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on Labour Economics |
| By: | Ponzo, Michela |
| Abstract: | This paper analyses the determinants of on-the-job search activities of Italian workers. Using several waves of the Bank of Italy Survey on Household Income and Wealth (SHIW) we estimate with a Probit model how individual socio demographic characteristics and economic variables affect the probability of on-the-job search. We find that the probability of being engaged in job-search activities is higher for low-wage earners, for workers with low tenure and higher levels of education, for males and for residents in large cities. Moreover, we find significant differences in the determinants of on-the-job search activities across sectors. Public sector employees show a considerable lower probability of on-thejob search compared to private sector workers; White-collars and teachers search much less than blue-collars (both in private and public sectors). Results suggest that the attractiveness of jobs varies considerably, even controlling for wage levels and that notwithstanding the high degree of centralization Italian markets are reactive to job-search determinants. |
| Keywords: | Job search; labour mobility; Public sector |
| JEL: | J45 J62 J61 M51 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25485&r=lab |
| By: | Livanos, Ilias; Nunez, Imanol |
| Abstract: | In this paper we investigate the effect of an academic degree on gender wage gap in Greece and the United Kingdom. Using Labour Force Survey (LFS) micro-data, first, we compare the returns to higher education for males and females, second, we decompose the gender wage gap between graduates and individuals with secondary education, and finally we analyse the effect of higher education on the (un)explained part of the wage gap. For that purpose, an extension of the Oaxaca-Blinder decomposition technique is used. We find that the unexplained part, which is often related to discrimination is lower for graduates in both countries. |
| Keywords: | Discrimination; graduates; gender |
| JEL: | A20 J01 |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25487&r=lab |
| By: | Annelle Bellony; Alejandro Hoyos; Hugo Nopo |
| Abstract: | This paper analyzes gender earnings gaps in Barbados and Jamaica, using a matching comparisons approach. In both countries, as in most of the Caribbean region, females’ educational achievement is higher than that of males. Nonetheless, males’ earnings surpass those of their female peers. Depending on the set of control characteristics, males’ earnings surpass those of females by between 14 and 27 percent of average females’ wages in Barbados, and between 8 and 17 percent of average females’ wages in Jamaica. In the former, the highest earnings gaps are found among low-income workers. Results from both countries confirm a finding that has been recurrent with this matching approach: the complete elimination of gender occupational segregation in labor markets would increase rather than reduce gender earnings gaps. The evidence is mixed regarding segregation by economic sectors. Occupational experience, in the case of Barbados, and job tenure, in the case of Jamaica, help to explain existing gender earnings gaps. |
| Keywords: | Gender, Ethnicity, Wage gaps, the Caribbean, Barbados, Jamaica, Matching |
| JEL: | C14 D31 J16 O54 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4683&r=lab |
| By: | Kai-Uwe Müller |
| Abstract: | In this paper employment effects of a sectoral minimum wage in the German construction sector are estimated from a single cross-sectional wage distribution using parametric and semi-parametric models. Parametric functional form assumptions seem too restrictive and lead to implausible results. We suggest semi-parametric censored quantile regression models to relax these assumptions and find that employment levels would be 4-5% higher without the minimum wage in the East German construction sector. That the effect for the West is clearly smaller (only 1-2%) is theoretically plausible, since the level of the minimum wage in East Germany was set much higher in relation to the wage distribution. There is heterogeneity hidden in the mean effect: employment losses are mostly borne by young construction workers, employees not covered by collective bargaining agreements and individuals working in small establishments. Although the paper confirms previous findings of a negative employment effect for East Germany, its magnitude is substantially larger than previously estimated. |
| Keywords: | Minimum wage, wage distribution, employment effects, labor demand |
| JEL: | J23 J31 J38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1061&r=lab |
| By: | Dauth, Wolfgang (IAB, Nürnberg); Hujer, Reinhard (Goethe University Frankfurt); Wolf, Katja (IAB, Nürnberg) |
| Abstract: | This paper contributes to the literature on macroeconometric evaluation of active labour market policies (ALMP) by considering the regional effects on both the matching process and the job-seeker rate. We use an unique new data set on all Austrian job-seekers between 2001 to 2007 and apply GMM and Quasi-ML estimators to take into account both the simultaneity of ALMP and spatial interrelations between employment office districts. The results indicate that job schemes in the non-profit sector, wage subsidies, and apprenticeships cause particularly favourable effects on the regional matching function and the job-seeker rate. |
| Keywords: | evaluation, active labour market policy, dynamic panel data model, spatial econometrics |
| JEL: | C33 H43 J64 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5217&r=lab |
| By: | Steiner, Viktor (DIW Berlin); Wakolbinger, Florian (University of Linz) |
| Abstract: | We analyze the labor supply and income effects of a needs-based minimum benefit system ("Bedarfsorientierte Mindestsicherung") to be introduced in Austria by the end of this/beginning of next year. The aim of this reform is to reduce poverty as well as increasing employment rates of recipients of social assistance. On the basis of a behavioral microsimulation model we show that this new system will slightly increase incomes for the poorest households and slightly reduce labor supply due to the generous allowances for marginal employment under the current and the planned regulations of unemployment assistance. As an alternative, we analyze a reform proposal which reduces financial incentives for marginal employment not covered by social security, and rewards working longer hours by a wage subsidy. Although this alternative reform would yield modest positive labor supply effects, a relatively large number of households would suffer income losses. |
| Keywords: | work incentives, labor supply, social safety system, microsimulation |
| JEL: | H31 I38 J22 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5191&r=lab |
| By: | Dronkers, Jaap |
| Abstract: | In this inaugural lecture, I will estimate the effects on language skills of two characteristics of school populations: average/share and diversity, both on the ethnic and the sociocultural dimension. I will use the cross-national PISA 206 data, for both 15-year-old native pupils and pupils with an immigrant background. A larger ethnic diversity of schools in secondary education hampers the educational performance of both pupils with an immigrant background and native pupils, but the negative effects are smaller in education systems with little stratification and strongest in highly stratified education systems. The sociocultural diversity of schools does not have an effect on educational performance, but these effects are positive in highly stratified educational systems and negative in hardly stratified systems. However, the average parental educational level of schools is very important for the educational performance of children, and this hardly differs between education systems. A higher share of pupils with an immigrant background in a school hampers educational performance, but if these pupils have the same regional origin (Islamic countries; non-Islamic Asian countries), a higher share of pupils with an immigrant background at that school promotes educational performance. Pupils originating from Islamic countries have substantially lower language scores than equivalent pupils with an immigrant background from other regions. This cannot be explained by the individual socioeconomic backgrounds, school characteristics, or education systems. |
| Keywords: | immigration; educational performance; country of origin; ethnic school diversity; social-economic school diversity; ethnic and social-economic share/average of schools; educational systems |
| JEL: | I21 J61 J24 |
| Date: | 2010–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25598&r=lab |
| By: | Nizalova, Olena Y. (Kyiv School of Economics) |
| 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: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5192&r=lab |
| By: | Fouarge Didier; Schils Trudie; Grip Andries de (ROA rm) |
| Abstract: | Several studies document the fact that low-educated workers participate less often infurther training than high-educated workers. The economic literature suggests thatthere is no significant difference in employer willingness to train low-educated workers,which leaves the question of why the low educated invest less in training unanswered.This paper investigates two possible explanations: Low-educated workers invest less intraining because of 1) the lower economic returns to these investments or 2) their lowerwillingness to participate in training. Controlling for unobserved heterogeneity that canaffect the probability of enrolling into training, we find that the economic returns totraining for low-educated workers are positive and not significantly different from thosefor high-educated workers. However, low-educated workers are significantly less willingto participate in training. This lesser willingness to participate in training is driven byeconomic preferences (future orientation, preference for leisure), as well as personalitytraits (locus of control, exam anxiety, and openness to experience). |
| Keywords: | education, training and the labour market; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2010010&r=lab |
| By: | Deepti Goel; Kevin Lang |
| Abstract: | It is shown that increasing the probability of obtaining a job offer through the network should raise the observed mean wage in jobs found through formal (non-network) channels relative to that in jobs found through the network. This prediction also holds at all percentiles of the observed wage distribution, except the highest and lowest. The largest changes are likely to occur below the median. [Working Paper No. 189]. |
| Keywords: | job offereing, formal, social ties, median, wages, observed mean, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2932&r=lab |
| By: | Ponzo, Michela |
| Abstract: | In this paper we investigate possible differences in student performance depending on the frequency and the type of computer usage both at home and at school of 15-years-old Italian students. Using the PISA 2006 dataset and controlling for a wide range of individual and school characteristics, our results suggest that students using the computer at home very often obtain higher test scores than those who never use it. More importantly, we find a significant positive correlation between student achievement and the use of computer at home as educational/learning device. Focusing on the frequency of computer usage at school, it emerges that student achievement increases with the intensity of computer use but the effect becomes smaller the more often they use the computer and even negative when students use the computer at school almost every day |
| Keywords: | Educational production function; Computers at home; Computers at school; Students achievement; PISA. |
| JEL: | I2 I21 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25483&r=lab |
| By: | Kuhn, Andreas; Wuellrich, Jean-Philippe; Zweimüller, Josef |
| Abstract: | We estimate the causal effect of early retirement on mortality for blue-collar workers. To overcome the problem of endogenous selection, we exploit an exogenous change in unemployment insurance rules in Austria that allowed workers in eligible regions to withdraw from the workforce up to 3.5 years earlier than those in non-eligible regions. For males, instrumental-variable estimates show a significant 2.4 percentage points (about 13%) increasein the probability of dying before age 67. We do not find any adverse effect early retirement onmortality for females. Death causes indicate a significantly higher incidence of cardiovascular disorders among eligible workers, suggesting that changes in health-related behavior explain increased mortality among male early retirees. |
| Keywords: | early retirement; endogeneity; health behavior; instrumental variable; mortality; premature death |
| JEL: | I1 J14 J26 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8024&r=lab |
| By: | Thushyanthan Baskaran (Gothenburg Centre of Globalization and Development, Department of Economics, University of Gothenburg, Sweden); Zohal Hessami (Department of Economics, University of Konstanz, Germany) |
| Abstract: | This paper studies the relationship between globalization and the composition of public education expenditures. The theoretical model is embedded in a median voter setting and is based on the assumption that globalization leads to lower tax revenues as well as an increase in the relative wage of high-skilled workers. Overall, the theoretical discussion suggests that globalization induces a shift from primary to tertiary education expenditures, which is backed up by empirical evidence from dynamic panel estimations for 121 countries over the 1992 - 2006 period. A possible implication of the shift in educational priorities towards higher education is an increase in income inequality |
| Keywords: | Globalization, public education expenditures, educational policy |
| JEL: | F15 H42 H52 |
| Date: | 2010–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1003&r=lab |
| By: | Olena Nizalova |
| 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. [IZA Discussion Paper No. 5192] |
| Keywords: | wage elasticity, informal care supply, labor supply, elderly care, family obligations |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2916&r=lab |
| By: | Arusha Cooray (School of Economics, University of Wollongong); Niklas Potrafke (Department of Economics, University of Konstanz, Germany) |
| Abstract: | We investigate empirically whether political institutions or culture and religion underlie gender inequality in education. The dataset contains up to 157 countries over the 1991-2006 period. The results indicate that political institutions do not significantly influence education of girls: autocratic regimes do not discriminate against girls in denying educational opportunities and democracies do not discriminate by gender when providing educational opportunities. The primary influences on gender inequality in education are culture and religion. Discrimination against girls is especially pronounced in Muslim dominated countries. |
| Keywords: | Gender discrimination, education, democracy, religion |
| JEL: | O11 O15 O43 O57 P26 P36 Z12 |
| Date: | 2010–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1001&r=lab |
| By: | K. Pushpangadan |
| Abstract: | The wage rate in s casual labour market, paddy field labour, is estimated from a reduced form version of a supply and demand model after incorporating literacy, caste and the degree of modernisation in the structural equations. The empirical evidence shows that the degree of unionisation is the only factor that affects the wage rates in one of the most important labour markets in Kerala. The adjustment of paddy output and its components, area and yield, to wage increase is brought out by comparative static analysis of Kerala. The estimation of the model from district level data provides an explanation for the observed decline in output and area and increase in the yield of paddy since 1975/76. [Working Paper No. 244] |
| Keywords: | labour, market, paddy field labour, literacy, caste, modernisation, unionisation, Kerala, Kerala |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2910&r=lab |
| By: | Staneva, Anita (Swansea University); Arabsheibani, Reza (Swansea University); Murphy, Philip D. (Swansea University) |
| Abstract: | This paper uses quantile regression techniques to analyze heterogeneous patterns of return to education across the conditional wage distribution in four transition countries. We correct for sample selection bias using a procedure suggested by Buchinsky (2001), which is based on a Newey (1991, 2009) power series expansion. We also examine the empirical implications of allowing for the endogeneity of schooling, using the control function approach proposed by Lee (2007). Using household data from Bulgaria, Russia, Kazakhstan and Serbia in 2003, we show that the return to education is heterogeneous across the earnings distribution. It is also found that accounting for the endogeneity of schooling leads to a higher rate of return to education. |
| Keywords: | rate of return to education, endogeneity, sample selection, quantile regression |
| JEL: | C14 I2 J24 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5210&r=lab |
| By: | Kuhn, Peter J. (University of California, Santa Barbara); Shen, Kailing (Xiamen University) |
| Abstract: | We study firms' advertised gender preferences in a population of ads on a Chinese internet job board, and interpret these patterns using a simple employer search model. The model allows us to distinguish firms’ underlying gender preferences from firms’ propensities to restrict their search to their preferred gender. The model also predicts that higher job skill requirements should reduce the tendency to gender-target a job ad; this is strongly confirmed in our data. We also find that firms' underlying gender preferences are highly job-specific, with many firms requesting men for some jobs and women for others, and with one third of the variation in gender preferences within firm*occupation cells. |
| Keywords: | discrimination, gender, China, internet, search |
| JEL: | J71 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5195&r=lab |
| By: | Pilar García Gómez; Sergi Jiménez Martín; Judit Vall Castello |
| Abstract: | In this paper we analyze the trends in labor force participation and transitions to benefit programs of older workers in relation to health trends as well as recent Social Security reforms. Our preliminary conclusions are pessimistic regarding the effect of health improvements on the labor market attachment of older workers since we show that despite the large improvements in the mortality rates among older individuals in Spain, the employment rates of individuals older than fifty-five remain lower than the ones observed in the late 1970s. Some caution should remain in our conclusions as the evidence on health trends is inconclusive. Regarding the effect of Social Security reforms, we find that both the 1997 and the 2002 reform decreased the stock into old-age benefits at the cost of an increased share of the participation into disability. Finally, we find that there was a significant increase in the outflow from employment into disability after the 2002 reform. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2010-24&r=lab |
| By: | Christian Belzil; Jörgen Hansen |
| Abstract: | Using a structural dynamic programming model, we investigate the relative importance of family background variables and individual specific abilities in explaining cross-sectional differences in schooling attainments and wages. Given scholastic ability, household background variables (especially parents' education) account for 68% of the explained cross- sectional variations in schooling attainments. When the effects of household background variables on ability are also taken into account, the percentage raises to 85%. However, individual differences in wages are mostly explained by abilities. Only 27% of the explained variation in wages is accounted for by parents’ background variables as opposed to 73% by unobserved abilities (orthogonal to family background variables). When scholastic ability is correlated with family background variables, ability endowments explain as much as 81% of individual wages. [Working Paper No. 973] |
| Keywords: | intergenerational education correlation, endogenous schooling, household characteristics, dynamic programming |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2892&r=lab |
| By: | Poot, Jacques (University of Waikato); Stillman, Steven (Motu Economic and Public Policy Research Trust) |
| Abstract: | Many immigrants are overqualified in their first job after arrival in the host country. Education-occupation mismatch can affect the economic integration of immigrants and the returns to education and experience. The extent of this problem has been measured in recent years by means of micro level data in Australia, North America and Europe. However, these papers have typically ignored the importance of allowing for heterogeneity, in particular by qualification level and years in the destination country. In this paper, we use micro data from the 1996, 2001 and 2006 New Zealand censuses to examine differences between each migrant’s actual years of education and the estimated typical years of education in the narrowly defined occupation in which they work. We find that migrants living in New Zealand for less than 5 years are on average overeducated, while earlier migrants are on average undereducated. However, once accounting for heterogeneity, we find that both overeducated and undereducated migrants become, with increasing years of residence in New Zealand, more similar to comparable native born. Convergence from overeducation is stronger than from undereducation. |
| Keywords: | immigration, occupation, skill transferability, job-worker mismatch, discrimination, New Zealand |
| JEL: | F22 J21 J61 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5211&r=lab |
| By: | Bick, Alexander |
| Abstract: | Consistent with facts for a cross-section of OECD countries, I document that the labor force participation rate of West German mothers with children aged zero to two exceeds the corresponding child care enrollment rate whereas the opposite is true for mothers with children aged three to mandatory school age. I develop a life-cycle model that explicitly accounts for this age-dependent relationship through various types of non-paid and paid child care. The calibrated version of the model is used to evaluate two recently passed policy reforms concerning the supply of subsidized child care for children aged zero to two in Germany. These counterfactual policy experiments suggest that the lack of subsidized child care constitutes indeed for some females a barrier to participate in the labor market and depresses fertility. |
| Keywords: | Child Care; Fertility; Life-cycle Female Labor Supply |
| JEL: | J13 J22 D10 |
| Date: | 2010–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25474&r=lab |
| By: | Jacques Poot (Motu Economic and Public Policy Research & University of Waikato); Steven Stillman (Motu Economic and Public Policy Research & University of Waikato) |
| Abstract: | Many immigrants are overqualified in their first job after arrival in the host country. Education-occupation mismatch can affect the economic integration of immigrants and the returns to education and experience. The extent of this problem has been measured in recent years by means of micro level data in Australia, North America and Europe. However, these papers have typically ignored the importance of allowing for heterogeneity, in particular by qualification level and years in the destination country. In this paper, we use micro data from the 1996, 2001 and 2006 New Zealand censuses to examine differences between each migrant’s actual years of education and the estimated typical years of education in the narrowly defined occupation in which they work. We find that migrants living in New Zealand for less than 5 years are on average overeducated, while earlier migrants are on average undereducated. However, once accounting for heterogeneity, we find that both overeducated and undereducated migrants become, with increasing years of residence in New Zealand, more similar to comparable native born. Convergence from overeducation is stronger than from undereducation. |
| Keywords: | immigration, occupation, skill transferability, job-worker mismatch, discrimination, New Zealand. |
| JEL: | F22 J21 J61 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201023&r=lab |
| By: | Theurl, Engelbert (Department of Economics and Statistics, University of Innsbruck); Winner, Hannes (University of Salzburg) |
| Abstract: | Empirical evidence from U.S. studies suggests that female physicians earn less than their male counterparts, on average. The earnings gap does not disappear when individual and market characteristics are controlled for. This paper investigates whether a gender earnings difference can also be observed in a health care system predominantly financed by public insurance companies. Using a unique data set of physicians’ earnings recorded by a public social security agency in an Austrian province between 2000 and 2004, we find a gender gap in average earnings of about 32 percent. A substantial share of this gap (20 to 47 percent) cannot be explained by individual and market characteristics, leaving labor market discrimination as one possible explanation for the observed gender earnings difference of physicians. |
| Keywords: | Health care financing; physician earnings; wage composition |
| JEL: | I11 I18 J31 J71 |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2010_015&r=lab |
| By: | Leela Gulati |
| Abstract: | This paper takes a look at the women urban industrial labour force in India. [Working Paper No. 127] |
| Keywords: | Women, labour, force, india, urban, industrial |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2899&r=lab |
| By: | Fortin, Bernard (Université Laval); Jacquemet, Nicolas (University of Paris 1 Panthéon-Sorbonne); Shearer, Bruce S. (Université Laval) |
| Abstract: | We develop and estimate a generalized labour supply model that incorporates work effort into the standard consumption-leisure trade-off. We allow workers a choice between two contracts: a piece rate contract, wherein he is paid per unit of service provided, and a mixed contract, wherein he receives an hourly wage and a reduced piece rate. This setting gives rise to a non-convex budget set and an efficient budget constraint (the upper envelope of contract-specific budget sets). We apply our model to data collected on specialist physicians working in the Province of Quebec (Canada). Our data set contains information on each physician's labour supply and their work effort (clinical services provided per hour worked). It also covers a period of policy reform under which physicians could choose between two compensation systems: the traditional fee-for-service, under which physicians receive a fee for each service provided, and mixed remuneration, under which physicians receive a per diem as well as a reduced fee-for-service. We estimate the model using a discrete choice approach. We use our estimates to simulate elasticities and the effects of ex ante reforms on physician contracts. Our results show that physician services and effort are much more sensitive to contractual changes than is their time spent at work. Our results also suggest that a mandatory reform, forcing all physicians to adopt the mixed remuneration system, would have had substantially larger effects on physician behaviour than those observed under the voluntary reform. |
| Keywords: | labour supply, effort, contracts, practice patterns of physicians, discrete choice econometric models, mixed logit |
| JEL: | C25 J22 J33 I10 J44 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5188&r=lab |
| By: | Bent Jesper Christensen (School of Economics, Aarhus University and CREATES); Malene Kallestrup Lamb (School of Economics, Aarhus University) |
| Abstract: | People quit the labor force for many different reasons, voluntarily or not, through various arrangements such as unemployment benefits, disability benefits or specially designed early retirement schemes. This paper complements the existing literature by considering a large, register-based sample including objective medical diagnosis codes. We estimate detailed hazard models of duration until retirement, controlling for unobserved heterogeneity and nonparametric baseline hazards, as well as observed heterogeneity through time-varying explanatory variables. These include diagnosis codes, along with a host of demographic, labor market and financial regressors. The panel structure of the data allows following individuals year by year from the age of 50 and precisely measure changes in objectively measured health and other regressors, as well as labor market status. We consider 12 broad, mutually exclusive and exhaustive categories of health diagnoses defined by aggregation across ICD codes. The use of objective medical diagnosis codes should eliminate the justification bias due to self-reports of health, and the large sample size obtained by using register rather than survey data should mitigate the e¤ect of any remaining mismeasurement of true work incapacity. Together, these improvements should help distinguish empirically important effects of health and economic variables on retirement. We distinguish a number of alternative exit routes, in particular, disability, early retirement, unemployment, and others (including out of the labor force and welfare). We estimate both single risk models, lumping all retirement states, and competing risk specifications, including all separate exit routes. Throughout, females are included in the estimations, and we present separate results by gender. We find sizeable differences in retirement behavior across marital status, gender, labor market attachment, occupation, income, and in particular health. We find that the disability retirement exit route that requires specific medical criteria to be met is different from the early retirement route. The latter shares similarities with private pension schemes in a number of countries, including the U.S., where benefits are tied to previous wages, and employers also contribute to this retirement scheme. These differences are pronounced within labor market attachment, income, and in particular health. Furthermore, unemployment followed by early retirement is different from unemployment followed by other programs regarding marital status, gender, income, and health. These comparisons hinge on the competing risk framework. Finally, even when using objective medical diagnosis measures we still find significant effects from health on retirement. Thus, not all health impact on retirement reported in earlier literature was due to justification bias. |
| Keywords: | Competing risks, Duration analysis, Grouped data, Justification bias, Objective medical diagnosis codes, Retirement, Unobserved heterogeneity. |
| JEL: | I18 J26 C41 |
| Date: | 2010–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2010-62&r=lab |
| By: | Gabrielle Demange; Robert Fenge |
| Abstract: | This paper analyzes in a two-country model the impact of students' mobility on the country-specific level of higher educational quality. Individuals decide whether and where to study based on their individual ability and the implemented quality of education. We show that the mobility of students affects educational quality in countries and welfare in a very different way depending on the degree of return migration. With a low return probability, countries choose suboptimally differentiated levels of educational quality, or even no differentiation at all. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2010-27&r=lab |
| By: | Barrett, Alan (ESRI, Dublin); Kelly, Elish (Economic and Social Research Institute, Dublin) |
| Abstract: | In the mid 2000s Ireland experienced a large inflow of immigrants, partly in response to strong economic growth but also in response to its decision to allow full access to its labour market when EU expansion occurred in May 2004. Between 2004 and 2007, the proportion of non-nationals living in Ireland almost doubled, increasing from 7.7 to 13.1 percent. Between 2008 and 2009, Ireland experienced one of the most acute downturns in economic activity in the industrialised world, with a cumulative fall in Gross National Product of close to 14 percent. In this paper, we assess how this downturn has impacted upon the employment outcomes of non-nationals relative to natives. We find huge job losses among immigrants, with an annual rate of job loss of close to 20 percent in 2009, compared to 7 percent for natives. A higher rate of job loss for immigrants is found to remain when we control for factors such as age and education. We also show how an outflow of non-nationals is occurring. The findings have many implications. In particular, the results point to economic vulnerability for immigrants. However, they also point to a potential macroeconomic benefit to Ireland in terms of a flexible labour supply adjustment. |
| Keywords: | recession, Ireland, immigration |
| JEL: | J61 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5218&r=lab |
| By: | Benedictis, Geovana; Calfat, Germán; Jara, Karina |
| Abstract: | We analyse the links between remittances and child education in Ecuador with special emphasis on the influences in supply conditions at the regional level. Our results point out to the favourable role of remittances on education, suggesting at the same time, the importance of an efficient basic infrastructure in the educational system, as a key element in fostering positive outcomes. The positive effect of remittances on child education is better understood within the context of public policies designed to improve and equalize educational supply conditions among the population. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:iob:wpaper:2010006&r=lab |
| By: | Andersen, Torben (University of Aarhus); Svarer, Michael (University of Aarhus) |
| Abstract: | The consequences of business cycle contingencies in unemployment insurance systems are considered in a search-matching model allowing for shifts between “good” and “bad” states of nature. We show that not only is there an insurance argument for such contingencies, but there may also be an incentive argument. Since benefits may be less distortionary in a recession than a boom, it follows that counter-cyclical benefits reduce average distortions compared to state independent benefits. We show that optimal (utilitarian) benefits are counter-cyclical and may reduce the structural (average) unemployment rate, although the variability of unemployment may increase. |
| Keywords: | unemployment benefits, business cycle, insurance, incentives |
| JEL: | J6 H3 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5196&r=lab |
| By: | Borodak, Daniela (Groupe ESC-Clermont); Piracha, Matloob (University of Kent) |
| Abstract: | This paper analyses the occupational choice of return migrants. Using the CBSAXA data on different aspects of migration in Moldova, we find that those who stayed illegally in the host country tend to go in wage employment on return to the home country. We also show that relatively better educated tend not be in formal employment, i.e., appear not to participate in the labour market whereas those with relatively lower skills or who obtained worse than expected outcome in the host country are more likely to be wage employed in the home country on return. We discuss intuition of these paradoxical results in the paper. |
| Keywords: | sample selection, return migration, occupational choice, Moldova |
| JEL: | C35 F22 J24 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5207&r=lab |
| By: | Persson, Mattias (Department of Business, Economics, Statistics and Informatics); Svensson, Mikael (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | In this paper we estimate the effect of class-size on the prevalence of physical and verbal bullying in Swedish schools. We use self-reported individual level data from approx. 3 100 Swedish adolescents in the 9th grade (aged 15-16) regarding their experience of bullying in the school environment. The data covers 40 schools containing 159 classes. We run probit regressions, school fixed-effects probit regressions controlling for between-school endogeneity, as well as using an instrumental variable approach controlling for between- and within-school endogeneity. The results indicate, giving the same conclusion in all specifications, that bullying is not less or more prevalent in smaller classes. However, there are some results indicating that in smaller classes there is a higher probability that an adolescent self-identifies as a bully. |
| Keywords: | Bullying; Class-size; School; Adolescents; Sweden |
| JEL: | H75 I12 I21 |
| Date: | 2010–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2010_007&r=lab |
| By: | Heineck, Guido (IAB, Nürnberg); Wölfel, Oliver (IAB, Nürnberg) |
| Abstract: | It is well known that individuals' risk attitudes are related to behavioral outcomes such as smoking, portfolio decisions, and also educational attainment, but there is barely any evidence on whether parental risk attitudes affect the educational attainment of dependent children. We add to this literature and examine children's secondary school track choice in Germany where tracking occurs at age ten and has a strong binding character. Our results indicate no consistent patterns for paternal risk preferences but a strong negative impact of maternal risk aversion on children's enrollment in upper secondary school. |
| Keywords: | educational choice, risk attitudes, SOEP |
| JEL: | I21 J24 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5197&r=lab |
| By: | Francisco Gallego; Borja Larraín |
| Abstract: | Using a novel data base for three emerging markets, we find that the type of large shareholder matters for CEO compensation. In particular, we find a compensation premium of about 30 log points for professional (not controller-related) CEOs working in firms controlled by a family compared to firms controlled by other large shareholders. The premium cannot be explained away by standard firm characteristics, observable executive skills (e.g., education or tenure), or the compensation of the CEO in herformer job. The premium comes mostly from family firms with absent founders and when sons are involved. |
| Keywords: | CEO compensation, Large shareholders, family firms, emerging markets |
| JEL: | G3 J3 M52 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:379&r=lab |
| By: | Eriksson, Tor (Aarhus School of Business); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | Assuming that people care not only about what others do but also on what others think, we study respect as a non-monetary source of motivation in a context where the length of the employment relationship is endogeneous. In our three-stage gift-exchange experiment, the employer can express respect by giving the employee costly symbolic rewards after observing his level of effort. This experiment sheds light on the extent to which symbolic rewards are used, how they affect employees’ further effort, the duration of relationships, and the profits of employers. Furthermore, we study whether employers’ decisions to give symbolic rewards are driven by strategic considerations, by manipulating the bargaining power of employers and employees. We find that employers make use of symbolic rewards and chiefly to express their satisfaction with the employee. Indeed, symbolic rewards are more frequently used when there is excess supply of labor in the market while they are used in almost the same proportion when the market is balanced and when there is excess demand of labor. They are associated with higher profits and increased probability of continuing employment relationships. Overall, however, the opportunity of expressing respect does not improve efficiency compared with an environment in which it does not exist, possibly due to a crowding-out of extrinsic incentives by the availability of non-monetary incentives. |
| Keywords: | respect, symbolic rewards, incentives, labor market, experiment |
| JEL: | C91 J32 J64 M52 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5200&r=lab |
| By: | Lindo, Jason M. (University of Oregon) |
| Abstract: | Although there exists a large literature documenting various consequences of job loss, this paper is the first to explore the extent to which the health effects of job displacement extend to the children of displaced workers and also the first to consider whether there are any harmful effects for children who are not yet born when the separation occurs. I use detailed work and fertility histories from the Panel Study of Income Dynamics to estimate the effect of parents' job displacements on children's birth weights. These data allow for an identification strategy that essentially compares the outcomes of children born after a displacement to the outcomes of their siblings born before using mother fixed effects. I find that husbands’ job losses have significant negative effects on infant health. They reduce birth weights by approximately four and a half percent with suggestive evidence that the effect is concentrated on the lower half of the birth weight distribution. |
| Keywords: | children, infant health, job loss, displacement |
| JEL: | I10 J13 J63 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5213&r=lab |
| By: | Konle-Seidl, Regina (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "The current low participation rate of low-skilled workers in vocational re-training activities as well as the relatively high share of youth without vocational qualification are major challenges for German labour market policies. Recently implemented programs by the Federal Employment Service (BA) to improve the management of school-to-work transitions as well as re-training activities of already employed workers are analyzed in the framework of 'Transitional Labour Markets' (TLM). The TLM approach provides a series of proposals to manage social risks deriving from the need of making transitions during the life course. Preliminary evaluation results of early intervention and BA re-training programs are promising so far. However, extending the existing programs or even institutionalizing life-long learning as a social right by converting contribution based unemployment insurance into employment insurance - a prominent TLM recommendation - would require high financial resources and possibly undermine individual as well as corporate responsibility." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Übergangsarbeitsmarkt, aktivierende Arbeitsmarktpolitik, Weiterbildung, Niedrigqualifizierte, ältere Arbeitnehmer, Jugendliche, erste Schwelle, Berufseinmündung |
| JEL: | J62 J65 D78 |
| Date: | 2010–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201018&r=lab |
| By: | Francisco Gallego; José Tessada |
| Abstract: | Sudden stops and international financial crises have been a main feature of developing countries in the last three decades. While their aggregate effects are well known, the disaggregated channels through which they work are not well explored yet. In this paper, we study the sectoral responses that take place over episodes of sudden stops. Using job flows from a sectoral panel dataset for four Latin American countries, we find that sudden stops are characterized as periods of lower job creation and increased job destruction. Moreover, these effects are heterogeneous across sectors: we find that when a sudden stop occurs, sectors with higher dependence on external financing experience lower job creation. In turn, sectors with higher liquidity needs experience significantly larger job destruction. This evidence is consistent with the idea that dependence on external financing affects mainly the creation margin and that exposure to liquidity conditions affects mainly the destruction margin. Overall, our results confirm the large labor market effects of sudden stops, and provide evidence of financial conditions being an important transmission channel of sudden stops within a country, highlighting the role of financial frictions in the restructuring process in general. |
| Keywords: | Sudden stops, Gross job flows, Adjustment, Financial frictions. |
| JEL: | E24 F3 G21 J63 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:378&r=lab |
| By: | Kim, Seonghoon (Ohio State University); Deng, Quheng (Chinese Academy of Social Sciences); Fleisher, Belton M. (Ohio State University); Li, Shi (Beijing Normal University) |
| Abstract: | We find that second-generation effects of in utero and early childhood malnutrition on the school participation of the offspring of mothers who experienced the China Great Leap Forward Famine. The direct impact on entrance to senior high school is also negative, but smaller in magnitude than that on entrance to junior high school. Given that entering senior high school is contingent on completion of junior high school, the direct impact on entrance to senior high school obviously understates the total impact on the second generation’s accumulation of human capital. Our estimation results are generally robust to IV estimation. |
| Keywords: | malnutrition, health, schooling, Barker hypothesis, China Famine |
| JEL: | I12 J16 P36 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5194&r=lab |
| By: | Dalen, H.P. van (Tilburg University); Henkens, K. (Tilburg University) |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-4260808&r=lab |
| By: | James MacGee (University of Western Ontario); Jie Zhou (Nanyang Technological University) |
| Abstract: | This paper investigates the effect of private pensions on the retirement wealth distribution. The model incorporates stochastic private pension coverage into a life- cycle model with stochastic earnings. The predictions of the calibrated model are compared to the distribution of retirement net worth and private pension wealth in the PSID. While private pensions lead to higher wealth inequality and reduces the lifetime earnings - retirement wealth correlation, the model still generates too little wealth inequality. However, when we extend the model to include heterogeneous life-cycle earnings profiles and permanent return differences across households, we find that the model largely accounts for the sizeable variation in retirement wealth. |
| Keywords: | private pensions; Wealth inequality; retirement |
| JEL: | D31 E21 J32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:epuwoc:20102&r=lab |
| By: | Winters, John V |
| Abstract: | Researchers have consistently shown that the stock of human capital in an area, measured as the share of the adult population with a college degree, is a strong predictor of future population growth. This paper examines this relationship for U.S. non-metropolitan counties and posits that student migration for higher education may play an important role. Students often move to an area for college and then stay in the area after their education is complete, causing the area’s educated population to grow. Empirical evidence suggests that student migration explains nearly all of the greater in-migration to highly educated non-metropolitan counties. Implications for non-metropolitan brain drain are discussed. |
| Keywords: | population growth; migration; human capital; non-metropolitan counties; college |
| JEL: | R11 R23 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25592&r=lab |
| By: | Tominey, E. |
| Abstract: | This thesis focuses on two dimensions of the child production function - the technology of human capital formation and the role of speci fic family inputs into human capital. The first two chapters explore the technology by which inputs produce child human capital. Speci fically, for given parental lifetime income, these ask whether the timing of income matters for later outcomes of the children. Two methodologies estimate the effect at different margins. Firstly in a fully flexible model, the relationship between parental income at child ages 0-5, 6-11 and 12-17 and subsequent child outcomes is estimated nonparametrically, allowing for complementarity across periods. Income aged 0-5 is as important in general as income at age 6-11 for child human capital formation. Complementarities exist between 0-5 and 6-11 for households with low permanent income, which are those likely to be credit constrained. Similarly, very strong complementarities are found between early years income and income during adolescence (age 12-17) for the group of poor parents. Chapter 3 analyses the role of permanent and transitory income shocks at different ages, upon adolescent human capital. Empirical results suggest the effect of permanent shocks declines across age. This is intuitive, given that a permanent shock changes household wealth and hence a shock at age 1 drives more future income realisations than a later shock. Transitory shocks on the other hand, have an increasing effect upon child outcomes across child age. Further, there is evidence of intrahousehold insurance against paternal transitory income shocks. The fi nal two chapters of the thesis look at parental inputs in the production function. Chapter 4 allows the life cycle of skill formation to begin pre-birth, by estimating the role of maternal smoking during pregnancy upon birth outcomes. Results suggest a large proportion of the correlation is explained by a maternal fi xed effect. Finally, chapter 5 offers a cross country comparison of the similarities in child test score gaps, by a range of measures of family inequality. Despite wide institutional differences, this chapter estimates homogeneous correlates for maternal education, family size and child gender upon child achievement, but differences in the covariates of lone parenthood and ethnicity. |
| Date: | 2010–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucllon:http://eprints.ucl.ac.uk/20476/&r=lab |
| By: | Björklund, Anders (Swedish Institute for Social Research, Stockholm University); Roine, Jesper (SITE, Stockholm School of Economics); Waldenström, Daniel (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This paper presents new evidence on intergenerational mobility in the top of the income and earnings distribution. Using a large dataset of matched father-son pairs in Sweden, we find that intergenerational transmission is very strong in the top, more so for income than for earnings. In the extreme top (top 0.1 percent) income transmission is remarkable with an IG elasticity above 0.9. We also study potential transmission mechanisms and find that sons’ IQ, non-cognitive skills and education are all unlikely channels in explaining this strong transmission. Within the top percentile, increases in fathers’ income are, if anything, negatively associated with these variables. Wealth, on the other hand, has a significantly positive association. Our results suggest that Sweden, known for having relatively high intergenerational mobility in general, is a society where transmission remains strong in the very top of the distribution and that wealth is the most likely channel. |
| Keywords: | Intergenerational income mobility; top incomes; earnings inequality; income inequality; welfare state; quantile regression |
| JEL: | D31 J62 |
| Date: | 2010–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2010_009&r=lab |
| By: | Hazarika, Gautam (University of Texas at Brownsville); Viren, Vejoya (University of Texas at Brownsville) |
| Abstract: | This paper examines the effect of prior participation in early childhood developmental programs, considered endogenous, upon 7-19 years olds' school enrollment and grade progression in rural North India. It hopes both to extend to less developed countries recent influential research on the long-term benefits of early childhood interventions in the United States, and to make a case for the inclusion of such interventions amongst developing nations’ policy initiatives toward expanding schooling. Analysis of data from the World Bank's 1997-98 Survey of Living Conditions in Uttar Pradesh and Bihar yields the findings that early childhood developmental program attendance at ages 0-6 raises the probability of school enrollment among average 7-19 year olds by 31 percentage points, and that this beneficial early experience also significantly hastens students’ grade progression. |
| Keywords: | early childhood development, less developed country, India, schooling |
| JEL: | I21 O12 O15 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5209&r=lab |
| By: | Stephens, Eric (University of Alberta, Department of Economics) |
| Abstract: | If governments could reduce inequality in human capital outcomes, say by targeting education funds to low productivity neighborhoods or regions, should they do so? All things equal, a lower dispersion in the distribution of human capital is generally considered desirable. This paper examines the use of education spending as a redistributive tool, when there is a nonlinear tax system in place. It seems plausible that greater equality in productivity, which implies less redistribution through taxation, could mean less distortion to labor markets and an increase in social welfare. The results presented in this paper suggest the contrary. It is shown that tax redistributions that take place after education is obtained, not only eliminate the need for educational transfers, but imply an optimal education policy that generally spends even less on those with lower initial endowments. |
| Keywords: | optimal nonlinear taxation; redistribution; equality of opportunity |
| JEL: | D63 D82 H21 I22 I28 |
| Date: | 2010–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2010_015&r=lab |
| By: | Fairlie, Robert W. (University of California, Santa Cruz); Kapur, Kanika (University College Dublin); Gates, Susan (RAND) |
| Abstract: | The focus on employer-provided health insurance in the United States may restrict business creation. We address the limited research on the topic of "entrepreneurship lock" by using recent panel data from matched Current Population Surveys. We use difference-indifference models to estimate the interaction between having a spouse with employer-based health insurance and potential demand for health care. We find evidence of a larger negative effect of health insurance demand on business creation for those without spousal coverage than for those with spousal coverage. We also take a new approach in the literature to examine the question of whether employer-based health insurance discourages business creation by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure of identifying age in months from matched monthly CPS data, we compare the probability of business ownership among male workers in the months just before turning age 65 and in the months just after turning age 65. We find that business ownership rates increase from just under age 65 to just over age 65, whereas we find no change in business ownership rates from just before to just after for other ages 55-75. We also do not find evidence from the previous literature and additional estimates that other confounding factors such as retirement, partial retirement, social security and pension eligibility are responsible for the increase in business ownership in the month individuals turn 65. Our estimates provide some evidence that "entrepreneurship lock" exists, which raises concerns that the bundling of health insurance and employment may create an inefficient level of business creation. |
| Keywords: | entrepreneurship, health insurance, medicare, job lock |
| JEL: | L26 I1 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5203&r=lab |
| By: | Ayako Kondo; Dongshu Ou |
| Abstract: | This paper investigates the occupational attainment and job mobility of permanent rural-to-urban migrants and compares them with migrants who were born with an urban hukou. Using data from the 2003 China General Social Survey, we examine how much of the gaps in occupational-prestige scores between rural- and urban-born migrants can be explained by differences in observable characteristics up to the time of migration. We find that, with controls for these characteristics, the difference in occupational attainment between rural and urban migrants becomes statistically insignificant or even positive for some subgroups. In contrast, our analysis of job mobility reveals that rural migrants are generally more mobile and also more likely to move to better jobs by changing work units, whereas urban migrants are more likely to be promoted within a work unit. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0793&r=lab |
| By: | Aronsson, Thomas (Umeå University); Blomquist, Sören (Uppsala Center for Fiscal Studies) |
| Abstract: | In this paper, we consider how the retirement age as well as a tax financed pension system ought to respond to a change in the standard deviation of the length of life. In a first best framework, where a benevolent government exercises perfect control over the individuals’ labor supply and retirement-decisions, the results show that a decrease in the standard deviation of life-length leads to an increase in the optimal retirement age and vice versa, if the preferences for “the number of years spent in retirement” are characterized by constant or decreasing absolute risk aversion. A similar result follows in a second best setting, where the government raises revenue via a proportional tax (or pension fee) to finance a lump-sum benefit per year spent in retirement. We consider two versions of this model, one with a mandatory retirement age decided upon by the government and the other where the retirement age is a private decision-variable. |
| Keywords: | Uncertain lifetime; retirement; pension system |
| JEL: | D61 D80 H21 H55 |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uufswp:2010_011&r=lab |
| By: | Hongyan Yang (Department of Economics, University of Konstanz, Germany) |
| Abstract: | This paper employs a two-period life-cycle model to derive the optimal tax policy when educational investments are subject to credit constraints. Credit constraints arise from the limited commitment of debitors to repay loans and are endogenously determined by private banks under the non-default condition that individuals can-not be better off by defaulting. We show that the optimal redistributive taxation trades the welfare gain of reducing borrowing demand and of changing the credit constraints against the efficiency costs of distorting education and labor supply. In addition, we compare the optimal taxation with that when credit constraints are taken as given. If income taxation decreases (increases) the borrowing limit, taking credit constraints as given leads to a too high (low) labor tax rate. Thus, ignoring the effects of tax policy on credit constraints overestimates (underestimates) the welfare effects of income taxation. Numerical examples show that income taxation tightens the credit constraints and the optimal tax rates are lower when credit constrains are endogenized. The intuition is that redistributive taxation reduces the incentive to invest in education and to work, thus exaggerating the moral hazard problems associated with credit constraints. |
| Keywords: | labor taxation, human capital investment, credit constraints |
| JEL: | H21 I2 J2 |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1004&r=lab |
| By: | Marczak, Martyna (University of Hohenheim); Beissinger, Thomas (University of Hohenheim) |
| Abstract: | This paper establishes stylized facts about the cyclicality of real consumer wages and real producer wages in Germany. As detrending methods we apply the deterministic trend model, the Beveridge-Nelson decomposition, the Hodrick-Prescott filter, the Baxter-King filter and the structural time series model. The detrended data are analyzed both in the time domain and in the frequency domain. The great advantage of an analysis in the frequency domain is that it allows to assess the relative importance of particular frequencies for the behavior of real wages. In the time domain we find that both real wages display a procyclical pattern and lag behind the business cycle. In the frequency domain the consumer real wage lags behind the business cycle and shows an anticyclical behavior for shorter time periods, whereas for longer time spans a procyclical behavior can be observed. However, for the producer real wage the results in the frequency domain remain inconclusive. |
| Keywords: | real wages, business cycle, frequency domain, time domain, Germany, trend-cycle decomposition, structural time series model, phase angle |
| JEL: | E32 C22 C32 J30 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5199&r=lab |
| By: | Andersen, Torben M |
| Abstract: | The potential distortions of job-search incentives caused by unemployment benefits and their financing are well known. However, a benefit-tax scheme also provides insurance having direct utility effects as well as indirect effects on risk taking. The latter mitigates or may even dominate standard incentive effects to produce a non-monotone relation between efficiency (incentives) and equity (insurance). This implies that an increase in both benefits and the tax rate up to some point may increase average income and reduce inequality, i.e., there is not necessarily a trade-off between considerations for efficiency and equity. However, optimal utilitarian policies always position the economy at a point where marginal policy changes involve a trade-off, otherwise policies would not be optimal. |
| Keywords: | incentives; risk sharing; Search; unemployment benefits |
| JEL: | D80 J20 J65 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8025&r=lab |
| By: | Sara Lång |
| Abstract: | This article explores the planning and design of educational facilities from a gender perspective, with a view to guiding future research and policy analysis. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2010/10-en&r=lab |
| By: | Sunanda Sen |
| Abstract: | We need to go beyond the accepted notions relating to the role of women in the economy and society, especially in terms of what is recognized in mainstream theory and policy as "work" done by women. Thus, the traditional gender roles, with the man as the breadwinner and the woman in the role of housekeeper, do not explain the contribution of women in general. We also need to go beyond standard models to interpret the intrahousehold gender inequities. We do not gain much insight from dwelling on the cooperative-conflict type of bargaining concepts either, which are offered in the literature to unfold the process of women's subordination within households. The issues relate to the intrahousehold power structure, which has an inbuilt bias against female members under patriarchy. In terms of a policy agenda, especially in the context of social and economic disparities that affect women in particular, we need to recognize not only the collective social norms but also the unequal power relations that influence the sexual division of labor, both within the family and in the workplace. A notion of "gendered moral rationality," complemented by the Rawlsian concept of "justice as fairness" (implying compensation for the underprivileged), can be used to devise policy that addresses the status of women both in the workplace and at home. We need a concerted move toward sensitization of gender issues and scrutiny entailing a gender audit at every level of activity. This may work at least partially until society is ready to remodel itself by treating men and women equally. |
| Keywords: | Gender; Justice; Feminization of Labor; Utilitarianism and Rationality; Households; Fair Exchange of Skills; Invisible Contribution; Social Reproduction |
| JEL: | J12 J16 J17 J22 J31 J71 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_621&r=lab |
| By: | OECD |
| Abstract: | Addressed to both local practitioners and national policy makers, this guide reviews responses to the recent economic downturn and the steep rise in unemployment in OECD and non-OECD countries, before identifying key principles for returning our communities to more sustainable growth for the future. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2010/13-en&r=lab |
| By: | Jeremy Hurst |
| Abstract: | Sometimes it is argued that the content of a reform is less important in determining whether or not it receives public and legislative approval than the timing of the proposal; the way in which the reform is presented; the discussions with stakeholders; and a multitude of other factors. The OECD has a crosscutting project on these issues, entitled Making Reform Happen. A number of OECD directorates are considering the factors lying behind successful implementation of reforms in their different policy areas, including tax, environment, agriculture, trade, competition, education, health, pensions, product markets and labour markets.<BR>D’aucuns arguent parfois que le contenu d’une réforme est moins important pour déterminer son acceptation par le public et par le législateur que le timing de la proposition, la manière dont la réforme est présentée, les discussions avec les parties prenantes et une multitude d’autres facteurs. L’OCDE a lancé un projet transversal sur ces questions sous le titre Making Reform Happen. Un certain nombre de Directions à l’OCDE étudient les facteurs qui sous-tendent le succès des réformes dans leurs différents domaines, notamment la fiscalité, l’environnement, l’agriculture, le commerce, la concurrence et l’éducation, la santé, les réformes des retraites, des marchés de produits et des marchés du travail. |
| JEL: | D72 D78 I18 |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:51-en&r=lab |
| By: | Carlos Gradín (Universidade de Vigo) |
| Abstract: | In this paper, we use a propensity score-based methodology to analyze the role of demographic and human capital characteristics of minorities in the U.S. in explaining their high occupational segregation with respect to whites. Thus, we measure conditional segregation based on an estimated counterfactual distribution in which minorities are given the relevant characteristics of whites. Our results show that the different levels of attained education by ethnicity and race explain a substantial share of occupational segregation of non-whites in the U.S., while English skills or immigration status are especially relevant for explaining segregation among Hispanics and Asians. |
| Keywords: | conditional occupational segregation, race and ethnicity, United States. |
| JEL: | D63 J15 J16 J71 J82 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2010-185&r=lab |
| By: | Poschke, Markus (McGill University) |
| Abstract: | In contrast to the very large literature on skill-biased technical change among workers, there is hardly any work on the importance of skills for the entrepreneurs who employ those workers, and in particular on their evolution over time. This paper proposes a simple theory of skill-biased change in entrepreneurial technology that fits with cross-country, historical and micro evidence. For this, it introduces two additional features into an otherwise standard occupational choice, heterogeneous firm model à la Lucas (1978): technological change does not benefit all potential entrepreneurs equally, and there is a positive relationship between an individual's potential payoffs in working and in entrepreneurship. If some firms consistently benefit more from technological progress than others, they stay closer to the frontier, and the others fall behind. Because wages rise for all workers, low-productivity entrepreneurs will then at some point exit and become workers. As a consequence, the entrepreneurship rate falls with income per capita, average firm size and firm size dispersion increase with income per capita, and "entrepreneurship out of necessity" falls with income per capita. The paper also documents, for two of the facts for the first time, that these are exactly the relationships prevailing in cross-country data. Quantitatively, the model fits the U.S. experience well. Using the parameters from a calibration to the U.S., the model also explains cross-country patterns quite well. |
| Keywords: | occupational choice, entrepreneurship, firm size, firm entry, growth, skill-biased technical change |
| JEL: | E24 J24 L11 L26 O30 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5202&r=lab |
| By: | D. Narayana |
| Abstract: | The objective of this paper is to give a rigorous and systematic conceptualization of Labour process which could provide a definite view point or approach to the study of evolution of social technology. [Working Paper No. 131] |
| Keywords: | rigorous, systematic, conceptualization, Labour, evolution, social technology |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2900&r=lab |
| By: | Alicia H. Munnell; April Wu; Joshua Hurwitz |
| Abstract: | The Census Bureau just reported a large increase in poverty in the United States. Driven by job loss and long-term unemployment, the poverty rate rose from 13.2 percent to 14.3 percent, as 3.7 million more Americans found themselves with incomes below the poverty threshold.1 Individuals aged 55-64 followed the national trend as they shared in job losses. Those 65 and over, however, saw a decline in their poverty rate. This outcome was the result of the timing of two different adjustments to reflect changes in consumer prices – an extraordinarily large cost-of-living adjustment (COLA) awarded to Social Security beneficiaries in 2009 and a decline in the index used to adjust the poverty threshold for 2009. This pattern is likely to be reversed in the future as Social Security beneficiaries receive no COLAs in 2010 and 2011 and the poverty threshold increases. The discussion proceeds as follows. The first section describes the poverty thresholds and how they are adjusted over time. The second section discusses the importance of Social Security for low-income elderly and how Social Security benefits are adjusted for inflation. The third section speculates about how the indexing procedures are likely to affect the poverty rate of older Americans in 2010 and 2011. |
| Keywords: | savings and consumption |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2010-16&r=lab |
| By: | Pedro Gomis Porqueras; José A. Rodrigues-Neto |
| Abstract: | This paper explores the incentives that students and instructors face when a new technology that grants access to online class materials is introduced. We examine the consequences for attendance and for the composition of live lectures. We also analyze how various sources of heterogeneity in students' characteristics, learning styles, and technologies affect individual incentives to attend lectures when different degrees of access to online resources are available. In particular, we consider heterogeneity in the outside options of students and the effectiveness of different online materials. We obtain some testable implications that may guide empirical researchers towards estimation strategies that better capture how granting access to online class materials impacts attendance and class composition. |
| JEL: | D1 I1 J22 J24 O33 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2010-528&r=lab |