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on Labour Economics |
| By: | Jhon James Mora (Departamento de Economía. Universidad ICESI.); Juan Muro (Departamento de Estadística, Estructura y O.E.I. Universidad de Alcalá.) |
| Abstract: | This paper discusses the effect of the minimum wage level on the decision to join the informal job sector. We estimate a pseudo panel of the engagement in the informal sector using an IV-probit. The findings show that an increase in the minimum wage level leads to a substitution effect between young and older workers. This results show that the standards effects over the labor market in the WGM segmented model are moderate because an increase of the minimum wage level does not imply total mobility between sectors. |
| Keywords: | Informality, minimum wages, instrumental variable probit, pseudo panel, sample selection bias |
| JEL: | C35 J32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:alc:alcamo:1001&r=lab |
| By: | Gomes, Pedro Maia (Universidad Carlos III de Madrid) |
| Abstract: | This paper documents a number of facts about worker gross flows in the United Kingdom for the period between 1993 and 2010. Using Labour Force Survey data, I examine the size and cyclicality of the flows and transition probabilities between employment, unemployment and inactivity, from several angles. I examine aggregate conditional transition probabilities, job-to-job flows, employment separations by reason, flows between inactivity and the labour force and flows by education. I decompose contributions of job-finding and job-separation rates to fluctuations in the unemployment rate. Over the past cycle, the job-separation rate has been as relevant as the job-finding rate. |
| Keywords: | worker gross flows, job-finding rate, job-separation rate, transition probabilities |
| JEL: | E24 J60 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5327&r=lab |
| By: | Pierre Lefebvre; Philip Merrigan |
| Abstract: | The purpose of this research is to estimate the impact of education, with a particular focus on education levels lower than a university diploma, on the labour market and social outcomes of the 24- to 26-year-old Canadians found in the fourth wave of the Youth in Transition Survey (YITS), conducted by Statistics Canada in 2006. We focus on differences between individuals who did not pursue college or university level degrees. We find that dropouts perform very poorly for most of the outcomes we analyse. Our most important result is that males who finish their high-school degree very late (after 19 years of age), perform, ceteris paribus, at many levels like dropouts. This suggests that policy makers should be taking a very close look at “second chance” or “adult education” programs across Canada. |
| Keywords: | Education levels, high school and postsecondary dropouts, graduate and continuers, earnings, wage rates, employment, employment insurance and social assistance, volunteer activities, youth skills |
| JEL: | I21 I28 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1045&r=lab |
| By: | Gomes, Pedro Maia (Universidad Carlos III de Madrid) |
| Abstract: | I build a dynamic stochastic general equilibrium model with search and matching frictions and two sectors in order to study the labour market effects of public sector employment and wages. Public sector wages plays an important role in achieving the efficient allocation. High wages induce too many unemployed to queue for public sector jobs, while if they are low, the government faces recruitment problems. The optimal steady-state wage premium depends mainly on the labour market friction parameters. In response to technology shocks, it is optimal to have procyclical public sector wages. Deviations from the optimal policy can increase the volatility of unemployment significantly. Public sector wage and employment shocks have mixed effects on unemployment. A wage shock raises the unemployment rate, while a reduction in the separations lowers it. Hiring more people can increase or decrease the unemployment rate. All shocks raise the wage and crowd out employment in the private sector. In the empirical part, I employ Bayesian methods to estimate the parameters of the model for the United States. I find that the direct search mechanism between the two sectors is an important element to explain business cycle fluctuations of the labour market variables. |
| Keywords: | public sector employment, public sector wages, unemployment, fiscal shocks |
| JEL: | E24 E32 E62 J31 J45 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5321&r=lab |
| By: | Vladimír Benáček (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | n this paper we study three crucial questions of economic decision-making: a) How are the people motivated in the choice of profession (career) and schools? This is also a decision that deals with the criteria for building the human capital of various specialisations. b) Can enterprises rely on the supply of new workers that should be qualified by skills for filling the future specialised demands of enterprises? c) Do the admissions into secondary schools, as intermediaries between the previous two, adjust to labour inputs with specific skills as required by firms? We have found by analysing the data for the agglomeration of Prague that the specialisation structure the supply of new cohort of workers (i.e. the school leavers) was highly consistent with the structure of expected demand of empoyers (i.e. enterprises). Our analysis working with 28 professional types of secondary schools in Prague reveals that the choice of school and profession depends primarily on the industrial structure of both employment opportunities and unemployment threats. As a secondary observation, the structure of new admissions to schools is related to the level of wages, profits, unemployment rates and R&D expenditures in industries. At the same time we could see that the existing official statistics about educational specialisation are insufficiently structured for serving as an efficient instrument for underpinning the labour market-dependent decision making in both families and schools. |
| Keywords: | education; human capital; supply and demand for working skills; employment in industries |
| JEL: | I21 G21 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2010_28&r=lab |
| By: | Månsson, Jonas (Centre for Labour Market Policy Research (CAFO)); Olsson, Mikael (Swedish International Development Cooperation Agency (SIDA)) |
| Abstract: | In this study the 2004 labor market attainment of all immigrants of working age from Estonia, Latvia, Lithuania and Poland on the Swedish labor market is investigated. The analysis is conducted in three steps. Step one investigates labor force participation at the time of observation by estimating the probability of being part of the labor force in 2004. In step two we estimate the probability of employment among those included in the labor force. In the third step we analyze the earnings of those employed while controlling for both types of selection. The data is a special delivery from Statistics Sweden and comprise all immigrants to Sweden from these countries from 1944 onwards. Comparisons are made with a stratified (on age and gender) random sample of persons born in Sweden. The results show that immigrants are less likely to be part of the labor force; that they are overrepresented among the unemployed and that the positive effects from higher education is less than for native Swedes. However, among those being employed the income differences are relatively minor. |
| Keywords: | Migration; Integration; Labor market attainment; Estonia; Latvia; Lithuania; Poland; Sweden |
| JEL: | J21 J23 J31 J61 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2010_006&r=lab |
| By: | Månsson, Jonas (Centre for Labour Market Policy Research (CAFO)); Ottoson, Jan (Uppsala University) |
| Abstract: | Using a rich data set on all registered Swedish part-time unemployed in 2003 we aim at identify individual characteristics that affect the probability of leaving part-time unemployment—from the perspective of whether part-time work serves as a transition mechanism offering access to the core labour market of full-time jobs, a stepping stone to the labour market, or if it is a dead end. The results of the study indicate clearly that there are groups for whom part-time employment cannot be considered as offering access to the market of full-time jobs—for them, part-time employment is a dead end. This is true especially for women and handicapped persons but also for part-time employed with unemployment benefit. Therefore, our policy recommendations are to strengthen placement and counselling services to these groups and to closely follow up and control the search process among those who are entitled to compensation from the unemployment insurance. |
| Keywords: | part-time; unemployment; |
| JEL: | E24 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2010_005&r=lab |
| By: | Canonva, Luciano; Vaglio, Alessandro |
| Abstract: | This paper investigates the role performed by mothers in affecting their childrens performance at school. The article develops firstly a theoretical modelin which household (parent - child pair) is treated as an individual, whose utility depends both on the performance at school of the student and on consumption. The model focuses on the different possibilities through which help of mothers may affect pupils' performance both in terms of time devoted to supervision and spillover effects. Empirical evidence then, using PISA 2006 and focusing on Italian case, shows that education of mothers is an issue when interacted with her occupational status. Highly educated mothers have a positive impact on students' score only when they are highly qualifi ed in the job market. |
| Keywords: | PISA 2006; parental help; education |
| JEL: | H0 N34 R2 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27019&r=lab |
| By: | Andreas Knabe; Alexander Plum |
| Abstract: | We examine whether low-paid jobs have an effect on the occupational advancement probability of unemployed persons to obtain better-paid jobs in the future (stepping-stone effect). We make use of data from the German Socio-Economic Panel (SOEP) and apply a dynamic random-effects probit model. Our results suggest that low-wage jobs can act as stepping stones to better-paid work. The improvement of the chance to obtain a high-wage job by accepting low-paid work is particularly large for less-skilled persons and for individuals with longer unemployment experiences. Low-paid work is less beneficial if the job is also associated with a low social status. |
| Keywords: | low pay dynamics, unemployment dynamics, dynamic random effects models, state dependence |
| JEL: | J64 J62 J31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp337&r=lab |
| By: | Åslund, Olof (Institute for Labour Market Policy Evaluation (IFAU), Uppsala University, IZA, and Uppsala Center for Labor Studies (UCLS).); Edin, Per-Anders (Uppsala University, IFAU, and UCLS.); Fredriksson, Peter (Stockholm University, IZA, and UCLS.); Grönqvist, Hans (Swedish Institute for Social Research (SOFI) Stockholm University.) |
| Abstract: | We examine to what extent immigrant school performance is affected by the characteristics of the neighborhoods that they grow up in. We address this issue using a refugee placement policy which provides exogenous variation in the initial place of residence in Sweden. The main result is that school performance is increasing in the number of highly educated adults sharing the subject’s ethnicity. A standard deviation increase in the fraction of high-educated in the assigned neighborhood raises compulsory school GPA by 0.9 percentile ranks. Particularly for disadvantaged groups, there are also long-run effects on educational attainment. |
| Keywords: | Peer effects; Ethnic enclaves; Immigration; School performance |
| JEL: | I20 J15 Z13 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2010_0024&r=lab |
| By: | Pia M. Orrenius; Madeline Zavodny; Jesús Cañas; Roberto Coronado |
| Abstract: | Remittances have been promoted as a development tool because they can raise incomes and reduce poverty rates in developing countries. Remittances may also promote development by providing funds that recipients can spend on education or health care or invest in entrepreneurial activities. From a macroeconomic perspective, remittances can boost aggregate demand and thereby GDP as well as spur economic growth. However, remittances may also have adverse macroeconomic impacts by increasing income inequality and reducing labor supply among recipients. We use state-level data from Mexico during 2003–07 to examine the aggregate effect of remittances on employment, wages, unemployment rates, the wage distribution, and school enrollment rates. While employment, wages and school enrollment have risen over time in Mexican states, these trends are not accounted for by increasing remittances. However, two-stage least squares specifications among central Mexican states suggest that remittances shift the wage distribution to the right, reducing the fraction of workers earning the minimum wage or less. |
| Keywords: | Emigrant remittances - Latin America ; Economic development - Latin America ; Economic conditions - Mexico ; Labor market ; Income distribution ; Emigration and immigration |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1007&r=lab |
| By: | Ossi Korkeamäki; Tomi Kyyrä |
| Abstract: | We use matched employer-employee data from Finland to model transitions out of work into sick leave and disability retirement. To identify the role of institutional factors we exploit reforms that changed medical requirements for disability pension eligibility and experience-rated employer contributions. We find that transitions to sick leave and disability pension benefits are relatively rare in growing establishments, but rather common in establishments with a high degree of excess worker turnover. We also show that transitions to disability retirement depend on the stringency of medical screening and the degree of experience rating applied to the employer. |
| Keywords: | Disability pension, sick leave, experience rating |
| JEL: | J26 J23 J14 |
| Date: | 2010–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:16&r=lab |
| By: | Tomi Kyyrä |
| Abstract: | A majority of older Finns withdraw from employment via early retirement schemes years before the statutory retirement age. Over the past 15 years, a series of policy reforms have been introduced to reduce the widespread use of early exit pathways. By exploiting variation in eligibility rules between different cohorts, this study examines the effects of changes in the eligibility age thresholds for unemployment and part-time pension schemes and the effect of tightening medical criteria for disability pension eligibility. The findings imply that these reforms have jointly raised the average age at which older workers leave employment by 3.9 months. This increase is mainly due to a sharp drop in disability pension enrolment from age 58 upwards and to a lower incidence of unemployment at younger ages. The policy effects are found to be heterogeneous, so that different subgroups were affected by different reforms. |
| Keywords: | Early retirement, policy reform, disability, unemployment |
| JEL: | J26 J14 |
| Date: | 2010–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:17&r=lab |
| By: | Kjell Erik Lommerud (Department of Economics, University of Bergen, Norway); Frode Meland (Department of Economics, University of Bergen, Norway); Odd Rune Straume (Universidade do Minho - NIPE and University of Bergen (Health Economics Bergen, Department of Economics), Norway) |
| Abstract: | We study how incentives for North-South technology transfers in multinational enterprises are affected by labour market institutions. If workers are collectively organised,incentives for technology transfers are partly governed by firms' desire to curb trade union power. This will affect not only the extent but also the type of technology transfer. While skill upgrading of southern workers benefits these workers at the expense of northern worker welfare, quality upgrading of products produced in the South may harm not only northern but also southern workers. A minimum wage policy to raise the wage levels of southern workers may spur technology transfer, possibly to the extent that the utility of northern workers decline. These conclusions are reached in a setting where a unionised multinational multiproduct firm produces two vertically differentiated products in northern and southern subsidiaries, respectively. |
| Keywords: | North-South technology transfer, Multinationals, Trade unions, Minimum wages |
| JEL: | F23 J51 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:35/2010&r=lab |
| By: | Nicola Meccheri (Department of Economics, University of Pisa, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy); Luciano Fanti (Department of Economics, University of Pisa, Italy) |
| Abstract: | This paper studies the interaction between incentive labour contracts, competition à la Cournot and industry profits, in a context where workers’ effort is not verifiable and the probability of the unemployed getting a job can depend on their employment histories according to the degree of product market competition. It is shown that efficiency wages paid by each firm can decrease when competition becomes fiercer. With discretionary bonuses, instead, wages are generally uncorrelated with competition, but there exists an upper threshold for the number of competing firms, over which profits collapse to zero. Moreover, if information about firms’ misbehaviour in paying bonuses flows in the labour market at a low rate, firms can make positive profits only by paying efficiency wages. |
| Keywords: | industry profits, Cournot competition, efficiency wages, performance pay |
| JEL: | J33 J41 L13 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:37_10&r=lab |
| By: | Månsson, Jonas (Centre for Labour Market Policy Research (CAFO)); Delander, Lennart (Centre for Labour Market Policy Research (CAFO)) |
| Abstract: | The aim of this article is to analyse the impact of human capital variables on the probability for young people of being included in and excluded from the labour market. Of special interest is to study the causal effects of having immigrant background, controlling for other individual characteristics such as age, sex, education, being breadwinner, parental income, and parental employment. The research questions are investigated by using data from Statistics Sweden on young people’s sources and levels of income. The population consists of 18–24 year olds in the county of Kronoberg in southern Sweden. The period covered by the study is 1997–2007. We estimate the impact of individual characteristics by means of both panel data analysis and cross-section analysis. We find that there is a strong association between not having completed compulsory school and being excluded from the labour market. When control-ling for other human capital variables we can not, however, argue that being immigrant or having immigrant parents considerably increases the probability of labour market exclusion. On the other hand, our results clearly testify that having foreign-born parents reduces the probability of being included in the labour market. It can be assumed that this is a consequence of young people with immigrant parents being disadvantaged compared to native youth as regards access to a social network that can be benefited from in the job search proc-ess. Thus, immigrant background chiefly is an obstacle to being included in the Swedish labour market and of less importance for the risk of labour market exclusion. In the respects mentioned here, the results of the panel data analysis corresponds qualitatively with those of the cross-section analysis. |
| Keywords: | Human capital; Immigration; Labour market inclusion; |
| JEL: | E24 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2010_003&r=lab |
| By: | Marco Leonardi (University of Milan and IZA); Giovanni Pica (Università di Salerno and CSEF) |
| Abstract: | Theory predicts that the wage effects of government-mandated severance payments depend on workers’ and firms. relative bargaining power. This paper estimates the effect of employment protection legislation (EPL) on workers. individual wages in a quasi-experimental setting, exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees and left .ring costs unchanged for bigger .rms. Accounting for the endogeneity of the treatment status, we find that high-bargaining power workers (stayers, white collar and workers above 45) are almost left unaffected by the increase in EPL, while low-bargaining power workers (movers, blue collar and young workers) suffer a drop both in the wage level and its growth rate. |
| Keywords: | Costs of Unjust Dismissals, Severance Payments, Policy Evaluation, Endogeneity of Treatment Status |
| JEL: | E24 J3 J65 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:265&r=lab |
| By: | Afonso, António (European Central Bank); Gomes, Pedro Maia (Universidad Carlos III de Madrid) |
| Abstract: | We examine the interactions between public and private sector wages per employee in OECD countries. The growth of public sector wages and of public sector employment positively affects the growth of private sector wages. Moreover, total factor productivity, the unemployment rate and the degree of urbanisation are also important determinants of private sector wage growth. With respect to public sector wage growth, we find that it is influenced by fiscal conditions in addition to private sector wages. We then set up a dynamic labour market equilibrium model with two sectors, search and matching frictions and exogenous growth to understand the interaction mechanisms. The model is quantitative consistent with the main estimation findings. |
| Keywords: | public sector wages, private sector wages, employment, fiscal policy |
| JEL: | E24 E62 H50 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5322&r=lab |
| By: | Eichhorst, Werner (IZA); Escudero, Veronica (ILO International Labour Organization); Marx, Paul (IZA); Tobin, Steven (International Institute for Labour Studies (ILO)) |
| Abstract: | The paper takes a comparative perspective on the labour market impact on G20 and EU countries of the financial and economic crisis that began in 2008. It starts from the observation that the decline in employment and rise in unemployment in relation to output or GDP reductions varies significantly across countries. It examines the impacts from an institutional perspective taking into account different channels of external, internal and wage flexibility determined by both the institutional arrangements in place before the crisis and discretionary reforms implemented during the crisis. Emphasis is placed on the role of permanent and temporary jobs, working time adjustment, wage flexibility and active and passive labour market policies. The paper shows that, at least for the time being, unemployment increases have been contained in countries with comparatively strong internal flexibility. At the same time, however, it appears that the crisis has – at least in some cases – contributed to a further dualization of labour markets given that risks are allocated unequally across types of employment. |
| Keywords: | crisis, employment, EPL, institutions, dual labour markets, flexibility |
| JEL: | J58 J65 J21 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5320&r=lab |
| By: | Michele Raitano (University of Rome, department of public economics); Francesco Vona (Observatoire Français des Conjonctures Économiques) |
| Abstract: | Recent literature agrees that the degree of intergenerational mobility substantially differs across European countries, ranked between the "mobile" Nordic countries and the "immobile" Anglo-Saxon and Southern ones. In this paper we will compare the intergenerational transmission of advantages in 8 European countries using EU-SILC dataset. Considering parental occupations as background variable, our main aims are to assess whether residual returns to background on offspring’s labour incomes persist after controlling for intermediated background-related outcomes (education and occupation) and to disentangle the role played by upward and downward occupational mobility on earnings. Our empirical analyses show that cross-country differences occur in the labour markets rather than in the educational stream. Consistently with previous findings, residual background effects on earnings are not significant in Nordic and Continental countries whereas they appear large in Anglo-Saxon and Southern ones. When the impact of backward and upward mobility is assessed, in all countries but Nordic ones penalties for upgrading emerge mostly in top occupations and are higher in less-mobile countries. These patterns are smoothened but preserved in bottom occupations and robust to different labour income measures. |
| Keywords: | Residual Returns to Background, Earning Impact of Occupational Mobility, International comparison, Intergenerational Inequality. |
| JEL: | D31 I21 J24 J31 J62 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1029&r=lab |
| By: | Eric French; John Bailey Jones |
| Abstract: | Virtually all developed countries face projected budget shortfalls for their public pension programs. The shortfalls arise for two reasons. First, populations in developed countries are aging rapidly. Second, until recently older individuals in developed countries have been retiring earlier. These two developments have created serious strains on public pension programs. In order to remain fiscally solvent, many governments have reformed their public pension schemes to encourage labor supply at older ages. These reforms include reductions in the generosity of public pensions and reduced penalties for working past the normal retirement age. In this paper, we consider how reforms to public pension systems affect labor supply over the life cycle. We put the recent empirical evidence on the effect of government pensions on labor supply in a life cycle context, and we present evidence on the effectiveness of tax reforms for stimulating labor supply over the life cycle. Our main conclusion is that the labor supply of older workers is responsive to changes in retirement incentives. The labor supply of younger workers is less responsive. Thus the trend towards lower taxes on older workers in many developed countries is likely to continue to fuel the recent trend towards later retirement. This, in turn, is likely to reduce the financial strain on public pension schemes. |
| Keywords: | Labor supply ; Pensions ; Retirement |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2010-09&r=lab |
| By: | Michele Raitano (University of Rome, department of public economics); Francesco Vona (Observatoire Français des Conjonctures Économiques) |
| Abstract: | The empirical literature using large international students’ assessments tends to neglect the role of school composition variables in order not to incur in a misidentification of peer effects. However, this leads to an error of higher logical type since the learning environment crucially depends on peers’ family background and on peer heterogeneity. In this paper, using PISA 2006, we show how peer heterogeneity is a key determinant of student attainment and of opportunity equalization. Interestingly, the effect of school compositional variables differs depending on the country tracking policy: peer heterogeneity reduces efficiency in comprehensive systems whereas it has a non-linear impact in early-tracking ones. In turn, linear peer effects are larger in early-tracking systems. Besides, higher heterogeneity tends to equalize student differences related to family background. Results do not change in school- and student-level regressions suggesting that the impact of heterogeneity is correctly identified. Results are also robust when we add school-level dummies and several controls correlated with the school choice to alleviate the selectivity bias of linear peer effects. |
| Keywords: | peer heterogeneity, peer effects, schooling tracking, educational production function, equality of opportunities. |
| JEL: | I21 I28 J24 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1023&r=lab |
| By: | Akresh, Richard (University of Illinois at Urbana-Champaign); Bagby, Emilie (University of Illinois at Urbana-Champaign); de Walque, Damien (World Bank); Kazianga, Harounan (Oklahoma State University) |
| Abstract: | Using data we collected in rural Burkina Faso, we examine how children's cognitive abilities influence resource constrained households' decisions to invest in their education. We use a direct measure of child ability for all primary school-aged children, regardless of current school enrollment. We explicitly incorporate direct measures of the ability of each child's siblings (both absolute and relative measures) to show how sibling rivalry exerts an impact on the parent's decision of whether and how much to invest in their child’s education. We find children with one standard deviation higher own ability are 16 percent more likely to be currently enrolled, while having a higher ability sibling lowers current enrollment by 16 percent and having two higher ability siblings lowers enrollment by 30 percent. Results are robust to addressing the potential reverse causality of schooling influencing child ability measures and using alternative cognitive tests to measure ability. |
| Keywords: | child ability, sibling rivalry, education, household decisions, Africa |
| JEL: | O15 J12 I21 J13 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5326&r=lab |
| By: | Francesca Modena; Fabio Sabatini |
| 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 wellbeing. |
| Keywords: | Fertility, family planning, parenthood, childbearing, participation, job instability, precarious employment, Italy. |
| JEL: | C25 J13 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:1013&r=lab |
| By: | Miana Plesca (Department of Economics, University of Guelph; The Rimini Centre for Economic Analysis (RCEA)) |
| Abstract: | This paper provides a general equilibrium evaluation of the Employment Service, also known as the Public Labor Exchange (PLX), a national program which facilitates meetings between job seekers and vacancies. The paper departs from the partial equilibrium framework of previous evaluations by constructing a dynamic general equilibrium matching model with the PLX as one search channel, and the other search channel comprising all other search methods. The PLX is a directed search channel in the sense that searchers are matched by skill levels. The model is calibrated to the U.S. PLX and to the U.S. labor market and is used to compute general and partial equilibrium impacts of the PLX. The findings are that (i) the partial equilibrium impacts are consistent with the empirical literature, but different from the general equilibrium ones; (ii) the standard assumption in the evaluation literature, that outcomes for agents who do not participate in a program are not directly affected by the program, does not hold for the PLX; (iii) the heterogeneity across and within worker skill levels plays an important role when computing aggregate impacts; and, (iv) equilibrium adjustments are driven by employers who post are high-skill vacancies when both search channels operate. |
| Keywords: | Search Models, Program Evaluation, Public Employment Service, PLX, General Equilibrium Impacts, Partial Equilibrium Impacts |
| JEL: | J63 J64 J68 E24 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:40_10&r=lab |
| By: | Månsson, Jonas (Centre for Labour Market Policy Research (CAFO)); Dahlander, Josefin (SIDA, Baltic Sea Unit) |
| Abstract: | We make use of a natural experiment, the hurricane ‘Gudrun’, and investigate the impact of human interaction on attitudes towards the labor market. Comparing attitudes between one group of Swedish forest owners that had interacted with guest workers, and one that had not, differences in attitudes towards guest workers is identified concerning the labor market performance and work moral. Those who had interacted have a more positive attitude than those who not interacted. The experimental setting makes it possible to claim that this observed difference in attitudes was an effect of interaction. |
| Keywords: | Attitudes; Interaction; Integration; Immigrant; Guest workers; Hurricane |
| JEL: | J15 J82 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2010_007&r=lab |
| By: | Pierre Lefebvre; Philip Merrigan |
| Abstract: | This paper exploits the panel features of the Canadian National Longitudinal Survey of Children and Youth (NLSCY) and the large diversity of measures collected on the children and their families over 7 cycles (1994-1995 to 2006-2007) to explain high school graduation (dropout rates) of Canadian youth aged 18 to 23 observed in the most recent wave of the survey. We focus on the gap between females and males which in some provinces is high, particularly in Québec. The econometric approach uses a non-linear Blinder-Oaxaca decomposition technique to identify and quantify the separate contributions of group differences in measurable characteristics (youth attributes and family endowments) to the gender gap in high school graduation rates. We find that the traditional barriers to high school graduation, linked to poverty, are very detrimental for males in Québec. However, we also find that the male-female gap across Canada is very partially explained by differences in endowments such as reading or maths skills in school. Finally, as in other recent studies, our results show that parental expectations about educational attainment are predictors of high school graduation. Public policy approaches for the reduction of the male-female gap are proposed. More radical measures and some experimental approaches (pilot projects) should be adopted in Québec to decrease rapidly the dropout rates and increase high school graduation rates by the age of 18. |
| Keywords: | Longitudinal data, high school dropouts, youth attributes, family endowments, gender gap, non-linear Blinder-Oaxaca decomposition |
| JEL: | I21 I28 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1044&r=lab |
| By: | Olivier Charlot; Franck Malherbet; Cristina Terra |
| Abstract: | This paper studies the impact of product and labor market regulations on the number and size of firms in the formal and informal sectors, as well as on relative wages, relative size of the two sectors and overall unemployment. We show that entry costs in the formal sector tend to make informal firms smaller and more numerous than informal firms, i.e., such costs render the informal sector relatively more competitive. Furthermore, it is possible to reduce informality without increasing unemployment or reducing workers’ wage by reducing entry costs in the formal sector rather than reducing labor market regulations. We also highlight a number of externalities stemming from labor and product market imperfections, allowing the size of those distortions to differ across sectors. We show that, while the so-called overhiring externality takes place in both sectors, this translates into a smaller relative size of the informal sector. |
| Keywords: | Informality, product and labor, market imperfections, firm size |
| JEL: | E24 E26 J60 L16 O1 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1043&r=lab |
| By: | Eckhardt Bode |
| Abstract: | This paper estimates annual data on educational attainment for 3,076 mainland U.S. counties 1991 -- 2005. Being estimated without resorting to ancillary information, this data is suited particular well for panel regression analyses. Several plausibility checks indicate that the data is fairly reliable and yields plausible parameter estimates in a panel regression |
| Keywords: | Educational attainment, U.S. counties, Panel regression |
| JEL: | C33 C61 R12 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1665&r=lab |
| By: | James Heintz |
| Abstract: | This paper explores the intersections between the current trajectory of globalization, changes to the structure of employment, and policies for maintaining opportunities for decent employment. There are numerous outcomes of these interactions, including higher levels of open unemployment, growth of informal employment, downward pressure on the returns to labor, and a redistribution of risk from capital to labor. Common factors have affected labor demand and labor supply in a range of countries, but specific employment outcomes are dependent on domestic institutions and structural realities. Within this broader framework, the paper examines changing patterns of employment in Japan and the U.S. in recent years, including the experience of both countries with regard to financial bubbles and subsequent crises. |
| Keywords: | J21, O43, P48 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uma:periwp:wp242&r=lab |
| By: | Patricia Justino; Olga Shemyakina |
| Abstract: | This paper analyzes the impact of remittances on the labor supply of men and women in post-conflict Tajikistan. We find that on average men and women from remittance-receiving households are less likely to participate in the labor market and supply fewer hours when they do. The negative effect of remittances on labor supply is smaller for women, which is an intriguing result as other studies on remittances and labor supply (primarily focused on Latin America) have shown that female labor supply is more responsive to remittances. The results are robust to using different measures of remittances and inclusion of variables measuring migration of household members. We estimate a joint effect of remittances and an individual’s residence in a conflict-affected area during the Tajik civil war. Remittances had a larger impact on the labor supply of men living in conflict-affected areas compared to men in less conflict-affected areas. The impact of remittances on the labor supply of women does not differ by their residence in both the more or less conflict affected area. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mcn:rwpapr:35&r=lab |
| By: | Lucila Berniell; Dolores de la Mata; Nieves Valdés |
| Abstract: | To prevent modern diseases such as obesity, cancer, cardiovascular conditions and diabetes, which have reached epidemic-like proportions in the last decades, many health experts have called for students to receive Health Education (HED) at school. Although this type of education aims mainly to improve children's health profiles, it might affect other family members as well. This paper exploits state HED reforms as quasi-natural experiments to estimate the causal impact of HED received by children on their parents' physical activity. We use data from the Panel Study of Income Dynamics (PSID) for the period 1999-2005 merged with data on state HED reforms from the National Association of State Boards of Education (NASBE) Health Policy Database, and the 2000 and 2006 School Health Policies and Programs Study (SHPPS). To identify the spillover effects of HED requirements on parents' behavior we use a "differences-in-differences-in-differences" (DDD) methodology in which we allow for different types of treatments. We find a positive effect of HED reforms at elementary school on parents' probability of doing light physical activity. The implementation of HED for the first time increases fathers' probability of engaging in physical activity in 14 percentage points, although it does not seem to affect mothers' probability of being physically active. We find evidence of two channels that may drive these spillovers. We conclude that information sharing between children and parents as well as the specialization of parents in doing typically-male or female activities with their children may play a role in generating these indirect effects and in turn in shaping healthy lifestyles within the household. |
| Keywords: | Physical activity, Healthy lifestyles, Indirect treatment effects, Health education, Triple differences |
| JEL: | I12 I18 I28 C21 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1031&r=lab |
| By: | Månsson, Jonas (Centre for Labour Market Policy Research (CAFO)); Elg, Ulf (Lund University); Jonnergård, Karin (Linnaeus University) |
| Abstract: | This study examines whether or not gender-related differences affect the likelihood of promotion. Using data from the Swedish audit industry, an industry with a well-defined and well-known career ladder, and applying a model that explicitly takes the characteristics of promotion into consideration, we identified such differences. One result is that females are on average less likely to be promoted. Separate regressions for males and females identified that the promotion probability increases for male, as an effect of having a child, but the probability of promotion decreases more for males than females if males highly involves in the care of these children. Thus, females who are involved in childcare are penalised by lower probability of promotion; however, males that are highly involved in childcare have much more to lose than females do in terms of promotion. For a family this will turn into a question of how to lose the least. |
| Keywords: | Gender; Promotions; |
| JEL: | J16 M51 |
| Date: | 2010–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vxcafo:2010_004&r=lab |
| By: | Andrén, Daniela (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | It has been suggested that using, when possible, part-time sick leave (PTSL) rather than full-time sick leave (FTSL) for employees diagnosed with a mental disorder (MD) decreases their likelihood of being on sick leave for long periods. However, no study has analyzed this "treatment". Using a one-factor loadings model and a sample of 627 employees on sick leave due to an MD diagnosis, we estimate the impact of the PTSL "treatment" on the probability of full recovery of lost work capacity. The results indicate that employees with an MD diagnosis assigned to PTSL after 60 days of FTSL have a relatively high probability of full recovery. More exactly, the average treatment effect of PTSL is relatively low (0.015) when assigned in the beginning of the spell, but relatively high (0.387), and statistically significant, when assigned after 60 days of FTSL. |
| Keywords: | Part-time sick leave; mental disorders; one-factor loadings model |
| JEL: | I12 J21 J28 |
| Date: | 2010–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2010_017&r=lab |
| By: | Ragni Hege Kitterød and Trude Lappegård (Statistics Norway) |
| Abstract: | An important aim of Norwegian work-family policies is to promote a dual-earner, equal-sharing family model, but we do not really know how common this family type is. By means of a multinomial latent-class model we develop a typology of dual-earner couples with children based on the way the partners allocate paid and unpaid work between them. We estimate four classes. One fourth of the couples belong to the Neo-Traditional class, where the mother often works part time and shoulders the domestic duties, whereas the father works full time or long hours. The Gender-Equal Light type, which comprises one third of the couples, has a similar, but less extreme gender disparity of paid and unpaid duties. In the both the Generalized Gender-Equal type (23 percent) and the Specialized Gender-Equal type (18 percent) the partners share paid and unpaid work fairly equally between them, but the spouses specialize more in different family tasks in the latter than in the former type. An equal sharing of paid and unpaid work is most likely when the partners are well educated, both partners work regular hours and the father has public-sector employment. A neo-traditional practice is likely when the partners have less education, the mother has health problems, the father works in the private sector, and the partners work non-regular hours. |
| Keywords: | Division of paid and unpaid work; dual-earner couples; gender equality; typologies. |
| JEL: | J22 J24 J45 J48 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:636&r=lab |
| By: | Luciano Fanti (Department of Economics, University of Pisa, Italy); Nicola Meccheri (Department of Economics, University of Pisa, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy) |
| Abstract: | This paper studies equilibrium incentive contracts in a Cournot duopoly, in which institutional arrangements constrain firms to pay (risk-neutral) workers a given salary. In this context, performance-related-pay (PRP) and relative performance evaluation (RPE) are compared in terms of resulting levels of workers' effort (firms' expected output), market price, profits, consumer surplus and social welfare. It is shown that, while under principal-agent standard assumptions (i.e. all wage components are "freely" negotiated by each firm-worker pair) PRP and RPE are equivalent, in the presence of institutional "frictions", RPE outperforms PRP in relation to output, profits, consumer surplus and social welfare. Moreover, RPE also permits to replicate results obtained without institutional constraints, even if the mechanism driving final outcomes is very different. |
| Keywords: | Cournot duopoly, principal-agent model, relative performance evaluation, institutional constraints |
| JEL: | J33 J41 L13 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:38_10&r=lab |
| By: | Mario Amendola (Università di Roma La Sapienza); Jean-Luc Gaffard (Observatoire Français des Conjonctures Économiques) |
| Abstract: | Keynes' theory can be interpreted as dealing with unemployment as a disequilibrium phenomenon in an essentially dynamic context. In this perspective, it is much more important to explain why unemployment changes than to identify a presumed level of equilibrium for this variable. Patinkin, an artisan of the so-called neo-classical synthesis, had the same intuition when maintaining that price and wage flexibility is not a cure for unemployment, and hence there is no unemployment equilibrium. However, two essential aspects of a thorough sequential analysis are missing in both authors: co-ordination failures and time. Leijonhufvud takes co-ordination failures due to imperfect knowledge into account by focussing on financial markets incapable of providing for the consistency of long-term production and consumption plans. The time dimension in the real side of the economy is introduced by Hicks who maintains that productive capacity must be built up before being used, and hence, by fossilising past events, appears as a factor of propagation of disequilibria. Coupling this time dimension of production with the imperfect knowledge that engenders co-ordination issues allows building-up a true dynamic analysis, which appears as the prolongation or the complement of Keynes' analysis. Within such an analytical framework, it becomes evident, that a fall not only in money wages but also in real wages, far from re-establishing full employment, is a source of global instability and threats the viability of the economy. And above all, it becomes evident that understanding the role of money and financial behaviours is essential for explaining the ongoing crisis as the previous ones. |
| Keywords: | co-ordination, disequilibrium, money, production, time, unemployment, wage |
| JEL: | B22 E12 E24 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1024&r=lab |
| By: | Propper, Carol; von Hinke Kessler Scholder, Stephanie; Tominey, Emma; Ratto, Marisa; Burgess, Simon |
| Abstract: | We use an experiment to study the impact of team-based incentives, exploiting rich data from personnel records and management information systems. Using a triple difference design, we show that the incentive scheme had an impact on team performance, even with quite large teams. We examine whether this effect was due to increased effort from workers or strategic task reallocation. We find that the provision of financial incentives did raise individual performance but that managers also disproportionately reallocated efficient workers to the incentivised tasks. We show that this reallocation was the more important contributor to the overall outcome. |
| Keywords: | Public Sector; Incentives; Performance; Teams; |
| JEL: | J33 J38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/4727&r=lab |
| By: | Persson, Mattias (Department of Business, Economics, Statistics and Informatics); Svensson, Mikael (Department of Business, Economics, Statistics and Informatics) |
| Abstract: | Being a victim of school bullying is related to several severe direct and indirect negative social and health consequences. There are an increasing number of antibullying programs used in schools in order to prevent and reduce school bullying, but often with a lack of understanding both regarding the effectiveness and monetary benefits of these programs. This paper uses a discrete choice experiment conducted in Sweden in the spring of 2010 to elicit respondents’ willingness to pay to reduce school bullying. Using both non-parametric and parametric approaches the results indicate a (societal) willingness to pay for each reduced statistical victim of bullying of 33 298 to 39,585 Swedish kronor (approx. €3 640 to €4 330). WTP was higher among individuals who reported to have themselves been bullied while in school. The results is a necessary input in order to conduct economic evaluations of antibullying programs and provides policymakers with useful information on taxpayers’ preferred allocations to antibullying programs. |
| Keywords: | Willingness to Pay; Choice Experiment; Bullying; School; Adolescents |
| JEL: | D61 I12 I21 |
| Date: | 2010–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2010_016&r=lab |
| By: | Danthine, Jean-Pierre (Swiss National Bank); Donaldson, John B. (School of Business, Columbia University) |
| Abstract: | We study the dynamic general equilibrium of an economy where risk averse shareholders delegate the management of the firm to risk averse managers. The optimal contract has two main components: an incentive component corresponding to a non-tradable equity position and a variable “salary” component indexed to the aggregate wage bill and to aggregate dividends. Tying a manager’s compensation to the performance of her own firm ensures that her interests are aligned with the goals of firm owners and that maximizing the discounted sum of future dividends will be her objective. Linking managers’ compensation to overall economic performance is also required to make sure that managers use the appropriate stochastic discount factor to value those future dividends. General equilibrium considerations thus provide a potential resolution of the “pay for luck” puzzle. We also demonstrate that one sided “relative performance evaluation” follows equally naturally when managers and shareholders are differentially risk averse. |
| Keywords: | incentives; optimal contracting; stochastic discount factor; pay-for-luck; relative performance |
| JEL: | E32 E44 |
| Date: | 2010–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:snbwpa:2010_019&r=lab |
| By: | Matsaganis M; Levy H; Flevotomou M |
| Abstract: | Even though interest in non take up of social benefits is considerable in many European countries, the topic is under-researched in southern Europe. The paper provides preliminary estimates of the extent of non take up of two pairs of means-tested retirement benefits in Greece and Spain. The benefits examined are (i) the minimum pension supplements pensioner social solidarity benefit ΕΚΑΣ and complementos por mÃnimos, and (ii) the social pensions pension to uninsured elderly and pensión de jubilación no contributiva. The paper finds that non take up of social benefits in the two countries is rather extensive, examines the methodological difficulties inherent in the analysis of non take up, and concludes with a discussion of the results and their implications. |
| Date: | 2010–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em7/10&r=lab |
| By: | Maurizio Iacopetta (Observatoire Français des Conjonctures Économiques) |
| Abstract: | In this paper, I examine the transitional dynamics of an economy populated by individuals who split their time between acquiring a formal education, producing final goods, and innovating. The paper has two objectives: (i) uncovering the macroeconomic circumstances that favored the rise of formal education; (ii) to reconcile the remarkable growth of the education sector with the constancy of other key macroeconomic variables, such as the interest rate, the consumption-output ratio, and the growth rate of per capita income (Kaldor facts). The transitional dynamics of human capital growth models, such as Lucas (1988), would attribute the arrival of education to the diminishing marginal productivity of physical capital. Conversely, the model proposed here suggests that it is the rate of learning that catches up with the rate of return on physical capital. As technical knowledge expands, the rate of return on education increases, and this induces individuals to stay longer in school. The model's transitional paths are matched with long run U.S. educational and economic data. |
| Keywords: | Public Knowledge, Learning Rate, Transitional Dynamics, Calibration. JEL codes: J24, N30, O33. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1033&r=lab |