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on Labour Economics |
| By: | García-Belenguer, Fernando (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Moral Carcedo, Julián (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.) |
| Abstract: | This paper studies the relation between labour market institutions and educational systems and how this relation may affect youth unemployment rates. By constructing a signalling model in which education can be used as a signal of workers’ unobserved productivity and firms face firing costs, we investigate how the structure of the educational system and the labour market institutions may influence the school-to-work transition of young unexperienced workers. In particular, we find that different educational systems can lead to different youth unemployment rates, even for high-skilled individuals. Besides, the framework presented in this paper allows to understand how the existence of minimum wages affects individual’s education decision and helps to explain some of the observed empirical regularities. |
| Keywords: | Educational systems; youth unemployment; minimum wages. |
| JEL: | J39 J49 J64 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:uam:wpaper:201102&r=lab |
| By: | Cobus Burger (Department of Economics, University of Stellenbosch); Servaas van der Berg (Department of Economics, University of Stellenbosch) |
| Abstract: | Attempts to explain wage differences between race groups in South Africa are constrained by the fact that quality of education is known to differ greatly between groups, thus the unexplained portion of the wage gap may be much affected by such differences in education quality. Using a simulation model that utilises school-leaving (matric) examination results and educational attainment levels to generate estimates of education quality, we find that much of the wage gap can indeed be explained by differences in education quality. Thus the unexplained residual, often identified with labour market discrimination, usually greatly over-estimates such discrimination. This emphasises even more strongly the need for greater equity in educational outcomes, particularly in the often unobserved quality of education. |
| Keywords: | South Africa, education quality, wages, labour market, Oaxaca-Blinder decomposition, discrimination, economics of education |
| JEL: | J7 J24 J31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers136&r=lab |
| By: | Juan Miguel Gallego; Carlos E. Sepulveda |
| Abstract: | This paper studies the e§ect of credit constraints and constraints on transfers between parents and children, on di§erences in labor and schooling across children within the same household, with an application to gender. When families are unconstrained in these respects, di§erences in labor supply or education are driven by di§erences in wages or returns to education. If the family faces an imperfect capital market, the labor supply of each child is ine¢ cient, but di§erences across children are still driven by comparative advantage. However, if interfamily transfers are constrained so that parents cannot o§set inequality between their children, they will favor the human capital accumulation of the more disadvantaged child -generally the one who works more as a child. We use our theory to examine the gender gap in child labor. Using a sample of poor families in Colombia, we conÖrm our prediction among rural households, although this is less clear for urban households. The gender gap is largely explained by the wage gap between girls and boys. Moreover, families with the potential to make capital transfers to adult children (e.g. those with large animals), can compensate adult sons for their greater child labor and reduced educational attainment. In such families, as predicted, the male/female labor gap is greater. |
| Date: | 2011–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:008248&r=lab |
| By: | Gideon du Rand (Department of Economics, University of Stellenbosch); Hendrik van Broekhuizen (Department of Economics, University of Stellenbosch); Dieter von Fintel (Department of Economics, University of Stellenbosch) |
| Abstract: | Highly convex estimates of average returns to education commonly found in South Africa are usually rationalised as being the result of a surplus of unskilled workers and a shortage of skilled workers in the economy (Keswell & Poswell, 2004). However, due to the absence of appropriate micro level data in the past, unbiased estimation of these returns has been difficult. This paper investigates potential sources of estimation bias using the NIDS 2008 survey, one of the first to contain concurrent information on individual labour market outcomes, numeric proficiency and quality of education received (which is highly diverse and unequal across the population). We compare naïve estimates in all relevant sub-samples with estimates that attempt to correct for the sample selection on numeracy (as the test was voluntary), as well as selection into employment. We also correct for (and exploit information on) the choice of test difficulty given to respondents, an option which was not intended in the design stage of the survey. This feature allows rough estimates of the influence of respondents’ confidence in their abilities on wages. More importantly, the sample selection adjustments allow us to control for numeracy and school quality, which influence the classic problem of ability bias in returns to education. We estimate the bias in returns to education as well as the extent of racial labour market discrimination that can be accounted for by schooling outputs rather than other features of the labour market. We assess whether convex returns to education can be explained by an unequal distribution of school quality, or whether conventional explanations (such as labour demand) remain the main explanation. Suggested remedies for selection on the endogenous numeracy measure include instrumental variables and a “Double Heckman” approach. Typical instrumental variables used in labour market analysis are poorly captured and restrict sample sizes to the extent that estimates often become nonsensical. The latter (non-standard) adjustments for sample selection issues show some promise but further evaluation and tests are required to fully rely on these results. Convex returns to education remain strongly present in the African population (after accounting for inequalities in schooling outputs), while they are concave for the white population. Bias in these returns is unreliably estimated for whites and Asians, but is highest for the more educated at a peak of 4.55 and 5.84 percentage points for the African and coloured populations respectively. Returns to numeracy, when more reliably identified, are convex. School outputs (measured in numeracy test scores and historical school performance) constitute a sizable part of discrimination estimates, accounting for between 18% and 36% of unexplained racial wage premia. |
| Keywords: | School quality, Labour Market Discrimination, Returns to Education, South Africa, Affirmative Action, Cognitive Skills |
| JEL: | C21 I21 J78 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers140&r=lab |
| By: | Ofer Malamud; Cristian Pop-Eleches |
| Abstract: | When students are tracked into vocational and academic secondary schools, access to higher education is usually restricted to those who completed an academic track. Postponing such tracking may increase university attendance among disadvantaged students if additional time in school enables them to catch up with their more privileged counterparts. However, if ability and expectations are fairly well set by an early age, postponing tracking during adolescence may not have much effect. This paper exploits an educational reform in Romania to examine the impact of postponing tracking on the proportion of disadvantaged students graduating from university using a regression discontinuity (RD) design. We show that, although students from poor, rural areas and with less educated parents were significantly more likely to finish an academic track and become eligible to apply for university after the reform, this did not translate into an increase in university completion. Our findings indicate that simply postponing tracking, without increasing the slots available in university, is not sufficient to improve access to higher education for disadvantaged groups. |
| JEL: | I21 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16914&r=lab |
| By: | Ophélie Cerdan (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Bruno Decreuse (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579) |
| Abstract: | Should education become more vocational or more general? We address this question in two steps. We first build and solve a two-sector matching model with generalists and specialists. Generalists pursue jobs in both sectors; however, they come second in job queues. Specialists seek for jobs in a single sector; they come first in job queues. Self-selection in education type vehicles three main externalities: specialists boost job creation in each sector; generalists improve the efficiency of the matching technology; generalists exacerbate firms' coordination problems. We then calibrate the model on the labor market for upper-secondary graduates in OECD countries. In each country, we match the proportion of specialists and unemployment rates by type of education in 2000. Self-selection is always inefficient: taxing vocational education to reduce the proportion of specialists down to the efficient level could reduce unemployment rates (for upper-secondary graduates) by 1.1 to 1.8 percentage points. |
| Keywords: | Matching frictions; Education; Efficiency; Calibration |
| Date: | 2011–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00580187&r=lab |
| By: | Thomas van Huizen; Janneke Plantenga |
| Abstract: | This paper reconsiders the behavioural effects of replacing the existing unemployment insurance system with unemployment accounts (UAs). Under this alternative system, workers are required to save a fraction of their wage in special accounts whereas the unemployed are allowed to withdraw savings from these accounts. Previous studies argued that such a reform will improve employment incentives considerably and thereby lead to a dramatic decrease in unemployment levels and durations. We show that this expected impact hinges critically on the assumptions on intertemporal choice. Using recent insights from behavioural economics, we demonstrate that the theoretical impact of UAs on unemployment is limited. This study points out that the overall effect of introducing an UA system on labour market behaviour is ambiguous rather than substantially positive. |
| Keywords: | unemployment insurance; unemployment accounts; time preferences; behavioural economics |
| JEL: | J64 J65 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1107&r=lab |
| By: | Facundo Albornoz; Samuel Berlinski; Antonio Cabrales |
| Abstract: | We study a model where student effort and talent interact with parental and teachers' investments, as well as with school system resources. The model is rich, yet sufficiently stylized to provide novel implications. We can show, for example, that an improvement in parental outside options will reduce parental and school effort, which are partially compensated through school resources. In this way we provide a rationale for the ambiguous existing empirical evidence on the effect of school resources. We also provide a novel microfoundation for peer effects, with empirical implications on welfare and on preferences for sorting across schools. |
| Keywords: | Education, Incentives, School resources, Parental involvement, School sorting, Peer effects |
| JEL: | I20 I21 I28 J24 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1103&r=lab |
| By: | vom Berge, Philipp |
| Abstract: | This paper develops a general equilibrium geographical economics model which uses matching frictions on the labor market to generate regional unemployment disparities alongside the usual core-periphery pattern of industrial agglomeration. In the model, regional wage differentials do not only influence migration decisions of mobile workers, but also affect the bargaining process on local labor markets, leading to differences in vacancies and unemployment as well. In a setting with two regions, both higher or lower unemployment rates in the core region are possible equilibrium outcomes, depending on transport costs and the elasticity of substitution. Stylized facts suggest that both patterns are of empirical relevance. |
| Keywords: | Regional labor markets; New Economic Geography; job matching; unemployment |
| JEL: | F12 J61 J64 R12 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:bay:rdwiwi:20304&r=lab |
| By: | Luciano Canova (Enrico Mattei School); Alessandro Vaglio (University of Bergamo) |
| Abstract: | This paper investigates the role performed by mothers in affecting their childrens’ performance at school. The article develops firstly a theoretical model in which household (parent - child pair) is treated as an individual, whose utility depends both on the performance at school of the student and on consumption. The model focuses on the different possibilities through which help of mothers may affect pupil’s performance both in terms of time devoted to supervision and spillover effects. Empirical evidence then, using PISA 2006 and focusing on Italian case, shows that education of mothers is an issue when interacted with her occupational status. Highly educated mothers have a positive impact on students’ score only when they are highly qualifed in the job market. |
| Keywords: | Education, PISA, quantile regressions, parental help |
| JEL: | J12 J24 I21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/3/doc2011-3&r=lab |
| By: | Stephen Taylor (Department of Economics, University of Stellenbosch) |
| Abstract: | For many poor South African children, who are predominantly located in the historically disadvantaged part of the school system, the ongoing low quality of education acts as a poverty trap by precluding them from achieving the level of educational outcomes necessary to be competitive in the labour market. An important question is the extent to which this low quality of education is attributable to poverty itself as opposed to other features of teaching and management that characterise these schools. The literature explaining schooling outcomes in South Africa has reached a consensus that additional educational resources are no guarantee of improved outcomes. While socio-economic status remains the most powerful determinant of educational outcomes, studies have typically struggled to isolate other school and teacher characteristics that consistently predict outcomes, leaving much of the variation in achievement unexplained. Several authors have pointed to an ineffable mix of management efficiency and teacher quality that must surely underlie this unexplained component. The National School Effectiveness Study (NSES) is the first large-scale panel study of educational achievement in South African primary schools. It examines contextually appropriate features of school management and teacher practice more thoroughly than other large sample surveys previously administered in South Africa. Using the NSES data, this paper identifies specific aspects of school organisation and teacher practice, such as the effective coverage of curriculum and completed exercises, which are associated with literacy and numeracy achievement and with the amount of learning that occurs within a year of schooling. Some suggestions are also made regarding the appropriate way to interpret these results for the purpose of policy-making. |
| Keywords: | National School Effectiveness Study (NSES), South Africa, education, education production function, school management, economics of education |
| JEL: | I20 I21 I30 O15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers138&r=lab |
| By: | Antti Kauhanen; Sami Napari |
| Abstract: | We study career and wage dynamics within and between firms using a large linked employer-employee panel dataset spanning 26 years. We construct six-level hierarchies for more than 5,000 firms. We replicate most of the analyses from Baker, Gibbs and Holmström (Quarterly Journal of Economics, 1994) and make some extensions. Many of our results corroborate their findings. Careers within firms are important, but the strong version of the theory of internal labor markets does not fit the data. Recent theories of career and wage dynamics explain our findings well. |
| Keywords: | internal labor markets, employer changes, promotions, wage growth, human capital |
| JEL: | M51 M12 J62 L22 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1244&r=lab |
| By: | Francisco Perez-Arce |
| Abstract: | A public college in Mexico City randomly assigns applicants into a group that can immediately enroll and a group that can only do so after one year. The author shows that the standard model of educational decisions predicts no (or minimal) effect of deferral on educational attainment. He surveyed the applicants to this college for the 2007/2008 academic year. Using data from that survey, he finds that, one and a half years after the first group enrolled, individuals in that group were 19 percentage points more likely to be enrolled than those that had to wait. This implies that offering more slots in a public college increases educational attainment. He finds that one additional slot increases the attainment of at least 0.3 individuals of the applicant pool and that offering them to individuals of poorer backgrounds has an even larger effect. To account for these results, he extends the standard model by placing the education decision in a model of labor market search. This suggests the importance of variability in opportunity costs for explaining who enrolls in college at any given moment. He derives testable implications of the model and show that they are verified empirically. He estimates the parameters of the model and show that the model can explain the observed patterns under reasonable assumptions. He also discusses alternative explanations of the impact of deferral and show they are inconsistent with observed patterns. The conclusion is twofold. First, public supply of college slots can impact the attainment of the target population. Second, within-individual variation in opportunity costs is an important element in determining educational attainment. This latter point can have implications for how systems of higher education systems should be designed. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:843&r=lab |
| By: | Francisco Perez-Arce |
| Abstract: | This paper studies the impact of expenditures on the returns to schooling within a context of dramatic reductions in public spending. The author matches data on expenditures and pupil-teacher ratios from Mexico in the 1980s with individual earnings in 2007/2008 and find that the returns to education among individuals that went to poorly funded schools are lower than among those that went to better funded ones. He determines that within-state changes in educational expenditures and pupil-teacher ratios predict changes in the returns to education. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:845&r=lab |
| By: | KURODA Sachiko; YAMAMOTO Isamu |
| Abstract: | Using information on Japanese, UK, and German workers' work hour and matched firms' characteristics, this paper investigates whether the number of hours worked is determined by demand-side factors, and tries to introduce one possibility to explain why Japanese tend to work longer hours than workers in other countries. Based on an empirical framework that each firm sets a minimum boundary of work hours, and workers hired by the firm are not able to work less than the minimum requirement, we found that the minimum requirement depends on the fixed costs of labor that the firm bears. Specifically, firms that tend to conduct labor hoarding during recessions, presumably because of higher fixed costs, require incumbent workers to work longer hours. We also found that the greater the workers' firm-specific skills, the more firms placed demands on these workers to work longer hours, given other things are equal. Since Japanese firms have long been considered to bear large fixed costs to train workers, we interpret the long work hour requirement as a rational strategy for Japanese firms to protect those workers that have accumulated high skills from dismissal. In other words, the long work hours of Japanese workers reflect the practice of long-term employment, a typical feature of the Japanese labor market. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11024&r=lab |
| By: | ASANO Hirokatsu; ITO Takahiro; KAWAGUCHI Daiji |
| Abstract: | The fraction of contingent workers among all workers in Japan increased from 17% in 1986 to some 34% in 2008. This paper investigates the reason for this secular trend. Both demand and supply increases of contingent workers relative to regular workers are important, as evidenced by the stable relative wage to regular workers. The increase of female labor-force participation explains the supply increase, and the change of industrial composition explains the demand increase. These compositional changes explain about one quarter of the increase of contingent workers. Uncertainty surrounding product demand and the introduction of information and communication technologies increase firms' usage of contingent workers, but its quantitative effect is limited. These findings suggest that the declining importance of firm-specific human capital is a probable cause for the increase of contingent workers. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11021&r=lab |
| By: | Laporte, Christine; Mueller, Richard |
| Abstract: | The number of registered apprentices in Canada more than doubled between 1995 and 2007, yet successful completion of apprenticeship programs increased by only about one-third as much. Uncovering the factors related to low completion rates is a necessary first step to ensuring that today's skilled labour is replaced in the future. This study utilizes the 2007 National Apprenticeship Survey (NAS) to investigate the completion behaviour of individuals enrolled in apprenticeship programs. These behaviours include continuing, discontinuing (or quitting), and completing programs. The NAS contains detailed demographic information regarding respondents' backgrounds and the characteristics of apprenticeship programs. The results show that program completion is positively related to a variety of demographic characteristics, including being married and having completed at least a high school education prior to beginning an apprenticeship. Males and females have similar completion probabilities. Completion is negatively related to time in the apprenticeship program (beyond the normal program length) and the number of employers during training. Type of technical training and having a journeyperson always present enhance the probability of completion. The regional unemployment rate has little effect on whether an individual completes an apprenticeship program or not. There are also large provincial and trade group differences. This is a revised version of an earlier paper circulated under the same title (Laporte and Mueller 2010). We thank the Canadian Labour Market and Skills Researcher Network (CLSRN) and Human Resources and Skills Development Canada (HRSDC) for supporting this research. We would also like to thank an anonymous reviewer, Grant Schellenberg, and Pamela White for useful comments as well as participants at the January 2010 HRSDC-CLSRN Apprenticeship Workshop in Vancouver and many colleagues at Statistics Canada and HRSDC. |
| Keywords: | Education, training and learning, Fields of study, Educational attainment, Outcomes of education |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2011333e&r=lab |
| By: | Hamermesh, Daniel S. (University of Texas at Austin); Abrevaya, Jason (University of Texas at Austin) |
| Abstract: | We measure the impact of individuals' looks on their life satisfaction or happiness. Using five data sets from the U.S., Canada, the U.K., and Germany, we construct beauty measures in different ways that allow putting a lower bound on the true effects of beauty on happiness. Personal beauty raises happiness, with a one standard-deviation change in beauty generating about 0.10 standard deviations of additional satisfaction/happiness among men, 0.12 among women. Accounting for a wide variety of covariates, including those that might be affected by differences in beauty, and particularly effects in the labor and marriage markets, the impact among men is more than halved, among women slightly less than halved. The majority of the effect of beauty on happiness may work through its effects on economic outcomes. |
| Keywords: | life satisfaction, measurement error, looks |
| JEL: | I30 J10 C20 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5600&r=lab |
| By: | KUEPIE Mathias; TENIKUE Michel; NOUETAGNI Samuel; MISANGUMUKINI Nicaise |
| Abstract: | This paper uses biographical data from Dakar and Yaounde, two big African cities, to study the link between the number of siblings and school attainment. The data describe all fertility events meet by parents and the sibling’s size structure of every child over time. The average sibling size effect is estimated first. Then, the sibling’s size at given age effect is estimated. The results show that, in Dakar, both the overall and age specific siblings size effect on education are negative and statistically significant. In Yaounde, the overall effect is not significant, but we observed negative effects at some schooling ages (between 14 and 16). This paper uses biographical data from Dakar and Yaounde, two big African cities, to study the link between the number of siblings and school attainment. The data describe all fertility events meet by parents and the sibling’s size structure of every child over time. The average sibling size effect is estimated first. Then, the sibling’s size at given age effect is estimated. The results show that, in Dakar, both the overall and age specific siblings size effect on education are negative and statistically significant. In Yaounde, the overall effect is not significant, but we observed negative effects at some schooling ages (between 14 and 16). |
| Keywords: | Education; siblings; Dakar; Yaounde |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-31&r=lab |
| By: | MIYAZAWA Kensuke |
| Abstract: | This paper measures human capital development in the Japanese workforce after WWII. An increase in workers' years of schooling is believed to have aided Japan's economic growth after WWII. The development of human capital has acquired increasing importance for Japan's future economic growth given its aging population. To quantify these historical and forward-looking contributions of human capital, we construct a dataset that incorporates the distribution of workers' years of schooling by employing data covering workers and students. We transform years of schooling into a measure of human capital by using a nonlinear Mincer-type wage function. We find that workers' average years of schooling increased dramatically during the 1950s and 1960s. While this increase in human capital could explain much of Japan's economic growth during these decades, education policies have limited prospects for contributing to Japan's future economic growth. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11037&r=lab |
| By: | Kevin Denny (Institute for Fiscal Studies and University College Dublin) |
| Abstract: | <p>University tuition fees for undergraduates were abolished in Ireland in 1996. This paper examines the effect of this reform on the socio-economic gradient to determine whether the reform was successful in achieving its objective of promoting educational equality that is improving the chances of low socio-economic status (SES) students progressing to university. It finds that the reform clearly did not have that effect. It is also shown that the university/SES gradient can be explained by differential performance at second level. Students from white collar backgrounds do significantly better in their final second level exams than the children of blue-collar workers. The results are very similar to recent findings for the UK. The results show that the effect of SES on school performance is generally stronger for those at the lower end of the conditional distribution of academic attainment.</p> |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:11/05&r=lab |
| By: | Veruska Oppedisano (Marie Curie Research Fellow); Gilberto Turati (University of Torino & HERMES) |
| Abstract: | This paper provides evidence on the sources of differences in inequalities in educational scores in European Union member states, by decomposing them into their determining factors. Using PISA data from the 2000 and 2006 waves, the paper shows that inequalities emerge in all countries and in both period, but decreased in Germany, whilst they increased in France and Italy. Decomposition shows that educational inequalities do not only reflect background related inequality, but especially schools’ characteristics. The findings allow policy makers to target areas that may make a contribution in reducing educational inequalities. However, they appear to exert a remarkable impact on excess spending. |
| Keywords: | Education expenditures, educational inequalities, Oaxaca decomposition. |
| JEL: | I2 I38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/3/doc2011-1&r=lab |
| By: | Amann, R.; Klein, T.J. (Tilburg University, Center for Economic Research) |
| Abstract: | A regression of wages on firm tenure is likely to yield biased estimates of the returns to tenure because tenure and wages are confounded by unobserved attributes of the job and the unobserved quality of the match between the firm and the employee. Previously, the within-job variation in tenure has been used as an instrument to estimate the average returns to tenure. In this paper, we propose to use instead an easy-to-implement control function estimator for the returns to tenure and their dependence on unobserved heterogeneity. The obtained results for Germany indicate that there is a substantial amount of unobserved heterogeneity in the returns to tenure and that good job matches are characterized by higher returns to tenure in the first five years and lower returns thereafter. |
| Keywords: | Wage growth;returns to tenure;selection on unobservables;control function approach;nonseparable model. |
| JEL: | J31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011001&r=lab |
| By: | Du Caju, Philip (National Bank of Belgium); Rycx, Francois (Free University of Brussels); Tojerow, Ilan (Free University of Brussels) |
| Abstract: | In the last decades, international trade has increased between industrialised countries and between high- and low-wage countries. This important change has raised questions on how international trade affects the labour market. In this spirit, this paper aims to investigate the impact of international trade on wage dispersion in a small open economy. It is one of the few to: i) use detailed matched employer-employee data to compute industry wage premia and disaggregated industry level panel data to examine the impact of changes in international trade on changes in wage differentials, ii) simultaneously analyse both imports and exports, and iii) examine the impact of imports according to the country of origin. Looking at the export side, we find (on the basis of the system GMM estimator) a positive effect of exports on industry wage premia. The results also show that import penetration has a significant and negative impact on industry wage differentials whatever the country of origin. However, the country of origin appears to matter quite a lot. Indeed, the detrimental effect of imports on wages is found to be significantly bigger when the latter come from low-income countries than from high-income countries. |
| Keywords: | wage structure, inter-industry wage differentials, international trade, matched employer-employee data |
| JEL: | F16 J31 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5597&r=lab |
| By: | Guo Xu |
| Abstract: | Exploiting Tangshan 1976 - the deadliest earthquake in the 20th century - as a source of exogenous variation, we estimate the long-run effect of a historical shock on contemporary socio-economic outcomes. Cohorts born after the earthquake were not only larger, but exhibit lower school completion rates, particularly among the female today. Despite lower schooling levels, there is no evidence for adverse labour market outcomes. We conduct robustness checks and argue that the effect is causal. |
| Keywords: | Environmental shock, earthquake, natural disaster, education, fertility |
| JEL: | I20 J00 O18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1117&r=lab |
| By: | Ana Balcao Reis |
| Abstract: | This paper analyses the efects of public funding of higher education on the welfare of the diferent agents. It takes into account the hierarchical nature of the educational system and also the fact that parents always have the possibility to complement basic public education with private expenditures in individual tutoring. It is obtained that although public funding implies a larger access to higher education it is always the case that some of the agents that gain access lose in welfare terms. Moreover, it is shown that the marginal agent to access university would always prefer a pure private funding system. Thus, when studying the e¤ects of public funding of higher education, we can not identify gaining access to University with an increase in welfare. Finally, I consider a funding system where only those that send their o¤spring to university support the funding of higher education. |
| Keywords: | higher education, public funding; higher education, public funding. JEL codes: I22, I28 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp553&r=lab |
| By: | Vikström, Johan (Uppsala University); Rosholm, Michael (Aarhus School of Business); Svarer, Michael (University of Aarhus) |
| Abstract: | We re-analyze the effects of a Danish active labour market program social experiment that included a range of sub-treatments, including monitoring, job search assistance and training. Previous studies have shown that the overall effect of the experiment is positive. We apply newly developed non-parametric methods to determine which of the individual policies that explains the positive effect. The use of non-parametric methods to separate sub-treatment effects is important from a methodological point of view, since the alternative, namely parametric/distributional assumptions, is in conflict with the concept of experimental evidence. Our results are highly relevant in a policy perspective, as optimal labour market policy design requires knowledge on the effectiveness of specific policy measures. |
| Keywords: | active labour market policy, treatment effect, non-parametric bounds |
| JEL: | C14 C41 C93 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5596&r=lab |
| By: | James Banks (Institute for Fiscal Studies and University of Manchester); Fabrizio Mazzonna |
| Abstract: | <p>We exploit the change to the minimum school-leaving age in the United Kingdom from 14 to 15 using a regression discontinuity design to evaluate the causal effect of one more year of education on cognitive abilities at older ages. We find a large and significant effect of this reform on males' memory and executive functioning measured using simple cognitive tests from the English Longitudinal Survey on Ageing (ELSA). This result is particularly remarkable since the 1947 reform had a powerful and immediate effect on about half the population of 14-yearolds. We investigate and discuss the potential channels by which this reform may have had its effects, as well as carrying out a full set of sensitivity analyses and robustness checks. </p> |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:11/04&r=lab |
| By: | Grönqvist, Hans (Swedish Institute for Social Research, Stockholm University) |
| Abstract: | This paper investigates the link between youth unemployment and crime using a unique combination of labor market and conviction data spanning the entire Swedish working-age population over an extended period. The empirical analysis reveals large and statistically significant effects of unemployment on several types of crime. The magnitude of the effect is similar across different subgroups of the population. In contrast to most previous studies, the results suggest that joblessness explain a meaningful portion of why male youths are overrepresented among criminal offenders. I discuss reasons for the discrepancy in the results and show that that the use of aggregated measures of labor market opportunities in past studies is likely to capture offsetting general equilibrium effects. Contrary to predictions by economic theory the effect of unemployment on crime is not mediated by income. Instead, an analysis of crimes committed during weekdays versus weekends provides suggestive evidence that unemployment increases the time that individuals have to engage in crime. |
| Keywords: | Unemployment; Delinquency; Age-crime profile |
| JEL: | J62 K42 |
| Date: | 2011–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sofiwp:2011_007&r=lab |
| By: | Francisco Gallego |
| Abstract: | I investigate empirically the determinants of the evolution of the skill premium in Chile from 1960 to 2000. After some fluctuations in the 1960s and 1970s, the skill premium increased in the 1980s and has remained roughly constant since then. The data suggest that this evolution is an outcome of a significant increase in relative demand for skilled workers in the 1980s and 1990s and a sizeable increase in the relative supply in the 1990s. I study the hypothesis that the evolution of the relative demand for skilled workers is a consequence of international transmission of skill upgrading technologies from developed (in particular from the US, the main producer of machinery and equipment used in Chile) to developing countries. Sectoral evidence shows that, after controlling for sector and time effects, (i) the relative demand increased faster in the same industries in Chile than in the US and (ii) the correlation is stronger for tradable and non-tradable industries that are intensive in imported capital. In turn, time series evidence suggests that, after controlling for other determinants of skill premium, there is a positive and economically relevant correlation between skill premium in Chile and in the US. I present sectoral and time-series evidence that does not support the alternative hypotheses that the correlation between skill upgrading in Chile and the US can be explained by trade-related theories emphasizing the role of price effects, trade in intermediate goods and outsourcing, or competition effects in tradable markets. |
| Keywords: | Wage premium, Skill Upgrading, Trade Openness, Skill Biased Technical Change, Chile, Latin America |
| JEL: | O3 J31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:396&r=lab |
| By: | Naz, Ghazala (INSTITUTE FOR RESEARCH IN ECONOMICS AND BUSINESS ADMINISTRATION) |
| Abstract: | An important feature of parental leave in Norway is that it allows significant sharing of leave between parents. Parents may take 54 weeks of leave and receive 80 per cent of previous earnings or 44 weeks of leave with 100 per cent of earnings, up to a ceiling amount. Nine weeks of total leave are, however, reserved for the mother and six weeks for the father and, as a general rule, these weeks cannot be transferred to the other parent. The remaining parental leave can be shared between parents. A reserved period of leave for fathers, known as the paternity quota, was introduced in 1993. Initially, this quota was four weeks. The paternity quota has been a great success and is utilized by 80–85 per cent of eligible fathers; however, very few fathers share gender-neutral parental leave. In this paper, we use register data to investigate factors that may influence fathers’ share of parental leave for children born in 2001. We find that married fathers use more leave than cohabitants. In addition, fathers’ education, mothers’ income and number of preschool children positively affect fathers’ use of the paternity quota and gender-neutral leave. Fathers’ workplace does not affect the use of the paternity quota but has a significant effect on the use of gender-neutral leave. |
| Keywords: | Economics of Gender; Non-labor Discrimination; Public Policy. |
| JEL: | J16 J18 |
| Date: | 2011–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2007_012&r=lab |
| By: | Dackehag, Margareta (Department of Economics, Lund University); Gerdtham, Ulf-G (Department of Economics, Lund University); Nordin, Martin (Department of Economics, Lund University) |
| Abstract: | Using longitudinal data, this paper investigates the penalty for excess weight in the Swedish labor market, distinguishing between the productivity and the discrimination hypotheses. We analyze employment, income, and sickness absence , using the latter as a direct measure of productivity. We find that excess weight women, but not men, experience a significant employment penalty. Both genders experience a significant income penalty for obesity. We conclude that the penalties are associated with lower productivity, primarily in terms of health. We find no evidence of discrimination. |
| Keywords: | Employment; income; sickness absence; obesity; overweight |
| JEL: | I10 I12 J23 J31 |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2011_012&r=lab |
| By: | Wenjun Liu (Graduate School of Economics, Kobe University); Tomokazu Nomura (Graduate School of Economics, Kobe University); Shoji Nishijima (Research Institute for Economics and Business Administration, Kobe University) |
| Abstract: | In this study, we investigated discrimination against women within the Brazilian labor market using firm-level data and considering the proportion of female employees as a proxy for the extent of discrimination. Estimating the profit efficiency of firms using data envelopment analysis, and regressing it on the proportion of female employees and other firm characteristics, we found that the proportion of female employees is positively correlated with firm profit efficiency. Our finding indicates that firms employing a high proportion of female workers incur a lower labor cost while producing the same level of output compared to firms employing a low proportion of female employees, and provide strong evidence of the existence of discrimination against female employees within the Brazilian labor market. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1019&r=lab |
| By: | Lindskog, Annika (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | The effects of older sisters’ and brothers’ literacy on the annual school entry and primary school grade progress probabilities of boys and girls are estimated using within-household variation. Older siblings’ literacy has positive effects, especially for same-sex siblings. The literacy of older sisters appears to be more beneficial than that of older brothers, not least since it has positive effects on school entry among both boys and girls, and since it has positive effects also when the sister has left the household. There are positive effects both from literate older siblings who left school and from literate older siblings who are still in school. This suggests that within-household education spillovers, rather than time-varying credit constraints, explain the positive sibling-dependency, since with credit constraints children in school would compete over scarce resources. The positive effects on school progress are limited to same-sex siblings who are still present in the household, suggesting every-day interactions to be important.<p> |
| Keywords: | Primary education; Ethiopia; Within-Household; Spillovers; Credit-Constraints |
| JEL: | D13 I21 |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0495&r=lab |
| By: | Daniel van Vuuren |
| Abstract: | Flexible retirement - that is, the opportunity to choose one’s own personal retirement age - serves as a hedge against pension risk and provides insurance to workers facing health or productivity shocks. This paper discusses three conditions to provide insurance through flexible retirement. |
| JEL: | J26 H55 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:174&r=lab |
| By: | Elias Katsikas (Department of Economics, University of Macedonia); Theodore Panagiotidis (Department of Economics, University of Macedonia) |
| Abstract: | This study employs administrative and survey data to assess the relationship between students’ socioeconomic background and educational outcomes, using regression and quantile regression methods. We take into account the existing institutional framework which allows differentiation in the duration of studies among students. We examine the association of students’ status ? working and non-working ? with degree grades and whether the documented negative influence of long duration of studies on grades is associated to students’ status. The findings reject both hypotheses; working students do not achieve lower grades than their non-working peers; the negative impact of the length of studies on grades is not linked to status, and affects both working and non-working students in the same way. |
| Keywords: | students, academic performance, duration of studies. |
| JEL: | I20 I23 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:mcd:mcddps:2011_04&r=lab |
| By: | MACHIKITA Tomohiro; SATO Hitoshi |
| Abstract: | Since the 1990s, there has been a rapid increase in the proportion of temporary workers in the Japanese workforce. This paper empirically explores a linkage between the shift from permanent to temporary workers in the Japanese manufacturing sector and economic globalization, using various industry level data. We find that FDI and/or outsourcing tend to encourage the replacement of permanent workers with temporary workers in home production. In addition, we find that industries with higher exports are the most aggressive in replacing permanent workers with temporary workers. However, some other measures of global market competition such as world share of value added are not always statistically significant. Our estimation suggests that the impact of these globalization channels is sizable relative to the impact of the Worker Dispatching Act in 2004. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11029&r=lab |
| By: | Francesco Arzilli; Andrea Morescalchi |
| Abstract: | This paper investigates the relation between job search effort and hous-ing tenure by focussing on the impact of the UK Jobseeker's Allowance reform introduced in the UK in 1996. Theory suggests that a tight-ening in job search requirements, as implied by this reform, raises movements off benefit of non-employed with low search intensity and this effect adjusts in size depending on the different housing tenure. Average Treatment Effect estimates confirm that the impact of the reform on the claimant outflow rate is related to housing tenure. |
| Keywords: | Jobseeker's Allowance, Unemployment Benefit, Job Search,Housing Tenure, Oswald Effect |
| JEL: | J68 R2 |
| Date: | 2011–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2011/111&r=lab |
| By: | Francisco Perez-Arce |
| Abstract: | The author examines whether education increases patience. Admission decisions in a public college in Mexico are determined through a lottery. He finds that applicants who were successful in the draw were more likely to study in the following years. He surveyed the applicants to this college almost two years after the admission decision was made and measured their time preferences with a series of hypothetical inter-temporal choice questions. He finds that individuals who were successful in the admission lottery were, on average, more patient. He argues that this evidence points towards a causal effect of education on time preferences. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:844&r=lab |
| By: | Suetens, S.; Tyran, J.R. (Tilburg University, Center for Economic Research) |
| Abstract: | The “gambler’s fallacy†is the false belief that a random event is less likely to occur if the event has occurred recently. Such beliefs are false if the onset of events is in fact independent of previous events. We study gender differences in the gambler’s fallacy using data from the Danish state lottery. Our data set is unique in that we track individual players over time which allows us to investigate how men and women react with their number picking to outcomes of recent lotto drawings. We find evidence of gambler’s fallacy for men but not for women. On average, men are about 1% less likely to bet on numbers drawn in the previous week than on numbers not drawn. Women do not react significantly to the previous week’s drawing outcome. |
| Keywords: | lottery gambling;gender;gambler’s fallacy. |
| JEL: | D81 D84 J16 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011011&r=lab |
| By: | Alexander Haupt (University of Plymouth); Tim Krieger (University of Paderborn); Thomas Lange (University of Konstanz) |
| Abstract: | This paper presents a model of two countries competing for a pool of students from the rest of the world (ROW). In equilibrium, one country offers high educational quality for high tuition fees, while the other country provides a low quality and charges low fees. The quality in the high quality country, the tuition fees, and the quality and tuition fee differential between the countries increase with the income prospects in ROW and the number of international students. Higher stay rates of foreign students lead to more ambiguous results. In particular, an increase in educational quality can be accompanied by a decline in tuition fees. Furthermore, international competition for students can give rise to a brain gain in ROW. |
| Keywords: | Higher education; student mobility; vertical quality dierentiation; return migration; brain gain |
| JEL: | H87 F22 I28 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:wpaper:35&r=lab |
| By: | Rob Alessie; Maarten van Rooij; Annamaria Lusardi |
| Abstract: | We present new evidence on financial literacy and retirement preparation in the Netherlands based on two surveys conducted before and after the onset of the financial crisis. We document that while financial knowledge did not increase from 2005 to 2010, significantly more individuals planned for their retirement in 2010. At the same time, employees’ expectations about the level of their pension income are high compared to what retirement plans may realistically provide. However, financially knowledgeable employees report lower expected replacement rates and acknowledge higher levels of uncertainty. Moreover using instrumental variation for financial conditions and financial knowledge of relatives, we find a positive effect of financial literacy on retirement preparation. Employing the panel feature of our dataset, we show that financial knowledge has a causal impact on retirement planning. Our findings suggest that the formation of pension expectations might be an important mechanism contributing to the impact of financial literacy on planning. |
| Keywords: | Financial Sophistication; Retirement Planning; Retirement Expectations |
| JEL: | D91 G11 D80 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:289&r=lab |
| By: | Michela Braga; Marco Paccagnella; Michele Pellizzari |
| Abstract: | This paper contrasts measures of teacher effectiveness with the students’ evaluations for the same teachers using administrative data from Bocconi University (Italy). The effectiveness measures are estimated by comparing the subsequent performance in follow-on coursework of students who are randomly assigned to teachers in each of their compulsory courses. We find that, even in a setting where the syllabuses are fixed, teachers still matter substantially. The average difference in subsequent performance between students who were assigned to the best and worst teachers (on the effectiveness scale) is approximately 43% of a standard deviation in the distribution of exam grades, corresponding to about 5.6% of the average grade. Additionally, we find that our measure of teacher effectiveness is negatively correlated with the students’ evaluations of professors: in other words, teachers who are associated with better subsequent performance receive worst evaluations from their students. We rationalize these results with a simple model where teachers can either engage in real teaching or in teaching-to-the-test, the former requiring higher students’ effort than the latter. Teaching-to-the-test guarantees high grades in the current course but does not improve future outcomes. Hence, if students are myopic and evaluate better teachers from which they derive higher utility in a static framework, the model is capable of predicting our empirical finding that good teachers receive bad evaluations, especially when teaching-to-the-test is very effective. Consistently with the predictions of the model, we also find that classes in which high skill students are over-represented produce evaluations that are less at odds with estimated teacher effectiveness. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:384&r=lab |
| By: | Fernanda Llussa |
| Abstract: | In this paper we investigate, for the first time, how individual determinants of entrepreneurship - such as age, income, education, work status, skills, access to networks and fear of failure - differ between males and females. We conduct our exercise using individual data provided by the Global Entrepreneurship Monitor (GEM), available for 46 countries, between 2001 and 2004. The literature on entrepreneurship has uncovered differences in the rate of entrepreneurship between men and women, with women generally displaying lower entrepreneurial activity than men. This is important since, as we show, entrepreneurial activity is positively related across countries with the female to male entrepreneurial ratio. We examine total entrepreneurship rates, as well as entrepreneurship driven by opportunity and by need. We find that indeed entrepreneurial activity rates are lower for females across all but one of the countries in the sample. Looking at categorical groups – by age interval, education, work status, etc. – we find that female entrepreneurial rates are significantly lower than for males. For the first time we test for differences in the characteristics of female and male entrepreneurs and find that female entrepreneurs are slightly older, more frequently at home or not working, lower income and lower educated, and less access to business networks than their male counterparts. AS to the determinants of entrepreneurial rates themselves, the main differences across genders are the lower impact of secondary education and the larger impact of skills and fear of failure in female entrepreneurial rates relative to males. Results for entrepreneurship by opportunity and by necessity confirm the larger importance of specific skills for women creating new businesses,. Our results suggest that facilitating access to business networks and specific business skills are the most powerful instruments to increase the rates of female entrepreneurship. JEL codes: |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp555&r=lab |