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on Labour Economics |
By: | Eren, Ozlem; Peoples, James |
Abstract: | This study examines worker compensation effects of foreign direct investment (FDI) activity in US non-manufacturing industry sectors. A clustered standard error correction is used when estimating wage and non-wage compensation equations, with special attention given to FDI’s effect by worker educational attainment and union status. Wage findings reveal that FDI activity is associated with a wage premium for highly educated non-union workers and with union rent erosion for all educational-gender groups excluding females with low educational attainment. Non-wage compensation analysis reveals FDI activity is generally associated with significantly higher probabilities of workers receiving employer financed non-wage compensation for union and non-union workers regardless of their level of educational attainment. |
Keywords: | FDI; labor; educational attainment; compensation; wage; non-manufacturing; union; healthcare; pension; |
JEL: | F20 J3 |
Date: | 2009–12 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26416&r=lab |
By: | Erling Barth; Alex Bryson; Harald Dale-Olsen |
Abstract: | Using linked employer-employee data for Britain we find job satisfaction and job anxiety arenegatively correlated but higher wages are associated with higher job satisfaction and higher jobanxiety. However, we observe a positive association between higher wages and non-pecuniary jobsatisfaction, which disappears with the inclusion of our effort measures. Thus high effort levelsprovide high levels of non-pecuniary job satisfaction and higher wages, in contrast to whatcompensating wage differentials predicts. On the other hand, the positive association between wagesand pay satisfaction and the positive association between wages and job anxiety are both robust to theinclusion of our effort measures and rich job controls. Mean wages of co-workers are positivelyassociated with pay satisfaction but there is no significant association with non-pecuniary jobsatisfaction or job anxiety. Thus there is a positive spill-over to workers from being in a high-wageworkplace and there is no support for the proposition that within-workplace wage differentials are asource of job anxiety. |
Keywords: | worker wellbeing, job stress, job anxiety, job satisfaction, wages, compensatingdifferentials |
JEL: | J28 J31 J81 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1011&r=lab |
By: | de la Croix, David (Université catholique de Louvain); Pierrard, Olivier (Université catholique de Louvain); Sneessens, Henri R. (University of Luxembourg) |
Abstract: | This paper re-examines the effects of population aging and pension reforms in an OLG model with labor market frictions. The most important feature brought about by labor market frictions is the connection between the interest rate and the unemployment rate. Exogenous shocks (such as aging) leading to lower interest rates also imply lower equilibrium unemployment rates, because lower capital costs stimulate labor demand and induce firms to advertize more vacancies. These effects may be reinforced by increases in the participation rate of older workers, induced by the higher wage rates and the larger probability of finding a job. These results imply that neglecting labor market frictions and employment rate changes may seriously bias the evaluation of pension reforms when they have an impact on the equilibrium interest rate. |
Keywords: | overlapping generations, search unemployment, labor force participation, aging, pensions, labor market |
JEL: | E24 H55 J26 J64 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5276&r=lab |
By: | Bishwanath Goldar |
Abstract: | Since the 1980s, there has been increasing informalization of industrial labour in India. It has taken two forms: rising share of the unorganized sector in manufacturing employment and informalization of the organized manufacturing sector itself through subcontracting and use of temporary and contract workers. The paper investigates whether and how far labour market rigidities and increasing import competition are responsible for the increasing informalization on industrial labour in India. An econometric model is estimated for this purpose using unit level data of the NSS 61st round employment-unemployment survey for 2004-05. The estimated model explains the casual worker – regular worker dichotomy in manufacturing. The results show that labour market reforms tend to increase the creation of regular jobs, while import competition tends to raise casual employment among workers with education above primary. The results also show that education enhances the probability of getting a regular job. |
Keywords: | informalistion of industrial labour, informalisation, manufacturing sector, labour market, labour market rigidities, import competition, worker dichotomy, employment, casual employment, education, Labour Studie, Labour Economics, IASSI conference |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3125&r=lab |
By: | Piatek, Rémi (University of Konstanz); Pinger, Pia (University of Mannheim) |
Abstract: | This paper demonstrates that locus of control, i.e. whether individuals believe that reinforcement in life comes from their own actions instead of being determined by luck or destiny, is an important predictor of the decision to obtain higher education. Furthermore, the authors find that premarket locus of control, defined as locus of control measured at the time of schooling – before the individual enters the labor market – does not significantly affect later wages after controlling for education decisions. In light of the existing literature, which finds mostly positive effects of contemporaneous locus of control measures on wages, this indicates that it is important to distinguish between premarket skills and those that are already influenced by labor market experience and age. Last, simulation of the model shows that moving individuals from the first to the last decile of the locus of control distribution significantly shifts the distribution of schooling choices, thus indirectly affecting later wages. The paper conveys important policy implications. If some personality traits, such as locus of control, influence the cost of education but not outcomes directly, these individual characteristics may keep individuals from studying who, once they reach the labor market, are no less successful than other individuals. If these individuals are at high risk of dropping out of school, early personality tests and targeted mentoring of students with an external locus of control are a means to countervail skill shortages in society. |
Keywords: | data set combination, locus of control, wages, latent factor model |
JEL: | C31 J24 J31 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5289&r=lab |
By: | Sonja Kassenböhmer; Mathias Sinning |
Abstract: | This paper analyzes changes in wage differentials between white men and white women over the period 1993-2006 across the entire wage distribution using Panel Study of Income Dynamics (PSID) data. We decompose distributional changes in the gender wage gap to assess the contribution of observed characteristics measuring individual productivity. We find that the gender wage gap narrowed by more than 13 percent at the lowest decile and by less than 4 percent at the highest decile. The decomposition results indicate that changes in the gender wage gap are mainly attributable to changes in educational attainment at the top of the wage distribution, while a sizeable part of the changes is due to work history changes at the bottom. Our findings suggest that the educational success of women could reduce the gender wage gap at the bottom of the distribution both before and during the 1990s but did not trigger a strong decline at the top of the distribution until today. |
JEL: | C21 J16 J31 |
Date: | 2010–11 |
URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2010-532&r=lab |
By: | Gartner, Hermann; Schank, Thorsten; Schnabel, Claus |
Abstract: | Since there is scant evidence on the role of industrial relations in wage cyclicality, this paper analyzes the effect of collective wage contracts and of works councils on real wage growth. Using linked employer-employee data for western Germany, we find that works councils affect wage growth only in combination with collective bargaining. Wage adjustments to positive and negative economic shocks are not always symmetric. Only under sectoral bargaining there is a (nearly symmetric) reaction to rising and falling unemployment. In contrast, wage growth in establishments without collective bargaining adjusts only to falling unemployment and is unaffected by rising unemployment. -- |
Keywords: | wage cyclicality,wage bargaining,works council,Germany |
JEL: | J31 E32 J53 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:072010&r=lab |
By: | Hermann Gartner; Thorsten Schenk; Claus Schnabel |
Abstract: | Since there is scant evidence on the role of industrial relations in wage cyclicality, this paper analyzes the effect of collective wage contracts and of works councils on real wage growth. Using linked employer-employee data for western Germany, we find that works councils affect wage growth only in combination with collective bargaining. Wage adjustments to positive and negative economic shocks are not always symmetric. Only under sectoral bargaining there is a (nearly symmetric) reaction to rising and falling unemployment. In contrast, wage growth in establishments without collective bargaining adjusts only to falling unemployment and is unaffected by rising unemployment |
Keywords: | wage cyclicality, wage bargaining, works council, Germany |
JEL: | J31 E32 J53 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1654&r=lab |
By: | Hirsch, Boris; Schnabel, Claus |
Abstract: | Using a large German linked employer-employee data set and methods of competing risks analysis, this paper investigates gender differences in job separation rates to employment and nonemployment. In line with descriptive evidence, we find lower job-to-job and higher job-to-nonemployment transition probabilities for women than men when controlling for individual and workplace characteristics and unobserved plant heterogeneity. These differences vanish once we allow these characteristics to affect separations differently by gender. When additionally controlling for wages, we find that both separation rates are considerably lower and also significantly less wage-elastic for women than for men. -- Das vorliegende Papier untersucht auf Grundlage eines großen deutschen verbunden Firmen-Beschäftigen-Datensatzes und Methoden der Verweildaueranalyse Geschlechterunterschiede in den Abgangsraten aus bestehenden Beschäftigungsverhältnissen in andere Beschäftigungsverhältnisse und Nichtbeschäftigung. Im Einklang mit den deskriptiven Befunden zeigen sich für Frauen bei Kontrolle für individuelle sowie beobachtete und unbeobachtete Firmenmerkmale niedrigere Jobabgangsraten in Beschäftigung und höhere in Nichtbeschäftigung. Sobald zugelassen wird, dass individuelle wie Firmenmerkmale die Abgangsraten für Frauen und Männer unterschiedlich beeinflussen, verschwinden diese Geschlechterunterschiede jedoch. Wenn außerdem für den Lohn kontrolliert wird, ergeben sich für Frauen niedrigere und weniger lohnelastische Abgangsraten sowohl in Beschäftigung als auch Nichtbeschäftigung. |
Keywords: | job separations,gender,gender pay gap,Germany |
JEL: | J62 J63 J16 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:69&r=lab |
By: | Hirsch, Boris; Schnabel, Claus |
Abstract: | Using a large German linked employer-employee data set and methods of competing risks analysis, this paper investigates gender differences in job separation rates to employment and nonemployment. In line with descriptive evidence, we find lower job-to-job and higher job-to-nonemployment transition probabilities for women than men when controlling for individual and workplace characteristics and unobserved plant heterogeneity. These differences vanish once we allow these characteristics to affect separations differently by gender. When additionally controlling for wages, we find that both separation rates are considerably lower and also significantly less wage-elastic for women than for men. -- Das vorliegende Papier untersucht auf Grundlage eines großen deutschen verbunden Firmen-Beschaftigen-Datensatzes und Methoden der Verweildaueranalyse Geschlechterunterschiede in den Abgangsraten aus bestehenden Beschäftigungsverhältnissen in andere Beschäftigungsverhältnisse und Nichtbeschäftigung. Im Einklang mit den deskriptiven Befunden zeigen sich für Frauen bei Kontrolle für individuelle sowie beobachtete und unbeobachtete Firmenmerkmale niedrigere Jobabgangsraten in Beschäftigung und höhere in Nichtbeschäftigung. Sobald zugelassen wird, dass individuelle wie Firmenmerkmale die Abgangsraten für Frauen und Männer unterschiedlich beeinflussen, verschwinden diese Geschlechterunterschiede jedoch. Wenn außerdem für den Lohn kontrolliert wird, ergeben sich für Frauen niedrigere und weniger lohnelastische Abgangsraten sowohl in Beschäftigung als auch Nichtbeschäftigung. |
Keywords: | job separations,gender,gender pay gap,Germany |
JEL: | J62 J63 J16 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:062010&r=lab |
By: | Lorenzo Cappellari (DISCE, Università Cattolica); Konstantinos Tatsiramos (Institute for the Study of Labor Bonn) |
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: | Networks, Unemployment, Friendship ties. |
JEL: | J64 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:ctc:serie4:ieil0059&r=lab |
By: | David Card (UC Berkeley); Alex Mas (Princeton University); Enrico Moretti (UC Berkeley); Emmanuel Saez (UC Berkeley) |
Abstract: | Economists have long speculated that individuals care about both their absolute income and their income relative to others. We use a simple theoretical framework and a randomized manipulation of access to information on peers’ wages to provide new evidence on the effects of relative pay on individual utility. A randomly chosen subset of employees of the University of California was informed about a new website listing the pay of all University employees. All employees were then surveyed about their job satisfaction and job search intentions. Our information treatment doubles the fraction of employees using the website, with the vast majority of new users accessing data on the pay of colleagues in their own department. We find an asymmetric response to the information treatment: workers with salaries below the median for their pay unit and occupation report lower pay and job satisfaction, while those earning above the median report no higher satisfaction. Likewise, below-median earners report a significant increase in the likelihood of looking for a new job, while above-median earners are unaffected. Our findings indicate that utility depends directly on relative pay comparisons, and that this relationship is non-linear. |
Keywords: | income, universities, wage information, job search, pay comparison |
JEL: | J01 J31 J40 J24 J39 |
Date: | 2010–09 |
URL: | http://d.repec.org/n?u=RePEc:pri:indrel:1269&r=lab |
By: | Lorenzo Cappellari (DISCE, Università Cattolica); Carlo Dell'Aringa (DISCE, Università Cattolica); Marco Leonardi (Dipartimento di Scienze Economiche, Aziendali e Statistiche Università degli Studi di Milano) |
Abstract: | In this paper we provide evidence on the effects of temporary employment on job flows, labour productivity and investment. As a source of identification, we exploit reforms in the legislation of fixed-term and apprenticeships contracts whose implementation varied over regions and industries. Results indicate that the reform of apprenticeship contracts has increased the turnover of workers and has induced capital-labor substitution in favour of labour, with an overall productivity-enhancing effect. The reform of fixed-term contracts instead does not seem to have had the intended results and may have made the use of these contracts more costly rather than less costly. Ineffectiveness of the reform may also depend on firms substituting across different types of labour: we estimate elasticities of substitution that are consistent with this interpretation. |
Keywords: | employment contracts, productivity, institutional changes |
JEL: | J24 J41 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:ctc:serie4:ieil0060&r=lab |
By: | Philip Du Caju (National Bank of Belgium); Gábor Kátay (Magyar Nemzeti Bank); Ana Lamo (European Central Bank); Daphne Nicolitsas (Bank of Greece); Steven Poelhekke (De Nederlandsche Bank) |
Abstract: | This paper documents the existence and main patterns of inter-industry wage differentials across a large number of industries for 8 EU countries (Belgium, Germany, Greece, Hungary, Ireland, Italy, Netherlands, and Spain) at two points in time (in general 1995 and 2002) and explores possible explanations for these patterns. The analysis uses the European Structure of Earnings Survey (SES), an internationally harmonised matched employer-employee dataset, to estimate inter-industry wage differentials conditional on a rich set of employee, employer and job characteristics. After investigating the possibility that unobservable employee characteristics lie behind the conditional wage differentials, a hypothesis which cannot be accepted, the paper investigates the role of institutional, industry structure and industry performance characteristics in explaining interindustry wage differentials. The results suggest that inter-industry wage differentials are consistent with rent sharing mechanisms and that rent sharing is more likely in industries with firm-level collective agreements and with higher collective agreement coverage. |
Keywords: | inter-industry wage differentials, rent sharing, unobserved ability |
JEL: | J31 J41 J51 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2010/9&r=lab |
By: | Savita Bhat; N S Siddharthan |
Abstract: | This paper analyses the importance of human capital in determining the inter-state differences in labour productivity and its growth in India. The paper also examines the impact of human capital differences on the growth of employment for a cross section of Indian states for the period 2003- 2007. It argues that the current technology is human capital and knowledge intensive and cannot be used in the absence of skill development. Due to the presence of skill bias in the new technology, persons with less education would become victims. The panel model results of Generalised Least Squares using cross section weights show that after controlling for other determinants, variables representing human capital emerge significant determinants of productivity. Furthermore, higher enrolments in high schools not only contribute to higher labour productivity but also to higher growth in productivity. In addition, states that have higher high school enrolment rates have been enjoying higher growth rates of employment. On the whole the results presented show strong skill bias in productivity and employment growths across states. |
Keywords: | human capital, skill development, technology, education, high school enrollments, productivity, Economics, Labour Economics |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3110&r=lab |
By: | Shutao Cao; Danny Leung |
Abstract: | In Canada, temporary workers account for 14 per cent of jobs in the non-farm business sector, are present in a range of industries, and account for 40 per cent of the total job reallocation. Yet most models of job reallocation abstract from temporary workers. This paper evaluates the importance of temporary workers in job reallocation in a multi-sector model with costly labour adjustment and temporary workers. The calibrated model captures some features of job reallocation in Canada. The paper shows that the adjustment cost parameters for permanent workers are underestimated if temporary workers are ignored. It also shows that when a shock occurs where permanent workers bear the brunt of reallocation (e.g. the 2005-2008 commodity price boom and the appreciation of the Canadian dollar), aggregate adjustment costs are underestimated if temporary workers are not accounted for. |
Keywords: | Labour markets; Productivity |
JEL: | D24 J32 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:10-27&r=lab |
By: | David Wozniak (Eastern Michigan University); William T. Harbaugh (University of Oregon); Ulrich Mayr (University of Oregon) |
Abstract: | Economic experiments have shown that in mixed gender groups women are more reluctant than men to choose tournaments when given the choice between piece rate and winner-take-all tournament style compensation. These gender difference experiments have all relied on a framework where subjects were not informed of their abilities relative to potential competitors. We replicate these findings with math and word tasks, and then show that feedback about relative performance moves high ability females towards more competitive compensation schemes, moves low ability men towards less competitive schemes such as piece rate and group pay, and removes the average gender difference in compensation choices. We also examine between and within-subjects differences in choices for females across the menstrual cycle. We find women's relative reluctance to choose tournaments comes mostly from women in the low hormone phase of their menstrual cycle. Women in the high hormone phase are substantially more willing to compete than women in the low phase, though still somewhat less willing to compete than men. There are no significant differences between the choices of any of these groups after they receive relative performance feedback. |
Keywords: | competition, tournaments, gender, hormones, menstruation, feedback |
Date: | 2010–10–28 |
URL: | http://d.repec.org/n?u=RePEc:ore:uoecwp:2010-2&r=lab |
By: | Eichhorst, Werner (IZA); Konle-Seidl, Regina (IAB, Nürnberg); Koslowski, Alison (University of Edinburgh); Marx, Paul (IZA) |
Abstract: | This paper explores the empirical evidence for the claim that non-employed men and women in post-industrial labour markets are more likely to make the transition into employment than has previously been the case. It concludes that whilst the unemployed and the inactive remain distinct groups with regards to transitions into employment, post-industrial labour markets have indeed become more inclusive. Only a few countries saw decreased odds of transition over time for the unemployed, controlling for macro-economic conditions. The picture for the inactive is more mixed cross-nationally. Regarding the question whether an increasingly inclusive labour market is associated with a reduction in job quality, as measured by contract type, the study finds that there is a trend towards more precarious employment for the recently non-employed in some countries such as the Czech Republic, France, Italy and Belgium. In Denmark, Spain, the UK and Hungary, however, there was the opposite trend towards more permanent employment. |
Keywords: | non-standard employment, fixed-term contracts, transitions |
JEL: | J41 J62 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5285&r=lab |
By: | Popov, Sergey V.; Bernhardt, Dan |
Abstract: | We develop a model of strategic grade determination by universities distinguished by their distributions of student academic abilities. Universities choose grading standards to maximize total wages of graduates. Job placement and wages hinge on a firm’s productivity assessment given a student’s university, grade and productivity signal. We identify conditions under which better universities set lower grading standards, exploiting the fact that firms cannot distinguish between “good” and “bad” “A”s. In contrast, a social planner sets stricter standards at better universities. We show how increases in skilled jobs drive grade inflation, and determine when grading standards fall faster at better schools. |
Keywords: | grading standards; grading inflation; information |
JEL: | I21 |
Date: | 2010–11–04 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26461&r=lab |
By: | Eric A. Hanushek; Ludger Woessmann |
Abstract: | Existing growth research provides little explanation for the very large differences in long-run growth performance across OECD countries. We show that cognitive skills can account for growth differences within the OECD, whereas a range of economic institutions and quantitative measures of tertiary education cannot. Under the growth model estimates and plausible projection parameters, school improvements falling within currently observed performance levels yield very large gains. The present value of OECD aggregate gains through 2090 could be as much as $275 trillion, or 13.8 percent of the discounted value of future GDP. Extensive sensitivity analyses indicate that, while differences between model frameworks and alternative parameter choices make a difference, the economic impact of improved educational outcomes remains enormous. Interestingly, the quantitative difference between an endogenous and neoclassical model framework – with improved skills affecting the long-run growth rate versus just the steady-state income level – matters less than academic discussions suggest. We close by discussing evidence on which education policy reforms may be able to bring about the simulated improvements in educational outcomes. |
JEL: | H0 I2 J24 J48 O4 |
Date: | 2010–11 |
URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16515&r=lab |
By: | Simona E. Cociuba; Alexander Ueberfeldt |
Abstract: | From 1980 until 2007, U.S. average hours worked increased by thirteen percent, due to a large increase in female hours. At the same time, the U.S. labor wedge, measured as the discrepancy between a representative household’s marginal rate of substitution between consumption and leisure and the marginal product of labor, declined substantially. We examine these trends in a model with heterogeneous households: married couples, single males and single females. Our quantitative analysis shows that the shrinking gender wage gaps and increasing labor income taxes observed in U.S. data are key determinants of hours and the labor wedge. Changes in our model’s labor wedge are driven by distortionary taxes and non-distortionary factors, such as cross-sectional differences in households’ labor supply and productivity. We conclude that the labor wedge measured from a representative household model partly reflects imperfect household aggregation. |
Keywords: | Labour markets; Economic models; Potential output |
JEL: | E24 H20 H31 J22 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:10-28&r=lab |
By: | Peter Dolton; Chiara Rosazza-Bondibene; Jonathan Wadsworth |
Abstract: | This paper assesses the impact of the National Minimum Wage (NMW) onemployment and inequality in the UK over the decade since its introduction in 1999.Identification is facilitated by using variation in the bite of the NMW across locallabour markets and the different sized year on year up ratings of the NMW. We use an'incremental differences-in-differences' (IDiD) estimator which allows us to estimatethe effects of the NMW in each year since its introduction. We find that an increasedbite of the NMW is associated with falls in lower tail wage inequality. Moreover, whilethe average employment effect of the NMW over the entire period is broadly neutral,there are small but significant positive employment estimates from 2003 onward, whenthe average bite of the NMW was at its highest since its introduction. |
Keywords: | Minimum wage, employment, wages, inequality |
JEL: | J0 J2 J3 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1007&r=lab |
By: | Nerman, Måns (Department of Economics, School of Business, Economics and Law, Göteborg University); Owens, Trudy (University of Nottingham) |
Abstract: | This paper uses household data to test whether the determinants of demand for education have changed during the Tanzanian government’s push for Universal Primary Education (UPE) in the 2000s. Drawing on the existing theoretical and empirical literature, we test three main hypotheses. First, we test whether demand for education is driven by the direct and opportunity costs of education. We find that the abolition of school fees has led to an increase in enrolment within agricultural households. However, wealth is still a significant determinant of demand, indicating that structural differences in educational attainment have remained largely intact over the period. In line with other studies, we find opportunity costs of sending children to school to be important, yet their impact is modest. Second, the paper estimates returns to education which is then used as an explanatory factor in the demand for education estimations. The paper finds strong indications that returns do not determine demand. Third, we test the importance of preferences in determining demand and find that educational choices are affected by the views held by others within the community, which is supportive of the importance of social norms in determining educational choices. However, after the introduction of UPE, the size of this impact halves, suggesting that the push has reduced the influence of previous social norms on the demand for education.<p> |
Keywords: | Education; household behaviour; Tanzania |
JEL: | I21 O15 |
Date: | 2010–11–02 |
URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0472&r=lab |
By: | Michela Ponzo; Vincenzo Scoppa (Dipartimento di Economia e Statistica, Università della Calabria) |
Abstract: | This paper analyses theoretically favouritism in recruitment decisions. We study the investments in connections by applicants for jobs which pay a wage rent and the behaviour of public or private managers intending to favour the recruitment of connected agents in place of more competent candidates. Key elements in determining favouritism are the delegation of recruitment decisions and unverifiable information regarding the skills of job applicants. We show in an agency framework that if the manager is “corruptible”, both low and high ability workers invest in connections and that nepotism is more widespread in jobs paying high wage-rents; in organisations in which “low-powered incentives” are used for managers; when firm performance is slightly sensitive to abilities; when it is easy to make hidden payments and the intensity of family ties is strong; when the uncertainty of connection process is low. |
Keywords: | Recruitment policies, Favouritism, Nepotism, Connections, Incentives |
JEL: | M51 D73 J24 J71 J31 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201017&r=lab |
By: | Yang Yao; Ninghua Zhong (China Center for Economic Research) |
Abstract: | Based on a survey of 1,268 firms in 12 Chinese cities, this paper empirically studies the effects of unions on three aspects of workers’ welfare, namely, hourly wages, monthly working hours, and pension coverage. Our baseline results show that unionization increases hourly wage rates by 5.6%, reduces monthly working hours by 1.4%, and raises pension coverage by 12.3%. Taking the endogeneity of unionization into consideration, our 3SLS estimation finds larger effects. These results are robust in the subsample of domestic private enterprises where unions are less common than in other types of firms. Further econometric analysis has established two channels for unions to improve workers’ welfare, one by encouraging collective wage contracts, and the other by encouraging written contracts. |
Keywords: | Unionization, workers’ welfare, Chinese firms |
JEL: | J3 J51 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:eab:microe:2335&r=lab |
By: | Alex Bryson; John Forth |
Abstract: | This paper analyses the continued decline of trade unions in Britain and examines thepossible implications for workers, employers, and unions themselves. Membership of tradeunions declined precipitously in the 1980s and 1990s. The rate of decline has slowed in themost recent decade, but we find that unions remain vulnerable to further erosion of theirmembership and influence. |
Keywords: | trade unions, wages, holidays, workplace performance |
JEL: | J51 J31 L25 |
Date: | 2010–09 |
URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1003&r=lab |
By: | Barrera-Osorio, Felipe; Raju, Dhushyanth |
Abstract: | Low student learning is a common finding in much of the developing world. This paper uses a relatively unique dataset of five semiannual rounds of standardized test data to characterize and explain the short-term changes in student learning. The data are collected as part of the quality assurance system for a public-private partnership program that offers public subsidies conditional on minimum learning levels to low-cost private schools in Pakistan. Apart from a large positive distributional shift in learning between the first two test rounds, the learning distributions over test rounds show little progress. Schools are ejected from the program if they fail to achieve a minimum pass rate in the test in two consecutive attempts, making the test high stakes. Sharp regression discontinuity estimates show that the threat of program exit on schools that barely failed the test for the first time induces large learning gains. The large change in learning between the first two test rounds is likely attributable to this accountability pressure given that a large share of new program entrants failed in the first test round. Schools also qualify for substantial annual teacher bonuses if they achieve a minimum score in a composite measure of student test participation and mean test score. Sharp regression discontinuity estimates do not show that the prospect of future teacher bonus rewards induces learning gains for schools that barely did not qualify for the bonus. |
Keywords: | Tertiary Education,Education For All,Secondary Education,Teaching and Learning,Primary Education |
Date: | 2010–11–01 |
URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5465&r=lab |
By: | David Marsden |
Abstract: | This article examines the relationship between individual and collective employee voice, and management-led voice (appraisal), under contrasted collective voice regimes. In the first, collective workplace voice depends on voluntary recognition by the employer, and in the second, it is based on statutory rights. It is argued that in the first, individual and collective voice act as substitutes, and in the second they act as complements. Management-led voice is also influenced by whether the preceding forms are substitutes or complements. The argument is tested using data from the British and French workplace employment relations surveys for 2004, combining responses from employees and from management. Within country differences are used to aid identification. In conclusion, it finds broad support for the main hypothesis. |
Keywords: | Labour-management relations, industrial jurisprudence, individual and collective voice, works councils |
JEL: | J53 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1006&r=lab |
By: | Jonasson, Erik (Department of Economics, Lund University) |
Abstract: | This paper analyses the role of government effectiveness and social norms in the determination of informal employment. A theoretical model is developed, in which local governance affects worker productivity and in which non-compliance with local social norms constitutes a non-pecuniary cost to the worker. These effects, together with skill level, are assumed to influence the decision of the worker whether to seek employment in the formal or informal sector. The model is assessed empirically using data from Brazil, where almost half of the urban labour force is employed informally. The empirical analysis supports the predictions of the model and suggests that informal employment is lower in regions with better governance, stronger social norms for compliance with tax and labour regulation, and higher average education. |
Keywords: | informal employment; government effectiveness; social norms; Brazil; Latin America |
JEL: | J21 J24 O17 R23 |
Date: | 2010–10–26 |
URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2010_013&r=lab |
By: | Jan Priebe (Georg-August-University Göttingen) |
Abstract: | Over the last two decades Indonesia has experienced a signifcant decline in fertility rates and substantial increases in the level of education of women. Despite this development female labor force participation rates have remained roughly constant throughout this period. This paper explores the causes for the seeming unresponsiveness of female labor supply to changes in fertility. The empirical analysis is performed using annual data from the national household survey Susenas for the period 1993-2008. The final sample comprises about 850,000 woman aged 21 to 35 with at least two children. Identifcation of causal effects builds upon the empirical strategy as outlined in Angrist and Evans (1998). The results suggest that a considerable share of women in Indonesia works in the labor market in order to finance basic expenditures on their children. Therefore, reductions in fertility rates seem to have led to two opposing effects that contributed to aggregate levels of female labor supply being constant. While some women were more likely to participate in the labor market due to a lower number of children, others might now lack the need to engage in the labor market due to a relaxation in their budget constraint. |
Keywords: | Causality; Child Costs; Indonesia; Labor Supply; LATE |
JEL: | C21 D01 J13 J20 |
Date: | 2010–10–29 |
URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:045&r=lab |
By: | Adrian de la Garza; Giovanni Mastrobuoni; Atsushi Sannabe; Katsunori Yamada |
Abstract: | This article uses survey data of 90,000 union employees working in 62 publicly traded companies in Japan between 1990 and 2004 to study the effect of both own and self-reported reference wages on workers' subjective well-being levels. The availability of self-reported reference wages generates very robust findings that do not depend on questionable identifying assumptions. These findings confirm that higher estimates by workers of their peers' earnings are associated with lower levels of life and job satisfaction. These comparison effects are statistically and economically strong but are smaller in absolute value than the impact of workers' own wages on their own utility. We compare our results with standard tests of the relative utility hypothesis in the literature that recur to alternative proxies for comparison wages, including: (i) Mincer-predicted wages; (ii) cell averages defined over different groups within our dataset; (iii) cell wage averages estimated from an external data source; and (iv) colleagues' average wages. In spite of their potential flaws - that we discuss - these alternative empirical constructs employed in the literature do not introduce a simple classical measurement error problem and the bias attributed to this measurement error issue can go in both directions. We propose a simple IV strategy when the self-reported reference wage is not available that does not eliminate the bias but delivers a lower bound of the "true" effect. We also address the issue of endogeneity of self-reported reference wages in our subjective well-being regressions by accounting for workers' pessimistic attitudes at the workplace. |
Date: | 2010–11 |
URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0798&r=lab |
By: | Adrian de la Garza; Giovanni Mastrobuoni; Atsushi Sannabe; Katsunori Yamada |
Abstract: | This article uses survey data of 90,000 union employees working in 62 publicly-traded companies in Japan between 1990 and 2004 to study the effect of both own and self-reported reference wages on workers' subjective well-being levels. The availability of self-reported reference wages generates very robust findings that do not depend on questionable identifying assumptions. These findings confirm that higher estimates by workers of their peers' earnings are associated with lower levels of life and job satisfaction. These comparison effects are statistically and economically strong but are smaller in absolute value than the impact of workers' own wages on their own utility. We compare our results with standard tests of the relative utility hypothesis in the literature that recur to alternative proxies for comparison wages, including: (i) Mincer-predicted wages; (ii) cell averages defined over different groups within our dataset; (iii) cell wage averages estimated from an external data source; and (iv) colleagues' average wages. In spite of their potential flaws — that we discuss — these alternative empirical constructs employed in the literature do not introduce a simple classical measurement error problem and the bias attributed to this measurement error issue can go in both directions. We propose a simple IV strategy when the self-reported reference wage is not available that does not eliminate the bias but delivers a lower bound of the "true" effect. We also address the issue of endogeneity of self-reported reference wages in our subjective well-being regressions by accounting for workers' pessimistic attitudes at the workplace. |
Keywords: | Subjective well-being; relative utility; reference wages |
JEL: | D00 J28 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:159&r=lab |
By: | Fitzenberger, Bernd; Osikominu, Aderonke; Paul, Marie |
Abstract: | This paper estimates the impact of training incidence and duration on employment transitions accounting for the endogeneity of program participation and duration. We specify a very flexible bivariate random effects probit model for employment and training participation and we use Bayesian Markov Chain Monte Carlo (MCMC) techniques for estimation. We develop a simulation approach that uses the estimated coefficients and individual specific effects from the MCMC iterations to calculate the posterior distributions of different treatment effects of interest. Our estimation results imply positive effects of training on the employment probability of the treated, lying between 12 and 21 percentage points ten quarters after program start. The effects are higher for women than for men and higher in West Germany than in East Germany. Further, we find that the effect of training versus waiting underestimates the effect of training versus no training in the medium and long run by a third. Finally, our results show that longer planned enrolment lengths of three and four quarters as opposed to just two quarters lead to an increase in employment rates in the medium and long run by four to eleven percentage points. -- |
Keywords: | evaluation,active labor market programs,dynamic non-linear panel data models,MCMC |
JEL: | J68 C33 C11 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10077&r=lab |
By: | Grund, Christian (University of Würzburg); Kräkel, Matthias (University of Bonn) |
Abstract: | Using data on executive compensation for the German chemical industry, we investigate the relevance of two theoretical approaches that focus on bonuses as part of a long term wage policy of a firm. The first approach argues that explicit bonuses serve as substitutes for implicit career concerns. The second approach claims that bonuses are used as complements to an executive's internal career. Our data show that bonus payments are mostly prevalent among senior executives at higher hierarchy levels and rather for management jobs than for jobs in research and development. This is true for the whole chemical sector as well as for single large corporations. The findings indicate that the two theoretical views are not mutually exclusive, but are both relevant in practice. |
Keywords: | bonus payments, chemical sector, hierarchy, tenure, wage policy |
JEL: | M52 J33 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5284&r=lab |
By: | Luc Behaghel; David M. Blau |
Abstract: | We use a US Social Security reform as a quasi-experiment to provide evidence on framing effects in retirement behavior. The reform increased the full retirement age (FRA) from 65 to 66 in two month increments per year of birth for cohorts born from 1938 to 1943. We find strong evidence that the spike in the benefit claiming hazard at 65 moved in lockstep along with the FRA. Results on self-reported retirement and exit from employment are less clear-cut, but go in the same direction. The responsiveness to the new FRA is stronger for people with higher cognitive skills. We interpret the findings as evidence of reference dependence with loss aversion. We develop a simple labor supply model with reference dependence that can explain the results. The model has potentially important implications for framing of future Social Security reforms. |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2010-37&r=lab |
By: | Martins, Pedro S. (Queen Mary, University of London); Yang, Yong (University of Essex) |
Abstract: | We present evidence about the role of rent sharing in fostering the interdependence of labour markets around the world. Our results draw on a firm-level panel of more than 2,000 multinationals and more than 5,000 of their affiliates, covering 47 home and host countries. We find considerable evidence that multinationals share profits internationally, by paying higher wages to their workers in foreign affiliates in periods of higher profits. This occurs even across continents, and not only within Europe, as shown in earlier research. The results are robust to different tests, including a falsification exercise based on 'matched' parents. Finally, we show that different measures of the heterogeneity between parents and affiliates tend to increase rent sharing while the number of affiliates tends to decrease rent sharing, results we argue are consistent with bargaining views. |
Keywords: | multinationals, profit sharing, wage determination |
JEL: | J31 J41 J50 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5283&r=lab |
By: | Xuejun Liu; Albert Park; Yaohui Zhao (China Center for Economic Research) |
Abstract: | Although theory predicts that international trade will decrease the relative demand for skilled workers in relatively skill-deficit countries, in recent decades many developing countries have experienced rising wage premiums for skilled workers. We examines this puzzle by quantifying the relative importance of different supply and demand factors in explaining the rapid increase in the returns to education experienced by China during the 1990s. Analyzing Chinese urban household survey and census data for six provinces, we find that although changes in the structure of demand did reduce the demand for skilled workers, consistent with trade theory, the magnitude of the effect was modest and more than offset by institutional reforms and technological changes that increased the relative demand for skill. |
Keywords: | international trade, education, China, urban household survey |
JEL: | I20 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:eab:tradew:2334&r=lab |
By: | Alexander Murray |
Abstract: | This report provides a critical assessment of recent Canadian efforts to measure and evaluate the impacts of labour market information (LMI). The purpose of this exercise is to provide a summary of the current state of knowledge on the role and impact of LMI in Canada, to assess the contribution of recent research to that knowledge, and to outline areas in which further research is required. The report finds that we know very little about the impact of LMI per se on labour market outcomes. The Canadian LMI literature does demonstrate that employers and individuals consider LMI to be useful in decision-making, and that LMI and LMI-related programs can have a positive impact on individuals' labour market knowledge and career decision-making. |
Keywords: | labour market, Canada, labour market information, decision-making, labour market outcomes |
JEL: | J01 J20 J60 |
Date: | 2010–06 |
URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1004&r=lab |
By: | Marczak, Martyna; Beissinger, Thomas |
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,trend-cycle decomposition,structural time series model,phase angle,Germany |
JEL: | E32 C22 C32 J30 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:202010&r=lab |
By: | Göbel, Christian; Zwick, Thomas |
Abstract: | In this study, we investigate the effect of five specific human resource measures for old employees (SMOE) on their relative productivity. Despite the fact that SMOE are applied in the majority of establishments, this is the first representative study on the effectiveness of these measures. We find that the relative productivity contributions of old workers are significantly higher in establishments that provide either specific equipment of work places or age-specific jobs for old workers. In establishments that apply mixed-age working teams the productivity contributions of old and of young employees are significantly higher than in establishments without this measure. Working time reductions and specific training for old employees are not associated with higher relative productivity of these employees. Our paper provides a joint explanation for two recent findings, the only modest decline of the productivity contributions of old workers and the high variance for estimates of age-productivity profiles. -- |
Keywords: | ageing workforce,age-productivity-profile,personnel management,HRM |
JEL: | J11 J14 J21 |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10069&r=lab |
By: | Andrew Sharpe; Jean-François Arsenault |
Abstract: | The objective of this paper is to summarize the research done by the Centre for the Study of Living Standards (CSLS) on the economic impacts of improving levels of Aboriginal education. Improving the social and economic well-being of the Aboriginal population is not only a moral imperative; it is a sound investment that will pay substantial dividends in the coming decades. In particular, Canada’s Aboriginal population could play a key role in mitigating the looming long-term labour shortage caused by Canada’s aging population and low birth rate. We estimate that complete closure of both the education and the labour market outcomes gaps by 2026 would lead to cumulative benefits of $400.5 billion (2006 dollars) in additional output and $115 billion in avoided government expenditures over the 2001-2026 period. |
Keywords: | Aboriginal, Education, Canada, Forecast of economic growth, Equity and efficiency, well-being, labour market, unemployment |
JEL: | J10 J11 I29 I28 E27 O11 O15 O47 |
Date: | 2010–02 |
URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1003&r=lab |
By: | Claire Crawford (Institute for Fiscal Studies, 7 Ridgmount Street, London, WC1E 7AE; Institute of Education, University of London, 20 Bedford Way, London WC1H 0AL, UK.); Anna Vignoles (Department of Quantitative Social Science, Institute of Education, University of London. 20 Bedford Way, London WC1H 0AL, UK.) |
Abstract: | One in five children in England are recorded as having some kind of special educational need, meaning that they receive additional help in school; yet there is very little evidence of the effect of such assistance on pupil’s academic progress. This is at least partly because it is usually very difficult to define an appropriate control group for pupils with special educational needs. To overcome this issue, we make use of extremely rich data from the Avon Longitudinal Study of Parents and Children to assess the academic progress of pupils between Key Stages 1 and 2 (ages 7 and 11). Specifically, we compare the progress of children who have been formally identified by the SEN system as having non-statemented (less severe) needs with the progress of children who do not have SEN label, but whose class teacher reports that they exhibit behaviour which suggests that they might have special educational needs. Our results suggest that, despite our very similar control group, pupils with a SEN label still score about 0.3 standard deviations lower at Key Stage 2 than otherwise identical pupils without a SEN label. This is perhaps not an entirely unexpected result, given that there is no compulsion in the system for non-statemented SEN funding to be spent on children with special educational needs and in any case additional resources may not close the gap completely. Nonetheless, such a result clearly has significant policy implications: schools are provided with resources to help children with special educational needs and if these resources are not improving academic outcomes for these children, then this should be of concern to both parents and policymakers alike. |
Keywords: | special educational needs, educational attainment, propensity score matching |
JEL: | I2 H52 |
Date: | 2010–11–03 |
URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1019&r=lab |
By: | Cai, Wenbiao |
Abstract: | This paper develops a general equilibrium model to quantitatively explain high labor share, low productivity and small farm size in agriculture in low income countries. The model features individual heterogeneity in skill that is augmentable over time and endogenous occupation choice. Calibrated to the U.S, the model can reproduce bulk of the observed variations in agriculture employment, agriculture output per worker and mean farm size across countries in the sample. In addition, the model generates endogenous farm size distributions that closely resemble the empirical counterpart for a large set of countries. Counterfactual exercises show TFP to be the main source of productivity differences. |
Keywords: | Income differences; agricultural productivity; Skill investment; farm size distribution |
JEL: | O11 O15 O13 O14 |
Date: | 2010–10–21 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26439&r=lab |
By: | Mulholland, Sean; Tomic, Aleksandar; Sholander, Samuel |
Abstract: | Analyzing the peer assessment portion of the US News and World Report’s college rankings, we find that administrators and faculty rate more highly universities whose football team receives a greater number of votes in either the final Associated Press or Coaches Poll. Controlling for unobserved heterogeneity, our estimates suggest that a one standard deviation increase in the number of votes received in either the Associated Press or USA Today Coaches’ Football Poll is viewed as positively as a forty point increase in a school’s SAT score at the 75th percentile. |
Keywords: | college football; football bowl subdivision; national universities; peer assessment |
JEL: | I20 I23 L83 |
Date: | 2010–09–07 |
URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26443&r=lab |
By: | Alex Bryson; Rafael Gomez; Kerry L. Papps |
Abstract: | A detailed longitudinal dataset is assembled containing annual performance and biographicaldata for every player over the entire history of professional major league baseball. The dataare then aggregated to the team level for the period 1920-2009 in order to test whether teamsbuilt on a more even distribution of observed talent perform better than those teams with amixture of highly able and less able players. The dependent variable used in the regressions isthe percentage of games a team wins each season. We find that conditioning on averageplayer ability, dispersion of both batting and pitching talent displays an optimal degree ofinequality, in that teams with too high or too low a spread in player ability perform worsethan teams with a more balanced distribution of offensive and defensive talent. Thesefindings have potentially important applications both inside and outside of the sporting world. |
Keywords: | skill dispersion, baseball, firm performance |
JEL: | L23 L25 L83 M51 |
Date: | 2010–10 |
URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1015&r=lab |
By: | Dibyendu S. Maiti; Arup Mitra |
Abstract: | This paper makes an attempt to estimate the index of informal sector employment which can be attributed to the supply-push phenomenon. Factors which explain the inter-state variations include the industrial-informal sector wage gap, revenue expenditure, and development expenditure incurred by the government. Increased development expenditure brings in a decline in distress-led informalization. With improved education, health, and infrastructure facilities the employability of an individual goes up, which, in turn, reduces the compulsion to get absorbed residually. However, expansion in government activities measured through increased revenue expenditure raises in-migration, which in turn raises the supply-push phenomenon. We also observed that with an increase in distress-led informalization inequality tends to rise. Adoption of labour intensive technology in the organized industrial sector is indeed crucial for pro-poor growth. The other policy implication is in terms of enhanced investment in the areas of education, health and other infrastructural facilities. |
Keywords: | Informal sector, informal sector employment , supply-push, development expenditure, stochastic frontier, infrastructure, employability, labour-intensive technology, informalisation, informalization, pro-poor growth, Labour Studies, Economics, Labour Economics |
Date: | 2010 |
URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3115&r=lab |