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on Labour Economics |
| By: | Camilo Mondragón-Vélez; Ximena Peña; Daniel Wills |
| Abstract: | Informality is at the center of the economic debate in Colombia, fueled by the high level prevalent in the country and its substantial increase during the 1990s. We study the effect of labor market rigidities, namely the increase in non-wage costs and the minimum wage on the size of the informal sector, the transition into and out of informality, and wages. Our results indicate that rises in non-wage costs and the minimum wage, increase the probability of transition into informality as well as the size of the informal sector. The business cycle has second order effects. The analysis across education groups points towards strong exclusion motives for low skilled informal workers, mainly driven by labor demand adjustments in response to increasing hiring costs; and argues somehow in favor of exit motives for workers with higher educational attainment. In addition, we document facts regarding the evolution and characteristics of the informal sector across alternative definitions of informality. |
| Date: | 2011–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:col:000425:008355&r=lab |
| By: | Pfeifer, Christian (Leuphana University Lüneburg) |
| Abstract: | Survey data is used to estimate the impact of physical attractiveness rated by the interviewer as well as by the respondent on employment probability and labor income of men and women. In addition to mean linear and non-linear effects on earnings, simultaneous quantile regressions are applied to analyze heterogeneity across the wage distribution. |
| Keywords: | employment, beauty, attractiveness, wages |
| JEL: | J31 J71 J10 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5664&r=lab |
| By: | Kunze, Astrid (Dept. of Economics, Norwegian School of Economics and Business Administration); Troske, Kenneth R. (University of Kentucky) |
| Abstract: | We investigate whether women search longer for a job than men and whether these differences change over the life cycle. Our empirical analysis exploits German register data on highly attached displaced workers. We apply duration models to analyze gender differences in job search taking into account observed and unobserved worker heterogeneity and censoring. Simple survival functions show that displaced women take longer to find a new job than comparable men. Disaggregation by age groups reveals that these differences are driven by differential behavior of prime age women. There is no significant difference in job search duration among the very young and older workers. These differential outcomes remain even after we control for differences in human capital, and when time dependence and unobserved heterogeneity are incorporated into the model. |
| Keywords: | Gender differences; job search; displaced workers; wage differences. discrimination. |
| JEL: | J31 J63 J64 J71 |
| Date: | 2010–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2010_002&r=lab |
| By: | Nakabayashi, Masaki |
| Abstract: | Schooling, an observable signal, decreases its impact on wages as employers “publicly” learn workers’ hidden types over workers’ experience in the market. This symmetric employer learning hypothesis has been empirically contested by, first, asymmetry of incumbent and entrant employers, and second, larger-than-imagined complementarity between schooling and work experience, which could enshroud learning effect. Microanalysis of Japanese steel industry shows, 1) experience before entering the long-term employment is complementary to schooling, 2) employer learning effect dominates the complementarity effect after workers’ joining the long-term employment. It suggests that reported evidences of employer learning have in fact captured internal labor market effect. |
| Keywords: | employer learning, schooling and wages, internal labor market effect |
| JEL: | N35 J31 J24 |
| Date: | 2011–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30597&r=lab |
| By: | Richard Duhautois (CEE et Université Paris-Est - ERUDITE, TEPP); Fabrice Gilles (Université de Lille - EQUIPPE et CEE); Héloïse Petit (CEE et Centre d'Economie de la Sorbonne) |
| Abstract: | We address the relation between establishment wage differentials and worker flows, i.e. the churning rate and the quit rate. Our analysis is based on a linked employer-employee dataset covering the French private non-farm sector from 2002 to 2005. Our estimations support the hypothesis that wage premium is an efficient human resource management tool to stabilize workers : churning rates are lower in high-paying firms due to lower quit rates. We further show that the relation is not linear, and it differs among skill groups and according to establishment size : it is strongest for low-wage levels, for low-skilled workers and in large establishments. |
| Keywords: | Establishment wage effects, worker flows, churming rate, quit rate, linked employer-employee panel data, France. |
| JEL: | J31 J63 C23 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11024&r=lab |
| By: | Cho, Yoonyoung (World Bank); Newhouse, David (World Bank) |
| Abstract: | This paper examines how different types of workers in 17 middle-income countries were affected by labor market retrenchment during the great recession. Impacts on different types of workers varied by country and were only weakly related to the severity of the shock. Among active workers, youth experienced by far the largest adverse impacts on employment, unemployment, and wage employment, particularly relative to older adults. The percentage employment reductions, for example, were greatest for youth in each sector of the economy, as firms reacted to the shock by substituting away from inexperienced workers. Employment rates, as a share of the population, also plummeted for men. Larger drops in male employment were primarily attributable to men's higher initial rate of employment, although men's concentration in the hard-hit industrial sector also played an important role. Within each sector, percentage employment declines were similar for men and women. Added worker effects among women were mild, even among less-educated workers. Differences in labor market outcomes across education groups and urban or rural residence tended to be smaller. These findings bolster the case for targeted support to displaced youth and wage employees. Programs targeted to female and unskilled workers should be undertaken with appropriate caution or empirical support from timely data, as they may not benefit the majority of affected workers. |
| Keywords: | labor markets, emerging economies, economic shocks |
| JEL: | E24 E32 J21 O15 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5681&r=lab |
| By: | René Böheim; Klemens Himpele; Helmut Mahringer; Christine Zulehner |
| Abstract: | Policies to reduce the gender pay gap feature prominently on the political agenda and interventions in the labor market are frequently proposed, claiming a persistent wage gap. We examine the change of the gender wage gap in Austria between 2002 and 2007 with new data from administrative records and find that it declined from 24% in 2002 to 19% in 2007. We observe that women's improved educational attainments were partly ofiset by a shift in the demand for skilled workers that disadvantaged unskilled labor. The main determinant of this decline is however the improvement of women's relative position in unobserved characteristics. |
| Keywords: | gender wage differentials, wage inequality, decomposition, matched employer-employee data |
| JEL: | J31 J71 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2011_03&r=lab |
| By: | S. Mahendra Dev (Indira Gandhi Institute of Development Research); M. Venkatanarayana (Centre for Economic and Social Studies) |
| Abstract: | Increase in the share of youth population due to demographic `dividend' or the `youth bulge' seems to be one of the sources of future economic growth in India. Although with increase in school and college enrolment rates, the proportion of youth in the labour force has been declining, their high proportions in the labour force indicate that the problem of youth unemployment and underemployment would remain a serious policy issue for many more years to come in India. In this context, this paper examines the employment and unemployment situation of the youth in India during the last two-and-half decades viz., 1983 to 2007-08. It analyses the trends in labour force and workforce participation rates, unemployment, joblessness, working poor, growth and employment elasticities etc. The paper also offers policy recommendations for increasing productive employment and reduction in unemployment for the youth. The poor employability of the workforce would hamper the advantages due to demographic dividend if measures are not taken to improve the educational attainment and skill development of the youth. |
| Keywords: | Youth Employment, unemployment, skill development, joblessness, demographic dividend, literacy, school education, vocational training |
| JEL: | J21 J23 J10 J11 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2011-009&r=lab |
| By: | Huffman, Sonya K.; Rizov, Marian |
| Abstract: | This paper estimates the impacts of weight, measured by body mass index (BMI), on employment, wages, and missed work due to illness for Russian adults by gender, in order to better understand the mechanisms through which obesity affects employment, wages, and sick-leave days using recent panel data (1994-2005) from the nationally representative Russian Longitudinal Monitoring Survey (RLMS). We employ econometric techniques to control for unobserved heterogeneity and potential biases due to endogeneity in BMI. The results show an inverted U-shaped effect of BMI on probability of employment for men and women. We did not find evidence of wage penalty for higher BMI. In fact, the wages for overweighed men are higher. However, having a BMI above 28.3 increases the number of days missing work days due to health problems for men. Overall, we find negative effects of obesity (BMI above 30) on employment only for women but not on wages. During the transition in Russia, the increasingly competitive pressure in the labour market combined with economic insecurity faced by the population has lead to a muted impact of an individual’s weight on labour market outcomes. |
| Keywords: | Russia; BMI; Labour outcomes |
| JEL: | D12 J71 O51 |
| Date: | 2011–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:33665&r=lab |
| By: | Fraisse, Henri (Bank of France); Kramarz, Francis (CREST-INSEE); Prost, Corinne (CREST-INSEE) |
| Abstract: | About one in four workers challenges her dismissal in front of a labor court in France. Using a data set of individual labor disputes brought to French courts over the years 1996 to 2003, we examine the impact of labor court activity on labor market flows. First, we present a simple theoretical model showing the links between judicial costs and judicial case outcomes. Second, we exploit our model as well as the French institutional setting to generate instruments for these endogenous outcomes. In particular, we use shocks in the supply of lawyers who resettle close to their university of origin. Using these instruments, we show that labor court decisions have a causal effect on labor flows. More trials and more cases won by the workers cause more job destructions. More settlements, higher filing rates, and a larger fraction of workers represented by a lawyer dampen job destructions. Various robustness checks confirm these findings. |
| Keywords: | labor judges, labor flows, employment protection legislation, unfair dismissal, France |
| JEL: | J32 J53 J63 K31 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5677&r=lab |
| By: | Badi H. Baltagi; Yusuf Soner Baskaya; Timur Hulagu |
| Abstract: | This paper examines the Turkish wage curve using individual data from the Household Labor Force Survey (HLFS) including 26 NUTS-2 regions over the period 2005 - 2008. When the local unemployment rate is treated as predetermined, there is evidence in favor of the wage curve only for younger and female workers. However, if the lagged unemployment rate is used as an instrument for current unemployment rate, we find an unemployment elasticity of -0.099. We also find a higher elasticity for younger, less educated, low experienced workers than for older, more educated and more experienced workers. Another important finding is that the wages of females in Turkey are significantly more responsive to local unemployment rates than their male counterparts. |
| Keywords: | Wage Curve, Fixed Effects, Regional Labor Markets, Two-Stage Least Squares |
| JEL: | J30 J60 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1106&r=lab |
| By: | Dominik Hanglberger; Joachim Merz (LEUPHANA University Lüneburg,Department of Economic, Behaviour and Law Sciences, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB))) |
| Abstract: | Empirical analyses using cross-sectional and panel data found significantly higher levels of job satisfaction for self-employed than for employees. We argue that those estimates in previous studies might be biased by neglecting anticipation and adaptation effects. For testing we specify several models accounting for anticipation and adaptation to self-employment and job changes. Based on data from the German Socio-Economic Panel Survey (SOEP) we find that becoming self-employed is associated with large negative anticipation effects. In contrast to recent literature we find no specific long term effect of self-employment on job satisfaction. Accounting for anticipation and adaptation to job changes in general, which includes changes between employee jobs, reduces the effect of self-employment on job satisfaction by 70%. When controlling for anticipation and adaptation to job changes, we find no further anticipation effect of self-employment and a weak positive but not significant effect of self-employment on job satisfaction for three years. Thus adaptation wipes out higher satisfaction within the first three years being self-employed. According to our results previous studies at least overestimated possible positive effects of self-employment on job satisfaction. |
| Keywords: | job satisfaction, self-employment, hedonic treadmill model, adaptation, anticipation, fixed-effects panel estimations, German Socio-Economic Panel (SOEP) |
| JEL: | J23 J28 J81 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:leu:wpaper:88&r=lab |
| By: | Pfeifer, Christian (Leuphana University Lüneburg); Janssen, Simon (University of Zurich); Yang, Philip (University of Hannover); Backes-Gellner, Uschi (University of Zurich) |
| Abstract: | We evaluate the effects of employer-provided formal training on employee suggestions for productivity improvements and on promotions among male blue-collar workers. More than twenty years of personnel data of four entry cohorts in a German company allow us to address issues such as unobserved heterogeneity and the length of potential training effects. Our main finding is that workers have larger probabilities to make suggestions and to be promoted after they have received formal training. The effect on suggestions is however only short term. Promotion probabilities are largest directly after training but also seem to be affected in the long term. |
| Keywords: | productivity, insider econometrics, human capital, promotions, training |
| JEL: | J24 M53 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5671&r=lab |
| By: | Martin Brown (Swiss National Bank and CenTER Tilburg University); Armin Falk (University of Bonn); Ernst Fehr (Institute for Empirical Research in Economics, University of Zurich) |
| Abstract: | When workers are faced with the threat of unemployment, their relationship with a particular firm becomes valuable. As a result, a worker may comply with the terms of a relational contract that demands high effort even when performance is not enforceable by a third party. But can relational contracts motivate high effort when workers can easily find alternative jobs? We examine how competition for labor affects the emergence of relational contracts and their effectiveness in overcoming moral hazard in the labor market. We show that effective relational contracts do emerge in a market with excess demand for labor. Long-term relationships turn out to be less frequent when there is excess demand for labor than they are in a market characterized by exogenous unemployment. However, stronger competition for labor does not impair labor market efficiency: higher wages induced by competition lead to higher effort out of concerns for reciprocity. |
| Keywords: | Relational Contracts, Involuntary Unemployment |
| JEL: | D82 J3 J41 E24 C9 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:359&r=lab |
| By: | Cuesta, Jose; Bohorquez, Camilo |
| Abstract: | This paper quantifies the magnitude of transitions across occupational categories in Colombia, a country with high unemployment and informality but quickly increasing its social security coverage for health. The analysis makes use of a panel of households between 2008 and 2009, representative of the main metropolitan areas in the country. Results confirm previous evidence found in Colombia and elsewhere in the region that transitions between occupations are large and asymmetric: they are disproportionally more likely to happen from formal to informal occupations than vice versa. The paper finds for the first time that such transitions are also different for salaried workers compared with the self-employed, as well as by poverty status of the worker. Salaried workers are more likely to transition first into other salaried jobs, while self-employed are more likely to transition into unemployment or out of the labor force. There are marked differences in the profiles of transitioning and non-transitioning workers, both in terms of socioeconomic characteristics and social security coverage. Causal analysis shows that affiliation to social security on health deters occupational transitions, while pension insurance does not. Hence, high-volume transitions may not be crisis-specific phenomena, but rather associated with contributive and non-contributive social security mechanisms that incentivize informality, and workers'preferences for informal jobs. The debate on labor market and social security reforms needs to take these features of transitions into account. |
| Keywords: | Labor Markets,Labor Policies,Population Policies,Labor Standards,Work&Working Conditions |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5650&r=lab |
| By: | Aparicio Fenoll, Ainhoa (Collegio Carlo Alberto) |
| Abstract: | This paper assesses the impact of product market competition on job instability as proxied by the use of fixed-term labor contracts. Using both worker data from the Spanish Labor Force Survey and firm data from the Spanish Business Strategies Survey, I show that job instability rises with competition. In particular, a one standard deviation increase in competition in an economic sector decreases the probability that a fixed-term worker gets an open-ended contract within that sector in a given year by more than 30%. The effect is identified by means of exogenous shifts in competition brought about by changes in legislation. |
| Keywords: | fixed-term employment, product market competition, labor contract |
| JEL: | J24 M51 C41 C33 C35 J6 L1 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5669&r=lab |
| By: | Stefania Marcassa (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This paper presents the results of an econometric analysis of the conditional probability of leaving unemployment for four waves of French married men and women entering unemployment from 1991 to 2002. The effect of spouse's hourly earnings on unemployment duration is found to be asymmetric for men and women. In particular, an elasticity of 0.38 for men and -0.15 for women are found to be significant for the entire sample. Individual data from the French Labor Force Survey are used with accurate information on spell durations, and labor earnings of the spouses. Parametric estimation techniques are used. |
| Keywords: | unemployment duration ; hazard models ; labor earnings ; marriage ; France |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00589546&r=lab |
| By: | Böheim, René (University of Linz); Lackner, Mario (University of Linz) |
| Abstract: | After three years in the National Collegiate Athletic Association (NCAA), collegiate football players face a trade-off between spending more time in the NCAA and pursuing a career in the National Football League (NFL) by declaring for the draft. We analyze the starting salaries and signing bonuses for 1,673 rookies in the NFL, who entered the league between 2001 and 2009 through the NFL draft. We instrument the endogenous decision to enter the professional market with a player's month of birth. A player's true talent is only imperfectly observed and the instrument provides a causal link between time at college and subsequent salaries in the NFL through the relative age effect. Our estimates suggest that a player enjoys a 6% higher starting salary in the NFL, and a 15% higher first-year signing bonus, for each year with the college team. On average, a rookie is estimated to earn $131,000 more in his rookie season, if he enters the NFL one year later. Our analysis of a typical labor market in professional sports shows that the returns to education in sports are sizeable and surprisingly similar to returns to formal education. The results of our analysis provide information for the players who are deciding about declaring for the draft, however, also colleges and the teams in the NFL may find the results of interest. |
| Keywords: | ability bias, returns to education, NFL, labor markets in sports |
| JEL: | J31 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5665&r=lab |
| By: | Marc Gurgand (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, J-PAL Europe - J-PAL Europe, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA); Adrien Lorenceau (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Thomas Mélonio (AFD - Agence Française de Développement - Agence Française de Développement) |
| Abstract: | Empirical evidence that access to higher education is constrained by credit availability is limited and usually indirect. This paper provides direct evidence by comparing university enrollment rates of South African potential students, depending on whether they get a loan or not to cover their registration fees, in a context where such fees are high. We use matched individual data from both a credit institution (Eduloan) and the Department of Education. Based on a regression discontinuity design using the fact that loans are granted according to a credit score threshold, we can estimate the causal impact of loan obtainment. We find that the credit constraint is substantial, as it decreases the enrollment rate into higher education by more than 20 percentage points in a population of student loan applicants. |
| Keywords: | Education ; university ; credit constraint ; regression discontinuity |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00590898&r=lab |
| By: | Mechtel, Mario; Potrafke, Niklas |
| Abstract: | We examine how electoral motives influence active labor market policies that promote job-creation. Such policies reduce unemployment statistics. Using German state data for the period 1985 to 2004, we show that election-motivated politicians pushed job-promotion schemes before elections. -- |
| Keywords: | political business cycles,opportunistic politicians,active labor market policies |
| JEL: | P16 J08 H72 E62 H61 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:2&r=lab |
| By: | Kim, Jaewon (Dept. of Economics, Stockholm University) |
| Abstract: | This study empirically investigates if international trade has an impact on aggregate unemployment in the presence of labour market institutions. Using data for twenty OECD countries for the years 1961-2008, this study finds that an increase in trade leads to higher aggregate unemployment as it interacts with rigid labour market institutions, whereas it may reduce aggregate unemployment if the labour market is characterised by flexibility. In a country with the average degree of the labour market rigidities, an increase in trade has no significant effect on unemployment rates. |
| Keywords: | Unemployment; Trade; Labour market institutions; Panel-data analysis; Instrument |
| JEL: | C33 F16 F41 J50 |
| Date: | 2011–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0019&r=lab |
| By: | Hyll, Walter; Stark, Oded |
| Abstract: | We analyze the impact on a firm's profits and optimal wage rates, and on the distribution of workers' earnings, when workers compare their earnings with those of co-workers. We consider a low-productivity worker who receives lower wage earnings than a high-productivity worker. When the low-productivity worker derives (dis)utility not only from his own effort but also from comparing his earnings with those of the high-productivity worker, his response to the sensing of relative deprivation is to increase the optimal level of effort. Consequently, the firm's profits are higher, its wage rates remain unchanged, and the distribution of earnings is compressed. -- |
| Keywords: | Social comparisons,Heterogeneous workforce,Relative deprivation,Effort exertion,Earnings gap,Earnings compression |
| JEL: | D01 D21 J22 J24 J31 M54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:6&r=lab |
| By: | Hart, Robert A.; Roberts, J. Elizabeth |
| Abstract: | Based on firm‐level payroll data from around 2000 member firms of the British Engineering Employers' Federation we examine the behavior of real hourly earnings over the 1927‐1937 cycle that contained the Great Depression. The pay statistics are based on adult male blue‐collar workers within engineering and metal working firms. They allow us to distinguish between pieceworkers and timeworkers and they are delineated by 14 occupations and 51 travel‐to‐work geographical engineering districts. We measure the cycle using national unemployment rates as well as rates that match our district breakdowns. Differences are found in the real hourly earnings cyclicality of pieceworkers and timeworkers. We attempt to relate our findings to those of modern micro panel data studies of real wage cyclicality. We offer some insight into why the estimates of real hourly pay display less procyclicality during the 1920s and 1930s than in studies based on more recent data. |
| Keywords: | aggregation bias; timework; piecework; the Great Depression; Real wage cyclicality |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2011-09&r=lab |
| By: | Michele Battisti (University of Palermo); Giovanna Vallanti (LUISS "Guido Carli" University) |
| Abstract: | This paper focuses on the effects of decentralized wage schemes and temporary forms of employment on worker/firm performance. The effect of monetary incentives on worker effort and firm performance is a central topic in economics. According to the principal-agent paradigm, firms (the principal) have to link employees’ remuneration scheme to any verifiable indicator of performance in order to avoid opportunistic behaviours. The effectiveness of incentives on workers’ behaviour may vary significantly accordingly to the institutional/economic context in which the firms operate but in general the empirical evidence shows that financial incentives have the potential to exert strong effects on indicators of firm performance, such as productivity and worker absenteeism. Both from a theoretical and empirical point of view, the prediction on the effects of temporary forms of employment on effort and productivity is less neat. In light of these considerations, the aim of this paper is to provide further empirical evidence on whether and to what extent the performance related pay and the contract flexibility affect workers effort and in turn firm productivity for different type of workers (white collar vs. blue collar), working in workplaces characterized by different degree of uncertainty and risk and in firms operating in different economic and institutional settings using a sample of Italian firms. According to our results, wage flexibility appears to have a significant effect on effort and then on firm’s productivity and white collars are more responsive to monetary incentives than blue collars. Moreover, the presence of a large share of temporary contracts implies a lower dismissal probability for permanent workers and a deterioration in the working environment and then it reduces workers’ motivation and effort. |
| Keywords: | Productivity, Effort, Performance-related-pay, Temporary contracts. |
| JEL: | J22 J33 J38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lui:celegw:1105&r=lab |
| By: | Luisito Bertinelli (Faculty of Law, Economics and Finance - University of Luxembourg); Olivier Cardi (ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - CNRS : UMR7017 - Université Panthéon-Assas - Paris II, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Partha Sen (Dehli School of Economics - Dehli School of Economics) |
| Abstract: | In a dynamic general equilibrium model with endogenous markups and labor market frictions, we investigate the effects of increased product market competition. Unlike most macroeconomic models of search, we endogenize the labor supply along the extensive margin. We show that beneficial effects in labor market outcomes require that the condition for saddle-path stability must be fulfilled whereas instability yields detrimental effects. Additionally, we find numerically that most of the decline in the unemployment rate can be attributed to the increase in the labor force, while the number of job seekers remains fairly unchanged. For a calibration capturing alternatively European and the U.S. labor markets, a deregulation episode, which lowers the markup by 3 percentage points, results in a fall in the unemployment rate by 0.1 and 0.05 percentage point, respectively, while the labor share is almost unaffected in the long-run. |
| Keywords: | Imperfect competition; Endogenous markup; Search theory; Unemployment; Deregulation. |
| Date: | 2011–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00589228&r=lab |
| By: | Bell, David N.F. (University of Stirling); Blanchflower, David G. (Dartmouth College) |
| Abstract: | This article reviews the effects of the Great Recession on youth labour markets. We argue that young people aged 16-24 have suffered disproportionately during the recession. Using the USA and UK as case studies, we analyse youth unemployment using microdata. We argue that there is convincing evidence that the effects of unemployment when young impose costs on individuals and society well into the future. Though the effects of current policies on youth unemployment are uncertain, there is still a strong case for policy intervention to address the difficulties that the young are having in accessing employment. |
| Keywords: | youth unemployment |
| JEL: | J01 J11 J21 J23 J38 J64 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5674&r=lab |
| By: | Naushin Mahmood (Pakistan Institute of Development Economics, Islamabad.) |
| Abstract: | This study examines how the changing demographics in Pakistan, resulting primarily from fertility transition, would affect educational attainment of school-age population during the next two decades. The basic question addressed is whether the expected population change would enable the country to benefit from the demographic dividend and enhance the chances to achieve universal primary education by 2015, one of the targets of the Millennium Development Goals (MDGs). Using projected population es timates and school enrolment data, the findings show that about 9.5 million children aged 5-9 years were not enrolled in school in 2005-06. Assuming a gradual and steady increase in enrolment, education simulations show that the number of children aged 5-9 years who will never enter school will cumulatively rise to approximately 27.7 million by 2030, of which 12.2 million would be boys, and 15.5 million girls, and it may take another two decades to achieve universal primary enrolment. Furthermore, children aged 10-14 years not attending secondary level were 14.5 million in 2005-06. Given the current trends in enrolment, this number is expected to increase almost four times by 2030, thereby widening the population education gap over the years. Thus rapid increase in enrolment is the desired option. Otherwise the large education deficit would create conditions highly unfavourable to capitalis e on the demographic dividend, and pose a threat rather than offer an opportunity to stimulate economic development. In terms of policy actions, investments in school education need to be almost doubled to absorb the prospective increase in the school-age population during the next two decades. |
| Keywords: | Demographic Dividend, Education, Primary Enrolment |
| JEL: | J1 I2 I22 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2011:68&r=lab |
| By: | Hartog, Joop (University of Amsterdam); Ding, Xiaohao (Peking University); Liao, Juan (Peking University) |
| Abstract: | We use the method of Dominitz and Manski (1996) to solicit anticipated wage distributions for continuing to a Master degree or going to work after completing the Bachelor degree. The means of the distributions have an effect on intention to continue as predicted by theory. The dispersions in these individual distributions have no effect on intention to continue, suggesting that anticipated earnings risk does not play a role in the decision. |
| Keywords: | educational choice, wage expectations |
| JEL: | D8 I21 J24 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5679&r=lab |
| By: | Dominik Hanglberger (LEUPHANA University Lüneburg,Department of Economic, Behaviour and Law Sciences, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB))) |
| Abstract: | The hedonic treadmill model for subjective well-being was subject to several recent empirical analyses based on individual panel data. Most of this adaptation literature is concentrated on how life events affect measures of life satisfaction and happiness, whereas adaptation processes of domain satisfactions like job satisfaction are largely unstudied. The aim of this paper is to test empirically adaptation processes of self-reported job satisfaction. For this purpose we consider flexibility characteristics of a job and derive hypotheses about which flexibility measures allow for or impede adaptation processes. Hypotheses are tested using data from up to 18 waves of the British Household Panel Survey (BHPS). We estimate fixed-effects panel models to test adaptation processes based on intra-individual changes in job satisfaction. Our results show no adaptation to rotating shift work, little adaptation to temporary employment, but full adaptation to flextime regulations. |
| Keywords: | job satisfaction, adaptation, hedonic treadmill model, rotating shift work, temporary employment, flextime, British Household Panel Study, fixed-effects panel estimation |
| JEL: | J28 J81 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:leu:wpaper:87&r=lab |
| By: | Marcello M. Estevão; Evridiki Tsounta |
| Abstract: | The recent crisis has had differential effects across U.S. states and industries causing a wide geographic dispersion in skill mismatches and housing market performance. We document these facts and, using data from the 50 states plus D.C from 1991 to 2008, we present econometric evidence that supports that changes in state-level unemployment rates are linked to skill mismatches and housing market performance even after controlling for cyclical effects. This result suggests some causality going from mismatches and housing conditions to unemployment rates. The numerical estimates imply that the structural unemployment rate in 2010 was about 1¾ percentage points higher than before the onset of the housing market meltdown at end-2006. Reversing this increase may require targeted active labor market policies and measures to expedite the adjustment in housing markets, as our results suggest weak housing market conditions interact negatively with skill mismatches to produce higher unemployment rates in the United States. |
| Date: | 2011–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/105&r=lab |
| By: | Yoshito Takasaki |
| Abstract: | An indigenous chiefly system can shape a country’s economic growth and inequality through institutional development in its colonial history. This paper addresses this thesis by using original household survey data in rural Fiji, which contain unique information about traditional chiefly status, and Fijian coups as a natural experiment. It demonstrates that chiefly labor networks in non-farm occupations that originated from the British colonial policy persistently affected Fijians’ schooling. Chiefly networks were effective for employment among male Fijians before and after 1970 independence, until the first coup occurred in 1987; then, their schooling strongly adjusted to structural changes in labor market. Those outside the chiefly network – the majority of Fijians – have always been discouraged from making education investments, because of low returns in the network-driven labor market. Without being directly constrained by this chiefly institution, Indians and Female Fijians outperformed male Fijians in higher education. Keywords: Chiefly system; Colonial policy; Labor network; Schooling; Fiji. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:tsu:tewpjp:2011-003&r=lab |
| By: | Nicole Maestas (RAND); Jae Song (Social Security Administration) |
| Abstract: | We analyze a natural experiment generated by the interaction of the Social Security DI and OA programs at Full Retirement Age, when DI beneficiaries are automatically converted from the DI program to the OA retired worker program. At conversion benefit payments continue unchanged, however the DI program’s high implicit marginal tax rate on earnings is abruptly relaxed. We use administrative Social Security data for the universe of primary worker DI beneficiaries from the 1934-1942 birth cohorts observed in panel over the period of 1995-2008. Our estimates imply that the DI program depresses labor supply among even the oldest DI beneficiaries. In the context of the literature to date that has sought to establish an upper bound on the earnings losses caused by the presence of the DI program by using quasi-experimental variation occurring at the program entry margin, our use of quasi-experimental variation arising from the program exit margin, when individuals are already in their mid-60s and the dominant trend in labor force participation in the population at large is downward, suggests that our estimates are most appropriately viewed as a lower bound estimate of the residual work capacity of all beneficiaries. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp247&r=lab |
| By: | Bell, David N.F. (University of Stirling); Blanchflower, David G. (Dartmouth College) |
| Abstract: | This paper focuses particularly on youth unemployment, why we should be concerned about it, why it is increasing again, how the present difficulties of young people entering the labour market differ from those of the past and what useful lessons have been learned that may guide future policy. We focus on Europe and USA, but introduce evidence from other countries where appropriate. Our analysis of the UK NCDS birth cohort data provides evidence supporting the notion that early adulthood unemployment creates long lasting scars which affect labour market outcomes much later in life. Our chosen variables are weekly wages and happiness. Our results show significant effects at age 50 from early adulthood unemployment. These affects are stronger than more recent unemployment experiences. |
| Keywords: | scarring effects, youth unemployment, happiness |
| JEL: | J31 J64 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5673&r=lab |
| By: | Muhammad Nasir (Pakistan Institute of Development Economics, Islamabad.); Muhammad Salman Tariq (Pakistan Institute of Development Economics, Islamabad.); Faiz-ur-Rehman (Quaid-i-Azam University, Islamabad.) |
| Abstract: | The underlying study intends to show the impact of foreign remittances on the educational performance of children in the households receiving these remittances. Much of the literature in this area covers the effects of remittances on poverty, consumption, and investment behaviour of the receiving households. The literature on the impact of remittances on educational performance, however, is rare, especially in Pakistan. To investigate the impact of remittances on educational performance, primary data at the household level is collected from four main cities of the Khyber Pakhtunkhwa Province, Pakistan. The OLS results illustrate that, without considering parental education, remittances have significant adverse effects on educational performance. However, the effect becomes insignificant once parental education is included, as a control variable, in the regression. The results also reveal that the low level of parental education, current income, assets, family type, and family size play an important role in the educational performance of children. |
| Keywords: | Remittances , Education, Parental Absence |
| JEL: | A20 I22 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2011:66&r=lab |
| By: | Akçomak, I. Semih (Maastricht University); Borghans, Lex (Maastricht University); ter Weel, Bas (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | This paper introduces indicators about the division of labour to measure and interpret recent trends in the structure of employment in the Netherlands. Changes in the division of labour occur at three different levels: the level of the individual worker, the level of the industry and the spatial level. At each level the organisation of work is determined by an equilibrium of forces that glue tasks together or unbundle them. Communication costs are the main force for clustering or gluing together tasks; comparative advantage stimulates unbundling and specialisation. The estimates suggest that on average the Netherlands has witnessed unbundling in the period 1996-2005, which implies that advantages of specialisation have increased. These developments explain to a considerable extent changes in the structure of employment. Especially at the spatial level it explains a substantial part of the increase in offshoring tasks abroad. |
| Keywords: | division of labour, tasks, technological change, the Netherlands |
| JEL: | J23 J24 O33 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5666&r=lab |
| By: | Loken, Katrine V. (University of Bergen); Lommerud, Kjell Erik (University of Bergen); Lundberg, Shelly (University of California, Santa Barbara) |
| Abstract: | Norwegian registry data is used to investigate the location decisions of a full population cohort of young adults as they complete their education, establish separate households and form their own families. We find that the labor market opportunities and family ties of both partners affect these location choices. Surprisingly, married men live significantly closer to their own parents than do married women, even if they have children, and this difference cannot be explained by differences in observed characteristics. The principal source of excess female distance from parents in this population is the relatively low mobility of men without a college degree, particularly in rural areas. Despite evidence that intergenerational resource flows, such as childcare and eldercare, are particularly important between women and their parents, the family connections of husbands appear to dominate the location decisions of less-educated married couples. |
| Keywords: | intergenerational proximity, marriage, location decisions |
| JEL: | J12 J16 J61 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5685&r=lab |
| By: | Boone, J.; Ours, J.C. van; Wuellrich, J.P.; Zweimuller, J. (Tilburg University, Center for Economic Research) |
| Abstract: | Workplace accidents are an important economic phenomenon. Yet, the pro-cyclical fl uctuations in workplace accidents are not well understood. They could be related to fluctuations in effort and working hours, but workplace accidents may also be affected by reporting behavior. Our paper uses unique data on workplace accidents from an Austrian matched worker-firm dataset to study in detail how economic incentives affect workplace accidents. We find that workers who reported an accident in a particular period of time are more likely to be tired later on. And, we find support for the idea that recessions in fluence the reporting of moderate workplace accidents: if workers think the probability of dismissals at the firm level is high, they are less likely to report a moderate workplace accident. |
| Keywords: | Workplace accidents;economic incentives;cyclical fl uctuations. |
| JEL: | I10 J60 J81 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011050&r=lab |
| By: | Kurt Mitman (Department of Economics, University of Pennsylvania); Stanislav Rabinovich (Department of Economics, University of Pennsylvania) |
| Abstract: | We study the optimal provision of unemployment insurance (UI) over the business cycle. We consider an equilibrium Mortensen-Pissarides search and matching model with risk-averse workers and aggregate shocks to labor productivity. Both the vacancy creation decisions of firms and the search effort decisions of workers respond endogenously to aggregate shocks as well as to changes in UI policy. We characterize the optimal history-dependent UI policy. We find that, all else equal, the optimal benefit is decreasing in current productivity and decreasing in current unemployment. Optimal benefits are therefore lowest when current productivity is high and current unemployment is high. The optimal path of benefits reacts non-monotonically to a productivity shock. Following a drop in productivity, benefits initially rise in order to provide short-run relief to the unemployed and stabilize wages, but then fall significantly below their pre-recession level, in order to speed up the subsequent recovery. Under the optimal policy, the path of benefits is pro-cyclical overall. As compared to the existing US UI system, the optimal history-dependent benefits smooth cyclical fluctuations in unemployment and deliver non-negligible welfare gains. |
| Keywords: | Unemployment Insurance, Business Cycles, Optimal Policy, Search and Matching |
| JEL: | E24 E32 H21 J65 |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:11-010&r=lab |
| By: | Inés Macho-Stadler; David Pérez-Castrillo; Nicolás Porteiro |
| Abstract: | We consider a market where firms hire workers to run their projects and such projects differ in profitability. At any period, each firm needs two workers to suc- cessfully run its project: a junior agent, with no specific skills, and a senior worker, whose effort is not verifiable. Senior workers differ in ability and their competence is revealed after they have worked as juniors in the market. We study the length of the contractual relationships between firms and workers in an environment where the matching between firms and workers is the result of market interaction. We show that, despite in a one-firm-one-worker set-up long-term contracts are the op- timal choice for firms, market forces often induce firms to use short-term contracts. Unless the market only consists of firms with very profitable projects, firms oper- ating highly profitable projects offer short-term contracts to ensure the service of high-ability workers and those with less lucrative projects also use short-term contracts to save on the junior workers' wage. Intermediate firms may (or may not) hire workers through long-term contracts. |
| JEL: | D86 C78 |
| Date: | 2011–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:872.11&r=lab |
| By: | Björklund, Anders (Swedish Institute for Social Research and IZA); Salvanes, Kjell G. (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | In every society for which we have data, people’s educational achievement is positively correlated with their parents’ education or with other indicators of their parents’socioeconomic status. This topic is central in social science, and there is no doubt that research has intensified during recent decades, not least thanks to better data having become accessible to researchers. The purpose of this chapter is to summarize and evaluate recent empirical research on education and family background. Broadly speaking, we focus on two related but distinct motivations for this topic. The first is equality of opportunity. Here, major the research issues are: How important a determinant of educational attainment is family background, and is family background—in the broad sense that incorporates factors not chosen by the individual—a major, or only a minor, determinant of educational attainment? What are the mechanisms that make family background important? Have specific policy reforms been successful in reducing the impact of family background on educational achievement? The second common starting point for recent research has been the child development perspective. Here, the focus is on how human-capital accumulation is affected by early childhood resources. Studies with this focus address the questions: what types of parental resources or inputs are important for children’s development, why are they important and when are they important? In addition, this literature focuses on exploring which types of economic policy, and what timing of the policy in relation to children’s social and cognitive development, are conducive to children’s performance and adult outcomes. The policy interest in this research is whether policies that change parents’ resources and restrictions have causal effects on their children. |
| Keywords: | Intergenerational mobility; Sibling correlations; Education; Education reform. |
| JEL: | I21 J13 J24 |
| Date: | 2010–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2010_014&r=lab |
| By: | M. Conceição Rego (Departamento de Economia & CEFAGE-UE, Universidade de Évora); António Caleiro (Departamento de Economia & CEFAGE-UE, Universidade de Évora) |
| Abstract: | The higher education system in Portugal, in recent decades, experienced profound structural changes, including a substantial increase in the number of higher education institutions, scattered throughout the country, with a growing number of students and teachers. The subject of this study is to examine the characteristics of current supply and demand within the higher education subsystem, in Portugal. The methodological approach includes two steps: first, making a characterization of key variables that shape demand and supply of higher education in Portugal and, second, using spatial econometric analysis, particularly multidimensional scaling, in order to estimate the location of universities. |
| Keywords: | Higher education, Multidimensional scaling, Spatial location. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2011_13&r=lab |
| By: | Armin Falk (University of Bonn and IZA); David Huffman (Swarthmore College and IZA); W. Bentley Macleod (Columbia University and IZA) |
| Abstract: | We provide evidence on how two important types of institutions – dismissal barriers, and bonus pay – affect contract enforcement behavior in a market with incomplete contracts and repeated interactions. Dismissal barriers are shown to have a strong negative impact on worker performance, and market efficiency, by interfering with firms' use of firing threat as an incentive device. Dismissal barriers also distort the dynamics of worker effort levels over time, cause firms to rely more on the spot market for labor, and create a distribution of relationship lengths in the market that is more extreme, with more very short and more very long relationships. The introduction of a bonus pay option dramatically changes the market outcome. Firms are observed to substitute bonus pay for threat of firing as an incentive device, almost entirely offsetting the negative incentive and efficiency effects of dismissal barriers. Nevertheless, contract enforcement behavior remains fundamentally changed, because the option to pay bonuses causes firms to rely less on long-term relationships. Our results show that market outcomes are the result of a complex interplay between contract enforcement policies and the institutions in which they are embedded. |
| Keywords: | incomplete contracts, bonus pay, efficiency wages, employment protection, firing costs, experiment |
| JEL: | J41 J3 C9 D01 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:361&r=lab |
| By: | David Tuesta |
| Abstract: | Latin America is one of the pioneers in introducing individual capitalization schemes as part of their compulsory component of their pension systems. Thirty years have passed since Chile took the !irst step. Now what reforms have been achieved today? What challenges lie ahead? This paper reviews the motivations of the reforms and their progress, using the experience of Colombia, Chile, Mexico and Peru. The main results are presented in terms of coverage, replacement rates, and !iscal sustainability, with projections to 2050. The results show that while the reforms of both the public and private pension systems have been key to providing !iscal sustainability and have strengthened retirement savings for groups with greater permanence in the labour market, there are still many pending challenges in order to address the signi!icant percentage of people who are self-employed, within the informal sector or frequently unemployed. In that sense, for each of the countries studied, recommendations have been explored that could help reduce the level of vulnerability at the retirement stage, incentivize savings, focus resources on the truly poor, and maintain !iscal balance. |
| Keywords: | pensions, retirement, Latin America |
| JEL: | H55 J26 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1115&r=lab |
| By: | Auriol, Emmanuelle (TSE, ARQADE and IDEI); Demonsant, Jean-Luc (Universidad Autonoma de Nuevo Leon) |
| Abstract: | The paper aims at studying determinants of schooling in traditional hierarchical societies confronted with an established history of outmigration. In the village, a ruling caste controls local political and religious institutions. For children who do not belong to the ruling caste, migration is a social mobility factor that is enhanced by formal schooling. Since formally educated children tend not to return, the ruling caste seeks to develop family loyalty by choosing religious education instead. The theory hence predicts that the social status of the family has a signicant impact on educational choice. Children from the ruling caste who are sent abroad have a lower probability of being sent to formal school. They are more likely to be sent to Koranic schools that emphasize religious and family values. The theoretical predictions are tested on data from Matam region in Senegal, a region where roughly one of every two children have ever attended school. |
| Keywords: | Schooling, Migration, Social Status, Haalpulaar |
| JEL: | I21 O12 O15 O17 Z13 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:24304&r=lab |
| By: | Marjorie Honig (Hunter College); Irena Dushi (Social Security Administration) |
| Abstract: | We use information from Social Security earnings records to examine the accuracy of survey responses regarding participation in tax-deferred pension plans. As employer-provided defined benefit pensions are replaced by voluntary contribution plans, employees’ understanding of the link between their annual contribution decisions and their post-retirement wealth is becoming increasingly important. We examine the extent to which wage-earners in the Health and Retirement Study correctly report their inclusion in tax-deferred contribution plans and, conditional on inclusion, their annual contributions. We use two samples representing different cohorts in two different periods: the original HRS cohort interviewed in 1992 at ages 51-61, and a combination of the War Babies and Early Baby Boomer cohorts at the same ages interviewed twelve years later. Our findings indicate that while respondents interviewed in 2004 were more likely to report correctly whether they were included in DC plans, they were no more accurate in reporting whether they contributed to their plans than respondents interviewed in 1992. Respondents in both cohorts, moreover, overestimated their annual contributions. In both 1992 and in 2004, the mean absolute difference between respondent-reported and Social Security earnings record contributions was 1.5 times larger than the mean earnings record contribution. |
| Keywords: | Social Security, Tax-deferred contribution, pension plan, Voluntary contribution, Health and Retirement Study, Baby Boomers |
| JEL: | J11 J14 J26 J33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:htr:hcecon:431&r=lab |
| By: | Dittrich, Dennis A. V.; Kocher, Martin G. |
| Abstract: | We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under standard assumptions. Yet, we also find evidence for reciprocal behavior. Our data analysis shows, however, that it does not pay for the employer to solely rely on the reciprocity of employees. |
| Keywords: | incentive contracts; supervision; efficiency wages;experiment; incomplete contracts; reciprocity |
| JEL: | C91 J31 J41 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:12222&r=lab |
| By: | Zimmermann, Laura (University of Michigan) |
| Abstract: | Detecting gender discrimination among children in the intra-household allocation of goods from household surveys has often proven to be difficult. This paper uses some of the commonly used techniques in this field to analyze education expenditures in India. Contrary to most previous research, I find evidence of discrimination against girls. Results at the all-India level are robust to the statistical method and the education expenditure measure, while they are more sensitive to changes in the analysis at the state level. In general, girls experience gender discrimination especially from age 10 onwards, with almost universal disadvantage in the amount of education expenditures in the group of 15-19 year olds. |
| Keywords: | gender discrimination, India, intra-household allocation, education expenditures |
| JEL: | J16 O15 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5687&r=lab |
| By: | Marja-Liisa Halko (Department of Accounting and Finance, Aalto University School of Economics); Juha Virrankoski (Department of Economics, University of Turku) |
| Abstract: | We solve the equilibrium market structure in a labor market where vacancies and unemployed workers can meet either in an intermediated market where wages are determined by take-it-orleave- it offers, or in a directed search market where firms post wages. By using an intermediary agents avoid the coordination problem which prevails in the search market. We study a monopolistic intermediary and perfect competition between intermediaries, and we consider the welfare properties of an intermediary institution, compared to an economy with an uncoordinated search process only. |
| Keywords: | intermediary, matching, labor market |
| JEL: | D40 J41 J64 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp64&r=lab |
| By: | Ooghe, Erwin (K.U.Leuven) |
| Abstract: | Many countries provide extra resources to schools serving disadvantaged pupils. We exploit a discontinuity in the assignment of such personnel subsidies in Flanders to estimate the impact on cognitive outcomes via a regression discontinuity (RD) design. Because bias can be substantial in RD designs, we include a bias correction in the specification of the control function. Overall, we find positive effects for mathematics, reading and spelling, but the impact is significant for spelling only. The effects are larger for disadvantaged pupils defined on the basis of family background, smaller – or less reliable – for low initial performers, and again larger at schools that used the resources to foster socio-emotional development. |
| Keywords: | impact evaluation, disadvantaged students, school resources |
| JEL: | H52 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5667&r=lab |
| By: | Fernando Martins |
| Abstract: | This paper presents the main findings of a survey conducted on a sample of Portuguese firms. The main aim was to identify some relevant characteristics about the dynamics of prices and wages in Portugal. The most important conclusions are: i) changes to wages are more synchronized than changes to prices; ii) most wages are defined using inflation as a yardstick, even though there are no formal rules; iii) the wages of most workers are defined in terms of sector-related collective agreements; iv) a considerable proportion of workers receive wages above those been agreed under the collective agreement; v) firms make frequent use of other mechanisms to cut payroll costs as a way of overcoming the restrictions imposed by downward nominal wage rigidity. |
| JEL: | D21 E30 J31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201109&r=lab |
| By: | Rupayan Pal |
| Abstract: | This paper compares and contrasts equilibrium outcomes under right-to-manage bargaining (RTM) and efficient bargaining (EB) corresponding to two alternative pay schemes, fixed wage vis-a-vis piece-rate. [WP No.8]. URL:[http://www.gipe.ac.in/pdfs/working% 20papers/wp8.pdf]. |
| Keywords: | equilibrium, RTM, Efficient bargaining, EB, alternative pay, fixed wage, union, firm, Bargaining,, piece-rate, Social welfare, Union, output, payoff, manufacturing, firms, pune, India, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3803&r=lab |
| By: | Owyang, Michael T.; Piger, Jeremy; Wall, Howard J. |
| Abstract: | This paper estimates city-level employment cycles for 58 large U.S. cities and documents the substantial cross-city variation in the timing, lengths, and frequencies of their employment contractions. It also shows how the spread of city-level contractions associated with U.S. recessions has tended to follow recession-specific geographic patterns. In addition, cities within the same state or region have tended to have similar employment cycles. We find no evidence, that similarities in employment cycles are related to similarities in industry mix, although cities with more-similar high school attainment and mean establishment size have tended to have more-similar employment cycles. |
| Keywords: | City Employment Cycles |
| JEL: | E32 R12 |
| Date: | 2010–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30757&r=lab |
| By: | Azam, Jean-Paul |
| Abstract: | This paper tries to reconcile the observed fact that suicide-terrorists have a relatively high education level with rationality. It brings out the conditions under which potential students choose to acquire some education in a rational-choice model where this yields a non-zero probability of blowing up the resulting human capital in a terrorist attack. The comparative-statics of the rational expectations equilibrium of this model demonstrate how economic development, on the one hand, and repression, on the other hand, might reduce terrorism under some parameter restrictions. |
| Keywords: | Terrorism – Education – Development |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:24338&r=lab |
| By: | A. Tampieri |
| Abstract: | This paper examines how assortative matching affects graduate earnings through the choice of attending university. We build up a model where individuals decide whether to attend university for increasing both their future income and the probability to marry an educated partner. The theoretical results suggest that, as assortative matching increases, the number of graduates increases and their earnings fall. The test using the British Household Panel Survey for years 1991-2006 supports the theoretical findings. |
| JEL: | I21 J12 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp748&r=lab |
| By: | Kim, Jaewon (Dept. of Economics, Stockholm University) |
| Abstract: | This paper investigates the hypothesis that generous unemployment benefits give rise to high levels of unemployment by systematically reviewing 34 cross- country studies. In contrast to conventional literature surveys, I perform a meta-analysis which applies regression techniques to a set of results taken from the existing literature. The main finding is that the choice of the primary data and estimation method matter for the final outcome. The control variables in the primary studies also affect the results. |
| Keywords: | meta-analysis; cross-country study; unemployment; benefits replacement rate; benefit duration |
| JEL: | C42 J65 |
| Date: | 2011–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0018&r=lab |
| By: | Heuer, Nina |
| Abstract: | This paper tests the hypothesis of a beneficial brain drain using occupation-specific data on migration from developing countries to OECD countries around 2000. Distinguishing between several types of human capital allows to assess whether the impact of high-skilled south-north migration on human capital in the sending economies differed across occupational groups requiring tertiary education. We find a robust negative effect of the incidence of high-skilled emigration on the level of human capital in the sending countries, thereby rejecting the hypothesis of a beneficial brain drain. The negative effect was significantly stronger for professionals - the occupational category with the largest incidence of south-north migration and the highest educational requirements - than for technicians and associate professionals. -- |
| Keywords: | International migration,Occupation-specific brain drain,Human capital,Transferability of skills,Beneficial brain drain |
| JEL: | F22 J24 O15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:7&r=lab |
| By: | Tito Boeri; Marta De Philippis; Eleonora Patacchini; Michele Pellizzari |
| Abstract: | We use a new dataset and a novel identification strategy to analyze the effects on labor market outcomes of residential segregation of migrants in 8 Italian cities. Our data are representative of the population of both legal and illegal migrants, allow us to measure segregation at the very local level (the block) and include measures of housing prices, commuting costs and migrants’ linguistic ability. We find evidence that migrants who reside in areas with a high concentration of non-Italians are less likely to be employed compared to similar migrants who reside in less segregated areas. In our preferred specification, a 10 percentage points increase in residential segregation reduces the probability of being employed by 7 percentage points or about 8% over the average. Additionally, we also show that this effect emerges only above a critical threshold of 15-20% of migrants over the total local population, below which there is no statistically detectable effect. Contrary to common wisdom, in our data migrants seem to be positively selected into segregated areas. A simple matching model with heterogeneous workers and endogenous sorting into heterogeneous locations rationalizes our findings and is supported by additional empirical results. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:390&r=lab |
| By: | Prakash Kannan; Jinzhu Chen; Bharat Trehan; Prakash Loungani |
| Abstract: | We provide cross-country evidence on the relative importance of cyclical and structural factors in explaining unemployment, including the sharp rise in U.S. long-term unemployment during the Great Recession of 2007-09. About 75% of the forecast error variance of unemployment is accounted for by cyclical factors-real GDP changes (?Okun‘s Law?), monetary and fiscal policies, and the uncertainty effects emphasized by Bloom (2009). Structural factors, which we measure using the dispersion of industry-level stock returns, account for the remaining 25 percent. For U.S. long-term unemployment the split between cyclical and structural factors is closer to 60-40, including during the Great Recession. |
| Date: | 2011–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/106&r=lab |
| By: | Jeffrey R. Brown; Arie Kapteyn; Olivia S. Mitchell |
| Abstract: | Eligible participants in the U.S. Social Security system may claim benefits anytime from age 62-70, with benefit levels actuarially adjusted based on the claiming age. This paper shows that individual intentions with regard to Social Security claiming ages are sensitive to how the early versus late claiming decision is framed. Using an experimental design, we find that the use of a “break-even analysis” has the very strong effect of encouraging individuals to claim early. We also show that individuals are more likely to report they will delay claiming when later claiming is framed as a gain, and when the information provides an anchoring point at older, rather than younger, ages. Moreover, females, individuals with credit card debt, and workers with lower expected benefits are more strongly influenced by framing. We conclude that some individuals may not make fully rational optimizing choices when it comes to choosing a claiming date. |
| JEL: | D12 D14 H55 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17018&r=lab |
| By: | Thomas Dohmen (ROA, Maastricht University); Armin Falk (University of Bonn) |
| Abstract: | This paper studies the impact of incentives on worker self-selection in a controlled laboratory experiment. Subjects face the choice between a fixed and a variable payment scheme. Depending on the treatment, the variable payment is a piece rate, a tournament or a revenue-sharing scheme. We find that output is higher in the variable pay schemes (piece rate, tourna- ment, and revenue sharing) compared to the fixed payment scheme. This difference is largely driven by productivity sorting. In addition personal attitudes such as willingness to take risks and relative self-assessment as well as gender affect the sorting decision in a systematic way. Moreover, self-reported effort is significantly higher in all variable pay conditions than in the fixed wage condition. Our lab findings are supported by an additional analysis using data from a large and representative sample. In sum, our findings underline the importance of multi-dimensional sorting, i.e., the tendency for different incentive schemes to systematically attract people with different individual characteristics. |
| Keywords: | Relational Sorting, Incentives, Piece Rates, Tournament, Revenue-Sharing, Risk Preferences, Social Preferences, Gender, Experiment, Field Evidence |
| JEL: | J3 M52 C91 D81 J16 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:360&r=lab |
| By: | Fortunato, Piergiuseppe; Panizza, Ugo |
| Abstract: | This paper looks at how the interaction between democracy and education affects the quality of government. It models an economy in which politicians of heterogeneous quality can run for office and shows that education has a positive effect on the quality of selected officials only if democratic institutions are in place. The model also fi…nds that democracy has positive effect on the quality of government in countries with high levels of education but that political institutions are not correlated with the quality of government in countries with low levels of education. Cross-country and panel data regressions confirm that the interaction between democracy and education is positively associated with the quality of government. |
| JEL: | D72 H11 P16 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:155&r=lab |
| By: | Steven D. Levitt; Thomas J. Miles |
| Abstract: | In determining the legality of online poker – a multibillion dollar industry – courts have relied heavily on the issue of whether or not poker is a game of skill. Using newly available data, we analyze that question by examining the performance in the 2010 World Series of Poker of a group of poker players identified as being highly skilled prior to the start of the events. Those players identified a priori as being highly skilled achieved an average return on investment of over 30 percent, compared to a -15 percent for all other players. This large gap in returns is strong evidence in support of the idea that poker is a game of skill. |
| JEL: | K23 K42 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17023&r=lab |
| By: | Craig Holmes (Department of Economics, University of Oxford) |
| Abstract: | The behavioral economics literature on time discounting has suggested that individuals may systematically undersave when planning for retirement. Hence, pension systems have developed to enable, or indeed force, individuals to save more for retirement. Of course, the saving aspect and the timing of retirement are connected, in the sense that the expected length of retirement determines what is meant by adequate post-retirement resources, and vice versa. Despite this, the timing aspect rarely enters into policy discussions, although the same behavioural phenomena that lead to undersaving – in this paper, myopia and present bias – may also have implications for the retirement decision. Moreover, the form of pension payments may also affect the timing decision when individuals do not have time consistent preferences. This paper presents a model of saving and retirement timing where saving rates are mandated, and pension payment may come in either a lump-sum or an annuity. It tests the model using data collected through a new experiment. The experiment presented has a particular novel feature which made it uniquely suited for testing the theoretical model. Specifically, participants in the experiment came back to the laboratory on a weekly basis over a two month period. This decision to return to the laboratory (or, to leave the experiment and collect a pension) became in itself the main variable of interest. The experiment therefore exploited the effort it takes for participants to come to the laboratory to capture preferences over time-use and leisure. The results shown that plans over leaving the experiment tend not to reflect preferences, whilst actual leaving times were lower for more impulsive individuals and those who gave up more time to participate. This suggests a tradeoff between increasing saving through pension systems and earlier retirement. Payment group had no effect on retirement timing, most likely because the small rewards meant participants were indifferent between the two forms of payment. The results suggest individuals may have time-inconsistent preferences over leisure choices, leading to the incidences of unplanned early retirement. |
| Keywords: | Retirement, Quasi-hyperbolic discounting, Pension payments, Laboratory experiment |
| JEL: | J26 D91 C91 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cex:dpaper:2011003&r=lab |
| By: | Hyll, Walter; Stark, Oded; Wang, Yong |
| Abstract: | This paper considers a setting in which the acquisition of human capital entails a change of location in social space that causes individuals to revise their comparison groups. Skill levels are viewed as occupational groups, and moving up the skill ladder by acquiring additional human capital, which in itself is rewarding, leads to a shift in the individual's inclination to compare himself with a different, and on average better-paid, comparison group, which in itself is penalizing. The paper sheds new light on the dynamics of human capital formation, and suggests novel policy interventions to encourage human capital formation in the aggregate and, at the same time, reduce inter-group income inequality. -- |
| Keywords: | Human capital formation,Skill levels as occupational groups,Interpersonal comparisons,Relative deprivation,Tax policy,Subsidization |
| JEL: | D11 H24 H30 J24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:3&r=lab |