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on Labour Economics |
| By: | Beffy, Magali (CREST-INSEE); Fougère, Denis (CREST-INSEE); Maurel, Arnaud (ENSAE-CREST) |
| Abstract: | In this paper, we provide new evidence on the effect of part-time work on postsecondary educational attainment. To do so, we use samples extracted from the French Labor Force Surveys conducted over the years 1992-2002. These samples are restricted to students in initial education following university studies and preparing an Associate, a Bachelor or a Master degree. We estimate probit models with two simultaneous equations accounting for part-time working while studying and for success on the final exam, along with the decision to continue the following year in one of the models. We take the working time into account by drawing in one of the models a distinction between jobs in which more or less than 16 hours are worked per week. We use variations across departements in low-skilled youth unemployment rates and in their interactions with the father's socio-economic status in order to identify the effect of part-time work on educational attainment. Our results suggest a statistically significant and very large detrimental effect of holding a regular part-time job on graduation probability. Still, a complementary analysis shows that working while studying does not have any significant effect on the probability of continuing studies. |
| Keywords: | post-secondary educational attainment, students' labor supply, bivariate Probit models |
| JEL: | C35 I20 J24 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5069&r=lab |
| By: | Hoyos, Alejandro (Inter-American Development Bank); Nopo, Hugo (Inter-American Development Bank); Peña, Ximena (Universidad de los Andes) |
| Abstract: | This paper surveys gender earnings gaps in Colombia from 1994 to 2006, using matching comparisons to examine the extent to which individuals with similar human capital characteristics earn different wages. Three sub-periods are considered: 1994-1998; 2000-2001; and 2002- 2006, corresponding to the economic cycle of the Colombian economy. The gaps dropped from the first to the second period but remained almost unchanged between the second and the third. The gender earnings gap remains largely unexplained after controlling for different combinations of socio-demographics and job-related characteristics, reaching between 13 and 23 percent of average female earnings. That gap is lower at the middle of the wage distributions than the extremes, possibly due to a gender-equalizing effect of the minimum wage. Moreover, the gap is more pronounced for low-productivity workers and those who need flexibility to participate in labor markets. This suggests that policy interventions in the form of labor market regulations may have little impact on reducing gender earnings gaps. |
| Keywords: | gender, ethnicity, wage gaps, Latin America, Colombia, matching |
| JEL: | C14 D31 J16 O54 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5073&r=lab |
| By: | Stephan, Gesine (IAB, Nürnberg) |
| Abstract: | This paper explores whether wage, employment and tenure outcomes of workers taking up a job subsidized by the German Federal Employment Agency differ by industry. The analysis utilizes administrative data and statistical matching techniques; it covers an observation period of 3.5 years. First, we conduct a within-industry comparison of temporarily subsidized and otherwise similar unsubsidized workers. The findings show for most industries that subsidized workers had similar short-run wages, but fared significantly better in the longer run. Second, we compare labor market outcomes of subsidized workers within each industry with those of similar subsidized workers in other industries. The main result is that cumulated wages of workers would not have differed significantly, if they had been hired in another industry instead. However, we find significant differences in short-term wages, employment and tenure outcomes across industries. Finally, from a fiscal point of view it seems more advantageous to subsidize workers hired in industries that are less subject to demand fluctuations. |
| Keywords: | wage subsidies, industry-specific effects, program evaluation |
| JEL: | J31 J38 J58 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5078&r=lab |
| By: | Florentino Felgueroso; Manuel Hidalgo; SergiJiménez Martín |
| Abstract: | The main purpose of this work is to document the driven forces of the fall in the wage skill premium (WSP) in Spain in the last two decades. We show that the increase of occupational mismatch helps to explain the downward trend in university returns since the mid-80s. In the second part of the 90s and during the last decade, the decrease of labor market experience and firm tenure among well-matched workers, due to the extensive use of temporary contracts, also contributes to explain the fall of the WSP. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-19&r=lab |
| By: | K. Sundaram |
| Abstract: | The National Sample Survey Organisation (NSSO) has recently released the report containing key results of the NSS 55th Round Employment-Unemployment Survey covering the period July 1999 thru June 20001 .Being canvassed over a separate set of households, the results of the Employment-Unemployment Survey are also free of the controversies surrounding the NSS 55th Round Consumer Expenditure Survey .They therefore provide an opportunity to review the changes in the size and structure of the work force and in the unemployment situation in the country in the 1990s through a comparative analysis of the results of the large-scale quinquennial surveys for 1993-94 and 1999-2000. The analysis will be primarily at the all-India level. But, at this level of aggregation, they have considered separately the four segments differentiated by gender and rural-urban location: rural males; rural females; urban males; and, urban females. The changes in the size of the work force and the underlying work force participation rates, the industrial distribution of this work force, the changes in labour productivity and, the changes in the extent of unemployment and underemployment in the country has been examined. Finally, They examine the changes in the average number of days worked by a worker on the usual status and the changes, in real terms, in the daily average wage earnings of casual wage labourers and in the average yearly "wage earnings" per capita. [Working Paper No. 89] |
| Keywords: | National Sample Survey Organisation (NSSO), Employment-Unemployment Survey, Consumer Expenditure Survey, gender, urban females, labour productivity, "wage earnings" per capita |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2702&r=lab |
| By: | Cesar Alonso-Borrego; Antonio Romero-Medina |
| Abstract: | We use data on expected wages self-reported by college students to assess the hypothesis that the positive gap between expected and actual wages would decrease as students approach graduation. Our estimation results confirm this hypothesis. The amount and the quality of student information, used to forecast wages, improves with student experience. We find that expected wages for first-year students are affected not only by the degree type and academic performance, but also by the variables determining their degree preferences and their household environment. In the case of junior students, the degree type and length affects expected wages, though neither pre-university performance nor household environment influence their wage forecasts. |
| Keywords: | Wage differentials, College choice, Ordered response |
| JEL: | I23 J24 J31 C24 C25 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1016&r=lab |
| By: | Julián Messina (World Bank); Philip Du Caju (National Bank of Belgium); Cláudia Filipa Duarte (Banco de Portugal); Niels Lynggård Hansen (Danmarks Nationalbank); Mario Izquierdo (Banco de España) |
| Abstract: | This paper presents estimates based on individual data of downward nominal and real wage rigidities for thirteen sectors in Belgium, Denmark, Spain and Portugal. Our methodology follows the approach recently developed for the International Wage Flexibility Project, whereby resistance to nominal and real wage cuts is measured through departures of observed individual wage change histograms from an estimated counterfactual wage change distribution that would have prevailed in the absence of rigidity. We evaluate the role of worker and firm characteristics in shaping wage rigidities. We also confront our estimates of wage rigidities to structural features of the labour markets studied, such as the wage bargaining level, variable pay policy and the degree of product market competition. We find that the use of firm-level collective agreements in countries with rather centralized wage formation reduces the degree of real wage rigidity. This finding suggests that some degree of decentralization within highly centralized countries allows firms to adjust wages downwards, when business conditions turn bad. |
| Keywords: | wage rigidity, wage-bargaining institutions |
| JEL: | J31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1022&r=lab |
| By: | Chiswick, Barry R. (University of Illinois at Chicago); Miller, Paul W. (Curtin University of Technology) |
| Abstract: | The payoff to schooling among the foreign born in the US is only around one-half of the payoff for the native born. This paper examines whether this differential is related to the quality of the schooling immigrants acquired abroad. The paper uses the Over-education/ Required education/Under-education specification of the earnings equation to explore the transmission mechanism for the origin-country school quality effects. It also assesses the empirical merits of two alternative measures of the quality of schooling undertaken abroad. The results suggest that a higher quality of schooling acquired abroad is associated with a higher payoff to schooling among immigrants in the US labor market. This higher payoff is associated with a higher payoff to correctly matched schooling in the US, and a greater (in absolute value) penalty associated with years of under-education. A set of predictions is presented to assess the relative importance of these channels, and the over-education channel is shown to be the more influential factor. This channel is linked to greater positive selection in migration among those from countries with better quality school. In other words, it is the impact of origin country school quality on the immigrant selection process, rather than the quality of immigrants’ schooling per se, that is the major driver of the lower payoff to schooling among immigrants in the US. |
| Keywords: | selectivity, earnings, school quality, schooling, immigrants |
| JEL: | I21 J24 J31 J61 F22 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5075&r=lab |
| By: | José Ramón García; Valeri Sorolla |
| Abstract: | In this paper we match the static disequilibrium unemployment model without frictions in the labor market and monopolistic competition with an infinite horizon model of growth. We compare the wages set at the firm, sector and national (centralized) levels, their unemployment rates and growth of the economic variables, for the Cobb-Douglas production function, in order to see under wich conditions the inverse U hypothesis between unemployment and centralization of wage bargain is confirmed. We also analyze, in the three wage setting systems, the effect of an increase in the monopoly power on employment and growth. |
| Keywords: | Disequilibrium Unemployment, Monopolistic Competition, Growth, Wage Setting Systems. |
| JEL: | E24 O41 |
| Date: | 2010–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:839.10&r=lab |
| By: | Emmanuel Dhyne (National Bank of Belgium, Boulevard de Berlaimont 14, B-1000, Brussels, Belgium.); Martine Druant (National Bank of Belgium, Boulevard de Berlaimont 14, B-1000, Brussels, Belgium.) |
| Abstract: | Survey results in 15 European countries for almost 15,000 firms reveal that Belgian firms react more than the average European firm to adverse shocks by reducing permanent and temporary employment. On the basis of a firm-level analysis, this paper confirms that the different reaction to shocks is significant and investigates what factors explain this difference. Although the explanatory value of the variables is limited, most of the explanatory power of the model being associated with the dummy variables coding for firm size, sector and country, the variables investigated provide valuable information. The importance of wage bargaining above the firm level, the automatic system of index-linking wages to past inflation, the limited use of flexible pay, the high share of low-skilled blue-collar workers, the labor intensive production process as well as the less stringent legislation with respect to the protection against dismissal are at the basis of the stronger employment reaction of Belgian firms. On the contrary, employment is safeguarded by the presence of many small firms and a wage cushion. JEL Classification: D21, E30, J31. |
| Keywords: | survey, wage rigidity, cost-push shocks, demand shock, wage bargaining institutions, indexation. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101224&r=lab |
| By: | Furtado, Delia (University of Connecticut); Theodoropoulos, Nikolaos (University of Cyprus) |
| Abstract: | Social networks are commonly understood to play a large role in the labor market success of immigrants. Using 2000 U.S. Census data, this paper examines whether access to native networks, as measured by marriage to a native, increases the probability of immigrant employment. We start by confirming in both least squares and instrumental variables frameworks that marriage to a native indeed increases immigrant employment rates. Next, we show that the returns to marrying a native are not likely to arise solely from legal status acquired through marriage or characteristics of native spouses. We then present several pieces of evidence suggesting that networks obtained through marriage play an important part in explaining the relationship between marriage decisions and employment. |
| Keywords: | immigration, marriage, employment, networks |
| JEL: | J61 J12 J21 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5080&r=lab |
| By: | Addison, John T. (University of South Carolina); Machado, José (Universidade Nova de Lisboa); Portugal, Pedro (Universidade Nova de Lisboa) |
| Abstract: | A thorny problem in identifying the determinants of reservation wages and particularly the role of continued joblessness in their evolution is the simultaneity issue. We deploy a natural control function approach to the problem that involves conditioning elapsed duration on completed unemployment duration in the reservation wage equation. Our analysis confirms that the use of elapsed duration alone compounds two separate and opposing influences. Only with the inclusion of completed duration is the negative effect of continued joblessness on reservation wages apparent. For its part, the completed duration coefficient suggests that higher reservation wages negatively influence the probability of exiting unemployment. |
| Keywords: | reservation wages, unemployment duration, control function |
| JEL: | J64 J65 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5077&r=lab |
| By: | Santos, Miguel |
| Abstract: | The employment attainment after a vocational training course, in a lifelong learning perspective is due to several factors, those inherent to the individual and those through exogenous scopes. In this theoretical revue we identify the most and the least notorious theories that can support policy maker’s decisions. This paper is a result of a subchapter of the author’s PhD thesis. The usefulness of the theories briefly described is under the reader’s verdict and judgment. The objective is barely to share a structured way to compare eleven “big groups” of theories, underneath ten different elements, that are commonly the aim of public and private policies. |
| Keywords: | employment attainment; vocational training; job search methods; constraints factors; employment; unemployment |
| JEL: | J6 J69 J64 J20 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24056&r=lab |
| By: | Brindusa Anghel; Antonio Cabrales |
| Abstract: | This study reviews the recent literature on the economics of education, with a special focus on policy interventions. It also attempts to uncover the importance of school inputs, social environment and parental background on the outcomes of a standardized exam for all sixth grade students in the region of Madrid. We have data from all exam results from 2006 to 2009. These data can then be linked to individual level characteristics such as nationality, family type and parental education and profession. For public schools we also have school level data on variables such as number of students, teachers and their characteristics (type of contracts, experience), students’ nationalities, extra-curricular activities, and number of students needing special assistance. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-20&r=lab |
| By: | John Schmitt; Tessa Conroy |
| Abstract: | Many lawmakers, policymakers, and economic commentators do not appear to recognize the depth of the current labor-market recession. Between December 2007 – the official first month of the recession – and December 2009, the U.S. economy lost more than eight million jobs. Even if the economy creates jobs from now on at a pace equal to the fastest four years of the early 2000s expansion, we will not return to the December 2007 level of employment until March 2014. And, by the time we return to the number of jobs we had in December 2007, population growth will have increased the potential labor force by about 6.5 million jobs. If job growth matched the fastest four years in the most recent economic expansion, the economy would not catch up to the expanded labor force until April 2021. Absent policy changes such as a major jobs bill, the Congressional Budget Office’s most recent projections suggest that the economy will not return to December 2007 employment levels until June 2013, and will not cover the intervening growth in the potential labor force until August 2015. This report examines the depth of the current labor-market recession and sketches the possible recovery path under several historically based job creation scenarios. |
| Keywords: | unemployment, recession, stimulus, deficit spending |
| JEL: | H H6 H62 H63 H68 J J1 J14 J18 J3 J32 J38 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2010-17&r=lab |
| By: | Carlos Medina |
| Abstract: | We use occupations descriptions for Brazil, Colombia and Mexico, to build computer-use related tasks intensities, and link then to series of cross sections of data of each country in order to empirically assess to what extent the observed empirical regularities, and the reallocation of workers across occupations that require different tasks intensities, are consistent with the SBTC or polarization models. We find an increase of both wages and workers at the extremes of the wage or skills occupations distribution, the less routinaire/computerizabe, particularly pronounced in the period since personal computers began to be introduced in the region. This finding, along with other empirical regularities, provides support for some of the main implications of the polarization model in the cases of Colombia and Mexico. |
| Date: | 2010–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:007269&r=lab |
| By: | Arunachalam, Raj (University of Michigan); Shah, Manisha (University of California, Irvine) |
| Abstract: | We estimate the earnings premium for beauty in an occupation where returns to physical attractiveness are likely to be important: commercial sex work. In the commercial sex market, perhaps more so than any other sector in the labor market, the beauty premium should be at the extreme due to the intimate interpersonal relationships required with clients. Therefore, the commercial sex sector provides the cleanest test for whether the beauty premium is driven solely by productivity. Somewhat surprisingly we find estimates that lie close to or comfortably within those for non-sex workers around the world. In fact, the estimated premium for above average beauty is only slightly larger than that estimated for women elsewhere, and the penalty for below average looks lies comfortably within the range of existing findings. We show that the beauty premium in the commercial sex market stems both from productivity and discrimination. In addition, including controls for personal characteristics (communication ability and desirability of personality) cuts the beauty premium by up to one-half. Our findings suggest that beauty premiums might be overestimated if measures akin to those in our dataset are not included in beauty regressions. |
| Keywords: | beauty premium, discrimination, sex markets |
| JEL: | J01 J71 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5064&r=lab |
| By: | Pereira, Pedro T. (University of Madeira) |
| Abstract: | The intergenerational transmission of education is certainly a problem that continues to challenge most countries. The level of education that an individual rises to is linked to the education level(s) of her/his parents. This note serves as an alert to researchers undertaking empirical investigation into how the parents' education should be considered with regard to the child's. Using Portuguese data we conclude that the parents should be viewed as a unit (i.e. as a couple), and we should examine all of the different education combinations, avoiding the temptation to aggregate them in larger categories. |
| Keywords: | transmission of education, human capital, parent’s education |
| JEL: | I21 J11 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5074&r=lab |
| By: | Nicoletti C (Institute for Social and Economic Research); Rabe B (Institute for Social and Economic Research) |
| Abstract: | We explore the relative influence of family and neighbourhood on educational attainment and how this varies by sibling type. Using English register data we find sibling correlations in exam scores of 0.563 at the end of primary school and of 0.621 at the end of compulsory schooling. The neighbourhood explains at most 10-15% of the variance in educational attainment; whereas the family explains at least 43%. This percentage is significantly higher for twins and for siblings of the same sex. It is also higher for closely spaced siblings and siblings with a similar school starting age but only at age 11. |
| Date: | 2010–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2010-26&r=lab |
| By: | Uwaifo Oyelere, Ruth (Georgia Tech); Belton, Willie (Georgia Institute of Technology) |
| Abstract: | In this paper we ask three questions: First, is there evidence of a Black-White gap in self-employment between 1994-2002 and could the inclusion of the White immigrant population be driving this result? Second, do within race differences in self-employment exist among the U.S. born? Finally, do cohort differences in the Black-White self-employment gap exist among the U.S. born? These questions are based on some of the regression findings in our earlier paper focused on the role of information and institutions in understanding the Black-White gap in self-employment. We find that the Black-White self-employment gap is not driven by the existence of White immigrants in the data set. In addition, we find that within race and cohort differences exist in the Black-White self-employment gap. A subgroup of U.S. born African-Americans have a self-employment probability that is identical to that of U.S. born White-Americans. In addition, younger cohorts of African-Americans have a much smaller self-employment gap than do older African-Americans. |
| Keywords: | self-employment, disparities, black-white gap |
| JEL: | J10 J11 J15 L26 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5071&r=lab |
| By: | Pedro Martins; Luca David Opromolla |
| Abstract: | The analysis of the effects of firm-level international trade on wages has so far focused on the role of exports, which are also typically treated as a composite good. However, we show in this paper that firm-level imports can actually be a wage determinant as important as exports. Furthermore, we also find significant differences in the relationship between trade and wages across types of products. In particular, firms that increase their exports (imports) of high- (intermediate-) technology products tend to increase their salaries. Our analysis is based on unique data from Portugal, obtained by merging a matched firm-worker panel and a matched firm-transaction panel. Our data set follows the population of manufacturing firms and all their workers from 1995 to 2005 and allows for several control variables, including jobspell fixed effects. |
| JEL: | F16 J31 F15 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201002&r=lab |
| By: | Rohen D'AIGLEPIERRE; Laurent WAGNER |
| Abstract: | Universal Primary Education (UPE) is one of the main objectives of development aid. However, very little empirical evidence of its effectiveness actually exists. Until very recently, the quality of available data was not sufficient to obtain robust results regarding the relationship between international aid and educational achievements. In this article, the latest, more disaggregated and more reliable data is used to study the relationship between aid to education and educational achievements. The focus here not only on educational variables in term of coverage, but also in term of equity and process. The year of Fast Track Initiative (FTI) endorsement is used as an original instrument to tackle the endogeneity problem of aid. Our results are very robust and indicate that aid to primary education has a strong effect on primary school enrollment and gender parity. A negative impact on repetitions rate is also indicated while no effect on the pupil teacher ratio can be observed. Diminishing return in the effectiveness of aid to primary education may also be highlighted. Finally, the governance variables do not appear to have an impact on this relationship. |
| Keywords: | aid effectiveness, education, Sector-specific aid |
| JEL: | O11 F35 I2 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1182&r=lab |
| By: | Kniesner, Thomas J. (Syracuse University); Leeth, John D. (Bentley University) |
| Abstract: | We examine theoretically and empirically the properties of the equilibrium wage function and its implications for policy. Our emphasis is on how the researcher approaches economic and policy questions when there is labor market heterogeneity leading to a set of wages. We focus on the application where hedonic models have been most successful at clarifying policy relevant outcomes and policy effects, that of the wage premia for fatal injury risk. Estimates of the overall hedonic locus we discuss imply the so-called value of a statistical life (VSL) that is useful as the benefit value in a cost-effectiveness calculation of government programs to enhance personal safety. Additional econometric results described are the multiple dimensions of heterogeneity in VSL, including by age and consumption plans, the latent trait that affects wages and job safety setting choice, and family income. Simulations of hedonic market outcomes are also valuable research tools. To demonstrate the additional usefulness of giving detail to the underlying structure we not only develop the issue of welfare comparisons theoretically but also illustrate how numerical simulations of the underlying structure can also be informative. Using a reasonable set of primitives we see that job safety regulations are much more limited in their potential for improving workplace safety efficiently compared to mandatory injury insurance with experience rated premiums. The simulations reveal how regulations incent some workers to take more dangerous jobs, while workers’ compensation insurance does not (or less so). |
| Keywords: | quantile regression, panel data, VSL, job safety, hedonic labor market equilibrium, OSHA, workers’ compensation insurance |
| JEL: | J2 J3 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5076&r=lab |
| By: | Carlos Robalo Marques (Banco de Portugal, Research Department, Portugal.); Fernando Martins (Banco de Portugal, Research Department, Portugal.); Pedro Portugal (Banco de Portugal, Research Department, Portugal.) |
| Abstract: | This paper brings together empirical research on price and wage dynamics for the Portuguese economy based both on micro and macro data. As regards firms' pricing behaviour the most noticeable finding is that prices in Portugal are somewhat less flexible than in the United States but more flexible than in the Euro Area. Regarding firms' wage setting practices, we uncover evidence favouring the hypothesis of aggregate and disaggregate wage flexibility. Despite the existence of mandatory minimum wages, the presence of binding wage floors and the general use of extension mechanisms, the firms still retain some ability to circumvent collective agreements via the mechanism of the wage cushion. The evidence also suggests that Portuguese wages behave in a fashion consistent with the wage curve literature, but the responsiveness of real wages to unemployment changes may have declined over the last decade. JEL Classification: C42, D40, E31, J30. |
| Keywords: | Survey data, wage and price rigidities, persistence, wage cushion. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101225&r=lab |
| By: | Boris Hofmann (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Gert Peersman (Ghent University, Sint-Pietersnieuwstraat 25, B-9000 Ghent, Belgium.); Roland Straub (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper explores time variation in the dynamic effects of technology shocks on U.S. output, prices, interest rates as well as real and nominal wages. The results indicate considerable time variation in U.S. wage dynamics that can be linked to the monetary policy regime. Before and after the "Great Inflation", nominal wages moved in the same direction as the (required) adjustment of real wages, and in the opposite direction of the price response. During the "Great Inflation", technology shocks in contrast triggered wage-price spirals, moving nominal wages and prices in the same direction at longer horizons, thus counteracting the required adjustment of real wages, amplifying the ultimate repercussions on prices and hence increasing inflation volatility. Using a standard DSGE model, we show that these stylized facts, in particular the estimated magnitudes, can only be explained by assuming a high degree of wage indexation in conjunction with a weak reaction of monetary policy to inflation during the "Great Inflation", and low indexation together with aggressive inflation stabilization of monetary policy before and after this period. This means that the monetary policy regime is not only captured by the parameters of the monetary policy rule, but importantly also by the degree of wage indexation and resultant second round effects in the labor market. Accordingly, the degree of wage indexation is not structural in the sense of Lucas (1976). JEL Classification: C32, E24, E31, E42, E52. |
| Keywords: | technology shocks, second-round effects, Great Inflation. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101230&r=lab |
| By: | Paola Bertolini; Michele Lalla; Valentina Toscano |
| Abstract: | The aim of the paper is the analysis of the immigrants' school insertion paths in Italy. The analysis focuses on the immigrants' school participation in the secondary school, considering also the first and the second generation. The data has been extracted from official statistical databases, mainly of the Ministry of Education and Istat (Italian National Statistics Institute). The analysis points out that the participation rates of foreign students in the secondary school are lower than those of the Italian students and both of them are different among regions and provinces. Five territorial areas are distinguished through some social and economic indicators (sectoral added value and number of industrial districts) in order to show the determinants of different participation rates between foreign and Italian students. A multivariate analysis by territorial areas reveals that the main factors affecting the education choices are related to the local characteristics and the economic variables, such as total families' income and gross national product (GNP) per capita. These results suggest that the immigrant students face with many difficulties in educational attainment preferring a fast entrance in the labour market. |
| Keywords: | immigrant students, educational territorial pattern, professional path, schooling determinants, seemingly unrelated regressions |
| JEL: | I21 J24 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:mod:depeco:0631&r=lab |
| By: | Olivier Joseph (Céreq); Séverine Lemière (IUT Paris Descartes et Centre d'Economie de la Sorbonne); Laurence Lizé (Centre d'Economie de la Sorbonne); Patrick Rousset (Céreq) |
| Abstract: | This paper deals with young people who declare themselves discriminated because of their ethnicity or colour. The aim is to evaluate the effect of the discrimination feeling on professional paths for young people 7 years after having left school. We use the statistical survey of Cereq Génération 97 (7years) and the clustering method using self-organizing maps (Kohonen algorithm). Eight classes of professional paths are exposed. Two kinds of segmentation of professional paths are obtained. The "inter-class" segmentation : young people who declare themselves discriminated are more present in temporary-work class or unemployment class. This finding is consolidated by some qualitative talks with young people who declare themselves discriminated. They explained the refusal of victimization in the labour market. The "intra-class" segmentation : a lot of inequalities exit inside classes. Working full time or become a manager is more difficult for young people who declare themselves discriminated even if their professional path is good. |
| Keywords: | Professional path, feeling of discrimination, classification, segmentation, ethnicity. |
| JEL: | J71 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10063&r=lab |
| By: | Bodvarsson, O B; Sessions, J |
| Abstract: | When immigrants experience “nationality discrimination” in the labor market, ceteris paribus their earnings are lower than native-born workers because they were born abroad. The challenge to testing for nationality discrimination is that the native/immigrant earnings gap will very likely also be influenced by productivity differences driven by incomplete assimilation of immigrants, as well as the possibility of racial or gender discrimination. There is relatively little empirical literature, and virtually no theoretical literature, on this type of discrimination. In this study, a model of nationality discrimination where customer prejudice and native/immigrant productivity differences jointly influence the earnings gap is presented. We derive an extension of Becker’s Market Discrimination Coefficient (MDC), applied to the case of nationality discrimination when there are productivity differences. A number of novel implications are obtained. We find, for example, that the MDC depends upon relative immigrant productivity and relative immigrant labor supply. We test the model on data for hitters and pitchers in Major League Baseball, an industry with a history of immigration, potential for customer discrimination, and clean, detailed micro-data on worker productivities and race. OLS and decomposition methods are used to estimate the extent of discrimination. We find no compelling evidence of discrimination in the hitter group, but evidence of ceteris paribus underpayment of immigrant pitchers. While our test case is for a particular industry, our theoretical model, empirical specifications, and general research design, are quite generalizable to many other labor markets. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:eid:wpaper:08/10&r=lab |
| By: | Biewen, Martin (University of Tuebingen); Juhasz, Andos (University of Tuebingen) |
| Abstract: | We examine the causes for rising income inequality in Europe’s most populous economy. From 2000 to 2006, Germany experienced an unprecedented rise in net equivalized income inequality and poverty. At the same time, unemployment rose to record levels and there was evidence for a widening distribution of labour market returns, as well as that of other market incomes. Other factors that possibly contributed to the rise in income inequality were changes in the tax system, changes in the household structure (in particular the rising share of single parent households), and changes in other socio-economic characteristics (e.g. age or education). We address the question of which factors were the main drivers of the observed inequality increase. Our results suggest that most of the increase can be explained by both changes in employment outcomes and in market returns, and, to a similar extent, by changes in the tax system. Changes in household structures and other household characteristics seem to have played a much smaller role. Put into an international perspective, our results suggest that rising income inequality in non-Anglo-Saxon countries is the likely result of both increasing inequality in market returns and increasing inequality in employment outcomes, as well as of idiosyncratic changes such as tax reforms. |
| Keywords: | unemployment, poverty, income inequality, kernel density estimation |
| JEL: | D31 C14 I30 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5062&r=lab |
| By: | Bell, Brian; Van Reenen, John |
| Abstract: | It is well known that the distribution of income in the United Kingdom has widened considerably in the last three decades. This rise has been a result of a widening at both the top and bottom of the wage distribution. More recently, most of the action appears to have occurred at the top of the distribution with lower wage workers keeping pace with the median. This paper explores this increased dispersion at the very top of the wage distribution. We show that the growth has occurred primarily within the top few percentiles and that the rise in inequality in recent years is much more pronounced when we focus on annual earnings as opposed to weekly wages (where most work has concentrated). This is because annual wages include bonuses. By the end of the decade to 2008, the top tenth of earners received £20bn more purely due to the increase in their share (it would have been only £173bn had their share of the pie remained the same as 1998), and £12bn of this went to workers in the financial sector (almost all of which was bonus payments). We consider various reasons why the bankers have managed to capture an increasing share of the wage bill over the last decade. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/28780/&r=lab |
| By: | Bruno De Borger (Department of Economics, University of Antwerp); Amihai Glazer (Department of Economics, University of California-Irvine) |
| Abstract: | A firm whose profits increase when outsiders believe that it pays high wages may induce its workers to over-consume goods that signal high compensation. One implication is that firms may lobby government to subsidize fringe benefits with high signaling value, such as company cars, to their employees. We show that under plausible conditions the provision of fringe benefits indeed can signal the firm's type. Moreover, we demonstrate the existence of multiple equilibria---one equilibrium has no firm providing certain fringe benefits, whereas another equilibrium has fringe benefits signal the firm's type. The paper further shows that a firm that provides the fringe benefit may oppose a government subsidizing it too heavily, because a large subsidy could destroy the signaling value of the benefit. The analysis shows that an employer may even provide a fringe benefit to employees who place no value on it. Our results are consistent with many stylized facts on the provision of fringe benefits by firms. More generally, we the model highlights how and why a firm may engage in behavior which signals the type of workers it hires. |
| Keywords: | Signaling; Fringe benefits; Compensation |
| JEL: | D21 D82 J32 M52 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:101101&r=lab |
| By: | Rebitzer, James B. (Boston University); Taylor, Lowell J. (Carnegie Mellon University) |
| Abstract: | Employers structure pay and employment relationships to mitigate agency problems. A large literature in economics documents how the resolution of these problems shapes personnel policies and labor markets. For the most part, the study of agency in employment relationships relies on highly stylized assumptions regarding human motivation, e.g., that employees seek to earn as much money as possible with minimal effort. In this essay, we explore the consequences of introducing behavioral complexity and realism into models of agency within organizations. Specifically, we assess the insights gained by allowing employees to be guided by such motivations as the desire to compare favorably to others, the aspiration to contribute to intrinsically worthwhile goals, and the inclination to reciprocate generosity or exact retribution for perceived wrongs. More provocatively, from the standpoint of standard economics, we also consider the possibility that people are driven, in ways that may be opaque even to themselves, by the desire to earn social esteem or to shape and reinforce identity. |
| Keywords: | agency, motivation, employment relationships, behavioral economics |
| JEL: | D2 J0 M5 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5058&r=lab |
| By: | Birgit Unger (Department of Human Resource Management and Organization, Eberhard Karls Universitaet Tuebingen); Kerstin Pull (Department of Human Resource Management and Organization, Eberhard Karls Universitaet Tuebingen); Uschi Backes-Gellner (Institute for Strategy and Business Economics, University of Zurich) |
| Abstract: | This chapter analyzes how one particular governance mechanism affects the performance of research teams. We look at an external requirement for interdisciplinarity and internationality of Research Training Groups (RTGs) and study how their performance is affected. We expect to observe two countervailing effects with changes in interdisciplinarity and/or internationality: first, increased performance due to an increase in productive resources and a second, decreased performance due to increased team problems (communication, conflicts etc). Since both effects are expected to vary with the disciplinary field of research, we separate our analysis for the Humanities & Social Sciences in comparison to the Natural & Life Sciences and indeed find different effects in the different disciplinary fields. Furthermore, we separately analyze the effects of interdisciplinarity on the one hand and internationality on the other hand. We conclude that the effectiveness of a particular governance mechanism varies substantially between the disciplinary fields and for the type of heterogeneity under consideration. Therefore governance of research should be either precisely engineered to a particular disciplinary field and a given type of heterogeneity or it should offer a menu of options that allows research teams to choose from according to their specific needs. |
| Keywords: | governance of Ph.D.-education, internationality, interdisciplinarity, performance, scientific visibility, doctoral completion rates, disciplinary fields |
| JEL: | I21 I23 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iso:wpaper:0130&r=lab |
| By: | Paolo Brunori (Università degli Studi di Bari); Patrizia Luongo (Università degli Studi di Bari) |
| Abstract: | In this paper we try to determine which policy implements fairness in the distribution of educational outcomes, in a framework in which skills arise from the combination of circumstances, effort and transfers, and determine individual utility. Our definition of fairness relies on two ethical principles, liberal reward and compensation, which have been well defined and studied by many authors in the last decade, and is linked to the philosophical debate that, since the late '60, has debated about the meaning of educational opportunities. According to this definition, to be fair an allocation should remove inequalities not due to individuals' responsibility. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2010_10.rdf&r=lab |
| By: | Jooyeon Jeong (Department of Economics, Korea University, Seoul, Republic of Korea) |
| Abstract: | In the literature in English, the prevailing view on Korean unions during the economic developmental period of the 1970s judged unions¡¯ lack of representative capacities as well as their exceptionally slow growth patterns as constrained chiefly by the state-led macro-political environment. However, this paper finds that enterprise unions as the primary form in Korea not only pursued weak to moderate economic unionism but also recorded a gradual pattern of growth while exhibiting significant diversity across sectors, industries, and firms during that period. That diverse pattern of union growth was repeated and intensified by the explosive growth of vigorous economic enterprise unionism during the political democratization period between 1987 and 1994. In particular, Korean union growth was not always solely, decisively, and negatively influenced by the state, as presumed in the literature. Instead, like their counterparts in several advanced nations, some Korean unions had relatively stable organizations and bargaining power in strategically growing industries, in state-regulated sectors and industries, in large enterprises (LEs), and among advantageous groups of workers enjoying stable wages and employment security in labor markets. |
| Keywords: | enterprise unionism, union growth patterns in Korea, meso- and micro-socioeconomic theory, pluralistic perspectives on union formation, comparative industrial relations |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:1012&r=lab |
| By: | Julia Adler-Milstein (Harvard Business School); Sara J. Singer (Harvard School of Public Health); Michael W. Toffel (Harvard Business School, Technology and Operations Management Unit) |
| Abstract: | Ideas that could enable organizations to improve their operating processes often come from front-line workers who voice concerns and share ideas about how to solve problems. Our study is among the first to develop and empirically test theory about how specific management practices can encourage employees to speak up about problems and to offer suggestions for solving them. We hypothesize that employees are more likely to speak up and offer solutions when organizations launch information campaigns to promote process improvement and when managers engage in process-improvement activities themselves. We test our hypotheses in the health-care context, in which problems are frequent and many organizations use incident-reporting systems to encourage employees to communicate about the operational problems they witness. Using data on nearly 7,500 reported incidents, we find that information campaigns encouraging process improvement promote both speaking up and offering solutions, while managerial engagement in process improvement promotes the latter. Our findings suggest that particular management practices can influence front-line workers' decisions about whether to speak up and that direct managerial engagement can result in their doing so constructively. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:11-005&r=lab |