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on Labour Economics |
| By: | Faria, Joao; Jellal, Mohamed |
| Abstract: | An optimizing representative firm pays efficiency wages to skilled workers to produce technological innovations, which are assumed to be of labor saving type, affecting negatively the hiring rate of unskilled workers. The results are: i) The efficiency wage of skilled workers is determined by the Solow condition; ii) There is underemployment of unskilled workers whenever the added value of innovations is greater than the opportunity cost of skilled workers’ wages; iii) The optimal level of technology is independent of technological parameters; iv) The employment of skilled workers increases with the level of technology and decreases with the efficiency wage; v) The employment of unskilled workers is not necessarily negatively affected by technological innovations in the steady state. |
| Keywords: | Unemployment; Dynamic Efficiency Wage Model; Technological Change |
| JEL: | J41 O33 D92 |
| Date: | 2009–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17185&r=lab |
| By: | Simona COMI; Mara GRASSENI |
| Abstract: | The aim of this paper is to analyse the wage gap between temporary and permanent jobs in 12 European countries. We use the semi-parametric (quantile regression) approach and evaluate the wage gap across the entire wage distribution. We show that the fixed-term wage gap decreases as higher quantiles are considered, and that having a fixed-term contract penalizes low–skilled workers (at the bottom of the earnings distribution) more than high–skilled ones. Finally, we decompose the wage differential across the entire wage distribution in order to account for the relative importance of observed characteristics versus different returns to skills. We find that workers with the same characteristics as temporary workers would receive higher wages if they worked on permanent contracts in almost all the countries considered, and that this finding is stable across? the entire wage distribution. |
| Keywords: | Temporary jobs, fixed-term contracts, wage differentials, quantile regression, decomposition. |
| JEL: | J31 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp17_09&r=lab |
| By: | Francesca Barigozzi; Gilberto Turati |
| Abstract: | In this note we study (adverse) selection in a labour supply model where potential applicants are characterised by different vocational premiums and skills. We show how the composition of the pool of active workers changes as wage increases. Contrary to standard results, average productivity does not necessarily increase monotonically in the wage rate. We provide conditions such that a wage increase deteriorates either the average productivity or the average vocation of workers accepting the job. Our results are relevant to understand the potential impacts of a wage increase as a policy aimed at solving shortage in the market for nurses. |
| Keywords: | nurses labour supply, skill and vocation. |
| JEL: | J24 J32 I11 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp18_09&r=lab |
| By: | Lídia Farré (Universitat d’Alacant); Libertad González (Universitat Pompeu Fabra); Francesc Ortega (Universitat Pompeu Fabra) |
| Abstract: | This paper investigates the effects of Spain’s large recent immigration wave on the labor supply of highly skilled native women. We hypothesize that female immigration led to an increase in the supply of affordable household services, such as housekeeping and child or elderly care. As a result, i) native females with high earnings potential were able to increase their labor supply, and ii) the effects were larger on skilled women whose labor supply was heavily constrained by family responsibilities. Our evidence indicates that over the last decade immigration led to an important expansion in the size of the household services sector and to an increase in the labor supply of women in high-earning occupations (of about 2 hours per week). We also find that immigration allowed skilled native women to return to work sooner after childbirth, to stay in the workforce longer when having elderly dependents in the household, and to postpone retirement. Methodologically, we show that the availability of even limited Registry data makes it feasible to conduct the analysis using quarterly household survey data, as opposed to having to rely on the decennial Census. |
| Keywords: | Immigration, Labor supply, Fertility, Retirement, Household services |
| JEL: | J61 J22 J13 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:200916&r=lab |
| By: | Newhouse, David; Suryadarma, Daniel |
| Abstract: | This paper examines the relationship between the type of senior high school attended by Indonesian youth and their subsequent labor market outcomes. This topic is very timely, given the government’s recent decision to dramatically expand vocational enrollment. The analysis controls for an unusually rich set of predetermined characteristics, and exploits longitudinal data spanning 14 years to separately identify cohort and age effects. There are four main findings. First, students are sorted into different school types largely on the basis of their entering exam score. Public schools attract the highest-scoring students, while private vocational schools serve the lowest-scoring students. Second, after controlling for a variety of characteristics, including test scores, male public school graduates earn a substantial premium over their privately schooled counterparts. Third, private vocational school graduates fare at least as well as private general graduates, despite coming from more disadvantaged socioeconomic backgrounds. Finally, the returns to public vocational education have declined sharply for the most recent cohort of men. This raises important concerns about the current expansion of public vocational education, and the relevance of the male vocational curriculum in an increasingly service-oriented economy. |
| Keywords: | Tertiary Education,Secondary Education,Education For All,Labor Markets,Teaching and Learning |
| Date: | 2009–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5035&r=lab |
| By: | Jellal, Mohamed |
| Abstract: | In developing countries, empirical evidence suggests that labor unions entail a positive wage gap for unionized workers, in particular in monopolistic and publicly controlled firms. In this paper, we analyze how the presence of a labor union affects the regulation of a monopoly under asymmetric information. Since part of the informational rent left to the monopolistic firm benefits to the syndicate, we prove that the regulator is induced to lower the rent when the union has a large bargaining power. The net consumers' surplus can either increase or decrease with the firm's bargaining power depending on the firm's efficiency type. JEL |
| Keywords: | asymmetric Information ;Labor Union ; Monopolistic Firms ; Regulation Incentives |
| JEL: | J51 D82 D42 L43 |
| Date: | 2009–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17279&r=lab |
| By: | Faria, Joao; Jellal, Mohamed |
| Abstract: | This paper provides a socio-psychological theory of efficiency wage growth. The model blends agency theory with the Forced Savings hypothesis by assuming that firms set an increasing wage profile to minimize shirking costs, and that workers’ effort is positively related to the variation of wages. In its simple formulation the model derives some interesting results, such as: i) a positive relationship between the growth rate of efficiency wages and the discount rate; ii) for the case of constant returns of motivation, the growth rate of wages is unrelated with technology and workers’ preferences. The model also allows the analysis of the optimal path of employment. The positive impact of increasing efficiency wage profile on job creation depends only on workers’ returns of motivation and technology. |
| Keywords: | Dynamic Efficiency Wage Profile, Job Satisfaction,Jobs Creation |
| JEL: | J41 J28 J23 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17184&r=lab |
| By: | Ferrer, Ana; Gagné, Lynda |
| Abstract: | We use data from the Canadian Workplace and Employee Survey (1999-2002) to assess the take-up of family-friendly benefits that are provided by employers. We distinguish between availability and actual use of benefits to account for worker selection into firms according to benefit availability. We find that selection is important for understanding the takeup of family-friendly benefits, although it does not differ much between genders. We also find that the provision of these benefits helps workers relatively little to manage the work-family conflict and benefits are often unavailable to those who need them most. Our findings suggest that the market fails to help employees balance their family-work conflict. |
| Keywords: | work and family balance, family-friendly benefits, take up of employer benefits |
| JEL: | J32 J39 |
| Date: | 2009–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2009-47&r=lab |
| By: | Eric V. Edmonds; Norbert Schady |
| Abstract: | How important are subsistence concerns in a family’s decision to send a child to work? We consider this question in Ecuador, where poor families are selected at random to receive a cash transfer that is equivalent to 7 percent of monthly expenditures. Winning the cash transfer lottery is associated with a decline in work for pay away from the child's home. The cash transfer is greater than the rise in schooling costs that comes with the end of primary school, but it is less than 20 percent of the income paid to child laborers in the labor market. Despite being less than foregone earnings, poor families seem to use the lottery award to delay the child's entry into paid employment and protect the child's schooling status. Schooling expenditures rise with the lottery, but total expenditures in the household decline relative to the control population because of foregone child labor earnings. |
| JEL: | I38 J22 J82 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15345&r=lab |
| By: | Felbermayr, Gabriel; Larch, Mario; Lechthaler, Wolfgang |
| Abstract: | We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms. Countries may differ with respect to size, geographical location, and labor market institutions. Contrary to the literature, our single-sector perspective pays special attention to the role of income effects and shows that bad institutions in one country worsen labor market outcomes not only in that country but also in its trading partners. This spill-over effect is conditioned by trade costs and country size: smaller and/or more centrally located nations suffer less from inefficient policies at home and are more heavily affected from spill-overs abroad than larger and/or peripheral ones. We offer empirical evidence for a panel of 20 rich OECD countries. Carefully controlling for institutional features and for business cycle comovements between countries, we confirm our qualitative theoretical predictions. However, the magnitude of spill-over effects is larger in the data than in the theoretical model. We show that introducing real wage rigidity can remedy this problem. |
| Keywords: | Spill-over effects of labor market institutions,unemployment,international trade,search frictions,heterogeneous firms |
| JEL: | F11 F12 F16 J64 L11 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:200906&r=lab |
| By: | Mauro Sylos Labini; Natalia Zinovyeva |
| Abstract: | This paper investigates whether the quality of higher education and, in particular, its research performance stimulate graduates' research-oriented careers. More specifically, exploiting a very rich data-set on university graduates and the higher education institutions they attended, we empirically study whether graduates from universities and programs that display better academic research records are more likely to be enroled in PhDs or employed as researchers three years after graduation. Controlling for a number of individual and university covariates and using different proxies for research performance, we find that the likelihood of entering a research-oriented career increases with the quality of academic research. Notably, the inclusion of university fixed-effects shows that this result does not stem from unobserved university heterogeneity. Our finding is stronger for graduates in science, medicine, and engineering. |
| Keywords: | academic research, labor market for scientist, post-graduate education |
| JEL: | I23 O30 O38 |
| Date: | 2009–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2009/12&r=lab |
| By: | Ugo Colombino; Erik Hernæs; Marilena Locatelli; Steinar Strøm |
| Abstract: | In order to estimate labour supply responses among older people we have employed a very simple model of retirement decisions that can be estimated on a single cross-section sample, and still be given a structural interpretation in terms of inter-temporal decisions. The model is estimated on Norwegian register data from 1996, which covers all Norwegians aged 55-68 in 1996. The empirical model is employed to assess the impact on retirement of moving the Norwegian pension system towards actuarial fairness. Future annual pension benefits are increased if retirement is postponed say, for one year. In one of the simulations future annual benefits are increased by NOK 8,000 (as of April 2009 1 Euro~ NOK 8.7), which is around 5 per cent of the average pension benefit in 1996 and corresponds approximately to the adjustment in the new pension system which comes into effect 1. January 2011. The number of men and women choosing retirement is reduced by around 5 per cent, given that there is no consumption smoothing. When perfect consumption smoothing is assumed the reduction is much larger; 18 per cent in the case of men and 14 per cent in the case of women. These reductions are really sizeable and indicate that pension reforms, combined with removing constraints in the credit market, may be of great importance in giving the individuals incentive to prolong their working life. |
| Keywords: | Retirement, inter-temporal interpretation, estimates and policy simulations, Norway |
| JEL: | D10 H55 J26 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp14_09&r=lab |
| By: | Richard Buddin; Gema Zamarro |
| Abstract: | This research examines whether teacher licensure test scores and other teacher qualifications affect high school student achievement. The results are based on longitudinal student-level data from Los Angeles. The achievement analysis uses a value-added approach that adjusts for both student and teacher fixed effects. The results show little relationship between traditional measures of teacher quality (e.g., experience and education level) and student achievement in English Language Arts (ELA) or math. Similarly, teacher aptitude and subject-matter knowledge, as measured on state licensure tests, have no significant effects on student achievement. Achievement outcomes differ substantially from teacher to teacher, however, and the effects of a good ELA or math teacher spillover from one subject to the other. |
| Keywords: | Teacher quality, teacher licensure, student achievement, high school, two-level fixed effects, education production function |
| JEL: | J44 J45 H0 H75 I21 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:693&r=lab |
| By: | Muendler, Marc-Andreas; Ekholm, Karolina; Becker, Sascha O. |
| Abstract: | We analyze the relationship between offshoring and the onshore workforce composition in German multinational enterprises (MNEs), using plant data that allow us to discern tasks, occupations, and workforce skills. Offshoring is associated with a statistically significant shift towards more non-routine and more interactive tasks, and with a shift towards highly educated workers. Moreover, the shift towards highly educated workers is in excess of what is implied by changes in either the task or the occupational composition. Whether offshored activities are located in low-income or high-income countries does not alter the direction of the relationship. We find offshoring to predict between 10 and 15 percent of observed changes in wage-bill shares of highly educated workers and measures of non-routine and interactive tasks. |
| Keywords: | linked employer-employee data; demand for labor; multinational enterprises; Trade in tasks |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2009-18&r=lab |
| By: | Patrick Lünnemann; Ladislav Wintr |
| Abstract: | This paper assesses the degree of wage flexibility in Luxembourg using an administrative data set on individual base wages covering the entire economy over the period 2001?2006 with monthly frequency. We find that the wage flexibility at the discretion of the firm is rather low once we limit measurement error and remove wage changes due to institutional factors (indexation, changes in statutory minimum wage, age and marital status). The so adjusted frequency of wage change lies between 5% and 7%. On average, wages change less often than consumer prices. In addition, less than one percent of (nominal) wages are cut both from month to month and from year to year. Given full automatic indexation of wages covering vast majority of employees in Luxembourg, wages appear to be subject to substantial downward real wage rigidity. Finally, wage changes tend to be highly synchronised as they are concentrated around the events of wage indexation and the month of January. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:bcl:bclwop:cahier_etudes_39&r=lab |
| By: | Marcel Voia (Department of Economics, Carleton University) |
| Abstract: | Popular perception holds that employment stability has decreased in recent decades. However, no conclusive evidence exists on secular declines in the length of jobs held. Furthermore, most studies conclude that the proportion of long term jobs has remained remarkably stable over the last few decades. To shed light on this dis-crepancy we use distribution analysis to systematically track changes in Canadian employment durations over an extended period. This is done in order to reconcile popular perception with recent studies and nest the existing literature in a broader historical context. Using ¯- nite mixture decomposition on successive cohorts of workers starting from the 1950s we identify worker types within cohort-based distri-butions. Then, using tests of stochastic dominance, we show that the distribution of employment has indeed changed. The ¯nite mix- ture decomposition reveals that earlier cohorts were more likely to have longer tenure than later cohorts and that there are shifts in pro-portions between longer and shorter work episodes. Our results also indicate that after the 1960s employment durations declined sharply for men, while for women the results were mixed. |
| Keywords: | Nonparametrics, Stochastic Dominance, Kolmogorov-Smirnov type statistic, Bootstrap, Heterogeneous Distribution, Cen-sored Distributions, Finite Mixtures, Employment Duration. |
| JEL: | J01 C14 C12 C16 C41 |
| Date: | 2009–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:09-01&r=lab |
| By: | Faria, Joao; Jellal, Mohamed |
| Abstract: | This paper studies a dynamic model with efficiency wages and adjustment costs associated with hiring and firing decisions. With linear adjustment costs, the optimal efficiency wage and employment are affected by the real interest rate and adjustment costs. When lumpy costs or convex adjustment costs (symmetric or asymmetric) are taken into account, the interest rate and the adjustment costs do not play any role in determining the equilibrium efficiency wage and level of employment. |
| Keywords: | Wage determination; Jobs creation |
| JEL: | J41 J23 |
| Date: | 2009–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17183&r=lab |
| By: | Philip Oreopoulos; Kjell G. Salvanes |
| Abstract: | This paper explores the many avenues by which schooling affects lifetime well-being. Experiences and skills acquired in school reverberate throughout life, not just through higher earnings. Schooling also affects the degree one enjoys work and the likelihood of being unemployed. It leads individuals to make better decisions about health, marriage, and parenting. It also improves patience, making individuals more goal-oriented and less likely to engage in risky behavior. Schooling improves trust and social interaction, and may offer substantial consumption value to some students. We discuss various mechanisms to explain how these relationships may occur independent of wealth effects, and present evidence that non-pecuniary returns to schooling are at least as large as pecuniary ones. Ironically, one explanation why some early school leavers miss out on these high returns is that they lack the very same decision making skills that more schooling would help improve. |
| JEL: | I20 J24 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15339&r=lab |
| By: | Sang Nguyen; Alice Zawacki |
| Abstract: | This paper examines the relationship between employer-sponsored offers of health insurance and establishments’ labor productivity. Our empirical work is based on unique plant level data that links the 1997 and 2002 Medical Expenditure Panel Survey-Insurance Component with the 1992, 1997, and 2002 Census of Manufactures. These linked data provide information on employer-provided insurance and productivity. We find that health insurance offers are positively associated with levels of establishments’ labor productivity. These findings hold for all manufacturers as well as those with fewer than 100 employees. Our preliminary results also show a drop in health care costs from the 75th to the 25th percentile would increase the probability of a plant offering insurance by 1.5-2.0 percent in both 1997 and 2002. The results from this paper provide encouraging and new empirical evidence on the benefits employers may reap by offering health insurance to workers. |
| Keywords: | Employer-provided health insurance, labor productivity, manufacturing industries |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:09-27&r=lab |
| By: | Klaus Prettner; Alexia Prskawetz |
| Abstract: | Persistent low fertility rates lead to lower population growth rates and eventually also to decreasing population sizes in most industrialized countries. There are fears that this demographic development is associated with declines in per capita GDP and possibly also increasing inequality of the wage distribution. We investigate whether this is true in the context of neoclassical growth models, augmented with endogenous fertility decisions and endogenous educational decisions. Furthermore we allow for imperfect substitutability across workers of different age in the production process and learning by doing effects as well as human capital depreciation. In particular, we assess the intergenerational wage redistribution effects which follow after a demographic change to persistent low fertility rates. |
| Keywords: | Population decline, economic growth, intergenerational wage gap. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:vid:wpaper:0906&r=lab |
| By: | Böckerman, Petri; Laukkanen, Erkki |
| Abstract: | Objectives: We examine the predictors of sickness presenteeism in comparison with sickness absenteeism. The paper focuses on the effects of working-time match and efficiency demands and differentiates the estimates by a respondent’s self-assessed health. Methods: We use survey data covering 884 Finnish trade union members in 2009. We estimate logit models. All models include control variables such as the sector of the economy and the type of contract. Results: Working-time match between desired and actual weekly working hours reduces both sickness absence and presenteeism in the whole sample that consists of workers with all health levels. The point estimates reveal that working-time match decreases the prevalence of sickness absence by 7% and presenteeism by 8%. However, the estimates that differentiate by a respondent’s health show that this pattern prevails only for those workers who have poor health. Hence, the point estimates for those who have poor health are much larger than the ones for the whole sample. Working-time match reduces the prevalence of sickness absence by 21% and presenteeism by 20% for those workers who have poor health. In contrast, working-time match has no influence whatsoever on the prevalence of work-related sickness for those who have good health. We also find that efficiency demands increase presenteeism in the whole sample. However, additional results reveal that this pattern prevails only for those workers who have good health. Conclusions: The effects of working-time match and efficiency demands on the prevalence of sickness absence and presenteeism are strongly conditional upon a worker’s self-assessed health level. Therefore, the worker’s initial health is an important attribute that has to be taken into account when one is designing appropriate policies to reduce sickness absence and presenteeism. |
| Keywords: | Absenteeism; Sickness absence; Presenteeism |
| JEL: | I10 |
| Date: | 2009–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17067&r=lab |
| By: | Kilic, Talip; Carletto, Calogero |
| Abstract: | This study uses a unique panel dataset that spans a 20-year period (1985-2005), and estimates the effect of household non-traditional agricultural export (NTX) adoption on changes in livelihood orientation and participation in non-farm employment in Santiago Sacatepéquez municipality of Guatemala. Given the heterogeneity in adoption patterns, it provides differential impact estimates based on a classification of households that takes into account the timing and duration of NTX adoption. Our findings suggest that over time, household reliance on off-farm income and access to non-farm employment, particularly self-employment and blue collar work, increased in the surveyed communities, irrespective of snow pea adoption. However, the extent of change varied across groups. Although the magnitudes of increase in the aforementioned outcomes among early long-term adopters and late adopters were not statistically significant with respect to the trends among non-adopters, early adopters who withdrew from NTX production in the medium-term exhibited greater and statistically significant increases in the same livelihood outcomes with respect to any other category. |
| Keywords: | Smallholders, Non-Traditional Export Crops, Long-Term Livelihood Changes, Consumer/Household Economics, Crop Production/Industries, |
| Date: | 2009–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa111:52838&r=lab |
| By: | Zuniga Gonzalez, Carlos Alberto |
| Abstract: | This article analyzes the indices for nonfarm agricultural activities, which combine agricultural activities with both employment and wages. They were made with panel data of the Living Measurement Standard Survey (1993, 1998, 2001 and 2005) and they were processed with econometric model as a parametric technique (Binary dependent variable model). The trend indices explain the varied combination of nonfarm and farming agricultural activities. In summary, when the economic public policy makers promote preventative measures in the labour market, we see that indices for nonfarm agricultural activities grow. In fact, small farmers use first, second and third nonfarm employment as livelihood strategies for clashing the public policy restrictive. |
| Keywords: | RMEA, RMNFA, RSEA, RSENFA, RTEA, RTNFA, RMWAI, RMWNFAI, RSWAI, RSWNFAI, RTWAI, RTWNFAI, Community/Rural/Urban Development, Labor and Human Capital, Research Methods/ Statistical Methods, |
| Date: | 2008–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa111:53076&r=lab |
| By: | Ponzo, Michela; Scoppa, Vincenzo |
| Abstract: | A large body of literature considers the advantages of using informal networks to match workers to jobs. However, family ties may interfere with a genuine process of worker selection, favoring people with connections over more talented workers. We offer a simple model of favoritism to explain these risks and show firms’ trade-off in using informal channels. We then investigate empirically the determinants and consequences of using informal networks in Italy by using the Bank of Italy Survey. We find that informal networks tend to be used by low educated individuals, in small firms, in low productivity jobs and in less developed regions. Finally, we show that informal networks have a negative impact on wages, controlling for individual and firm characteristics. |
| Keywords: | Informal Networks; Favoritism; Nepotism; Earnings functions; Survey of Household Income and Wealth (SHIW) |
| JEL: | D73 M51 J24 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17281&r=lab |
| By: | Luis Garicano; Thomas Hubbard |
| Abstract: | Earnings inequality has increased substantially since the 1970s. Using evidence from confidential Census data on U.S. law offices on lawyers’ organization and earnings, we study the extent to which the mechanism suggested by Lucas (1978) and Rosen (1982), a scale of operations effect linking spans of control and earnings inequality, is responsible for increases in inequality. We first show that earnings inequality among lawyers increased substantially between 1977 and 1992, and that the distribution of partner-associate ratios across offices changed in ways consistent with the hypothesis that coordination costs fell during this period. We then propose a “hierarchical production function” in which output is the product of skill and time and estimate its parameters, applying insights from the equilibrium assignment literature. We find that coordination costs fell broadly and steadily during this period, so that hiring one’s first associate leveraged a partner’s skill by about 30% more in 1992 than 1977. We find also that changes in lawyers’ hierarchical organization account for about 2/3 of the increase in earnings inequality among lawyers in the upper tail, but a much smaller share of the increase in inequality between lawyers in the upper tail and other lawyers. These findings indicate that new organizational efficiencies potentially explain increases in inequality, especially among individuals toward the top of the earnings distribution. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:09-24&r=lab |
| By: | Norikazu Takami (the Graduate School of Economics, Osaka University and Suntory Foundation Torii Fellow) |
| Abstract: | This paper examines the unemployment controversy between J. M. Keynes and A. C. Pigou, mainly from the latter's viewpoint. In this controversy, although he eventually conceded de- feat, Pigou attempted to prove that money wage cuts were effective on employment regardless of the level of interest rate. His defeat in the controversy was not due to the inconsistency in his perspective, but rather due to his inability to theorize a relevant notion, \forced anti- levies" as expounded in Industrial Fluctuations (1927). The \Pigou effect" devised later in 1943 could be considered as theorization of forced anti-levies. This allowed Pigou to formally demonstrate that money wage cuts were effective in increasing employment regardless of the level of interest rate. Thus, we conclude that the unemployment controversy was gainful at least to Pigou, resulting in the formulation of the notion originated in Industrial Fluctuations. |
| Keywords: | Pigou, unemployment, macroeconomics, Pigou effect, Keynes |
| JEL: | B22 B31 E24 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0927&r=lab |
| By: | Choi, Kangsik |
| Abstract: | This study investigates social welfare and privatization depending on the government's preference for tax revenues and the timing of wage setting in either a unionized-mixed or a unionized-privatized duopolistic market. We show that bargaining over wages is always sequential regardless of who decide the timing of endogenous wage setting and market type except for the following cases; (i) there cannot be any sustained equilibrium or (ii) any timing can be sustained as an equilibrium. Moreover, if the government's preference for tax revenues is sufficiently large, the privatization of the public firm is harmful in terms of both social welfare and government's payoff whether the wage setting is simultaneous or not. However, if the government's preference for tax revenues is sufficiently small, there can exist incongruence regarding privatization between the public firm and the government. |
| Keywords: | Endogenous Wage Setting; Government's Preference; Social Welfare; Tax; Privatization. |
| JEL: | C79 L13 J51 D43 L33 H44 |
| Date: | 2009–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17221&r=lab |
| By: | Kulsoom, Rafia |
| Abstract: | Child labor is one of the problems that occur as a result of responses to the economic problems faced by vulnerable children. Keeping in view the theoretical background of existence of child labor across the world, the study analyzes the incidence of child labor from Rawalpindi city of Pakistan. It also empirically investigates the household demographics and incidence of child labor. The earning and participation functions were estimated for a sample of 150 children. All the coefficients and overall model was observed to be statistically significant. |
| Keywords: | Child Labor, Labor Supply |
| JEL: | J0 |
| Date: | 2009–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17224&r=lab |
| By: | Jellal, Mohamed |
| Abstract: | In this paper, we introduce firm heterogeneity in the context of a model of non-compliance with minimum wage legislation. The introduction of heterogeneity in the ease with which firms can be monitored for non compliance allows us to show that non-compliance will persist in sectors which are relatively difficult to monitor, despite the government implementing non –stochastic monitoring. Moreover, we show that the incentive not to comply is an increasing function of the level of the minimum wage and increasing function of the gap between the minimum wage and the competitive wage rate. |
| Keywords: | Minimum Wage Legislation; Informal Sector in LDCs; firms Heterogeneity;Lateral Contracts; Stochastic Monitoring; Hiring Policies |
| JEL: | O17 J31 J88 |
| Date: | 2009–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17156&r=lab |
| By: | Annamaria Lusardi; Olivia S. Mitchell |
| Abstract: | This paper reports on several self-assessed and objective measures of financial literacy newly added to the American Life Panel (ALP), and it links these performance measures to efforts consumers make to plan for retirement. We evaluate the causal relationship between financial literacy and retirement planning by exploiting information about respondents’ financial knowledge acquired in school - before entering the labor market and certainly before starting to plan for retirement. Results show that those with more advanced financial knowledge are those more likely to be retirement-ready. |
| JEL: | D91 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15350&r=lab |
| By: | Chiara Pronzato |
| Abstract: | More educated parents are observed to have better educated children. From a policy point of view, however, it is important to distinguish between causation and selection. Previous research trying to control for unobserved heterogeneity has found conflicting results: in most cases, a strong positive paternal effect was found with a negligible maternal effect; in fewer cases, opposite results were found. In this paper, I make use of a sample of Norwegian twins to evaluate the impact on the robustness of the estimates when varying the sample size and when selecting different parts of the population. Results concerning the effect of mother’s education are very sensitive to the size of the sample, while the part of the educational distribution considered seems to be a key to reconciling previous results from the literature. |
| Keywords: | intergenerational transmission, education, twin-estimator, sibling-estimator, power of the test |
| JEL: | C23 I2 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:wpc:wplist:wp20_09&r=lab |
| By: | Gartell, Marie (Institute for Futures Studies) |
| Abstract: | The ranking of colleges varies both across methods and model specifications. Still, earnings equations tend to be consistent with regard to which colleges that on average are found in the top and bottom half of the earnings distribution. Moreover, there are no systematic differences in the ranking of colleges dependent on the age of the college, i.e. old versus new colleges. Although ranking by earnings equations provide some information about the relation to earnings, endogeneity issues preclude any causal interpretation of the rankings presented here. |
| Keywords: | University education; college chocie; ranking |
| JEL: | I21 J16 J24 J31 J44 |
| Date: | 2009–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2009_019&r=lab |
| By: | Müller, Bettina |
| Abstract: | In this paper, I analyse how the survival of new firms is affected by the average ability level in the founding team, the team size, team members' homogeneity with respect to ability, and team members' heterogeneity with respect to education. As a theoretical basis, I apply the O-ring theory (Kremer (1993)). Using a rich employer-employee data set on the whole population of Danish firms founded in 1998, I find that the average ability level in a team and the team size have positive effects on firm survival. Having a team at all is the most crucial factor for the probability of survival of young firms. The degree of homogeneity with respect to ability and the degree of heterogeneity with respect to educations have no effect on the survival probability. |
| Keywords: | Entrepreneurship,firm survival,O-ring theory,start-ups |
| JEL: | D23 L25 L26 M13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:09041&r=lab |
| By: | Bernardino, Pedro; Marques, Rui |
| Abstract: | The academic rankings are a controversial subject in higher education. However, despite all the criticism, academic rankings are here to stay and more and more different stakeholders use rankings to obtain information about the institutions’ performance. The two most well-known rankings, The Times and the Shanghai Jiao Tong University rankings have different methodologies. The Times ranking is based on peer review, whereas the Shanghai ranking has only quantitative indicators and is mainly based on research outputs. In Germany, the CHE ranking uses a different methodology from the traditional rankings, allowing the users to choose criteria and weights. The Portuguese higher education institutions are performing below their European peers, and the Government believes that an academic ranking could improve both performance and competitiveness between institutions. The purpose of this paper is to analyse the advantages and problems of academic rankings and provide guidance to a new Portuguese ranking. |
| Keywords: | Academic rankings; CHE; higher education; performance evaluation; Portugal; Shanghai; THES |
| JEL: | I2 I23 |
| Date: | 2009–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:17297&r=lab |
| By: | Woessmann, Ludger; Cinnirella, Francesco; Becker, Sascha O. |
| Abstract: | The trade-off between child quantity and education is a crucial ingredient of unified growth models that explain the transition from Malthusian stagnation to modern growth. We present first evidence that such a trade-off indeed existed before the demographic transition, exploiting a unique census-based dataset of 334 Prussian counties in 1849. Estimating two separate instrumental-variable models that instrument education by landownership inequality and distance to Wittenberg and fertility by previous-generation fertility and sex-imbalance ratio, we find that causation between fertility and education runs both ways. Furthermore, education in 1849 predicts the fertility transition in 1880-1905. |
| Keywords: | 19th-century Prussia; unified growth theory; fertility transition; Sch ooling |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2009-17&r=lab |