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on Labour Economics |
| By: | Burdett, Ken (University of Pennsylvania); Carrillo-Tudela, Carlos (University of Leicester); Coles, Melvyn (University of Essex) |
| Abstract: | We analyse an equilibrium labour market with on-the-job search and experience effects (where workers learn-by-doing). The analysis yields a standard Mincer wage equation with worker fixed effects and endogenously determined firm fixed effects. It shows that learning-by-doing increases equilibrium wage dispersion consistent with the data. Equilibrium sorting - where over time more experienced workers also tend to find and quit to better paid employment - has a significant impact on wage inequality. As the model yields a cross section distribution of wages paid with the 'right' structure (the density of wages paid is single peaked with a 'fat' Pareto right tail) and yields the 'right' time profile of worker wage outcomes (the initial 10 years of a worker's career are characterised by several job changes and rapid wage growth) it yields a new, coherent statistical structure for future applied work. |
| Keywords: | search, wage dispersion, human capital accumulation |
| JEL: | J24 J42 J64 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4215&r=lab |
| By: | Shimizutani, Satoshi; Oshio, Takashi |
| Abstract: | The interval in time between leaving a career job and exit from the labor force is especially long for Japanese employees and separation from the career job often takes place due to mandatory retirement in Japan. Using micro-level data compiled by the Japanese Government, we examine determinants of post-career work arrangements from two perspectives: work status and the route to a second job. We show that these determinants differ between male and female workers and that the customary function of career employers to place their workers in a second job has declined since the middle of the 1990s. |
| Keywords: | mandatory retirement, postretirement arrangements, labor supply of the elderly, Japan |
| JEL: | J14 J26 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:430&r=lab |
| By: | Bonilla, Roberto |
| Abstract: | I analyse an economy where a search labour market and a matching marriage market interact. The economy is populated by homogeneous workers, firms and marriage partners (MPs). Workers simultaneously search for firms in order to work and for MPs in order to marry. Firms post wages to attract workers. MPs look for workers in order to marry. I assume that married workers receive a pre-determined flow utility, and married MPs derive flow utility equal to the worker's earnings. This provides the link between the markets. Noisy search in the labour market generates a distribution of wages. I show that the so called married wage premium can be the consequence of frictions in both markets, without having to resort to the typical explanations. In one equilibrium, MPs marry all workers, regardless of their employment status. In a more interesting equilibrium, MPs marry only high earners, while workers accept wages that render them "unmarriageable". The workers' reservation wage must compensate them for the loss of marriageability in addition to the option of continued search for better wages. This affects the distributions of wages offered and earned, which are crucial in the MPs decision to marry/reject low earners. |
| Keywords: | Search; Married wage premium; matching markets |
| JEL: | J01 |
| Date: | 2009–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15881&r=lab |
| By: | Moon, Weh-Sol |
| Abstract: | I construct a matching model to explain the labor market transition between employment, unemployment and nonparticipation, and evaluate the quantitative effects of firing costs. The model has several features that are distinguished from previous studies: endogenous labor force participation, different job-search decisions and imperfect insurance markets. I find that the model is able to account for the U.S. labor market, especially the gross labor-force transition rates. I also find that firing costs as a type of firing tax have a negative effect on the layoff rate, the job-finding probability and the participation rate. In particular, the effect of a decrease in the job-finding probability is greater than the effect of a decrease in the layoff rate, and this results in an increase in the unemployment-to-population ratio. Finally, firing costs make individuals' job tenures longer and skew the asset distribution to the right. |
| Keywords: | Search and Matching; Labor Force Participation; Firing Costs |
| JEL: | E24 J21 J65 J64 |
| Date: | 2009–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15749&r=lab |
| By: | Elke Holst; Anne Busch |
| Abstract: | Although there are a variety of studies on the gender pay gap, only a few relate to managerial positions. The present study attempts to fill this gap. Managers in private companies in Germany are a highly selective group of women and men, who differ only marginally in their human capital endowments. The Oaxaca/Blinder decomposition shows that the gender pay gap in the gross monthly salary can hardly be explained using the human capital approach. Adding variables on gender-specific labor market segregation and dimensions of the household and family to the model allows more than two-thirds of the gender pay gap to be explained. However, taking selection effects in a managerial position into account (Heckman correction), the proportion explained decreases to only one-third. This reveals the real extent to which women are disadvantaged on the labor market. In addition, we observe not only that the wages in typical women’s jobs are lower than in typical men’s jobs but also that women are paid less than men in typical women’s jobs. The two-thirds of the gender pay gap that remain unexplained represent the unobserved heterogeneity. This includes, for example, general societal and cultural conditions as well as structures and practices on the labor market and in companies that subject women to pay discrimination and pose an obstacle to them breaking the glass ceiling. |
| Keywords: | Gender pay gap, managerial positions, segregation, Oaxaca/Blinder decomposition, Heckman correction |
| JEL: | J31 J16 J2 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp201&r=lab |
| By: | DANIEL FERNANDEZ (Instituto de Empresa) |
| Abstract: | Part-time work has recently received renewed attention in Spain as its Prime Minister, José LuÃs RodrÃguez Zapatero, has offered to use part-time (PT) work as a measure to increase labor market flexibility in the midst of the current economic crisis. However, little is known in Spain on whether PT employment, which is mainly female employment, offers the opportunity for career progression or the risk of career stagnation in a country with a striking segmentation of its labor market. This paper uses a rich longitudinal Spanish data set to investigate the PT / full-time (FT) wage growth differential between prime-aged women strongly attached to the labor force, distinguishing by their type. |
| Keywords: | Fixed-term, Permanent contract, Wage growth, Prime-aged women, fixed-effects estimator |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:emp:wpaper:wp09-04&r=lab |
| By: | Bosch, Nicole (CPB Netherlands Bureau for Economic Policy Analysis); van der Klaauw, Bas (VU University Amsterdam) |
| Abstract: | Among OECD countries, the Netherlands has average female labor force participation, but by far the highest rate of part-time work. This paper investigates the extent to which married women respond to financial incentives. We exploit the exogenous variation caused by a substantial Dutch tax reform in 2001. Our main conclusion is that the positive significant effect of tax reform on labor force participation dominates the negative insignificant effect on working hours. Our preferred explanation is that women respond more to changes in tax allowances than to changes in marginal tax rates. |
| Keywords: | uncompensated wage elasticity, labor force participation, working hours, endogeneity |
| JEL: | H24 J22 J38 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4238&r=lab |
| By: | O'Higgins, Niall (University of Salerno) |
| Abstract: | This paper uses a unique survey of Roma and non-Roma in South Eastern Europe to evaluate competing explanations for the poor performance of Roma in the labour market. The analysis seeks to identify the determinants of educational achievement, employment and wages for Roma and non-Roma. LIML methods are employed to control for endogenous schooling and two sources of sample selection bias in the estimates. Nonlinear and linear decomposition techniques are applied in order to identify the extent of discrimination. The key results are that: the employment returns to education are lower for Roma than for non-Roma whilst the wage returns are broadly similar for the two groups; the similar wage gains translate into a smaller absolute wage gain for Roma than for non-Roma given their lower average wages; the marginal absolute gains from education for Roma are only a little over one-third of the marginal absolute gains to education for majority populations; and, there is evidence to support the idea that a substantial part of the differential in labour market outcomes is due to discrimination. Explanations of why Roma fare so badly tend to fall into one of two camps: 'low education' vs. 'discrimination'. The analysis suggests that both of these explanations have some basis in fact. Moreover, a direct implication of the lower absolute returns to education accruing to Roma is that their lower educational participation is, at least partially, due to rational economic calculus. Consequently, policy needs to address both low educational participation and labour market discrimination contemporaneously. |
| Keywords: | Roma, returns to education, discrimination, transition |
| JEL: | C35 J15 J24 P23 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4208&r=lab |
| By: | Clark, Andrew E. (PSE); Knabe, Andreas (Free University of Berlin); Rätzel, Steffen (University of Magdeburg) |
| Abstract: | The social norm of unemployment suggests that aggregate unemployment reduces the well-being of the employed, but has a far smaller effect on the unemployed. We use German panel data to reproduce this standard result, but then suggest that the appropriate distinction may not be between employment and unemployment, but rather between higher and lower levels of labour-market security, at least for men. Men with good job prospects, both employed and unemployed, are strongly negatively affected by regional unemployment. However, insecure employed men and poor-prospect unemployed men are less negatively, or even positively, affected. There is however no clear relationship for women. We analyse labour-market inequality and unemployment hysteresis in the light of our results. |
| Keywords: | job insecurity, externalities, unemployment, well-being |
| JEL: | I31 D84 J60 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4210&r=lab |
| By: | Sæther, Erik Magnus (Ragnar Frisch Centre for Economic Research) |
| Abstract: | When entering the job market registered nurses (RNs) face job alternatives with differences in wages and other job attributes. Previous studies of the nursing labor market have shown large earnings differences between similar hospital and non-hospital RNs. Corresponding differences are found in some of the analyses of shift and regular daytime workers. In the first part of this paper I analyze the wage differentials in the Norwegian public health sector, applying a switching regression model. I find no hospital premium for the shift RNs and a slightly negative hospital premium for the daytime RNs, but it is not significant for the hospital job choice. I find a positive shift premium. The wage rate is 19% higher for the shift working hospital RNs and 18% for the sample of primary care workers. The shift premium is only weakly significant for the shift work choice for the sample of hospital RNs, and not for the primary care RNs. I identify some selection effects. In the second part of the paper I focus on the shift compensation only, and present a structural labor supply model with a random utility function. This is done to identify the expected compensating variation necessary for the nurses to remain on the same utility level when they are “forced” from a day job to a shift job. The expected compensating variations are derived by Monte Carlo simulations and presented for different categories of hours. I find that on average the offered combination of higher wages, shorter working hours and increased flexibility overcompensates for the health and social strains related to shift work. |
| Keywords: | Registered nurses; compensating variations; switching regression; random utility models; discrete choice; shift work; labor supply |
| JEL: | C25 I10 J31 J33 |
| Date: | 2009–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oslohe:2004_010&r=lab |
| By: | David H. Autor; Michael J. Handel |
| Abstract: | Employing original, representative survey data, we document that cognitive, interpersonal and physical job task demands can be measured with high validity using standard interview techniques. Job tasks vary substantially within and between occupations, are significantly related to workers' characteristics, and are robustly predictive of wage differentials both between occupations and among workers in the same occupation. We offer a conceptual framework that makes explicit the causal links between human capital endowments, occupational assignment, job tasks, and wages. This framework motivates a Roy (1951) model of the allocation of workers to occupations. Tests of the model’s implication that 'returns to tasks' must negatively covary among occupations are strongly supported. |
| JEL: | J15 J16 J24 J31 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15116&r=lab |
| By: | Graf, Nikolaus (IHS - Institute for Advanced Studies, Vienna); Hofer, Helmut (IHS - Institute for Advanced Studies, Vienna); Winter-Ebmer, Rudolf (University of Linz) |
| Abstract: | In this paper we evaluate the impact of the old-age part-time scheme (OAPT) on the Austrian labour market which was a policy to allow flexible retirement options for the elderly with an aim to increase labour supply. According to our matching estimates employment probability increases slightly, especially in the first two years after entrance into the programme. Furthermore, the programme seems to reduce the measured unemployment risk. However, the total number of hours worked is significantly reduced by OAPT. While the policy is meant to reduce early exit from the labour force by allowing part-time work, our analysis indicates that most workers substitute part-time work for full-time work and thus the overall effect is rather negative. |
| Keywords: | evaluation of labour market programmes, labour supply of the elderly, nearest neighbour matching |
| JEL: | C31 J14 J26 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4239&r=lab |
| By: | Valentina Calderón (Harris School of Public Policy, University of Chicago); Ana María Ibáñez (Department of Economics, Universidad de los Andes) |
| Abstract: | This paper studies the labor market effects of migration-related supply shocks. We exploit forced migration caused by the Colombian conflict as a natural experiment to examine the impact of exogenous labor supply shifts on labor outcomes. While migration flows are exogenously produced by conflict dynamics, location decisions might be positively correlated with demand shocks. An instrumental variables strategy allows us to correct for the possible attenuation bias generated by internally displaced populations locating in dynamic labor markets. Our results suggest that these immigration flows produce large negative impacts on the wages and employment opportunities of all workers, and are particularly large for low skill workers. |
| Keywords: | Migration, Labor Markets, Developing Countries |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mcn:rwpapr:14&r=lab |
| By: | Mariapia Mendola (University of Milan Bicocca and LdA); Gero Carletto (the World Bank) |
| Abstract: | This paper examines the role of male-dominated international migration in shaping labor market outcomes by gender in migrant-sending households in Albania. Using detailed information on family migration experience from the latest Living Standards Measurement Study (LSMS) survey, we find that male and female labor supplies respond differently to current and past migration episodes of household members. Controlling for the potential endogeneity of migration and for the income (remittances) effect, estimates show that having a migrant abroad decreases female paid labor supply while increasing unpaid work. On the other hand, women with past family migration experience are significantly more likely to engage in self-employment and less likely to supply unpaid work. The same relationships do not hold for men. These findings suggest that over time male-dominated Albanian migration may lead to women’s empowerment in the access to income-earning opportunities at origin. |
| Keywords: | International Migration, Gender, Labor supply, Albania |
| JEL: | J22 J24 J16 O15 |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:272&r=lab |
| By: | Sweetman, Arthur; Warman, Casey |
| Abstract: | We compare the economic outcomes of former Temporary Foreign Workers (TFWs) and former international students to immigrants who have no Canadian human capital at the time of landing. First, controlling for all possible variables that are adjustable under the current Canadian points system, we find that TFWs and students have better earning and employment outcomes, although by four years after landing, there is no difference between the employment outcomes of students or earnings of TFWs and workers with no pre-immigration Canadian human capital. Predicting the points that immigrants would obtain based on their observable human capital under the points system, each point increases earnings by around 2 percent and the probability of being employed by around half a percent. We also find that the predicted points of the respondent helps predict the earning and employment outcomes of the spouse. Next we examine the outcomes of immigrants based on entry class separately by gender. We find that both male and female Principal Applicants entering through the Skilled Worker program perform much better than immigrants entering through most of the other classes, although, for males, Principal Applicants entering under the Family Class are more likely to be employed at six months and two years after landing. Finally, restricting the sample to immigrants who were directly assessed based on economic criteria (Skilled Worker Principal Applicants), we discover that for males, immigrants who had previously worked in Canada as TFWs have much better outcomes in terms of entry earnings than immigrants who have no pre-Canadian experience at landing. Former international students experience an advantage in terms of hourly earnings, but much smaller than that experienced by TFWs, and students experience no earnings advantage in terms of weekly earnings. Overall, the evidence suggests that temporary foreign worker or student status does provide some signal of how well an immigrant will integrate economically. |
| Keywords: | Immigrants, Temporary Foreign Workers, International Students, Canada |
| JEL: | J15 J24 J31 J61 J62 |
| Date: | 2009–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-34&r=lab |
| By: | Hynninen S (University of Jyvaskyla) |
| Abstract: | The study examines how the job competition among the highly educated affects their wages in regional labour markets. We estimate individual-level wage curves separately for graduates and post-graduates and divide the job competition in unemployed and employed job search by level of education. The study does not find a wage curve for the highly educated in Finland. The results indicate that the dynamics of the market apparent in the increased employed job search creates more job opportunities for the graduates in the private sector, while declining the opportunities of both the graduates and the postgraduates in the municipality sector. |
| Date: | 2009–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2009-17&r=lab |
| By: | Avraham Ebenstein; Ann Harrison; Margaret McMillan; Shannon Phillips |
| Abstract: | In this paper, we link industry-level data on offshoring activities of U.S. multinational firms, import penetration, and export shares with individual level worker data from the Current Population Surveys. We examine whether increasing globalization through offshoring or trade has led to reallocation of labor, both within and out of manufacturing, and measure its impact on the wages of domestic workers. We also control for the “routineness†of individual occupations. Our results suggest that (1) offshoring to high wage countries is positively correlated with U.S. manufacturing employment (2) offshoring to low wage countries is associated with U.S. employment declines (3) wages for workers who remain in manufacturing are generally positively affected by offshoring; in particular, we find that wages are positively associated with an increase in U.S. multinational employment in high income locations (4) much of the negative effects of globalization operate through downward pressure on wages of workers who leave manufacturing to take jobs in agriculture or services and (5) the downward pressure on aggregate U.S. wages operating through import competition has been quite important for some occupations. This effect has been overlooked because it operates across, not within, industries. |
| JEL: | F15 F16 F23 J23 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15107&r=lab |
| By: | Cardoso, Ana Rute (IAE Barcelona (CSIC)) |
| Abstract: | This paper quantifies the long-run impact of exposure to youth minimum wages and sheds light on its mechanisms. It uses remarkable longitudinal data spanning for twenty years and explores legislative changes that define groups of teenagers exposed for different durations. After controlling for the contemporaneous impact of the minimum wage, its long-run impact translates into: an overall wage premium, consistent with an upgrading in the quality of jobs offered; a flatter tenure-earnings profile, consistent with lower initial investment in firm-specific training. Interestingly, the overall wage premium increases with exposure and the tenure-earnings profile is flatter the longer the exposure. |
| Keywords: | skill formation, human capital investment, on-the-job-training, career, long-term, linked employer-employee data |
| JEL: | J08 J31 J24 J38 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4236&r=lab |
| By: | Sæther, Erik Magnus (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Many registered nurses (RNs) in Norway work part-time, or in non-health jobs. The nurses’ trade organizations claim that a wage increase will increase the short-term labor supply in health care. This paper is an attempt to identify the effects of job-type specific wage increases through policy simulations on micro data. The individual’s labor supply decision can be considered as a choice from a set of discrete alternatives (job packages). These job packages are characterized by attributes such as hours of work, sector specific wages and other sector specific aspects of the jobs. The unique data set covers all RNs registered in Norway and their families. The spouses’ incomes and age of the children are vital when estimating the labor supply of this profession. For married females the results indicate job type specific wage elasticities for hours of work of 0.17 in hospitals and 0.39 in primary care. The total hours worked in health and non-health jobs are actually predicted to be slightly reduced, but the change is not significantly different from zero. Single females are somewhat more responsive to wage changes than married ones. |
| Keywords: | Registered nurses; discrete choice; non-convex budget sets; labor supply; sector-specific wages |
| JEL: | C25 I10 J22 |
| Date: | 2009–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oslohe:2004_007&r=lab |
| By: | Chen, Yuanyuan (Shanghai University of Finance and Economics); Feng, Shuaizhang (Princeton University) |
| Abstract: | Using nationally representative data in China, we find substantial positive partial correlations of both parents' education with one's wage. In addition, returns to father's education are higher in more monopsonistic and less meritocratic labor markets, including non-coastal regions, the state-owned sector, and the early periods of the reform era. The opposite is, however, true with respect to mother's education. Overall, the empirical evidence is consistent with the story that father's education mainly indicates family connections useful for locating a better-paying first job, while mother's education primarily captures unmeasured ability. |
| Keywords: | parental education, wages, family connections, unmeasured ability |
| JEL: | J30 J62 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4218&r=lab |
| By: | Rebekka Christopoulou and Theodora Kosma |
| Abstract: | This paper examines changes in the Greek wage distribution over 1995-2002 and the role of skill in these changes. The methodology adopted is the Machado-Mata counterfactual decomposition, which separates the part of wage changes that is due to job and workers' characteristics (composition effects) from the part due to the returns to these characteristics (price effects). We find that mean wages have not increased substantially, but wage inequality has, mostly at the upper tail of the distribution. The role of skill has been decisive. Falling tenure levels at all but the very high wage deciles, and rising education across the board, have carried much of the inequality increasing influence of overall composition effects. Although to a lesser extent, changes in the returns to skill have contributed to inequality by forming a U-shaped pattern along the wage distribution. This pattern is further reinforced when price-effects of skill are added together with the composition effect of tenure to produce the share of skill-effects that is responsive to market forces. Drawing on this evidence, we make a case for the routinization hypothesis. |
| Keywords: | Returns to skill; Wage inequality; Quantile regression. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:hel:greese:26&r=lab |
| By: | Devashish Mitra |
| Abstract: | In this paper, in order to study the impact of offshoring on sectoral and economy wide rates of unemployment, we construct a two sector general equilibrium model in which unemployment is caused by search frictions. The model shows that wage increases and sectoral unemployment decreases upon offshoring in the presence of perfect intersectoral labor mobility. If, as a result, labor moves to the sector with the lower (or equal) vacancy costs, there is an unambiguous decrease in economy wide unemployment. With imperfect intersectoral labor mobility, unemployment in the offshoring sector can rise, with an unambiguous unemployment reduction in the non-offshoring sector. Imperfect labor mobility can result in a mixed equilibrium in which only some firms in the industry offshore, with unemployment in this sector rising. [IZA DP no. 4136] |
| Keywords: | trade; unemployment; offshoring; search frictions; labor minority |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2071&r=lab |
| By: | Vikström, Johan (IFAU - Institute for Labour Market policy Evaluation) |
| Abstract: | Several studies have documented that employer incentives, in form of experience rating, co-insurance or deductibles, could decrease the social insurance usage. Such employer incentives may though have unintended side effects, as it gives employers incentives to transfer the costs to their workers, affecting individual wages and inducing cream skimming. Side effects which have been given limited attention. This paper aims to fill one part of this gap in the literature. The effect off employer incentives on individual wages is estimated using a reform in January 1992, which introduced an employer co-insurance system into the Swedish sickness absence insurance. The analysis based on a long population panel database, including survey information on hourly wages, gives no support of any important individual wage effects from the co-insurance reform. This is not a result of lack of variation in individual wage increases, nor is it a result of large standard errors. |
| Keywords: | Wage; employer incentives; co-insurance; sickness absence; work absence; social insurance |
| JEL: | C23 H55 I18 J39 |
| Date: | 2009–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2009_013&r=lab |
| By: | Pierre Cahuc (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, Center for Economic Research - CEPR, IZA - Institute for the Study of Labor); Thomas Le Barbanchon (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, Unité de gestion de la direction de l'action régionale et des relations avec l'enseignement supérieur (DARES) - INRA) |
| Abstract: | We analyze the consequences of counseling provided to job seekers in a standard job search and matching model. It turns out that neglecting equilibrium effects induced by counseling can lead to wrong conclusions. In particular, counseling can increase steady state unemployment although counseled job seekers exit unemployment at a higher rate than the noncounseled. Dynamic analysis shows that permanent and transitory policies can have effects of opposite sign on unemployment. |
| Keywords: | evaluation, equilibrium effect, labor market policy |
| Date: | 2009–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00396295_v1&r=lab |
| By: | Maurer-Fazio, Margaret (Bates College); Connelly, Rachel (Bowdoin College); Lan, Chen (affiliation not available); Tang, Lixin (Bates College) |
| Abstract: | We employ data from the three most recent Chinese population censuses to consider married, urban women's labor force participation decisions in the context of their families and their residential locations. We are particularly interested in how the presence in the household of preschool and school-age children and/or the elderly and disabled affects women's likelihood of engaging in work outside the home. We find that the presence of older people in the household (any parent or parent-in-law and any person aged 75 or older) significantly increases prime-age urban women's likelihood of participating in market work and that presence of pre-school age children significantly decreases it. The negative effect on women's labor force participation of having young children in the household (compared to no children in the household) is substantially larger in magnitude for married, migrant women than for married, non-migrant urban residents. This appears to be explained, in part, by the practice of married, female migrants leaving their children in the care of relatives in rural areas in order to facilitate their employment. |
| Keywords: | labor force participation, China, childcare, eldercare, migrants, population census, urban women |
| JEL: | J11 J12 J13 J16 J22 O15 P23 R23 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4204&r=lab |
| By: | Shimizutani, Satoshi |
| Abstract: | Although there exists a large volume of literature on the subject, a consensus on the labor supply effects of the social security earnings test for the elderly has yet to be reached. This study proposes an alternative approach of utilizing direct responses to a survey on the earnings test, a unique feature of our dataset compiled by the Japanese Government, to provide new evidence on the sensitivity of the labor supply decision of workers aged between 60 and 64 with respect to the earnings test. Our empirical results show that a large proportion of these workers are discouraged from working or reduce their working hours, even after correcting for observed attributes of individuals who reported either affected or unaffected. In addition, the revision of the test rules in 1995 did not alter the labor supply of the elderly. |
| Keywords: | social security earnings test, labor supply of the elderly, Japan, wage distribution, DiNardo-Fortin-Lemieux decomposition |
| JEL: | H55 J26 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:429&r=lab |
| By: | Sæther, Erik Magnus (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Shift work has a documented negative impact on workers’ health and social life, effects which are compensated for with higher wages and shorter working hours. Many countries face a ‘nursing shortage’, and increasing wages is argued to lead to an increase in the short-term labor supply in health care. Omitting shift work in the evaluation of such policies may lead to biased estimates of the wage elasticities. Focusing on registered nurses (RN) employed in the public health sector, this paper presents an econometric analysis that allows the nurses to compose their ‘job package’ in three steps by choosing: a) hospital or primary care, b) daytime or shift work and c) one of four categories of hours. The utility maximization problem is solved by discretizing the budget set and choosing the optimal job package from a finite set of alternatives. The nested structure is estimated on Norwegian micro data. There is some variation in the responsiveness to wage between shift and day workers and by care level. The job-specific elasticities are small but positive. However, the simulation of a wage increase in all job types, when conditioning the analysis to those already participating in the sector, indicates a slight reduction in hours. Thus, the income effect seems to dominate in the labor supply of nurses. |
| Keywords: | Registered nurses; discrete choice; labor supply; selection; nested logit; sector-specific wages |
| JEL: | C25 I10 J22 |
| Date: | 2009–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oslohe:2004_009&r=lab |
| By: | Hirsch, Boris (University of Erlangen-Nuremberg); König, Marion (IAB, Nürnberg); Möller, Joachim (IAB, Nürnberg) |
| Abstract: | In this paper, we investigate regional differences in the gender pay gap both theoretically and empirically. Within a spatial oligopsony model, we show that more densely populated labour markets are more competitive and constrain employers' ability to discriminate against women. Utilising a large administrative data set for western Germany and a flexible semi-parametric propensity score matching approach, we find that the unexplained gender pay gap for young workers is substantially lower in large metropolitan than in rural areas. This regional gap in the gap of roughly ten percentage points remained surprisingly constant over the entire observation period of thirty years. |
| Keywords: | gender pay gap, urban-rural differences, matching, monopsonistic discrimination |
| JEL: | J16 J42 J71 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4231&r=lab |
| By: | Fabio Berton (Department of Public Policy and Public Choice, University of Eastern Piedmont); Francesco Devicienti (Department of Economics and Public Finance "G. Prato", University of Torino); Lia Pacelli (Department of Economics and Public Finance "G. Prato", University of Torino) |
| Abstract: | Are temporary jobs a port of entry into permanent employment? In this paper we argue that the answer crucially depends on the type of temporary contracts being considered, as the different contracts observed in practice are typically characterized by varying combinations of training, tax-incentives and EPL provisions. We base our empirical evidence on a longitudinal sample of labour market entrants in Italy, a country where a large number of temporary contracts coexist with a relatively high employment protection for standard employees. We estimate dynamic multinomial logit models with fixed effects, to allow for non-random sorting of workers into the different types of contracts. We show that the transition to permanent employment is more likely for individuals holding any type of temporary contracts than for the unemployed, thus broadly confirming the existence of port-of-entry effects. Yet, not all temporary contracts are the same: training contracts are the best port of entry, while freelance contracts are the worst. We also show that temporary contracts are generally a port-of-entry into a permanent position within the same employer, but not across firms, implying that little general-purpose training is gained while on temporary jobs. Moreover, the time needed for an internal transformation from a temporary to a permanent position appears rather long, suggesting that firms are likely to use (a sequence of) temporary contracts as a cost-reduction strategy, rather than as a screening device for newly hired workers. |
| Keywords: | temporary jobs, port of entry, matched employer-employee data, dynamic multinomial logit models, state dependence, fixed effects |
| JEL: | J41 J63 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:tur:wpaper:6&r=lab |
| By: | Max Friedrich Steinhardt (Centro Studi Luca D’Agliano (LdA) and Hamburg Institute of International Economics (HWWI)) |
| Abstract: | The paper contributes to the ongoing debate about the adequate technique to identify the impact of immigration. Initially the regression analysis on the basis of education-experience cells reveals that the impact of immigration on native wages in Germany is negative, but small. The subsequent analysis on the basis of occupations using the same data yields a considerably higher adjustment coefficient and indicates strong wage effects within primary service occupations with a magnitude comparable to results for the US. The analysis therefore demonstrates that the use of formal qualifications as an exclusive classification criterion may lead to an underestimation of the impact of immigration. |
| Keywords: | Labour market impact of migration, skill group approach, occupations, fixed effects model |
| JEL: | C23 J15 J31 J42 J60 |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:273&r=lab |
| By: | Hanaoka, Chie |
| Abstract: | In Japan, as in other developed countries, smoking rates have been decreasing among men but it has been increasing among women. The prevalence of smoking may relate to accompanying gender differences in the labor market. The purpose of this paper is to empirically examine how occupation affects smoking behavior, with a particular emphasis on the differential effects for gender. The types of occupations have significant effects on smoking for both men and women, even after controlling for employment status, income, education, and demographic characteristics. Furthermore, the detailed classification of occupation reveals the stark difference in a response to the types of occupations among men and women, while showing the similarity in a response to cigarette price, income and education. The results suggest that smoking cessation policies should be designed more effectively with taking into consideration for gender differences of occupation on smoking. |
| Keywords: | cigarettes, smoking, gender, occupation |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:411&r=lab |
| By: | Cavaco, Sandra (University of Paris 2); Fougère, Denis (CREST-INSEE); Pouget, Julien (CREST-INSEE) |
| Abstract: | In this paper we estimate by matching techniques the effects of a French retraining program on the reemployment rate of displaced workers. This program, called "Conventions de conversion", was intended to improve reemployment prospects of displaced workers by proposing them retraining and job seeking assistance for a period of six months beginning just after the dismissal. Our empirical analysis is based upon non-experimental data collected by the French Ministry of Labour. Matching estimates show that this program succeeded in increasing the employment rate of trainees by approximately 6 points of percentage in the medium-term, namely in the second and third years after the date of entry into the program. This improvement is essentially due to an increase of their reemployment rate in regular jobs, namely jobs under long-term labour contracts. |
| Keywords: | evaluation, retraining program, displaced workers, matching estimates |
| JEL: | C41 J24 J64 J68 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4227&r=lab |
| By: | Gartner, Hermann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Merkl, Christian; Rothe, Thomas (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper shows that the German labor market is more volatile than the US labor market at the business cycle frequency. Specifically, the volatility of the cyclical component of several labor market variables (e.g., the job-finding rate, the labor market tightness and vacancies) divided by the volatility of labor productivity is roughly twice as large as in the United States. We derive and simulate a simple model to explain this seemingly puzzling result. This new model provides explanations for this phenomenon, in particular the longer job tenure in Germany." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitsmarktindikatoren - internationaler Vergleich, Beschäftigungsschwankung, offene Stellen, Arbeitsproduktivität, Konjunkturabhängigkeit, Betriebszugehörigkeit, Beschäftigungsdauer, Arbeitslosenquote, labour turnover, Kündigung - Quote, Lohnhöhe, institutionelle Faktoren, Lohnfindung, matching - Quote, Produktivitätsentwicklung, USA, Bundesrepublik Deutschland |
| JEL: | J6 E24 E32 |
| Date: | 2009–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200912&r=lab |
| By: | Stephan Thomsen (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | Job search assistance programs are part of active labor market policy in many countries. The main characteristics of these activities are an intensi ed counseling and a job search monitoring; in addition, several countries integrate courses teaching further skills into the programs. Job search assistance programs should help to increase the employment chances and to reduce the unemployment duration of the job seekers. In this paper, recent empirical ndings from evaluation studies for 9 European countries are reviewed and implications with regard to the e ectiveness of the activities are derived. To make the ndings of various studies evaluating the di erent programs comparable, the methodological issues of the empirical approaches applied to estimate the causal e ects of the programs are discussed in detail. In addition, relevant characteristics of the unemployment insurance systems, the assignment process, and the content of programs are presented to derive meaningful implications. The comparison of the programs takes account of individual e ects and, if available, cost bene t considerations. The results show that job search assistance programs tend to provide an e ective means to reduce individual unemployment, particularly if provided as combinations of intensive counseling and short-term training courses |
| Keywords: | Job search assistance programs, active labor market policy, evaluation methods, Europe |
| JEL: | J68 C31 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:09018&r=lab |
| By: | Olivier Bargain (University College Dublin); Prudence Kwenda (University College Dublin) |
| Abstract: | This paper provides new evidence on the wage gap between informal and formal salary workers in South Africa, Brazil and Mexico. We use rich datasets that allow us to define informality in a relatively comparable fashion across countries. We compute precise wage differentials by accounting for taxes paid in the formal sector. For each country, we analyze how the sectoral wage gap varies within groups, between groups and over time. To account for unobserved heterogeneity, we use large (unbalanced) panels to estimate fixed effects models at the mean and at di¤erent points of the wage distribution. We find that unobserved heterogeneity explains a large part of the (conditional) wage gap. The remaining informal sector wage penalty is large in the lower part of the distribution but almost disappears at the top. The penalty primarily concerns young workers and is found to be procyclical. We carefully investigate the robustness of these results and discuss their policy implications as well as regularities across countries. |
| Keywords: | wage gap, informal sector, quantile regression, fixed effects model, selection |
| JEL: | J21 J23 J24 J31 C14 O17 |
| Date: | 2009–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200905&r=lab |
| By: | Popescu, Nicolae Iulian (CNSAS) |
| Abstract: | The relationship between education and employment, and school-to-work transitions has been the subject of substantial research over the last decade and has formed a large part of the European Union preocupations, but also for the Romanian authorities. High unemployment rates for youths have caused concern especially for our last nineteen years, leading researchers and policy-makers to focus more than ever first on the schoolto- work transition stage of young peoples lives, but also for the others categories, especially on the actual crisis. This research highlights the main role of the universities in the process. The dynamics of this brief study line focuses on the keys of adjusting the university education process to the real labour market functions and needs, and in particular on the role of increasing the number and the quality of skills as a simultaneous result of the university education level in this equation. The emphasis is on the analysis of, on the one hand, the structure of problems, and on the other hand, on solutions that can be tookover in order to positive influence the current and future of supply and demand, to meet the requires of the actual various Romanian labour market segments towards the knoledge-based society and economy. |
| Keywords: | economic crisis; education; skills; labor; knowledge-based economy; partnership between universities and private environment |
| JEL: | F23 |
| Date: | 2009–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sphedp:2009_034&r=lab |
| By: | W. Bentley MacLeod; Miguel Urquiola |
| Abstract: | Friedman (1962) argued that a free market in which schools compete based upon their reputation would lead to an efficient supply of educational services. This paper explores this issue by building a tractable model in which rational individuals go to school and accumulate skill valued in a perfectly competitive labor market. To this it adds one ingredient: school reputation in the spirit of Holmstrom (1982). The first result is that if schools cannot select students based upon their ability, then a free market is indeed efficient and encourages entry by high productivity schools. However, if schools are allowed to select on ability, then competition leads to stratification by parental income, increased transmission of income inequality, and reduced student effort---in some cases lowering the accumulation of skill. The model accounts for several (sometimes puzzling) findings in the educational literature, and implies that national standardized testing can play a key role in enhancing learning. |
| JEL: | D02 I2 J3 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15112&r=lab |
| By: | Christoph M. Schmidt; Michael Fertig; Mathias G. Sinning |
| Abstract: | This paper investigates whether and to what extent demographic change has an impact on human capital accumulation. The effect of the relative cohort size on educational attainment of young adults in Germany is analyzed utilizing data from the German Socio-Economic Panel forWest-German individuals of the birth cohorts 1966 to 1986. These are the cohorts which entered the labor market since the 1980’s. Particular attention is paid to the effect of changes in labor market conditions, which constitute an important channel through which demographic change may affect human capital accumulation. Our findings suggest that the variables measuring demographic change exert a considerable though heterogeneous impact on the human capital accumulation of young Germans. Changing labor market conditions during the 1980’s and 1990’s exhibit a sizeable impact on both the highest schooling and the highest professional degree obtained by younger cohorts. |
| Keywords: | Demographic change, schooling, vocational training |
| JEL: | J11 J24 C25 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0107&r=lab |
| By: | Michael W. L. Elsby; Matthew D. Shapiro |
| Abstract: | This paper emphasizes the role of wage growth in shaping work incentives. It provides an analytical framework for labor supply in the presence of a return to labor market experience and aggregate productivity growth. A key finding of the theory is that there is an interaction between these two forms of wage growth that explains why aggregate productivity growth can affect employment rates in steady state. The model thus speaks to an enduring puzzle in macroeconomics by uncovering a channel from the declines in trend aggregate wage growth that accompanied the productivity slowdown of the 1970s to persistent declines in employment. The paper also shows that the return to experience for high school dropouts has fallen substantially since the 1970s, which further contributes to the secular decline in employment rates. Taken together, the mechanisms identified in the paper can account for all of the increase in nonemployment among white male high school dropouts from 1968 to 2006. For all white males, it accounts for approximately one half of the increase in the aggregate nonemployment rate over the same period. |
| JEL: | E24 J2 J3 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15117&r=lab |
| By: | Eichhorst, Werner (IZA); Marx, Paul (IZA) |
| Abstract: | Different models of protection against labor market risks are associated with diverging models of economic performance. Historically established institutional complementarities between labor market regulation, unemployment protection, and vocational training tend to mirror specific national models of economic production. For example, the German dual apprenticeship system is a core feature of the corporatist model of "diversified quality production". This, in turn, is supported via skills-protecting, earnings-related unemployment insurance, skills-oriented active labor market policies and strong dismissal protection so that long-term productive employment relationships become viable. The paper explores the connection between structural change and the development of skill creation in the German case with a particular focus on the difference between manufacturing and services as well as between different types of service sub-sectors. The paper takes manufacturing, a sector dominated by standard employment, as a reference point but mainly addresses different segments of the service economy: traditional ones (banking and insurance), new high-skill sectors (IT and the "creative economy") and growing areas of low-skill services (hotels and restaurants, cleaning). We find that dynamic job creation in these segments of the service sector was possible due to a less regulated institutional environment. |
| Keywords: | service sector, Germany, dual labor market, low-skilled work, atypical employment |
| JEL: | J31 J44 J24 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4220&r=lab |
| By: | Addison, John T. (University of South Carolina); Bailey, Ralph (University of Birmingham, UK); Siebert, W. Stanley (University of Birmingham, UK) |
| Abstract: | Taking as our point of departure a model proposed by David Card (2001), we suggest new methods for analyzing wage dispersion in a partially unionized labor market. Card's method disaggregates the labor population into skill categories, which procedure entails some loss of information. Accordingly, we develop a model in which each worker individually is assigned a union-membership probability and predicted union and nonunion wages. The model yields a natural three-way decomposition of variance. The decomposition permits counterfactual analysis, using concepts and techniques from the theory of factorial experimental design. We examine causes of the increase in U.K. wage dispersion between 1983 and 1995. Of the factors initially considered, the most influential was a change in the structure of remuneration inside both the union and nonunion sectors. Next in importance was the decrease in union membership. Finally, exogenous changes in labor force characteristics had, for most groups considered, only a small negative effect. We supplement this preliminary three-factorial analysis with a five-factorial analysis that allows us to examine effects from the wage-equation parameters in greater detail. |
| Keywords: | wage dispersion, three-way variance decomposition, bivariate kernel density smoothing, union membership, deunionization, factorial experimental design |
| JEL: | D3 J31 J51 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4202&r=lab |
| By: | Jody Heymann; Hye Jin Rho; John Schmitt; Alison Earle |
| Abstract: | This report finds that the U.S. is the only country among 22 countries ranked highly in terms of economic and human development that does not guarantee that workers receive paid sick days or paid sick leave. Under current U.S. labor law, employers are not required to provide short-term paid sick days or longer-term paid sick leave. By relying solely on voluntary employer policies to provide paid sick days or leave to employees, tens of millions of U.S. workers are without paid sick days or leave. As a result, each year millions of American workers go to work sick, lowering productivity and potentially spreading illness to their coworkers and customers. |
| Keywords: | paid time off, paid sick leave, productivity |
| JEL: | O O51 O52 O57 I I18 H H5 H51 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-19&r=lab |
| By: | José Emilio Boscá (University of Valencia, Spain); Javier Ferri (University of Valencia, Spain); Rafa Doménech (BBVA Economic Research Department, Spain) |
| Abstract: | This paper analyses the effects of introducing typical Keynesian features, namely rule-of-thumb consumers and consumption habits, into a standard labour market search model. It is a well-known fact that labour market matching with Nash-wage bargaining improves the ability of the standard real business cycle model to replicate some of the cyclical properties featuring the labour market. However, when habits and rule-of-thumb consumers are taken into account, the labour market search model gains extra power to reproduce some of the stylised facts characterising the US labour market, as well as other business cycle facts concerning aggregate consumption and investment behaviour. |
| Keywords: | general equilibrium, labour market search, habits, rule-of-tumb consumers |
| JEL: | E24 E32 E62 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iei:wpaper:0806&r=lab |
| By: | Amodio, Francesco |
| Abstract: | Evidence suggests the average ability of teachers to have progressively declined in developed countries over the last decades. Many explanations have been proposed, all suggesting the idea of a lower attractiveness of teaching professions (both in monetary and non monetary terms) with respect to feasible alternative working opportunities. This should apply to women at least, because of the great expansion of job opportunities which interested female cohorts in the second half of the century. However, the long lasting problem of getting credible ability measures has often driven partial results. Here two UK population samples of individuals born in different years are considered. Individuals were exposed to ability tests at early stages of their life, so that subsequent education paths are exogenous to test scores. Transformation in percentiles allows to get comparable measures of ability, and distributions for those who undertook the teaching career are obtained in the two samples. Consistently with previous literature, using difference-in-difference, we find evidence of teachers quality decline. A gender based analysis is performed in order to address gender differences and specific questions. Data on salaries, ditributions across jobs and social mobility are finally used in order to find possible explanations. Further questions arise. |
| Keywords: | teachers quality; ability measure; NCDS; BCS; difference in difference; social mobility |
| JEL: | J08 J45 I2 J0 J16 |
| Date: | 2009–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15796&r=lab |
| By: | Stewart, Jay (U.S. Bureau of Labor Statistics) |
| Abstract: | I use data from the American Time Use Survey to examine how maternal employment affects when during the day that mothers of pre-school-age children spend doing enriching childcare and whether they adjust their schedules to spend time with their children at more-desirable times of day. I find that employed mothers shift enriching childcare time from workdays to nonwork days. On workdays, full-time employed parents shift enriching childcare time toward evenings, but there is little shifting among part-time employed mothers. I find no evidence that full-time employed mothers adjust their schedules to spent time with their children at more-preferred times of day, whereas part-time employed mothers shift employment to later in the day. |
| Keywords: | timing of activities, time use, childcare |
| JEL: | J22 J13 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4219&r=lab |
| By: | Sunnee Billingsley (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | This research offers fresh evidence 1) on the contribution of social mobility to health differentials by proposing a new link between downward mobility and health: downward mobility itself may have an immediate impact on health, above and beyond selection, origin or destination effects, and 2) on causes behind the mortality crisis in Russia by testing an innovative operationalization of the negative impact of economic crisis and transition. Specifically, downward mobility as well as unemployment are assessed in this study as possible contributors to increased risk of death from 1994-2005 in Russia. Using RLMS data and Cox proportional hazard models, the results demonstrate that men were at greater risk of mortality when they experienced downward mobility, relative to men who did not. Women’s mortality did not appear to be linked to downward mobility. Both men’s and women’s risk of death substantially increased when experiencing unemployment, relative to low-mid grade workers and relative to non-participation in the labor market. Whereas the impact of downward mobility appears immediate and short-term, the impact of unemployment was longer term and not limited to the year in which unemployment occurred for men. All findings were robust to adjustment of other potentially important factors such as alcohol consumption and health status that preceded downward mobility or unemployment. This robustness suggests that selection effect alone may not be a sufficient explanation for a high risk of death. |
| Keywords: | Russia, health, mortality |
| JEL: | J1 Z0 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2009-015&r=lab |
| By: | Morris M. Kleiner (University of Minnesota and NBER); Alan B. Krueger (Princeton University and NBER) |
| Abstract: | This study examines the extent and influence of occupational licensing in the U.S. using a specially designed national labor force survey. Specifically, we provide new ways of measuring occupational licensing and consider what types of regulatory requirements and what level of government oversight contribute to wage gains and variability. Estimates from the survey indicated that 35 percent of employees were either licensed or certified by the government, and that 29 percent were fully licensed. Another 3 percent stated that all who worked in their job would eventually be required to be certified or licensed, bringing the total that are or eventually must be licensed or certified by government to 38 percent. We find that licensing is associated with about 14 percent higher wages, but the effect of governmental certification on pay is much smaller. Licensing by multiple political jurisdictions is associated with the highest wage gains relative to only local licensing. Specific requirements by the government for a worker to enter an occupation, such as education level and long internships, are positively associated with wages. We find little association between licensing and the variance of wages, in contrast to unions. Overall, our results show that occupational licensing is an important labor market phenomenon that can be measured in labor force surveys. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:pri:indrel:1165&r=lab |
| By: | Lozano, Fernando A. (Pomona College) |
| Abstract: | In this paper I explore the flexibility of the work week in the United States, using the FIFA Soccer World Cup as a natural experiment. My empirical strategy exploits the exogenous variation that arises due to which country hosts the World Cup, as this will determine the time games are broadcast across different time zones in the United States. The hour of the day when games are broadcast differentially affects hours of work across different time zones. Further, the calendar timing of the World Cup allows me to compare labor market outcomes in June/July for a worker in World Cup year t, with the outcomes in June/July for a worker in non-World Cup years t + 1, t + 2 and t + 3. My results highlight the importance of the worker's pay frequency in their work week flexibility, as all differences in hours of work due to the World Cup are concentrated among salary paid workers, while hourly paid workers do not change their market hours during the World Cup. Also, my results show that after controlling for observable demographic characteristics as well as year and month fixed effects, a worker reduces on average his weekly number of hours of work during the World Cup by statistically significant estimates that range from 9 weekly minutes to 28 weekly minutes, depending on specification choice and time of the day during which World Cup games are broadcast live in the U.S. |
| Keywords: | hours of work, schedule flexibility, FIFA World Cup |
| JEL: | J22 L83 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4217&r=lab |
| By: | Kunz, Marcus |
| Abstract: | "The results for labour demand shocks at the place of residence for German Federal States and districts according to the model of regional adjustment developed by Blanchard/Katz (1992) are in line with other studies in this field. They suggest that adjustment to region-specific shocks in the year of the shock is mainly through par-ticipation behaviour and unemployment changes, not by migration. If, however, the estimations additionally allow for commuting as adjustment mechanism, the unemployment rate and interregional mobility (i.e. migration and commuting activities) capture the major part of the regional adjustment process. Thus, migration and commuting are highly relevant for the adjustment behaviour of districts as well as for Federal States. As the major part of the shock has settled within only about one to two years, slow working adjustment mechanisms in the aftermath of labour demand shocks are not responsible for persistent unemployment differentials. Furthermore, the hypothesis that the adjustment process for smaller spatial units is much more reflected in interregional mobility and less in changes in the unemployment and the participation rate is confirmed." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitskräftenachfrage, Konjunkturabhängigkeit, Arbeitskräfteangebot - Anpassung, regionale Mobilität, Arbeitsmigration, Pendelwanderung, Arbeitslosenquote, regionaler Vergleich, Bundesländer, Landkreis, regionale Disparität, Arbeitskräftemobilität, regionale Faktoren, Westdeutschland, Bundesrepublik Deutschland |
| Date: | 2009–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200911&r=lab |
| By: | Anesi, Vincent; De Donder, Philippe |
| Abstract: | The objective of this paper is to provide a political economy explanation of the empirically observed negative correlation between employment protection and insurance. We study an economy composed of four groups of agents (capitalists, unemployed people, low- and high-skilled workers), each one represented by a politician. Politicians first form political parties and then compete in a winner-takes-all election by simultaneously proposing policy bundles composed of an employment protection level and an unemployment benefit. We first show that, in the absence of parties (i.e., in a citizen-candidate model), low-skilled workers are decisive and support a maximum employment protection level together with some unemployment benefit. We then obtain that, under some conditions, allowing for party formation results in all policy equilibria being in the Pareto set of the coalition formed by high-skilled workers together with unemployed people. Policies in this Pareto set exhibit a negative correlation between employment protection and unemployment benefit. |
| Keywords: | bidimensional voting; citizen-candidate; flexicurity; labor market rigidities; party competition |
| JEL: | D72 J65 J68 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7333&r=lab |
| By: | Olivier Bargain (University College Dublin); Karina Doorley (University College Dublin) |
| Abstract: | Financial incentives to work usually have signi?cant e¤ect on the labor market participation of married women and single mothers. In contrast, inactive single males are often suspected to be demand-side rationed, even though this group composes the core of social assistance recipients in continental Europe. We exploit a particular feature of the main welfare scheme in France (Revenu Minimum d?Insertion, RMI), namely that childless adults under age 25 are not eligible for welfare payments. Using a regression discontinuity approach and the French micro-census data, we ?nd convincing evidence that the RMI reduces employment among single men with the lowest education levels. Important policy implications are drawn. |
| Keywords: | Regression discontinuity; Welfare; Social assistance; Labor supply |
| JEL: | H52 J21 |
| Date: | 2009–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:200906&r=lab |
| By: | Gabriele, CARDULLO |
| Abstract: | This paper studies the effects of product and labour market deregulation on wage inequality and welfare. By constructing an analytically tractable model in which the level of product market competition and the wages are endogenously distributed, I show that even though deregulation in labour markets raises the aggregate level of employment and the average real wage, the welfare of trade unions may decrease in sectors with a low level of competition. Moreover, removing barriers to entry in the goods market has mixed effects on inequality : the wage variance and the Gini index are lower, but the ratio of the highest over the lowest wage paid in the economy increases. Finally, an interesting result of the model concerns the wage density function. By parameterizing the rates of firms creation and destruction on the basis of Belgian data, the resulting shape of the wage distribution exhibits an empirically accurate form, unimodal and positively skewed. |
| Keywords: | Product market competition; wage distribution; barriers to entry |
| JEL: | E24 J5 L16 |
| Date: | 2009–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2009007&r=lab |
| By: | Miriam Steurer (School of Economics, The University of New South Wales) |
| Abstract: | A two-stage bargaining model is developed to describe how fertility decisions are made in a strategic family setting. Given the assumption that family contracts are incomplete and cannot be used to enforce optimal behavior, it is shown that investments in children (i.e. the fertility rate) may be sub-optimal. This is because the woman may find it in her interest to invest too little in children in stage 1 of the model in order to protect her bargaining status in stage 2. I then consider in the context of this model the impact on fertility rates of changes in child custody rules (in the case of divorce), the wage rate, and the male-female wage differential. I conclude by exploring how the introduction of child subsidies can change the results. |
| Keywords: | Family bargaining; Fertility; Child subsidies; Labor Participation Rate |
| JEL: | D13 H55 J13 J14 J22 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2009-04&r=lab |
| By: | Inmaculada García; José Alberto Molina; Víctor M. Montuenga |
| Abstract: | This paper analyses the intra-household allocation of time to show gender differences in childcare. In the framework of a general efficiency approach, hours spent on childcare by each parent are regressed against individual and household characteristics, for five samples (Denmark, France, Germany, Italy and Spain), with data being drawn from the European Community Household Panel-ECHP (1994-2001). Empirical results show a clear inequality in childcare between fathers and mothers, with this being more evident in Mediterranean countries. Panel data estimates reveal that, in general, caring tasks are mainly influenced by the presence of young children in the household, by the total non-labor income, and by the ratio of mothers¿ non-labor income to family¿s non-labor income, with this latter variable exhibiting a different behavior across genders and across countries. |
| Keywords: | Childcare, gender differences, intra-household allocation, time use |
| JEL: | D13 J22 C33 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp197&r=lab |
| By: | Jason M. Fletcher; Jody L. Sindelar; Shintaro Yamaguchi |
| Abstract: | We examine whether the job characteristics of physical demands and environmental conditions affect individual’s health. Five-year cumulative measures of these job characteristics are used to reflect findings in the biologic and physiologic literature that indicate that cumulative exposure to hazards and stresses harms health. To create our analytic sample, we merge job characteristics from the Dictionary of Occupational Titles with the Panel Study of Income Dynamics dataset. We control for early and lagged health measures and a set of pre-determined characteristics to address concerns that individuals self-select into jobs. Our results indicate that individuals who work in jobs with the ‘worst’ conditions experience declines in their health, though this effect varies by demographic group. For example, for non-white men, a one standard deviation increase in cumulative physical demands decreases health by an amount that offsets an increase of two years of schooling or four years of aging. We also find evidence that job characteristics are more detrimental to the health of females and older workers. Finally, we report suggestive evidence that earned income, another job characteristic, partially cushions the health impact of physical demands and harsh environmental conditions for workers. These results are robust to inclusion of occupation fixed effects. |
| JEL: | I1 J0 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15121&r=lab |
| By: | Aghion, Ph.; Askenazy, Ph.; Bourlès, R.; Cette, G.; Dromel, N. |
| Abstract: | This paper investigates the effects of the education level, product market rigidities and employment protection legislation on growth. It exploits macro-panel data for OECD countries. For countries close to the technological frontier, education and rigidities are significantly related to TFP growth. The contribution of the interaction between product market regulation and labour market rigidity seems particularly substantial. |
| Keywords: | Productivity ; Growth ; Regulations ; Market Rigidities ; Education |
| JEL: | O47 J24 J68 L40 O57 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:229&r=lab |
| By: | John Schmitt; Hye Jin Rho; Alison Earle; Jody Heymann |
| Abstract: | Critics of legislation requiring employers to provide paid sick days frequently argue that these measures will lead to job loss and raise the national unemployment rate. However, this issue brief shows that the experience of 22 countries with the highest level of social and economic development (as measured by the Human Development Index) suggests that there is no statistically significant relationship between national unemployment rates and legally-mandated access to paid sick days and leave. |
| Keywords: | paid time off, paid sick leave, unemployment, unemployment rate |
| JEL: | O O51 O52 O57 I I18 H H5 H51 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-21&r=lab |
| By: | Kahanec, Martin (IZA); Zaiceva, Anzelika (IZA and University of Bologna); Zimmermann, Klaus F. (IZA, DIW Berlin and Bonn University) |
| Abstract: | The Eastern enlargement of the EU was an institutional impetus to the migration potential in Europe. While the overall numbers of migrants from the new member states in the EU15 increased between 2003 and 2007, this increase was distributed unevenly among countries. The proportion of these migrants in the EU15 remains smaller than that of non-EU27 migrants. The transitory arrangements may have diverted some migrants from the EU8 mainly to Ireland and the UK. Migrants from the EU2 continued to go predominantly to Italy and Spain. To date, there is no evidence that these primarily economic migrants would displace native workers or lower their wages (and even if crowding out happened in certain sectors or occupation, aggregate data suggest that such natives found well-paid jobs elsewhere), or that they would be more dependent on welfare than the natives. The drain of mainly young and skilled people could pose some additional demographic challenges on the source countries. However, the anticipated brain circulation may in fact help to solve their demographic and economic problems. While the ongoing economic crisis may change the momentum of several migration trajectories, free migration should in fact alleviate many consequences of the crisis and generally improve the allocative efficiency of EU labor markets. |
| Keywords: | free movement of workers, EU Eastern enlargement, effects of migration, migration |
| JEL: | F22 J61 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4230&r=lab |
| By: | Aditi Roy (SMU) |
| Abstract: | Estimating the causal impact of child work on the contemporaneous health of a child has proven quite challenging given non-random selection into the labor market and the inability to find strong and valid instruments. Our data, the Indonesian Family Life Survey is no different. Recognizing the lack of a credible instrument, we instead pursue a different strategy based on the methodology of Altonji et al. (JPE, 2005). This method assesses the robustness of the impact of child work estimated under the assumption of random selection (i.e., selection into child work on observable attributes only) to varying degrees of non-random selection (i.e., selection into child labor on unobservable attributes). If the estimated effect is found to be extremely sensitive to selection on unobservables, then one should be wary about inferring an adverse causal effect of child work. In addition, the nature of the selection process is identified using parametric assumptions. The results are striking, suggesting positive selection of children into work when we consider underweight and high weight status as dependent variables. This indicates that there is both healthy worker selection effect as well as unhealthy worker selection effect. There is however negative selection into work for the children belonging to the intermediate weight range. This heterogeneity in the selection process across the distribution has not been previously identified in the literature. Moreover, we also find evidence suggesting a heterogeneous impact of child work on health once we allow for a modest amount of selection on unobservables. Specifically, we find evidence of a negative causal effect of work on healthier children, but evidence of beneficial impact of work on the least healthy children. |
| Keywords: | Child work; health; selection on unobservables; Indonesia. |
| JEL: | I12 J13 J22 J28 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:0905&r=lab |
| By: | Simonetta Longhi (Institute for Social and Economic Research, University of Essex, Colchester, UK); Peter Nijkamp (VU University Amsterdam); Jacques Poot (Population Studies Centre, University of Waikato) |
| Abstract: | A burgeoning literature has emerged during the last two decades to assess the economic impacts of immigration on host countries. In recent years much research has been at the national level under the assumption that impacts in open regions may dissipate through adjustment processes such as factor mobility. However, this is ultimately an empirical issue. In this paper we revisit the impacts of immigration at the regional level. We briefly review analytical approaches for identifying regional economic impacts, specifically the labour market impact. A meta-analytic approach is adopted. As a novel contribution to existing meta-analyses on labour market impacts, we use a simultaneous equations approach to the meta-analysis of wage and employment effects. The number of studies that informs on both effects is rather limited, but eight econometric analyses yielded 130 useful meta-observations. We find that wage rigidity increases the magnitude of the employment impact on the native born, particularly of those who are low skilled, following positive net immigration. The employment elasticity is also greater in Europe than in the United States. However, observed employment elasticities are not informative about whether larger or smaller wage effects may be expected. |
| Keywords: | international migration; regional labour market; meta-analysis; impact analysis; regional growth |
| JEL: | F22 J61 R23 |
| Date: | 2009–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090047&r=lab |
| By: | Lacroix, Guy |
| Abstract: | In 2002 the Quebec government implemented the "Action Emploi" (AE) program aimed at making work pay for long-term social assistance recipients (SA). AE oered a generous wage subsidy that could last up to three years to recipients who found a full-time job within twelve months. The program was implemented on an experimental basis for a single year. Based on little empirical evidence, a slightly modied version of the program was implemented on permanent basis in May 2008. The paper investigates the impact of the temporary program by focusing on the labour market transitions of the targeted population starting one year before the implementation of the program and up until the end of 2005. We use a multi-state multi-episode model. The endogeneity of the participation status is accounted for by treating AE as a distinct state and by allowing correlated unobserved factors to aect the transitions. The model is estimated by the method of simulated moments. Our results show that AE has indeed increased the duration of O-SA spells and decreased the duration of SA spells slightly. There is also some evidence that the response to the program varies considerably with unobserved individual characteristics. |
| Keywords: | Wage subsidy, multi-state multi-episode transition model, social assistance |
| JEL: | I38 J31 J64 |
| Date: | 2009–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-35&r=lab |
| By: | Enrique Llopis Agelán (Departamento de Historia e Instituciones Económicas II, Facultad de Ciencias Economicas y Empresariales, Universidad Complutense de Madrid); Hector Garcia Montero |
| Abstract: | The presentation and analysis of a cost of living index and of different wage indices for the city of Madrid, covering the period 1680-1800 is the essential aim of this article. The accounts books of several charitable institutions have been the basic source of information for this research. The main conclusions of the work are as follows: 1) in the eighteenth century the evolution of prices in Madrid was quite similar to those in most western and central European cities; 2) yearly fluctuations in the cost of living were lower in Madrid than Palencia, Toledo and Seville; 3) in the second half of that century, Madrid was one of the cities of the old continent which showed the most abrupt fall in the wages of unskilled workers; 4) during the eighteenth century, the ‚'skill premium' increased quite noticeably in the Madrid service sector; and 5) the wage differential between men and women fell in that century, due, probably, to the considerable raise in the weight of female work in the important domestic service sector in Madrid |
| Keywords: | Prices; Wages; 18th century; Madrid |
| JEL: | N33 N63 N90 N93 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:0901&r=lab |
| By: | Pierre Cahuc (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, IZA - Institute for the Study of Labor, Center for Economic Research - CEPR); Guy Laroque (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, Department of Economics, University College London - University College London) |
| Abstract: | Does monopsony on the labor market in itself justify the implementation of a minimum wage when it would not be used in a competitive economy? This issue is studied in a model of optimal taxation. We adopt a definition most favorable to the minimum wage: the minimum wage is useful whenever it can replace a non negligible part of the tax schedule. The minimum wage is useful to correct the inefficiencies associated with the monopsony when there is a single skill. But the minimum wage is not useful any more when there are a continuum of skills. |
| Keywords: | Minimum wage, Optimal taxation, Monopsony. |
| Date: | 2009–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00396252_v1&r=lab |
| By: | Miriam Steurer (School of Economics, The University of New South Wales) |
| Abstract: | Welfare comparisons between funded and pay-as-you-go (PAYG) pension systems are often made using the Aaron condition. However, the Aaron condition as usually stated is not precise enough about the exact form of the PAYG pension system. PAYG pension systems can be either of the defined-benefit or defined-contribution variety. They can also differ with regard to intra-generational redistribution. For example, pension benefits can be flat or earnings related. Here, four alternative PAYG pension systems are considered. It is shown that each system generates its own Aaron condition. In addition, the standard Aaron condition assumes that the wage rate and labor participation rate does not vary across individuals and that the rate of population growth is constant and exogenous. These assumptions are also relaxed. Using US data covering the period 1933-2001, I then show that the results of comparisons between PAYG and funded systems depend critically on exactly which variety of PAYG system is being compared, and that PAYG systems are becoming less attractive over time as fertility rates decline. |
| Keywords: | Aaron Condition; Pay-As-You-Go Pension; Funded Pension; Defined Contribution; Defined Benefit; Labor Participation Rate; Fertility Rate |
| JEL: | H55 J13 J14 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2009-03&r=lab |
| By: | Douhan, Robin (IFN - Research Institute of Industrial Economics); van Praag, Mirjam (University of Amsterdam) |
| Abstract: | We combine two empirical observations in a general equilibrium occupational choice model. The first is that entrepreneurs have more control than employees over the employment of and accruals from assets, such as human capital. The second observation is that entrepreneurs enjoy higher returns to human capital than employees. We present an intuitive model showing that more control (observation 1) may be an explanation for higher returns (observation 2); its main outcome is that returns to ability are higher in higher control environments. This provides a theoretical underpinning for the control-based explanation for higher returns to human capital for entrepreneurs. |
| Keywords: | entrepreneurship, ability, occupational choice, human capital, wage structure |
| JEL: | L26 I20 J24 J31 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4211&r=lab |
| By: | Bergin, Adele (Economic and Social Research Institute (ESRI)) |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb20090205&r=lab |
| By: | Gunnarsson, Victoria; Orazem, Peter; Sanchez, Mario; verdisco, Aimee |
| Abstract: | School autonomy and parental participation have been frequently proposed as ways of making schools more productive. Less clear is how governments can foster decentralized decision-making by local schools. This paper shows that across eight Latin-American countries, most of the variation in local control over school decisions exists within and not between countries. That implies that the exercise of local authority to manage schools is largely a local choice only modestly influenced by constitutional stipulations regarding jurisdiction over school personnel, curriculum and facilities. As a consequence, estimated impacts of local school autonomy, parental participation or school supplies on student performance must account for the endogeneity of local efforts to manage schools. Empirical tests confirm that local managerial effort by the principal and the parents and the adequacy of school supplies are strongly influenced by parental human capital and the size and remoteness of the community, and that these effects are only partially moderated by central policies regarding the locus of control over the schools. Correcting for endogeneity, parental participation and adequacy school supplies have strong positive effects on 4th grade test performance, but school autonomy has no discernable impact on school outcomes. |
| Keywords: | Autonomy, parental participaton, school inputs, achievement, test scores, education, Latin America |
| JEL: | I2 |
| Date: | 2009–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:13083&r=lab |
| By: | Prantl, Susanne (WZB - Social Science Research Center Berlin); Spitz-Oener, Alexandra (Humboldt University, Berlin) |
| Abstract: | We analyze how an entry regulation that imposes a mandatory educational standard affects entry into self-employment and occupational mobility. We exploit the German reunification as a natural experiment and identify regulatory effects by comparing differences between regulated occupations and unregulated occupations in East Germany to the corresponding differences in West Germany after reunification. Consistent with our expectations, we find that entry regulation reduces entry into self-employment and occupational mobility after reunification more in regulated occupations in East Germany than in West Germany. Our findings are relevant for transition or emerging economies as well as for mature market economies requiring large structural changes after unforeseen economic shocks. |
| Keywords: | occupational mobility, self-employment, entry regulation |
| JEL: | J24 J62 K20 L11 L51 M13 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4221&r=lab |
| By: | Kotakorpi, Kaisa (University of Tampere); Poutvaara, Panu (University of Helsinki) |
| Abstract: | In this paper, we estimate the effect of pay for politicians on who wants to be a politician. We take advantage of a considerable 35 percent salary increase of Finnish MPs in the year 2000, intended to make the pay for parliamentarians more competitive. A difference-indifferences analysis, using candidates in municipal elections as a control group, suggests that the higher salary had the intended effect among women, whether measured by education or occupational qualifications. We also examine cross-party differences. |
| Keywords: | pay for politicians, candidate selection, gender differences in politics |
| JEL: | D72 J3 J45 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4235&r=lab |
| By: | Arpaia, Alfonso; Pérez, Esther; Pichelmann, Karl |
| Abstract: | This paper seeks to understand labour share dynamics in Europe over the medium run. After documenting basic empirical regularities, we quantify the contribution of shifts in the sectoral and the employment composition of the economy to labour share movements. The findings from the shift-share analysis being on the descriptive side, we next identify the factors underlying labour share behaviour through a model-based approach. We proceed along the lines of Bentolila and Saint Paul (2003) but adopt a production function with capital-skill complementarity. We show that labour share movements are driven by a complex interplay of demand and supply conditions for capital and different skill categories of labour, the nature of technological progress and imperfect market structures. Based upon robust calibration, we show that most of the declining pattern in labour shares in nine EU15 Member States is governed by capital deepening in conjunction with capitalaugmenting technical progress and labour substitution across skill categories. Although institutional factors also play a significant role, they appear to be of somewhat less importance. To illustrate the relevance of the technological explanation we quantitatively assess the dynamic impact of a permanent reduction in the fraction of unskilled employment on the labour share. We find that, for a given elasticity of substitution between skilled and unskilled labour, the more skilled labour is complementary to capital, the more pronounced the decline in the labour share. |
| Keywords: | labour income share; medium term; two-level CES technology; labour market institutions. |
| JEL: | E25 J30 |
| Date: | 2009–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15649&r=lab |
| By: | Matilde Bombardini; Giovanni Gallipoli; Germán Pupato |
| Abstract: | Is skill dispersion a source of comparative advantage? While it is established that a country's aggregate endowment of human capital is an important determinant of comparative advantage, this paper investigates whether the distribution of skills in the labor force can play a role in the determination of trade flows. We develop a multi-country, multi-sector model of trade in which comparative advantage derives from (i) differences across sectors in the complementarity of workers' skills, (ii) the dispersion of skills in the working population. First, we show how higher dispersion in human capital can trigger specialization in sectors characterized by higher substitutability among workers' skills. We then use industry-level bilateral trade data to show that human capital dispersion, as measured by a standard international metric, has a significant effect on trade flows. We find that the effect is of a magnitude comparable to that of aggregate endowments. The result is robust to the introduction of several controls for other proximate causes of comparative advantage. |
| JEL: | F12 F16 J82 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15097&r=lab |
| By: | Velamuri, Malathi |
| Abstract: | I examine whether the availability of health coverage through the spouse’s health plan influences a married woman’s decision to become self-employed. The Tax Reform Act of 1986 (TRA86) introduced a tax subsidy for the self-employed to purchase their own health insurance. I test whether this ‘natural’ experiment induced more women without spousal health insurance cov-erage to select into self-employment. The difference-in-difference estimates based on an analysis of employed women indicate that the incidence of self-employment among women who did not enjoy spousal health benefits rose significantly - between 14% and 25% - in the post-TRA86 pe- riod, while a multinomial specification based on a sample of both employed and non-employed women suggests that the increase was around 9%. |
| Keywords: | Health Insurance; Self-Employment |
| JEL: | J3 J0 I1 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15731&r=lab |
| By: | Harbring, Christine (University of Cologne); Irlenbusch, Bernd (London School of Economics) |
| Abstract: | Although relative performance schemes are pervasive in organizations reliable empirical data on induced sabotage behavior is almost non-existent. We study sabotage in tournaments in a controlled laboratory experiment and are able to confirm one of the key insights from theory: effort and sabotage increase with the wage spread. Additionally, we find that even in the presence of tournament incentives, agents react reciprocally to higher wages, which mitigates the sabotage problem. Destructive activities are reduced by explicitly calling them by their name 'sabotage'. Communication among principal and agents curbs sabotage due to agreements on flat prize structures and increased output. |
| Keywords: | sabotage, tournament, reciprocity, relative performance scheme, experiment |
| JEL: | M52 J33 J41 L23 C72 C91 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4205&r=lab |
| By: | Andrew Sharpe; Jean-François Arsenault; Fraser Cowan |
| Abstract: | Investing in disadvantaged young people is one of the rare public policies with no equity-efficiency tradeoff. Based on the methodology developed in Sharpe, Arsenault and Lapointe (2007), we estimate the effect of increasing the educational attainment level of Aboriginal Canadians on labour market outcome and output up to 2026. We build on these projection to estimate the potential effect of eliminating educational and social gaps between Aboriginal and non-Aboriginal people on government spending and government revenues using population and economic projections to 2026. |
| Keywords: | Aboriginal, Education, Canada, Forecast of economic growth, Equity and efficiency. |
| JEL: | J10 J11 I29 E27 O11 O47 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:0903&r=lab |
| By: | Stéphane Pallage; Lyle Scruggs; Christian Zimmermann |
| Abstract: | Unemployment insurance policies are multidimensional objects. They are typically defined by waiting periods, eligibility duration, benefit levels and asset tests when eligible, which make intertemporal or international comparisons difficult. To make things worse, labor market conditions, such as the likelihood and duration of unemployment matter when assessing the generosity of different policies. In this paper, we develop a methodology to measure the generosity of unemployment insurance programs with a single metric. We build a first model with such complex characteristics. Our model features heterogeneous agents that are liquidity constrained but can self-insure. We then build a second model that is similar, except that the unemployment insurance is simpler: it is deprived of waiting periods and agents are eligible forever with constant benefits. We then determine which level of benefits in this second model makes agents indifferent between both unemployment insurance policies. We apply this strategy to the unemployment insurance program of the United Kingdom and study how its generosity evolved over time. |
| Keywords: | Social policy, generosity, unemployment insurance, measurement |
| JEL: | E24 J65 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:0921&r=lab |
| By: | Eric Strobl (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Frank Walsh (School of Economics - University College Dublin) |
| Abstract: | We examine the impact of hurricane strikes on the construction industry in US counties. To this end we use a measure of hurricane destruction derived from a wind field model and historical hurricane track data and employ this within a dynamic labour demand framework. Our results show that destruction due to hurricanes causes on average an increase in county level employment in construction of a little over 25 per cent. |
| Keywords: | hurricanes, labour demand, construction industry |
| Date: | 2009–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00393886_v1&r=lab |
| By: | Sunny Jose |
| Abstract: | The paper is an attempt to review critically the association between women’s paid work and empowerment in India. As a prelude, the author seek to assess the extent of women’s participation in paid work during the last three decades (section two), and offer a glimpse into the nature and quality of women’s work in India (section three). A discussion on the probable causes underlying women’s participation in paid work becomes necessary (section four) so as to assess and contextualise the empowering potentials of women’s paid work (section five). An attempt will also be made to reflect on the issues arising from the assessment with a view to suggest, if necessary, possible directions for further work (section six).[CWDS OP] |
| Keywords: | Women’s Paid Work; empowerment; India; economic activities; NSSO; workforce; urban; NREP; TRSEM: JRY; RLEGP; EAS |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2064&r=lab |
| By: | Jonathan Meer (Stanford University); Harvey S. Rosen (Princeton University) |
| Abstract: | One justification offered for legacy admissions policies at universities is that that they bind entire families to the university. Proponents maintain that these policies have a number of benefits, including increased donations from members of these families. We use a rich set of data from an anonymous selective research institution to investigate which types of family members have the most important effect upon donative behavior. We find that the effects of attendance by members of the younger generation (children, children-in-law, nieces and nephews) are greater than the effects of attendance by older generations (parents, parents-in-law, aunts and uncles). Previous research has indicated that, in a variety of contexts, men and women differ in their altruistic behavior. However, we find that there are no statistically discernible differences between men and women in the way their donations depends on the alumni status of various types of relatives. Neither does the gender of the various types of relatives who attended the uni-versity seem to matter. Thus, for example, the impact of having a son attend the university is no different from the effect of a daughter. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:1163&r=lab |
| By: | Andersen, Torben M; Svarer, Michael |
| Abstract: | The consequences of business cycle contingencies in unemployment insurance systems are considered in a search-matching model allowing for shifts between "good" and "bad" states of nature. We show that not only is there an insurance argument for such contingencies, but also an incentive argument. If benefits are less distortionary in a recession than a boom, it follows that countercyclical benefits reduce average distortions compared to state independent benefits. We show that optimal benefits are state contingent and tend to reduce the structural (average) unemployment rate, although the variability of unemployment may increase. |
| Keywords: | business cycle; incentives; insurance; unemployment benefits, |
| JEL: | H4 J6 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7334&r=lab |
| By: | Franco Sassi; Jody Church; Michele Cecchini; Francesca Borgonovi |
| Abstract: | An epidemic of obesity has been developing in virtually all OECD countries over the last 30 years. Existing evidence provides strong suggestions that such epidemic has affected certain social groups more than others. In particular, education appears to be associated with a lower likelihood of obesity, especially among women. A range of analyses of health survey data from Australia, Canada, England and Korea were undertaken with the aim of exploring the relationship between education and obesity. The findings of these analyses show a broadly linear relationship between the number of years spent in full-time education and the probability of obesity, with most educated individuals displaying lower rates of the condition (the only exception being men in Korea). This suggests that marginal returns to education, in terms of reduction in obesity rates, are approximately constant throughout the education spectrum. The findings obtained confirm that the education gradient in obesity is stronger in women than in men. Differences between genders are minor in Australia and Canada, more pronounced in England and major in Korea. The causal nature of the link between education and obesity has not yet been proven with certainty; however, using data from France we were able to ascertain that the direction of causality appears to run mostly from education to obesity, as the strength of the association is only minimally affected when accounting for reduced educational opportunities for those who are obese in young age. Most of the effect of education on obesity is direct. Small components of the overall effect of education on obesity are mediated by an improved socio-economic status linked to higher levels of education, and by a higher level of education of other family members, associated with an individual’s own level of education. The positive effect of education on obesity is likely to be determined by at least three factors: (a) greater access to health-related information and improved ability to handle such information; (b) clearer perception of the risks associated with lifestyle choices; and, (c) improved self-control and consistency of preferences over time. However, it is not just the absolute level of education achieved by an individual that matters, but also how such level of education compares with that of the individual’s peers. The higher the individual’s education relative to his or her peers’, the lower is the probability of the individual being obese.<P>Éducation et obésité dans quatre pays de l’OCDE<BR>Une épidémie d’obésité est en train de s’étendre dans presque tous les pays de l’OCDE depuis les 30 dernières années. Les preuves existantes suggèrent fortement qu’une telle épidémie a davantage affecté certains groupes sociaux que d’autres. En particulier, l’éducation paraît être associée à une plus faible probabilité d’obésité, notamment chez les femmes. Une série d’analyses de données d’enquête de santé concernant l’Australie, le Canada, l’Angleterre et la Corée a été menée dans le but d’explorer la relation entre l’éducation et l’obésité. Les résultats de ces analyses montrent une relation généralement linéaire entre le nombre d’années d’éducation à plein temps et la probabilité d’obésité, les individus les plus éduqués ayant de plus bas taux d’obésité (la seule exception étant les hommes en Corée). Ceci suggère que les rendements marginaux de l’éducation, en termes de réduction des taux d’obésité, sont approximativement constants quelque soit le nombre d’années d’éducation. Les résultats obtenus confirment que le gradient d’obésité selon le niveau d’éducation est plus fort chez les femmes que chez les hommes. Les différences entre les genres sont faibles en Australie et au Canada, plus prononcées en Angleterre et importantes en Corée. La nature causale du lien entre l’éducation et l’obésité n’a pas encore été prouvée avec certitude ; cependant, en utilisant des données françaises, nous avons pu établir que le sens de la causalité semble aller de l’éducation vers l’obésité, puisque la force de l’association est faiblement affectée quand on tient compte d’une moindre éducation pour ceux qui sont obèses aux jeunes âges. La plupart des effets de l’éducation sur l’obésité sont directs. De petites composantes de l’effet total de l’éducation sur l’obésité sont médiées par un meilleur statut socio-économique lié à des niveaux d’éducation plus élevés, et par un meilleur niveau d’éducation des autres membres de la famille, associé au niveau d’éducation propre à l’individu. Il est probable que l’effet positif de l’éducation sur l’obésité soit déterminé par au moins trois facteurs : (a) un meilleur accès à l’information liée à la santé et une meilleure capacité à utiliser une telle information ; (b) une perception plus claire des risques associés aux choix de vie ; et, (c) un meilleur contrôle de soi et une cohérence des préférences dans le temps. Cependant, ce n’est pas seulement le niveau absolu de l’éducation acquis par un individu qui importe, mais aussi comment un tel niveau d’éducation se place par rapport à celui de l’entourage de l’individu. Plus le niveau d’éducation relatif à son entourage est élevé, plus faible est la probabilité que l’individu soit obèse. |
| Keywords: | education, éducation, obesity, obésité |
| JEL: | I12 I21 |
| Date: | 2009–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:46-en&r=lab |
| By: | Frank T. Denton; Christine H. Feaver; Byron G. Spencer |
| Abstract: | We construct cohort working life tables for Canadian men and women aged 50 and older and, for comparison, corresponding period tables. The tables are derived using annual single age time series of participation rates for 1976-2006 from the master files of the Statistics Canada Labour Force Survey. The cohort calculations are based on stochastic projections of mortality coupled with alternative assumptions about future participation rates. Separate tables are provided for the years 1976, 1991, and 2006, thus spanning a period of substantial gains in life expectancy and strong upward trends in female participation. |
| Keywords: | Cohort working life tables |
| JEL: | J10 J26 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:qseprr:432&r=lab |
| By: | Chaudhuri, Saraswata (University of North Carolina, Chapel Hill); Rose, Elaina (University of Washington) |
| Abstract: | Instrumental variables estimates of the effect of military service on subsequent civilian earnings either omit schooling or treat it as exogenous. In a more general setting that also allows for the treatment of schooling as endogenous, we estimate the veteran effect for men who were born between 1944 and 1952 and thus reached draft age during the Vietnam era. We apply a variety of state-of-the-art econometric techniques to gauge the sensitivity of the estimates to the treatment of schooling. We find a significant veteran penalty. |
| Keywords: | veteran effect, weak instruments |
| JEL: | C2 J24 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4203&r=lab |
| By: | Markussen, Simen (Ragnar Frisch Centre for Economic Research); Roed, Knut (Ragnar Frisch Centre for Economic Research); Røgeberg, Ole J. (Ragnar Frisch Centre for Economic Research); Gaure, Simen (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Based on comprehensive administrative register data from Norway, we examine the determinants of sickness absence behavior; in terms of employee characteristics workplace characteristics, panel doctor characteristics, and economic conditions. The analysis is based on a novel concept of a worker's steady state sickness absence propensity, computed from a multivariate hazard rate model designed to predict the incidence and the duration of sickness absence for all workers. Key conclusions are i) that most of the cross-sectional variation in absenteeism is caused by genuine employee heterogeneity; ii) that the identity of a person's panel doctor has a significant impact on absence propensity; iii) that sickness absence insurance is frequently certified for reasons other than sickness; and iv) that the recovery rate rises enormously just prior to the exhaustion of sickness insurance benefits. |
| Keywords: | sickness absence, multivariate hazards, MMPH, NPMLE |
| JEL: | C14 C41 H55 I18 J22 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4240&r=lab |
| By: | Rosalind S Hunter |
| Abstract: | They collect data on the movement and productivity of elite scientists. Their mobility is remarkable: nearly half of the world’s most-cited physicists work outside their country of birth. They show they migrate systematically towards nations with large R&D spending. Their study cannot adjudicate on whether migration improves scientists’ productivity, but we find that movers and stayers have identical h-index citations scores. Immigrants in the UK and US now win Nobel Prizes proportionately less often than earlier. US residents’ h-indexes are relatively high. They describe a framework where a key role is played by low mobility costs in the modern world.[IZA DP No. 4005] |
| Keywords: | mobility; science; brain drain; citations |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2048&r=lab |
| By: | Edward L. Glaeser; Matthew G. Resseger |
| Abstract: | There is a strong connection between per worker productivity and metropolitan area population, which is commonly interpreted as evidence for the existence of agglomeration economies. This correlation is particularly strong in cities with higher levels of skill and virtually non-existent in less skilled metropolitan areas. This fact is particularly compatible with the view that urban density is important because proximity spreads knowledge, which either makes workers more skilled or entrepreneurs more productive. Bigger cities certainly attract more skilled workers, and there is some evidence suggesting that human capital accumulates more quickly in urban areas. |
| JEL: | D0 R0 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15103&r=lab |
| By: | Parimala V Rao |
| Abstract: | This paper deals with the nationalist discourse in Maharashtra spanning over forty years. This discourse argued that educating women and non-Brahmins would amount to a loss of nationality. The nationalists,led by Bal Gangadhar Tilak during 1881-1920 consistently opposed the establishment of girls’ schools, the imparting of education to non-Brahmins, and implementing compulsory education. They were also instrumental in defeating the proposals to implement compulsory education in nine out of eleven municipalities. By demanding ‘National Education’, the nationalists sought to reshape the meaning and scope of compulsory education advocated by reformers, as their national education consisted of teaching the Dharmashastras and some technical skills. The important source for this paper is Tilak’s own writings in his paper, the Mahratta.[CWDS] |
| Keywords: | Maharashtrian society; pre-colonial; Hunter Commission; Nationalist Opposition; education; women's education; Rakhmabai; national education; womens university |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2045&r=lab |
| By: | Haile, Getinet Astatike (Policy Studies Institute) |
| Abstract: | This paper analyses job separations in Germany using data from the German Socio-Economic Panel spanning from 1984 to 2003. Based on detailed reasons for job separation and different SOEP samples, the paper attempts to establish the nature of job separations in Germany. It brings to light some patterns of separations that have hitherto been unexplored. The findings of the study suggest, among others, that minority group status is important in characterising job separations, particularly in the event of exogenous shocks. Targeting minorities in the face of a major shock of the sort experienced in Germany might be a policy option. |
| Keywords: | job separations, job turnover, economics of minorities |
| JEL: | J6 J15 C35 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4216&r=lab |
| By: | Jonasson, Erik (Department of Economics, Lund University) |
| Abstract: | Informal economic activity across countries has been studied thoroughly in the empirical literature, but little research addresses sources of variation in informality on the sub-national level. This paper analyzes reasons for regional variation in informal employment. It develops a theoretical model, which predicts that worker skill endowment, quality of local governance, and social norms are important determinants of the degree of informal employment in a city. The empirical application draws on data from Brazil, where 45 percent of the urban labor force are employed informally. The degree of such employment, however, varies substantially across regions, with some cities having 20 percent or less informal employment and others having 80 percent or more. The empirical evaluation supports the predictions of the model and shows that informal employment is lower in regions with better governance and stronger social norms for compliance with tax and labor regulation. The analysis also supports the notion of a "skill threshold" for successful entry into the formal sector. Endogeneity concerns are raised and assessed along with other robustness checks of the empirical results. |
| Keywords: | informal employment; social norms; government effectiveness; Latin America; Brazil |
| JEL: | J21 J24 O17 R23 |
| Date: | 2009–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2009_010&r=lab |
| By: | Aoki, Reiko; Konishi, Yoko |
| Abstract: | We present an alternative explanation of the positive relationship between total fertility rate (TFR) and female labor participation rate (FLPR) observed in recent cross section of OECD countries. We first show quality adjusted consumption is related to fertility and female labor supply in a general equilibrium model with vertical quality differentiation and heterogeneous labor. Then we verify this relationship with Japanese cross sectional data from 8 different points in time (every five years from 1970-2005) in which a positive correlation between TFR and FLPR among prefectures (regions) have been observed since 1980. We show that consumption variables are statistically significant when they are added to the cross section regression of TFR on FLPR. However, the FLPR coefficient is no longer significant at the 5% level when quality of consumption variables are included in the regression. Furthermore, FLPR has a statistically significant negative effect on TFR in addition to the statistically significant consumption variables, once we take both time-variant regional heterogeneity of consumption and time-invariant heterogeneity into account using the fixed effect model. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:420&r=lab |
| By: | Doepke, Matthias (Northwestern University); Zilibotti, Fabrizio (University of Zurich) |
| Abstract: | In recent years, a number of governments and consumer groups in rich countries have tried to discourage the use of child labor in poor countries through measures such as product boycotts and the imposition of international labor standards. The purported objective of such measures is to reduce the incidence of child labor in developing countries and thereby improve children's welfare. In this paper, we examine the effects of such policies from a political-economy perspective. We show that these types of international action on child labor tend to lower domestic political support within developing countries for banning child labor. Hence, international labor standards and product boycotts may delay the ultimate eradication of child labor. |
| Keywords: | child labor, political economy, international labor standards, trade sanctions |
| JEL: | J20 J88 O10 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4214&r=lab |
| By: | Gonzales, Naihobe (Georgia Tech); Uwaifo Oyelere, Ruth (Georgia Tech) |
| Abstract: | There is anecdotal evidence that the standard of living for the educated has fallen in Venezuela over the last few years. This evidence comes as a surprise because after experiencing an economic downturn in 2002 and 2003, Venezuela's economy has boomed (gross domestic product growth has hovered between 8 and 18%) in large part due to the increase in the price of petroleum. In this paper, we provide evidence that returns to education have decreased significantly in Venezuela from 2002 to 2008. More importantly, we focus on what has led to the decrease in returns. We explore a fall in quality and a supply-demand argument for this decline. Mission Sucre was enacted in September 2003 by President Hugo Chavez to provide free mass tertiary education, in particular targeting the poor and marginalized. The implementation of this program created a sudden increase in the supply of skilled labor and had a direct impact on quality of education. Although we do not claim that 100% of the decline between 2002 and 2008 can be linked to this program, we provide ample evidence that a good part of the falling returns can be linked to Mission Sucre. Specifically, we show that for a 1% increase in the share of Mission Sucre students in the state, returns to university level of education declined by about 5.6 percentage points between 2007 and 2008. |
| Keywords: | human capital, Venezuela, policy reform, returns to education, schooling |
| JEL: | J2 J24 J38 I21 O12 O15 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4206&r=lab |
| By: | Anna, BATYRA; Michel, DE VROEY |
| Abstract: | The notion of frictional unemployment first arose in the writings of Beveridge, PIgou and Hicks. Why did it fail at the time to grow into a fully fledged theory ? Our answer is simple. This failure was due to the fact these economists were unwilling and/or unable to go beyond the then-prevailing Marshallian approach, in particular to depart from its trade organization assumptions. They did not realize that these assumptions excluded any rationing outcome in general, and any unemployment result in particular. We make our claim in three steps. First, we make explicit the trade-organization assumptions underpinning MarshallÕs equilibrium theory. Our second step is a study of the attempts at introducing unemployment in a Marshallian framework. We start with an examination of BeveridgeÕs, PigouÕs and HicksÕs early works on wages and unemployment. We also briefly discuss how and why Keynes was able to shift attention from frictional to involuntary unemployment. Newt, for a reason that will become clear as the paper evolves, we ponder FriedmanÕs celebrated Presidential Address inaugurating the notion of a natural rate of unemployment. In our third and last step we lool at the papers by McCall, Lucas and Prescott, Mortensen and Pissarides that paved the way for the present thriving research literature. We show that their success in providing an equilibrium unemployment result stems from the fact that they have indeed departed from the Marschallian trade-organization assumptions |
| Keywords: | Supply and Demand; Marshall; Search; Matching |
| JEL: | B10 B20 B40 J20 J60 |
| Date: | 2009–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2009005&r=lab |
| By: | Cools, E.; Vanderheyden,K. (Vlerick Leuven Gent Management School) |
| Abstract: | Given the lack of unequivocal findings on person-career fit, this investigation aims to gain insight into the role of cognitive styles in understanding students’ career preferences by two complementary studies. In study 1, we examined whether students (n = 84) with different cognitive styles differ in their entrepreneurial attitudes. Results showed a strong positive correlation between the creating style and the overall occupational status choice index, which implies a preference to become self-employed. No significant correlations were found between this index and the knowing and the planning style respectively. A more detailed look at the occupational status choice sub-indexes showed a positive correlation for the knowing style with the ‘economic opportunity’ index, for the planning style with ‘security’ and ‘participation in the whole process’, and for the creating style with ‘career’, ‘challenge’, ‘economic opportunity’, ‘autonomy’, ‘authority’, and ‘self-realisation’. No significant differences in overall occupational status choice were found in terms of gender, degree option, or family background in entrepreneurship. Study 2 focused on the link between students’ career anchors and their cognitive styles and personality profile (n = 275). We found for the knowing style a positive correlation with ‘pure challenge’, for the planning style a positive correlation with ‘lifestyle’ and ‘security/stability’ and a negative one with ‘autonomy/independence’, and for the creating style a positive correlation with ‘entrepreneurial creativity’ and ‘pure challenge’ and a negative one with ‘security/stability’. Hierarchical regression analyses showed that cognitive styles and personality traits could predict people’s career anchors to a certain extent. These findings are particularly relevant for career counselling services of higher education institutions and for selection and recruitment policies of organisations. Further cross-sectional as well as longitudinal research in diverse cultural settings is needed to cross-validate and strengthen the conclusions of this study. |
| Keywords: | Cognitive styles, career preferences, career anchors, entrepreneurial attitudes and intentions, students. |
| Date: | 2009–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:vlg:vlgwps:2009-17&r=lab |
| By: | Prüfer, J.; Walz, U. (Tilburg University, Center for Economic Research) |
| Abstract: | We analyze competition among academic faculties for new researchers. The value to individual members through social interaction within the faculty depends on the average status of their fellow members. When competing for new members, existing members trade off the effect of entry on average status of the faculty against the reduction in teaching load that can be bought if no entry takes place and the entrant's wage is saved. We show that the best candidates join the best faculties but that they receive lower wages than some lower-ranking candidates. Endogenizing the governance structure of the faculties, we show that the aggregate surplus of a faculty is maximized if a decision-making rule is implemented that makes the average faculty member pivotal. Our main policy implication is that consensus-based faculties, such as many in Europe, could improve the well-being of their members if they liberalized their internal decision making processes. |
| Keywords: | Academic faculties;university governance;organizational design;status organizations. |
| JEL: | D02 D71 L22 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200949&r=lab |
| By: | Crawford R |
| Abstract: | This paper uses the New Zealand Linked Income Supplement (LIS) to investigate the annual transitions in hourly earnings of working age individuals over the years 1997 to 2004. I first construct transition matrices for annual changes in weekly and hourly earnings, to enable comparison with previous analyses using New Zealand tax data. I then estimate the determinants of annual changes in hourly earnings using OLS and quantile regressions. Differences in human capital are associated with differences in the rate of earnings growth. The results were broadly similar across the sub-periods 1997-2001 and 2001-2004. |
| Date: | 2009–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2009-18&r=lab |
| By: | Pradeep Dubey (SUNY, Stonybrook); John Geanakoplos (Cowles Foundation, Yale University) |
| Abstract: | We introduce grading into games of status. Each player chooses effort, producing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incentives to work are changed. We apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative rank) in class, they are often best motivated to work not by revealing their exact numerical exam scores (100, 99, ...,1), but instead by clumping them into coarse categories (A,B,C). When student abilities are disparate, the optimal absolute grading scheme is always coarse. Furthermore, it awards fewer A’s than there are alpha-quality students, creating small elites. When students are homogeneous, we characterize optimal absolute grading schemes in terms of the stochastic dominance between student performances (when they shirk or work) on subintervals of scores, showing again why coarse grading may be advantageous. In both the disparate case and the homogeneous case, we prove that absolute grading is better than grading on a curve, provided student scores are independent. |
| Keywords: | Status, Grading, Incentives, Education, Exams |
| JEL: | C70 I20 I30 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1710&r=lab |
| By: | Chi, Wei; Qian, Xiaoye |
| Abstract: | This study examines one of the channels through which education may contribute to economic growth, specifically, innovation. Endogenous growth theory has long suggested that human capital lead to greater innovation and, through technology innovation and diffusion, contribute to economic growth. However, there is little evidence on the role of human capital in innovation. Using the Chinese provincial data from 1997 to 2006, we show that workers’ tertiary education is significantly and positively related to provincial innovative activities measured by invention patent applications per capita. This result does not vary when spatial dependence is allowed in the estimation. Thus, we find strong and robust evidence for the prediction of endogenous growth theory regarding the effect of human capital on innovation. However, we do not find the consistently significant effect of innovation on growth. This finding may, however, relate to the growth pattern in China. |
| Keywords: | Education; Human Capital; Innovation; Paten; Economic Growth; Spatial Analysis |
| JEL: | O1 O3 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15779&r=lab |
| By: | John Schmitt; Hye Jin Rho; Shawn Fremstad |
| Abstract: | From the early 1990s through the peak of the last business cycle, relatively low U.S. unemployment rates seemed to make the United States a model for the rest of the world’s economies. The Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), and other international organizations all praised the U.S. unemployment performance and urged the rest of the world’s rich countries to emulate the "flexibility" of the U.S. model. However, this report shows that in the current economic crisis, the U.S. unemployment rate ranks 4th to last among the major OECD countries. |
| Keywords: | unemployment, unemployment rate, Europe, United States |
| JEL: | O51 E E2 E24 J J1 J11 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-20&r=lab |
| By: | Luigi Guiso; Tullio Jappelli; Mario Padula |
| Abstract: | Using a representative sample of Italian investors, we estimate the risk associated with pension benefits by eliciting for each individual the subjective distribution of the replacement rate as a summary indicator of social security wealth. We find substantial heterogeneity of pension risk and show that it is consistently related to observable features in the pension system that have different effects on individuals with different characteristics. We then relate subjective pension risk to individuals’ financial decisions. We find that people try to attenuate the adverse consequences of pension wealth uncertainty by increasing demand for targeted retirement saving and for insurance. Individuals facing more pension wealth risk tend to enroll more often in private pension funds, invest more in life insurance and buy more private health insurance. These effects are consistent with people becoming more risk-averse when pension wealth becomes less predictable, leading them to search for greater financial security. |
| Keywords: | Pension Risk, Retirement Saving, Insurance |
| JEL: | H55 E21 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2009/18&r=lab |
| By: | Bardasi, Elena; Wodon, Quentin |
| Abstract: | This paper provides a new definition of'time poverty'as working long hours and having no choice to do otherwise. An individual is time poor if he/she is working long hours and is also monetary poor, or would fall into monetary poverty if he/she were to reduce his/her working hours below a given time poverty line. Thus being time poor results from the combination of two conditions. First, the individual does not have enough time for rest and leisure once all working hours (whether spent in the labor market or doing household chores such as cooking, and fetching water and wood) are accounted for. Second, the individual cannot reduce his/her working time without either increasing the level of poverty of his/her household (if the household is already poor) or leading his/her household to fall into monetary poverty due to the loss in income or consumption associated with the reduction in working time (if the household is not originally poor). The paper applies the concepts of the traditional poverty literature to the analysis of time poverty and presents a case study using data for Guinea in 2002-03. Both univariate and multivariate results suggest that women are significantly more likely to be time poor than men. |
| Keywords: | Rural Poverty Reduction,Population Policies,Achieving Shared Growth,Scientific Research&Science Parks |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4961&r=lab |
| By: | Speklé, Roland F.; Verbeeten, Frank H.M. (Nyenrode Business Universiteit) |
| Abstract: | In this project, we study the use of performance measurement systems in the public sector. We hypothesize that the way in which these systems are being used depends on the characteristics of the activities -particularly on contractibility, which is a broad construct encompassing clarity of goals, the ability to select undistorted performance metrics, and the degree to which managers know and control the transformation process. We expect that public sector organizations that use their performance measurement systems in ways that match the characteristics of their activities outperform those that fail to achieve such fit. We also examine the influence of political or stakeholder pressure on performance measurement system use. We test our hypotheses using survey data from 101 public sector organizations. Our findings indicate that contractibility of performance moderates the relationship between the use of the performance measurement system and performance. Using the performance measurement system for incentive purposes negatively influences organizational performance, but this effect is less severe when contractibility is high. We also find that an exploratory use of the performance measurement system tends to enhance performance. This positive effect is independent of the level of contractibility. Finally, we find that stakeholders’ demands for information on goal achievement lead to a more intense use of performance measurement systems for exploratory purposes. Keywords Performance measurement; Public sector |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:nijrep:2009-08&r=lab |
| By: | Mustafa. K. Mujeri |
| Abstract: | Although economic growth has improved in recent years in Bangladesh, the better economic performance has not translated into satisfactory poverty reduction. The type of growth that matters Bangladesh is the one that creates employment opportunities especially for the poor. In Bangladesh, monetary policy can create better employment opportunities with a well functioning financial sector having capability to ensure adequate resource flows to socially productive uses. On the contrary, such a monetary regime may contribute to high real interest rates impeding the realization of stipulated growth and poverty reduction. For success in reducing poverty, complementary policies to increase the economic mobility of the poor and raise their average returns to labor are also crucial.[PAU 0904] |
| Keywords: | Bangladesh; economic growth; employment; monetary policy; financial sector |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2061&r=lab |
| By: | Vassiliki Avgerinou (University of Peloponnese); Stefanos Giakoumatos (The Highest Institute for Technological Education of Kalamata) |
| Abstract: | Based on data of 26 Greek professional football clubs of Division A’ and B’ for 16 seasons (1991/92-2006/07), we investigate the effect of sporting and economic variables on the attendance in Greek football stadia. Price, income and unemployment are found to be statistically significant in the small Greek football market, while controlling for classic sporting determinants of demand such as success, entertainment and promotion/relegation. We include two more dummy variables; one for the new stadia constructed for the Olympic Games of 2004 and one for the enthusiasm effect of the EURO 2004 victory by the Greek National Team. |
| Keywords: | Greek Football, Football Demand, Attendance |
| JEL: | L83 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:spe:wpaper:0907&r=lab |
| By: | Uesugi, Iichiro; Saito, Yukiko |
| Abstract: | We examine the pattern of top executive turnover among small non-listed businesses in Japan using a unique panel data set of about 25,000 firms for 2001-2007 and find the following. First, the likelihood of a change in top executive among non-listed firms is independent of their ex-ante performance, especially when the firms are owned by the top executives themselves or by their relatives. Second, non-listed firms which experienced a top executive turnover saw an improvement in ex-post performance relative to firms without turnover. The extent of the improvement is similar between non-listed firms and listed firms. All of the above results indicate that underperforming non-listed firms do not face disciplinary pressure to replace their executive, but that once new top executives are in place, they exert high managerial effort and thus significantly improve their firm's profitability. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:piecis:424&r=lab |
| By: | Peter A. Groothuis; Jana Groothuis; Kurt W. Rotthoff |
| Abstract: | NASCAR’s reward structure for rank order tournaments has been considered the exception to the rule in tournament theory due to the linear payout structure. We suggest that the rewards for drivers are nonlinear when you take into consideration the value of sponsorship time on camera and sponsor mentions during a race on TV. Given the importance of corporate sponsorship in NASCAR, we suggest that performance in a race provides additional benefits that are not captured in traditional tournament payments. Key Words: |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:09-15&r=lab |
| By: | Holmlund, Bertil (Department of Economics) |
| Abstract: | This paper discusses some issues of compensation policy in business and academia from the perspectives of incentive theory, other theories, and empirical research. The main conclusion is that mechanical rules for performance-related pay are likely to be inferior to more subjective performance evaluation criteria. Formalized performance pay, where pay is directly linked to measures of output, can easily have dysfunctional effects, especially when some dimensions of performance are easier to observe than others. Subjective performance evaluation is not perfect, but it is probably the best method to obtain a holistic assessment of multidimensional performance indicators. |
| Keywords: | compensation policy; performance-based pay; incentive theory. |
| JEL: | J30 J33 |
| Date: | 2009–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2009_009&r=lab |