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on Labour Economics |
| By: | Tim H. Gindling (UMBC); Katherine Terrell (University of Michigan) |
| Abstract: | In this paper we use an individual- and household-level panel data set to study the impact of changes in legal minimum wages on a host of labor market outcomes: a) wages and employment, b) transitions of workers across jobs (in the covered and uncovered sectors) and employment status (unemployment and out of the labor force), and c) transitions into and out of poverty. We find that changes in the legal minimum wage affect only those workers whose initial wage (before the change in minimum wages) is close to the minimum: i.e., increases in the legal minimum wage lead to significant increases in the wages and decreases in employment of private covered sector workers who have wages within 20% of the minimum wage before the change, but have no significant impact on wages in other parts of the distribution. The estimates from the employment transition equations suggest that the decrease in covered private sector employment is due to a combination of layoffs and reductions in hiring. Most workers who lose their jobs in the covered private sector as a result of higher legal minimum wages leave the labor force or go into unpaid family work; a smaller proportion find work in the public sector. We find no evidence that these workers become unemployed. |
| Keywords: | minimum wages, employment, poverty. |
| JEL: | J3 O17 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:umb:econwp:10126&r=lab |
| By: | Brunner, Beatrice (University of Zurich); Kuhn, Andreas (University of Zurich) |
| Abstract: | We estimate the effects of labor market entry conditions on wages for male individuals first entering the Austrian labor market between 1978 and 2000. We find a large negative effect of unfavorable entry conditions on starting wages as well as a sizeable negative long-run effect. Specifically, we estimate that a one percentage point increase in the initial local unemployment rate is associated with an approximate shortfall in lifetime earnings of 6.5%. We also show that bad entry conditions are associated with lower quality of a worker's first job and that initial wage shortfalls associated with bad entry conditions only partially evaporate upon involuntary job change. These and additional findings support the view that initial job assignment, in combination with accumulation of occupation or industry-specific human capital while on this first job, plays a key role in generating the observed wage persistencies. |
| Keywords: | initial labor market conditions, endogenous labor market entry, initial job assignment, specific human capital |
| JEL: | E3 J2 J3 J6 M5 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5360&r=lab |
| By: | Bachmann, Ronald (RWI); David, Peggy (RWI) |
| Abstract: | Using administrative data on individual workers' employment history and firms, we investigate the cyclicality of worker flows on the German labour market. Focusing on heterogeneities on both sides of the labour market, we find that small firms hire mainly unemployed workers, and that they do so at the beginning of an economic expansion. Later on in the expansion, hirings more frequently result from direct job-to-job transitions to larger firms. Transitions between employment and unemployment at large firms are generally found to be more cyclical. However, this stylised fact disappears when the composition of the workforce is controlled for. |
| Keywords: | employer-to-employer, job-to-job, business cycle, separations, accessions, worker flows |
| JEL: | J63 J64 J21 E24 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5358&r=lab |
| By: | SIERMINSKA Eva; TAKHTAMANOVA Yelena |
| Abstract: | The recession the United States economy entered in December of 2007 is considered to be the most severe downturn the country has experienced since the Great Depression. The unemployment rate reached as high as 10.1 percent in October 2009 - the highest we have seen since the 1982 recession. In this paper we examine the severity of this recession compared to those in the past by examining worker flows into and out of unemployment taking into account changes in the demographic structure of the population. We identify the most vulnerable groups of this recession by dissagregating the workforce by age, gender and race. We find that adjusting for the aging of the U.S. labor force increases the severity of this recession. Our results indicate that the increase in the unemployment rate is driven to a larger extent by the lack of hiring (low outflows), but flows into unemployment are still important for understanding unemployment rate dynamics (they are not as acyclical as some literature suggests) and differences in unemployment rates across demographic groups. We find that this is indeed a "mancession," as men face higher job separation probabilities, lower job finding probabilities and, as a result, higher unemployment rates than women. Lastly, there is some evidence that blacks suffered more than whites (again, this difference is particularly pronounced for men). |
| Keywords: | Unemployment; Worker flows; Job Finding Rate; Separation Rate; Demographics; Gender |
| JEL: | J01 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2010-41&r=lab |
| By: | Orrenius, Pia M. (Federal Reserve Bank of Dallas); Zavodny, Madeline (Agnes Scott College) |
| Abstract: | Immigrants have figured prominently in U.S. economic growth for decades, but the recent recession hit them hard. Immigrants’ labor market outcomes began deteriorating even before the recession was officially underway, largely as a result of the housing bust. An analysis of employment and unemployment rates over the past 15 years shows that immigrants' labor market outcomes are more cyclical than those of natives. The greater cyclicality of immigrants' employment and unemployment is concentrated among less-educated immigrants, but college-educated immigrants nonetheless have more cyclically-sensitive employment outcomes than college-educated natives. |
| Keywords: | business cycle, recession, employment, immigrants |
| JEL: | J21 J61 J64 E32 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5354&r=lab |
| By: | Catherine HAECK; Frank VERBOVEN |
| Abstract: | Based on a rich personnel data set of a large university we .nd strong evidence for the existence of an internal labor market. First, the lowest academic rank is a strong port of entry and the highest rank is a port of exit. Second, wages do not follow external wage developments, since they follow administrative rules that have not been modi.ed for a long time. We subsequently look at internal promotion dynamics to assess the relevance of alternative internal labor market theories. A unique feature of our data is that we have good measures of performance. Consistent with incentive theories of internal labor markets, research and teaching performance turn out to be crucial determinants of promotion dynamics. Learning theories of internal labor markets appear to have support when we do not account for observed performance, but the evidence becomes much weaker once we control for performance. Finally, we .nd that administrative rigidities play an important role in explaining promotion dynamics. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces10.18&r=lab |
| By: | Machin Stephen; Marie Olivier; Vujić Sunčica (ROA rm) |
| Abstract: | In this paper, we study the crime reducing potential of education, presenting causalstatistical estimates based upon a law that changed the compulsory school leaving agein England and Wales. We frame the analysis in a regression-discontinuity setting anduncover significant decreases in property crime from reductions in the proportion ofpeople with no educational qualifications and increases in the age of leaving school thatresulted from the change in the law. The findings show that improving education canyield significant social benefits and can be a key policy tool in the drive to reduce crime. |
| Keywords: | education, training and the labour market; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2010013&r=lab |
| By: | Åslund, Olof (Uppsala Center for Labor Studies); Edin, Per-Anders (Uppsala Center for Labor Studies); Fredriksson, Peter (Uppsala Center for Labor Studies); Grönqvist, Hans (SOFI) |
| 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 place¬ment 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: | 2010–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2010_018&r=lab |
| By: | C. Kirabo Jackson |
| Abstract: | Using exogenous secondary school assignments to remove self-selection bias to schools and peers, I obtain credible estimates of (1) the effect of attending schools with higher-achieving peers, and (2) the direct effect of peer quality improvements within schools, on the same population. While students at schools with higher-achieving peers have better academic achievement, within-school increases in peer achievement improve outcomes only at high-achievement schools. Peer quality can account for about one tenth of school value-added on average, but over one-third among the top quartile of schools. The results reveal large and important differences by gender. |
| JEL: | H0 I2 J0 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16598&r=lab |
| By: | Jenny Willson; Andy Dickerson (Department of Economics, The University of Sheffield) |
| Abstract: | The relationship between part time employment and job satisfaction is analysed for mothers in Germany, Denmark, the Netherlands, Finland, France, Spain and the UK. The impact of working part time on subjective life satisfaction and mental well-being is additionally analysed for British mothers. Cultural traditions concerning women’s role in society, and institutional differences between the countries are exploited. Results indicate that poor quality jobs can diminish any positive well-being repercussions of part time employment. The results additionally suggest that part time mothers in the UK experience higher levels of job satisfaction but not of overall life satisfaction as compared to their full time counterparts. |
| Keywords: | part time work, job satisfaction, well being |
| JEL: | J28 J16 J13 I31 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2010021&r=lab |
| By: | FANG Zheng and Chris SAKELLARIOU; FANG Zheng (Division of Economics, Nanyang Technological University, Singapore, 639798); Chris SAKELLARIOU (Division of Economics, Nanyang Technological University, Singapore, 639798) |
| Abstract: | We extend the Burdett and Coles (2003) search model with wage-tenure contracts to two types of workers and firms and derive the equilibrium earnings distributions for both types of workers, by means of which we succeed in predicting many stylized facts found in empirics. For example, we find that at the same wage level, majority workers almost always experience a faster wage increase than the minority workers; minority workers have a higher unemployment rate; discriminating firms make lower profit than non-discriminating firms and offers to minority workers by non-discriminating firms are consistently superior to those provided by discriminating firms etc. Besides, we find a similar result to the classical discrimination theory that the average wage of the majority workers, though higher in most cases, can be smaller than their counterpart’s wage when the fraction of discriminating firms is small and the degree of recruiting discrimination and disutility are mild. We also show that in a special case of CRRA utility function with the coefficient of relative risk aversion approaching infinity, our model degenerates to Bowlus and Eckstein (2002). |
| Keywords: | discrimination, wage gap, equilibrium search, wage-tenure |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:1004&r=lab |
| By: | Falch , Torberg (Department of Economics, Norwegian University of Science and Technology); Sandgren Massih, Sofia (Uppsala Center for Labor Studies) |
| Abstract: | This paper utilizes information on cognitive ability at age ten and earnings information from age 20 to 65 to estimate the return to ability over the life-cycle. Cognitive ability measured at an early age is not influenced by the individual’s choices of schooling. We find that most of the unconditional return to early cognitive ability goes through educational choice. The conditional return is increasing for low levels of experience and non-increasing for experience above about 15-25 years. The return is similar for men and women, and highest for individuals with academic education. Only a small part of the return can be explained by higher probability to have a supervisory position. |
| Keywords: | Cognitive ability; life-cycle; earnings; IQ; employer learning * |
| JEL: | I29 J31 |
| Date: | 2010–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2010_002&r=lab |
| By: | Servaas van der Berg (Department of Economics, University of Stellenbosch); Rulof Burger (Department of Economics, University of Stellenbosch) |
| Abstract: | The role of teachers in achieving good quality education is universally acknowledged. What is less clear is what incentives are required to attract good teachers to teaching. Incentives, including teachers pay, need to be sufficient yet, in the light of fiscal resource constraints, not excessive. This paper deals with the issue of teacher pay in South Africa before the introduction of the recent Occupation Specific Dispensation (OSD) for teachers, that was intended to offer more attractive lifetime incentives to teachers in order to attract quality teachers. The paper first reviews the literature on teacher pay internationally and for South Africa, before using recent South African household surveys to empirically compare the wage received by teachers to that received by non-teachers with a similar level of education. |
| Keywords: | teacher pay, wages, labour market, incentives |
| JEL: | J31 J45 I22 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers125&r=lab |
| By: | Samuel Bentolila (CEMFI, Centro de Estudios Monetarios y Financieros); Pierre Cahuc (Ecole Polytechnique and CREST); Juan J. Dolado (Universidad Carlos III de Madrid); Thomas Le Barbanchon (Ecole Polytechnique and CREST) |
| Abstract: | This paper analyzes the strikingly different response of unemployment to the Great Recession in France and Spain. Their labor market institutions are similar and their unemployment rates just before the crisis were both around 8%. Yet, in France, unemployment rate has increased by 2 percentage points, whereas in Spain it has shot up to 19% by the end of 2009. We assess what part of this differential is due to the larger gap between the dismissal costs of permanent and temporary contracts and the less restrictive rules regarding the use of the latter contracts in Spain. Using a calibrated search and matching model, we estimate that about 45% of the surge in Spanish unemployment could have been avoided had Spain adopted French employment protection legislation before the crisis started. |
| Keywords: | Temporary contracts, unemployment, Great Recession. |
| JEL: | H29 J23 J38 J41 J64 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2010_1009&r=lab |
| By: | Tyrefors Hinnerich, Björn (Department of Economics, Stockholm University); Höglin, Erik (Swedish Fiscal Policy Council); Johannesson, Magnus (Department of Economics, Stockholm School of Economics) |
| Abstract: | Girls typically have higher grades than boys in school and recent research suggests that part of this gender difference may be due to discrimination of boys. We rigorously test this in a field experiment where a random sample of the same tests in the Swedish language is subject to blind and non-blind grading. The non-blind test score is on average 15 % lower for boys than for girls. Blind grading lowers the average grades with 13 %, indicating that personal ties and/or grade inflation are important in non-blind grading. But we find no evidence of discrimination against boys. The point estimate of the discrimination effect is close to zero with a 95 % confidence interval of ±4.5 % of the average non-blind grade. |
| Keywords: | Discrimination; Field experiments; Grading; Education; Gender |
| JEL: | C93 I20 J16 |
| Date: | 2010–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2010_014&r=lab |
| By: | Carneiro, Pedro (University College London); Loken, Katrine V. (University of Bergen); Salvanes, Kjell G. (Norwegian School of Economics and Business Administration) |
| Abstract: | We study the impact on children of increasing the time that the mother spends with her child in the first year by exploiting a reform that increased paid and unpaid maternity leave in Norway. The reform increased maternal leave on average by 4 months and family income was unaffected. The increased time with the child led to a 2.7 percentage points decline in high school dropout. For mothers with low education we find a 5.2 percentage points decline. The effect is also especially large for children of mothers who, prior to the reform, would take very low levels of unpaid leave. |
| Keywords: | adult outcomes, time with mother, maternity leave |
| JEL: | J13 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5362&r=lab |
| By: | Kampon ADIREKSOMBAT, FANG Zheng and Chris SAKELLARIOU; Kampon ADIREKSOMBAT (Economic Intelligence Center, Siam Commercial Bank, Thailand); FANG Zheng (Division of Economics, Nanyang Technological University, Singapore, 639798); Chris SAKELLARIOU (Division of Economics, Nanyang Technological University, Singapore, 639798) |
| Abstract: | Using unconditional quantile regression combined with Oaxaca-Blinder decomposition, we study the gender wage differentials over the whole distribution in Thailand from 1991 to 2007. A Vshape pattern of the overall gender gap is observed in each year, most attributable to the wage structure effect (“discrimination”), and persistent sticky floors are documented. We also develop a “double decomposition” method to analyze the over-time changes in gender wage gaps, and find that the degree of gender inequality in the Thai labor market has improved compared to the 1990s, while relative changes in characteristics explained only very small part of the total changes. |
| Keywords: | Southeast Asia; Thailand; unconditional quantile regression; sticky floors; discrimination |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:nan:wpaper:1005&r=lab |
| By: | Sezgin Polat (Galatasaray University (GIAM)); Francesco Saraceno (Observatoire Français des Conjonctures Économiques) |
| Abstract: | We investigate the general equilibrium effects of minimum consumption constraints over labor supply decisions. Within a simple static model, a minimum consumption constraint modifies labor supply decisions of unskilled workers, generating the well-known added worker effect. The results of the model help to analyze the Turkish labor market where added worker effects were observed following the 2001 crisis. We investigate the asymmetric effects of the crisis, using the Household Budget Surveys that cover the period between 2002 and 2005. The substantial decrease in real wages has increased labor supply for unskilled labor, especially for women. |
| Keywords: | Added worker, Taxation, Bivariate Probit, Labor Supply, Turkish Labor Market |
| JEL: | H2 J21 J22 J31 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1036&r=lab |
| By: | Tom VAN PUYENBROECK; Karolien DE BRUYNE; Luc SELS |
| Abstract: | We build on the Information Theory foundations of the Mutual Information Index of Segregation [Mora and Ruiz-Castillo, 2003; Frankel and Volij, 2007] to analyze two horizontal dimensions of gender segregation on the labour market. We provide a novel, three-way additive decomposition of their effects on overall segregation. Using survey data from 41,712 Flemish employees, we .find that choice of study field has a larger effect on overall segregation than sectoral choice. Their mutual interaction is negative, indicating that sectoral segregation, although low, is still partly explained by educational choices. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces10.25&r=lab |
| By: | Fernando Alexandre (University of Minho and NIPE); Pedro Bação (University of Coimbra and GEMF); João Cerejeira (University of Minho and NIPE); Miguel Portela (University of Minho, NIPE and IZA) |
| Abstract: | Integration into the world economy, specialization in low-technology sectors and labour market rigidity have been singled out as structural features of the Portuguese economy that are crucial for the understanding of its performance. In this paper, we explore empirically the role of openness, technology and labour market rigidity in the determination of the effect of the exchange rate on the dynamics of employment in Portugal. Our estimates indicate that employment in low-technology sectors with a high degree of trade openness and facing less rigidity in the labour market is more sensitive to movements in exchange rates. Therefore, our results provide additional evidence on the relevance of those structural features for explaining the evolution of the Portuguese economy in the last decades. In this paper the degree of labour market rigidity is measured at the sector level by means of a novel index. According to this index, high-technology sectors face less labour market rigidity. These sectors are also more exposed to international competition. However, the bulk of employment destruction has occurred in low-technology sectors. This suggests that productivity/technology may be the key variable to reduce the economy's exposure to external shocks. |
| Keywords: | exchange rates, international trade, job flows, labour market rigidity, technology |
| JEL: | J23 F16 F41 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2010-23&r=lab |
| By: | Blanca ZULUAGA |
| Abstract: | All individuals belong to a social network with certain quality level. This paper analyzes the role of the quality of the social network in the educational decision making process. We propose a measure for quality of network based on the schooling level and the labor position of the members of the net. Our analysis compares individuals who are similar in at least two characteristics: socioeconomic level and intellectual ability. Although they belong to the same type of community (poor), they differ in the composition of their social network. The higher the quality of the network, the higher the probability of investing in education. Hence, socially disadvantaged and equally intelligent individuals may end up acquiring different schooling levels. |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces10.29&r=lab |
| By: | MacLeod, W. Bentley (Columbia University) |
| Abstract: | This chapter reviews the literature on employment and labor law. The goal of the review is to understand why every jurisdiction in the world has extensive employment law, particularly employment protection law, while most economic analysis of the law suggests that less employment protection would enhance welfare. The review has three parts. The first part discusses the structure of the common law and the evolution of employment protection law. The second part discusses the economic theory of contract. Finally, the empirical literature on employment and labor law is reviewed. I conclude that many aspects of employment law are consistent with the economic theory of contract – namely, that contracts are written and enforced to enhance ex ante match efficiency in the presence of asymmetric information and relationship specific investments. In contrast, empirical labor market research focuses upon ex post match efficiency in the face of an exogenous productivity shock. Hence, in order to understand the form and structure of existing employment law we need better empirical tools to assess the ex ante benefits of employment contracts. |
| Keywords: | employment law, labor law, employment contract, employment contract, law and economics |
| JEL: | J08 J33 J41 J5 K31 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5357&r=lab |
| By: | Fallahi, Firouz; Sakineh, Sojoodi; Mehin Aslaninia, Nasim |
| Abstract: | In an era of globalized competition, productivity has become a crucial factor determining profitability, competitiveness and the growth of a firm. High productivity means lower per unit cost and, therefore, ability of the firm to match prices on the global markets. Because of that, there has been an increasing interest recently in the literature on factors affecting productivity. This paper investigates the determinants of labor productivity at the firm level in the Iran’s manufacturing sector. The analysis is based on descriptive statistics and cross sectional regression models on a sample of 12299 Industrial firms. The results show that labor productivity is positively related to wage, fixed capital per employee, export orientation, R&D activity and Education of labor force. |
| Keywords: | Labor productivity; Industrial firms; Education; Training; Export; R&D |
| JEL: | J24 J2 |
| Date: | 2010–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27447&r=lab |
| By: | Parama Chaudhury |
| Abstract: | In this paper, I study how an increase in the use of new work practices that involve multi-tasking has affected the returns to experience. If each task in a job has a concave learning curve, then increasing the number of tasks may increase the returns to experience. Using the Panel Study of Income Dynamics, I provide evidence for the fact that successive cohorts have greater returns to experience. Next, I construct proxies for multi-tasking using Paul Osterman’s 1992 survey of workplace practices in U.S. establishments, and find that (i) later cohorts choose jobs with greater multi-tasking, (ii) the rate of within-job wage growth rises with the degree of multi-tasking, and (iii) the returns to experience are larger in jobs with more multi-tasking. Finally, I find mixed evidence on the effect of unobserved heterogeneity, which implies that part of these larger returns to experience may be because those in jobs with more multi-tasking have higher unobserved ability. |
| Keywords: | Teams, job rotation, experience, cohorts |
| JEL: | J24 J31 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:518&r=lab |
| By: | Kapsalis, Constantine |
| Abstract: | The reverse regression method of measuring wage discrimination is the main challenge to the dominant direct regression method based on the Oaxaca/Blinder approach. In this article, it is argued that the choice between the two methods is fundamentally a choice of assumptions regarding the nature of the wage determination process and the nature of the unexplained regression residual of the wage regression equation. In particular, this article concludes that the reverse regression method is more likely to produce the correct wage discrimination measure if any of the following three assumptions is correct: (a) qualifications do not determine how much individuals earn (as the direct regression method assumes) but, instead, determine which candidates are selected for existing jobs with fixed wages; (b) errors in the measurement of qualifications are larger than errors in the measurement of wages, in which case the direct regression method would understate the importance of differences in qualifications; and (c) differences in unobserved qualifications (e.g., importance of job flexibility; relevance of past work experience) between two groups are not zero (as the direct regression method assumes) but tend to favour the group with the better observed qualifications. Finally, this article shows that application of the reverse regression technique simply requires the augmentation of the qualification component of the direct regression method by dividing it by the R2 coefficient. |
| Keywords: | wage discrimination; gender discrimination |
| JEL: | J7 |
| Date: | 2010–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27331&r=lab |
| By: | Reyn van Ewijk (VU University Amsterdam, and Netspar) |
| Abstract: | Previous research shows that ethnic minority students perform poorer in school when they are taught by ethnic majority teachers. Why this is the case was unclear. This paper focuses on one important potential explanation: I examine whether ethnic majority teachers grade minority and majority students differently for the same work. Using an experiment, I rule out the existence of such a direct grading bias. I do find indirect evidence for alternative explanations: teachers report lower expectations and unfavorable attitudes that both likely affect their behavior towards minority students, potentially inducing them to perform below their ability level. Effects of having majority teachers on minority students' grades hence seem more likely to be indirect than direct. |
| Keywords: | Ethnicity; Discrimination; Grading; Experiment |
| JEL: | I2 J15 |
| Date: | 2010–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100127&r=lab |
| By: | Veliziotis M (Institute for Social and Economic Research) |
| Abstract: | In this paper we use British Household Panel Survey data to examine the relationship between unionization and unpaid overtime in Britain. The findings indicate that in the for-profit, non-caring sector of the economy, union covered employees supply fewer unpaid overtime hours than noncovered ones due to union protection and the weakening of economic incentives caused by union bargaining. On the other hand, in the non-profit, caring sector, union members offer more unpaid extra hours than covered non-members because of their specific pro-social motivations. Additional evidence is presented that confirms that union members are actually characterized by a specific pro-social ethos. |
| Date: | 2010–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2010-43&r=lab |
| By: | Gustavsson, Magnus (Department of Economics); Österholm, Pär (National Institute of Economic Research) |
| Abstract: | Employing econometric methods for univariate time series, this paper investigates the empirical validity of assuming a unit root in individuals’ labor-income processes. Using a Swedish register-based longitudinal dataset which allows us to follow a cohort of workers from 1968 to 2005, we are able to obtain distributions of median unbiased estimates of localto- unity parameters. The results indicate that earnings for the representative worker are governed by a process where shocks to earnings have fairly high persistence but are both economically and statistically significantly different from having permanent effects; that is, the largest autoregressive root is less than unity. These results add to the studies that question the heavy use of unit-root processes for earnings in calibrations of life-cycle models. |
| Keywords: | Idiosyncratic income risk; Unit-root model; Earnings dynamics; Local-to-unity parameter |
| JEL: | C22 C23 J31 |
| Date: | 2010–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2010_021&r=lab |
| By: | Bargain, Olivier (University College Dublin); Immervoll, Herwig (OECD); Viitamäki, Heikki (VATT, Helsinki) |
| Abstract: | The main objectives of social assistance benefits, including poverty alleviation and labor-market or social reintegration, can be seriously compromised if support is difficult to access. While recent studies point to high non-take-up rates, existing evidence does not make full use of the information recorded by benefit agencies. Most studies have to rely on interview-based data, with misreporting and measurement errors affecting the variables needed to establish both benefit receipt and benefit entitlement. In this paper, we exploit a unique combination of Finnish administrative data and eligibility simulations based on the tax-benefit calculator of the Finnish authorities, carefully investigating the measurement issues that remain. We find rates of non-take-up that are both substantial and robust: 40% to 50% of those eligible do not claim. Using repeated cross-section estimations for years 1996-2003, we identify a set of stable determinants of claiming behavior and suggest that changes in behavior could drive the observed downward trend in take-up rates during the post-recession period. We discuss the poverty implications of our results. |
| Keywords: | register data, take-up, social assistance, poverty |
| JEL: | D31 H31 H53 I38 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5355&r=lab |
| By: | Muravyev, Alexander (IZA) |
| Abstract: | This paper presents and discusses new data on employment protection legislation (EPL) in the successor states of the former USSR – the CIS and Baltic states – over 25 years from 1985 to 2009. We use the OECD methodology (OECD EPL, version II) for assessing the strictness of national labor laws with respect to employers’ firing costs. In addition to the overall OECD EPL index, we present detailed statistics for 18(22) sub-indicators used for its computation. The new data allow us to make several important observations. In particular, the data do not support the widely held view that labor regulations in the former USSR with respect to firing costs were extremely rigid and were subsequently liberalized by the 15 successor states over the course of transition to a market economy. Rather, the dynamics of the EPL index in the region resembles an inverted U-shaped pattern with the peak of labor market rigidity occurring in the mid-1990s in the CIS countries and a decade later in the Baltic States. In terms of major sub-indicators, we observe a rather unusual pattern: gradual liberalization of permanent contracts on the background of increasing regulation of temporary contracts and collective dismissals. This is in sharp contrast with the OECD economies, where liberalization of temporary contracts has been the major trend in the recent decades. By now, the ex-USSR states as a group do not differ that much from the EU-15 and OECD countries in terms of the overall EPL index, although they differ considerably in terms of contributions to the overall EPL of its thee major components, namely, regulation of permanent contracts, temporary contracts, and collective dismissals. We also show that our EPL data are correlated with a number of variables characterizing economic development, progress in market-oriented reforms, and political regimes prevailing in the countries studied, which suggests potential of using the new dataset in further politico-economic research. |
| Keywords: | labor market institutions, employment protection, transition countries |
| JEL: | J68 K31 P20 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5365&r=lab |
| By: | Constant, Amelie F. (DIW DC, George Washington University); Tien, Bienvenue (DIW DC) |
| Abstract: | Leaders are critical to a country’s success. They can influence domestic policy via specific measures that they enforce, and they can also influence international public opinion towards their country. Foreign Direct Investments are also essential for a country’s economic growth. Our hypothesis is that foreign-educated leaders attract more FDI to their country. Our rationale is that education obtained abroad encompasses a whole slew of factors that can make a difference in FDI flows when this foreign-educated individual becomes a leader. We test this hypothesis empirically with a unique dataset that we constructed from several sources, including the Library of Congress and the World Bank. Our analysis of 40 African countries employs the robust technique of conditional quantile regression. Our results reveal that foreign education is a significant determinant of FDI inflows, beyond other standard characteristics. While intuitive, this result does not necessarily indicate sheepskin effects or superior human capital obtained abroad. Rather, it indicates the powerful role of the social capital, networks, and connections that these leaders built while they were abroad that they in turn mobilize and utilize when they become leaders. |
| Keywords: | FDI, leaders' educational level, return migration, Africa |
| JEL: | C31 C33 F21 I21 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5353&r=lab |
| By: | Bonsang Eric; Soest Arthur van (ROA rm) |
| Abstract: | Using data on individuals of age 50 and older from 11 European countries, we analyzetwo economic aspects of subjective well-being of older Europeans: satisfaction withhousehold income, and job satisfaction. Both have been shown to contribute substantiallyto overall well-being (satisfaction with life or happiness). We use anchoring vignettes tocorrect for potential differences in response scales across countries.The results highlight a large variation in self-reported income satisfaction, which ispartly explained by differences in response scales. When differences in response scalesare eliminated, the cross country differences are quite well in line with differences inan objective measure of purchasing power of household income. There are commonfeatures in the response scale differences in job satisfaction and income satisfaction.French respondents tend to be critical in both assessments, while Danish and Dutchrespondents are always on the optimistic end of the spectrum. Moreover, correcting forresponse scale differences decreases the cross-country association between satisfactionwith income and job satisfaction among workers. |
| Keywords: | labour economics ; |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2010011&r=lab |
| By: | Marcel Gerard (FuCAm, UCLouvain) |
| Abstract: | The current system for financing cross-border students, based on the host country, is neither sustainable nor efficient: it produces too little cross-border education. On that background, and motivated as well by a recent decision of the European Court of Justice, we explore two alternative solutions. the first one substitutes to the financing by the host country, a financing by the country of origin, through vouchers that the student may use at home or abroad provided it is in a recognized institution. The second one, potentially an efficient design, combines that substitution with a reimbursement of education costs through interjurisdictional transfers or the change of vouchers into contingent loans |
| Keywords: | Bologna process, Higher Education, Contingent loan, Bhagwati tax |
| JEL: | I22 I23 H77 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0026&r=lab |
| By: | Wennberg, Karl (The Ratio Institute and Stockholm School of Economics); Wiklund, Johan (Whitman School of Management and Jönköping International Business School, Sweden); Wright, Mike (Centre for Management Buy-out Research, Nottingham University Business School and University of Ghent) |
| Abstract: | While much prior research has focused upon how the Technology Transfer Offices and other contextual characteristics shape the level of university spin-offs (USO), there is little research on entrepreneurial potential among individual academics, and to the best of our knowledge, no comparative studies with other types of spin-offs exist to date. In this paper we suggest that knowledge transfer from academic research may flow indirectly to entrepreneurship by individuals with a university education background who become involved in new venture creation by means of corporate spin-offs (CSO) after gaining industrial experience, rather than leaving university employment to found a new venture as an academic spinoff. In fact, the commercial knowledge gained by industry experience is potentially more valuable for entrepreneurial performance compared to the academic knowledge gained by additional research experience at a university. This leads us to posit that not only will the average performance of CSOs be higher than comparable USOs, but the gains from founder’s prior experiences will also be higher among CSOs. We investigate these propositions in a comparative study tracking the complete population of USOs and CSOs among the Swedish knowledge-intensive sectors between 1994 and 2002. |
| Keywords: | Spill-Overs |
| JEL: | L53 M13 O32 O34 |
| Date: | 2010–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0160&r=lab |