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on Labour Economics |
| By: | Alaniz, Enrique (Fundación Internacional para el Desafío Económico Global (FIDEG)); Gindling, T. H. (University of Maryland, Baltimore County); Terrell, Katherine (University of Michigan) |
| Abstract: | We use an individual-level panel data set to study the impact of changes in legal minimum wages on a host of labor market outcomes in Nicaragua including: a) wages and employment, b) transitions of workers across jobs (in the covered and uncovered sectors) and employment status (unemployment and out of the labor force), and c) transitions into and out of poverty. We find that changes in the legal minimum wage affect only those workers whose initial wage (before the change in minimum wages) is close to the minimum. For example, increases in the legal minimum wage lead to significant increases in the wages and decreases in employment of private covered sector workers who have wages within 20% of the minimum wage before the change, but have no significant impact on wages in other parts of the distribution. The estimates from the employment transition equations suggest that the decrease in covered private sector employment is due to a combination of layoffs and reductions in hiring. Most workers who lose their jobs in the covered private sector as a result of higher legal minimum wages leave the labor force or go into unpaid family work; a smaller proportion find work in the public sector. Our analysis of the relationship between the minimum wage and household income finds: a) increases in legal minimum wages increase the probability that a poor worker's family will move out of poverty, and b) increases in legal minimum wages are more likely to reduce the incidence of poverty if they impact the head of the household rather than the non-head. |
| Keywords: | minimum wages, employment, poverty |
| JEL: | J3 O17 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5702&r=lab |
| By: | David Howell, Bert M. Azizoglu (New School for Social Research, New York, NY) |
| Keywords: | Unemployment, Unemployment Insurance, Recession, Labor Market |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2011-7&r=lab |
| By: | Hart, Robert A.; Roberts, J. Elizabeth |
| Abstract: | This paper makes use of the British New Earnings Survey Panel Dataset between 1976 and 2010. Individual‐level pay and hours data are obtained from company payrolls and consist of a random sample of 1% of the entire British male and female labor force. We find that the real wages of both male and female workers who change job titles within companies are significantly more procyclical than job stayers. Wage cyclicality of internal job movers who retain their job titles is the same as that of job stayers. This lends support to the predicted procyclical real wage effects of the Reynolds‐Reder‐Hall job re‐grading hypothesis. On the extensive margin, title changers and title retainers who move jobs between companies exhibit the same degrees of wage cyclicality and these are significantly greater than for job stayers. We argue that our findings are compatible with earlier research that has established the importance of spot market wage setting in Britain. |
| Keywords: | job re‐assignments; job moves; spot wages; Real wage cyclicality |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2011-11&r=lab |
| By: | Mazza, Jacopo (University of Amsterdam); Hartog, Joop (University of Amsterdam) |
| Abstract: | Using an internet collected dataset, we will provide some empirical evidence on the information that Dutch high school students possess before their decision on tertiary education participation. The sample is prone to selective participation and high attrition, but we detect little systematic effects and inconsistent reporting of probability distribution is not more frequent than in controlled settings. We find little support for patterns that one would expect from individuals having private information. Girls expect substantially lower earnings in all schooling scenarios, but implicit rate of returns do not differ from those anticipated by boys. We find no evidence of expected risk compensation. |
| Keywords: | wage expectations, wage risk, risk compensation |
| JEL: | J24 J31 I20 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5714&r=lab |
| By: | Mosthaf, Alexander (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This study investigates how the effects of low-wage employment and non-employment on wage prospects vary depending on qualification. We apply dynamic multinomial logit models with random effects and include interactions of the lagged labor market state with qualification to estimate heterogeneity in state dependence. We find that low-wage jobs are stepping stones to high-paid jobs for low qualified workers. In contrast, the chances of workers with a university degree to obtain a high-paid job are the same when being low-paid or non-employed (whereas their risk of non-employment is lower when having a low-paid job). Furthermore, our results suggest that for workers with university degree low-wage jobs are associated with negative signals." (author's abstract, IAB-Doku) ((en)) |
| JEL: | J30 J60 C33 |
| Date: | 2011–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201111&r=lab |
| By: | Juliane Scheffel |
| Abstract: | This paper examines pecuniary aspects of work during unusual hours based on the German Time Use Data for 2001/02. The findings show positive wage premia of 9 – 10 percent for shift workers and men who work during unusual hours. There is some evidence of negative selection which suggests that men with lower potential daytime earnings have a higher propensity to choose these jobs because of the associated wage premium. The findings further show a U-shaped impact of temporal work disamenity across the wage distribution with higher wage premia paid to the extreme 5-percentiles. |
| Keywords: | Shift Work, Non-Standard Working Hours, Time Allocation, Compensating Wage Differentials, Wage Premia, Quantile Regression |
| JEL: | J22 J31 J33 J81 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2011-026&r=lab |
| By: | Richard Duhautois (CEE - Centre d'Etudes de l'Emploi - Ministère de la Recherche - Ministère chargé de l'Emploi, ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Ministère de l'Education nationale, de l'Enseignement supérieur et de la Recherche - Université Paris XII Val de Marne : EA437 - Université Paris-Est); Fabrice Gilles (CEE - Centre d'Etudes de l'Emploi - Ministère de la Recherche - Ministère chargé de l'Emploi, EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université des Sciences et Technologies de Lille - Lille I); Héloïse Petit (CEE - Centre d'Etudes de l'Emploi - Ministère de la Recherche - Ministère chargé de l'Emploi, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| 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, churning rate, quite rate, linked employer-employee panel data, France. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00593952&r=lab |
| By: | Asma Hyder (Business School, National University of Sciences and Technology, Islamabad); Jere R. Behrman (Department of Economics, University of Pennsylvania) |
| Abstract: | Many studies document significantly positive associations between schooling attainment and wages in developing countries. But when individuals enter occupations subsequent to completing their schooling, they not only face an expected work-life path of wages, but a number of other occupational characteristics, including wage risks and disability risks, for which there may be compensating wage differentials. This study examines the relations between schooling on one hand and mean wages and these two types of risks on the other hand, based on 77,685 individuals from the wage-earning population as recorded in six Labor Force Surveys of Pakistan. The results suggest that schooling is positively associated with mean total wages and wage rates, but has different associations with these two types of risks: Disability risks decline as schooling increases but wage risks, and even more, wage rate risks increase as schooling increases. The schooling-wage risks relation, but not the schooling-disability risks relation,is consistent with there being compensating differentials. |
| Keywords: | Wages, Risks, Labor Markets, Job Disabilities, Compensating Differentials,Developing Country, Schooling |
| JEL: | J31 J28 O53 |
| Date: | 2011–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:11-0013&r=lab |
| By: | Troske, Kenneth (University of Kentucky); Voicu, Alexandru (CUNY - College of Staten Island) |
| Abstract: | We study differences in life-cycle labor supply among white, black, and Hispanic women, focusing on the interaction between race/ethnicity, education, and fertility. We use panel data that capture women's labor market and fertility histories and an econometric model that accounts for the endogeneity of labor market and fertility decisions, the heterogeneity of the effects of children and their correlation with the fertility decisions, and the correlation of sequential labor market decisions. Our results show an intricate connection between race/ethnicity, education, and fertility as determinants of women's life-cycle labor supply. For all levels of education, white women have fewer children, have the first birth later in life, and space subsequent births more closely together. The level of labor market involvement before the first birth is highest for white women and lowest for Hispanic women, but children reverse the relationship between race/ethnicity and level of labor market involvement. The negative effects of children are largest for white women and smallest for Hispanic women, and as a result, among women with two children, black and Hispanic women work more than white women. Racial/ethnic differences in fertility decisions, pre-natal labor supply, and labor supply responsiveness to children decline with the level education. Educational differences contribute to the racial/ethnic differentials in labor supply. White women have the highest levels of education and Hispanic women have the lowest levels of education. Other things equal, women with higher education have fewer children, have the first birth later in life, space subsequent births more closely together, work more before the birth of the first child, but face larger negative effects of children on their level of labor market involvement. |
| Keywords: | racial/ethnic differentials in female labor supply, education, endogenous fertility decisions, heterogeneous children effects, multinomial probit model, Gibbs sampler |
| JEL: | C11 C15 J13 J22 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5729&r=lab |
| By: | Fernández-Kranz, Daniel (IE Business School, Madrid); Rodriguez-Planas, Nuria (Universitat Autònoma de Barcelona) |
| Abstract: | Family-friendly laws may backfire if not all workers with access to the policies use them. Because these policies are costly to the employer, hiring practices may consequently be affected at the detriment of the at-risk population who may end up accessing the policy. We exploit a 1999 Spanish law that granted all workers with children under 7 years the right to work part-time. Most importantly, the law declared a layoff invalid if the worker had previously asked for a work-week reduction due to family responsibilities. Using a difference-in-differences (DD) methodology, we first find evidence that the law increased part-time work among eligible mothers with a permanent contract, but had no effect on eligible fathers or mothers with a temporary contract. This effect is driven by the less-educated women. Then, using both a DD and a DDD approach, we analyze the effects of the law among the at-risk population, i.e., childbearing-aged women with no children under 7. We find that this policy led to the unintended effect of decreasing the likelihood of being employed with a permanent contract among the at-risk high-school graduate women (relative to their male counterpart), while increasing their relative likelihood of having a fixed-term contract job. These findings suggest that, after the law, employers preferred hiring childbearing-aged men under permanent contracts (offering fixed-term contracts to childbearing-aged women). |
| Keywords: | temporary employment, flexible work arrangement laws, European unemployment |
| JEL: | J21 J68 J78 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5709&r=lab |
| By: | Nopo, Hugo (Inter-American Development Bank); Daza, Nancy (National Planning Department, Colombia); Ramos, Johanna (National Planning Department, Colombia) |
| Abstract: | This paper documents gender disparities in labor earnings for sixty-four countries around the world. Disparities are partially attributed to gender differences in observable socio-demographic and job characteristics. These characteristics are used to match males and females such that gender earnings disparities are computed only among individuals with the same characteristics, as in Ñopo (2008). After comparing males and females with the same characteristics we found that the earnings gap falls within a range between 8% and 48% of average females' earnings, being more pronounced in South Asia and Sub-Saharan Africa. The unexplained earnings gaps are more pronounced among part-time workers and those with low education. |
| Keywords: | gender, wage gaps, matching |
| JEL: | C14 D31 J16 O57 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5736&r=lab |
| By: | Alam, Andaleeb (World Bank); Baez, Javier E. (World Bank); Del Carpio, Ximena (World Bank) |
| Abstract: | The Punjab Female School Stipend Program, a female-targeted conditional cash transfer program in Pakistan, was implemented in response to gender gaps in education. An early evaluation of the program shows that the enrollment of eligible girls in middle-school increased in the short term by nearly 9 percentage points. This paper uses regression discontinuity and difference-in-difference analyses to show that five years into the program implementation positive impacts do persist. Beneficiary adolescent girls are more likely to progress through and complete middle school and work less. There is suggestive evidence that participating girls delay their marriage and have fewer births by the time they are 19 years old. Also, girls who are exposed to the program later-on, and eligible for the benefits given in high school, increase their rates of matriculating into and completing high school. The persistence of impacts can potentially translate into gains in future productivity, consumption, inter-generational human capital accumulation and desired fertility. Lastly, there is no evidence that the program has negative spillover effects on educational outcomes of male siblings. |
| Keywords: | conditional cash transfers, female education, female labor participation, fertility, Pakistan |
| JEL: | J13 J21 O15 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5703&r=lab |
| By: | Drydakis, Nick (University of Patras) |
| Abstract: | In the current study, we analyze the effect of having a Roma background on women's wages. By utilizing the Athens Area Study random sample (2007-08) drawn from 16 multiethnic municipalities in which Roma live, we estimate that 66.1% of the wage differential between Roma and non-Roma female workers cannot be explained by differences in observed characteristics. Prejudices against Roma women are discussed and appear to explain the wage gap found here. The occupational segregation of the Roma in low-paid jobs and employers' statistical motivations are also found to influence wages earned by Roma. This study concludes that there is a need for better implementations of existing laws, rules and regulations which would counter the discrimination of minority women in the labor market. In addition, a better means of assessing workers' skill may contribute to the reduction of wage discrimination, as well as, greater educational achievement would significantly boost the economic status of Roma women. In its use of a random Roma sample and multivariate analysis, this study is a methodological advancement over previous studies of Roma employment, and it could inspire new efforts to compare wages by Roma background. |
| Keywords: | Roma, labor discrimination, Blinder-Oaxaca decomposition, taste theory, statistical theory, occupational segregation |
| JEL: | J31 J71 J15 C13 C81 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5732&r=lab |
| By: | Elsby, Michael W.L.; Smith, Jennifer C.; Wadsworth, Jonathan |
| Abstract: | Unemployment varies substantially over time and across subgroups of the labour market. Worker flows among labour market states act as key determinants of this variation. We examine how the structure of unemployment across groups and its cyclical movements across time are shaped by changes in labour market flows. Using novel estimates of flow transition rates for the UK over the last 35 years, we decompose unemployment variation into parts accounted for by changes in rates of job loss, job finding and flows via non-participation. Close to two-thirds of the volatility of unemployment in the UK over this period can be traced to rises in rates of job loss that accompany recessions. The share of this inflow contribution has been broadly the same in each of the past three recessions. Decreased job-finding rates account for around one-quarter of unemployment cyclicality and the remaining variation can be attributed to flows via non-participation. Digging deeper into the structure of unemployment by gender, age and education, the flow-approach is shown to provide a richer understanding of the unemployment experiences across population subgroups. Key words: labour market ; unemployment ; worker flows JEL classification: E24 ; J6 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:962&r=lab |
| By: | Alam, Andaleeb; Baez, Javier E.; V. Del Carpio, Ximena |
| Abstract: | The Punjab Female School Stipend Program, a female-targeted conditional cash transfer program in Pakistan, was implemented in response to gender gaps in education. An early evaluation of the program shows that the enrollment of eligible girls in middle school increased in the short term by nearly 9 percentage points. This paper uses regression discontinuity and difference-in-difference analyses to show that five years into the program implementation positive impacts do persist. Beneficiary adolescent girls are more likely to progress through and complete middle school and work less. There is suggestive evidence that participating girls delay their marriage and have fewer births by the time they are 19 years old. Girls who are exposed to the program later, and who are eligible for the benefits given in high school, increase their rates of matriculating into and completing high school. The persistence of impacts can potentially translate into gains in future productivity, consumption, inter-generational human capital accumulation and desired fertility. Lastly, there is no evidence that the program has negative spillover effects on educational outcomes of male siblings. |
| Keywords: | Education For All,Primary Education,Tertiary Education,Gender and Education,Disability |
| Date: | 2011–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5669&r=lab |
| By: | Andersen, Torben (University of Aarhus) |
| Abstract: | Flexicurity labour markets are characterised by flexible hiring/firing rules, generous social safety net, and active labour market policies. How can such labour markets cope with the consequences of the Great Recession? Larger labour shedding is to be expected and this strains the social safety net and increases the demands on active labour market policies. This paper takes a closer look at the labour market consequences of the crisis for Denmark. It is found that employment adjustment is not particularly large in international comparison, although it has more weight on the extensive (number of employees) than the intensive (hours) margin. The level of job creation remains high, although job creation is pro-cyclical and job-separation counter-cyclical. As a consequence most unemployment spells remain short. This is critical since a persistent increase in unemployment will affect the financial balance of the model severely. Comparative evidence does not, however, indicate that flexicurity markets are more prone to persistence. Crucial for this is the design of the social safety net and in particular the active labour market policy. However, the larger inflow into activation raises questions concerning the possibility of maintaining the efficiency of the system. |
| Keywords: | flexicurity, employment protection, unemployment insurance, active labour market policy |
| JEL: | J01 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5710&r=lab |
| By: | Kohn, Karsten (KfW Bankengruppe); Antonczyk, Dirk (University of Freiburg) |
| Abstract: | Using a large administrative data set, this paper studies the evolution of the East German wage structure throughout the transition period 1992-2001. Wage dispersion has generally been rising. The increase occurred predominantly in the lower part of the wage distribution for women and in the upper part for men. Sectoral transition affected women to a much larger extent than men. A sequential decomposition analysis using quantile regressions reveals that changes in industry-specific remuneration schemes contributed strongly to the rise in wage inequality in the lower part of the distribution for female workers. On the other hand, inter-industry trends away from the manufacturing sector towards service sectors contribute to the smaller increase of inequality in the upper part of the distribution, while causing wage dispersion in the lower part of the distribution to decline. Changes in the industry composition alone would have led to a polarization of wages for female workers. For men, changes in individual characteristics and a general time trend contribute the largest part to the increasing wage dispersion. These gender differences result from employment segregation across industries right after German reunification, and a particularly strong concentration of females in the public sector. |
| Keywords: | wage distribution, transition, gender, decomposition, quantile regression, polarization, East Germany |
| JEL: | J31 C21 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5708&r=lab |
| By: | John Schmitt |
| Abstract: | This paper reviews the recent labor-market performance of 21 rich countries, with a focus on Denmark and Germany. Denmark, which was widely seen as one of the world's most successful labor markets before the downturn, has struggled in recent years. Germany, however, has outperformed the rest of the world's rich countries since 2007, despite earlier labor-market difficulties. Labor-market institutions seem to explain the different developments in the two economies. Danish institutions – which include extensive opportunities for education, training, and placement of unemployed workers – appear to perform well when the economy is at or near full employment, but have not been effective during the downturn. German labor-market institutions, which emphasize job security by keeping workers connected to their current employers, may have drawbacks when the economy is operating at or near full employment, but have performed well in the Great Recession. The paper also discusses lessons for U.S. labor-market policy. |
| Keywords: | Great Recession, recession, labor, labor policy, |
| JEL: | E E2 E24 E3 E6 E65 J J2 J21 J3 J31 J33 J38 J6 J62 J65 J68 J8 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2011-12&r=lab |
| By: | Carlsson, Mikael (Sveriges Riksbank); Messina, Julián (World Bank); Nordström Skans, Oskar (IFAU) |
| Abstract: | We study how workers' wages respond to TFP-driven innovations in firms' labor productivity. Using unique data with highly reliable firm-level output prices and quantities in the manufacturing sector in Sweden, we are able to derive measures of physical (as opposed to revenue) TFP to instrument labor productivity in the wage equations. We find that the reaction of wages to sectoral labor productivity is almost three times larger than the response to pure idiosyncratic (firm-level) shocks, a result which crucially hinges on the use of physical TFP as an instrument. These results are all robust to a number of empirical specifications, including models accounting for selection on both the demand and supply side through worker-firm (match) fixed effects. Further results suggest that technological progress at the firm level has negligible effects on the firm-level composition of employees. |
| Keywords: | matched employer-employee data, sorting, wage, labor productivity, TFP |
| JEL: | J31 J23 J33 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5719&r=lab |
| By: | KURODA Sachiko; YAMAMOTO Isamu (Keio University) |
| Abstract: | Using data from a Japanese time use survey, we show a noteworthy increase in the share of employees working unusual hours (late night and early morning) over a period of a decade since the mid 1990s. When controlling for changes in hours worked, however, we find that the notable increase in the fraction of people working unusual hours was for low-income nonregular employees (part time, temporary and contract workers), while relatively higher-income regular employees' work timing remains stable. These observations imply that there is a trend of diversification of work timing in Japan between regular and nonregular employees. A possible explanation is that the increase in the average hours worked per weekday by regular employees, possibly because of the spread of the five-day workweek since the 1990s, increased the demand for services and goods during unusual hours, as they returned home. An Oaxaca-Blinder type decomposition suggests that such an increase in the average hours worked by regular employees explains partially the rise in the employment rate of nonregular employees at unusual times. We also suggest that the negative income effect induced low-wage nonregular employees to take jobs at night to earn a wage premium. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11047&r=lab |
| By: | Christian Pfeifer (Leuphana University Lueneburg, Institute of Economics; and IZA); Simon Janssen (Department of Business Administration, University of Zurich); Philip Yang (Leibniz University Hannover, Institute of Labor Economics); Uschi Backes-Gellner (Department of Business Administration, 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: | Human capital, Insider econometrics, Productivity, Promotions, Training |
| JEL: | J24 M53 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0061&r=lab |
| By: | Meghir, Costas (Yale University and University College London); Palme, Mårten (Dept. of Economics, Stockholm University); Schnabel, Marieke (University College London) |
| Abstract: | The Swedish comprehensive school reform implied an extension of the number of years of compulsory school from 7 or 8 to 9 for the entire nation and was implemented as a social experiment by municipality between 1949 and 1962. A previous study (Meghir and Palme, 2005) has shown that this reform significantly increased the number of years of schooling as well as labor earnings of the children who went through the post reform school system, in particular for individuals originating from homes with low educated fathers. This study estimates the impact of the reform on criminal behavior: both within the generation directly affected by the reform as well as their children. We use census data on all born in Sweden between 1945 and 1955 and all their children merged with individual register data on all convictions between 1981 and 2008. We find that the educational reform decreased crime substantially for men who were directly affected by it. We also find that the crime rate declined for the sons of those fathers directly affected by the new educational system; we interpret this results as implying that improved education increased resource and parenting quality, leading to improved child outcomes. |
| Keywords: | Comprehensive school; economics of crime; returns to education; returns to human capital |
| JEL: | I20 I21 I28 K42 N34 |
| Date: | 2011–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0023&r=lab |
| By: | William Collier; Javier Valbuena; Yu Zhu |
| Abstract: | Using a unique dataset which is rich in both family background and attainment in education, we find that educational attainments at the end of the compulsory schooling stage are powerful predictors for post-compulsory educational choices in England. In particular, the single academic success indicator of achieving the Government’s gold standard in GCSE, is able to explain around 30% of the variation in the proportion of young people studying for academic qualifications. Instrumental-variables estimation which exploits variations in birth weight and school starting age suggest that over half of the least-squares effect of achieving the gold standard in GCSEs on studying for academic qualifications is due to individual heterogeneity (ability bias) or simultaneity bias (reverse causation). Nonetheless, conditional on the young person working towards a higher-level qualification, we find strong evidence of a highly significant causal effect of achieving the gold standard when choosing between the academic or vocational pathway. |
| Keywords: | Educational choice; instrumental-variable estimation Multiplier; North-South Models; Global Imbalances |
| JEL: | I21 J24 P36 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1112&r=lab |
| By: | Bijwaard, Govert (NIDI - Netherlands Interdisciplinary Demographic Institute); Schluter, Christian (University of Southampton); Wahba, Jackline (University of Southampton) |
| Abstract: | Using administrative panel data on the entire population of new labour immigrants to The Netherlands, we estimate the causal effects of labour dynamics on their return decisions. Specifically, the roles of unemployment and re-employment spells on immigration durations are examined. The endogeneity of labour market outcomes and the return migration decision, if ignored, confounds the causal effect. This empirical challenge is addressed using the "timing-of-events" method. We estimate the model separately for distinct immigrant groups, and find that, overall, unemployment spells shorten immigration durations, while re-employment spells delay returns for all but one group. The magnitude of the causal effect differs across groups. |
| Keywords: | temporary migration, durations, timing of event method, labour market dynamics |
| JEL: | J61 J64 C41 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5722&r=lab |
| By: | Ganguli, Ina (Harvard University); Hausmann, Ricardo (Harvard University); Viarengo, Martina (Harvard University) |
| Abstract: | In this paper we examine several dimensions of gender disparity for a sample of 40 countries using micro-level data. We start by documenting the reversal of the gender education gap and ranking countries by the year in which it reversed. Then we turn to an analysis of the state of other gaps facing women: we compare men and women's labor force participation (the labor force participation gap), married and single women's labor force participation (the marriage gap), and mothers' and non-mother's labor force participation (the motherhood gap). We show that gaps still exist in these spheres in many countries, though there is significant heterogeneity among countries in terms of the size of and the speed at which these gaps are changing. We also show the relationship between the gaps and ask how much the participation gap would be reduced if the gaps in other spheres were eliminated. In general, we show that while there seems to be a relationship between the decline of the education gap and the reduction of the other gaps, the link is rather weak and highly heterogeneous across countries. |
| JEL: | J16 O12 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-021&r=lab |
| By: | Bauer, Thomas (RWI); Flake, Regina (Ruhr Graduate School in Economics); Sinning, Mathias (Australian National University) |
| Abstract: | This paper combines individual-level data from the German Socio-Economic Panel (SOEP) with economic and demographic postcode-level data from administrative records to analyze the effects of immigration on wages and unemployment probabilities of high- and low-skilled natives. Employing an instrumental variable strategy and utilizing the variation in the population share of foreigners across regions and time, we find no support for the hypothesis of adverse labor market effects of immigration. |
| Keywords: | international migration, effects of immigration |
| JEL: | F22 J31 J64 R23 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5707&r=lab |
| By: | Basu, Arnab K. (College of William and Mary) |
| Abstract: | The recent enactment of the National Rural Employment Guarantee Act in India has been widely hailed a policy that provides a safety net for the rural poor with the potential to boost rural income, stabilize agricultural production and reduce rural-urban migration. This paper, models the impact of such employment guarantee schemes in the context of an agrarian economy characterized by lean season involuntary unemployment as a consequence of tied-labor contracts. Specifically, we examine labor and output market responses to a productive rural Employment Guarantee Scheme (EGS) and determine the optimal compensation to public work employees consistent with the objectives of (i) productive efficiency in agriculture and (ii) welfare maximization of the laborers. Our framework provides a theoretical framework for the evaluation of a number of (sometimes) conflicting observations and empirical results on the impact of an EGS on agricultural wages, employment and output, and underscores the importance of the relative productivity of workers in the EGS program vis-à-vis their counterparts engaged in agricultural production in determining the success of these programs. |
| Keywords: | labor contracts, rural unemployment, employment guarantee schemes, public input, optimal wage |
| JEL: | J3 Q38 Q12 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5701&r=lab |
| By: | Philip Du Caju (National Bank of Belgium); Gábor Kátay (Magyar Nemzeti Bank); Ana Lamo (European Central Bank); Daphne Nicolitsas (Bank of Greece); Steven Poelhekke (Bank of Greece) |
| Abstract: | This paper documents the existence and main patterns of inter-industry wage differentials across a large number of industries for 8 EU countries at two points in time and explores possible explanations for these. The analysis uses the European Structure of Earnings Survey (SES), an internationally harmonised matched employer-employee dataset, to estimate inter-industry wage differentials conditional on a set of employee, employer and job characteristics. After investigating the possibility that unobservable employee characteristics lie behind the conditional wage differentials, a hypothesis which cannot be accepted, the paper investigates the role of institutional, industry structure and performance characteristics in explaining inter-industry wage differentials. The results suggest that inter-industry wage differentials are consistent with rent sharing mechanisms and that rent sharing is more likely in industries with firm-level collective agreements and with higher collective agreement coverage. |
| Keywords: | inter-industry wage differentials;rent sharing;unobserved ability |
| JEL: | J31 J41 J51 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:121&r=lab |
| By: | Fairlie, Robert W. (University of California, Santa Cruz) |
| Abstract: | The "Great Recession" resulted in many business closings and foreclosures, but what effect did it have on business formation? On the one hand, recessions decrease potential business income and wealth, but on the other hand they restrict opportunities in the wage/salary sector leaving the net effect on entrepreneurship ambiguous. The most up-to-date microdata available – the 1996 to 2009 Current Population Survey (CPS) – are used to conduct a detailed analysis of the determinants of entrepreneurship at the individual level to shed light on this question. Regression estimates indicate that local labor market conditions are a major determinant of entrepreneurship. Higher local unemployment rates are found to increase the probability that individuals start businesses. Home ownership and local home values for home owners are also found to have positive effects on business creation, but these effects are noticeably smaller. Additional regression estimates indicate that individuals who are initially not employed respond more to high local unemployment rates by starting businesses than wage/salary workers. The results point to a consistent picture – the positive influences of slack labor markets outweigh the negative influences resulting in higher levels of business creation. Using the regression estimates for the local unemployment rate effects, I find that the predicted trend in entrepreneurship rates tracks the actual upward trend in entrepreneurship extremely well in the Great Recession. |
| Keywords: | entrepreneurship, great recession, unemployment, self-employment |
| JEL: | L26 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5725&r=lab |
| By: | Peeters, Marga |
| Abstract: | The demographic structure of Egypt has the form of a pyramid, indicating that labour supply will grow at a relatively high rate for many years to come. Unless emigration flows will rise, Egypt needs to create jobs at a much higher pace than most other countries around the globe to absorb the new entrants at the domestic labour market. Adding to this is the currently high share of 30-40% of the Egyptian employees working in the rather inefficient public sector. In order to quantify future developments at the labour market, this paper presents a labour supply model to analyze the impact of the ongoing demographic supply shocks on unemployment, public finances and welfare in Egypt. The findings indicate that the demographic labour supply will increase unemployment in the short term as the Egyptian labour market will not be able to absorb the demographic labour supply, unless the Egyptian economy grows steadily at least at 5% for many years in a row. In the long term, the employment dividend can be reaped by productivity growth increases if the labour market starts functioning. The findings also point out that, for growth to accelerate rapidly, job creation should occur in the private and not in the public sector. The large public sector has been driving up government expenditures disproportionably, not only because of the existence of the high number of people employed in the public sector but also because of excessive public wage increases. |
| Keywords: | Demographics; labour supply; employment; greening; public sector employment; public finance |
| JEL: | C32 J21 J22 J11 J23 |
| Date: | 2011–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31101&r=lab |
| By: | Alina Botezat (Department of Economics, Al. I. Cuza University of Iasi, Rumänien); Ruben R. Seiberlich (Department of Economics, University of Konstanz, Germany) |
| Abstract: | When the Soviet Union collapsed a transition process started in Eastern Europe. This included a number of reforms to adapt the educational system to the new requirements of the job market. To assess the educational systems in Eastern Europe, this paper takes a look at the gap in PISA test scores between different countries. Using PISA 2006 data we disentangle the effects that explain the gap between Finland, the best performing country, and seven Eastern European countries, as well as, between Eastern European countries. The methodology applied in this paper is a semiparametric version of the threefold Blinder-Oaxaca decomposition, an approach which is not yet used in the research regarding the differences in school outcomes. Our results show that in all cases the differences in characteristics does not explain much of the gap. The return effect is the driving force of the differences in test scores. Under our identifying assumption, our results therefore indicate that the PISA test score gap can mainly be attributed to the different efficiency of school systems and are not due to better characteristics of students in a particular country. Furthermore, we provide evidence that the gap is smaller for better students indicating that, especially for poor performing students, the efficiency of Eastern European schools is behind the efficiency of Finnish schools. |
| Keywords: | PISA, test score gap, decomposition, semiparametric, propensity score matching |
| JEL: | J24 I21 C14 |
| Date: | 2011–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1115&r=lab |
| By: | Stephen Machin; James Vernoit |
| Abstract: | In this paper, we study a high profile case - the introduction of academy schools into the English secondary school sector ‐ that has allowed schools to gain more autonomy and flexible governance by changing their school structure. We consider the impact of an academy school conversion on their pupil intake and pupil performance and possible external effects working through changes in the pupil intake and pupil performance of neighbouring schools. These lines of enquiry are considered over the school years 2001/02 to 2008/09. We bypass the selection bias inherent in previous evaluations of academy schools by comparing the outcomes of interest in academy schools to a specific group of comparison schools, namely those state‐maintained schools that go on to become academies after our sample period ends. This approach allows us to produce a well balanced treatment and control group. Our results suggest that moving to a more autonomous school structure through academy conversion generates a significant improvement in the quality of their pupil intake and a significant improvement in pupil performance. We also find significant external effects on the pupil intake and the pupil performance of neighbouring schools. All of these results are strongest for the schools that have been academies for longer and for those who experienced the largest increase in their school autonomy. In essence, the results paint a (relatively) positive picture of the academy schools that were introduced by the Labour government of 1997‐2010. The caveat is that such benefits have, at least for the schools we consider, taken a while to materialise. |
| Keywords: | Academies, pupil intake, pupil performance |
| JEL: | I20 I21 I28 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0123&r=lab |
| By: | Perraudin, Corinne; Petit, Héloïse; Rebérioux, Antoine |
| Abstract: | Information disclosure requirements significantly increased in French listed companies in the early 2000s, converging toward the U.S./U.K. stock market standards. Following the burgeoning literature on relations between corporate governance and labor, we investigate the consequences of this process regarding worker information: does more information for shareholders mean more information for workers? We take advantage of a French (representative) establishment survey that generates linked ‘employer–employee representative’ information at two points in time, 1998 and 2004. Our results strongly suggest that worker information has improved in listed companies but not in private ones, as an externality of the financialization process. |
| Keywords: | worker information; corporate governance; firm disclosure; workplace data |
| JEL: | J53 G39 C21 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1105&r=lab |
| By: | Galí, Jordi; Smets, Frank; Wouters, Rafael |
| Abstract: | We reformulate the Smets-Wouters (2007) framework by embedding the theory of unemployment proposed in Galí (2011a,b). We estimate the resulting model using postwar U.S. data, while treating the unemployment rate as an additional observable variable. Our approach overcomes the lack of identification of wage markup and labor supply shocks highlighted by Chari, Kehoe and McGrattan (2008) in their criticism of New Keynesian models, and allows us to estimate a "correct" measure of the output gap. In addition, the estimated model can be used to analyze the sources of unemployment fluctuations. |
| Keywords: | Nominal rigidities; output gap; Phillips curve; unemployment fluctuations; wage markup shocks |
| JEL: | D58 E24 E31 E32 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8401&r=lab |
| By: | Nyström, Kristina (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Entrepreneurship is often claimed to be important for generating employment. However, the empirical evidence on the relationship between entrepreneurship is not always convincing. Most of the studies that analyse the relationship between new firm formation and employment growth perform their analysis on cross-country or regional data. At the micro-level, we still know little about the labour dynamics and re-allocation effects induced by new firm formation. Which role do new firms play regarding labour reallocation? This paper intends to explore the individual and firm characteristics for employees in new Swedish firms. Do new firm start-ups absorb outsiders in the labour market or do they recruit employees from already incumbent firms? The paper use unique matched firm-employees dataset that makes it possible to link new firm formation and information about the individuals employed in these new firms. The empirical results indicate that the individual and firm characteristics associated with employees differ between new and incumbent firms. In particular, the share of immigrants, recently graduated employees and people entering the labor market is slightly higher in new firms. Hence, new firms might play a more important role for outsiders in the labor market. |
| Keywords: | Entrepreneurship; labour mobility; employment |
| JEL: | L21 L26 L62 |
| Date: | 2011–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0250&r=lab |
| By: | Yamamura, Eiji; Mano, Yukichi |
| Abstract: | We analyze the effect of a wife’s human capital on her husband’s earnings, using individual-level data for Japan in the period 2000–2003. We find a positive association between a wife’s education and her husband’s earnings, which can be attributed to the assortative mating effect as well as the positive effect of an educated wife on her husband’s productivity. We divide the sample into those couples with non-working wives and those with working wives, and also employ an estimation strategy proposed by Jepsen (2005), attempting to control for the assortative mating effect. Our regression analysis provides suggestive evidence that educated wives increase their husbands’ productivity and earnings only when they are non-workers and have sufficient time to support their husbands. |
| Keywords: | earnings; human capital; marriage; the family; assortative mating; cross-productivity effect within marriage. |
| JEL: | D13 J31 J22 J24 |
| Date: | 2011–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31097&r=lab |
| By: | Axel H. Boersch-Supan; Hendrik Juerges |
| Abstract: | The aim of this paper is to describe for (West) Germany the historical relationship between health and disability on the one hand and old-age labor force participation or early retirement on the other hand. We explore how both are linked with various pension reforms. To put the historical developments into context, the paper first describes the most salient features and reforms of the pension system since the 1960s. Then we show how mortality, health and labor force participation of the elderly have changed since the 1970. While mortality (as our main measure of health) has continuously decreased and population health improved, labor force participation has also decreased, which is counterintuitive. We then look at a number of specific pension reforms in the 1970s and 1980s and show that increasing or decreasing the generosity of the pension system has had the expected large effects on old-age labor force participation. Finally, we explore the possible link between early childhood environment and early retirement by analyzing the retirement behavior of cohorts born during World War I, a period of harsh living conditions among the civilian population in Germany. Our data show higher early retirement rates among those cohorts, presumably because those cohorts still suffer from worse health on average many decades after their birth. |
| JEL: | H55 J14 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17079&r=lab |
| By: | Drakopoulos, Stavros A.; Grimani, Aikaterini |
| Abstract: | The paper starts with a literature survey concerning absenteeism and job satisfaction. Most of the literature on absenteeism suggests that absence from work is a complex issue influenced by multiple causes, both of personal and of organizational nature. Job satisfaction has also been identified as one of the factors affecting an employee’s motivation to work attendance. There is no universal agreement concerning the relationship between absenteeism and job satisfaction. Some research has found no correlation between these two variables whereas other studies indicate a weak relationship between these two variables. It has also been suggested that absence and job satisfaction might be more strongly related under some conditions, for instance in case of blue collar workers. After a survey of the relevant literature, this study attempts to establish a causal relationship between absenteeism and job satisfaction using a new set of Greek and European data. The paper concentrates on Greek data given that absenteeism has not been the subject of systematic investigation in Greece. The empirical results suggest that there is a weak negative relationship between injury absenteeism and job satisfaction. Furthermore, comparisons are made with similar findings from UK. |
| Keywords: | Job Satisfaction; Absenteeism; Greek labour market |
| JEL: | J28 I10 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30990&r=lab |
| By: | Andrea Pescatori; Murat Tasci |
| Abstract: | This paper assesses whether labor market frictions, in the form of searching and matching, can help explain movements in the labor wedge--the gap between the marginal rate of substitution (MRS) and the marginal productivity of labor in a perfectly competitive business cycle model. Results suggest that those frictions are not able to explain fluctuations in the labor wedge, per se. However, the introduction of extensive and intensive margin shows that measuring the MRS in terms of total hours artificially introduces procyclicality in the MRS. When the MRS is correctly measured in terms of hours per worker, the labor wedge obtained is less variable than the one of the perfectly competitive model. A Frisch elasticity of 2.8, as in most macro models, implies a 20 percent decline in the variability of the labor wedge. A Frisch elasticity closer to micro estimates implies an even higher reduction. Finally, we show that it is possible to measure a strongly procyclical labor wedge as in CKM (2007) even if the actual data generating process does not have any labor wedge but has search frictions that allow for movements in both labor margins. |
| Keywords: | Labor market ; Business cycles |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1111&r=lab |
| By: | Nordin, Martin (Department of Economics, Lund University); Rooth , Dan-Olof (School of Business and Economics, Linnaeus University) |
| Abstract: | This study uses US survey data (NLSY) and Swedish register data to estimate the relationship between returns to schooling and ability for each country separately. A significant and positive relationship is found for Sweden but not for the US. The purpose is to propose an explanation for why such differences might occur. While many studies have focused on whether credit constraints result in inefficiencies in the schooling market, this study answers the opposite question: whether weak credit constraints lead to inefficiencies, in other words in an overuse of the schooling system. It is argued argue that the US schooling system more effectively sorts out education investments with a low rate of return to schooling than the Swedish schooling system. Therefore, an imperfect allocation of individuals going to higher education in Sweden makes a relationship between returns to schooling and ability observable in Sweden but not in the US. Since the relationship between returns to schooling and ability is the same when the schooling systems of the two countries is similar, that is at lower levels of education, it is indicative of the fact that this explanation may be correct. Of course, the empirical findings in this study are not convincing evidence on their own, but the findings suggest and agree with such an explanation. |
| Keywords: | Cognitive ability; return to schooling; credit constraints |
| JEL: | I21 J24 |
| Date: | 2011–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2011_017&r=lab |
| By: | Azam, Mehtabul (World Bank); Kingdon, Geeta (Institute of Education, University of London) |
| Abstract: | This paper revisits the issue of the intra-household allocation of education expenditure with the recently available India Human Development Survey which refers to 2005 and covers both urban and rural areas. In addition to the traditional Engel method, the paper utilizes a Hurdle model to disentangle the decision to enroll (incur any educational expenditure) and the decision of how much to spend on education, conditional on enrolling. Finally the paper also uses household fixed effects to examine whether any gender bias is a within-household phenomenon. The paper finds that the traditional Engel method often fails to pick up gender bias where it exists not only because of the aggregation of data at the household-level but also because of aggregation of the two decisions in which gender can have opposite signs. It is found that pro-male gender bias exists in the primary school age group for several states but that the incidence of gender bias increases with age – it is greater in the middle school age group (10-14 years) and greater still in the secondary school age group (15-19 years). However, gender discrimination in the secondary school age group 15-19 takes place mainly through the decision to enroll boys and not girls, and not through differential expenditure on girls and boys. The results also suggest that the extent of pro-male gender bias in educational expenditure is substantially greater in rural than in urban areas. Finally, our results suggest that an important mechanism through which households spend less on girls than boys is by sending sons to fee-charging private schools and daughters to the fee-free government-funded schools. |
| Keywords: | hurdle model, educational expenditure, gender bias, school choice, India |
| JEL: | I21 J16 J71 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5706&r=lab |
| By: | Donze, Jocelyn; Gunnes, Trude |
| Abstract: | This paper sheds light on the role of student motivation in the success of schooling. We develop a model in which a teacher engages in the management of student motivation through the choice of the classroom environment. We show that the teacher is able to motivate high-ability students, at least in the short run, by designing a competitive environment. For students with low ability, risk aversion, or when engaged in a long-term relationship, the teacher designs a classroom environment that is more focused on mastery and self-referenced standards. In doing so, the teacher helps to develop the intrinsic motivation of students and their capacity to overcome failures. |
| Keywords: | Education; Student Achievement; Intrinsic and Extrinsic Motivation; Effort; Goal Theory. |
| JEL: | I21 |
| Date: | 2011–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31059&r=lab |
| By: | Jorge Calero (Universitat de Barcelona & IEB); Álvaro Choi (Universitat de Barcelona & IEB); Josep-Oriol Escardíbul (Universitat de Barcelona & IEB) |
| Abstract: | Although not exclusive to the Republic of Korea’s educational system, the pervasiveness of private tutoring, and its consequences, serve to distinguish it from systems operated in other countries. However, the identification of inefficiencies linked to this phenomenon have seen the educational authorities struggling against private tutoring since the 1980s. Yet, public policies have systematically failed because of the widely held belief that private tutoring services increase students’ academic performance. This paper quantifies the impact of time spent in private tutoring on the performance of students in the three competence fields assessed in the PISA-2006 (Programme for International Student Assessment). Instrumental variables are applied in a multilevel model framework in an attempt at addressing the endogeneity of the effects of private tutoring on academic performance. Our results indicate that the impact of time dedicated to private tutoring on academic performance depends on the particular competence: positive for mathematics, positive but decreasing for reading, and non-significant for science. |
| Keywords: | private tutoring, demand for schooling, academic performance, PISA |
| JEL: | I21 I22 I28 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/5/doc2011-10&r=lab |
| By: | Hansen, Jörgen (Concordia University); Liu, Xingfei (Concordia University) |
| Abstract: | In this paper, we formulate and estimate an economic model of labor supply and welfare participation. The model is estimated on data on single men from Quebec drawn from the 1986 Canadian Census. Budget sets for each work-welfare combination – accounting for income taxes, tax credits and welfare benefit rules – are derived using a microsimulation model. We validate our model by comparing reactions to a welfare reform that implied a dramatic increase in welfare benefits predicted by our model to those obtained by using a regression discontinuity approach. The results show that our model is capable of recovering actual changes in labor supply and welfare participation. We also show the advantage of having estimated a structural model by illustrating how labor supply and welfare participation change when benefit levels change. |
| Keywords: | labor supply, welfare participation, unobserved heterogeneity, natural experiment, regression discontinuity, microsimulation |
| JEL: | J22 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5718&r=lab |
| By: | B, Karan Singh |
| Abstract: | This paper analyses the impact of adverse economic shocks on human capital formation in the case of India. It uses the extended theoretical model of Basu and Van (1998). The study has been carried out for the period between 1999 and 2002 and covers 385 districts. The results show that during a crisis, there is a fall in the school enrollment rate and a rise in the child labour participation rate. The study also argues that in the absence of a well-functioning credit market, to mitigate the adverse economic shocks on the children of poor households, the government must provide an incremental cash/in-kind conditional transfers to poor households with children. |
| Keywords: | Adverse economic shock; Child labour; Poverty; Labour market; Education; Human capital formation; Mid-day meal programme |
| JEL: | E62 D81 B21 C33 |
| Date: | 2011–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30958&r=lab |
| By: | Julius Agbor |
| Abstract: | This paper empirically tests the hypothesis that education, as measured by the average schooling years in the population aged 15 and above, reduces the likelihood of societal conflicts in Africa. It focuses on a sample of 31 African countries during 1960-2000 and uses both panel ordered probit and multinomial logistic estimation models. Using an aggregated measure of all intrastate major episodes of political violence obtained from the Political Instability Task Force (PITF) as proxy for conflict, and controlling for the extent of political participation, income inequality, labour market conditions, neighborhood e¤ects, different income levels, natural resource revenues, youth bulge, inflation, ethno-linguistic and religious fractionalisation and urbanisation; the results suggests that education e¤ectively reduces the likelihood of intra-state conflicts in Africa. This finding is robust to alternative model specifications and to alternative time frames of analysis. The evidence also suggests that, sound macroeconomic policies, by way of rapid per capita GDP growth, better export performance and lower in‡ation are means of effectively reducing the likelihood of conflicts while neighborhood effects are a significant driver of internal conflicts in African states. Therefore, in the battle to reduce the frequency of intrastate conflicts, African governments should complement investments in education with sound macroeconomic policies while seeking mutually beneficial solutions to all major internal conflicts, with a view to minimising their spill-over effects.. |
| Keywords: | School Education, Intra-state Con‡ict, Economic Development, Africa |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:218&r=lab |
| By: | Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany); Ansgar Wohlschlegel (Wirtschaftspolitische Abteilung, University of Bonn, Germany) |
| Abstract: | We analyze educational institutions’ incentives to set up demanding or lax curricula in duopolistic markets for education with endogenous enrolment of students. We assume that there is a positive externality of student achievement on the local economy. Comparing the case of regulated tuition fees with an unregulated market, we identify the following inefficiencies: Under regulated tuition fees schools will set up inefficiently lax curricula in an attempt to please low-quality students even if schools internalize some of the externality. On the other hand, unregulated schools set up excessively differentiated curricula in order to relax competition in tuition fees. Deregulation gets more attractive if a larger fraction of the externality is internalized. |
| Keywords: | Education, Local Externalities, Product Differentiation, Price Competition, Vouchers |
| JEL: | I28 L13 |
| Date: | 2011–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1116&r=lab |
| By: | Juliane Scheffel |
| Abstract: | It is recognized that employment policies must grant flexibility to theworking schedules to allow parents to reconcile family and work. By exploiting the particularity of the East German labor market, I identify the causal effect of temporal work flexibility on parental time with children. The analysis unambiguously shows that it allows parents to spend about 30 percent more time with their children. The results can be generalized to Germany as a whole. It can be concluded that temporal work flexibility can be used as a device to mitigate the adverse effect of parental employment on the child’s cognitive development. |
| Keywords: | Time Use, Childcare, FlexibleWorking Schedules, Flexitime, Endogeneity |
| JEL: | J08 J13 J21 J22 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2011-024&r=lab |
| By: | Pham, Thong Le (Cantho University); Kooreman, Peter (Tilburg University); Koning, Ruud H. (University of Groningen); Wiersma, Doede (University of Groningen) |
| Abstract: | We analyze child mortality in Vietnam focusing on gender aspects. Contrary to several other countries in the region, mortality rates for boys are substantially larger than for girls. A large rural-urban mortality difference exists, but much more so for boys than for girls. A higher education level of the mother reduces mortality risk, but the effect is stronger for girls than for boys. |
| Keywords: | child mortality, gender differences, hazard rate, frailty model |
| JEL: | C13 C31 C35 C41 I12 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5741&r=lab |
| By: | Annamaria Lusardi; Olivia S. Mitchell |
| Abstract: | Relatively little is known about why people fail to plan for retirement and whether planning and information costs might affect retirement saving patterns. This paper reports on a purpose-built survey module on planning and financial literacy for the Health and Retirement Study which measures how people make financial plans, collect the information needed to make these plans, and implement the plans. We show that financial illiteracy is widespread among older Americans, particularly women, minorities, and the least educated. We also find that the financially savvy are more likely to plan and to succeed in their planning, and they rely on formal methods such as retirement calculators, retirement seminars, and financial experts, instead of family/relatives or co-workers. These results have implications for targeted financial education efforts. |
| JEL: | D91 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17078&r=lab |
| By: | Colciago , Andrea (University of Milano-Bicocca, Department of Economics); Rossi, Lorenza (University of Pavia, Department of Economics) |
| Abstract: | We propose a flexible prices model where endogenous market structures and search and matching frictions in the labour market interact endogenously. The interplay between firms’ endogenous entry, strategic interactions among producers and labour market frictions represents a strong amplification channel for technology shocks on labour market variables and helps in addressing the unemployment- volatility puzzle. Consistently with US evidence, new firms create a large fraction of new jobs and grow faster than more mature firms, net entry of firms is procyclical and the price mark-up is countercyclical. |
| Keywords: | endogenous market structures; firms’ entry; search and matching; friction |
| JEL: | E24 E32 L11 |
| Date: | 2011–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2011_012&r=lab |
| By: | Irani Arráiz (Inter-American Development Bank); Sandra Rozo (Inter-American Development Bank) |
| Abstract: | This paper estimates the impact of the conditional cash transfer program, Red de Oportunidades, on human capital outcomes in areas with different incidences of poverty: indigenous and rural non-indigenous areas of Panama. The analysis relies on data from the Living Standards Measurement Survey of 2008. It uses a propensity score matching technique to identify the impact of the program by replicating the selection criteria followed by the government. Our results show that the program increased school enrollment and was able to reduce child labor in both areas. In rural areas, the impact of the program on education outcomes was restricted to enrollment in middle school where we estimated an increase of 10.2 percentage points (pp). The program also increased the proportion of children that completed elementary school by 13.8 pp, although it did not have an impact on enrollment in elementary or high school. In indigenous areas, the impact of the program on education outcomes was restricted to enrollment in elementary school where we estimate an increase of 7.9 pp. Additionally, the results show that the program reduced child labor in children ages 12 to 15 in both areas: by 10.1 pp in rural areas and 15.8 pp in indigenous areas. With regard to preventive health care services, we found no evidence of impact on the numbers of visits to health care providers or the number of vaccines that children received. However, we estimated that the proportion of women who had a Papanicolau test screening because of the program increased by 11.7 pp in rural areas and 14.7 pp in indigenous areas. Sadly, we found that the program might also have led to an increase in the number of pregnancies in rural areas: the proportion of pregnant women in 2008 was 3.2 pp higher in the beneficiary group than in the control group, and the number of pregnancies since the beginning of the program increased by 0.44 among beneficiaries---despite the fact that the number of children ages 3 to 6, who were born before the implementation of the program, was not statistically different between the groups. |
| Keywords: | Conditional Cash Transfer, Impact Evaluation, Panama |
| JEL: | I38 I18 I28 H43 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:ovewps:0311&r=lab |
| By: | Bhattacharyya, Ranajoy; Saha, Bibhas |
| Abstract: | In a standard model of vertical differentiation, wage is assumed to determine the quality. Wage is also subject to bargaining. Increased bargaining power of the worker in the low quality firm reduces quality differential, and increases price competitiveness. The Opposite happens from a similar change in the high quality firm. |
| Keywords: | Wage bargaining; Quality competition |
| JEL: | C7 |
| Date: | 2011–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30968&r=lab |
| By: | Suresh Naidu; Noam Yuchtman |
| Abstract: | British Master and Servant law made employee contract breach a criminal offense until 1875. We develop a contracting model generating equilibrium contract breach and prosecutions, then exploit exogenous changes in output prices to examine the effects of labor demand shocks on prosecutions. Positive shocks in the textile, iron, and coal industries increased prosecutions. Following the abolition of criminal sanctions, wages differentially rose in counties that had experienced more prosecutions, and wages responded more to labor demand shocks. Coercive contract enforcement was applied in industrial Britain; restricted mobility allowed workers to commit to risk-sharing contracts with lower, but less volatile, wages. |
| JEL: | J41 K31 N13 N43 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17051&r=lab |
| By: | Hartmut Lehmann; Jonathan Wadsworth |
| Abstract: | Using longitudinal data from Ukraine we examine the extent of any long-lasting effects of radiation exposure from the Chernobyl disaster on the health and labour market performance of the adult workforce. The variation in the local area level of radiation fallout from the Chernobyl accident is considered as a random exogenous shock with which to try to establish its causal impact on poor health, labour force participation, hours worked and wages. There appears to be a significant positive association between local area-level radiation dosage and perception of poor health, though much weaker associations between local area-level dosage and other specific self-reported health conditions. There is also some evidence to suggest that those more exposed to Chernobyl-induced radiation have significantly lower levels of labour market performance twenty years on. |
| Keywords: | Chernobyl, health, labour market performance |
| JEL: | H00 J00 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1052&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, the authors find that the use of a "break-even analysis" has the very strong effect of encouraging individuals to claim early. They 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. They conclude that some individuals may not make fully rational optimizing choices when it comes to choosing a claiming date. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:854&r=lab |
| By: | Enzo Valentini (University of Macerata) |
| Abstract: | <div style="text-align: justify;">Economists are paying increasing attention to “factors” in job satisfaction. Job satisfaction can affect productivity, effort, absenteeism, and quits. This paper analyzes data from the “Working in Britain, 2000” questionnaire; the results confirm the effects of individual features on job satisfaction, as highlighted in previous studies. The analysis shows that job satisfaction can be enhanced by spreading information within the organization and by giving voice to employees, but the management must choose communication strategies perceived as reliable by the employees.</div> |
| Keywords: | Human Resource Management,Job satisfaction,gift exchange,employees’ voice,procedural utility |
| JEL: | J28 J53 D23 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpaper:wpaper00036&r=lab |
| By: | Juliane Scheffel |
| Abstract: | The widening of the working hour distribution complicates the coordination of social leisure. This paper examines the short- and long-run impact of unusual working schedules on social life using German Time Use Data for 2001/02. I find evidence that younger workers with higher than median earnings seem to accept higher levels of solitary leisure as investment and because of the substantial wage premia. Younger workers tend to substitute sleep with free time. Older workers, in contrast, tend to sleep less which can be interpreted as elevated risk of mental and physical health. |
| Keywords: | ShiftWork, Non-StandardWorking Hours, Time Allocation, Social Capital, Social Life, Solitary Leisure, Adverse Consequences |
| JEL: | J22 J28 J81 D62 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2011-025&r=lab |
| By: | Robert Baumann (Department of Economics, College of the Holy Cross); Bryan Engelhardt (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross) |
| Abstract: | This paper provides an empirical examination of impact the 1994 FIFA World Cup in the United States on local employment. In contrast to ex ante economic impact reports that suggest large increases in employment due to the tournament, an ex post examination of employment in 9 host metropolitan areas finds no significant impact on employment from hosting World Cup games. Furthermore, an analysis of employment in specific sectors of the economy finds no impact from hosting games on employment in the leisure and hospitality and professional and business services sectors but a statistically significant negative impact on employment in the retail trade sector. |
| Keywords: | World Cup, soccer, impact analysis, mega-event, tourism |
| JEL: | L83 O18 R53 J21 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1104&r=lab |
| By: | Mueller, Steffen |
| Abstract: | We analyze teacher experience as a moderating factor for the effect of class size reduction on student achievement in the early grades using data from the Tennessee STAR experiment with random assignment of teachers and students to classes of different size. The analysis is motivated by the high costs of class size reductions and the need to identify the circumstances under which this investment is most rewarding. We find a class size effect only for senior teachers. The effect is most pronounced for higher and average-performing students. We further show that senior teachers outperform rookies only in small classes. The results have straightforward policy implications. Interestingly, the class size effect is most likely due to a higher quality of instruction in small classes and not due to less disruptions. -- |
| Keywords: | class size reduction,teacher experience,student achievement |
| JEL: | I2 H4 J4 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:072011&r=lab |
| By: | Damiaan Persyn; Wouter Torfs |
| Abstract: | This paper applies the Bond and Coombes (2007) algorithm to construct Travel-to-Work Areas for Belgium. We study how these functional labor markets evolved between 1981 and 2001 and find that the number of distinct regional labor markets decreased over time. For 2007, sector-specic Travel-to-Work Areas are constructed. The results reveal that the size of a sectors labor market increases with its degree of technological intensity. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ete:vivwps:17&r=lab |
| By: | Alesina, Alberto (Harvard University); Giuliano, Paola (University of California, Los Angeles); Nunn, Nathan (Harvard University) |
| Abstract: | This paper seeks to better understand the historical origins of current differences in norms and beliefs about the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution and persistence of gender norms. We find that, consistent with existing hypotheses, the descendants of societies that traditionally practiced plough agriculture, today have lower rates of female participation in the workplace, in politics, and in entrepreneurial activities, as well as a greater prevalence of attitudes favoring gender inequality. We identify the causal impact of traditional plough use by exploiting variation in the historical geo-climatic suitability of the environment for growing crops that differentially benefited from the adoption of the plough. Our IV estimates, based on this variation, support the findings from OLS. To isolate the importance of cultural transmission as a mechanism, we examine female labor force participation of second-generation immigrants living within the US. |
| Keywords: | culture, beliefs, values, gender roles |
| JEL: | J16 N30 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5735&r=lab |
| By: | Kube, Sebastian; Maréchal, Michel André; Puppe, Clemens |
| Abstract: | What determines reciprocity in employment relations? We conducted a controlled field experiment to measure the extent to which monetary and non-monetary gifts affect workers' performance. We find that nonmonetary gifts have a much stronger impact than monetary gifts of equivalent value. We also observe that when workers are offered the choice, they prefer receiving the money but reciprocate as if they received a nonmonetary gift. This result is consistent with the common saying, 'it's the thought that counts.' We underline this point by showing that also monetary gifts can effectively trigger reciprocity if the employer invests more time and effort into the gift's presentation. -- |
| Keywords: | field experiment,reciprocity,gift exchange,non-monetary gifts,in-kind gifts |
| JEL: | C93 J30 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:25&r=lab |
| By: | Inwood, Kris; MacKinnon, Mary; Minns, Chris |
| Abstract: | This paper uses newly available census evidence to portray changes in labour market outcomes in Canada between 1891 and 1911. Multiple census cross-sections allow for the documentation of how the location, occupation, and earnings of Canadian and foreign-born cohorts changed over time. The westward movement of young anglophones after 1901 contributed to the formation of a national labour market. Anglophone, francophone, and foreign-born cohorts all experienced significant occupational mobility between 1891 and 1911, but francophones and immigrants remained over-represented at the bottom of the occupational ladder. Greater occupational and geographical mobility supported higher rates of earnings growth among Anglophones. |
| JEL: | O51 N0 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:30016&r=lab |
| By: | Pfeiffer, Friedhelm; Reuß, Karsten |
| Abstract: | The paper analyses alternative investment policies and their consequences for the evolution of human capital in Europe based on a model of age dependent skill formation where the life span depends on investments during childhood. What makes the approach special is the analysis of the returns to education of alternative educational policies targeted at certain ages, countries, or productivity levels for two counterfactual policy regimes, one regime assuming the actual state of diversity and the other a unified Europe. Our results indicate that investments need to be directed more generally to people of younger ages in Europe. If equality is important enough additional investment should specifically be directed to disadvantaged individuals during childhood. Furthermore, high levels of life cycle income inequality and a high skill level increase the optimal amount of investments during younger adulthood. In a unified Europe, the effectiveness of policies to reduce inequality would be higher. -- |
| Keywords: | human capital investment,life cycle skill formation,welfare function,Europe |
| JEL: | D87 I12 I21 J13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11033&r=lab |
| By: | Asadullah, Niaz (University of Reading); Chaudhury, Nazmul (World Bank) |
| Abstract: | Bangladesh has experienced the largest mass poisoning of a population in history owing to contamination of groundwater with naturally occurring inorganic arsenic. Prolonged drinking of such water risks development of diseases and therefore has implications for children's cognitive and psychological development. This study examines the effect of arsenic contamination of tubewells, the primary source of drinking water at home, on the learning outcome of school-going children in rural Bangladesh using recent nationally representative data on secondary school children. We unambiguously find a negative and statistically significant correlation between mathematics scores and arsenic-contaminated drinking tubewells at home, net of the child's socio-economic status, parental background and school specific unobserved correlates of learning. Similar correlations are found for an alternative measure of student achievement and subjective well-being (i.e. self-reported measure of life satisfaction), of the student. We conclude by discussing the policy implication of our findings in the context of the current debate over the adverse effect of arsenic poisoning on children. |
| Keywords: | drinking water pollution, Madrasa, subjective well-being, Bangladesh |
| JEL: | I21 Z12 O12 O15 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5716&r=lab |
| By: | Pischke, Jörn-Steffen (London School of Economics) |
| Abstract: | There is a well-established positive correlation between life-satisfaction measures and income in individual level cross-sectional data. This paper attempts to provide some evidence on whether this correlation reflects causality running from money to happiness. I use industry wage differentials as instruments for income. This is based on the idea that at least part of these differentials are due to rents, and part of the pattern of industry affiliations of individuals is random. To probe the validity of these assumptions, I compare estimates for life satisfaction with those for job satisfaction, present fixed effects estimates, and present estimates for married women using their husbands' industry as the instrument. All these specifications paint a fairly uniform picture across three different data sets. IV estimates are similar to the OLS estimates suggesting that most of the association of income and well-being is causal. |
| Keywords: | life satisfaction, well-being |
| JEL: | D1 J31 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5705&r=lab |