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on Labour Economics |
| By: | Anger, Silke (DIW Berlin) |
| Abstract: | This study analyzes real wage cyclicality for male full-time workers within employer-employee matches in Germany over the period 1984-2004. Five different wage measures are compared: the standard hourly wage rate; hourly wage earnings including overtime and bonus pay; the effective wage, which takes into account unpaid overtime; and monthly earnings, with and without additional pay. None of the hourly wage measures exhibits cyclicality except for the group of salaried workers with unpaid overtime. Their effective wages show a strongly procyclical reaction to changes in unemployment. Despite acyclical wage rates, salaried workers without unpaid overtime experienced procyclical earnings movements if they had income from extra pay. Monthly earnings were also procyclical for hourly paid workers with overtime pay. These findings suggest that cyclical earnings movements are generated by variable pay components, such as bonuses and overtime, and by flexible working hours. The degree of earnings procyclicality revealed for the German labor market is comparable to the United States. |
| Keywords: | real wage cyclicality, effective wages, unpaid overtime, bonus payments, firm stayers |
| JEL: | E32 J31 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5489&r=lab |
| By: | Stefan Hochguertel (VU University Amsterdam, and Netspar) |
| Abstract: | This paper uses panel data from the pan-European SHARE survey to study labor market behavior of older male self-employed vis-a-vis wage employed workers. We find the self-employed to work longer hours, to be more flexible in their hours allocation, and to retire later in all countries. We relate these differences in observed behavior to individual characteristics, economic resources, and to documented cross-national variation in labor market and social security institutions. Differential incentives matter for the retirement behavior of the self-employed. We also provide evidence of the self-employed not wanting to retire as early as possible, and contrast these expectation data with realized retirement transitions. The overall picture that emerges is that older self-employed have a very strong labor market attachment and they use their degrees of freedom to work more and retire later accordingly. |
| Keywords: | self-employment; labor supply; retirement; pensions; Europe; institutions |
| JEL: | J14 J22 J26 L26 |
| Date: | 2010–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100067&r=lab |
| By: | Danzer, Alexander M. (University of Munich) |
| Abstract: | The paper investigates how employees use secondary employment to smooth out consumption shortfalls from non-anticipated wage shocks in their main employment. The identification strategy exploits surprising changes in firms’ wage payment and repayment behavior in Ukraine. Based on unique nationally representative panel data, the econometric approach accounts for workers' unobserved heterogeneity and measurement error in the wage shock information. The estimated labor supply responses suggest that secondary activities are used as temporary coping strategies against wage shocks and that they closely follow the lifecycle of wage arrears. Households that engage in secondary employment can successfully smooth their consumption. The results are robust to several alternative hypotheses concerning the observed labor supply pattern. |
| Keywords: | dual job holding, wage shock, consumption smoothing, subsidiary farming, reaction time to shocks |
| JEL: | J22 J33 P36 O17 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5499&r=lab |
| By: | Florence Jaumotte |
| Abstract: | The Spanish labor market is not working: the unemployment rate is structurally very high; wages are not very responsive to labor market conditions, causing a high cyclicality of unemployment; and the labor market is highly dual. Compared with the EU15, Spanish labor market institutions and policies stand out by the structure of its collective bargaining, which occurs mostly at an intermediate level, and by very high severance payments for permanent workers. Based on a quantitative analysis, the paper shows that moving away from the intermediate level of bargaining would go a long way toward bringing the unemployment rate closer to the EU15 average. The key reform needed to reduce the share of temporary workers is reducing employment protection of permanent workers. Substantially reforming the collective bargaining system and reducing the protection of permanent workers are likely to be highly complementary to secure a substantial reduction in the unemployment rate. The recent 2010 labor market reform attempts to address these issues, although its effects are still to materialize. |
| Keywords: | Cross country analysis , Economic models , European Economic and Monetary Union , Labor costs , Labor markets , Spain , Unemployment , Wage bargaining , Wages , |
| Date: | 2011–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/11&r=lab |
| By: | Emanuelle Bourbeau; Pierre Lefebvre; Philip Merrigan |
| Abstract: | This paper examines the evolution of the returns to education and experience from 1990 to 2005 in Canada and across the provinces. The focus is on the earnings of young adults, age 21 to 35 at the times of the Censuses, classified by very detailed education groups, age and gender. Returns to higher education are very different across provinces and are particularly high in the western part of the nation. Over time, they are quite stable, but they are increasing for females in 2005 relative to 2000 in particular Bachelor’s degree and higher degrees. This is surprising given the very important increase in the supply of well educated females since 1991. These returns can explain partially why so many young women turned to higher education over time. It is also surprising that males have not followed suit, given that the returns are just as high for them as for women. Yet, the returns for university education are much higher than the returns for college or CEGE. Also, returns for trade degrees are much higher for males than for females. The male-female gap in higher education will certainly help to reduce the wage gap between genders, however, public policy must be concerned by the difference between male and female participation in higher education. |
| Keywords: | Human Capital, Wage Differentials, Returns to Education, Young Workers, Canadian Provinces, Gender |
| JEL: | J24 J31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1106&r=lab |
| By: | Charlot, Olivier (University of Cergy-Pontoise); Malherbet, Franck (University of Rouen); Terra, Cristina (University of Cergy-Pontoise) |
| Abstract: | This paper studies the impact of product and labor market regulations on informality and unemployment in a general framework where formal and informal firms are subject to the same externalities, differing only with respect to some parameter values. Both formal and informal firms have monopoly power in the goods market, they are subject to matching friction in the labor market, and wages are determined through bargaining between large firms and their workers. The informal sector is found to be endogenously more competitive than the formal one. We find that lower strictness of product or labor market regulations lead to a simultaneous reduction in informality and unemployment. The difference between these two policy options lies on their effect on wages. Lessening product market strictness increases wages in both sector but also increases the formal sector wage premium. The opposite is true for labor market regulation. Finally, we show that the so-called overhiring externality due to wage bargaining 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: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5519&r=lab |
| By: | Pieter A. Gautier (VU University Amsterdam); Coen N. Teulings (Netherlands Bureau of Policy Analysis CPB, The Hague, and University of Amsterdam) |
| Abstract: | We analyze a general search model with on-the-job search and sorting of heterogeneous workers into heterogeneous jobs. This model yields a simple relationship between (i) the unemployment rate, (ii) the value of non-market time, and (iii) the max-mean wage differential. The latter measure of wage dispersion is more robust than measures based on the reservation wage, due to the long left tail of the wage distribution. We estimate this wage differential using data on match quality and allow for measurement error. The estimated wage dispersion for the US is consistent with an unemployment rate of 4-6%. We find that without search frictions, output would be between 7.5% and 18.5% higher, depending on whether or not firms can ex ante commit to wage payments. |
| Keywords: | Sorting; search frictions; wage dispersion; unemployment; mismatch; on-the-job search; output loss; business stealing |
| JEL: | E24 J62 J63 J64 |
| Date: | 2011–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110010&r=lab |
| By: | Kleiner, Morris M. (University of Minnesota); Krueger, Alan B. (Princeton University) |
| Abstract: | This study examines the extent and influence of occupational licensing in the U.S. using a specially designed national labor force survey. Specifically, we provide new ways of measuring occupational licensing and consider what types of regulatory requirements and what level of government oversight contribute to wage gains and variability. Estimates from the survey indicated that 35 percent of employees were either licensed or certified by the government, and that 29 percent were fully licensed. Another 3 percent stated that all who worked in their job would eventually be required to be certified or licensed, bringing the total that are or eventually must be licensed or certified by government to 38 percent. We find that licensing is associated with about 18 percent higher wages, but the effect of governmental certification on pay is much smaller. Licensing by larger political jurisdictions is associated with higher wage gains relative to only local licensing. We find little association between licensing and the variance of wages, in contrast to unions. Overall, our results show that occupational licensing is an important labor market phenomenon that can be measured in labor force surveys. |
| Keywords: | occupational licensing, labor market institutions, labor market data, wages and labor market institutions, wage inequality and labor market institutions |
| JEL: | J08 J44 J58 J80 K23 K31 L38 L5 L51 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5505&r=lab |
| By: | Eva Gutierrez-i-Puigarnau (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam) |
| Abstract: | There is little known about the effects of staggered-hours programs that affect workers' working schedules to mitigate peak congestion. We examine the effect of workers' morning start times on their wages for Germany. In contrast to previous work based on cross-section data, we demonstrate that wages are not, or maybe, a slight inverse U-shaped function of start time suggesting that staggered-hours programs might be welfare enhancing. |
| Keywords: | Commuting; start time; wages; staggered hours; peak congestion |
| JEL: | R48 |
| Date: | 2010–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100073&r=lab |
| By: | Bergemann, Annette (University of Mannheim); Caliendo, Marco (IZA); van den Berg, Gerard J. (University of Mannheim); Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: | Labor market programs may affect unemployed individuals' behavior before they enroll. Such ex ante effects may differ according to ethnic origin. We apply a novel method that relates self-reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. We compare German native workers with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. We examine the omnibus ex ante effect of the German ALMP system, using the novel IZA Evaluation Data Set, which includes self-reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes. We find that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered. |
| Keywords: | immigrants, policy evaluation, reservation wage, search effort, expectations, unemployment duration, program evaluation, active labor market policy |
| JEL: | J64 J61 C21 D83 D84 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5485&r=lab |
| By: | Lozano, Fernando A. (Pomona College); Sorensen, Todd (University of California, Riverside) |
| Abstract: | We present estimates of the effect of legal immigration status on earnings of undocumented workers. Our contribution to the literature centers on a two-step procedure that allows us to first estimate the legal status of an immigrant and then estimate the effect of the Immigration Reform and Control Act (IRCA) on immigrants’ labor market outcomes using a triple difference approach. From a sample of young to middle aged Mexican men, our results show that IRCA causes a 20 log point increase in labor market earnings of Mexican immigrants over the long run, and that nearly all of this increase is in the occupational wage. These results suggest that the primary disadvantage for undocumented workers is the type of jobs that they are able to obtain. We estimate the model for immigrants from other countries not benefiting from IRCA to the extent that Mexican immigrants did, and find no systematic bias towards positive and significant results. |
| Keywords: | immigration, legal status, immigration reform |
| JEL: | J08 F22 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5492&r=lab |
| By: | Frederic DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS); Çaglar OZDEN (The World Bank, Development Research Group); Giovanni PERI (University of California, Davis) |
| Abstract: | In this paper, we simulate the long-run effects of migrant flows on wages of high-skilled and low-skilled non-migrants in a set of countries using an aggregate representation of national economies. We focus on Europe and compare the outcomes for large Western European countries with those of other key destination countries both in the OECD and outside the OECD. Our analysis builds on an improved database of bilateral stocks and net migration flows of immigrants and emigrants by education level for the years 1990 through 2000. We find that all European countries experienced a decrease in their average wages and a worsening of their wage inequality because of emigration. Whereas, immigration had nearly equal but opposite effects. These patterns hold true using a range of parameters for our simulations, accounting for the estimates of undocumented immigrants, and correcting for the quality of schooling and/or labor-market downgrading of skills. In terms of economic outcomes, it follows that prevalent public fears in European countries are misplaced; immigration has had a positive average wage effect on native workers. These concerns would be more properly focused on the wage effect of emigration. |
| Keywords: | Immigration, Emigration, Complementarity, Schooling Externalities, Average Wage, Wage inequality |
| JEL: | F22 J61 J31 |
| Date: | 2010–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2010044&r=lab |
| By: | Mimi Engel; Brian A. Jacob |
| Abstract: | Recent evidence on the large variance in teacher effectiveness has spurred renewed interest in teacher labor market policies. A substantial body of prior research documents that more highly qualified teachers tend to work in more advantaged schools, although this literature cannot determine the relative importance of supply versus demand factors in generating this equilibrium outcome. To isolate the importance of teacher labor supply, we attended three large teacher job fairs in Chicago during the summer of 2006 and collected detailed information on the specific schools at which teachers interviewed. We document a substantial variation in the number of applicants per school, with some schools having fewer than five applicants and others schools having over 300 applicants, even after controlling for the number and type of positions advertised at the school. We show that the demographic characteristics of schools strongly predict the number of applicants to the school in the expected direction. Interestingly, the geographic location of the school is an extremely strong predictor of applications, even after controlling for a host of observable school and neighborhood characteristics. |
| JEL: | I21 I28 J01 J08 J2 J45 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16802&r=lab |
| By: | Kar, Saibal (Centre for Studies in Social Sciences, Calcutta); Saha, Bibhas Chandra (University of East Anglia) |
| Abstract: | Immigrant workers and their labor force participation in host countries have received critical attention in all concerned disciplines, principally owing to its strong implications for well-being of natives. The ageing population in many rich countries and several related and unrelated issues including global integration, pension provisions or security threats keeps immigration under continuous impact evaluation. However, of the several studies that dealt with patterns and consequences aspects of labor migration, only a handful discusses asymmetric information across transnational labor markets despite agreement that a standardized screening mechanism is unavailable. At the same time, several empirical studies show that immigrants are proportionally overrepresented in self-employment, vis-à-vis natives of equivalent skill levels. We try to explain this phenomenon based on asymmetric information in the host country labor market. We focus on the design of a contract menu by the employers, which when offered to a mixed cohort of immigrants facilitates self-selection in favor of paid employment or the outside option of self-employment/entrepreneurship. We also discuss countervailing incentives among the mixed cohort. |
| Keywords: | immigrants, asymmetric information, labor contracts, self-employment, incentive compatibility |
| JEL: | D82 J23 J24 J41 J61 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5508&r=lab |
| By: | Hans Bloemen (VU University Amsterdam); Stefan Hochguertel (VU University Amsterdam); Marloes Lammers (VU University Amsterdam) |
| Abstract: | In this paper, we use a recent policy change in the Netherlands to study how changes in search requirements for the older unemployed affect their transition rates to employment, early retirement and sickness/disability benefits. The reform, becoming effective on January 1st 2004, required the elderly to formally report their job search efforts to the employment office in order to avoid a (temporary) cut in benefits. Before the new law was passed, unemployed were allowed to stop all search activity at the moment they turned 57.5. Estimating various duration models using difference-in-difference and regression discontinuity approaches, we find that for several groups of individuals that were affected by the policy change, the stricter search requirements did significantly increase their entry rate into employment. However, we also find evidence of a higher outflow to sickness/disability insurance schemes, a presumably unwanted side-effect of the policy change. |
| Keywords: | Duration Analysis; Policy Evaluation; Search effort; Substitution |
| JEL: | C31 J26 J64 J68 |
| Date: | 2011–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110008&r=lab |
| By: | Jan K. Brueckner; David Neumark |
| Abstract: | The absence of a competitive market and the presence and strength of public-sector labor unions make it likely that public-sector pay reflects an element of rent extraction by government workers. In this paper, we test a specific hypothesis that connects such rent extraction to the level of local amenities. Specifically, although migration of taxpayers limits the extent of rent-seeking, public-sector workers may be able to extract higher rents in regions where high amenities mute the migration response. We develop a theoretical model that predicts such a link between public-sector wage differentials and local amenities, and we test the model's predictions by analyzing variation in these wage differentials and amenities across states. The evidence reveals that public-sector wage differentials are, in fact, larger in the presence of high amenities, with the effect being stronger for unionized public-sector workers, who are likely better able to exercise political power in extracting rents. |
| JEL: | J45 J48 J61 R10 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16797&r=lab |
| By: | Korpi, Walter (Swedish Institute for Social Research, Stockholm University); Ferrarini, Tommy (Swedish Institute for Social Research, Stockholm University); Englund, Stefan (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | Women’s rising labor force participation since the 1960’s was long seen as heralding decreasing gender inequalities. According to influential social science writings this view has now to be revised; “women friendly” policies bringing women into the workforce are held to create major inequality tradeoffs between quantity and quality in women’s jobs. Unintendedly, such policies increase employer statistical discrimination and create glass ceilings impeding women’s access to influential positions and high wages. This paper re-examines theoretical and empirical bases in analysis of family policy effects on gender inequalities. Including capabilities as well as earnings in definitions of gender inequality, we improve possibilities for causal analyses by mapping institutional constellations of separate dimensions of family policies in Western countries. Reflecting conflicting political forces as well as religion, contrary to accepted assumptions of uni-dimensionality, family policies are multi-dimensional, with main distinctions favoring traditional families, mother’s employment, or market reliance. Using multilevel analyses and broad sets of outcome variables, we show that methodological mistakes largely invalidate earlier causal interpretations of major tradeoffs between quantity and quality in women’s labor force participation. Positive policy effects facilitate work-family reconciliation and combine women’s increased labor force participation with relatively high fertility. While major negative policy effects for women with tertiary education are difficult to find, family policies clearly differ in the extent to which they improve opportunities for women without university degrees. |
| Keywords: | - |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2011_002&r=lab |
| By: | Gould, Eric D. (Hebrew University, Jerusalem); Simhon, Avi (Hebrew University, Jerusalem) |
| Abstract: | This paper uses variation created by parental deaths in the amount of time children spend with each parent to examine whether the parent-child correlation in schooling outcomes stems from a causal relationship. Using a large sample of Israeli children who lost one parent during childhood, we find a series of striking patterns which show that the relationship is largely causal. Relative to children who did not lose a parent, the education of the deceased parent is less important in determining child outcomes, while the education of the surviving parent becomes a stronger factor. Moreover, within the group of families that lost a parent, this pattern intensifies when a child loses a parent earlier in life – the education of the deceased parent becomes even less important, while the effect of the surviving parent's schooling intensifies. These results provide strong evidence that there is a causal connection between parent and child schooling, which is dependent on the child's interaction time with each parent. These findings help us understand why educated parents typically spend more time with their children – they are more effective in producing human capital in their children. |
| Keywords: | intergenerational mobility, education |
| JEL: | I21 J13 J24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5487&r=lab |
| By: | Martins, Pedro S. (Queen Mary, University of London); Snell, Andy (University of Edinburgh); Thomas, Jonathan P. (University of Edinburgh) |
| Abstract: | In this paper we show that panel estimates of tenure specific sensitivity to the business cycle of wages is subject to serious pitfalls. Three canonical variates used in the literature – the minimum unemployment rate during a worker’s time at the firm (min u), the unemployment rate at the start of her tenure (Su) and the current unemployment rate interacted with a new hire dummy (δu) – can all be significant and "correctly" signed even when each worker in the firm receives the same wage, regardless of tenure (equal treatment). In matched data the problem can be resolved by the inclusion in the panel of firm-year interaction dummies. In unmatched data where this is not possible, we propose a solution for min u and Su based on Solon, Barsky and Parker's (1994) two step method. Our proposed solution method is however suboptimal because it removes a lot of potentially informative variation in average wages. Unfortunately δu cannot be identified in unmatched data because a differential wage response to unemployment of new hires and incumbents will appear under both equal treatment and unequal treatment. |
| Keywords: | wage cyclicality, unemployment |
| JEL: | J50 J31 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5503&r=lab |
| By: | Kazuyasu Sakamoto |
| JEL: | D13 J13 J22 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-152&r=lab |
| By: | Joanne Lindley (University of Surrey) |
| Abstract: | Studies have shown technical change has led to job polarisation. A relatively unexplored aspect of this is whether there has been a gender bias. This paper shows gender bias in technology driven skill polarisation. Between 1997 and 2006 the demand for women shows hollowing out across education groups as a consequence of technical change. This was not the case for men. Overall, the demand for women has fallen relative to that for men as a consequence of technical change. This can be explained by a gender bias in the complementarities between computerisation and changes in task inputs. Numeracy skills are the largest complementarity to technical change and these help to explain the increase in the demand for highly skilled women. However, there are gender biased complementarities to technical change across a range of other non-routine tasks which can explain the fall in the demand for medium educated women and the overall increase in the relative demand for men. At the same time there was a fall in the gender pay differential. For moderate and complex computer users this fall is largely explained by changes in qualifications. However, there remains a large unexplained component suggesting that gender biased demand shifts towards numerate and computer literate women have significantly contributed to the closing of the gender pay gap. |
| Keywords: | Gender Pay, Task-Bias Technology Change, Skills |
| JEL: | J01 J16 J2 J31 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:0111&r=lab |
| By: | Behaghel, Luc (CREST-INSEE); Caroli, Eve (University Paris Ouest-Nanterre); Walkowiak, Emmanuelle ((CEE) Centre D'Ètudes de L'Emploi) |
| Abstract: | Following the adoption of information and communication technologies (ICT), firms are likely to face increasing skill requirements. They may react either by training or hiring the new skills, or by a combination of both. We first show that ICT are indeed skill biased and we then assess the relative importance of external and internal labour market strategies. We show that skill upgrading following ICT adoption takes place mostly through internal labour markets adjustments. The introduction of ICT is associated with an upward shift in firms’ occupational structure, of which one third is due to hiring and firing workers from and to the external labour market, whereas two-thirds are due to promotions. Moreover, we find no compelling evidence of external labour market strategies based on "excess turnover". In contrast, French firms heavily rely on training in order to upgrade the skill level of their workforce, even if this varies across industries. |
| Keywords: | technical change, labour turnover, skill bias, training, internal labour markets |
| JEL: | J23 J24 J41 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5494&r=lab |
| By: | Forslund, Anders (Institute for Labour Market Policy Evaluation); Fredriksson, Peter (Dept. of Economics, Stockholm University); Vikström, Johan (Institute for Labour Market Policy Evaluation) |
| Abstract: | This paper discusses the case for expanding active labor market policy in recession. We find that there is reasonable case for relying more heavily on certain kinds of programs. The argument is tied to the varying size of the lock-in effect in boom and recession. If programs with relatively large lock-in effects should ever be used, they should be used in a downturn. The reason is simply that the cost of forgoing search time is lower in recession. We also provide new evidence on the relative effectiveness of different kinds of programs over the business cycle. In particular we compare an on-the-job training scheme with (traditional) labor market training. We find that labor market training is relatively more effective in recession. This result is consistent with our priors since labor market training features relative large lock-in effects. |
| Keywords: | Active labor market policy; business cycle; unemployment |
| JEL: | J08 J64 J68 |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0009&r=lab |
| By: | Picot, Garnett; Hou, Feng |
| Abstract: | This paper reviews the recent research on the determinants of the educational attainment among the children of immigrants born in Canada and the United States, also known as the second generation. The focus is on the gap in educational attainment between the second and third-and-higher generations (the children of domestic-born parents), as well as the intergenerational transmission of education between immigrants and their children. On average, the children of immigrants have educational levels significantly above those of their counterparts in Canada with Canadian-born parents. In the U.S., educational levels are roughly the same between these two groups. In both countries, conditional on the educational attainment of the parents and location of residence, the children of immigrants attain higher levels of education than the third-and-higher generations. Parental education and residential location are major determinants of the numerically positive gap in educational attainment between the children of immigrants and the children of Canadian-born or American-born parents. However, even after accounting for these and other demographic background variables, much of the positive gap between the second generation and the third-and-higher generations remains in Canada. In Canada, parental education is less important as a determinant of educational attainment for the children in immigrant families than for those with Canadian-born parents. Less educated immigrant parents are more likely to see their children attain higher levels of education than are their Canadian-born counterparts. Outcomes vary significantly by ethnic/source region group in both countries. In the U.S., some second-generation ethnic/source region groups, such as those with Mexican, Puerto Rican and other Central/South American backgrounds, have relatively low levels of education (unadjusted data with no controls). However, conditional on background characteristics, these second-generation |
| Keywords: | Education, training and learning, Children and youth, Ethnic diversity and immigration, Educational attainment, Immigrant children and youth, Ethnic groups and generations in Canada, Outcomes of education |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2011332e&r=lab |
| By: | Ismir Mulalic (Technical University of Denmark, and University of Copenhagen, Denmark); Jos N. van Ommeren (VU University Amsterdam, the Netherlands); Ninette Pilegaard (Technical University of Denmark) |
| Abstract: | We examine the causal effect of commuting distance on workers' wages in a quasi-natural experiments setting using information on all workers in Denmark. We account for endogeneity of distance by using changes in distance that are due to firms' relocations. For the range of commuting distances where income tax reductions associated with commuting do not apply, one kilometre increase in commuting distance induces a wage increase of about 0.42%, suggesting an hourly compensation of about half of the hourly net wage. Our findings are consistent with wage bargaining theory and suggest a bargaining power parameter of about 0.50. Due to the experimental setup we are able to exclude many competing explanations of the wage-distance relationship. |
| Keywords: | Bargaining theory; Wages; Commuting |
| JEL: | J22 R41 |
| Date: | 2010–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100093&r=lab |
| By: | Jacobus de Hoop (VU University Amsterdam) |
| Abstract: | Large scale tracking policies, allowing academically apt pupils to enter a select group of secondary schools, can be found in many Sub-Saharan countries. However, evidence on the impact of these policies on school outcomes, especially school participation, is limited. This paper fills this gap by providing regression discontinuity evidence on the impact of Malawi's tracking program. The analysis is based on unique institutional data covering an entire cohort of pupils. Estimates show that Malawi's tracking program raises school participation of top students without a reduction in pupil learning. These findings have implications for education policy in Sub-Saharan Africa. |
| Keywords: | education; Malawi; regression discontinuity; Sub-Saharan Africa; tracking |
| JEL: | I21 O15 |
| Date: | 2010–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100041&r=lab |
| By: | Dobbelaere, Sabien (VU University Amsterdam); Luttens, Roland Iwan (Ghent University) |
| Abstract: | We introduce collective bargaining in a static framework where the firm and its risk-neutral employees negotiate over wages in a non-binding contract setting. Our main result is the equivalence between the non-binding collective equilibrium wage-employment contract and the equilibrium contract under binding risk-neutral efficient bargaining. We also demonstrate that our non-cooperative equilibrium wages and profits coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization. |
| Keywords: | collective bargaining, union, firm, bargaining power, non-binding contract |
| JEL: | C71 J51 L20 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5518&r=lab |
| By: | Zenou, Yves (Stockholm University) |
| Abstract: | The aim of this paper is to provide a new mechanism based on social interactions explaining why distance to jobs can have a negative impact on workers' labor-market outcomes, especially ethnic minorities. Building on Granovetter's idea that weak ties are superior to strong ties for providing support in getting a job, we develop a model in which workers who live far away from jobs tend to have less connections to weak ties. Because of the lack of good public transportation in the US, it is costly (both in terms of time and money) to commute to business centers to meet other types of people who can provide other sources of information about jobs. If distant minority workers mainly rely on their strong ties, who are more likely to be unemployed, there is then little chance of escaping unemployment. It is therefore the separation in both the social and physical space that prevents ethnic minorities from finding a job. |
| Keywords: | weak ties, labor market, social networks, land rent |
| JEL: | A14 J15 R14 Z13 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5507&r=lab |
| By: | Jim Taylor |
| Abstract: | This paper challenges the view held by the UK Government that the introduction of the English Baccalaureate will lead to an improvement in educational outcomes in secondary education. Evidence is presented to show that this new qualification is biased against disadvantaged pupils from low-income families, pupils with special needs, and pupils who have little inclination to study a foreign language. Furthermore, the English Baccalaureate is deeply flawed when used as a school performance indicator and should not be included in the School Performance Tables. |
| Keywords: | English baccalaureate, Performance indicator, Secondary schools |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:007245&r=lab |
| By: | Agnese Romiti (CeRP - Collegio Carlo Alberto) |
| Abstract: | This paper studies the impact of immigration on the Italian labor market using administrative data on Italian private-sector employees during the period 1987-2004. The analysis adopts a structural model based on a three level CES production function extending the model in Card (2001) in order to allow for imperfect substitution both between immigrants and natives within the same area-skill cell, and between females and males within the same area-skill-immigration status cell. The endogeneity of labor supply is controlled for by using an instrument based on the past immigrants' settlement as in Card (2001). The results, robust to the offsetting role of natives out-migration, provide evidence of a small but detectable degree of imperfect substitution between immigrants and natives, whereas female and male workers turn out to be perfect substitutes. Despite immigrants not having any effect on natives' employment, the simulation based on the estimated parameters suggests that a flow of low-skilled immigrants reduces mostly the wages of similarly skilled immigrants (-3.5%), and to a lesser extent those of natives (-1%). |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:105&r=lab |
| By: | Bas van der Klaauw (VU University Amsterdam); Jan C. van Ours (CentER, Tilburg University, Netherlands, University of Melbourne, Australia, CESifo, CEPR, and IZA) |
| Abstract: | To increase their transition from welfare to work, benefit recipients in the municipality of Rotterdam were exposed to various financial incentives, including both carrots to sticks. Once their benefit spell exceeded one year, welfare recipients were entitled to a reemployment bonus if they found a job that lasted at least six months. However, they could also be punished for noncompliance with eligibility requirements and face a sanction, i.e. a temporary reducing of their benefits. In this paper we investigate how benefit sanctions and reemployment bonuses affect job finding rates of welfare recipients. We find that benefit sanctions were effective in bringing unemployed from welfare to work more quickly while reemployment bonuses were not. |
| Keywords: | welfare to work; financial incentives; timing-of-events; dynamic selection |
| JEL: | J64 C21 C41 |
| Date: | 2010–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100064&r=lab |
| By: | Koerselman, Kristian (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | Curriculum tracking creates incentives before its start, and we should expect scores in tested subjects to be higher at that point. I find evidence from both UK and international data for sizable incentive effects. Incentive effects are important from a methodological perspective because they lead to downward bias in value-added estimates of the later age effect of tracking on achievement. They also invalidate placebo tests that work by regressing pre-tracking scores on tracking policies. |
| Keywords: | incentives; curriculum tracking; ability streaming; high-stakes testing; student achievement |
| JEL: | I21 I28 J08 J24 |
| Date: | 2011–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2011_003&r=lab |
| By: | Heckman, James J. (University of Chicago) |
| Abstract: | In contemporary America, racial gaps in achievement are primarily due to gaps in skills. Skill gaps emerge early before children enter school. Families are major producers of those skills. Inequality in performance in school is strongly linked to inequality in family environments. Schools do little to reduce or enlarge the gaps in skills that are present when children enter school. Parenting matters, and the true measure of child advantage and disadvantage is the quality of parenting received. A growing fraction of American children across all race and ethnic groups is being raised in dysfunctional families. Investment in the early lives of children in disadvantaged families will help close achievement gaps. America currently relies too much on schools and adolescent remediation strategies to solve problems that start in the preschool years. Policy should prevent rather than remediate. Voluntary, culturally sensitive support for parenting is a politically and economically palatable strategy that addresses problems common to all racial and ethnic groups. |
| Keywords: | skill gap, racial inequality, early childhood intervention |
| JEL: | J15 J24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5495&r=lab |
| By: | Chad Steinberg; Masato Nakane |
| Abstract: | The Great Recession pushed Japan’s unemployment rate to historic highs, but the increase has been small by international standards and small relative to the large output shock. This paper explores Japan’s cyclical labor market response to the global financial crisis. Our findings suggest that: (i) employment responsiveness has been historically low but rising over time with the increasing importance of the non-regular workforce; (ii) the labor market response was consistent with historical patterns once we control for the size of the output shock; and (iii) the comparatively lower employment response vis-à -vis other countries can in part be explained by the quick implementation of an employment subsidy program, a more flexible wage system, and a corporate governance structure that places workers rights above shareholders. |
| Keywords: | Business cycles , Economic recession , Employment , Global Financial Crisis 2008-2009 , Japan , Labor markets , Manufacturing sector , Unemployment , |
| Date: | 2011–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/15&r=lab |
| By: | Hessel Oosterbeek (University of Amsterdam); Reyn van Ewijk (VU University Amsterdam) |
| Abstract: | Recent studies for primary and secondary education find positive effects of the share of girls in the classroom on achievement of boys and girls. This study examines whether these results can be extrapolated to post-secondary education. We conduct an experiment in which the shares of girls in workgroups for first year students in economics and business are manipulated and students are randomly assigned to these groups. Boys tend to postpone their dropout decision when surrounded by more girls, and there is also a modest reduction in early absenteeism. On the other hand, boys perform worse on courses with high math content when assigned to a group with many girls. Overall, however, we fail to find substantial gender peer effects on achievement. This in spite of the fact that students' perceptions of the behavior of themselves and their peers are influenced by the share of girls. |
| Keywords: | Field experiment; Peer effects; University students |
| JEL: | I22 I28 D83 |
| Date: | 2010–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100113&r=lab |
| By: | Morefield, G. Brant (University of North Carolina, Greensboro); Ribar, David C. (University of North Carolina, Greensboro); Ruhm, Christopher J. (University of Virginia) |
| Abstract: | We use longitudinal data from the 1984 through 2007 waves of the Panel Study of Income Dynamics to examine how occupational status is related to the health transitions of 30 to 59 year-old U.S. males. A recent history of blue-collar employment predicts a substantial increase in the probability of transitioning from very good into bad self-assessed health, relative to white-collar employment, but with no evidence of occupational differences in movements from bad to very good health. These findings are robust to a series of sensitivity analyses. The results suggest that blue-collar workers "wear out" faster with age because they are more likely, than their white-collar counterparts, to experience negative health shocks. This partly reflects differences in the physical demands of blue-collar and white-collar jobs. |
| Keywords: | occupations, physical demands, health |
| JEL: | I12 J24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5482&r=lab |
| By: | Runli Xie |
| Abstract: | This paper focuses on the dynamic link between skill-specific labor markets with search frictions. Human capital investment is formed through households' endogenous decision, and competes with physical capital investment. Idiosyncratic shock shifts the skilled labor share and changes tightness in both skilled and unskilled markets. Given inelastic labor participation, the model can generate downward-sloping Beveridge curves in aggregate, skilled and unskilled labor markets. Upon a neutral shock, total unemployment decrease is two-staged: firstly with a reduction in unskilled unemployment, and then due to a sharp decline of skilled unemployment when skill substitution dominates. A higher elasticity of substitution between two types of labor leads to higher volatility of the model variables and higher u - v correlation. |
| Keywords: | skill-specific unemployment, human capital investment, idiosyncratic shock, skill substitution, search and matching |
| JEL: | E24 E32 J24 J63 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2011-011&r=lab |
| By: | Richard Mussa (SALDRU, School of Economics, University of Cape Town) |
| Abstract: | This paper analyses the impact of educational interventions made in the first- and second-year microeconomics courses on academic development students’ final mark in the second-year course. It also addresses issues of methodology, specification, and statistical analysis with respect to other studies in the field. The results suggest that the educational interventions in the first-year had a positive impact on the academic performance of the academic development cohort, relative to the mainstream cohort for the first period (2000-2002). The results also suggest that the educational interventions introduced in the second period (2003-2005), in the form of voluntary workshops for the academic development cohort, also improved the academic performance of this cohort relative to that of mainstream students. |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:49&r=lab |
| By: | Roberto Bonfatti; Maitreesh Ghatak |
| Abstract: | An interesting puzzle is that trade liberalization in the 1980s and 1990s has been associated with a sharp increase in the skill premium in both developed and developing countries. This is in contrast with neoclassical theory, according to which trade should increase the relative return of the relatively abundant factor. We develop a simple model of trade with capital market imperfections, and show that trade can increase the skill premium in both the North and the South, and both in the short run as well as in the long run. We show that trade with a skill-intensive economy has two effects: it reduces the skilled wage, and thus discourages non talented agents out of the skilled labor force; and it reduces the cost of subsistence, thus allowing the talented offspring of unskilled workers to go to school. This compositional effect has a positive effect on the observed skill premium, possibly strong enough to counterweight the decrease in the skilled wage. |
| Keywords: | Trade Liberalization, Skill Premium, Credit Market Frictions, Latin America |
| JEL: | F16 O15 O16 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieop:020&r=lab |
| By: | Leonard Smith (School of Economics, University of Cape Town); Vimal Ranchhod (SALDRU, School of Economics, University of Cape Town; School of Economics, University of Cape Town) |
| Abstract: | This paper analyses the impact of educational interventions made in the first- and second-year microeconomics courses on academic development students’ final mark in the second-year course. It also addresses issues of methodology, specification, and statistical analysis with respect to other studies in the field. The results suggest that the educational interventions in the first-year had a positive impact on the academic performance of the academic development cohort, relative to the mainstream cohort for the first period (2000-2002). The results also suggest that the educational interventions introduced in the second period (2003-2005), in the form of voluntary workshops for the academic development cohort, also improved the academic performance of this cohort relative to that of mainstream students. |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:48&r=lab |
| By: | Aaron George Grech |
| Abstract: | Spurred by the ageing transition, many governments have made wide-ranging reforms, dramatically changing Europe's pensions landscape. Nevertheless there remain concerns about future costs, while unease about adequacy is growing. This study develops a comprehensive framework to assess pension system sustainability. It captures the effects of reforms on the ability of systems to alleviate poverty and maintain living standards, while setting out how reforms change future costs and relative entitlements for different generations. This framework differs from others, which just look at generosity at the point of retirement, as it uses pension wealth - the value of all transfers during retirement. This captures the impact of both longevity and changes in the value of pensions during retirement. Moreover, rather than focusing only on average earners with full careers, this framework examines individuals at different wage levels, taking account of actual labour market participation. The countries analysed cover 70% of the EU's population and include examples of all system types. Our estimates indicate that while reforms have decreased generosity significantly, in most, but not all, countries the poverty alleviation function remains strong, particularly where minimum pensions have improved. However, moves to link benefits to contributions have made some systems less progressive, raising adequacy concerns for women and those on low incomes. The consumption smoothing function of state pensions has declined noticeably, suggesting the need for longer working lives or additional private saving for individuals to maintain pre-reform living standards. Despite the reforms, the size of entitlements of future generations should remain similar to that of current generations, in most cases, as the effect of lower annual benefits should be offset by longer retirement. Though reforms have helped address the financial challenge faced by pension systems, in many countries pressures remain strong and further reforms are likely. |
| Keywords: | Social Security and Public Pensions, Retirement, Poverty, Retirement Policies |
| JEL: | H55 I38 J26 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:/140&r=lab |
| By: | Janet Currie |
| Abstract: | Recent research shows that health at birth is affected by many factors, including maternal education, behaviors, and participation in social programs. In turn, endowments at birth are predictive of adult outcomes, and of the outcomes of future generations. Exposure to environmental pollution is one potential determinant of health at birth that has received increasing attention. A large literature outside of economics advocates for “Environmental Justice,” and argues that poor and minority families are disproportionately exposed to environmental hazards. I provide new evidence on this question, showing that children born to less educated and minority mothers are more likely to be exposed to pollution in utero and that white, college educated mothers are particularly responsive to changes in environmental amenities. I estimate that differences in exposure to toxic releases may explain 6% of the gap in incidence of low birth weight between infants of white college educated mothers and infants of black high school dropout mothers. |
| JEL: | I12 Q51 Q53 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16798&r=lab |
| By: | G. Brant Morefield; David C. Ribar; Christopher J. Ruhm |
| Abstract: | We use longitudinal data from the 1984 through 2007 waves of the Panel Study of Income Dynamics to examine how occupational status is related to the health transitions of 30 to 59 year-old U.S. males. A recent history of blue-collar employment predicts a substantial increase in the probability of transitioning from very good into bad self-assessed health, relative to white-collar employment, but with no evidence of occupational differences in movements from bad to very good health. These findings are robust to a series of sensitivity analyses. The results suggest that blue-collar workers “wear out” faster with age because they are more likely, than their white-collar counterparts, to experience negative health shocks. This partly reflects differences in the physical demands of blue-collar and white-collar jobs. |
| JEL: | I1 I12 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16794&r=lab |
| By: | Klarita Gerxhani (University of Amsterdam); Jordi Brandts (Autonoma University, Barcelona); Arthur Schram (University of Amsterdam) |
| Abstract: | We use laboratory experiments to investigate how employers develop social structures for sharing information about the trustworthiness of job candidates, when worker opportunism is possible. The experimental data show that substantial information sharing emerges. Two types of information networks are observed. One consists of 'anonymity networks' where information is anonymously and voluntarily provided as a collective good for all employers to use. The other type is a 'reciprocity network' where information sharing is driven by the rewarding of previously given information by the requestor. In both types, the extent of information sharing depends on the costs of providing it. Moreover, information sharing enables employers to recruit trustworthy workers which creates a high quality of trading, benefiting both employer and worker. |
| Keywords: | Social structure; Information networks; Recruitment; Experiments |
| JEL: | Z13 J23 |
| Date: | 2011–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110032&r=lab |
| By: | Kazuya Wada |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-146&r=lab |
| By: | Eichhorst, Werner (IZA) |
| Abstract: | The European Employment Strategy has set the goal of raising the retirement age of workers in the EU through a strategy of "active ageing". Yet despite some progress over the last decade, empirical data show persistent diversity across EU member states. Institutional arrangements of social and labor market policies can be seen as the core factors behind cross-national diversity. Hence, institutional change is crucial to explain structural changes. The paper tries to assess the role of supranational policy initiatives and national politico-economic factors in shaping the transition from work to retirement in EU member states which is still governed by the national political economy. Taking the German case as an example in point, the paper shows the dynamic interaction between policy changes, in particular in benefit systems and activation, and changes in the approach of firms and workers to early retirement. Policy changes influence actors’ behavior in the medium run and open up opportunities for subsequent reforms. |
| Keywords: | early retirement, older workers, Germany, European Employment Strategy |
| JEL: | J14 J26 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5490&r=lab |
| By: | Josse Delfgaauw (Erasmus University Rotterdam); Robert Dur (Erasmus University Rotterdam); Arjan Non (Erasmus University Rotterdam); Willem Verbeke (Erasmus University Rotterdam) |
| Abstract: | We conduct a field experiment among 189 stores of a retail chain to study dynamic incentive effects of relative performance pay. Employees in the randomly selected treatment stores could win a bonus by outperforming three comparable stores from the control group over the course of four weeks. Treatment stores received weekly feedback on relative performance. Control stores were kept unaware of their involvement, so that their performance generates exogenous variation in the relative performance of the treatment stores. As predicted by theory, treatment stores that lag far behind do not respond to the incentives, while the responsiveness of treatment stores close to winning a bonus increases in relative performance. On average, the introduction of the relative performance pay scheme does not lead to higher performance. |
| Keywords: | Dynamic incentives; Relative performance pay; Field experiment |
| JEL: | C93 M52 |
| Date: | 2010–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100124&r=lab |
| By: | Carola Frydman; Raven S. Molloy |
| Abstract: | The trends in executive pay and labor income tax rates since the 1940s suggest a high elasticity of taxable income with respect to tax policy. By contrast, the level and structure of executive compensation have been largely unresponsive to tax incentives since the 1980s. However, the relative tax advantage of different forms of pay was small during this period. Using a sample of top executives in large firms from 1946 to 2005, we also find a small short run response of salaries, qualified stock options, and bonuses paid after retirement to changes in tax rates on labor income—even though tax rates were significantly higher and more heterogeneous across individuals in the first several decades following WWII. We explore several potential explanations for the conflicting impressions given by the long-run and short-run correlations between taxes and pay, including changes in social norms and concerns about pay equality. |
| JEL: | G30 H24 H32 J31 J33 N32 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16812&r=lab |
| By: | Riphahn, Regina T.; Trübswetter, Parvati (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Socialist societies often emphasized the abolition of traditional social classes. To achieve this objective, educational opportunities were at times 'actively managed' and allocated to children of less educated parents. What happened to these patterns after the demise of socialist rule in Eastern Europe? We study the development of educational mobility after the fall of the iron curtain in East Germany and compare the relevance of parental educational background for secondary schooling outcomes in East and West Germany. Based on data from the German Mikrozensus we find that educational mobility is lower in East than in West Germany and that it has been falling in East Germany after unification. While the educational advantage of girls declined over time, having many siblings presents a more substantial disadvantage in East than in West Germany." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bildungsmobilität, Intergenerationsmobilität, Eltern, Kinder, Qualifikationsniveau, Schullaufbahnwahl, Gymnasium, Ostdeutschland, Westdeutschland, Bundesrepublik Deutschland |
| JEL: | I21 I28 J11 |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201104&r=lab |
| By: | Brunello, Giorgio (University of Padova); Rocco, Lorenzo (University of Padova) |
| Abstract: | We study whether a higher share of immigrant pupils affects the school performance of natives using aggregate multi-country data from PISA. We find evidence of a negative and statistically significant relationship. The size of the estimated effect is small: doubling the share of immigrant pupils in secondary schools from its current sample average of 4.8 percent to close to 10 percent would reduce the test score of natives by 1.32 to 1.96 percent, depending on the selected group of natives. There is also evidence that – conditional on the average share of immigrant pupils – reducing the dispersion of this share between schools has small positive effects on the test scores of natives. |
| Keywords: | immigrants, school performance, natives |
| JEL: | J15 I28 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5479&r=lab |
| By: | Joeri Sol (Erasmus University Rotterdam) |
| Keywords: | peer evaluation; peer appraisal; incentive contracts; co-worker relations; likeability bias |
| JEL: | D86 J33 M50 |
| Date: | 2010–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100055&r=lab |
| By: | Hiromi Hara |
| JEL: | J23 J24 J31 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-147&r=lab |
| By: | Noel Gaston; Gulasekaran Rajaguru |
| Abstract: | Does trade affect the equilibrium rate of unemployment? To theoretically examine this question, we incorporate firm-union bargaining considerations into a model with a booming external sector and a stagnating manufacturing sector. In the model, a sustained improvement in the terms of trade lowers unemployment. To empirically investigate the predicted determinants of the unemployment rate, we use data for Australia, a country whose prosperity has always depended on the value of its exports. We find strong evidence that higher export prices, capital accumulation in tradeable goods industries and a lower unemployment benefit replacement rate each reduce the equilibrium unemployment rate. |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0801&r=lab |
| By: | Devesh Raval |
| Abstract: | Both the recent literature on production function identification and a considerable body of other empirical work on firm expansion assume a Cobb-Douglas production function. Under this assumption, all technical differences are Hicks neutral. I provide evidence from US manufacturing plants against Cobb-Douglas and present an alternative production function that better fits the data. A Cobb Douglas production function has two empirical implications that I show do not hold in the data: a constant cost share of capital and strong comovement in labor productivity and capital productivity (revenue per unit of capital). Within four digit industries, differences in cost shares of capital are persistent over time. Both the capital share and labor productivity increase with revenue, but capital productivity does not. A CES production function with labor augmenting differences and an elasticity of substitution between labor and capital less than one can account for these facts. To identify the labor capital elasticity, I use variation in wages across local labor markets. Since the capital cost to labor cost ratio falls with local area wages, I strongly reject Cobb-Douglas: capital and labor are complements. Now productivity differences are no longer neutral, which has implications on how productivity affects firms’ decisions to expand or contract. Non neutral technical improvements will result in higher stocks of capital but not necessarily more hiring of labor. Specifying the correct form of the production function is more generally important for empirical work, as I demonstrate by applying my methodology to address questions of misallocation of capital. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:11-05&r=lab |
| By: | Paul Ryan (King's College Cambridge); Karin Wagner (Hochschule für Technik und Wirtschaft Berlin); Silvia Teuber (Department of Business Administration, University of Zurich); Uschi Backes-Gellner (Department of Business Administration, University of Zurich) |
| Abstract: | This paper considers whether listed companies with dispersed ownership invest less in training than do other firms, as part of a short-termist stance caused by pressure from the stock market. An analytical framework that supports the proposition involves three factors: high agency costs between the shareholders and managers of listed firms that have dispersed ownership; the use of highly geared performance-related pay to reward top managers; and accounting conventions that distort performance measures by requiring that spending on intangible assets be expensed not amortised. Managers then have the incentive and ability to restrict spending on training in order to increase their remuneration. Countervailing factors, including institutions of corporate governance, may however weaken or destroy such effects. Evidence is presented concerning the initial training programmes of 56 companies in engineering and retailing in Britain, Germany and Switzerland. The evidence is consistent with ownership effects in both sectors, but those effects are at most moderate in both incidence and strength. The skill requirements of competitive success in product markets appear more important than ownership. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0055&r=lab |
| By: | Tim Willems (University of Amsterdam) |
| Abstract: | Recent research has shown that the standard labor market matching model fails to match the dynamics of US data. In particular, the model lacks sufficient propagation of shocks. This paper shows that refining the informational structure of the model leads to significant improvements along this dimension. In particular, when one assumes that agents cannot separately identify persistent and transitory technology shocks on impact (so that they must solve a signal extraction problem) shocks are propagated and the standard matching model performs much better. |
| Keywords: | imperfect information; labor market matching; option value of waiting; signal extraction |
| JEL: | D80 E32 J63 J64 |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100098&r=lab |
| By: | Lee, Jungmin (Sogang University); Lee, Sokbae (Seoul National University) |
| Abstract: | Blau and Kahn (JOLE, 1997; ILRR, 2006) decomposed trends in the U.S. gender earnings gap into observable and unobservable components using the PSID. They found that the unobservable part contributed significantly not only to the rapidly shrinking earnings gap in the 1980s, but also to the slowing-down of the convergence in the 1990s. In this paper, we extend their framework to consider measurement error due to the use of proxy/representative respondents. First, we document a strong trend of changing gender composition of household-representative respondents toward more females. Second, we estimate the impact of the changing gender composition on Blau and Kahn's decomposition. We find that a non-ignorable portion of changes in the gender gap could be attributed to changes in the self/proxy respondent composition. Specifically, the actual reduction in the gender gap can be smaller than what the estimates without taking into account the measurement error might suggest. We conclude that a careful validation study would be necessary to ascertain the magnitude of the spurious measurement error effects. |
| Keywords: | gender earnings gap, survey response error, proxy response |
| JEL: | J3 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5512&r=lab |
| By: | Mauro Mastrogiacomo; Rob Euwals |
| Abstract: | We study the causal relation between private wealth and retirement age. We propose two estimation strategies based on expected retirement age. |
| JEL: | C23 J26 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:160&r=lab |
| By: | Peichl, Andreas (IZA); Pestel, Nico (IZA); Siegloch, Sebastian (IZA) |
| Abstract: | Using a unique dataset of German members of parliament with information on total earnings including outside income, this paper analyzes the politicians’ wage gap (PWG). After controlling for observable characteristics as well as accounting for selection into politics, we find a positive PWG which is statistically and economically significant. It amounts to 40-60% compared to citizens with an executive position. Hence, we show that the widely held claim that politicians would earn more in the private sector is not confirmed by our data. Our findings are robust with respect to potential unobserved confounders. We further show that the PWG exceeds campaigning costs and cannot be justified by extraordinary workload. Hence, our results suggest that part of the PWG can be interpreted as rent extraction. This calls for a reform of the regulation of outside earnings, which account for a sizeable share of the wage premium. |
| Keywords: | politicians' wage gap, descriptive representation, citizen-candidate model, political rents, outside earnings |
| JEL: | D72 H11 H83 J31 J45 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5520&r=lab |
| By: | Mano, Yukichi; Yamamura, Eiji |
| Abstract: | Japanese household-level data describing a husband's earnings, his wife's working status, and their schooling levels are used to test the implications of a model proposing a time-consuming process of human capital accumulation within marriages, in which an educated wife is more productive. The empirical results support the model’s predictions: in particular (i) a housewife's schooling has a greater positive effect on her husband's earnings than a working wife’s schooling does; and (ii) the effect of a housewife's schooling increases with the length of marriage, whereas the effect of a working wife’s schooling does not change over the course of marriage. |
| Keywords: | Human Capital; Married Couple;Housewife; Working Wife |
| JEL: | J12 J24 |
| Date: | 2011–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28936&r=lab |
| By: | Peter Cappelli; Martin J. Conyon |
| Abstract: | We investigate gift exchange relationships in real jobs, making use of a field quasi-experiment associated with the exercise of stock options for roughly 4500 managers in a large public company. In this company, option grants are set equally for all employees within occupational categories, and financial markets set the price at which the options are ultimately exercised. We assert that the considerable variation that we observe across employees and over time in profits from those sales is beyond the control of the individual employee and can be thought of as effectively randomized. We also assert that employees perceive the profit they receive from exercising these options at least in part as the equivalent of a gift: Higher profits in turn cause them to reciprocate with better job performance in the subsequent period. We find significant and economically meaningful positive relationships between the variation in profit per share of the options sold and standard measures of subsequent job performance for individual employees. These effects exist in real jobs and persist over long periods, extending previous studies. Non-parametric and parametric fixed effects models, other controls for sample heterogeneity, and alternative specifications address possible concerns about the randomization assumption and associated statistical issues. |
| JEL: | J33 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16814&r=lab |
| By: | Jana Vyrastekova (Radboud University Nijmegen); Sander Onderstal (University of Amsterdam); Pierre Koning (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | We examine how self-selection of workers into firms depends on the power of the firms' incentive schemes and how it affects the performance of firms that increase the power of the incentive schemes. In a laboratory experiment, we let subjects choose between (low-powered) team incentives and (high-powered) individual incentives. We observe that subjects exhibiting high trust or reciprocity in the trust game are more likely to choose team incentives. When exposed to individual incentives, workers who chose team incentives perform worse if both the unobservable interdependency between workers and their incentive to cooperate under team incentives are high. |
| Keywords: | Incentive scheme; Self-selection; Laboratory experiment |
| JEL: | C91 J33 M52 |
| Date: | 2010–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100074&r=lab |
| By: | Eric J. Bartelsman (VU University Amsterdam, IZA); Pieter A. Gautier (VU University Amsterdam, CEPR, IZA); Joris de Wind (De Nederlandsche Bank, University of Amsterdam) |
| Abstract: | Using a country-industry panel dataset (EUKLEMS) we uncover a robust empirical regularity, namely that high-risk innovative sectors are relatively smaller in countries with strict employment protection legislation (EPL). To understand the mechanism, we develop a two-sector matching model where firms endogenously choose between a safe technology with known productivity and a risky technology with productivity subject to sizeable shocks. Strict EPL makes the risky technology relatively less attractive because it is more costly to shed workers upon receiving a low productivity draw. We calibrate the model using a variety of aggregate, industry and micro-level data sources. We then simulate the model to reflect both the observed differences across countries in EPL and the observed increase since the mid-1990s in the variance of firm performance associated with the adoption of information and communication technology. The simulations produce a differential response to the arrival of risky technology between low- and high-EPL countries that coincides with the findings in the data. The described mechanism can explain a considerable portion of the slowdown in productivity in the EU relative to the US since 1995. |
| Keywords: | employment protection legislation; exit costs; Information and Communications Technology; heterogeneous productivity; sectoral allocation |
| JEL: | J65 O38 |
| Date: | 2010–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100042&r=lab |
| By: | Andalón, Mabel (University of Melbourne); Fields, Gary (Cornell University) |
| Abstract: | This paper adopts a labor market economics perspective to understanding the crisis of health care professionals in Africa. Five challenges resulting from this crisis are identified: a production challenge, an underutilization challenge, a distributional challenge, a performance challenge, and a financing challenge. Differences between the labor market approach and others used in the health field are noted. We conclude that more empirical data, a full labor market analysis, and the use of social benefit-cost criteria are all needed before policy recommendations to address any of these challenges can be confidently offered. |
| Keywords: | labor market, health care, Africa |
| JEL: | I11 J01 J08 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5483&r=lab |
| By: | Daniel van Vuuren; Paul de Hek |
| Abstract: | It is widely believed that wage and productivity profiles of individual workers do not coincide at all ages. We give an overview of the theories which provide a rationale for this, and discuss the empirical literature. |
| JEL: | J24 J31 J33 J51 J62 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:165&r=lab |
| By: | Munshi Sulaiman |
| Abstract: | Food assistance is one of the most common forms of safety net programs in postconflictsituations. Besides the humanitarian and promotional roles, there arewidespread scepticisms of food assistance regarding its possible influence ondisincentive to work and on crowding out of private transfers. While there is arelatively large amount of empirical research on social protection in stable context, itis less researched in post-conflict situations. Based on randomized evaluation of afood-for-training program implemented in Southern Sudan, this paper estimatesthese effects. We observe a significant negative impact (about 13%) on per capitahousehold income. However, there is no effect on the hours of work or the type ofthe economic activities of the adult members. The decline in income mostlyhappened through a reduction in child labor. There is also a positive effect on schoolenrolment for girls (about 10 percentage points) and an improvement in theirhousing status. We also do not find any indication of crowding out of privatetransfers for the participants. This is most likely due to the extent of private transfersbeing very low to begin with. However, there is a small but significant impact of thetransfers given out by the participants. |
| Keywords: | food assistance, incentive, crowding-out, Southern Sudan |
| JEL: | J22 O12 Q18 L |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieop:019&r=lab |
| By: | Dhammika Dharmapala (University of Illinois at Urbana Champaign); Nadine Riedel (Oxford University Centre for Business Taxation) |
| Abstract: | This paper presents a new approach to estimating the existence and magnitude of tax-motivated income shifting within multinational corporations. Existing studies of income shifting use changes in corporate tax rates as a source of identification. In contrast, this paper exploits exogenous earnings shocks at the parent firm and investigates how these shocks propagate across low-tax and high-tax multinational subsidiaries. This approach is implemented using a large panel of European multinational affiliates over the period 1995 -2005. The central result is that parents’ positive earnings shocks are associated with a significantly positive increase in pretax profits at low-tax affiliates, relative to the effect on the pretax profits of high-tax affiliates. The result is robust to controlling for various other differences between low-tax and high-tax affiliates and for country-pair-year fixed effects. Additional tests suggest that the estimated effect is attributable primarily to the strategic use of debt across affiliates. The magnitude of income shifting estimated using this approach is substantial, but somewhat smaller than that found in the previous literature. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:1101&r=lab |
| By: | Juan Carlos Cuestas (Department of Economics, The University of Sheffield); Luis A. Gil-Alana |
| Abstract: | In this paper we aim to analyse the dynamics of unemployment in a group of Central and Eastern European Countries (CEECs). The CEECs are of special importance for the future of the European Union, given that most of them have recently become member states, and labour flows have been seen to rise with their accession. By means of unit root tests incorporating structural changes and nonlinearities, as well as fractional integration, we find that the unemployment rates for the CEECs are mean reverting processes, which is consistent with the NAIRU hypothesis, although shocks tend to be highly persistent. |
| Keywords: | Unemployment, NAIRU, hysteresis, unit roots, fractional integration |
| JEL: | C32 E24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2011005&r=lab |
| By: | Inas Rashad Kelly; Dhaval M. Dave; Jody L. Sindelar; William T. Gallo |
| Abstract: | Occupational choice is a significant input into individuals’ health investments, operating in a manner that can be either health-promoting or health-depreciating. Recent studies have highlighted the potential importance of initial occupational choice on subsequent outcomes pertaining to morbidity. This study is the first to assess the existence and strength of a causal relationship between initial occupational choice at labor entry and subsequent health behaviors and habits. We utilize the Panel Study of Income Dynamics to analyze the effect of first occupation, as identified by industry category and blue collar work, on subsequent health outcomes relating to body mass index, obesity, alcohol consumption, and physical activity in 1999-2005. Our findings suggest that initial occupations described as craft, operative, and service are related to higher body mass index and obesity later in life, while labor occupations are related to higher probabilities of smoking later in life. Blue collar work early in life is associated with increased probabilities of obesity and smoking, and decreased physical activity later in life, although effects may be masked by unobserved heterogeneity. Few effects are found for the effect of initial occupation on alcohol consumption. The weight of the evidence bearing from various methodologies, which account for non-random unobserved selection, indicates that at least part of this effect is consistent with a causal interpretation. These estimates also underscore the potential durable impact of early labor market experiences on later health. |
| JEL: | I0 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16803&r=lab |
| By: | Alcalde, Jose; Romero-Medina, Antonio |
| Abstract: | This paper proposes a way to allocate students to schools such that conciliates Pareto efficiency and stability. Taking as a starting point the recent reform proposed by the Boston School Committee, we propose a marginal modification to reach our objective redefine how students are prioritize. Our proposal is to allow schools to prioritize only a small set of students an then use a common priority order for the rest. Under this condition we propose a score based priority ranking that makes the output of the new Boston Mechanism Pareto efficient and stable. |
| Keywords: | School allocation problem; Pareto efficient matching |
| JEL: | D71 C71 C72 |
| Date: | 2011–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28831&r=lab |
| By: | Dolton, Peter (Royal Holloway, University of London); Smith, Jeffrey A. (University of Michigan) |
| Abstract: | This paper evaluates the UK New Deal for Lone Parents (NDLP) program, which aims to return lone parents to work. Using rich administrative data on benefit receipt histories and a "selection on observed variables" identification strategy, we find that the program modestly reduces benefit receipt among participants. Methodologically, we highlight the importance of flexibly conditioning on benefit histories, as well as taking account of complex sample designs when applying matching methods. We find that survey measures of attitudes add information beyond that contained in the benefit histories and that incorporating the insights of the recent literature on dynamic treatment effects matters even when not formally applying the related methods. Finally, we explain why our results differ substantially from those of the official evaluation of NDLP, which found very large impacts on benefit exits. |
| Keywords: | program evaluation, active labor market policy, matching, lone parents, New Deal |
| JEL: | I3 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5491&r=lab |
| By: | Diana Hidalgo (University of Amsterdam, and TIER); Mercedes Onofa (FLASCO-Ecuador); Hessel Oosterbeek (University of Amsterdam, and TIER); Juan Ponce (FLASCO-Ecuador) |
| Abstract: | To raise school attendance, many programs in developing countries eliminate or |
| Keywords: | Uniforms; school attendance; sunk-cost effect; Ecuador |
| JEL: | I22 I38 O15 H52 |
| Date: | 2010–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100103&r=lab |
| By: | Yaw Nyarko |
| Abstract: | We look at the decision of the government or "central planner" in the allocation of scarce governmental resources for tertiary education, as well as that for the individual. We provide estimates of the net present values, or cost and benefits. These include costs of tertiary education; the benefits of improved skills of those who remain in the country; and also takes into account the flows of the skilled out of the country (the brain drain) as well as the remittances they bring into the country. Our results are positive for the net benefits relative to costs. Our results suggest that (i) there may be room for creative thinking about the possibility that the brain drain could provide mechanisms for dramatic increases in education levels within African nations; and (ii) by at least one metric, spending by African nations on higher education in this period yielded positive returns on the investment. Our results on the individual decision problem resolve a paradox in the returns to education literature which finds low returns to tertiary education. |
| JEL: | F35 F43 O0 O55 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16813&r=lab |
| By: | Kitov, Oleg; Kitov, Ivan |
| Abstract: | An empirical model is presented linking inflation and unemployment rate to the change in the level of labour force in Switzerland. The involved variables are found to be cointegrated and we estimate lagged linear deterministic relationships using the method of cumulative curves, a simplified version of the 1D Boundary Elements Method. The model yields very accurate predictions of the inflation rate on a three year horizon. The results are coherent with the models estimated previously for the US, Japan, France and other developed countries and provide additional validation of our quantitative framework based solely on labour force. Finally, given the importance of inflation forecasts for the Swiss monetary policy, we present a prediction extended into 2050 based on official projections of the labour force level. |
| Keywords: | Inflation; Unemployment; Labour force; Forecasting; Switzerland |
| JEL: | J21 E6 E3 |
| Date: | 2011–02–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28887&r=lab |
| By: | Hao Feng; Ming Lu |
| Abstract: | The extent to which the quantity and quality of education is capitalized into housing prices is a key issue in understanding the relationship between allocation of educational resources and the housing market. Using monthly panel data of 52 residential areas in Shanghai and employing a natural experiment of designating Shanghai Experimental Model Senior High Schools (EMSHS), we find that housing prices in Shanghai have capitalized the access to quality schools and other public goods. One quality school per square kilometer raises average housing prices by approximately 19%, and one best EMSHS per square kilometer increases housing prices by 21%. We also match the schools designated for EMSHS with schools of similar quality but not designated for EMSHS, and compare housing prices in the corresponding areas. We find that the designation increased the housing prices, showing that dissemination of information about school quality was significantly affected by the designation. |
| Keywords: | education, housing market, capitalization, public goods, natural experiment |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-154&r=lab |
| By: | Rooth, Dan-Olof (Linneaus University); Stenberg, Anders (SOFI, Stockholm University) |
| Abstract: | We analyze the association between inequality and growth across 72 labor market regions in Sweden 1990-2006. Highly accurate measures of growth and inequality (gini, Q3, p9075, p5010) are derived from population register data. The regional set-up also reduces problems with omitted variable bias and endogeneity found in cross country comparisons since the regions within a country share the same redistributive policies and institutions. The findings suggest that inequality between the 90th and 75th percentiles enhances regional growth. This result no longer holds when we take into account changes in commuting patterns. Although only suggestive, the finding is interesting in that it is consistent with the hypothesis that inequality enhances growth by stimulating commuting incentives. |
| Keywords: | growth, income distribution, inequality, gini |
| JEL: | O4 D3 J6 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5486&r=lab |
| By: | Silvia Dominguez-Martinez (University of Amsterdam); Otto H. Swank (Erasmus University Rotterdam) |
| Abstract: | Using simple game-theoretical models, this paper studies the role of pre-determined rules for HRM policies. We consider a model in which HRM decisions affect employees' self-images and thereby their motivation. We show that in the absence of written rules, managers are too reluctant (1) to differentiate between employees on the basis of their abilities, and (2) to terminate employment of employees on probation. Generally, organizations benefit from committing to strict rules for various HRM practices. |
| Keywords: | rules; human resource management policies; self-image; motivation |
| JEL: | M5 D82 D83 |
| Date: | 2011–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110034&r=lab |
| By: | Ambrogio Rinaldi (Covip and OECD) |
| Abstract: | The paper discusses the Italian experience in developing its system of private, supplementary pensions, as a case study of the implementation of nation-wide auto-enrolment mechanisms; in the discussion, attention is devoted to pension awareness issues. Auto-enrolment (i.e. the automatic enrolment of workers in a private pension plan, with the individual allowed to opt out) can be seen as an effective means to increase participation in supplementary pension plans, as the process of raising pension awareness is slow, and mandatory participation may be distortive of individuals’ preferences and politically unfeasible. The paper summarizes the reasons for the limited success of auto-enrolment in Italy. Besides the importance of country-specific structural issues, the need for an overall, coherent, pension strategy is underlined, together with a consistent use of the different policy instruments available: not only in order to achieve the desired membership targets, but also as a prerequisite for effective awareness campaigns and education efforts. In addition, the importance is emphasized of a balance of responsibilities between the individual, the State, and intermediate bodies (such as social partners), with appropriate default options that should back-up the individual when he/she is unable or unwilling to choose; default options are important not only because they gently force individuals to “take” the right decisions, but also as complements to education and information efforts, because they convey information and advice in a simple and effective way. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:104&r=lab |
| By: | Michele Belloni (CeRP, Collegio Carlo Alberto, Italy); Rob Alessie (University of Groningen, Netspar, the Netherlands) |
| Abstract: | Using Italian data, we estimate an option value model to quantify the effect |
| Keywords: | retirement; option value model; dynamic self-selection; unobserved preference heterogeneity |
| JEL: | J26 H55 C33 C34 C35 |
| Date: | 2010–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100102&r=lab |