing to either low or high income countries. |
| Keywords: | Institutional quality, Outsourcing, Developing countries |
| JEL: | F15 F23 O19 K11 K12 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0903&r=lab |
| By: | Berthoud R (Institute for Social and Economic Research) |
| Abstract: | Social security benefits designed to meet the extra costs faced by disabled people have been in place since the early 1970s, and currently cost nearly £15 billion per year. Over the period the benefits have enjoyed bilateral political support, and the only major changes (eg in 1992) have been to extend entitlement and increase expenditure. But remarkably little is known about the impact of these benefits – exactly what difference they make to claimants’ care and mobility arrangements, to their overall standard of living, and to their social inclusion and sense of identity. The Department for Work and Pensions is considering how to study the impact of disability benefits in more depth. The Department has commissioned this feasibility study, to summarise the questions and assess alternative research approaches, with a view to launching more detailed investigations. |
| Date: | 2009–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2009-06&r=lab |
| By: | Christian Dustmann (Centre for Research and Analysis of Migration, Department of Economics, University College London); Josep Mestres (Centre for Research and Analysis of Migration, Department of Economics, University College London) |
| Abstract: | In this paper we study the remittance behavior of immigrants and how it relates to temporary versus permanent migration plans. We use a unique data source that provides unusual detail on remittances and return plans, and follows the same household over time. Our data allows us also to distinguish between different purposes of remittances. We analyze the association between individual and household characteristics and the geographic location of the family as well as return plans, and remittances. The panel nature of our data allows us to condition on household fixed effects. To address measurement error and reverse causality, we use an instrumental variable estimator. Our results show that changes in return plans are related to large changes in remittance flows. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:0909&r=lab |
| By: | Doepke, Matthias; Zilibotti, Fabrizio |
| Abstract: | Child labor is a persistent phenomenon in many developing countries. In recent years, support has been growing among rich-country governments and consumer groups for the use of trade policies, such as product boycotts and the imposition of international labor standards, to reduce child labor in poor countries. In this paper, we discuss research on the long-run implications of such policies. In particular, we demonstrate that such measures may have the unintended side effect of lowering domestic support for banning child labor within developing countries, and thus may contribute to the persistence of the child-labor problem. |
| JEL: | J20 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7196&r=lab |
| By: | Michelle Alexopoulos; Jon Cohen |
| Abstract: | Difficulties in sorting out the empirical relationship between technical change and employment is attributable, at least in part, to the shortcomings associated with traditional measures of the former. In this paper, we use new indicators of technical change that we believe resolve many issues associated with other methods of identifying technology shocks, and use them to explore the impact of technical change on employment from 1909-49. The payoff to this effort is substantial for at least three reasons. First, it sheds light on the role of technology shocks in cyclical fluctuations during this period, second, it informs business cycle model selection (New Keynesian vs. Real Business Cycle), and, third, it contributes to our understanding of the part played by the New Deal Policies in the recovery from the Great Depression. |
| Keywords: | Business Cycles; Technical Change; Great Depression; Unemployment |
| JEL: | E2 E3 N1 O3 |
| Date: | 2009–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-351&r=lab |
| By: | Kannan, Srinivasan |
| Abstract: | Decision making is always been an important in social setting. For understanding the process of decision making it is important to understand as to how people make decisions and the factors influence the decisions. Studies (Srinivasan and Sharan 2005, Pescosolido, 1992) show that decisions are not made in isolation but they are the products of influence and confluence of social correlates. These studies emphasize that the decisions are not made in isolation but in consultation with other members. This raises an important question of how individual’s choices no longer of his or her own but socially constructed. This emphasizes how individuals consult with others while making decisions. From this it clear that the matters relating to health are also decided in consultation with the other members of the community. From this we can understand how decision making is important in a family setting for an individual. Literatures on social network (Srinivasan and Sharan 2005) have suggested the importance of social interaction on health decisions. They also suggest social networks help the individuals to learn to handle problematic situations. In National Family Health Survey (NFHS-3)(2005-06), under “Women’s empowerment and demographic and health outcomes” discussed the importance of wife’s participation in household decision making. According to NFHS-3, it is important to study the above aspect which will help in understanding the status and empowerment of women in society and within their households. It is thus critical to promote change in reproductive behaviour. This reminds the importance of Social Network by Bott(1957).According Bott Social Network is conjugal role relationships. According to her the degree of segregation in the role relationship of husband and wife varies directly with the connectedness of the family’s social network. The more connected the network, the greater the degree of segregation between the roles of husband and wife and vice versa. |
| Keywords: | Health Management; Women; Family; Health seeking behaviour |
| JEL: | D70 |
| Date: | 2009–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13767&r=lab |
| By: | Margarida Duarte; Diego Restuccia |
| Abstract: | We investigate the role of sectoral differences in labor productivity in explaining the process of structural transformation - the secular reallocation of labor across sectors - and the time path of aggregate productivity across countries. Using a simple model of the structural transformation that is calibrated to the growth experience of the United States, we measure sectoral labor productivity differences across countries. Productivity differences between rich and poor countries are large in agriculture and services and smaller in manufacturing. Moreover, over time, productivity gaps have been substantially reduced in agriculture and industry but not nearly as much in services. In the model, these sectoral productivity patterns generate implications that are broadly consistent with the cross-country evidence on the structural transformation, aggregate productivity paths, and relative prices. We show that productivity catch-up in industry explains about 50 percent of the gains in aggregate productivity across countries, while low relative productivity in services and the lack of catch-up explains all the experiences of slowdown, stagnation, and decline observed across countries. |
| Keywords: | labor productivity, structural transformation, sectoral productivity, employment, hours, cross-country data |
| JEL: | O1 O4 |
| Date: | 2009–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-348&r=lab |
| By: | Hideaki Sakawa; Naoki Watanabel |
| Abstract: | This paper examines the relations between the disciplinary role of Japanese relationship-oriented corporate governance mechanisms, such as keiretsu memberships and bank-appointed directors, and pay-performance sensitivity in Japan. Previous studies show that pay-performance sensitivity is positive and almost the same as in a market-oriented system like that of the USA. However, under the Japanese relationship-oriented system, pay-performance sensitivity may be controlled by financial keiretsu ties and bank-appointed directors. We find that the disciplinary mechanism of keiretsu memberships and bank-appointed monitors did not function well in Japan in the 1990s. |
| Keywords: | Corporate Governance, Firm Performance, Japan, Keiretsu Memberships, Managerial Compensation |
| JEL: | G30 G32 J33 L22 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd08-031&r=lab |
| By: | Kitov, Ivan |
| Abstract: | There is no Phillips curve in the United States, i.e. unemployment does not drive inflation at any time horizon. There is a statistically robust anti-Phillips curve - inflation leads unemployment by 10 quarters. Apparently, the anti-Phillips curve would be the conventional one, if the time would flow in the opposite direction. Several tests for cointegration do not reject the hypothesis that there exist a long-term equilibrium relation between inflation and unemployment in the US. The cointegrating relation between inflation and unemployment is not the proof of causality, however, and both variables are driven by the same external force. Also presented are some statistical evidences that there exist conventional Phillips curves in Germany and France, but there is no causality link between unemployment and inflation as well. |
| Keywords: | the Phillips curve; inflation; unemployment; causality |
| JEL: | E24 E31 E58 E52 |
| Date: | 2009–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13641&r=lab |
| By: | Yolanda Portilla |
| Abstract: | This paper characterizes the contractual relationship between an external auditor and a manager of a client firm when the incentives for both agents are implicit as in the career concerns framework. The main result is that the earning management and the audit effort are decreasing over time because the incentives to build a reputation also decline for both agents in spite of a managers first mover advantage. This suggests that the audit effort should be higher when the auditor is an emerging firm and the future employment opportunities for the client firm´s manager are larger. |
| Keywords: | Contract theory, Career concerns, Reputation, Auditing |
| JEL: | C73 G38 D82 D83 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we091308&r=lab |
| By: | Bhalotra, S.; Valente, C.; Soest, A.H.O. van (Tilburg University, Center for Economic Research) |
| Abstract: | The socio-economic status of Indian Muslims is, on average, considerably lower than that of upper caste Hindus. Muslims have higher fertility and shorter birth spacing and are a minority group that, it has been argued, have poorer access to public goods. They nevertheless exhibit substantially higher child survival rates, and have done for decades. This paper documents and analyses this seeming puzzle. The religion gap in survival is much larger than the gender gap but, in contrast to the gender gap, it has not received much political or academic attention. A decomposition of the survival differential reveals that some compositional effects favour Muslims but that, overall, differences in characteristics between the communities and especially the Muslim deficit in parental education predict a Hindu advantage. Alternative outcomes and specifications support our finding of a Muslim fixed effect that favours survival. The results of this study contribute to a recent literature that debates the importance of socioeconomic status (SES) in determining health and survival. They augment a growing literature on the role of religion or culture as encapsulating important unobservable behaviours or endowments that influence health, indeed, enough to reverse the SES gradient that is commonly observed. |
| Keywords: | religion;caste;gender;child survival;anthropometrics;Hindu;Muslim;India |
| JEL: | O12 I12 J15 J16 J18 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200913&r=lab |
| By: | Taiju Kitano (National Graduate Institute for Policy Studies); Hiroshi Ohashi (Faculty of Economics, University of Tokyo) |
| Abstract: | This paper examines US safeguards applied to the motorcycle market in the 1980s. After receiving temporary protection by means of a maximum tariff of over 45%, Harley-Davidson sales recovered dramatically. Simulations, based on structural demand and supply estimates, indicate that while safeguard tariffs did benefit Harley-Davidson, they only account for a fraction of its increased sales. This is primarily because consumers perceived that Harley-Davidson and Japanese large motorcycles were poorly matched substitutes for each other. Our results provide little evidence that safeguard provisions triggered restructuring in Harley-Davidson. |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2009cf612&r=lab |
| By: | Wilson, Chris M |
| Abstract: | Despite the existence of two vast literatures, very little is known about the potential differences or interactions between search and switching costs. This paper demonstrates the benefits of examining the two frictions in unison. First, the paper shows how subtle distinctions between the two costs can provide important differences in their effects upon consumer behaviour and market prices. In many cases, policymakers may prefer to reduce search costs rather than switching costs. Second, the paper illustrates a simple methodology for estimating the magnitude of both costs while demonstrating the potential bias that can arise from a single-cost approach. |
| Keywords: | Search costs; Switching Costs; Market Friction |
| JEL: | L10 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13672&r=lab |
| By: | Muravyev, Alexander; Bilyk, Olga; Grechaniuk, Bogdana |
| Abstract: | The paper studies whether and how CEO turnover in Ukrainian firms is related to their performance. Based on a novel dataset covering Ukrainian joint stock companies in 2002-2006, the paper finds statistically significant negative association between the past performance of firms measured by return on sales and return on assets, and the likelihood of managerial turnover. While the strength of the turnover-performance relationship does not seem to depend on factors such as managerial ownership and supervisory board size, we do find significant entrenchments effects associated with ownership by managers. Overall, our analysis suggests that corporate governance in Ukraine operates with a certain degree of efficiency, despite the well-known lacunas in the country’s institutional environment. |
| Keywords: | corporate governance; managerial labor market; transition; Ukraine |
| JEL: | J40 G34 L29 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13685&r=lab |
| By: | Gelber, Alexander M. |
| Abstract: | This paper investigates the effect of 401(k) eligibility on saving. To address the possibility that eligibility correlates across individuals with their unobserved tastes for saving, I examine a change in eligibility: some individuals are initially ineligible for their 401(k) but become eligible when they have worked at their firm long enough. I find that eligibility raises 401(k) balances, but I find no evidence that other financial assets decrease. I also find no evidence that intertemporal substitution drives increases in saving following eligibility. In response to eligibility, IRA assets increase, consistent with a “crowd-in” hypothesis, and accumulation of cars decreases. |
| Keywords: | Savings; Retirement |
| JEL: | H31 H24 |
| Date: | 2009–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13613&r=lab |
| By: | N. NGOC THANG; D. BUYENS |
| Abstract: | Although there has been growing studies of the effects of training on firm performance, research attention has been limited to the contextual conditional that moderate the training- firm performance relationship. In this study, we used a contingency approach to examines the relationship between training, organizational strategy and firm performance. Results of regression from The Vietnam Employer survey 2007 show that quality and flexibility strategies moderated the training - firm sales and productivity relationship. However, we found no significant of the moderating effects of cost strategy on the training- firm performance relationship. |
| Keywords: | training; organizational strategy; firm performance |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:08/541&r=lab |
| By: | Tara Watson; Sara McLanahan |
| Abstract: | In this paper we investigate the effect of relative income on marital status. We develop an identity model based on Akerlof and Kranton (2000) and apply it to the marriage decision. The empirical evidence is consistent with the idea that people are more likely to marry when their incomes approach a financial level associated with idealized norms of marriage. We hypothesize that the "marriage ideal" is determined by the median income in an individual's local reference group. After controlling flexibly for the absolute level of income and a number of other factors, the ratio between a man's income and the marriage ideal is a strong predictor of marital status – but only if he is below the ideal. For white men, relative income considerations jointly drive co-residence, marriage, and fatherhood decisions. For black men, relative income affects the marriage decision only, and relative income is tied to marital status even for those living with a partner and children. Relative income concerns explain 10-15 percent of the decline in marriage since 1970 for low income white men, and account for more than half of the persistent marriage gap between high- and low-income men. |
| JEL: | J12 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14773&r=lab |
| By: | Farchy, Emily |
| Abstract: | Can a brain drain be good for development? Many studies have established the theoretical possibility of such a brain gain. Yet it is only recently that the relaxation of data constraints has allowed for sound empirical assessments. In utilizing the dramatic policy change that accompanied European Union accession as a natural experiment, this paper is able to assuage fears of reverse causality between migration and human capital formation. The results highlight a significant impact of European Union accession on human capital formation indicating that the prospect of migration can indeed fuel skill formation even in the context of middle-income economies. And, if accompanied by policies to promote return migration, as well as a functioning credit market to enable private investment, international labor mobility could represent a powerful tool for growth. |
| Keywords: | Population Policies,Economic Theory&Research,Labor Policies,Tertiary Education,Access to Finance |
| Date: | 2009–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4845&r=lab |
| By: | In-Koo Cho; Akihiko Matsui |
| Date: | 2009–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:814577000000000134&r=lab |
| By: | Novarese, Marco |
| Abstract: | According to a wide literature persons are not able to evaluate their own skills and knowledge, but the discussion on the nature, extension and determinants of this phenomenon is still open. This paper aims at proposing new empirical evidence on overconfidence and its determinants, trying to find out the possible effect of past performance on present optimism. I test my students' calibration and confidence in predicting their future results, comparing their expectations and real grades. My analysis allows showing the existence of overconfidence, its reduction in two following tests, and its non linear relation with students' capacities. Besides, I focus my attention on the effect of the grade my students got at the end of high school. This is used a proxy of their past experience and habit to get good or bad grades. Past success determined overconfidence. This idea is connected to the literature on heuristics and rule based perception. |
| Keywords: | overconfidence; expectations; learning; inertia; rule based behavior; economic education |
| JEL: | D83 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13754&r=lab |
| By: | Yolanda Portilla |
| Abstract: | An important puzzle in financial economics is why fund managers invest in short-maturity assets when they could obtain larger profits in assets with longer maturity. This work provides an explanation to this fact based on labor contracts signed between institutional investors and fund managers. Using a career concern setup, we examine how the optimal contract design, in the presence of both explicit and implicit incentives, affects the fund managers decisions on investment horizons. A numerical analysis characterizes situations in which young (old) managers prefer short-maturity (long-maturity) positions. However, when including multitask analysis, we find that career concerned managers are bolder and also prefer assets with long maturity. |
| Keywords: | Contract theory, Career concerns, Financial equilibrium, Investment maturity |
| JEL: | G29 J44 J24 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we091106&r=lab |
| By: | Juan M. Contreras (Congressional Budget Office); Beomsoo Kim (Department of Economics, Korea University, Seoul, South Korea); Ignez M. Tristao (Congressional Budget Office) |
| Abstract: | In this paper, we examine the ¡°learning-by-doing¡± hypothesis in medicine using a longitudinal census of laser in situ keratomileusis (LASIK) eye surgeries collected directly from patient charts. LASIK surgery has precise measures of presurgical condition and postsurgical outcomes. Unlike other types of surgery, the impact of unobservable underlying patient conditions on outcomes is minimal. Individual learning-bydoing is identified through observations of surgical outcomes over time based on the cumulative number of surgeries each surgeon has performed. Collective learning is identified separately through changes in a group adjustment rule determined jointly by all the surgeons through a structured internal review process. Our unique data set overcomes some of the measurement problems in patient outcomes encountered in other studies, and improves the possibility of identifying the impact of learning-by-doing separate from other effects. Our results do not support the hypothesis that the surgeon¡¯s individual learning improves outcomes, but we find strong evidence that experience accumulated by surgeons as a group in a clinic significantly improves outcomes. |
| Keywords: | learning, experience, LASIK |
| JEL: | I10 I12 I18 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:0902&r=lab |
| By: | Carrillo Julio A. (METEOR) |
| Abstract: | This paper compares two approaches towards the empirical inertia of inflation and output. Two variants that produce persistence are added to a baseline DSGE model of sticky prices: 1) sticky information applied to firms, workers, and households; and 2) a backward-looking inflation indexation along with habit formation. The rival models are then estimated using U.S. data in order to determine their plausibility. It is shown that the sticky information model is better at predicting inflation, wage inflation, and the degree of price stickiness. Output dynamics, however, are better explained by habit persistence. |
| Keywords: | macroeconomics ; |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2009008&r=lab |
| By: | Arturo Antón Sarabia |
| Abstract: | During the last years, Mexico has registered relatively large output falls. The business cycle accounting method of Chari, Kehoe and McGrattan (2007) is applied to the two most recent recessions in Mexico (including the “Tequila crisis”) in order to understand what are the most important wedges driving output over the cycle and to evaluate to what extent such falls may be smoothed. First, it is found that efficiency and labor wedges may reasonably account for output fluctuations in each recession. Second, counterfactual exercises suggest that the elimination of distortions represented in terms of the efficiency wedge might result in output falls about one third of those observed in the data. |
| Keywords: | Business cycle accounting, Tequila crisis, Total factor productivity, Mexico |
| JEL: | E32 O41 O54 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2008-05&r=lab |
| By: | Kannan, Srinivasan |
| Abstract: | Modern technologies such as Information Communication Technologies have helped many of the development sectors. One of the sectors it has lot of scope to develop is the Education. It is also evident from the experience that the benefits of these technologies have contributed much in the area of healthcare. However, these benefits come with few limitations. A technology is useful only if (a) the systems are designed keeping the user perspective mind, (b) if the users are trained on those systems, (c) users recognize the need for a system and (d) users feel there is a need for such system. Developing a system for an application does not necessarily lead to usage. Many developments ended without giving any benefit to society. For the better usage and the benefits, one has to have a commitment to promote the system among the appropriate users by demonstrating the benefits of such systems. This further discouraged by the restrictions imposed by the IPR regime. There is some relief now due to the popularization of the free software movements. This paper is an effort to highlight the benefits of such systems in public health education with special reference to the open source online tools. Author is a faculty of a Public Health school teaching health management course to the students of public health. The paper addresses the importance of ICT systems in training the public health professionals. It also discusses the benefits and limitations of such system. The present system is a complementary teaching method to the existing classroom teaching. |
| Keywords: | ICT Education; Online Tools; Learning Management System |
| JEL: | I20 |
| Date: | 2009–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13768&r=lab |
| By: | Luca Zamparelli |
| Abstract: | This paper develops a growth model combining elements of endogenous growth and induced innovation literatures. In a standard induced innovation model firms select at no cost innovations from an innovation possibilities frontier describing the trade-off between increasing capital or labor productivity. The model proposed allows firms to choose not only the direction but also the size of innovation by representing the innovation possibilities through a cost function of capital and labor augmenting innovations. By so doing, it provides a micro-foundation both of the intensity and of the direction of technical change. The policy analysis implies that an increase in subsidies to R&D as opposed to capital accumulation raises per capita steady state growth, employment rate and wage share. |
| Keywords: | Induced innovation, endogenous growth, direction of technical change |
| JEL: | O31 O33 O40 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:dsc:wpaper:4&r=lab |
| By: | Titelman, Daniel; Vera , Cecilia; Perez Caldentey, Esteban |
| Abstract: | In the past two decades, Latin American countries reformed their pension systems focusing mainly on addressing the weaknesses of the contributory schemes - fiscal unsustainability, low coverage levels and a high degree of segmentation- and barely addressed the non-contributory element. The reform experiences show however that the intended reforms did not manage to meet their objectives. Firstly, to this day, a large proportion of the population remains inadequately covered by the contributory system. Secondly, the fiscal performance and outcome of the reform was worse than originally planned. The possibilities for the success of these reforms faced several constraints of a structural nature that are independent of the pension system itself and that as a result can not be overcome by a pension reform including mainly the limited savings capacity of some population groups and the instability and precariousness of the labor markets in the region. The Latin American experience shares similarities with that of China in terms of coverage, labor market informality. Both cases attest to the importance of combining contributory and non-contributory components in pension reform design. |
| Keywords: | Pension reform; contributory schemes; coverage; Fiscal unsustainability; Contributory coverage; contribution density; fragmentation; transition costs; pension reform in Latin America; pension reform in China |
| JEL: | G23 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13730&r=lab |
| By: | Philippe Aghion; John Van Reenen; Luigi Zingales |
| Abstract: | We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nests the lazy-manager hypothesis with career-concerns, where institutional owners increase managerial incentives to innovate by reducing the career risk of risky projects. The data supports the career concerns model. First, whereas the lazy manager hypothesis predicts a substitution effect between institutional ownership and product market competition (and managerial entrenchment generally), the career-concern model allows for complementarity. Empirically, we reject substitution effects. Second, CEOs are less likely to be fired in the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables, policy changes and disaggregating by type of owner we find that the effect of institutions on innovation does not appear to be due to endogenous selection. |
| JEL: | G20 G32 O31 O32 O33 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14769&r=lab |
| By: | Gadd, Håkan (Swedish Institute for Growth Policy Studies (ITPS)); Hansson, Gustav (Swedish Insitute for Growth Policy Studies (ITPS)); Månsson, Jonas (Centre for Labour Market Policy Research (CAFO)) |
| Abstract: | In this paper, we investigate if firms who received the Regional Development Grant are performing better than firms that did not receive the subsidy. Using data on Swedish stock companies, we firstly estimate a multilevel logit model of the probability of receiving the subsidy. The multilevel approach enables us to adequately take into account the regional context. Secondly, we use propensity score matching to assess the successfulness of the subsidy. The results show that firm characteristics and regional context matters for the probability of receiving the subsidy. Subsidized firms increased their firm size compared to non-subsidized firms’, however; we find no evidence that the subsidized firms have any higher profitability. |
| Keywords: | Subsidy; Policy evaluation; Firm profitability; Employment growth; Regional development; Multilevel; Propensity score matching |
| JEL: | C01 E20 H32 O18 R11 |
| Date: | 2008–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2009_003&r=lab |
| By: | Freeman, Alan; Desai, Radhika |
| Abstract: | This article assesses the significance of the January 2009 US unemployment figures. The steep fall of 4 million jobs is greater than any 12-month fall in history. Does this mean that 2007-2008 heralds the worst recession since 1929? This article assesses the empirical evidence of the US payroll figures to date. |
| Keywords: | Keywords: Credit Crunch; Investment; Liquidity Preference; Rate of Profit; State; Welfare State; War; Military Keynesianism |
| JEL: | E0 E12 E24 |
| Date: | 2009–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13740&r=lab |
| By: | André van Stel; Mickey Folkeringa; Sierdjan Koster |
| Abstract: | We investigate the impact of start-up rates on a measure of competition among incumbent firms called mobility. Interactions between new and incumbent firms play an important role in the process of economic growth. While recent literature suggests that competition among incumbent firms is caused by (lagged) start-up rates, this relation has not yet been tested using a direct measure of competition among incumbent firms. In the present paper we estimate a regression model, at the region-sector level for the Netherlands, where the mobility rate is explained by (lagged) startup rates and control variables. Using data for 40 regions and five sectors over the period 1993-2006 we find that the impact of start-ups on mobility varies by sector. In particular, we find a strong positive relation between start-up rates and mobility rates for industry sectors (manufacturing and construction) but a much smaller effect for services sectors. These results suggest there are differences in the types of entry between sectors and in the roles start-ups play in different sectors. |
| Date: | 2009–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h200905&r=lab |
| By: | M. KNOCKAERT; B. CLARYSSE; M. WRIGHT; A. LOCKETT |
| Abstract: | In this paper, we study which VC firm and investment manager related factors drive the VC’s attitude towards academic spin-out investing by taking an agency and human capital perspective. In order to do so, we use a unique hand-collected dataset involving 68 investment managers working at early stage VCs in Europe who were interviewed and provided us with information on the fund characteristics and their human capital. First, the results show that academic spin-out investors work to a large extent at publicly funded VCs that often engage in a very hands-on type of postinvestment behaviour. Second, the results show that human capital is associated with the willingness of the investment manager to invest in academic spin-outs. Investment managers that had worked in an academic environment and thus have similar human capital compared to the academic founders were more inclined to invest in academic spin-outs. Other specific human capital, such as technical education, and general human capital were not found to be associated with the investment manager’s interest in academic spin-out investing, except for the amount of entrepreneurial experience that negatively affected the attitude towards academic spin-outs. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:08/537&r=lab |
| By: | Sandén, Klas (Centre for Labour Market Policy Research (CAFO)) |
| Abstract: | This paper makes a theoretical contribution by investigating how the optimal copyright legislation depend on hidden information. A mixed hidden action – hidden information model is used. The regulator neither observes the type of firm nor the quality choice of firms. The paper provides no evidence that hidden information can motivate a copyright legislation. In fact it shows that the optimal policy, with asymmetric information, is a reward system that is second best. |
| Keywords: | Asymmetric information; Copyright; Reward system; Legislation |
| JEL: | D20 D82 |
| Date: | 2008–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2009_004&r=lab |
| By: | Aghion, Philippe; Van Reenen, John; Zingales, Luigi |
| Abstract: | We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nests the lazy-manager hypothesis with career-concerns, where institutional owners increase managerial incentives to innovate by reducing the career risk of risky projects. The data supports the career concerns model. First, whereas the lazy manager hypothesis predicts a substitution effect between institutional ownership and product market competition (and managerial entrenchment generally), the career-concern model allows for complementarity. Empirically, we reject substitution effects. Second, CEOs are less likely to be fired in the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables, policy changes and disaggregating by type of owner we find that the effect of institutions on innovation does not appear to be due to endogenous selection. |
| Keywords: | career concerns; Innovation; Institutional Ownership; productivity; R&D |
| JEL: | G20 G32 O31 O32 O33 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7195&r=lab |
| By: | Anna Stepanova |
| Abstract: | In a two-stage R&D game of process innovation, we investigate the effect of exogenously changing R&D spillovers and market concentration on the equilibrium level of effective cost reduction, total output, profits and social welfare. Interpreting spillover as a measure of patent protection, we find that weaker patent protection results in less R&D. We also show that firms prefer weaker patent protection, but social welfare is maximized for higher levels of patent protection. In terms of market concentration we show that firm profits decrease with increasing numbers of firms. Social welfare is typically maximized under oligopoly with the optimal number of firms depending on the level of spillover and efficiency of R&D investment. |
| Keywords: | oligopoly; R&D; competition; spillover process; cost reduction; market concentration |
| JEL: | C72 L13 O31 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:0901&r=lab |