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on Labour Economics |
| By: | Zafar Nazarov |
| Abstract: | This study estimates the effect of the UI (Unemployment Insurance) wage replacement rate on reemployment wages using the sample of men in the 1996 and 2001 Surveys of Income and Program Participation. It models employment search behavior in a dynamic discrete time hazard setting with three possible outcomes: finding a full-time job, finding a part-time job, or staying unemployed (continuing the job search). It finds that reemployment wages, particularly part-time wages, decrease with the UI wage replacement rate. Furthermore, the wage replacement rate depresses the prospect of finding full-time work while increasing the prospect of finding part-time work. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:734&r=lab |
| By: | Bauer, Christian; Lingens, Jörg |
| Abstract: | We analyze the welfare and employment effects of different wage bargaining regimes. Within the large firm search model, we show that collective bargaining affects employment via two channels. Collective bargaining exerts opposing effects on job creation and wage setting. Firms have a stronger incentive for strategic employment, while workers benefit from the threat of a strike. We find that the employment increase due to the strategic motive is dominated by the employment decrease due to the increase in workers' threat point. In aggregate equilibrium, employment is ineciently low under collective bargaining. But it is not always true that equilibrium wages exceed those under individual bargaining. If unemployment benefits are sufficiently low, collectively bargained wages are smaller. The theory sheds new light on policies concerned with strategic employment and the relation between replacement rates and the extent of collective wage bargaining. |
| Keywords: | search; overemployment; collective wage bargaining; wage determination |
| JEL: | J30 J50 J41 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:11315&r=lab |
| By: | Marco Caliendo; Konstantinos Tatsiramos; Arne Uhlendorff |
| Abstract: | The generosity of the Unemployment Insurance system (UI) plays a central role for the job search behavior of unemployed individuals. Standard search theory predicts that an increase in UI benefit generosity, either in terms of benefit duration or entitlement, has a negative impact on the job search activities of the unemployed increasing their unemployment duration. Despite the disincentive effect of UI on unemployment duration, UI benefit generosity may also increase job match quality by allowing individuals to wait for better job offers. In this paper we use a sharp discontinuity in the maximum duration of unemployment benefits in Germany, which increases from 12 months to 18 months at the age of 45, to identify the effect of extended benefit duration on unemployment duration and post-unemployment outcomes. We find a spike in the re-employment hazard for the unemployed workers with 12 months benefit duration, which occurs around benefit exhaustion. This leads to lower unemployment duration compared to their counterparts with 18 months benefit duration. However, we also show that those unemployed who obtain jobs close to and after the time when benefits are exhausted are significantly more likely to exit subsequent employment and receive lower wages compared to their counterparts with extended benefit duration. |
| Keywords: | Unemployment benefits, unemployment duration, employment probability, job match quality, regression discontinuity |
| JEL: | C41 J64 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp967&r=lab |
| By: | Gianna Claudia Giannelli; Ursula Jaenichen; Claudia Villosio |
| Abstract: | According to the aims of the labour market reforms of the 90s implemented in many European countries, workers may stay at their first job for a shorter time, but should be ble to switch jobs easily. This would generate a trade-off between job opportunities and job stability. This paper addresses this issue using administrative longitudinal data for Germany and Italy, taken as representative examples of continuous and isolated reforms, respectively. The estimated piecewise constant job and employment duration models show that changes in the durations of the first job and employment - measured as the sum of multiple consecutive jobs - are observed in periods of labour market reforms. However, the existence of a trade-off is not confirmed by the results. In Germany, men have experienced an increase in employment stability over time, mated with somewhat longer job durations, while women have not benefitted from an increase in employment durations as a compensation for the marked decrease in their first job durations. In Italy, employment stability of the new entrants of both sexes has not improved after the reforms. The reduction in the duration of the first job has not been counterbalanced by an increase in the opportunity to find rapidly another job. These results suggest that the objective of increasing job opportunities by means of labour market deregulation has not been fully achieved. |
| Keywords: | employment duration, work career, tenure, precarious jobs, labour market reforms, mixed proportional hazard. |
| JEL: | J62 J64 J68 K31 C41 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:95&r=lab |
| By: | Bruno Contini; Elisa Grand |
| Abstract: | This paper explores the “disposable” patterns of workforce utilization in Italy. The term “disposable” reflects the fact that people enter the labor market, their services are “used” as a disposable commodity for few years, after which they leave the labor market and are no longer observable in the official data. Out of 100 new young entries, only 70 are still in the labor market 10 years after entry if their first job spell was at least one year long. For those – three times as many - whose first job is short (< 3 months), 10-year survival does not reach 50%. |
| Keywords: | youth employment, unemployment, unemployment duration. |
| JEL: | J J0 J1 J6 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:98&r=lab |
| By: | Agus Priyambada; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | Although in general less prevalent than other developing countries at similar stage of development, the problem of child labor in Indonesia is significant. Like in other countries, this study finds that there is a strong link between the child labor phenomenon and poverty. The profile of child labor largely mirrors the profile of poverty. Furthermore, poverty is found as an important determinant of working for children. However, working does not always completely eliminate a child’s opportunity to obtain formal education. In fact, children from poor households can still go to school by undertaking part-time work to pay for their education, implying that banning working for these children may force them to drop out of schools instead. Since the phenomenon of child labor is strongly associated with and determined by poverty, the most effective policy for eliminating child labor is through poverty alleviation. Other policies that can foster the rate of reduction in child labor are to make it easier for children from poor families to access education and to increase the opportunity cost of working by improving the quality of education to increase the rate of return to education. |
| Keywords: | child, labour |
| JEL: | J78 J70 D63 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1624&r=lab |
| By: | Daniel Suryadarma; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | This study provides an overview of the concepts used to measure unemployment in Indonesia and their consequences for the measured unemployment trends. One finding shows that BPS’s decision in 2001 to relax the definition of labor force by including discouraged workers has resulted in an artificially high open unemployment rate and disguises the actual decline in traditionally-measured open unemployment rates post-crisis. Another finding indicates that discouraged workers in Indonesia are not confined only to the poor and those who are denied access to the proper job market. We recommend that, if Indonesia still wants to utilize a broader definition of the labor force, the measurement of open unemployment should adhere to the ILO’s recommendation of only including those discouraged workers who are still willing to work. The discouraged workers who are unwilling to work should be left in the “out of labor force� category. |
| Keywords: | discouraged workers, open unemployment, measurement, Indonesia |
| JEL: | E24 J64 J60 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1634&r=lab |
| By: | Schmieder, Johannes F.; Wachter, Till von; Bender, Stefan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| 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." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitsplatzverlust - Auswirkungen, Lebenseinkommen, Lohnhöhe, Massenentlassungen - Auswirkungen |
| JEL: | J64 J65 |
| Date: | 2010–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201001&r=lab |
| By: | Silvia Loriga; Paolo Naticchioni (Univ. of Cassino, Univ. of Rome “La Sapienza”, CeLEG (LUISS-Rome) and ISFOL.) |
| Abstract: | In the last decade the European Employment Strategy strongly recommended reforms of active labour market policies, reforms that have generated a spread of evaluation exercises for most of European countries. This paper fills the gap in the literature concerning the Italian case, assessing the efficacy of Public Employment Services (PESs) -after the reforms of 1997, 2000, 2003- in increasing the unemployment to employment transition probabilities, through matching techniques. Exploiting the longitudinal dimension of the Labour Force Survey data we design an evaluation structure that allows observing outcomes in both the short (at most 3 months) and the long run (at most 12 and 15 months). In this framework, PES users show a lower probability of finding a job in the short term, because of a lock-in effect, while in the long term this probability turns out to be positive. We also show that PES effects in the long term are much less pronounced when considering as outcome variable the probability of finding a permanent job, a proxy for the quality of the job, suggesting that PES impacts are to a large extent driven by the use of temporary contracts. Furthermore, to deal with issues related to selection on unobservables we carry out two different sensitivity analysis, which confirm our baseline findings. |
| Keywords: | Public Employment Services, Active Labour Market Policies, , European Employment Strategy, Matching, Policy Evaluation |
| JEL: | J64 J68 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:des:wpaper:17&r=lab |
| By: | Edward Teo; Shandre M. Thangavelu; Elizabeth Quah (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper explores the relationship between unemployment (U) and job vacancies (V) in the Singapore labour market. Empirical analysis using the framework of the UV Curve (also known as the Beveridge Curve) indicates that Singapore’s labour market appears to have improved in its matching efficiency as compared to other East-Asian countries. However, detailed study of Beveridge Curve for the Singapore economy reveals that it has become more inelastic since the Asian crisis, thereby suggesting that the labour market is less responsive in recent years. This might suggest the possibility that employers are now more cautious and selective in their employment decisions. |
| Keywords: | unemployment, job vacancies, labour, Beveridge Curve, East-Asian, Singapore |
| JEL: | E24 J61 J64 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1667&r=lab |
| By: | Guido Menzio; Shouyong Shi |
| Abstract: | We study a labor market where workers search for jobs both on the job and off the job. In the model, there are aggregate productivity shocks and match-specific shocks. We outline the proof of existence of an equilibrium which we call a block recursive equilibrium (BRE), in which individuals' decisions and market tightness are independent of the distribution of workers over wages or contracts. A critical assumption that is responsible for a BRE to exist is that search is directed by firms' posting of contracts. We explain why a BRE does exist under the assumption of directed search and why it does not under the assumption of random search. Finally, we generalize the proof of existence of a BRE to allow workers to be ex-ante heterogeneous with respect to some observable characteristics such as education and skill. |
| Keywords: | Directed Search; On the Job Search; Heterogeneity; Aggregate Fluctuations |
| JEL: | E24 E32 J64 |
| Date: | 2010–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-390&r=lab |
| By: | Diego Restuccia; Guillaume Vandenbroucke |
| Abstract: | Between 1940 and 2000 there has been a substantial increase of educational attainment in the United States. What caused this trend? Using a simple model of schooling decisions, we assess the quantitative contribution of changes in the return to schooling in explaining the evolution of education. We restrict changes in the returns to schooling to match data on earnings across educational groups and growth in aggregate labor productivity. These restrictions imply modest increases in returns that nevertheless generate a substantial increase in educational attainment: average years of schooling increase by 37 percent in the model compared to 23 percent in the data. This strong quantitative effect is robust to relevant variations of the model including allowing for changes in the relative cost of acquiring education. We also find that the substantial increase in life expectancy observed during the period contributed to only 7 percent of the change in educational attainment in the model. |
| Keywords: | educational attainment, schooling, skill-biased technical progress, human capital |
| JEL: | E1 O3 O4 |
| Date: | 2010–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-388&r=lab |
| By: | Hoon Hian Teck (Singapore Management University) |
| Abstract: | What forces have shaped our nation’s employment and remuneration record so far? Where is Singapore’s unemployment rate headed? What should policy-makers do about it? These are the questions tackled in this paper. It is shown that based on our historical experience, it would be necessary to achieve an annual real GDP growth rate of 7.1 percent in order to keep the unemployment rate unchanged. Moreover, a one-percentage point shortfall of the real GDP growth rate below 7.1 percent in any given year results in a rise in the unemployment rate of 0.12 percentage points over the previous year. Consequently, if the economy is able to generate at most 5 percent real GDP annual growth rate (the high end of the range of official medium-term projections of our economy’s growth rate, which is 3 to 5 percent), it would seem that the unemployment rate is set to rise from its current level based upon the historical relationship. Is there any reason, however, to believe that the Okun’s Law relationship for a fast-developing country like ours might be expected to change once we have reached the status of a mature economy as we now have become? After all, in a mature economy like the US, the critical real GDP growth rate required to keep the unemployment rate steady is only 3 percent. It is likely that the Okun’s Law relationship would indeed shift as the economy matures. As workers adjust their expectations to the reality that the economy has reached a new lower growth regime and they incorporate their revised growth expectations in their wage bargaining, the unemployment rate can remain steady despite slower growth. This steady structural rate of unemployment is, however, likely to be higher than in the past. In response to the worsened medium to long term outlook for the labor market, one is tempted to ask- Can anything be done by policy-makers to reduce the equilibrium rate of unemployment? I believe that reaching out for a weaker Singapore dollar in order to boost international competitiveness, and so to boost aggregate demand and hence employment, or reaching out for budgetary deficits as a direct means to boost aggregate demand is unlikely to have a lasting effect on the structural rate of unemployment. Instead that it would be better to consider policies aimed directly at influencing equilibrium unemployment. One proposal is to introduce an employment subsidy scheme aimed particularly at low-skilled workers, which has the effect of increasing job creation directly. Increased effort to create a business-friendly environment to encourage new start-ups by ensuring minimal red tape and enabling relatively easy financing for them will also work to increase the pace of job creation. Finally, the work of the Workforce Development Agency aimed at retraining low-skilled and older workers to meet the skills demand of new jobs and then matching them to firms offering the job vacancies should help somewhat in bringing down the structural rate of unemployment as our small geographical area works to our advantage when it comes to job-matching. |
| Keywords: | Singapore, employment, GDP, Okun’s Law relationship |
| JEL: | J21 J64 E24 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1573&r=lab |
| By: | Bruno Contini |
| Abstract: | Why did employment growth - high in the last decade– take place at the expense of young workers in the countries of Central and Southern Europe ? This is the question addressed in this paper. Youth unemployment has approached or exceeded 20% despite a variety of factors, common to most EU countries. According to neo-classical economics all would be expected to exert a positive impact on its evolution: population ageing and the demographic decline, low labor cost of young workers, flexibility of working arrangements, higher educational attainment, low unionization of young workers, early retirement practices of workers 50+. But neither seems to provide a convincing explanation. Historically based institutions and political tradition, cultural values, social capital – factors that go beyond the standard explanation of economic theory – provide a more satisfying interpretation. |
| Keywords: | youth employment, unemployment, social capital, institutions. |
| JEL: | J J0 J1 J6 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:97&r=lab |
| By: | Xiaolin Xing; Zhenlin Yang (Singapore Centre for Applied and Policy Economics) |
| Abstract: | This paper explores both observable and unobservable variables that would affect employed workers’ decisions on job change. We find that age, job satisfaction, satisfaction with working environment or job security, and firm size are among the major factors determining workers’ intentions of job-to-job mobility. Younger workers and workers in smaller firms are more likely to look for other jobs. We also find that men are more likely to consider a change in job than women, but when “actually looking for another job� is concerned, men and women do not differ. Furthermore, monthly income and working sector contribute significantly to looking for other jobs. |
| Keywords: | Voluntary job-to-job mobility; Job satisfaction; Logistic regression model |
| JEL: | J60 J63 C25 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1677&r=lab |
| By: | Orley Ashenfelter (Princeton University); Kirk B. Doran (University of Notre Dame); Bruce Schaller (New York City Department of Transportation) |
| Abstract: | The available estimates of the wage elasticity of male labor supply in the literature have varied between -0.2 and 0.2, implying that permanent wage increases have relatively small, poorly determined effects on labor supplied. The variation in existing estimates calls for a simple, natural experiment in which men can change their hours of work, and in which wages have been exogenously and permanently changed. We introduce a panel data set of taxi drivers who choose their own hours, and who experienced two exogenous permanent fare increases instituted by the New York City Taxi and Limousine Commission. Our preferred estimate suggests that their elasticity of labor supply is about -0.2. |
| Keywords: | male labor supply, effect of wage rates, long run labor supply, public policies, taxation, social safety nets, and redistribution of income, New York City Taxi and Limousine Commission |
| JEL: | E27 E24 F16 J21 J40 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:1203&r=lab |
| By: | Riccardo Faini; Steiner Strom; Alessandra Venturini; Claudia Villosio |
| Abstract: | The paper compares the pattern of wage assimilation of foreigners with both native immigrants and local natives in Italy, a country with large internal and international migration. This comparison, not yet exploited, yields understanding of the role played by language and knowledge of social capital. We use the administrative dataset on dependent employment (WHIP), to estimate a fixed effect model of the weekly wages of males aged 18-45 with controls for selection in return migration and unobserved heterogeneity. The three groups of workers start their careers at the same wage level but, as experience increases, the wage profiles of foreigners and natives, both immigrants and locals, diverge. A positive selection in the returns prevails, so that the foreign workers with lower wages are the most likely to stay in Italy. Also an “ethnic” skill differential emerges and a negative status dependence for those entering at low wage level. |
| Keywords: | Migration, Assimilation, Wage differential. |
| JEL: | J31 J61 C23 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:96&r=lab |
| By: | Fali Huang; Peter Cappelli (Singapore Management University) |
| Abstract: | Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. This should be especially useful in work systems where monitoring by supervisors is more difficult, such as teamwork systems. We analyze the relationship between screening and monitoring in the context of a principal-agent model and test the theoretical results using a national sample of U.S. establishments, which includes information on employee selection. We find that employers screen applicants more intensively for work ethic where they make greater use of systems such as teamwork where monitoring is more difficult. This screening is also associated with higher productivity and higher wages and benefits, as predicted by the theory- The synergies between reduced monitoring costs and high performance work systems enable the firm to pay higher wages to attract and retain such workers. Screening for other attributes, such as cognitive ability, does not produce these results. |
| Keywords: | elicit effort from employees, worker, screening, monitoring, cognitive ability |
| JEL: | J2 J3 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1530&r=lab |
| By: | Fali Huang; Peter Cappelli (Singapore Management University) |
| Abstract: | Arguably the fundamental problem faced by employers is how to elicit effort from employees. Most models suggest that employers meet this challenge by monitoring employees carefully to prevent shirking. But there is another option that relies on heterogeneity across employees, and that is to screen job candidates to find workers with a stronger work ethic who require less monitoring. This should be especially useful in work systems where monitoring by supervisors is more difficult, such as teamwork systems. We analyze the relationship between screening and monitoring in the context of a principal-agent model and test the theoretical results using a national sample of U.S. establishments, which includes information on employee selection. We find that employers screen applicants more intensively for work ethic where they make greater use of systems such as teamwork where monitoring is more difficult. This screening is also associated with higher wages, as predicted by the theory- The synergies between reduced monitoring costs and high performance work systems enable the firm to pay higher wages to attract and retain such workers. Screening for other attributes, such as work experiences and academic performance, does not produce these results. |
| Keywords: | Employee Screening, Monitoring, Work Ethic, High Performance Work Practices, Principal-Agent Model |
| JEL: | M51 M54 J30 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1533&r=lab |
| By: | Elanor Colleoni; Roberto Leombruni |
| Abstract: | Given the group job classification and collective agreement identification code, we extracted from the national bargaining archive the skill level definition and we created a skill grades classification for the workers. We added this information to Workers History Italian Panel -Whip-, and we created a new variable which allow us to identify whether a worker is skilled or unskilled. The new skill level variable increase the possibility for a better comprehension of labour market issues as well as for new studies in the field of job risk evaluation. The sections are organized as follow: 1. creation of skill level classification from national collective agreements archive; 2. short explanation of Whip archives; 3. adding informations to Whip archives; 4. checking the consistency and coverage of the skill level variable in Whip; 5. a first interpretation of the resulting skill distribution. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:99&r=lab |
| By: | Nils Braakmann (Institute of Economics, Leuphana University of Lüneburg, Germany) |
| Abstract: | In this paper, I contrast the effects of individual and spousal disability on subjective wellbeing and labor supply using data on couples from the German Socio-Economic Panel for the years 1984 to 2006. I find that both men and women reduce their propensity to work when they or their partner become disabled. The effects of spousal disability are economically large. I find no evidence for hours and wage adjustments by spousal disability, although there are wage effects of individual disability. The life-satisfaction of women, but not of men, is reduced considerably by their partners’ disability. The effects are about 33 to 50% as large as those of individual disability. I also find no evidence that individuals adapt to their partners’ disability, although there is adaption to individual disability. |
| Keywords: | disability, labor supply, subjective well-being, adaption; other-regarding preferences |
| JEL: | D64 I10 J14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:161&r=lab |
| By: | Isabella David |
| Abstract: | I estimate the cyclicality of Italian real wages over the period 1985-2003 controlling for the so-called "composition bias". Aggregate real wage statistics, commonly used to measure real wage elasticity, are affected by the bias arising from the cyclical change in the skill-composition of the labor force. An analysis on WHIP longitudinal data shows that the degree of Italian real wage procyclicality significantly increases after controlling for composition bias: this result is robust to several checks and it is consistent with Solon, Barsky and Parker's 1994 seminal paper on the US. Finally, I discuss the effects of the the 90's labor market's reforms on Italian real wage cyclicality. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:92&r=lab |
| By: | Gábor Kátay (Magyar Nemzeti Bank); Benedek Nobilis (Magyar Nemzeti Bank) |
| Abstract: | This paper proposes a simple and transparent methodology for decomposing changes in the aggregate labour force participation rate over time into changes in the labour force participation behaviour of different population groups and changes in each group’s population share. Unlike traditional decomposition methods based only on demographic factors, our approach also identifies the contribution of all major factors that can account for the developments in the labour force participation such as change in the general educational level or the most important social welfare programs. An application on Hungarian labour force data shows that the selected variables explain the evolution of the participation rate quite well – especially on the long term. More specifically, our results indicate that the rising labour supply since ’97 in Hungary was principally driven by the increasing average level of education and, most importantly, the gradual tightening of the conditions of old-age retirement. The other estimated effects are also in line with our expectations. Given that the residual term not captured by the model has no visible trend but fluctuates with economic cycles, the explained part can also be interpreted as an indicator of the underlying labour supply. |
| Keywords: | labour force participation, decomposition, demographic change, schooling, social transfers. |
| JEL: | J11 J21 J22 J26 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2009/5&r=lab |
| By: | Daniel Suryadarma; Asep Suryahadi; Sudarno Sumarto (SMERU Research Institute) |
| Abstract: | In this study we investigate the causes of low secondary school enrollment in Indonesia despite near universal primary school attendance. We then find that attrition during the transition between primary and junior secondary education levels is the main cause. We investigate the causes of attrition using a longitudinal household survey dataset. Firstly, household welfare level is a significant determinant of the low enrollment. Secondly, children from Muslim families have a significantly lower probability of continuing to the secondary level. Thirdly, children in areas with relatively abundant employment opportunities have a higher probability of giving up schooling. Fourthly, girls have a significantly lower chance of continuing. The policy implications of our results point to, among other things, the need for refocusing government education spending and scholarship programs to target those who go missing from the education system after completing primary education. |
| Keywords: | education, determinants, secondary school, enrollment, Indonesia |
| JEL: | I21 I28 J16 Z12 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1635&r=lab |
| By: | Daniel Suryadarma; Yus Medina Pakpahan; Asep Suryahadi (SMERU Research Institute) |
| Abstract: | Using a sufficiently long-spanning longitudinal dataset, we estimate the short and long term effects of maternal and paternal death on children’s school enrollment, educational attainment, and health in Indonesia, then compare them to the effect of chronic poverty. We also investigate whether there are any gender dimensions in the effects. We find that young maternal orphans have worse educational outcomes than non-orphans, with the effect getting worse over time. However, we find no significant effect of orphanhood on health. However, chronically poor children have worse health and education outcomes. Among young children, the effect of maternal orphanhood on education is significantly more adverse than that of chronic poverty. Finally, chronically poor orphans do not suffer adverse effects beyond the effects of chronic poverty. |
| Keywords: | orphanhood, chronic poverty, education, health, children, Indonesia |
| JEL: | I10 I21 I31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1638&r=lab |
| By: | Nguyen Thi Kim Dung; Nguyen Manh Hai; Tran Thi Hanh; Tran Kim Chung (Central Institute for Economic Management) |
| Abstract: | As revealed in the previous studies, the earning decomposition based on secondary data has appeared less informative with respect to the actual and perceived barriers to the integration of labour markets. Hence, additional information is needed to determine what are the biggest constraints of finding ‘good’ jobs? What are the perceived chances of finding ‘good’ jobs and how stable are they? What other individual characteristics besides formal human capital increase the chances of finding ‘good’ jobs? Do certain labour market segments carry a ‘stigma’ such that it becomes more difficult to move to other segments? As such, the fieldwork has been designed to gather this additional information among a number of the poor wage workers. It is expected that this information is both corroborate the earlier market segmentation analysis based on secondary data as well as provides additional insights into the functioning of labour markets in Vietnam, especially those for the poor. |
| Keywords: | Vietnam, Labour Market Segmentation |
| JEL: | D31 D81 J40 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1977&r=lab |
| By: | Chul Chung; Bonggeun Kim (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY) |
| Abstract: | This paper investigates the trend of the wage inequality and the metropolitan wage premium in the United States during the 1980s. Two distinct sets of literature documented that the wage inequality between skilled and unskilled workers and the metropolitan wage premium have risen significantly during the decade. When we combine these two sets of evidence and consider the interaction between skill and location, however, the increasing trends of the skill wage gap and the metropolitan wage premium almost disappear. Most of the dynamic changes are picked up by the interaction term, an extra metropolitan wage premium for skill, which rises significantly over the decade. As a partial explanation we find an increasing trend of the skill wage inequality across industries and occupations within metropolitan areas relative to non-metropolitan areas. This finding suggests that the skill biased technology alone may not sufficiently explain the growing wage inequality and it can be interpreted as a metropolitan specific phenomenon to an extent. |
| Keywords: | Wage Inequality, Skill premium, Metropolitan areas, Globalization |
| JEL: | J31 R23 F16 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1120&r=lab |
| By: | Bartling, Björn; Fehr, Ernst; Schmidt, Klaus M. |
| Abstract: | In recent decades, many firms offered more discretion to their employees, often increasing the productivity of effort but also leaving more opportunities for shirking. These “high-performance work systems” are difficult to understand in terms of standard moral hazard models. We show experimentally that complementarities between high effort discretion, rent-sharing, screening opportunities, and competition are important driving forces behind these new forms of work organization. We document in particular the endogenous emergence of two fundamentally distinct types of employment strategies. Employers either implement a control strategy, which consists of low effort discretion and little or no rent-sharing, or they implement a trust strategy, which stipulates high effort discretion and substantial rent-sharing. If employers cannot screen employees, the control strategy prevails, while the possibility of screening renders the trust strategy profitable. The introduction of competition substantially fosters the trust strategy, reduces market segmentation, and leads to large welfare gains for both employers and employees. |
| Keywords: | job design; high-performance work systems; screening; reputation; competition; trust; control; social preferences; complementarities |
| JEL: | C91 D86 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:11312&r=lab |
| By: | John Leach; A. Abigail Payne; Steve Chan |
| Abstract: | Over the last 20 years, states and provinces have become increasingly involved in the financing and administration of elementary and secondary education. Local school boards, however, still retain control over key aspects of the provision of education. Historically, these boards were organized at the community level so as to meet the wants of the local community. Today, states and provinces have become more interested in consolidating school boards and moving to a more centralized funding scheme. Do these changes result in improved student achievement? This paper attempts to answer these questions by examining the school board consolidation and funding changes instituted by the province of Ontario. We differentiate the effects of the policy changes based on observed differences in the school boards prior to consolidation. We show that students in previously high wealth school boards perform worse after the policy change compared to students in previously low wealth school boards. |
| Keywords: | school district consolidation; student achievement |
| JEL: | I20 I28 H75 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2010-02&r=lab |
| By: | Karlström, Anders (Royal Institute of Technology); Isacsson, Gunnar (VTI and Dalarna University) |
| Abstract: | This paper focuses on the effects of commuting time on sickness insurance utilization by applying a generalized propensity score estimator to a large sample of Swedish employees. We analyse the effect of commuting time both on the probability of using sickness insurance at all and on the probability that an individual on sick leave is on so-called partial sick leave rather than being completely absent from work. Insurance utilization is in both cases defined as being ill for more than 14 days. The results indicate, in general, that individuals do not use sickness insurance because of their commuting time. However, commuting time seems to increase the risk of being on sick leave among females with relatively low annual wage earnings. The results indicate, furthermore, a relatively weak and negative relationship between the probability of being on partial sick leave and commuting time in the group of individuals who have utilized sickness insurance. The latter result applies to both men and women. |
| Keywords: | Commuting time; Sick absence; General propensity score estimator |
| JEL: | C21 H55 |
| Date: | 2009–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vtiwps:2010_003&r=lab |
| By: | Aniceto C. Orbeta, Jr. (Philippine Institute for Development Studies) |
| Abstract: | This paper demonstrates how family size can be an important contributor to poverty in the Philippines. It examines one of the mechanisms behind this link by focusing on the relation between number of children and the decision to seek a job and parents' wage earnings. It surveys the international literature to establish how the problem has been approached and what the results are for other countries. It then formulates and tests a model using a nationally representative household survey data for the Philippines to explain what determines the decision to seek a job and the earnings of both mothers and fathers. The model specifically considered the endogeneity of the number of children in both the labor force participation and the earnings equations. |
| Keywords: | Family Size, Labor Force Participation, Earnings, Philippines |
| JEL: | J21 J20 J30 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1783&r=lab |
| By: | Le Thi Ai Lam (Philippine Institute for Development Studies) |
| Abstract: | In the last twenty years, the Philippines has gained a good progress in poverty reduction. However, compared to other countries in the region, the Philippines is still behind. In the early years of the 21st century, more than a third of the Philippine population lives below the poverty line. With landless status, the poor depended largely on labor with its embedded educational capital. However, in education, the rich and the poor are separated by two different educational divisions--private and public--and of high quality and low-quality education. Poor children encounter lack of access to quality education due to a high dropping out rate at an early age and going to public schools that offer low quality education. The lack of access to quality education has affected the poor more severely when there was poor job generation, relative deterioration of unskilled labor situation, and low rate of return on education at basic levels. The poor faced high rate of underemployment and low income. The government is aware of the educational lack of the poor, but there are a number of factors that prevent the poor having access to quality education. To an extent, government spending policies on education was not geared toward pro-poor. Furthermore, opportunity costs and their unfavorable outcomes in labor markets prevent further improvements of early and high dropout rate of the poor as a result of weaknesses in policy implementation. |
| Keywords: | poverty, education, human resource development, labor, Philippines |
| JEL: | I32 O15 J20 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1752&r=lab |
| By: | David Card; Martin Dooley; Abigail Payne |
| Abstract: | The province of Ontario has two publicly funded school systems: secular schools (known as public schools) that are open to all students, and separate schools that are limited to children with Catholic backgrounds. A simple model of inter-system competition predicts that incentives for effort are higher in areas where there are more Catholic families who are relatively uncommitted to one system or the other. We measure the willingness of Catholic families to switch systems by studying the effect of school openings on enrollment at nearby schools in the competing system. The results suggest that families in rapidly growing areas have the weakest attachment to a particular system. We then relate student test score gains between 3rd and 6th grade to measures of potential cross-system competition. We find that competition for Catholic students has a significant effect on test outcomes in both systems, particularly in fast-growing areas. Our estimates imply that expanding competition to all students would raise average test scores in 6th grade by 6-8% of a standard deviation. |
| Keywords: | school competition; student achievement |
| JEL: | I20 I21 I28 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2010-01&r=lab |
| By: | Davin Chor; Richard B. Freeman (Singapore Management University) |
| Abstract: | The 2004 Global Labor Survey (GLS) is an Internet-based survey that seeks to measure de facto labor practices in countries around the world, covering issues such as freedom of association, the regulation of work contracts, employee benefits and the prevalence of collective bargaining. To find out about de facto practices, the GLS invited labor practitioners, ranging from union officials and activists to professors of labor law and industrial relations, to report on conditions in their country. Over 1,500 persons responded, which allowed us to create indices of practices in ten broad areas for 33 countries. The GLS' focus on de facto labor practices contrasts with recent studies of de jure labor regulations (Botero et al., 2004) and with more limited efforts to measure labor practices as part of surveys of economic freedom (Fraser Institute) and competitiveness (World Economic Forum). Although our pool of respondents differs greatly from the conservative foundations and business leaders who contribute respectively to the Fraser Institute and World Economic Forum reports, the GLS and the labor market components of the economic freedom and competitiveness measures give similar pictures of labor practices across countries. This similarity across respondents with different economic interests and ideological perspectives suggests that they are all reporting on labor market realities in a relatively unbiased way. As a broad summary statement, the GLS shows that practices favorable to workers are more prevalent in countries with high levels of income per capita; are associated with less income inequality; are unrelated to aggregate growth rates; but are modestly positively associated with unemployment. |
| Keywords: | Labor Survey, industrial relation, |
| JEL: | J00 J80 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1151&r=lab |
| By: | Aurora Galego (Department of Economics, University of Évora); António Caleiro (Department of Economics, University of Évora) |
| Abstract: | A traditional way of looking at the importance of universities assumes that these are sources of many positive effects from the point of view of the inputs, i.e. from a demand side perspective. In accordance to this perspective, the importance of a university can be measured by its multiplier effects, at a regional or national level. This perspective can be complemented with the analysis of the issues associated with the transition to work by their graduates. The paper thus analyses the factors that reveal to be explanatory of the time spent by first degree students of a small university in Portugal, the University of Évora, in order to enter the labour market. In doing so, we employ a sample of 767 students and estimate several specifications of discrete-time duration models. The results show that there are significant differences among the students from the several courses and highlight the importance of the final mark in the course. On the other hand, we did find any significant differences between male and female students. |
| Keywords: | Duration Models;Graduates; Labour Market; Universities |
| JEL: | J64 I23 C41 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:evo:wpecon:2009_06&r=lab |
| By: | Mirco Tonin (Economics Division, School of Social Sciences, University of Southampton) |
| Abstract: | This paper examines the interaction between minimum wage legislation and tax evasion by employed labor. I develop a model in which firms and workers may agree to report less than the true amount of earnings to the fiscalauthorities. I show that introducing a minimum wage creates a spike in the distribution of declared earnings and induces higher compliance by some agents, thus reducing their disposable income. The comparison of food consumption before and after the massive minimum wage hike that took place in Hungary in 2001 reveals that households who appear to benefit from it actually experienced a drop compared to similar but unaffected household, thus supporting the prediction of the theory. |
| Keywords: | minimum wage, tax evasion, Hungary. |
| JEL: | J38 H24 H26 H32 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2009/2&r=lab |
| By: | Rees, Ray; Scholz, Sebastian |
| Abstract: | This model is the first to solve for the optimal timing of childbirth and number of children in a continuous time framework simultaneously. The model depicts how changes in wage at different stages of an individual’s life influence the timing decision of childbirth and the optimal number of children. When a woman wants to have more children, she decides to have them at a younger age. Medical research that extends the fecund life span induces women to have fewer children. A reduction of the parental leave due to daycare centers or a reduction in the costs of leave due to child benefits increase the number of children. Women value labour more, when they face the risk of an unknown divorce. This paper also shows that divorce does not change the timing of childbirth directly, it influences the number of children negatively and the reduced number of children delays the timing. The model can be used to predict upper bound fertility rates, when the expected divorce rate continues to increase. |
| Keywords: | Fertility; Timing of Childbirth; Number of Children |
| JEL: | D12 J13 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:11316&r=lab |
| By: | Marco Guerrazzi |
| Abstract: | Following the Farmer’s (2008a-b, 2010) micro-foundation of the General Theory, I build a competitive search model in which output and employment are demand-driven, prices are flexible, the nominal wage is used as numeraire and agents are divided in two categories: wage and profit earners. Within this framework, I show that the model economy has a continuum of demand constrained equilibria that might be consistent with a certain degree of endogenous real wage stickiness. Moreover, calibrating and simulating the model economy in order to fit the US first-moments data, I show that this setting can provide a rationale for the Shimer’s (2005) puzzle, i.e., the relative stability of real wages in spite of the large volatility of labor market tightness. |
| Keywords: | Stochastic Dynamics, Competitive Search, Old Keynesian Economics, Demand Constrained Equilibrium, Numerical Simulations. |
| JEL: | E12 E24 J63 J64 |
| Date: | 2010–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2010/95&r=lab |
| By: | Nicolas L. Jacquet (Singapore Management University) |
| Abstract: | This paper considers the efficiency properties of risk-neutral workers’ mobility decisions in an equilibrium model with search frictions, but no search externalities, when the rent accruing to a match is split through bargaining. Matches are ex ante homogeneous and their true productivity is learnt after the match is formed. It is shown that the efficiency of worker turnover depends on contract enforceability, and that in the absence of complete enforceability the equilibrium fails to be efficient. This is because without complete enforceability firms cannot credibly offer workers contracts that will guarantee them the entire future of all potential future matches. |
| Keywords: | On-the-Job Search, Learning, Bargaining, Contracts, Enforceability |
| JEL: | J30 J63 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1537&r=lab |
| By: | Myoung-Jae Lee; Chun Seng Yip (Singapore Management University) |
| Abstract: | There has been much recent interest in the effects of pre and non-market skills on future labor market outcomes. This paper examines one such effect- the effect on future wages of military leadership experience among "Vietnam generation" American men. We study rank, not just veteran status. We argue that rank is a good measure of pre-market leadership skills because of the clear military hierarchy and the primarily youth experience of Vietnam service. Two sources of selection bias are accounted for- non-random military entry and eventual rank attained. We apply a modified 2-stage parametric sample selection method. The rank premia on future wages are estimated using the parametric selection corrections and a propensity score matching with two indices. We find evidence of a leadership premium, but not a veterans' premium. It is the rank that matters. If one joins the military believing that military service commands a future wage premium, he had better become an NCO or an officer. |
| Keywords: | non-market skills, military, future wages, parametric sample selection |
| JEL: | J24 J10 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1551&r=lab |
| By: | Böckerman, Petri; Johansson, Edvard; Kiiskinen, Urpo; Heliövaara, Markku |
| Abstract: | The paper examines the role of physical capacity in the determination of the height premium by using the “Health 2000 in Finland” data that contain both self-reported information on the physical strenuousness of work, and information on muscle mass from medical examinations. Our results show that the height premium does not vary according to the physical strenuousness of work. We also find that muscle mass is not related to wages. Furthermore, we observe that the shortest men do physically very demanding work and the tallest do sedentary work, even after controlling for the effects of age and education. |
| Keywords: | Height; Height premium; Body composition; Wages |
| JEL: | J31 J23 I10 |
| Date: | 2010–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20108&r=lab |
| By: | Brienna Perelli-Harris (Max Planck Institute for Demographic Research, Rostock, Germany); Wendy Sigle-Rushton; Michaela Kreyenfeld (Max Planck Institute for Demographic Research, Rostock, Germany); Trude Lappegård; Caroline Berghammer (Max Planck Institute for Demographic Research, Rostock, Germany); Renske Keizer |
| Abstract: | Nearly every European country has experienced some increase in nonmarital childbearing, largely due to increasing births within cohabitation. Relatively few studies in Europe, however, investigate the educational gradient of childbearing within cohabitation or how it changed over time. Using retrospective union and fertility histories, we employ competing risk hazard models to examine the educational gradient of childbearing in cohabitation in 8 countries across Europe. In all countries studied, birth risks within cohabitation demonstrated a negative educational gradient. When directly comparing cohabiting fertility with marital fertility, the negative educational gradient persists in all countries except Italy, although differences were not significant in Austria, France, and Germany. These findings suggest that childbearing within cohabitation largely follows a Pattern of Disadvantage. We argue that the Pattern of Disadvantage developed due to: 1) feminist and social movements that liberalized attitudes towards nonmarital childbearing, and 2) globalization and economic uncertainty that led to job insecurity and relationship instability. This explanation provides an alternative to the Second Demographic Transition theory, for which we find little evidence. |
| Keywords: | Europe, UN, childbearing, cohabitation, family formation, fertility, unmarried mothers |
| JEL: | J1 Z0 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2010-004&r=lab |
| By: | Shun-ichiro Bessho; Masayoshi Hayashi (Policy Research Institute, Ministry of Finance, Government of Japan) |
| Abstract: | When he labor supply is elastic with respect to the net wage rate, labor income taxation generates economic distortion and welfare loss. The substitute effect is a key determinant of the magnitude of such deadweight loss; thus, evaluating the elasticity of the labor supply has broad and significant implications for assessing the effects of changes in public policy. We estimate the labor supply function based on the CES utility function, using large microdata sets in Japan and treating the complex Japanese income tax system carefully. The results of this chapter suggest that the uncompensated elasticity of the labor supply of prime-age males is at most 0.1. |
| Keywords: | piecewise linear budget constraint, labor supply, CES utility function |
| JEL: | D31 D61 D63 H21 H31 J22 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1118&r=lab |
| By: | Emma Aguila; Julie Zissimopoulos |
| Abstract: | This study analyzed the retirement behavior of Mexicans with migration spells to the United States that returned to Mexico and non-migrants. The analysis is based on rich panel data from the Mexican Health and Aging Study (MHAS). Approximately 9 percent of MHAS respondents age 50 and older reported having lived or worked in the United States. These return migrants were more likely to be working at older ages than non-migrants. Consistent with much of the prior research on retirement in the United States and other developed countries, Mexican non-migrants and return migrants were responsive to institutional incentives. Both groups were more likely to retire if they had publicly provided health insurance and pensions. In addition, receipt of U.S. Social Security benefits increased retirement rates among return migrants. Return migrants were more likely to report being in poor health and this also increased the likelihood of retiring. The 2004 draft of an Agreement on Social Security would coordinate benefits across United States and Mexico boundaries to protect the benefits of persons who have worked in foreign countries. The agreement would likely increase the number of authorized and unauthorized Mexican workers and family member eligible for Social Security benefits. The responsiveness of current, older Mexican return migrants to pension benefits, suggests that an agreement would affect the retirement behavior of Mexican migrants. |
| JEL: | J14 J21 J61 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:726&r=lab |
| By: | Dalisay S. Maligalig; Jose Ramon G. Albert (Philippine Institute for Development Studies) |
| Abstract: | The second goal of the Millennium Development Goals (MDGs) is to achieve universal primary education. The target is to reach all the MDGs by 2015. Trends in education indicators for monitoring the second MDG suggest that Philippines may probably not meet the target on achieving universal primary education. Indicators that monitor gender disparity in primary and secondary education suggest that females are at an advantage over males. In this paper, various education indicators sourced from administrative reporting systems and surveys are looked into for assessing basic education in the country. Issues on the lack of comparability of figures from reporting systems, on the need to improve dissemination of education statistics, and on the need to properly link data with policy through a systematic monitoring and evaluation system are also discussed. |
| Keywords: | MDGs, education indicators, monitoring and evaluation |
| JEL: | I21 I28 H74 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1769&r=lab |
| By: | Philippe De Vreyer (Université de Lille II, DIAL); Flore Gubert (DIAL, IRD, Paris); Anne-Sophie Robilliard (DIAL, IRD, Paris) |
| Abstract: | (english) _________________________________ (français) |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt200906&r=lab |
| By: | Julie Zissimopoulos; James P. Smith |
| Abstract: | Money parents give their adult children may be important for the financing of a child's education or a first home, relaxing binding credit constraints or responding to a transitory income shock. Financial transfers however, may extend economic disparities across generations if the wealthy transfer considerable resources to their children while middle class and poor households do not. In this paper, the authors first examine annual gifts of money from parents to adult children in the United States and ten European countries using the 2004 waves of the Health and Retirement Study (HRS) and Survey of Health, Ageing and Retirement in Europe (SHARE). Second, utilizing the long panel of the HRS, the authors study the long-run behavior of parental monetary giving to children across families and within a family. This paper found that in all countries, some parents gave money to children, many did not, the amount was low, about 500 Euros annually per child, and varied by parental socio-economic status and public social expenditures. In the short-term parents in the U.S. gave money to a child to compensate for low earnings or satisfy an immediate need such as schooling. Over sixteen years, parents gave an average of about $38,000 to all their children, five percent gave over $140,000 and gave persistently. With time, the amount of money children in the same family received became more equal and a child's level of education was one of the few remaining sources of differences in money given to children. Overall, the annual amount of money parents gave adult children in any country was not enough to affect the distribution of resources within or between families in the next generation although the timing of transfers for schooling or housing may have a significant impact on an individual child. Annual parental transfers for college age children in school in the U.S. were substantially higher than average transfers to all children. The effect of parental transfers for higher education on intergenerational mobility in the U.S. will depend in part upon whether this financing is essential in the schooling decision. |
| JEL: | D31 D1 J26 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:723&r=lab |
| By: | MIYAZAWA Kensuke |
| Abstract: | This paper clarifies the effects of pension benefit systems on aggregate hours worked. By incorporating the labor income taxes and the social security taxes into a representative agent model, previous studies successfully explain the long term decline in the hours worked in some continental European countries, and the differences between these European countries and the U.S. in recent years. However, their model underpredicts the hours worked in Japan and Sweden. We measure the marginal pension benefit rates of the labor supply, which the previous studies do not take into account, and incorporate them into previous studies. We fid that the marginal pension benefit can explain much of the discrepancy between the actual hours worked and the predictions of the previous studies. This result also implies that the pension benefit might offset the effect of the unemployment insurance that is thought to make the prediction worse in some continental European countries. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10004&r=lab |
| By: | Thulin, Per (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | This paper investigates the relationship between inter-firm labor mobility and regional productivity growth. Previous studies have shown that density is positively correlated with growth. I claim that it is not density in itself, but rather the attributes associated with it that drives economic growth. One such attribute is the increased possibility for labor mobility and knowledge diffusion that follows when firms and individuals locate in close proximity to each other. This hypothesis is tested using a matched employer-employee dataset where regional labor mobility is instrumented with density. The result shows that labor mobility increases regional growth rates. |
| Keywords: | Labor mobility; regional growth; agglomeration economies |
| JEL: | J62 R11 R23 |
| Date: | 2009–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0209&r=lab |
| By: | David Card (UC Berkeley and NBER); David S. Lee (Princeton University and NBER); Zhuan Pei (Princeton University) |
| Abstract: | We consider nonparametic identification of the average marginal effect of a continuous endogenous regressor in a generalized nonseparable model when the regressor of interest is a known, deterministic, but kiniked function of an observed continuous assignment variable. This design arises in many institutional settings where a policy variable of interest (such as weekly unemployment benefits) is mechanically related to an observed but potentially endogenous variable (like previous earnings). We characterize a broad class of models in which a "Regression Kink Design" (RKD) provides valid inferences for the underlying marginal effects. Importantly, this class includes cases where the assignment variable is endogenously chose. Under suitable conditions we show that the RKD estimand identifies the "treatment on the treated" parameter (Florens et al., 2009) or the "local average response" (altonji and Matzkin, 2005) that is identified in an ideal randomized experiment. As in a regression discontinuity design, the required indentification assumption implies strong and readilt testable predictions for the pattern of predetermined covariates around the kink point. Standard local linear regression techniques can be easily adapted to obtain "nonparametris" RKD estimates. We illustrate the RKD approach by examining the effect of unemployment insurance benefits on the duration of benefit claims, using rich microdata from the state of Washington. |
| Keywords: | Unemployment benefits, Washington State, unemployment insurance, regression kink design |
| JEL: | D50 C01 E24 J08 J64 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:pri:indrel:1206&r=lab |
| By: | Aniceto C. Orbeta Jr. (Philippine Institute for Development Studies) |
| Abstract: | This paper shows how large family size can be an important contributor to household poverty. It presents results from recent research by the author using nationally representative household survey data that demonstrate clearly how large family size can contribute to poverty and vulnerability through its impact on household savings, labor supply, and parental earnings and education of children. The paper is the most systematic attempt to date to show the links between family size and poverty in the Philippines using household survey data. The clear implication of the results is that, in the case of the Philippines, an active population policy aimed at restricting family size could have an important impact on poverty reduction. |
| Keywords: | Family Size, Poverty, Vulnerability, Philippines |
| JEL: | J13 I32 I31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:1784&r=lab |
| By: | Massimiliano Landi; Antonio Merlo; Vincenzo Galasso; Andrea Mattozzi (Singapore Management University) |
| Abstract: | Like voters (the represented), politicians (the representees) are the heart and soul of representative democracy. But isn’t being a politician just like any other job? After we get past the rhetoric, is politics any different than other occupations? In the political sector, voters, parties and politicians represent the counterparts of consumers, firms and workers/managers in the market sector. In fact, the analogy is much deeper than it may appear at first sight. In the market sector, consumers determine to a large extent the success of a firm and ultimately the management’s fate. However, managers are chosen by the firms, which typically have an objective that is different from those of consumers and managers. Likewise, while in all democratic systems the voters ultimately determine who is elected, it is typically the case that political parties nominate candidates for public office. Furthermore, the objectives of voters and parties with respect to the selection of candidates may differ, and are constrained by the career ambitions of individuals with political aspirations. But then, what really makes a career in the political sector different from a career in any other economic sector? There are at least three distinctive features that characterize the labor market in the political sector. First, politicians are typically “under the spotlight,� receiving the attention of the media and of a variety of citizens’ organizations. This makes politics a “showcase,� where politicians in office can display their political skills, while it might be more difficult for individuals working in the market sector to reveal their market ability. Second, inter-party competition for potential politicians is likely to be of secondary importance, as ideological preferences are more likely to attract individuals toward specific parties at the beginning of their political careers. Third, it is often the case that political parties “take care of their losers� by reserving party’s positions to defeated incumbents. As a result, while individual careers within the political sector are inevitably linked to the opportunities available within parties, the extent to which individual endowments of “political� and “market� skills are correlated, or experience in the political (market) sector is also valuable in the market (political) sector, links the labor markets of the two sectors. This link affects the selection of politicians, the politicians’ careers, and the relationship between parties and voters. |
| Keywords: | politicians, voters, parties, political sector, |
| JEL: | J21 J00 J49 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:eab:laborw:1548&r=lab |