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on Labour Economics |
| By: | Michelle Rendall |
| Abstract: | This paper estimates how much of the post-World War II evolution in employment and average wages by gender can be explained by a model where changing labor demand requirements are the driving force. I argue that a large fraction of the original female employment and wage gaps in mid-century, and the subsequent shrinking of both gaps, can be explained by labor reallocation from brawn-intensive to brain-intensive jobs favoring women's comparative advantage in brain over brawn. Thus, aggregate gender-specific employment and wage gap trends resulting from this labor reallocation are simulated in a general equilibrium model. This shift in production is able to explain: (1) about 79 percent of the rise in female labor force participation, (2) approximately 37 percent of the stagnation in the average female to male wage ratio from 1960 to 1980, and (3) about 83 percent of the closing wage gap between 1980 and 2005. In contrast, a counterfactual experiment, where agents cannot increase their innate brain abilities through education, fails to match the shape of the wage gap over time, resulting in a stagnant simulated wage gap from the 1960s onward. |
| Keywords: | Technological progress, education, gender wage gap, labor demand/supply |
| JEL: | E21 E24 J20 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:491&r=lab |
| By: | Richard Johnson; Barbara Butrica; Corina Mommaerts |
| Abstract: | This study examines how the shifting choices and constraints facing older workers have changed work and retirement patterns over the past 30 years. Health improvements, declines in physical job demands, changes in Social Security rules, and the erosion in traditional defined benefit pension coverage and employer-sponsored retiree health insurance have altered work incentives at older ages. This paper compares labor force exits by older workers born 1913 to 1917 (part of the G.I. Generation), 1933 to 1937 (part of the Silent Generation), and 1943 to 1947 (part of the Baby Boom Generation). The analysis uses 16-year longitudinal panels from the Health and Retirement Study and decades-long administrative earnings records linked to respondents in the Survey of Income and Program Participation. The results show that early boomers worked longer than members of the Silent Generation, and that the pathways older workers follow out of the labor force have become more complex over time. The median retirement age for men was about one-half year higher in the 1943–47 cohort than in the 1933–37 cohort (62 vs. 61.5), but differences were more pronounced at older ages. By age 65, for example, 40 percent of early boomer men had not yet retired, compared with only 20 percent of Silent Generation men. Both male and female workers in the 1933–37 cohort were much less likely than their counterparts in the 1913–17 cohort to follow the traditional retirement path of exiting the labor force from full-time employment and never returning to work. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2010-7&r=lab |
| By: | Heinze, Anja |
| Abstract: | Using linked employer-employee data, this study measures and decomposes the differences in the earnings distribution between male and female employees in Germany. I extend the traditional decomposition to disentangle the effect of human capital characteristics and the effect of firm characteristics in explaining the gender wage gap. Furthermore, I implement the decomposition across the whole wage distribution with the method proposed by Machado and Mata (2005). Thereby, I take into account the dependence between the human capital endowment of individuals and workplace characteristics. The selection of women into less successful and productive firms explains a sizeable part of the gap. This selection is more pronounced in the lower part of the wage distribution than in the upper tail. In addition, women also benefit from the success of firms by rent-sharing to a lesser extent than their male colleagues. This is the source of the largest part of the pay gap. Gender differences in human capital endowment as well as differences in returns to human capital are less responsible for the wage differential. -- |
| Keywords: | gender wage gap,decomposition,quantile regression |
| JEL: | J16 J31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10043&r=lab |
| By: | Burns, Justine; Edwards, Lawrence; Pauw, Karl |
| Abstract: | Wage or employment subsidies have been used in both developed and developing countries to raise employment levels. Various advisers to the South African government have endorsed wage subsidies as a policy measure to deal with this countrys massive unemployment problem. This paper takes stock of the international literature and conducts an economywide macro-micro analysis to obtain insights into wage subsidy design and implementation issues facing developing countries. It also investigates whether this policy measure is appropriate in dealing with South Africas particular sources of unemployment. We argue that although wage subsidies may be successful at creating jobs in South Africa, they should not be seen as the primary or dominant policy instrument for dealing with the broader unemployment problem. To enhance the effectiveness of wage subsidies, they should preferably be linked to structured workplace training, be targeted to industries where employment will be responsive to changes in labor costs, and be focused on the youth. In the long run, addressing unemployment in South Africa requires policies that improve economic growth and the economys employment absorption capacity, that raise skills of new labor market entrants, that reduce labor market rigidities, and that promote effective job search, especially among the youth. |
| Keywords: | Computable General Equilibrium (CGE) microsimulation modeling, Developing countries, economic growth, employment absorption capacity, labor costs, macro-micro analysis, Unemployment, wage subsidies, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:969&r=lab |
| By: | Dante Contreras; Paulina Sepúlveda C.; Soledad Cabrera |
| Abstract: | In 1996, the Chilean government approved the extension of the school day, increasing the amount of time that students spend at school by 30%. Using data from the Chilean socio- economic household survey and administrative data from the Ministry of Education for 1990- 2006, we exploit the quasi-experimental nature of the reform’s implementation by time and region in order to identify the causal impact of the program on labor participation, employment and hours worked for women between 20 and 65 years old. The identification strategy relies on a fixed effect model of repeated cross-section. The results show a positive and significant effect on labor participation and female employment in all age groups and a negative and statistically significant effect on the number of hours worked. The main conclusion of this study is that the implicit childcare subsidy induced by the program had a positive and significant impact on the labor supply of women in Chile. |
| Keywords: | Female labor supply; childcare; fertility; labor supply; Chile. |
| JEL: | J22 J13 O12 H42 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp323&r=lab |
| By: | Anne Lauringson |
| Abstract: | This paper uses a unique dataset about unemployment insurance recipients and their exits to employment in Estonia to investigate the effects of benefits on unemployment duration. The administrative data used clearly pinpoints total unemployment spells and exits to employment. Both nonparametric and parametric estimations show that unemployment benefits have a strong and significant disincentive effect on hazard rates to exit into employment, just as search theory predicts. The effects of benefits are stronger and more homogeneous when the maximum duration of unemployment insurance benefit is longer. Unemployed people eligible for shorter unemployment insurance benefits are influenced more by the size of benefits and changes in the benefit replacement rate. Also, for both groups there is a rise in hazard rates during the benefit period and a sharp drop straight after. |
| Keywords: | unemployment benefits, disincentive effects, Estonia |
| JEL: | J64 J65 C41 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:70&r=lab |
| By: | Tia Linda Zuze (Independent Researcher) |
| Abstract: | This study explores the important relationship between policy variables that represent a school’s human resources and product variables in the form of student performance in Botswana’s schools. A focus of particular interest is if the teaching environment is related to student success and whether it can promote equity in learning between students from different socioeconomic backgrounds. Data for the study are drawn from a rich survey of students, teachers and schools in Southern and Eastern Africa. There is modest evidence to suggest that students attending well resourced schools are likely to perform better, irrespective of their background. The results points to a clear association between teacher content preparation and student achievement. Regular assessment is associated with better performance and greater social equity between students within the same school. Policy implications related to teacher preparation programmes in Botswana are discussed. |
| Keywords: | Botswana, education production function, demand for schooling, teacher evaluation, teacher knowledge, teacher education |
| JEL: | C10 H52 I21 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers114&r=lab |
| By: | Michelle Rendall |
| Abstract: | Continental Europe has seen a smaller rise in formal female employment compared with the United States or the Nordic countries. Additionally, Continental Europe has a substantially smaller service sector. These facts coincide with job requirements shifting from physical strength to intellectual capacity. Given empirical evidence, this paper develops a model of endogenous technical change, where new 'technologies' can be invented to increase the productivity of brain-inputs. Two inputs, brain and brawn, are combined through CES production functions into services and industrial goods, with the production sector for goods requiring more brawn than brain. Households allocate time to working at home or the labor market, choose consumption of services and goods, and invest in new technologies. The key is households can produce a substitute for market services and women have, on average, less brawn than men, giving them a comparative advantage with respect to staying home and working in the service sector. Therefore, an economy that does not facilitate the movement of women into the labor market, by imposing high taxes, causes service production to remain at home. This reduces technological innovation, pushing an economy into a self-reinforcing loop, where a small service sector feeds back into low total hours worked by women (and men), further depressing the service sector. |
| Keywords: | Technological progress, sectoral labor allocation, cross-country differences, gender wage gap, labor demand/supply. |
| JEL: | E21 E24 J20 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:492&r=lab |
| By: | David Rosnick |
| Abstract: | Since the Great Depression, the worst episode of unemployment came in the second half of 1982 and the first half of 1983. Over that time, the unemployment rate stayed above ten percent from September through June—reaching 10.8 percent of the labor force in November and December of 1982. A naïve examination of the raw unemployment rates would suggest that the downturn of the early 1980s resulted in a labor market even weaker than what we have experienced as a result of the collapse of the housing bubble. However, the demographics of the labor force have changed significantly over the last quarter century. After adjusting for the aging of the population since the early 1980s, the current labor-market downturn has resulted in both a higher unemployment rate and a longer period when the rate of unemployment remained over 10 percent. |
| Keywords: | unemployment, unemployment rate |
| JEL: | O51 E E2 E24 J J1 J11 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2010-15&r=lab |
| By: | Ryo Kambayashi (Institute of Economic Research, Hitotsubashi University); Daiji Kawaguchi (Faculty of Economics, Hitotsubashi University); Ken Yamada (School of Economics, Singapore Management University) |
| Abstract: | The statutory minimum wage has steadily increased for decades in Japan, while the median wage has fallen nominally since 1999 because of a severe recession. We use large micro-data sets from two government surveys to investigate how the minimum wage has affected the wage distribution under unusual circumstances of deflation. The compression of the lower tail of the female wage distribution is largely explained by an increased real value of the minimum wage. Steady increases in the effective minimum wage reduced employment among low-skilled, middle-aged female workers, but the mechanical effect associated with disemployment on wage compression was minimal. |
| Keywords: | Minimum Wage, Wage Distribution, Wage Inequality, Employment, Deflation |
| JEL: | J23 J31 J38 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:06-2010&r=lab |
| By: | Olena Nizalova (Kyiv School of Economics, Kyiv Economics Institute) |
| Abstract: | This paper focuses on the relationship between wages and supply of informal care to elderly parents. Unlike most of the previous research estimating wage elasticities of informal care supply, this study employs instrumental variable technique to account for the fact that the wage rate is likely to be correlated with omitted variables. Based on the data from the 1998 wave of the Health and Retirement Study, the results show that the wage elasticity of informal care supply is negative and larger in magnitude than has been found previously. The lower bound of this elasticity is estimated to be -1.8 for males and -3.6 for females. Additional findings suggest that the wage elasticity of informal care supply differs by the type of care provided to elderly parents, and that it is larger in magnitude among individuals with siblings and those with independently living parents. The analysis also indicates that the reductions in the informal care constitute about 18% of the labor supply response for men and about 56% of the labor supply response for women, which are not compensated by monetary transfers. |
| Keywords: | wage elasticity, informal care supply, labor supply, elderly care, family obligations |
| JEL: | J22 J18 J14 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:kse:dpaper:32&r=lab |
| By: | Margaret Denton; Jennifer Plenderleith; James Chowhan |
| Abstract: | While some retirement is welcomed and on-time, other retirements are involuntary or forced due to the loss of a job, an early retirement incentive, a health problem, mandatory retirement, lack of control with too many job strains, or to provide care to a family member. An analysis of the 2002 Canadian General Social Survey reveals that 27% of retirees retired involuntarily. This research focuses on the disabled population in Canada and considers factors that influence voluntary and involuntary retirement. Further, consideration is given to the economic consequences of retiring involuntarily. This research will examine issues surrounding retirement and disability through statistical analysis of the Canadian Participation and Activity Limitations Survey (PALS) 2006 data. Methods include the use of descriptive statistics and logistic regression analysis to determine the characteristics associated with involuntary retirement. This study found that those who retired involuntarily were more likely to have the following socio-demographic and socioeconomic characteristics -- age 55 or less, less than high-school education, live in Quebec, rent their home, and have relatively low income. They were also more likely to be worse off financially after retirement and to be receiving social assistance or a disability benefit. In terms of disability, the likelihood of retiring involuntarily was greater for those with poor health at retirement, the age of onset was over 55, higher level of severity, and multiple types of disability. For the discussion, a social inequalities framework is used, where health selection into involuntary retirement depends on social location defined by age and education. Policy initiatives that reduce the effects of disability, and allow individuals to remain in or return to the labour force such as workplace accommodations are discussed. |
| Keywords: | Retirement, Disabled, Health, Labour Force |
| JEL: | J14 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:271&r=lab |
| By: | Yamamura, Eiji |
| Abstract: | Empirical results using cross-country data suggest that public spending on education increases the rate of students skipping school but does not influence the rate of students completing school. This infers that public spending on education leads to a deterioration in the effectiveness of education. |
| Keywords: | Public spending; education; skipping class; incentive; |
| JEL: | I21 H52 |
| Date: | 2010–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23657&r=lab |
| By: | Michael A. Clemens; Claudio E. Montenegro; Lant Pritchett |
| Abstract: | We estimate the “place premium”—the wage gain that accrues to foreign workers who arrive to work in the United States. First, we estimate the predicted, purchasing-power adjusted wages of people inside and outside the United States who are otherwise observably identical—with the same country of birth, country of education, years of education, work experience, sex, and rural or urban residence. We use new and uniquely rich micro-data on the wages and characteristics of over two million individual formal-sector wage-earners in 43 countries (including the US). Second, we examine the extent to which these wage ratios for observably equivalent workers may overstate the gains to a marginal mover because movers may be positively selected on unobservable productivity in their home country. New evidence for nine of the countries, combined with a range of existing evidence, suggests that this overstatement can be significant, but is typically modest in magnitude. Third, we estimate the degree to which policy barriers to labor movement in and of themselves sustain the place premium, by bounding the premia observed under self-selected migration alone. Finally, we show that the policy induced portion of the place premium in wages represents one of the largest remaining price distortions in any global market; is much larger than wage discrimination in spatially integrated markets; and makes labor mobility capable of reducing households’ poverty at the margin by much more than any known in situ intervention. |
| Keywords: | migration, wage discrimination, price distortions, policy barriers, place premium, poverty. |
| JEL: | F22 J61 J71 O15 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp321&r=lab |
| By: | Dronkers, Jaap |
| Abstract: | The effect of two characteristics of school populations on reading skills will be estimated in this paper: share and diversity, both on the ethnic and the social-cultural dimension. We use the cross-national PISA-data 2006, both for the 15 years old native pupils and the pupils with a migrant background. A larger ethnic diversity of schools in secondary education hampers the educational achievement of both pupils with a migrant background and native pupils, but the negative effect is smaller in educational systems with little differentiation and strongest in highly differentiated educational systems. The social-cultural diversity of schools do not effect educational achievement, but these effects are positive in strongly differentiated educational systems and negative in hardly differentiated systems. However, the average parental educational level of schools is very important for the educational achievement of children, and this hardly differs between educational systems. A higher share of pupils with a migrant background at a school hampers educational achievement, but if these pupils have the same origin region (Islam countries; non-Islam Asian countries), a higher share of pupils with a migrant background at that school improves the educational achievement. Pupils originating from Islam countries have substantial lower reading scores in comparison with equivalent pupils with a migrant background from other origin regions, which can not be explained by the individual social-economic background, the school characteristics or the educational systems. |
| Keywords: | school achievement; social-economic composition of schools; ethnic composition of schools; ethnic diversity; country of destination; country of origin; differentiation of educational systems; pupils with an immigrant background; 15-year old pupils; PISA data |
| JEL: | O15 I21 J15 |
| Date: | 2010–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23824&r=lab |
| By: | Boeters, Stefan |
| Abstract: | Changing the income tax progressivity in labour markets with collective wage bargaining generates a trade-off. On the one hand, higher progressivity distorts individual labour supply decisions at the hours-of-work margin, on the other hand, it reduces unemployment by exerting downward pressure on wages. This trade-off is quantitatively assessed using a numerical model for Germany. The model combines a microsimulation module, which captures the labour-supply decisions of approximately 4600 individual households, and a macro (computable general equilibrium) module, which features collective wage bargaining and involuntary unemployment. In the simulations carried out using this model, the optimal degree of tax progressivity turns out to be higher than the one in the actual German tax schedule. The optimum is located at marginal tax rates that are 6 percentage points higher than the actual rates (combined with a transfer that balances the public budget). The welfare gain from such a reform is modest, however. It amounts to no more than two euros per person per month. -- |
| Keywords: | labour taxation,tax progressivity,optimal taxation,collective wage bargaining,unemployment,microsimulation,computable general equilibrium model |
| JEL: | C63 C68 H21 J22 J51 J64 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10035&r=lab |
| By: | Marika Karanassou (Queen Mary, University of London and IZA); Hector Sala (Universitat Autònoma de Barcelona and IZA) |
| Abstract: | This paper challenges the prevailing view of the neutrality of the labour income share to labour demand, and investigates its impact on the evolution of employment. Whilst maintaining the assumption of a unitary long-run elasticity of wages with respect to productivity, we demonstrate that productivity growth affects the labour share in the long run due to frictional growth (that is, the interplay of wage dynamics and productivity growth). In the light of this result, we consider a stylised labour demand equation and show that the labour share is a driving force of employment. We substantiate our analytical exposition by providing empirical models of wage setting and employment equations for France, Germany, Italy, Japan, Spain, the UK, and the US over the 1960-2008 period. Our findings show that the timevarying labour share of these countries has significantly influenced their employment trajectories across decades. This indicates that the evolution of the labour income share (or, equivalently, the wage-productivity gap) deserves the attention of policy makers. |
| Keywords: | Wages, Productivity, Labour income share, Employment |
| JEL: | E24 E25 O47 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp668&r=lab |
| By: | Green, Francis (Institute of Education, University of London); Machin, Stephen (University College London); Murphy, Richard (CEP, London School of Economics); Zhu, Yu (University of Kent) |
| Abstract: | Despite its relatively small size, the private school sector plays a prominent role in British society. This paper focuses on changing wage and education differentials between privately educated and state educated individuals in Britain. It reports evidence that the private/state school wage differential has risen significantly over time, despite the rising cost to sending children to private school. A significant factor underpinning this has been faster rising educational attainment for privately educated individuals. Despite these patterns of change, the proportion attending private school has not altered much, nor have the characteristics of those children (and their parents) attending private school. Taken together, our findings are consistent with the idea that the private school sector has been successful in transforming its ability to generate the academic outputs that are most in demand in the modern economy. Because of the increased earnings advantage, private school remains a good investment for parents who want to opt out, but it also contributes more to rising economic and social inequality. |
| Keywords: | returns to education, private schools |
| JEL: | I22 I29 J31 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5018&r=lab |
| By: | Powdthavee, Nattavudh (University of York); Adireksombat, Kampon (Nanyang Technological University, Singapore) |
| Abstract: | Does more schooling causes a delay in marriage? Using a nationwide change in the compulsory schooling law in the UK as a source of exogenous variation in education, this paper estimates the causal effect of schooling on age at first marriage. The 1947 reform, which uniquely affected about a half of the relevant population, led to a jump in the average age at first marriage for both genders, with the effect being much more statistically robust for men than women. The regression discontinuity and IV estimates imply that completing an extra year of schooling increases the average age at first marriage by approximately 3 years for men and almost 2 years for women. Given the compelling effect of the 1947 reform, it is likely that our reduced form estimates come close to mirroring the ATE for the general population. |
| Keywords: | compulsory schooling, age at first marriage, regression discontinuity, human capital, family formation |
| JEL: | I2 J12 N34 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5019&r=lab |
| By: | Margaret Denton; Jennifer Plenderleith |
| Abstract: | The purpose of this research paper is to contribute to knowledge regarding employer pension plan (EPP) inequality in Canada. Information on EPP coverage and value is analyzed using the 1999 and 2005 Surveys of Financial Security. The results indicate that women, persons who may live alone, landed immigrants, and language minorities are at a disadvantage in their EPP coverage and accrued value. In addition, age, educational attainment, occupation, industry of employment, union membership, total personal income, province, and size of urban residence figure importantly in EPP coverage. Furthermore, age, educational attainment, industry of employment, total personal income, province and size of urban residence are all important determinants of the termination value of EPPs. To identify inequalities in EPP coverage among the sub-populations, the researchers use multivariate analysis. This allows an identification of inequalities that are not a direct result of differences in age, gender, level of education, location, or position in the labour market. Findings indicate that differences in EPP coverage for women, persons who may live alone, landed immigrants and language minorities are primarily due to differences in these other characteristics. However, the lower EPP value witnessed by these sub-populations cannot be explained by individual or labour market characteristics. |
| Keywords: | Employer Pension Plans, Registered Pension Plans, coverage, value, inequality, seniors, landed immigrants, gender differences, minority language |
| JEL: | J14 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:270&r=lab |
| By: | Arnaud Chevalier (Royal Holloway - University of London and IZA); Colm Harmon (University College Dublin and IZA); Vincent O'Sullivan (University of Warwick); Ian Walker (Lancaster University Management School and IZA) |
| Abstract: | This paper addresses the intergenerational transmission of education and investigates the extent to which early school leaving (at age 16) may be due to variations in parental background. An important contribution of the paper is to distinguish between the causal effects of parental income and parental education levels. Least squares estimation reveals conventional results – weak effects of income (when the child is 16), stronger effects of maternal education than paternal, and stronger effects on sons than daughters. We find that the education effects remain significant even when household income is included. However, when we use instrumental variable methods to simultaneously account for the endogeneity of parental education and paternal income, only maternal education remains significant (for daughters only) and becomes stronger. These estimates are consistent to various set of instruments. The impact of paternal income varies between specifications but become insignificant in our preferred specification. Our results provide limited evidence that policies alleviating income constraints at age 16 can alter schooling decisions but that policies increasing permanent income would lead to increased participation (especially for daughters). There is also evidence of intergenerational transmissions of education choice from mothers to daughters. |
| Keywords: | Early school leaving, intergenerational transmission |
| JEL: | I20 J62 |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201032&r=lab |
| By: | Shuaizhang Feng and Yingyao Hu |
| Abstract: | Using recent results in the measurement error literature, we show that the official U.S. unemployment rates substantially underestimate the true levels of unemployment, due to misclassification errors in labor force status in Current Population Surveys. Our closed-form identification of the misclassification probabilities relies on the key assumptions that the misreporting behaviors only depend on the true values and that the true labor force status dynamics satisfy a Markov-type property. During the period of 1996 to 2009, the corrected monthly unemployment rates are 1 to 4.6 percentage points (25% to 45%) higher than the official rates, and are more sensitive to changes in business cycles. Labor force participation rates, however, are not affected by this correction. We also provide results for various subgroups of the U.S. population defined by gender, race and age. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:jhu:papers:561&r=lab |
| By: | J. Andrés; J.E. Boscá; R. Doménech; J. Ferri |
| Abstract: | The benefits implied by changing the growth model are at the heart of the heated political and economic debate in Spain. Increases in productivity and the reallocation of employment towards more innovative sectors are defended as the panacea for most of the ills afflicting the Spanish economy. In this paper we use a DSGE model with price rigidities, and labour market search frictions a la Mortensen- Pissarides, to assess the effects of the change in the growth model on unemployment. In so doing, we assume that the vigorous demand shock which has been mostly responsible for recent economic growth in Spain will be successfully substituted by a productivity shock as the main driver of Spain‘s economic growth in the future. So we assume that we actually succeed in the so called "change in the growth model". We show that whatever the benefits that this change might bring to the Spanish economy, the time span needed to bring the unemployment rate down to the European average actually increases. We then analyze the impact of several reforms in the labour market and evaluate their interaction with the new growth model. We conclude that changes in the economic structure do not make labour reforms any less necessary, but rather the opposite if we want to shorten employment recovery significantly. |
| Keywords: | productivity, labour market, general equilibrium. |
| JEL: | E24 E27 E65 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1013&r=lab |
| By: | Alessandro Barattieri (Boston College); Susanto Basu (Boston College; NBER); Peter Gottschalk (Boston College) |
| Abstract: | Nominal wage stickiness is an important component of recent medium-scale structural macroeconomic models, but to date there has been little microeconomic evidence supporting the as- sumption of sluggish nominal wage adjustment. We present evidence on the frequency of nominal wage adjustment using data from the Survey of Income and Program Participation (SIPP) for the period 1996-1999. The SIPP provides high-frequency information on wages, employment and demographic characteristics for a large and representative sample of the US population. The main results of the analysis are as follows. 1) After correcting for measurement error, wages appear to be very sticky. In the average quarter, the probability that an individual will experience a nominal wage change is between 5 and 18 percent, depending on the samples and assumptions used. 2) The frequency of wage adjustment does not display significant seasonal patterns. 3) There is little heterogeneity in the frequency of wage adjustment across industries and occupations 4) The hazard of a nominal wage change first increases and then decreases, with a peak at 12 months. 5) The probability of a wage change is positively correlated with the unemployment rate and with the consumer price inflation rate. |
| Keywords: | Wage stickiness, micro-level evidence, measurement error |
| JEL: | E24 E32 J30 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:740&r=lab |
| By: | Jones, A.;; Rice, N.;; Rosa Dias, P. |
| Abstract: | Members of the National Child Development Study (NCDS) cohort attended very different types of secondary school, as their schooling lay within the transition period of the comprehensive education reform in England and Wales. This provides a natural setting to explore the impact of educational attainment and of school quality on health and health-related behaviour later in life. We use a combination of matching methods and parametric regressions to deal with selection effects and to evaluate differences in adult health outcomes and health-related behaviour for cohort members exposed to the old selective and to the new comprehensive educational systems. |
| Keywords: | Health; Education; Comprehensive schooling; Cognitive ability; Non-cognitive skills; NCDS |
| JEL: | I12 I28 C21 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:10/11&r=lab |
| By: | Falck, Oliver (Ifo Institute for Economic Research); Woessmann, Ludger (Ifo Institute for Economic Research) |
| Abstract: | School choice research mostly focuses on academic outcomes. Policymakers increasingly view entrepreneurial traits as a non-cognitive outcome important for economic growth. We use international PISA-2006 student-level data to estimate the effect of private-school competition on students' entrepreneurial intentions. We exploit Catholic-Church resistance to state schooling in 19th century as a natural experiment to obtain exogenous variation in current private-school shares. Our instrumental-variable results suggest that a 10 percentage-point higher private-school share raises students' entrepreneurial intentions by 0.3-0.5 percentage points (11-18 percent of the international mean) even after controlling for current Catholic shares, students' academic skills, and parents' entrepreneurial occupation. |
| Keywords: | private school competition, entrepreneurship, Catholic schools |
| JEL: | I20 L33 L26 Z12 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5024&r=lab |
| By: | Götz Zeddies |
| Abstract: | During the last decades, international trade flows especially of the industrialized countries allegedly became more and more intra-industry. At the same time, employment perspectives particularly of the low-skilled by tendency deteriorated in these countries. This phenomenon is often traced back to the fact that intra-industry trade, which should theoretically involve low labor market adjustment, became increasingly vertical in nature and might thus entail labor market disruptions. Against this background, the present paper investigates the relationship between international trade patterns and selected labor market indicators in European countries, with a focus on vertical intra-industry trade. As the results show, neither inter- nor vertical intra-industry trade do have a verifiable effect on wage spread in EU member states. As far as structural unemployment is concerned, the latter increases only with the degree of countries’ specialization on capi-tal intensively manufactured products in inter-industry trade relations. Only for unemployment of the less-skilled, a slightly significant impact of superior vertical intra-industry trade seems to exist. However, the link between unemployment of the lower qualified and inter-industry specialization on labor intensive goods as well as parts and components imports is considerably higher. |
| Keywords: | intra-industry trade, trade and labor market interactions, unemployment |
| JEL: | F12 F16 J64 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:15-10&r=lab |
| By: | Chris Bidner (School of Economics, University of New South Wales) |
| Abstract: | I propose a model in which credentials, such as diplomas, are intrinsically valuable; a situation described as credentialism. The model overcomes an important criticism of signalling models by mechanically tying a worker’s wages to their productivity. A worker’s productivity is influenced by the skills of their coworkers, where such skills arise from an ability-augmenting investment that is made prior to matching with coworkers. A worker’s credentials allow them to demonstrate their investment to the labor market, thereby allowing workers to match with high-skill coworkers in equilibrium. Despite the positive externality associated with a worker’s investment, I show how over-investment is pervasive in equilibrium. |
| Keywords: | Credentialism; Matching; Spillovers; Signaling |
| JEL: | D80 I20 J24 C78 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2010-10&r=lab |
| By: | Mühlenweg, Andrea M. |
| Abstract: | Germany has recently made extensive reforms in its tertiary education system. Traditional degrees are being replaced by Bachelor and Master programs. This study examines the question of how the choice of a new Bachelor program as opposed to a traditional degree program has affected first-year students' satisfaction. Three dimensions of student satisfaction are focused upon: Student satisfaction with teaching, student satisfaction with the organization of the study programs, as well as an indicator for students' personal problems within the academic context. The selection into the type of program is taken into account as I control for individual performance at secondary school, motivation and family background and try different robustness checks. The main specification includes fixed effects on the level of institutions and subjects. Results robustly point to minor differences between the programs. The outcomes are slightly more favorable for students in the new programs compared to the traditional programs in recent years. -- |
| Keywords: | Bologna,reforms,evaluation,fixed effects,student satisfaction |
| JEL: | I21 I28 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10040&r=lab |
| By: | Dario Sciulli |
| Abstract: | This paper analyses data from the 6th sweep of National Child Development Study to investigate the labour market perspective of convicted individuals. Decomposition analysis makes it clear that convicted workers are actually discriminated against both in terms of employment and wage with respect to non-convicted. Adopting a simple theoretical model accounting for partial adverse selection problem in the hiring process, I show that discrimination is not only explained in terms of economic stigma but also may derive from the inefficiency of the police/justice system in detecting crime and punishing offenders. In fact, while firms may apply economic stigma to recover the expected extracosts from hiring convicted workers, firms rationality may impose to charge on convicted workers also unobservable expected extra-costs deriving from offenders non-convicted hired. The resulting over-stigma is increasing with the probability of offending and with the level of expected extra-costs, while it is decreasing with the probability of convicting offenders. |
| JEL: | J71 K14 C21 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:594&r=lab |
| By: | Cortes, Kalena E. (Syracuse University) |
| Abstract: | In light of the recent bans on affirmative action in higher education, this paper provides new evidence on the effects of alternative admissions policies on the persistence and college completion of minority students. I find that the change from affirmative action to the Top 10% Plan in Texas decreased both retention and graduation rates of lower-ranked minority students. Results show that both fall-to-fall freshmen retention and six-year college graduation of second-decile minority students decreased, respectively, by 2.4 and 3.3 percentage points. The effect of the change in admissions policy was slightly larger for minority students in the third and lower deciles: fall-to-fall freshmen retention and six-year college graduation decreased, respectively, by 4.9 and 4.2 percentage points. Moreover, I find no evidence in support of the minority "mismatch" hypothesis. These results suggest that most of the increase in the graduation gap between minorities and non-minorities in Texas, a staggering 90 percent, was driven by the elimination of affirmative action in the 1990s. |
| Keywords: | affirmative action, Top 10% Plan, college quality, freshmen retention, college graduation |
| JEL: | I21 I23 J15 J24 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5021&r=lab |
| By: | Gill, David (University of Southampton); Prowse, Victoria L. (University of Oxford) |
| Abstract: | We present experimental evidence which sheds new light on why women may be less competitive than men. Specifically, we observe striking differences in how men and women respond to good and bad luck in a competitive environment. Following a loss, women tend to reduce effort, and the effect is independent of the monetary value of the prize that the women failed to win. Men, on the other hand, reduce effort only after failing to win large prizes. Responses to previous competitive outcomes explain about 11% of the variation that we observe in women's efforts, but only about 4% of the variation in the effort of men, and differential responses to luck account for about half of the gender performance gap in our experiment. These findings help to explain both female underperformance in environments with repeated competition and the tendency for women to select into tournaments at a lower rate than men. |
| Keywords: | behavioral preferences, real effort experiment, gender differences, gender gap, competition, competition aversion, tournament, luck, win, loss, narrow framing |
| JEL: | C91 J16 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5022&r=lab |
| By: | Mani, Subha; Hoddinott, John; Strauss, John |
| Abstract: | This paper identifies the cumulative impact of early schooling investments on later schooling outcomes in the context of a developing country, using enrollment status and relative grade attainment (RGA) as short- and long-run measures of schooling. Using a child-level longitudinal dataset from rural Ethiopia, we estimate a dynamic conditional schooling demand function where the coefficient estimate on the lagged dependent variable captures the impact of all previous periods’ schooling inputs and resources. We find that this lagged dependent variable indicates a strong positive association between current and lagged schooling. Past history matters more for girls than boys and for children from higher-income households compared with the poor. |
| Keywords: | panel data, Schooling, value-added, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:981&r=lab |
| By: | Elizabeth M. King; Claudio E. Montenegro; Peter F. Orazem |
| Abstract: | T.W. Schultz (1975) proposed that returns to human capital were highest in economic environments where technology, price or production shocks were common and managerial skills to adapt resource allocations to those shocks were most in need. We hypothesize that variation in returns to human capital across developing countries can be explained in part by government institutions that blunt the magnitude of those shocks or that limit individual abilities to respond to those shocks. Using estimated returns to schooling and experience from 122 household surveys from 86 developing countries, we demonstrate a strong positive correlation between economic freedom and returns to human capital. The positive effect is observed at all quantiles of the wage distribution. Economic freedom benefits the most skilled who get higher returns to schooling; but it also benefits the least skilled who get higher returns from experience. |
| Keywords: | Returns to Education; Returns to Experience; Economic Freedom, Inequality; Quantiles. |
| JEL: | J31 O15 P10 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp320&r=lab |
| By: | Müller, Kathrin; Peters, Bettina |
| Abstract: | This paper explores the role of R&D worker mobility on innovation performance. As one main novelty, we employ churning as a measure for worker mobility. Churning depicts the number of workers which are replaced by new ones. It is a very informative indicator since a firm may be exposed to simultaneous leave and inflow of R&D workers even if the size of R&D employment remains unchanged. Hence, we can separate the effect of replacement from net change in R&D workforce. Our results from estimating various knowledge production functions suggest an inverse u-shaped relationship. The exchange of R&D personnel fosters innovation through inter-firm knowledge spillovers and improved job-match quality up to certain threshold. The point when costs of churning exceed the benefits is reached faster if the R&D knowledge is non-duplicative. -- |
| Keywords: | innovation,churning,mobility |
| JEL: | O33 C35 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10032&r=lab |
| By: | Ana María Iregui B.; Ligia Alba Melo B.; María Teresa Ramírez G. |
| Abstract: | This paper uses a wage setting survey of 1,305 Colombian firms to explore the nature and sources of wage rigidities. This is the first study of a non-European emerging economy that uses evidence from a survey of firms to analyse this topic. The survey was carried out during the first half of 2009, when the Colombian economy was showing signs of a slowdown in economic activity and increasing unemployment. The sample is fully representative of the population under study. The results provide evidence of nominal and real downward wage rigidities in the country. The most important factor in not reducing base wages during an economic slowdown is to avoid the loss of more experienced and productive workers, which is related to the efficiency wage theory in its adverse selection version. In addition, ordered logit regressions were used to determine what factors are related to wage rigidities. The findings indicate that, in general, permanent contracts, workforce composition, labour intensity and the presence of collective agreements play an important role in explaining wage rigidities in the country. |
| Date: | 2010–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:007195&r=lab |
| By: | Antonio Di Paolo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB); Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain. Institut d’Economia de Barcelona, Universitat de Barcelona.); Josep Lluís Raymond (Departament de Fonaments de l’Anàlisi Econòmic, Universitat Autònoma de Barcelona (Spain). Institut d’Economia de Barcelona, Universitat de Barcelona.) |
| Abstract: | This paper investigates the economic value of Catalan knowledge for national and foreign first- and second-generation immigrants in Catalonia. Specifically, drawing on data from the “Survey on Living Conditions and Habits of the Catalan Population (2006)”, we want to quantify the expected earnings differential between individuals who are proficient in Catalan and those who are not, taking into account the potential endogeneity between knowledge of Catalan and earnings. The results indicate the existence of a positive return to knowledge of Catalan, with a 7.5% increase in earnings estimated by OLS; however, when we account for the presence of endogeneity, monthly earnings are around 18% higher for individuals who are able to speak and write Catalan. However, we also find that language and education are complementary inputs for generating earnings in Catalonia, given that knowledge of Catalan increases monthly earnings only for more educated individuals. |
| Keywords: | Language, Earnings, Immigrants, Endogeneity, Complementarity |
| JEL: | J79 J24 J61 C31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2010-7&r=lab |
| By: | Anne Lauringson |
| Abstract: | This paper analyzes the impact of trade unions on remuneration in the Estonian public sector. In this paper, union bargaining power is investigated separately in healthcare, education and culture and the public service using a case study approach. The method elaborated by the author uses documentation from branch level negotiations in the period 2001–2005. The analysis reveals that unions do have an impact on remuneration in the Estonian public sector. The influence is greater in healthcare, less in education and culture, and ambiguous in the public service where social dialogue does not really work. The most important factors of union influence turn out to be the political and legal environment (the right to strike), funding schemes and the bargaining structure (the existence and stability of an employers’ union, the number of wage levels bargained, the clarity with which parties represent their positions). |
| Keywords: | trade unions, bargaining power, public sector, CEE countries, Estonia |
| JEL: | J51 J52 J45 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:72&r=lab |
| By: | Gill Wyness (Institute for Fiscal Studies, 7 Ridgmount Street, London, WC1E 7AE, UK.) |
| Abstract: | The subject of how to finance Higher Education (HE) has been on the agenda of successive UK governments since the 1960s. The UK has moved from a situation where the taxpayer footed the entire bill for HE, to a system where graduates themselves must contribute part of the cost of their education. Further changes to the HE system are expected soon, as an independent review of the HE system, chaired by Lord Browne, makes its recommendations this year. This paper documents the entire time line of major policy events affecting UK higher education finance, starting from the 1960’s and going up to the present day. |
| Keywords: | higher education, education funding policy |
| JEL: | I22 I28 H52 N34 |
| Date: | 2010–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1015&r=lab |
| By: | Addison, John T. (University of South Carolina); Bryson, Alex (National Institute of Economic and Social Research); Teixeira, Paulino (University of Coimbra); Pahnke, André (IAB, Nürnberg); Bellmann, Lutz (IAB, Nürnberg) |
| Abstract: | This paper investigates trends in collective bargaining and worker representation in Germany from 2000 to 2008. It seeks to update and widen earlier analyses pointing to a decline in collective bargaining, while providing more information on the dual system as a whole. Using data from the IAB Employment Panel and the German Employment Register, we report evidence of a systematic and continuing erosion of the dual system. Not unnaturally the decline is led by developments in western Germany. Arguably, the path of erosion will continue until rough and ready convergence is reached with eastern Germany. Expressed differently, if the process of decentralization underpinning these developments once was ‘regulated’ it no longer appears to be so. |
| Keywords: | erosion of the dual system, collective bargaining/works council coverage, eastern and western Germany, institutional transitions, permanent stayers, newly-founded firms, closing/failing firms |
| JEL: | J50 J53 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5030&r=lab |