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on Labour Economics |
| By: | Johannes F. Schmieder (Columbia University - Department of Economics); Till von Wachter (Columbia University - Department of Economics); Stefan Bender (Institute for Employment Research (IAB)) |
| Abstract: | This paper evaluates the impact of large changes in the duration of unemployment insurance (UI) in different economic environments on labor supply, job matches, and search behavior. We show that differences in eligibility thresholds by exact age give rise to a valid regression discontinuity design, which we implement using administrative data on the universe of new unemployment spells and career histories over twenty years from Germany. We find that increases in UI have small to modest effects on non-employment rates, a result robust over the business cycle and across demographic groups. Thus, large expansions in UI during recessions do not lead to lasting increases in unemployment duration, nor can they explain differences in unemployment durations across countries. We do not find any effect of increased UI duration on average job quality, but show that the mean potentially confounds differential effects on job search across the distribution of UI duration. However, it appears that for a majority of UI beneficiaries increases in UI duration may lead to small declines in wages. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0910-08&r=lab |
| By: | John M. Abowd; Francis Kramarz; Sébastien Pérez-Duarte; Ian Schmutte |
| Abstract: | We estimate a structural model of job assignment in the presence of coordination frictions due to Shimer (2005). The coordination friction model places restrictions on the joint distribution of worker and firm effects from a linear decomposition of log labor earnings. These restrictions permit estimation of the unobservable ability and productivity differences between workers and their employers as well as the way workers sort into jobs on the basis of these unobservable factors. The estimation is performed on matched employer-employee data from the LEHD program of the U.S. Census Bureau. The estimated correlation between worker and firm effects from the earnings decomposition is close to zero, a finding that is often interpreted as evidence that there is no sorting by comparative advantage in the labor market. Our estimates suggest that this finding actually results from a lack of sufficient heterogeneity in the workforce and available jobs. Workers do sort into jobs on the basis of productive differences, but the effects of sorting are not visible because of the composition of workers and employers. |
| JEL: | E24 J21 J31 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15546&r=lab |
| By: | Johannes F. Schmieder (Columbia University - Department of Economics); Till von Wachter (Columbia University - Department of Economics); Stefan Bender (Institute for Employment Research (IAB)) |
| Abstract: | We show that workers displaced from their stable jobs during mass-layoffs in 1982 recession in Germany suffered permanent earnings losses of 10-15% lasting at least 15 years. These estimates are obtained using data and methodology comparable to similar studies for the United States. Exploiting advantages of the German data, we also show that while reduction and recovery in time worked plays a role in explaining earnings losses during the first ten years, the majority of the long-run loss is due to a decline in wages. We also show that even the generous German unemployment insurance system replaced only a small fraction of the total earnings loss. These findings suggest that job displacements can lead to large and lasting reductions in income even in labor markets with tighter social safety nets and lower earnings inequality. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:0910-07&r=lab |
| By: | Gylfi Zoega (Department of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | A medium-term relationship exists between share prices, normalised by labour productivity, and the rate of unemployment in the OECD countries. A similar relationship appears to exist between unemployment and house prices. This helps explain decadal changes in mean unemployment, such as the shift to higher mean unemployment in the Continental European countries in the 1970s and 1980s that coincided with a fall in the level of share prices, as well as differences in mean unemployment between countries. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0917&r=lab |
| By: | Dante Contreras; Patricia Medrano |
| Abstract: | This paper uses alternative measures of neighborhood quality to study its impact on student performance in school. The Chilean voucher-based education system allows us to test separately for neighborhood and traditional in-classroom peer effects, which have been traditionally empha- sized by the literature. We use the Human Development Index reported by United Nations, and the relative number of books in public libraries at the county level, to measure neighborhood quality. We ?nd that a 5 basis point increase in the HDI Index, is related to an increase of 1 to 4 points in the SIMCE test, depending on the speci?cation. The e?ect is equivalent to half a year increase in mothers education (one additional year achieves a 7 point increase in SIMCE scores). Interestingly, the e?ect remains when we look at the sample of random movers. |
| JEL: | O18 Z13 J18 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp302&r=lab |
| By: | Pedro S. Martins |
| Abstract: | How do teacher incentives affect student achievement? Here we examine the effects of the recent introduction of teacher performance-related pay and tournaments in Portugal's public schools. Specifically, we conduct a difference-in-differences analysis based on population matched student-school panel data and two complementary control groups: public schools in autonomous regions that were exposed to lighter versions of the reform; and private schools, which are subject to the same national exams but whose teachers were not affected by the reform. We find that the focus on individual teacher performance decreased student achievement, particularly in terms of national exams, and increased grade inflation. |
| Keywords: | Tournaments, Public Sector, Matched School-Student Data |
| JEL: | I21 M52 I28 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:29&r=lab |
| By: | Yu-Fu Chen; Gylfi Zoega (Department of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | This paper provides an explanation for the observed positive relationship between youth unemployment and the cost of firing workers. When the cost of firing workers is high, firms only fire when the present discounted value of future losses is high, in which case they gain little by postponing the firing decision in the hope that productivity will recover. The young workers are then the first to go due to their longer remaining tenure. In contrast, when the cost of firing workers is low, the present discounted value of future losses is small at the firing margin and firms may choose to wait in the hope of a recovery. In this case they may choose to fire the older workers first since the younger ones are more likely to be around when productivity recovers. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0915&r=lab |
| By: | Nicolas Petrosky-Nadeau |
| Abstract: | The propagation properties of the standard search and matching model of equilibrium unemployment are significantly altered when vacancy costs require some external financing on frictional credit markets. The latter induce variation in the shadow cost of external funds of the cycle that greatly increase the elasticity of vacancy postings to productivity through two distinct channels: (i) a cost channel - a lowered shadow cost during an upturn as credit constraints are relaxed increases the incentive to post vacancies; (ii) a wage channel - the improved bargaining position of firms afforded by the lowered cost of vacancies limits of the upward pressure of market tightness on wages. As a result, the model can match the observed volatility of unemployment, vacancies and labor market tightness. Moreover, the progressive easing of financing constraints to innovations generates persistence in the response of market tightness and vacancies, a robust feature of the data and shortcoming of the standard model. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:cmu:gsiawp:1258554433&r=lab |
| By: | Sankar Mukhopadhyay (Department of Economics, University of Nevada, Reno) |
| Abstract: | This paper quantifies the association between religions, religiosity and educational attainment of new lawful immigrants to the U.S. This paper considers a broad set of religions that includes most of the major religions of the world. Using data from the New Immigrant Survey (2003), we show that affiliation with religion is not necessarily associated with an increase in educational attainment. Muslim and “Other religion” immigrants have less education compared to the immigrants who are not affiliated with any religion. However, affiliation with the Jewish religion is associated with higher educational attainment for males. With regard to religiosity, our results show that high religiosity is associated with lower educational attainment, especially for females. We also outline alternative frameworks that provide insight about the mechanisms that link religion and religiosity with educational attainment. |
| Keywords: | Immigration; Religion; Religiosity; Education |
| JEL: | I21 Z12 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:unr:wpaper:09-003&r=lab |
| By: | Sabatini, Fabio |
| Abstract: | This paper uses a dataset built by the author on the basis of raw data taken from different national surveys to carry out an investigation into the socio-economic determinants of couples’ childbearing decisions in Italy. Since having children is in most cases a “couple matter”, the analysis accounts for the characteristics of both the aspiring parents. Our results contradict theoretical predictions according to which the increase in the opportunity cost of motherhood connected to higher female labour participation is responsible for the fall in fertility. On the contrary, the instability of the women’s work status (i.e. their being occasional, precarious, and low-paid workers) reveals to be a significant and strong dissuasive deterrent discouraging the decision to have children. Couples with unemployed women are less likely to plan childbearing as well. Other relevant explanatory variables are age, current family size, and the strength of family ties. |
| Keywords: | Fertility; Family planning; Childbearing; Labour market; Female participation; Labour precariousness; Social capital; Italy |
| JEL: | J13 J21 Z13 J24 |
| Date: | 2009–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18851&r=lab |
| By: | Popov, Sergey V.; Bernhardt, Dan |
| Abstract: | We model how the choices by students to “rush” a fraternity, and the choices by a fraternity of whom to admit, interact with the signals that firms receive about student productivities to determine labor market outcomes. Both the fraternity and students care about future wages and fraternity socializing values. We first show that if the signals firms receive about students are either perfectly informative or perfectly noisy, then fraternity membership has no impact on labor market outcomes. For intermediate signaling technologies, however, three types of equilibria can exist: pessimistic beliefs by firms about the abilities of fraternity members can support an equilibrium in which no one pledges; optimistic beliefs can lead to higher wages for fraternity members than non-members, so that in equilibrium everyone whom the fraternity would like to admit actually pledges; and an equilibrium in which most fraternity members have intermediate abilities—less able students apply, hoping to be mixed in with better students, but are rejected unless they have high fraternity socializing values, while most very able students do not apply to avoid being tainted in labor market outcomes due to being mixed in with less able fraternity members. We provide sufficient conditions for this latter “hump-shaped” equilibrium to exist, take the model to the data and show that this equilibrium can reconcile the ability distribution of fraternity members at the University of Illinois. Finally, we estimate the welfare impact of the fraternity on different students. |
| Keywords: | Signaling; fraternities; statistical discrimination |
| JEL: | H4 J31 D82 |
| Date: | 2009–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18853&r=lab |
| By: | Jürgen Holl; Robert M. Kunst |
| Abstract: | We apply range unit-root tests to OECD unemployment rates and compare the results to conventional tests. By simulations, we nd that unemployment is represented adequately by a new nonlinear transformation of a serially-correlated I(1) process. |
| JEL: | C12 C22 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0915&r=lab |
| By: | Chikako Yamauchi |
| Abstract: | This paper examines pathways through which parental characteristics might affect children’s cognitive and behavioural outcomes. Using the 2004 LSAC, I show that more educated and mentally healthier parents are likely to have children with better outcomes. While educated parents are more frequently engaged in education-oriented activities with their children, mentally healthier parents exhibit more favourable parenting practices. To the extent that these results reflect causal relationships, they suggest that parental education and mental health affect children’s outcomes through different pathways. |
| Keywords: | parental education, parental mental health, test score, behavioural outcome, parenting |
| JEL: | D1 I2 J2 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:621&r=lab |
| By: | Irarrazabal, Alfonso; Moxnes, Andreas; Ulltveit-Moe, Karen-Helene |
| Abstract: | We expect trade liberalization to give rise to aggregate productivity gains, as the least efficient firms are forced out, and labor is reallocated towards the best performing firms. But the positive intra-industry reallocation effects rely on the stark assumption that exporters’ superior performance is due to intrinsic firm efficiency. We investigate the importance of intrinsic firm efficiency relative to input quality as sources of exporters’ productivity premium, employing a matched employer-employee data set for Norwegian manufacturing. Augmented measures of total factor productivity which take worker characteristics into account, indicate that up to 67 percent of the exporter premium reflects differences in workforce rather than true efficiency. Simulating the labor dynamics proceeding firm exits, we illustrate that the benign impact on aggregate productivity from firm exits may be reduced because of worker reallocation. |
| Keywords: | exporters; firm heterogeneity; labor reallocation; productivity measurement; worker heterogeneity |
| JEL: | D24 F12 F14 F16 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7577&r=lab |
| By: | Elaina Rose (with Yoram Bauman) |
| Abstract: | A substantial body of research suggests that economists are less generous than other professionals and that economics students are less generous than other students. We address this question using administrative data on donations to social programs by students at the University of Washington. Our data set allows us to track student donations and economics training over time in order to distinguish selection effects from indoctrination effects. We find that economics majors are less likely to donate than other students and that there is an indoctrination effect for non-majors but not for majors. Women majors and non-majors are less likely to contribute than comparable men. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:udb:wpaper:uwec-2009-20&r=lab |
| By: | Matthew A Cole; Robert J R Elliott; Joanne K Lindley |
| Abstract: | Within a compensating wage differential framework we investigate whether there is a wage premium for working in a pollution intensive industry. Our results for the economy as a whole suggest a small wage premium of approximately one quarter of one percent associated with the risk of working in a dirty job. This premium rises to over fifteen percent for those individuals who work in one of the five dirtiest industries. We also find evidence of a fatal risk wage premium, providing estimates of the value of a statistical life of between £12 million and £19 million (2000 prices). |
| Keywords: | Compensating Wage Differentials, Pollution, Value of Statistical Life |
| JEL: | J28 J31 Q52 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:09-13&r=lab |
| By: | Matthias Kräkel |
| Abstract: | We show that in competitive careers based on individual performance the least productive individuals may have the highest probabilities to be promoted to top positions. These individuals have the lowest fall-back positions and, hence, the highest incentives to succeed in career contests. This detrimental incentive effect exists irrespective of whether effort and talent are substitutes or complements in the underlying contest-success function. However, in case of complements the incentive effect may be be outweighed by a productivity effect that favors high effort choices by the more talented individual |
| Keywords: | career competition; contest; mediocracy |
| JEL: | D72 J44 J45 M51 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:bon:bonedp:bgse25_2009&r=lab |
| By: | Cette, Gilbert; Etienne , Wasmer |
| Abstract: | Contrary to most European countries, indexation rules of the French minimum wage are very precise. However, three possible rules are consistent with the texts, which diverge in particular in periods of deflation or of negative growth of real wages. The alternative interpretations can have a large impact on the dynamics of the minimum wage, on the dynamics of real wages compared to productivity and on the bottom of the wage distribution. This note examine the three rules and recommand the optimal one, which appear to be most robust to alternative scenarios of inflation and deflation. |
| Keywords: | minimum wage; indexation; inflation; deflation; real wage growth |
| JEL: | J3 J50 |
| Date: | 2009–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18855&r=lab |
| By: | Atila Abdulkadiroglu; Joshua Angrist; Susan Dynarski; Thomas J. Kane; Parag Pathak |
| Abstract: | Charter schools are publicly funded but operate outside the regulatory framework and collective bargaining agreements characteristic of traditional public schools. In return for this freedom, charter schools are subject to heightened accountability. This paper estimates the impact of charter school attendance on student achievement using data from Boston, where charter schools enroll a growing share of students. We also evaluate an alternative to the charter model, Boston's pilot schools. These schools have some of the independence of charter schools, but operate within the school district, face little risk of closure, and are covered by many of same collective bargaining provisions as traditional public schools. Estimates using student assignment lotteries show large and significant test score gains for charter lottery winners in middle and high school. In contrast, lottery-based estimates for pilot schools are small and mostly insignificant. The large positive lottery-based estimates for charter schools are similar to estimates constructed using statistical controls in the same sample, but larger than those using statistical controls in a wider sample of schools. The latter are still substantial, however. The estimates for pilot schools are smaller and more variable than those for charters, with some significant negative effects. |
| JEL: | H52 I21 I28 J24 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15549&r=lab |
| By: | Elie Appelbaum (York University, Toronto) |
| Abstract: | This paper shows that the Rubinstein alternating offers model can be modified to provide a Pareto superior outcome in the context of the right-to-manage union-firm bargaining. Two examples of bargaining protocols that yield a superior outcome are provided. In the first example, the union and the firm engage in a game in which the order of play is determined as part of the bargaining. We show that the game has a unique subgame perfect equilibrium in which the firm always moves first in the wage bargaining game and the equilibrium wage is, therefore, unique. In the second example we examine a two-part-tariff alternating offers bargaining protocol, where the firm and the union bargain over the wage and transfer payments. We show that this bargaining protocol has a Pareto efficient, unique subgame perfect equilibrium. Thus, although the parties do not bargain over the level of employment, the outcome under this protocol is, nevertheless, “socially” optimal. |
| Keywords: | Union Wage premium, Efficient Bargaining, Right to Manage |
| JEL: | J51 J52 J53 C70 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:yca:wpaper:2009_02&r=lab |
| By: | Ariane TICHIT MINISCLOUX (Centre d'Etudes et de Recherches sur le Développement International); Daniela BORODAK (Ecole Supérieure de Commerce (Clermont-Ferrand)) |
| Abstract: | This paper investigates the motivations behind the trip duration in the destination country for Moldovan migrants. The New Economics of Labour Migration (NELM) asserts that preference for the home country; wage differential and migration costs drive the choice of the timing of return. Within this framework, we focus on the influence of the legal status of migrants (as part of the migration costs) and on the potential push or pull effects of the characteristics of the migrant's region of origin (influencing the choice of the migrant both in terms of wage differential and preference for the origin country). The central proposition is that undocumented migrants face higher migration costs than legal migrants and therefore have an incentive to stay in destination countries longer than migrants with documents in order to increase the amount of savings relative to the costs of entry on a given trip. To test this hypothesis we run a duration model using a national household dataset on migration in the Republic of Moldova collected in 2006 complemented with a regional dataset from Roscovan and Galer (2006). Evidence from parametric survival models supports our proposition and therefore recommends enforcing international laws as regards to the free movement of labor. In addition, the social regional development of the departure zone acts as a pull factor, claiming for more public development aid. |
| Keywords: | Moldova, duration, migration |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1079&r=lab |
| By: | Yang, Zaigui |
| Abstract: | This paper uses an overlapping generations model to investigate the urban public pension in China. It examines the effects of the replacement rates and population growth rate on the capital-labor ratio, pension benefits, consumption and utility, and finds the optimal replacement rate. It is shown that raising the individual account benefit replacement rate only induces the increase in the individual account benefits. Raising the social pool benefit replacement rate induces the increase in the social pool benefits and retirement-period consumption, while the decrease in the capital-labor ratio, individual account benefits, working-period consumption and utility. The fall in the population growth rate leads to the increase in the capital-labor ratio, social pool benefits, individual account benefits, working-period consumption and utility, and leads to a decrease in the retirement-period consumption. The optimal social pool benefit replacement rate depends on the individual discount factor, social discount factor, capital share of income and population growth rate, and it decreases in the case of falling population growth rates. It will do more good than harm to raise the individual account benefit replacement rate, reduce the social pool benefit replacement rate and strictly implement China's population policy. |
| Keywords: | Urban public pension; Replacement rate; Population growth rate |
| JEL: | H55 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18846&r=lab |
| By: | Eli Berman; Joseph Felter; Jacob N. Shapiro |
| Abstract: | Most aid spending by governments seeking to rebuild social and political order is based on an opportunity-cost theory of distracting potential recruits. The logic is that gainfully employed young men are less likely to participate in political violence, implying a positive correlation between unemployment and violence in places with active insurgencies. We test that prediction on insurgencies in Iraq and the Philippines, using survey data on unemployment and two newly- available measures of insurgency: (1) attacks against government and allied forces; and (2) violence that kills civilians. Contrary to the opportunity-cost theory, we find a robust negative correlation between unemployment and attacks against government and allied forces and no significant relationship between unemployment and the rate of insurgent attacks that kill civilians. |
| JEL: | F51 F52 H4 H56 J6 O12 O53 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15547&r=lab |
| By: | Daniel Mejía; María José Uribe |
| Abstract: | Violence against union members in Colombia has been at the center of a debate for several years now. Union leaders and NGOs in Colombia and abroad continuously argue that free trade agreements with Colombia should be blocked based on the failure of the current Colombian government to protect union members from targeted killings. We first look at the evolution over time of the indicators for violence against union members and union leaders. In particular we show (using different indicators and data sources) that violence against unionists in Colombia has steadily declined over the last seven years. Then, we use available panel data to study the determinants of violence against union members and union leaders. We make special emphasis on testing the claim that a greater intensity in the characteristic activities of unions leads to more violence against union members and union leaders. Using different data sets, data sources and estimation methods, we find no statistical evidence supporting this claim. These results suggest that, on average, violence against unionists in Colombia is neither systematic nor targeted. |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:006147&r=lab |