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on Labour Economics |
| By: | Philip Schuster |
| Abstract: | Times of high unemployment always inspire debates on the role of labor market policy and its optimal implementation. This paper uses a dynamic model of search unemployment and bilateral wage bargaining to characterize optimal labor market policy in a possibly turbulent environment. A firing externality, generated by the existence of a partial unemployment insurance system, distorts the pre-policy equilibrium along three margins: job creation, job acceptance, and job destruction. Optimal policy is characterized by a payroll tax, a firing tax, and a hiring subsidy. Endogenous job acceptance demands that a firing tax and a hiring subsidy have to be set equal in any case and cannot be used to correct for the possible failure of the Hosios condition. In that case the optimal policy mix has to be extended by either an output or recruitment tax/subsidy. It is further shown that the derived policy mix is robust to the introduction of economic turbulence in form of state-dependent worker transitions between skill classes. This is crucial as widely discussed intergroup redistribution schemes, like in-work benefits targeted at low-skilled workers, are rendered considerably less effective in that case. Instead of redistribution from high- to low-skilled workers or from firing firms to unemployed workers, the paper identifies a scheme involving redistribution from firing to hiring firms to be optimal. |
| Keywords: | Search and matching, employment subsidies, economic turbulence, policy spill-over |
| JEL: | E24 E61 J08 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2010:2010-29&r=lab |
| By: | Matthias S. Hertweck (University of Basel) |
| Abstract: | This paper addresses the large degree of frictional wage dispersion in US data. The standard job matching model without on-the-job search cannot replicate this pattern. With on-the-job search, however, unemployed job searchers are more will- ing to accept low wage offers since they can continue to seek for better employment opportunities. This explains why observably identical workers may be paid very dif- ferently. Therefore, we examine the quantitative implications of on-the-job search in a stochastic job matching model. Our key result is that the inclusion of variable on-the-job search increases the degree of frictional wage dispersion by an order of a magnitude. |
| Keywords: | Matching, On-the-job Search, Wage Dispersion |
| JEL: | E24 J31 J64 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:02/10&r=lab |
| By: | Anton A. Cheremukhin; Paulina Restrepo-Echavarria |
| Abstract: | The labor wedge accounts for a large fraction of business cycle fluctuations. This paper uses a search and matching model to decompose the labor wedge into three classes of labor market frictions and evaluate their role. We find that frictions to job destruction and bargaining commonly considered in the search literature are not helpful in explaining the labor wedge. We also identify an asymmetric effect of separation, bargaining and matching frictions on unemployment, as well as a potential solution to Shimer's puzzle. |
| Keywords: | Business cycles - Econometric models ; Labor supply ; Unemployment ; Labor turnover |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1004&r=lab |
| By: | Hart, Robert A.; Roberts, J. Elizabeth |
| Abstract: | We have assembled two British data sets to re-examine the behaviour of real wages over the 1927-1937 cycle that contained the Great Depression. Both provide a degree of micro detail that greatly exceeds previous studies. The first consists of annual wages for 36 manufacturing industries. The second is based on blue-collar workers' company payroll data within engineering and metal working firms. It allows us to distinguish between pieceworkers and timeworkers, 14 occupations and 51 travel-to-work geographical districts. We measure the cycle using national unemployment rates as well as rates that match our industrial and district breakdowns. The roles of standard and overtime hours are found to be crucial to the behaviour of real pay during the Depression. Real weekly earnings are strongly procyclical. Real hourly earnings of pieceworkers are also significantly procyclical. Otherwise, real wage measures that do not fully reflect hours changes produce either weak procyclical or acyclical wage responses. |
| Keywords: | the Great Depression; timework; piecework; working time; Real wage cyc licality |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2010-09&r=lab |
| By: | Milu Muyanga; John Olwande; Esther Mueni; Stella Wambugu |
| Abstract: | This paper attempts to evaluate the impact of the free primary education programme in Kenya, which is based on the premise that government intervention can lead to enhanced access to education especially by children from poor parental backgrounds. Primary education system in Kenya has been characterised by high wastage in form of low enrolment, high dropout rates, grade repetition as well as poor transition from primary to secondary schools. This scenario was attributed to high cost of primary education. To reverse these poor trends in educational achievements, the government initiated free primary education programme in January 2003. This paper therefore analyzes the impact of the FPE programme using panel data. Results indicate primary school enrolment rate has improved especially for children hailing from higher income categories; an indication that factors that prevent children from poor backgrounds from attending primary school go beyond the inability to pay school fees. Grade progression in primary schools has slightly dwindled. The results also indicate that there still exist constraints hindering children from poorer households from transiting to secondary school. The free primary education programme was found to be progressive, with the relatively poorer households drawing more benefits from the subsidy. |
| Keywords: | Primary education, Programme evaluation, Propensity score, benefit incidence analysis, Kenya |
| JEL: | I20 I21 I22 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2010-08&r=lab |
| By: | Cappellari, Lorenzo (Università Cattolica del Sacro Cuore); Tatsiramos, Konstantinos (IZA) |
| Abstract: | We investigate the effect of social interactions on labor market outcomes using a direct measure of social contacts based on information about individuals’ three best friends and their characteristics. We examine the effect of the number of employed friends on the transition from non-employment to employment, and we find the existence of significant network effects at the individual level. An additional employed friend increases the probability of finding a job by 3.7 percentage points. This finding is robust to specifications that address the endogeneity of friends’ employment status, which may be induced by correlation with unobserved individual attributes and feedback effects. Considering labor market outcomes, we find evidence of higher wages and employment stability for those with more employed friends, which is consistent with networks acting as an information transmission mechanism. |
| Keywords: | friendship ties, unemployment, networks |
| JEL: | J64 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5240&r=lab |
| By: | Daniel Suryadarma |
| Abstract: | This paper measures the evolution of the gender differences in numeracy among school age children using a longitudinal dataset from Indonesia. A unique feature of the dataset is that it uses an identical test for two survey rounds, which implies that any changes in the gender gap are caused by actual changes in numeracy. To my knowledge, this is the first study that is able to distinguish actual changes in numeracy from changes in the difficulty of the tests. I find that girls outperform boys by 0.09 standard deviations when the sample was around 11 years old. Seven years later, the gap has increased to 0.19 standard deviations. This gap is equivalent to around 18 months of schooling. I find evidence for two explanations for the widening gap. The first is that households invest more resources in girls relative to boys. This behavior appears to be rational, driven by the higher labor market returns to numeracy for girls than for boys. In contrast, I find no marriage market returns to numeracy for either gender. The second explanation is that the Indonesian education system appears to play some role in promoting the gender gap. A particular source of this appears to be the teachers, as the gender gap in numeracy only occurs in schools where more than half of the teachers are female. |
| Keywords: | numeracy, gender gap, education, Indonesia |
| JEL: | I21 J16 O15 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:644&r=lab |
| By: | de Carvalho Filho, Irineu E. |
| Abstract: | This paper studies the effects of household income on labor participation and school enrollment of children aged 10 to 14 in Brazil using a social security reform as a source of exogenous variation in household income. We find that increased benefits are associated with increases in school enrollment for girls, as well as a smaller reduction in their labor participation, but find no effects for boys. We also uncover evidence that the gender of the benefit receiver matters for girls’ labor variables: only benefits received by females reduce girls’ work. |
| Keywords: | social security reform; child labor; family; school enrollment; old-age benefits; Brazil |
| JEL: | J13 O12 N36 |
| Date: | 2010–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26046&r=lab |
| By: | Benoit Dostie |
| Abstract: | In this paper, we estimate returns to classroom and on-the-job firm-sponsored training in terms of value-added per worker using longitudinal linked employee-employer Canadian data from 1999 to 2006. We estimate a standard production function controlling for endogenous training decisions because of perceived net benefits and time-varying market conditions using dynamic panel GMM methods. We find that employees who undertook classroom training are 11 percent more productive than otherwise similar employees. We show that returns to on-the-job training are on average lower (3.4 percent). We provide evidence that these lower returns are due to on-the-job training being more closely related to turnover and more geared toward subjects that are less productivity-enhancing. |
| Keywords: | Productivity, Classroom training, On-the-Job training, Linked employer-employee data, Turnover, Subjects of training |
| JEL: | C23 D24 J31 J63 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1040&r=lab |
| By: | Duncan McVicar (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Jan M. Podivinsky (Economics Division, The University of Southampton) |
| Abstract: | One view of Active Labour Market Programmes (ALMPs) is that they are 'most needed in slack labour markets, where more unemployed workers require help finding jobs. But ALMPs might be less effective in such labour markets because there are fewer vacancies with which programme participants can match. In this paper we use data over a nine year period, across 300 local labour markets, to show that the unemployment exit and job entry impacts of participating in a mandatory ALMP for unemployed young people – the British New Deal for Young People (NDYP) – were negatively correlated with unemployment rates. |
| Keywords: | Active Labour Market Programmes, New Deal for Young People, unemployment, evaluation, heterogeneous effects |
| JEL: | J64 J68 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2010n16&r=lab |
| By: | Andrea Bassanini; Andrea Garnero; Pascal Marianna; Sebastien Martin |
| Abstract: | There is little cross-country comparative evidence on the way labour market institutions shape gross job and worker flows, by and large because comparable data for many countries are scarce. By using a unique harmonised dataset on hirings and separations at the industry-level for a large majority of OECD countries, we fill this gap, by analysing the role of a number of labour and product market institutions in shaping cross-country differences in gross worker flows. In order to identify the effect of policies and institutions we consider an industry-level difference-in-difference approach. The basic premise of this approach is that the effect of a particular policy on gross job flows is greater in industries where the policy is more likely to constrain firm behaviour. We check, however, the robustness of our results using more standard cross-country/time-series estimates. The richness of the data available to us allows estimating the impact of the institutions also on the transitions from job to job, the transitions from job to nonemployment and the transitions from non-employment to jobs. We find that cross-country differences in job protection for open-ended contracts and unemployment benefits can explain a large share of crosscountry variation in gross worker flows. However, the effect of the former is essentially limited to job-tojob flows.<BR>Il y a peu de résultats comparatifs à travers les pays sur la manière dont les institutions du marché du travail façonnent les flux bruts d’emplois et de main d’oeuvre, en raison d’un manque de données comparables pour un certain nombre de pays. Cet article comble cet écart, en s’appuyant sur une base de données harmonisées sur les embauches et les cessations d‘emplois au niveau des secteurs d’activité pour un grand nombre de pays de l’OCDE, et en analysant comment un certain nombre d’institutions nationales des marchés du travail et des produits façonnent les écarts de réallocation de main d’oeuvre entre les pays. Afin d’identifier l’effet des politiques et des institutions nationales, nous considérons un modèle de différence en différences au niveau des secteurs d’activité. Le principe de base de cette méthode est que l’effet d’une certaine politique sur le flux brut d’emplois est supérieur dans les industries où cette politique est de nature à imposer une contrainte sur le comportement des entreprises. Nous vérifions, cependant, la robustesse des résultats en utilisant des estimations plus standards en coupe transversale et série temporelle. La richesse des données disponibles permet également l’estimation de l’impact des institutions sur les transitions d’un emploi à l’autre, les transitions d’un emploi au non-emploi et les transitions du nonemploi vers l’emploi. Nous trouvons que les différences inter-pays dans la protection de l’emploi pour les contrats à durée indéterminée et les prestations de chômage peuvent expliquer une large proportion des variations inter-pays des flux bruts de main d’oeuvre. Cependant, l’effet du premier est essentiellement limité aux flux d’un emploi à l’autre. |
| Keywords: | labour market institutions, worker flows, job-to-job transitions, cross-country data |
| JEL: | J23 J24 J63 |
| Date: | 2010–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:107-en&r=lab |
| By: | Shenila Rawal (Institute of Education, University of London, 20 Bedford Way, London WC1H 0AL.); Geeta Kingdon (Institute of Education, University of London, 20 Bedford Way, London WC1H 0AL.) |
| Abstract: | This paper uses a unique data set from 5028 primary school children in rural India to examine whether the demographic interactions between students and teachers influence student outcomes and whether social distance between student and teacher exacerbates gender, caste and religious gaps in children's achievement. One would expect this to be the case if discrimination and/or role model effects persist in the classroom. School and individual fixed effects methodology are used. In the pupil fixed effects model, across subject variation is used to test whether having a teacher whose gender, caste and religion are the same as that of the student improves student test scores. We find statistically significant positive effects of matching student and teacher characteristics. We find that a student's achievement in a subject in which the teacher shares the same gender, caste and religion as the child is, on average, nearly a quarter of a SD higher than the same child's achievement in a subject taught by a teacher who does not share the child's gender, caste or religion. Policy implications are considered. |
| Keywords: | education, religion, gender |
| JEL: | I2 I21 |
| Date: | 2010–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1018&r=lab |
| By: | Galenianos, Manolis; Kircher, Philipp; Virag, Gabor |
| Abstract: | We build a theoretical model to study the welfare effects and resulting policy implications of firms’ market power in a frictional labor market. Our environment has two main characteristics: wages play a role in allocating labor across firms and there is a finite number of agents. We find that the decentralized equilibrium is inefficient and that the firms’ market power results in the misallocation of workers from the highto the low-productivity firms. A minimum wage forces the low-productivity firms to increase their wage, leading them to hire even more often thereby exacerbating the inefficiencies. Moderate unemployment benefits can increase welfare because they limit firms’ market power by improving the workers’ outside option. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/29706/&r=lab |
| By: | Judith K. Hellerstein (Department of Economics and MPRC,University of Maryland); Melissa P. McInerney (Department of Economics, College of William and Mary); David Neumark (Department of Economics, UCI, NBER, and IZA) |
| Abstract: | We specify and implement a test for the presence and importance of labor market network based on residential proximity in determining the establishments at which people work. Using matched employeremployee data at the establishment level, we measure the importance of these network effects for groups broken out by race, ethnicity, and various measures of skill. The evidence indicates that these types of labor market networks do exist and play an important role in determining the establishments where workers work, that they are more important for minorities and the less-skilled, especially among Hispanics, and that these networks appear to be race-based. |
| Date: | 2010–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:101&r=lab |
| By: | Jenny C. Aker, Christopher Ksoll, and Travis J. Lybbert |
| Abstract: | CGD non-resident fellow Jenny Aker and co-authors report on the results from a randomized evaluation of a mobile phone education program (Project ABC) in Niger, in which adult students learned how to use mobile phones as part of a literacy and numeracy class. Overall, students demonstrated substantial improvements in literacy and numeracy test scores. There is also evidence of persistent impacts: six months after the end of the first year of classes, students in the program retained what they had learned better than others. The effects do not appear to be driven by differences in teacher quality or in teacher and student attendance. The results suggest that simple and relatively cheap information and communication technology can serve as an effective and sustainable learning tool for rural populations. |
| Keywords: | Education |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:223&r=lab |
| By: | Antonio Di Paolo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona, Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain. Institut d’Economia de Barcelona (IEB), Universitat de Barcelona) |
| Abstract: | Drawing on data contained in the 2005 EU-SILC, this paper investigates the disparities in educational opportunities in Italy and Spain. Its main objective is to analyse the predicted probabilities of successfully completing upper-secondary and tertiary education for individuals with different parental backgrounds, and the changes in these probabilities across birth cohorts extending from 1940 to 1980. The results suggest that the disparities in tertiary education opportunities in Italy tend to increase over time. By contrast, the gap in educational opportunity in Spain shows a marked decrease across the cohorts. Moreover, by using an intuitive decomposition strategy, the paper shows that a large part of the educational gap between individuals of different backgrounds is “composed” of the difference in the endowment of family characteristics. Specifically, it seems that more highly educated parents are more able to endow their children with a better composition of family characteristics, which accounts for a significant proportion of the disparities in educational opportunity. |
| Keywords: | Educational Opportunity, Family Background, Birth cohorts, Italy, Spain |
| JEL: | I21 J12 J62 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2010-05&r=lab |
| By: | Fortin, Bernard; Jacquemet, Nicolas; Shearer, Bruce |
| 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 nonconvex 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: | 2010–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2010-30&r=lab |
| By: | Antonio Di Paolo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona, Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain & IEB, Barcelona, Spain); José Luís Raymond (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona, Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain & IEB, Barcelona, Spain); Jorge Calero (Departament d'Economia Política i Hisenda Pública, Universitat de Barcelona, Barcelona, Spain & IEB, Barcelona, Spain) |
| Abstract: | This paper is concerned with the investigation of the intergenerational mobility of education in several European countries and its changes across birth cohorts (1940-1980) using a new mobility index that considers the total degree of mobility as the weighted sum of mobility with respect to both parents. Moreover, this mobility index enables the analysis of the role of family characteristics as mediating factors in the statistical association between individual and parental education. We find that Nordic countries display lower levels of educational persistence but that the degree of mobility increases over time only in those countries with low initial levels. Moreover, the results suggest that the degree of mobility with respect to fathers and mothers converges to the same level and that family characteristics account for an important part of the statistical association between parental education and children’s schooling; a particular finding is that the most important elements of family characteristics are the family’s socio-economic status and educational assortative mating of the parents. |
| Keywords: | Educational Economics, Intergenerational Mobility, Europe, Birth Cohorts, Family |
| JEL: | J62 I21 I29 D13 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2010-11&r=lab |
| By: | Peter Sivey (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Anthony Scott (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Anthony Scott (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Julia Witt (Department of Economics, University of Manitoba); Catherine Joyce (Department of Epidemiology and Preventive Medicine, Monash University); John Humphreys (School of Rural Health, Monash University) |
| Abstract: | A number of studies suggest there is an over-supply of specialists and an undersupply of GPs in many developed countries. Previous econometric studies of specialty choice from the US suggest that a number of factors play a role, including expected future earnings, educational debt, and having predictable working hours. Given endogeneity issues in revealed preference studies, a stated-preference approach is warranted. This paper presents results from a discrete-choice experiment completed by a sample of 532 junior doctors in 2008 before they choose a specialty training program. This was conducted as part of the first wave of the MABEL (Medicine in Australia: Balancing Employment and Life) longitudinal survey of doctors. We include key job attributes such as future earnings and hours worked, but also allow the choice to be influenced by academic research opportunities, continuity of care and the amount of procedural work. Interactions of attributes with doctor characteristics, including gender, educational debt, and personality traits are also examined. We find the income/working hours trade-offs estimated from our discrete choice model are close to the actual wages of senior specialists, but much higher than those of senior GPs. In a policy simulation we find that increasing GPs’ earnings by $50,000, increasing opportunities for procedural or academic work can increase the number of junior doctors choosing General Practice by between 8 and 16 percentage points, approximately 212 to 376 junior doctors per year. The results can inform policymakers looking to address unbalanced supply of doctors across specialties. |
| Keywords: | Junior doctors, discrete choice experiment, specialty choice |
| JEL: | C9 I11 J24 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2010n17&r=lab |
| By: | Boeri, Tito (Bocconi University); Galasso, Vincenzo (Bocconi University) |
| Abstract: | The introduction of NDC public pension scheme in few European countries, such as Latvia, Sweden, Italy, and Poland, in the nineties was motivated, among other things, by the need (i) to ensure the long term financial sustainability of the public pension system by linking pension returns to economic growth; (ii) to reduce the existing distortions in the labor market, due to the existing strong incentives to retire early, (iii) to increase the intergenerational equity of the system, jeopardized by the different returns across generations; and (iv) to reduce the systematic political interference with public pension systems under aging through the introduction of a sequence of automatic adjustments in the system that do not require government intervention. After more than ten years from their introduction, these systems have performed reasonably well on these accounts. However, some degree of political involvement with the working of the pension systems has continued (f.e., in Italy), and new concerns have emerged. In particular, the combination of a pension system, which strongly bases the benefit calculation on previous contributions (and on thus labor market status), and the existence in some countries of a dual labor market, with young workers being held on the margin of the regular labor market for many years, create a new, potentially strong challenge to these systems. Our simulations of the future pension benefits for the current generation of young workers with a discontinuous working history in Italy and Sweden suggest that the replacement rates will be low, unless the retirement age is significantly increased. This effect may end up jeopardizing the political sustainability of these NDC systems in the future, unless important labor market reforms are introduced. We discuss the effects on the future generation of retirees in Italy and Sweden of a current labor market reform: the introduction of a unique labor market contract, aimed at reducing the dualism between temporary and permanent workers. |
| Keywords: | notional defined contribution, pay as you go, labor market dualism and pensions |
| JEL: | J26 J68 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5235&r=lab |
| By: | FitzRoy, Felix (University of St. Andrews); Jin, Jim (University of St. Andrews) |
| Abstract: | We compare two systems of income redistribution: unemployment benefits (UB) and basic income (BI). First, for a simple utility function, with both intensive and extensive margins, the unemployed are likely better off with pure BI than pure UB, regardless of labour supply elasticity and wage distribution. Then we allow a general utility function and ignore intensive margins. For given unemployment, lowering UB and raising BI always benefits the unemployed, raises utilitarian welfare and benefits a poor majority. Reducing unemployment and UB simultaneously can benefit a majority of the employed as well as all unemployed, again for any wage distribution. |
| Keywords: | income distribution, basic income, unemployment benefits |
| JEL: | H20 D40 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5236&r=lab |
| By: | Tolga U. Kuzubas |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bou:wpaper:2010/13&r=lab |
| By: | Alejandro Gaviria; Alejandro Hoyos |
| Abstract: | Welfare programs in Colombia have been focused on reducing malnutrition and hunger and on increasing school attendance rates. However, there is not much evidence on the hypothesized relationship between nutrition and education. Using the National Survey of Nutritional Status in Colombia – 2005 (ENSIN) and the Demographic and Health Survey –2005 (DHS), this paper estimates the impact of nutrition on schooling outcomes. The results suggest that anemic children have a higher probability of lagging behind in school. Malnutrition, defined by anthropometric measures, does not have an impact on schooling lags. School attendance seems to be unrelated to nutrition measures. The results are consistent under different specifications. |
| Date: | 2010–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:007610&r=lab |
| By: | Michael Beckmann; Dieter Kuhn (University of Basel) |
| Abstract: | Owing to changes in the business environment, there has been a tremendous adoption of innovative<br />workplace organisation (WO) and human resource (HR) practices during the last few<br />decades. Assuming a holistic perspective on human resource management (HRM), the present<br />study establishes the hypothesis of mutually reinforcing WO and HR practices that, thus, constitute<br />a so-called high-performance work system. Precisely, it is argued that there may be a<br />complementary relationship between a more decentralised way of allocating tasks and decision<br />rights on the one hand and continuing training (or skilled labour), incentive pay or a more<br />intensive use of long-term, as opposed to temporary, employment on the other. This hypothesis<br />is examined empirically using latest nationally representative panel data of about 2,500<br />firms in Switzerland and applying econometric estimation techniques on the basis of an augmented<br />Cobb-Douglas production function. The estimation results show statistically significant<br />complementarities between the WO and HR practices mentioned above. In addition, socalled<br />innovative HRM systems of mutually reinforcing WO and HR practices increase firm<br />performance significantly. These results are robust to unobserved firm heterogeneity and to<br />the problem of reversed causality. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:03/10&r=lab |
| By: | Antonio Di Paolo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB); Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain. Institut d’Economia de Barcelona, Universitat de Barcelona.) |
| Abstract: | This paper explores the earnings return to Catalan knowledge for public and private workers in Catalonia. In doing so, we allow for a double simultaneous selection process. We consider, on the one hand, the non-random allocation of workers into one sector or another, and on the other, the potential self-selection into Catalan proficiency. In addition, when correcting the earnings equations, we take into account the correlation between the two selectivity rules. Our findings suggest that the apparent higher language return for public sector workers is entirely accounted for by selection effects, whereas knowledge of Catalan has a significant positive return in the private sector, which is somewhat higher when the selection processes are taken into account. |
| Keywords: | Language, Sector Choice, Earnings, Simultaneous Selection, Catalonia |
| JEL: | J24 J45 J70 C31 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2010-09&r=lab |
| By: | Jeannette Wicks-Lim; Jeff Thompson |
| Abstract: | Current federal policies to ‘make work pay’ leave the vast majority―88%―of low-income working families in the U.S. without the guarantee of a decent living standard, even with full-time work. In their new study, Jeannette Wicks-Lim and Jeffrey Thompson advance proposals to substantially strengthen minimum wage laws and the federal Earned Income Tax Credit (EITC) program in the United States, so that, in combination, they can guarantee decent living standards for all full-time U.S. workers and their families. By considering minimum wage laws and the EITC as complements, they show how these measures can operate most effectively and, crucially, how any possible negative unintended consequences of each measure can be minimized. Their proposal increases the effectiveness of these two policy measures so that they would guarantee 60% of all low-income working families a decent living standard through full-time employment. <br /><br />Wicks-Lim and Thompson assess the federal fiscal impact of the changes they propose to the two policies, and consider potential sources of revenue to pay for the increases. They discuss the need for a full-employment economy as the context in which the maximum number of families can have a decent living standard, and propose policies towards that end. |
| Keywords: | Living wage, minimum wage, working poor, tipping point, earned income tax credit, labor standards |
| JEL: | J38 J88 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uma:perips:peri_mw_eitc_oct2010&r=lab |
| By: | Modena, Francesca; Sabatini, Fabio |
| Abstract: | This paper carries out an investigation into the socio-economic determinants of childbearing decisions made by couples in Italy. The analysis accounts for the characteristics of both possible parents. Our results do not support established theoretical predictions according to which the increase in the opportunity cost of motherhood connected to higher female labour participation is responsible for the fall in fertility. On the contrary, the instability of women’s work status (i.e. having occasional, precarious, and low-paid positions) is revealed as a significant dissuasive factor in the decision to have children. Couples in which there is an unemployed woman are less likely to plan childbearing as well. Other relevant explanatory variables are women’s age, men’s work status and education, women’s citizenship, marital status and perceived economic well-being. |
| Keywords: | Fertility; family planning; parenthood; childbearing; participation; job instability; precarious employment; Italy |
| JEL: | J13 J71 J12 Z13 C25 |
| Date: | 2010–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26117&r=lab |
| By: | Murat Tasci |
| Abstract: | In this paper, we present a simple, reduced form model of comovements in real activity and unemployment flows and use it to uncover the trend changes in these flows, which determine the trend in the unemployment rate. We argue that this trend rate has several key features that are reminiscent of a “natural rate.” We show that the natural rate, measured this way, has been relatively stable in the last decade, even after the last recession hit the U.S. economy. This relatively muted change was due to two opposing trend changes: On one hand, the trend in the job-finding rate, after being relatively stable for decades, declined by a significant margin in the last decade, pushing trend unemployment up. On the other hand, the separation rate has somewhat offset this effect with a continued secular decline since the early 1980s. We also show that, contrary to business-cycle frequency movements, most of the low-frequency variation in the unemployment rate could be accounted for by changes in the trend of separation rates, not job-finding rates. The notable exception is the last decade, when clear trend changes in both flows imply opposing effects on the trend unemployment rate and slower worker reallocation in the U.S. economy. |
| Keywords: | Unemployment |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1017&r=lab |
| By: | Luthra R (Institute for Social and Economic Research) |
| Abstract: | This paper compares the educational performance of the children of immigrants to the children in their parentsÂ’ home countries. I utilize the 2003 and 2006 PISA internationally standardized test scores for Italian, Polish, Turkish, former Yugoslavian, and former Soviet origin youth attending school in Germany, as well as youth attending school in the origin countries. Controlling for family background, I find that the children of immigrants in Germany perform better than peers in every origin country with the exception of Italy. Checks for selection bias suggest that positive selection may account for some, but not all, of this immigrant advantage. |
| Date: | 2010–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2010-34&r=lab |
| By: | Mohammed Matar; Imad Brighith |
| Abstract: | A recent research project aimed to gather first-hand data from school users as well as academic performance data from pupils. Researchers compared data obtained from users of new and site-specific schools to that of "standard" ones in order to show whether more attractive and site-specific designs have a positive effect on learning... |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2010/5-en&r=lab |
| By: | Antonio Di Paolo (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB); Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain. Institut d’Economia de Barcelona, Universitat de Barcelona.); Josep Lluís Raymond (Departament de Fonaments de l’Anàlisi Econòmic, Universitat Autònoma de Barcelona (Spain). Institut d’Economia de Barcelona, Universitat de Barcelona.) |
| Abstract: | This paper investigates the economic value of Catalan knowledge for national and foreign first- and second-generation immigrants in Catalonia. Specifically, drawing on data from the “Survey on Living Conditions and Habits of the Catalan Population (2006)”, we want to quantify the expected earnings differential between individuals who are proficient in Catalan and those who are not, taking into account the potential endogeneity between knowledge of Catalan and earnings. The results indicate the existence of a positive return to knowledge of Catalan, with a 7.5% increase in earnings estimated by OLS; however, when we account for the presence of endogeneity, monthly earnings are around 18% higher for individuals who are able to speak and write Catalan. However, we also find that language and education are complementary inputs for generating earnings in Catalonia, given that knowledge of Catalan increases monthly earnings only for more educated individuals. |
| Keywords: | Language, Earnings, Immigrants, Endogeneity, Complementarity |
| JEL: | J79 J24 J61 C31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2010-07&r=lab |
| By: | Sala, Luca (Department of Economics and IGIER); Söderström, Ulf (Research Department, Central Bank of Sweden); Trigari, Antonella (Department of Economics and IGIER) |
| Abstract: | We use a standard quantitative business cycle model with nominal price and wage rigidities to estimate two measures of economic inefficiency in recent U.S. data: the output gap - the gap between the actual and efficient levels of output - and the labor wedge - the wedge between households' marginal rate of substitution and firms' marginal product of labor. We establish three results. (i) The output gap and the labor wedge are closely related, suggesting that most inefficiencies in output are due to the inefficient allocation of labor. (ii) The estimates are sensitive to the structural interpretation of shocks to the labor market, which is ambiguous in the model. (iii) Movements in hours worked are essentially exogenous, directly driven by labor market shocks, whereas wage rigidities generate a markup of the real wage over the marginal rate of substitution that is acyclical. We conclude that the model fails in two important respects: it does not give clear guidance concerning the efficiency of business cycle fluctuations, and it provides an unsatisfactory explanation of labor market and business cycle dynamics. |
| Keywords: | Business cycles; Efficiency; Labor markets; Monetary policy |
| JEL: | E24 E32 E52 |
| Date: | 2010–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:rbnkwp:0246&r=lab |
| By: | FitzRoy, Felix (University of St. Andrews); Nolan, Michael A. (University of Hull) |
| Abstract: | In a model with heterogeneous workers and both intensive and extensive margins of employment, we consider two systems of redistribution: a universal basic income, and a categorical unemployment benefit. Well-being depends on own-consumption relative to average employed workers’ consumption, and concern for relativity is a parameter that affects model outcomes. While labour supply incurs positive marginal disutility, we allow negative welfare effects of unemployment. We also compare Rawlsian and utilitarian welfare in general equilibrium under the polar opposite transfer systems, with varying concern for relativity. Basic income Pareto dominates categorical benefits with moderate concern for relativity in both cases. |
| Keywords: | relative income, redistribution, basic income, unemployment benefits, happiness, well-being |
| JEL: | H20 D40 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5241&r=lab |
| By: | Alfredo R. Paloyo |
| Abstract: | This paper estimates the causal impact of compulsory military service on men in Germany using social security and pension administrative data for the cohort of individuals born in the period 1932–1942. Due to the combination of laws restricting conscription only to men born on or after July 1, 1937, difference-in-differences estimates of the effect of conscription on average daily wages can be computed using cohorts of women as a comparison group. The results indicate that conscription had no significant impact on a draftee’s labor-market performance, validating an earlier result using an alternative identification strategy. |
| Keywords: | Conscription; difference in differences; German Federal Defense Force |
| JEL: | J31 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0206&r=lab |
| By: | Ferreira, Pedro Cavalcanti; Santos, Marcelo Rodrigues dos |
| Abstract: | This article investigates the causes in the reduction of labor force participation ofthe old. We argue that the changes in social security policy, in technology and indemography may account for most of the changes in retirement over the second partof the last century in the U.S. economy. We develop a dynamic general equilibriummodel with endogenous retirement that embeds social security legislation. The modelis able to match very closely the increase in the retirement rate of males aged 65 andolder. It also quanti es the isolated impact on retirement and on the solvency of thesocial security system of the di¤erent factors. The model suggests that technologicaland demographic changes had a strong in uence on retirement, so that it would haveincreased signi cantly even if the social security rules had not changed. However, asthe latter became much more generous in the past, changes in social security policycan account not only for a sizeable part of the expansion of retirement, but also for themost of the observed increase in the social security expenses as a share of GDP. |
| Date: | 2010–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:710&r=lab |
| By: | Rana Hendy (Université Paris 1 Panthéon-Sorbonne & Paris School of Economics); Chahir Zaki |
| Abstract: | This paper develops a microsimulation analysis to evaluate the impact of trade liberalization policies in Egypt on income redistribution. Our analysis aims at identifying the effects of those measures on redistribution aspects. For this, we rely on a macro - micro approach integrating results obtained from a discrete choice model of labor supply in a Computable General Equilibrium model (CGE). In the empirical work, we use the Egyptian Labor Market and Panel Survey (ELMPS) of 1998 and 2006 as well as the Social Accounting Matrix (SAM) of 2001. This assessment allows us to find out to what extent such macroeconomic policies affect, on the microeconomic level, females poverty, wages and employment opportunities. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:555&r=lab |
| By: | Kircher, Philipp; Eeckhout, Jan |
| Abstract: | Assortative Matching between workers and firms provides evidence of the complementarities or substitutes in production. The presence of complementarities is important for policies that aim to achieve the optimal allocation of resources, for example unemployment insurance. We argue that using wage data alone, it is virtually impossible to identify whether Assortative Matching is positive or negative. Even though we cannot identify the sign of the sorting, we can identify the strength, i.e., the magnitude of the cross-partial, and the associated welfare loss. We show first that the wage for a given worker is non-monotonic in the type of his employer. This is due to the fact that in a sorting model, wages re ect the opportunity cost of mismatch. We show analytically that this non-monotonicity prevents standard form fixed effects to correlate with the true type of the form. We then propose an alternative procedure that measures the strength of sorting in the presence of search frictions. Knowing the strength of sorting facilitates the measurement of the output loss due to mismatch. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/29708/&r=lab |
| By: | Dostie, Benoit |
| Abstract: | In this paper, we estimate the determinants of low (and slow) completion rates with a competing risk duration model using data from the National Apprenticeship Survey (NAS) 2007. This allows us to distinguish the impact age and duration dependence on the probability of dropping out. We find older apprentices are less likely to transit toward completion after age 28. We also find duration dependence to be positive, meaning transition probabilities to completion increase with apprenticeship duration. However, the positive effect dies out quickly after 10 years of apprenticeship. |
| Keywords: | Apprenticeship training, human capital, competing risks model |
| JEL: | J24 I21 |
| Date: | 2010–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2010-29&r=lab |
| By: | Rodney Ramcharan; Shekhar Aiyar |
| Abstract: | How important is luck in determining labor market outcomes? We address this question using a new dataset of all international test cricketers who debuted between 1950 and 1985. We present evidence that a player’s debut performance is strongly affected by an exogenous source of variation: whether the debut series is played at home or abroad. This allows us to identify the role of luck - factors unrelated to ability - in shaping future career outcomes. We find that players lucky enough to debut at home perform significantly better on debut. Moreover, debut performance has a large and persistent impact on long run career outcomes. We also make headway in empirically distinguishing between competing explanations for why exogenous initial conditions exercise a persistent impact on career performance |
| Date: | 2010–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/225&r=lab |
| By: | Mark R. Rosenzweig (Department of Economics, Yale University); Andrew D. Foster (Department of Economics, Brown University) |
| Abstract: | We show empirically using panel data at the plot and farm level and based on a model incorporating supervision costs, risk, credit-market imperfections and scale-economies associated with mechanization that small-scale farming is inefficient in India. Larger farms are more profitable per acre, more mechanized, less constrained in input use after bad shocks, and employ less per-acre labor than small farms. Based on our structural estimates of the effects of farm size on labor use and the distribution of Indian landholdings, we estimate that over 20% of the Indian agricultural labor force is surplus if minimum farm scale is 20 acres. |
| Keywords: | agriculture, India, scale, profits, labor, tractors |
| JEL: | O13 O16 O53 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:991&r=lab |
| By: | Emmanuel Dhyne (National Bank of Belgium, Research Department; Université de Mons, Centre de recherche Warocqué); Catherine Fuss (National Bank of Belgium, Research Department); Claude Mathieu (University of Paris Est Créteil, ERUDITE) |
| Abstract: | This paper examines whether multinational companies differ in their employment adjustment from domestic firms, on the basis of a panel of Belgian firms for the period 1997-2007. We focus on incumbent firms as, in general, they account for the largest fraction of net employment creation, especially among multinational firms (MNFs). We obtain structural estimates of adjustment cost parameters for blue-collar workers and white-collar workers, domestic firms, and MNFs. We find evidence of convex, asymmetric (in the sense that it is more expensive to downsize than to upsize) and cross adjustment costs (indicating costly substitution between workers). To adjust white-collar employment seems to be around half as costly for MNFs as for domestic firms. There is no difference between Belgian MNFs and foreign MNFs. A small fraction of the gap between the adjustment costs of MNFs and domestic firms may be explained by the use of fixed-term contracts and early retirement. Controlling for firm size does not yield robust conclusions; the cost advantage of MNFs may diminish, vanish or turn into a disadvantage. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201010-207&r=lab |
| By: | Burcu Duygan-Bump; Alexey Levkov; Judit Montoriol-Garriga |
| Abstract: | This paper exploits the differential financing needs across industrial sectors and provides strong empirical evidence that financing constraints of small businesses are important in explaining the unemployment dynamics around the Great Recession. In particular, we show that workers in small firms are more likely to become unemployed during the 2007-2009 financial crisis if they work in industries with high external financing needs. According to our estimates, eliminating financial constraints of small firms could add up to 850,000 jobs to the economy. We suggest that policies aimed at making credit available to small businesses would significantly help stabilize the labor markets and economic activity in the U.S. |
| Keywords: | Unemployment ; Small business - Finance ; Recessions ; Financial crises - United States |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbqu:qau10-6&r=lab |
| By: | Brendan Walsh (University College Dublin); Dermot Walsh (Mental Health Commission) |
| Abstract: | In this paper we model the behaviour of the Irish suicide rate over the period 1968-2009 using the unemployment rate and the level of alcohol consumption as explanatory variables. It is found that these variables have significant positive effects on suicide mortality in several demographic groups. Alcohol consumption is a significant influence on the male suicide rate up to age 64. Its influence on the female suicide rate is not as well-established, although there is evidence that it is important in the 15-24 and 25-34 age groups. The unemployment rate is also a significant influence on the male suicide rate in the younger age groups. The behaviour of suicide rates among males aged 55 and over and females aged 25 and over is largely unaccounted for by our model. These broad conclusions hold when account is taken of a structural break in the 1980s, with the response to unemployment being greater in the earlier period and that to alcohol greater in the later period. The findings suggest that higher alcohol consumption played a major role in the increase in suicide mortality among young Irish males between the late 1960s and the end of the century. In the early twenty first century a combination of falling alcohol consumption and low unemployment led to a marked reduction in suicide rates, although there is some evidence that the suicide rate is being increasingly under-reported in recent years. The recent rise in the suicide rate may be attributed to the sharp increase in unemployment, especially among males, but it has been moderated by the continuing fall in alcohol consumption. Some policy implications of the findings are discussed. |
| Keywords: | Suicide, Alcohol, Unemployment, Lederman Hypothesis |
| Date: | 2010–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201035&r=lab |
| By: | Kenneth Aarskaug Wiik, Trude Lappegård, and Renske Keizer (Statistics Norway) |
| Abstract: | In this study, we utilize data from the first wave of the Generations and Gender Surveys to investigate relationship quality among currently married and cohabiting individuals aged 18 to 55 (N = 41, 666) in eight European countries (Bulgaria, France, Germany, Hungary, Norway, Romania, Russia, and the Netherlands). Controlling for a range of characteristics of respondents and their partners, the analyses show that cohabitors in general more often have breakup plans and are less satisfied than those married. We expected to find fewer differences between cohabitation and marriage in countries where cohabitation is widespread. Correspondingly, we find that the difference between marriage and cohabitation is largest in Russia, Romania, Germany and Bulgaria. |
| Keywords: | Marriage; Cohabitation; Relationship Quality; Europe |
| JEL: | Z10 Z13 Z19 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:633&r=lab |
| By: | Gokce Basbug; Ceyhun Elgin |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:bou:wpaper:2010/10&r=lab |
| By: | James B. Rebitzer; Lowell J. Taylor |
| 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: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_607&r=lab |
| By: | Ludo Cuyvers (University of Antwerp; North-West University (Potchefstroom Campus), South Africa); Emmanuel Dhyne (National Bank of Belgium, Research Department; Université de Mons, Centre de recherche Warocqué); Reth Soeng (University of Antwerp, Steunpunt Buitenlands Beleid) |
| Abstract: | We empirically investigate the effects of the internationalisation of Belgian firms on domestic demand for production and non-production workers, which are used as proxies for unskilled and skilled labour. Distinction is made between home-employment effects of firms’ internationalisation, through either international trade or outward foreign direct investment, in highincome countries and in low-income economies. The results of our econometric analysis, using data over 1997-2007, suggest that increasing import shares from low-income countries or investing in those countries significantly reduces demand for low-skilled labour, while it increases demand for skilled labour. An increase in exports generally raises the demand for production workers, while it reduces the demand for non-production workers. However, these effects are reversed in the case of exports to low-income countries. Considering the impact of FDI, our results tentatively suggest that the setting up of a new international investment project has a positive impact on demand for non-production workers one period before it is made. This positive effect is offset in the long run, particularly in the case of investment in low-income countries. |
| Keywords: | labour demand, international trade, outward FDI, skilled and unskilled labour |
| JEL: | C23 F16 F21 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201010-206&r=lab |
| By: | Rafal Chomik; Edward R. Whitehouse |
| Abstract: | The pensionable age is the most visible parameter of retirement-income systems. This paper surveys pensionable ages in the OECD for a period of a century: back to 1950 and forward to 2050. Average pensionable age in OECD countries dropped by nearly two years during the second half of the 20th century to 62.5 for men and 61.1 for women. Legislation already in place will increase it almost to 65 for both sexes by 2050. At the same time, life expectancy has increased in most countries at most times. Between 1960 and the turn of the century, life expectancy after pensionable age is grew from 13.4 to 17.3 years for men and 16.8 to 22.1 years for women on average in OECD countries. However, life expectancy after normal pension age is projected to reach 20.3 and 24.6 years (for men and women respectively) in 2050. This continued increase is projected despite many OECD countries having already legislated for phased increases in the pension age in the future.<BR>L'âge de la retraite est le paramètre le plus visible des systèmes de retraite. Ce document passe en revue les changements dans l'âge de la retraite des pays de l'OCDE sur une période d'environ un siècle: de 1950 jusqu'en 2050. La moyenne d'âge de la retraite dans les pays de l'OCDE a chuté de près de deux ans durant la seconde moitié du 20ème siècle s'établissant à 62,5 pour les hommes et 61,1 pour les femmes. En considérant la législation déjà en place, dans les pays de l'OCDE, pour les années à venir, il augmentera de nouveau, s'établissant à environ 65 pour les deux sexes d'ici à 2050. Dans le même temps, l'espérance de vie a augmenté dans la plupart des pays la plupart du temps. Entre 1960 et 2000, l'espérance de vie, après avoir atteint l'âge de départ à la retraite est passé de 13,4 à 17,3 ans pour les hommes et de 16,8 à 22,1 ans pour les femmes en moyenne dans les pays de l'OCDE. Cependant cette augmentation ne semble pas avoir pris fin: L'espérance de vie après l'âge normal de la retraite devrait atteindre 20,3 et 24,6 ans (pour les hommes et les femmes respectivement) en 2050. Cette augmentation continue est prévue dans de nombreux pays de l'OCDE nonobstant le fait que la plupart des ceux-ci aient déjà légiféré pour tenir compte de l'augmentation progressive de l'âge de retraite à l'avenir. |
| JEL: | H55 J11 J14 J26 |
| Date: | 2010–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:105-en&r=lab |
| By: | Jeemol Unni; Suma Scaria |
| Abstract: | The perspective of global commodity chain or GCC framework and social embeddedness are used to understand the organizational and social linkages in the embellishment production network in garment industry. The findings are based on the fieldwork conducted in Bareilly situated in Uttar Pradesh, an important centre of embellishment activity in India. |
| Keywords: | organizational, social linkages, value chain, informal workers, home-based work, women, Bareilly, wages, export products, india, global commodity chain, GCC, social embeddedness, garment industry, Uttar Pradesh, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3061&r=lab |
| By: | De Wet van der Westhuizen (Department of Economics, Auckland University of Technology, Auckland, New Zealand.); Gail Pacheco (Department of Economics, Auckland University of Technology, Auckland, New Zealand.); Don J. Webber (Department of Economics, Auckland University of Technology and Department of Economics, UWE, Bristol) |
| Abstract: | This study explores the impact of culture on participative decision making (PDM) and job satisfaction (JS) using data obtained from the European Values Study. We parameterise two different cultural variables using principal components analysis: first a continuum based on survival versus self-expression values, and second a continuum based on traditional versus secular-rational values. Application of ordered logistic regression to Likert scales of PDM and JS suggest that greater self-expression in the survival versus self-expression variable enhances both PDM and JS; more traditional values in the traditional versus secular-rational continuum have the same effect. |
| Keywords: | Job satisfaction; participatory decision making; culture |
| JEL: | J28 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:uwe:wpaper:1010&r=lab |
| By: | Graziella Bertocchi; Arcangelo Dimico |
| Abstract: | We investigate the impact of slavery on the current performances of the US economy. Over a cross section of counties, we find that the legacy of slavery does not affect current income per capita, but does affect current income inequality. In other words, those counties that displayed a higher proportion of slaves are currently not poorer, but more unequal. Moreover, we find that the impact of slavery on current income inequality is determined by racial inequality. We test three alternative channels of transmission between slavery and inequality: a land inequality theory, a racial discrimination theory and a human capital theory. We find support for the third theory, i. e., even after controlling for potential endogeneity, current inequality is primarily influenced by slavery through the unequal educational attainment of blacks and whites. To improve our understanding of the dynamics of racial inequality along the educational dimension, we complete our investigation by analyzing a panel dataset covering the 1940-2000 period at the state level. Consistently with our previous findings, we find that the educational racial gap significantly depends on the initial gap, which was indeed larger in the former slave states. |
| Keywords: | Slavery, development; inequality; institutions; education |
| JEL: | D02 H52 J15 O11 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:mod:recent:051&r=lab |
| By: | Mardukhi, Jian |
| Abstract: | Conventionally, it is presumed that restructuring of industrial composition of employment only modestly affects the average wage. This is because in a partial equilibrium setting such a restructuring affects the calculation of the average wage only through changes in employment shares of industries used as weights on constant industry wages. On the contrary, this paper brings substantial evidence indicating that aside from such partial equilibrium shift-share effects, a change in industrial composition sizably impacts all industry wages through general equilibrium (G.E.) feed-backs from the average wage – as a reservation wage in all industries in a search and bargaining framework – onto all industry wages. In particular, this paper uses Brazilian census data for years 1991 and 2000 to study the G.E. wage impacts of exogenous shifts in industrial compositions in cities of Brazil induced by substantial trade liberalization in this country during the 1990s. A restructuring of industrial composition in a city favoring high-wage industries that modestly raises the average wage in this city by only 1% through shift-share accounting, is estimated here to increase all industry wages in the city in average by at least twice as much – between 2 to 4 percent – in the long-run through the G.E impacts, resulting in an overall increase of 3 to 5 percent in the average wage. Concerns about endogeneity is address by using an IV strategy that exploits distance of a city from major international commercial ports as an indicator of how the change in trade policy impacted its industrial composition. The result is also robust to correcting for sample selection bias generated by regional migrations and to the presence of alternative explanatory mechanisms. The finding here highlights the importance of considering G.E. interactions in policy evaluations. It also indicates that major changes in national industrial or trade policies in developing countries such as Brazil, with already non-uniform distribution of economic development across regions, create geographical winners and losers depending on how the impacts are distributed across different localities sub-nationally. If the distribution of impacts is such that the losers-to-be regions are those already suffering, then balancing measures are necessary to avoid spatially uneven sub-national economic development. |
| Keywords: | Industrial Composition; Wage Structure; International Trade; Sub-national Economic Development; Spatial Distribution of Policy Impacts; Brazil |
| JEL: | O25 O18 O24 R23 O11 R58 J31 O54 R11 O12 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25916&r=lab |
| By: | Doan, Tinh; Gibson, John |
| Abstract: | A common phenomenon about transition economies is that the return to schooling improves as economic reform progresses. Existing research suggests that Vietnam is not an exception to the pattern. However, the rate of return for the period 1992-1998 is still relatively low, below 5%, relative to that of the world and other transitional economies. In addition, it is hard to see a clear trend in the current literature due to different methods applied and sets of variables controlled in the earnings equations (see Appendix B). The low returns may result from the gradual economic reforms applied in Vietnam, whilst in Eastern European countries the “Big Bang” transformation was conducted. Therefore, to test whether the return to schooling in Vietnam is rising and reaches other transitional economies’ rate of returns, we re-examine the trend in the rate of return to schooling in Vietnam over the 1998-2008 period, when the reforms have had a longer time to have an effect. We apply the OLS and Heckman selection estimator (Maximum Likelihood approach) and find that the return has increased quickly during the later economic reform but its pace has slowed down when the return reached the global average rate of returns around 10%. |
| Keywords: | economic transition; returns to schooling; Vietnam |
| JEL: | J31 O15 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24984&r=lab |
| By: | Hnatkovska, Viktoria; Lahiri, Amartya; Paul, Sourabh Bikash |
| Abstract: | This document contains supplemental material to Hnatkovska, Lahiri and Paul (2010) paper. It presents detailed estimation results underlying the Tables and Figures in the main text. |
| Date: | 2010–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:bricol:viktoria_hnatkovska-2010-31&r=lab |
| By: | Karen M. Kobayashi; Steven G. Prus |
| Abstract: | Using data from the 2005 Canadian Community Health Survey, the current study expands on previous research on the healthy immigrant effect (HIE) in adult populations by considering the effects of both immigrant and visible minority status on health for males and females in mid- (45- 64) and later life (65+). The findings indicate that the HIE applies to recent immigrant men in midlife; that is, new male immigrants – those who immigrated less than 10 years ago – have better health compared to their Canadian-born counterparts, and that the effect is particularly strong for visible minorities. The picture is similar for older women who have recently immigrated, however this advantage largely disappears when a number of socio-demographic, socio-economic, and lifestyle factors are controlled. For older men and middle-aged women of color, however, the reality is strikingly different: both groups report health disadvantages compared to their Canadian-born counterparts, with both recent and longer-term midlife women having poorer health. Findings are discussed in terms of their implications for health care policy for immigrant adults. |
| Keywords: | healthy immigrant effect, gender, ethnicity, mid-life, later life, health care policy |
| JEL: | I18 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:274&r=lab |
| By: | Pham Thi Phuong , Nga (Maastricht University) |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:maastr:urn:nbn:nl:ui:27-24246&r=lab |
| By: | Andreu, L.; Swinkels, L.A.P. |
| Abstract: | This paper examines the ability of balanced pension plan managers to successfully time the equity and bond market and select the appropriate assets within these markets. In order to evaluate both market timing abilities in these balanced pension plans, we extend the traditional equity market timing models to also account for bond market timing. As far as we know, we are among the first to apply this multifactor timing model to investigate equity and bond market timing simultaneously. This performance evaluation has been conducted on two samples of Spanish balanced pension plans, one with Euro Zone and one with World investment focus. This allows us to decompose managers’ skills in three components: selectivity, equity market timing, and bond market timing. Our findings suggest that the average stock picking ability of pension plans is positive. World schemes tend to have positive bond timing skills, while Euro Zone pension plans are on average not able to time equity or bond markets. |
| Keywords: | balanced pension plans;market timing;performance evaluation;stock picking |
| Date: | 2009–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765021036&r=lab |
| By: | Maya Rossin (Columbia University - Department of Economics) |
| Abstract: | This paper evaluates the impacts of unpaid maternity leave provisions of the 1993 Family and Medical Leave Act (FMLA) on children’s birth and infant health outcomes in the United States. My identification strategy uses variation in pre-FMLA maternity leave policies across states and variation in which firms are covered by FMLA provisions. Using Vital Statistics data and difference-in-difference-in-difference methodology, I find that maternity leave led to small increases in birth weight, decreases in the likelihood of a premature birth, and substantial decreases in infant mortality for children of college-educated and married mothers, who were most able to take advantage of unpaid leave. My results are robust to the inclusion of numerous controls for maternal, child, and county characteristics, state and year fixed effects, and state-year interactions, as well as across several different specifications. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:1011-01&r=lab |
| By: | EHLERS, Lars |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montde:2010-05&r=lab |
| By: | Ugo Colombino |
| Abstract: | Many microeconometric models of discrete labour supply include alternative-specific constants meant to account for (possibly besides other factors) the density or accessibility of particular types of jobs (e.g. parttime jobs vs. full-time jobs). The most common use of these models is the simulation of tax-transfer reforms. The simulation is usually interpreted as a comparative static exercise, i.e. the comparison of different equilibria induced by different policy regimes. The simulation procedure, however, typically keeps fixed the estimated alternative-specific constants. In this note we argue that this procedure is not consistent with the comparative statics interpretation. Equilibrium means that the number of people willing to work on the various job types must be equal to the number of available jobs. Since the constants reflect the number of jobs and since the number of people willing to work change as a response to the change in tax-transfer regime, it follows that the constants should also change. A structural interpretation of the alternative-specific constants leads to the development of a simulation procedure consistent with the comparative static interpretation. The procedure is illustrated with an empirical example. |
| Keywords: | Random Utility; Discrete Choice; Labour Supply; Simulation of tax reforms; Alternative-specific constants; Equilibrium simulation |
| JEL: | C35 C53 H31 J22 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:156&r=lab |
| By: | Viral V. Acharya; Ramin P. Baghai; Krishnamurthy V. Subramanian |
| Abstract: | Stringent labor laws can provide firms a commitment device to not punish short-run failures and thereby spur their employees to pursue value-enhancing innovative activities. Using patents and citations as proxies for innovation, we identify this effect by exploiting the time-series variation generated by staggered country-level changes in dismissal laws. We find that within a country, innovation and economic growth are fostered by stringent laws governing dismissal of employees, especially in the more innovation-intensive sectors. Firm-level tests within the United States that exploit a discontinuity generated by the passage of the federal Worker Adjustment and Retraining Notification Act confirm the cross-country evidence. |
| JEL: | F30 G31 J08 J5 K31 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16484&r=lab |
| By: | José García-Quevedo (Barcelona Institute of Economics (IEB) and Dpt. of Political Economy and Public Finance, University of Barcelona); Francisco Mas-Verdú (Dpt. of Economics and Social Sciences, Universidad Politécnica de Valencia and Barcelona Institute of Economics (IEB)); José Polo-Otero (CYD Foundation and Barcelona Institute of Economics (IEB)) |
| Abstract: | PhD graduates hold the highest education degree, are trained to conduct research and can be considered a key element in the creation, commercialization and diffusion of innovations. The impact of PhDs on innovation and economic development takes place through several channels such as the accumulation of scientific capital stock, the enhancement of technology transfers and the promotion of cooperation relationships in innovation processes. Although the placement of PhDs in industry provides a very important mechanism for transmitting knowledge from universities to firms, information about the characteristics of the firms that employ PhDs is very scarce. The goal of this paper is to improve understanding of the determinants of the demand for PhDs in the private sector. Three main potential determinants of the demand for PhDs are considered: cooperation between firms and universities, R&D activities of firms and several characteristics of firms, size, sector, productivity and age. The results from the econometric analysis show that cooperation between firms and universities encourages firms to recruit PhDs and point to the existence of accumulative effects in the hiring of PhD graduates. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2010-02&r=lab |