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on Labour Economics |
| By: | YIP, Chi Man |
| Abstract: | Based on the effect of skill-biased technology change (SBTC), this paper builds a search model with heterogeneous firms and workers to explain the dynamics of the wage inequality in the U.S. from 1963-2005. Firms differ in capital intensity (technology content) of the job created and workers differ in their education level. As the match-specific productivity is stochastic, the productivity threshold of employment of each education-job pair matched is endogenously determined. The advance in skill-biased technology increases the productivity of the highly educated workers as well as the capital intensity facing firms when creating high-tech jobs. We argue that in response to the rise in the capital intensity, high-tech firms increase the productivity thresholds of hiring, which leads to wage increment in the high-tech sector, and thus widening the residual wage inequality. Meanwhile, the increase in the productivity of the highly educated worker in the high-tech sector results in higher education premium in both the high-tech and low-tech sectors. Using the historical U.S. data, calibration shows that SBTC can explain the general trends in the education premium and the residual wage inequality from 1963-2005. In particular, it solves the puzzle why the education premium fell but the residual wage inequality grew in the early 1970s. |
| Keywords: | SBTC; Education Premium; Residual Wage Inequality; Capital Intensity |
| JEL: | J31 J41 J24 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31198&r=lab |
| By: | Fisher, Walter H. (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria); Keuschnigg, Christian (University of St. Gallen (FGN-HSG), CEPR, CESifo and Netspar, Switzerland) |
| Abstract: | This paper investigates the consequences of pension reform for life-cycle unemployment and retirement. We find that (i) improving actuarial fairness in pension assessment not only boosts old age participation but also reduces unemployment among prime age workers and raises welfare; (ii) strengthening the tax benefit link boosts life-cycle labor supply on all margins and welfare; (iii) excluding unemployment benefits from the pension assessment base reduces unemployment, encourages later retirement and boosts efficiency; and (iv) extending the calculation period favors employment of young workers, might possibly lead to more unemployment among older ones, encourages postponed retirement and most likely yields positive welfare gains. |
| Keywords: | Pensions, Tax benefit link, Retirement, Unemployment |
| JEL: | H55 J26 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:267&r=lab |
| By: | Elizabeth Oltmans Ananat; Anna Gassman-Pines; Dania V. Francis; Christina M. Gibson-Davis |
| Abstract: | Given the magnitude of the recent recession, and the high-stakes testing the U.S. has implemented under the No Child Left Behind Act (NCLB), it is important to understand the effects of large-scale job losses on student achievement. We examine the effects of state-level job losses on fourth- and eighth-grade test scores, using federal Mass Layoff Statistics and 1996-2009 National Assessment of Educational Progress data. Results indicate that job losses decrease scores. Effects are larger for eighth than fourth graders and for math than reading assessments, and are robust to specification checks. Job losses to 1% of a state’s working-age population lead to a .076 standard deviation decrease in the state’s eighth-grade math scores. This result is an order of magnitude larger than those found in previous studies that have compared students whose parents lose employment to otherwise similar students, suggesting that downturns affect all students, not just students who experience parental job loss. Our findings have important implications for accountability schemes: we calculate that a state experiencing one-year job losses to 2% of its workers (a magnitude observed in seven states) likely sees a 16% increase in the share of its schools failing to make Adequate Yearly Progress under NCLB. |
| JEL: | I2 J6 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17104&r=lab |
| By: | Andrabi, Tahir; Das, Jishnu; Khwaja, Asim Ijaz |
| Abstract: | With an estimated 115 million children not attending primary school in the developing world, increasing access to education is critical. Resource constraints limit the effectiveness of demand-based subsidies. This paper focuses on the importance of a supply-side factor -- the availability of low-cost teachers -- and the resulting ability of the market to offer affordable education. The authors first show that private schools are three times more likely to emerge in villages with government girls'secondary schools (GSS). Identification is obtained by using official school construction guidelines as an instrument for the presence of GSS. In contrast, there is little or no relationship between the presence of a private school and girls'primary or boys'primary and secondary government schools. In support of a supply-channel, the authors then show that, for villages that received a GSS, there are over twice as many educated women and that private school teachers'wages are 27 percent lower in these villages. In an environment with poor female education and low mobility, GSS substantially increase the local supply of skilled women lowering wages locally and allowing the market to offer affordable education. These findings highlight the prominent role of women as teachers in facilitating educational access and resonate with similar historical evidence from developed economies. The students of today are the teachers of tomorrow. |
| Keywords: | Education For All,Primary Education,Tertiary Education,Secondary Education,Teaching and Learning |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5674&r=lab |
| By: | Michael C. Burda; Jennifer Hunt |
| Abstract: | Germany experienced an even deeper fall in GDP in the Great Recession than the United States with little employment loss. Employers’ reticence to hire in the preceding expansion - associated in part with a lack of confidence it would last - contributed to an employment shortfall equivalent to 40 percent of the missing employment decline in the recession. Another 20 percent may be explained by wage moderation. A third important element was the widespread adoption of working time accounts, which permit employers to avoid overtime pay if hours per worker average to standard hours over a window. We find that this provided disincentives for employers to lay off workers in the downturn. While the overall cuts in hours per worker were consistent with the severity of the Great Recession, reduction of working time account balances substituted for traditional government-sponsored short time work. |
| Keywords: | unemployment, Germany, Great Recession, short time work, working time accounts, Hartz reforms, extensive vs. intensive employment margin |
| JEL: | E24 E65 J23 J33 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2011-031&r=lab |
| By: | Pascal Michaillat |
| Abstract: | This paper models unemployment as the result of matching frictions and job rationing. Job rationing is a shortage of jobs arising naturally in an economic equilibrium from the combination of some wage rigidity and diminishing marginal returns to labor. During recessions, job rationing is acute, driving the rise in unemployment, whereas matching frictions contribute little to unemployment. Intuitively, in recessions jobs are lacking, the labor market is slack, recruiting is easy and inexpensive, so matching frictions do not matter much. In a calibrated model, cyclical fluctuations in the composition of unemployment are quantitatively large. |
| Keywords: | Unemployment, matching frictions, job rationing |
| JEL: | E24 E32 J64 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1024&r=lab |
| By: | Björn Eriksson; Tobias Karlsson; Tim Leunig; Maria Stanfors |
| Abstract: | Women have, on average, been less well-paid than men throughout history. Prior to 1900, most economic historians see the gender wage gap as a reflection of men's greater strength and correspondingly higher productivity. This paper investigates the gender wage gap in cigar making around 1900. Strength was rarely an issue, but the gender wage gap was large. Two findings suggest that employers were not sexist. First, differences in earnings by gender for workers paid piece rates can be fully explained by differences in experience and other productivity-related characteristics. Second, conditioning on those characteristics, women were just as likely to be promoted to the better paying piece rate section. Neither finding is compatible with a simple model of sex-based discrimination. Instead, the gender wage gap can be decomposed into two components. First, women were typically less experienced, in an industry in which experience mattered. Second there were some jobs that required strength, for which men were better suited. Because strength was so valuable in the other jobs at this time, men commanded a wage premium in the general labour market, raising their reservation wage. Hiring a man required the firm to pay a 'man's wage'. This implies that firms that were slow to feminise their time rate workforce ended up with a higher cost structure than those that made the transition more quickly. We show that firms with a higher proportion of women in their workforce in 1863 were indeed more likely to survive 35 years later. |
| Keywords: | gender, productivity, discrimination, piece-rates, time-rates, labour markets, firm survival |
| JEL: | J16 J24 J71 J33 J40 L25 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1053&r=lab |
| By: | Stephen Taylor (Department of Economics, University of Stellenbosch); Servaas van der Berg (Department of Economics, University of Stellenbosch); Vijay Reddy (Human Sciences Research Council); Dean Janse van Rensburg (Human Sciences Research Council) |
| Abstract: | School retention in South Africa and performance in the major school-leaving matric examination are characterised by significant inequalities on the basis of race and socio-economic status. In order to know at what point in the educational trajectory policy interventions and school improvement programmes will be most effective, it is necessary to trace the development of these educational inequalities to earlier phases of schooling and before. This paper reports on findings from a unique dataset that tracks individuals who participated in TIMSS in 2002 as grade 8 students to matric in 2006 and 2007. This permits an investigation into the extent to which educational inequalities are already evident by the eighth grade, and what if anything is achieved by secondary schools to reduce them. Several noteworthy findings emerge. The overall level of achievement, at both grade 8 and matric, differs widely across the historically different parts of the school system. There are also intriguing differences in the abilities of different parts of the system to convert grade 8 achievement into matric outcomes. What is clear is that inequalities in the cognitive ability of students at the outset of secondary school persist and that there is no observable evidence of a closing of these gaps by matric. This points to the importance of interventions prior to secondary school – at the primary school level and even at the level of early childhood development. Finally, it is also demonstrated that the decision to take mathematics in matric is characterised by a high degree of randomness within the historically black part of the school system. This points to the value of meaningful assessment practices and feedback to students, which serve as an important signal as to whether or not to choose mathematics as a matric subject. |
| Keywords: | South Africa, Socio-economic Status, Education, Educational Achievement, Educational Inequality |
| JEL: | I20 I21 I30 O15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers141&r=lab |
| By: | Brunello, Giorgio (University of Padova); Schlotter, Martin (Ifo Institute for Economic Research) |
| Abstract: | This paper reviews the empirical economic literature on the relative importance of non cognitive skills for school and labour market outcomes, with a focus on Europe. There is evidence that high cognitive test scores are likely to result not only from high cognitive skills but also from high motivation and adequate personality traits. This suggests that part of the contribution of cognitive skills to economic growth could be due to personality traits. Across large parts of the literature, there is consensus that non cognitive skills have important effects both on school attainment and on labour market outcomes. These effects might be as important as the effects of cognitive skills. Less consensus exists on the malleability of non cognitive skills, with some arguing that these skills can be altered until the end of teenage years and others claiming that emotional intelligence can be changed at any age. Most of what economists know about the technology of non cognitive skill formation concerns early educational levels, such as preschools and schools. While it is difficult to argue that all relevant skill formation ends before labour market entry, there is scant evidence on the role of the workplace in the maintenance and development of existing skills. Clearly, more research in this area is needed. |
| Keywords: | non cognitive skills, Europe |
| JEL: | J24 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5743&r=lab |
| By: | Alex Bryson; John Forth |
| Abstract: | This paper examines how employees' experiences of, and attitudes towards, work have changed over the last quarter of a century. It assesses the extent to which any developments relate to the economic cycle and to trends in the composition of the British workforce. Many of the findings are broadly positive, particularly when compared with a picture of deterioration in the late 1980s and 1990s. The onset of a major recession in the late 2000s might have been expected to herald a fundamental shift in employees' attitudes to paid work and their working environment. The impression at the time of writing is, instead, of a more muted reaction than was seen in the early 1990s - in keeping with the more muted impact of the current recession on the labour market as a whole. |
| Keywords: | wages, job security, employee engagement, employment relations, recession |
| JEL: | J28 J31 J53 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1030&r=lab |
| By: | Joshua D. Angrist; Stacey H. Chen; Brigham R. Frandsen |
| Abstract: | The veterans disability compensation (VDC) program, which provides a monthly stipend to disabled veterans, is the third largest American disability insurance program. Since the late 1990s, VDC growth has been driven primarily by an increase in claims from Vietnam veterans, raising concerns about costs as well as health. We use the draft lottery to study the long-term effects of Vietnam-era military service on health and work in the 2000 Census. These estimates show no significant overall effects on employment or work-related disability status, with a small effect on non-work-related disability for whites. On the other hand, estimates for white men with low earnings potential show a large negative impact on employment and a marked increase in non-work-related disability rates. The differential impact of Vietnam-era service on low-skill men cannot be explained by more combat or wartheatre exposure for the least educated, leaving the relative attractiveness of VDC for less skilled men and the work disincentives embedded in the VDC system as a likely explanation. |
| Keywords: | Public economics, social security and public pensions, health, education, welfare,labour, demographic economics |
| JEL: | H55 H59 I12 I38 J22 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1041&r=lab |
| By: | Elhanan Helpman; Oleg Itskhoki; Stephen Redding |
| Abstract: | This paper reviews a new framework for analyzing the interrelationship between inequality, unemployment, labor market frictions, and foreign trade. This framework emphasizes firm heterogeneity and search and matching frictions in labor markets. It implies that the opening of trade may raise inequality and unemployment, but always raises welfare. Unilateral reductions in labor market frictions increase a country's welfare, can raise or reduce its unemployment rate, yet always hurt the country's trade partner. Unemployment benefits can alleviate the distortions in a country's labor market in some cases but not in others, but they can never implement the constrained Pareto optimal allocation. We characterize the set of optimal policies, which require interventions in product and labor markets. |
| Keywords: | Inequality, unemployment, trade, labour market policy |
| JEL: | F12 F16 J64 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1028&r=lab |
| By: | Greg Kaplan (Department of Economics, University of Pennsylvania) |
| Abstract: | I structurally estimate an incomplete markets lifecycle model with endogenous labor supply, using data on the joint distribution of wages, hours and consumption. The model is successful at matching the evolution of both the first and second moments of the data over the lifecycle. The key challenge for the model is to generate declining inequality in annual hours worked over the first half of the working life, while respecting the constraints imposed by the data on consumption and wages. I argue that this is a robust feature of the data on lifecycle labor supply that is strongly at odds with the intra-temporal first order condition for labor supply. Allowing for a realistic degree of involuntary unemployment, coupled with preferences that feature nonseparability in the disutility of the extensive and intensive margins of hours worked, allows the model to overcome this challenge. The results imply that labor market frictions are important in jointly accounting for observed cross-sectional inequality in labor supply and consumption and may have quantitative relevance for analyses that exploit the intra-temporal first-order condition for labor. |
| Keywords: | Structural Estimation, Inequality, Lifecycle, Labor Supply, Incomplete Markets, Consumption, Unemployment |
| JEL: | D10 D31 E21 J22 |
| Date: | 2011–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:11-014&r=lab |
| By: | Pierre-Andre Chiappori (Columbia University - Department of Economics); Sonia Oreffice (Universitat d.Alacant - Department of Economics); Climent Quintana-Domeque (Universitat d.Alacant - Department of Economics) |
| Abstract: | We develop a matching model on the marriage market, where individuals have preferences over the smoking status of potential mates, and over their socioeconomic quality. Spousal smoking is bad for non-smokers, but it is neutral for smokers, while individuals always prefer high socioeconomic quality. Furthermore, there is a gender difference in smoking prevalence, there being more smoking men than smoking women for all education levels, so that smoking women and non-smoking men are in short supply. The model generates clear cut conditions regarding matching patterns. Using CPS data and its Tobacco Use Supplements for the years 1996 to 2007, and proxing socioeconomic status by educational attainment, we .nd that these conditions are satis.ed. There are fewer "mixed" couples where the wife smokes than vice-versa, and matching is assortative on education within smoking types of couples. Among non-smoking wives those with smoking husbands have on average 0.14 fewer years of completed education than those with non-smoking husbands. Finally, and somewhat counterintuitively, we find that, as theory predicts, among smoking husbands those who marry smoking wives have on average 0.16 more years of completed education than those with non-smoking wives. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:1011-07&r=lab |
| By: | David H. Autor; Alan Manning; Christopher L. Smith |
| Abstract: | We reassess the effect of state and federal minimum wages on U.S. earnings inequality, attending to two issues that appear to bias earlier work: violation of the assumed independence of state wage levels and state wage dispersion, and errors-in-variables that inflate impact estimates via an analogue of the well known division bias problem. We find that the minimum wage reduces inequality in the lower tail of the wage distribution (the 50/10 wage ratio), but the impacts are typically less than half as large as those reported in the literature and are almost negligible for males. Nevertheless, the estimated effects extend to wage percentiles where the minimum is nominally non-binding, implying spillovers. We structurally estimate these spillovers and show that their relative importance grows as the nominal minimum wage becomes less binding. Subsequent analysis underscores, however, that spillovers and measurement error (absent spillovers) have similar implications for the effect of the minimum on the shape of the lower tail of the measured wage distribution. With available precision, we cannot reject the hypothesis that estimated spillovers to non-binding percentiles are due to reporting artifacts. Accepting this null, the implied effect of the minimum wage on the actual wage distribution is smaller than the effect of the minimum wage on the measured wage distribution. |
| Keywords: | Wage structure, inequality, minimum wage |
| JEL: | E24 J3 J31 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1025&r=lab |
| By: | Maarten Goos; Alan Manning; Anna Salomons |
| Abstract: | This paper shows the employment structure of 16 European countries has been polarizing in recent years with the employment shares of managers, professionals and low-paid personal services workers increasing at the expense of the employment shares of middling manufacturing and routine office workers. To explain this job polarization, the paper develops and estimates a simple model to capture the effects of technology, globalization, institutions and product demand effects on the demand for different occupations. The results suggest that the routinization hypothesis of Autor, Levy and Murnane (2003) is the single most important factor behind the observed shifts in employment structure. We find some evidence for offshoring to explain job polarization although its impact is much smaller. We also find that shifts in product demand are acting to attenuate the polarizing impact of routinization and that differences or changes in wage-setting institutions play little role in explaining job polarization in Europe. |
| Keywords: | Labor Demand, Technology, Globalization, Institutions |
| JEL: | J21 J23 J24 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1026&r=lab |
| By: | Andrea Pescatori (International Monetary Fund); Murat Tasci (Federal Reserve Bank of Cleveland) |
| 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 Search; Business Cycle Accounting; Labor Wedge |
| JEL: | E24 E32 J64 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1113&r=lab |
| By: | Joanna N. Lahey (Texas A & M University) |
| Abstract: | This paper examines the labor market effects of state health insurance mandates that increase the cost of employing a demographically identifiable group. State mandates requiring that health insurance plans cover infertility treatment raise the relative cost of insuring older women of child-bearing age. Empirically, wages in this group are unaffected, but their total labor input decreases. Workers do not value infertility mandates at cost, and so will not take wage cuts in exchange, leading employers to decrease their demand for this affected and identifiable group. Differences in the empirical effects of mandates found in the literature are explained by a model including variations in the elasticity of demand, moral hazard, ability to identify a group, and adverse selection. |
| Keywords: | labor supply, infertility, health insurance, health insurance mandates |
| JEL: | I18 J23 J13 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:11-175&r=lab |
| By: | Florence Kondylis; Marco Manacorda |
| Abstract: | Is improved school accessibility an effective policy tool for reducing child labor in developing countries? We address this question using micro data from rural Tanzania and a regression strategy that attempts to control for non-random location of households around schools as well as classical and non-classical measurement error in self-reported distance to school. Consistent with a simple model of child labor supply, but contrary to what appears to be a widespread perception, our analysis shows that school proximity leads to a rise in school attendance but no fall in child labor. |
| Keywords: | Distance to school, child labor, school enrolment |
| JEL: | J22 J82 O12 O55 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1035&r=lab |
| By: | Bai, Chong-en; Chi, Wei |
| Abstract: | Each year, millions of Chinese high school students sit the National College Entrance Examination (CEE). For the majority of students, the CEE score is the single determinant in whether they gain admission into a college and to what college they enter. Despite the significance of the exam, there is very little empirical evidence on the predictive power of the CEE with respect to students’ later academic performance in college. The purpose of this paper is to determine whether and how well the CEE score predicts college academic success. We also consider high school achievement and admission route in predicting college grades. We find that the CEE total and subject test scores predict undergraduate GPAs for all four years in college. High school achievement is also a significant predictor of college grades. Moreover, students’ academic performance in college varies significantly with regard to their admission route. |
| Keywords: | Undergraduate GPA; Student Attributes; Admission Route |
| JEL: | I2 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31240&r=lab |
| By: | Leslie A. Muller (Hope College); John A. Turner (Pension Polciy Center) |
| Abstract: | Many middle-income workers save for retirement through 401(k) plans. This study addresses the concern that low account balances of older workers may indicate that these vehicles are not sufficient to insure adequate retirement savings. In particular, the study shows that workers are not persistent (continuing once a worker has started) in contributing, and a weak stock market exacerbates the problem. The study suggests that the concept of inertia, which is in vogue in behavioral economics, does not seem to hold for 401(k) saving behavior. Furthermore, the investment strategy of dollar cost averaging does not seem to hold, either. Using panel data (Panel Study of Income Dynamics) covering a six-year time span from 1999 to 2005, the study presents descriptive and econometric evidence about the persistence behavior of individuals with 401(k) accounts. In particular, the PSID data that were analyzed come from four biannual waves in 1999, 2001, 2003, and 2005. Descriptive data show that of the sample of household heads aged 21-65 in 2005 who were employed in every time period, only about one-third (35 percent) contributed to their plan in all four waves. Job changing had an impact. However, even for individuals in the sample who did not change jobs, less than half (46 percent) contributed in all four years of the survey. An equation modeling 401(k) contribution behavior was estimated using logit regression analysis. When this model was estimated with the sample of individuals who were employed in each panel and with the sample of individuals who were employed in each panel and never changed jobs, the coefficient on the Dow Jones Industrial Average was positive and significant. Workers contributed to their plans when the market was up. This investment error is called herd investing, where individuals get into the market when it is high and not when it is low. The study concludes that the findings have important implications for the pension system and adequacy of retirement income. Projects of future retirement income readiness that assume that workers persistently contribute over their working lives greatly exaggerate the future levels of pension assets workers will have accumulated. |
| Keywords: | private pensions, non-wage compensation, financial literacy, investment behavior, 401(k) plans, retirement savings, stock market cycle |
| JEL: | D14 J26 J32 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:11-174&r=lab |
| By: | John Jerrim (Department of Quantitative Social Science, Institute of Education, University of London, 20 Bedford Way London, WC1H 0AL.) |
| Abstract: | In most countries, children from disadvantaged backgrounds are under-represented amongst the undergraduate population. One explanation is that they do not see higher education as a realistic goal; that it is ‘not for the likes of them’. In this paper, I use the Programme for International Assessment data to investigate whether 15 year olds from disadvantaged backgrounds are less likely to expect to complete university than their advantaged peers. I explore this issue across the OECD nations, though paying particular attention to the US and UK. My results suggest that children from less fortunate families are not as likely to make early plans for university as their affluent peers. Yet the extent to which these findings differ across countries is rather modest, with little evidence to suggest that the UK stands out from other members of the OECD. The US, on the other hand, appears to be a nation where the relationship between socio-economic background and the expectation of completing higher education is comparatively weak. |
| Keywords: | Higher Education, University Access, Educational Expectations, PISA |
| JEL: | I21 I28 J62 |
| Date: | 2011–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1104&r=lab |
| By: | Vikström, Johan (IFAU - Institute for Labour Market Policy Evaluation); Rosholm, Michael (Department of Economics and Business, Aarhus University); Svarer, Michael (Department of Economics and Business, Aarhus University) |
| Abstract: | We reanalyze the effects of a Danish active labour market program social experiment, that included a range of sub-treatments, including monitoring, job search assistance and training. Previous studies have shown that the overall effect of the experiment is positive. We apply newly developed non-parametric methods to determine which of the individual policies that explains the positive effect. The use of non-parametric methods to separate sub-treatment effects is important from a methodological point of view, since the alternative, namely parametric/distributional assumptions, is in conflict with the concept of experimental evidence. Our results are highly relevant in a policy perspective, as optimal labour market policy design requires knowledge on the effectiveness of specific policy measures. |
| Keywords: | Active labour market policy; treatment effect; non-parametric bounds |
| JEL: | C14 C41 C93 |
| Date: | 2011–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2011_007&r=lab |
| By: | Mehtabul Azam (The World Bank and IZA.); Geeta Kingdon (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: | Gender bias, educational expenditure, Engel curve, Hurdle model, India |
| JEL: | I21 J16 J71 |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1103&r=lab |
| By: | Rafael Lalive; Michael Morlok; Josef Zweimüller |
| Abstract: | This paper calculates the impact of Active Labour Market Programmes through the use of three new indicators measuring the application performance of the unemployed. These indicators can be measured repeatedly and therefore allow the usage of Panel Regression methods, cancelling out any unobserved individual heterogeneity. To implement the new approach, data on 30,000 applications has been collected. Using this data, a large positive effect for unemployed with a long term unemployment forecast was estimated. For unemployed without such a forecast, the effect is much smaller. The paper also shows that the new evaluation approach fulfils the requirements of a good controlling instrument: It is accurate, detailed, non-intrusive, inexpensive and therefore easy to keep up to date, easy to understand and communicate. |
| Keywords: | Evaluation, treatment effect, active labour market program, job search |
| JEL: | I38 J64 J68 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:019&r=lab |
| By: | Jesús Otero; Luis Fernando Gamboa; Andrés García-Suaza |
| Abstract: | This document examines the time-series properties of the wage differentials that arise between the public and private sector in Colombia during the sample period 1984 to 2005. We find conflicting results in unit-root and stationarity tests when looking at wage differentials at an aggregate level (such as for men, women or both). However, when we analyse wage differentials at higher levels of disaggregation, treat them jointly as a panel of data, and allow for the presence of potential cross section dependence, there is more supportive evidence for the view that wage differentials are stationary. This implies that although wage differentials do exist, they have not been consistently increasing (or decreasing) over time. |
| Date: | 2011–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:008738&r=lab |
| By: | Moritz Heimes (Department of Economics, University of Konstanz, Germany); Steffen Seemann (Department of Economics, University of Konstanz, Germany) |
| Abstract: | In this paper we analyze executive compensation in Germany for the period 2005-2009. We use a self-collected dataset on compensation arrangements in German corporations to estimate the impact of firm performance and firm risk on executive pay. To be in line with earlier studies in this literature, we first measure firm performance and firm risk based on stock market returns. Our findings support the prediction from agency theory that incentive pay decreases with firm risk. We find, however, that stock market returns have no explanatory power in the presence of accounting based performance measures. Based on accounting data we also find a positive impact of firm performance on executive pay and a negative relationship between firm risk and incentive pay for our sample period. We conclude that shareholders use accounting measures rather than stock market data to evaluate and pay for manager performance. We also find that with accounting data we can explain short-term bonus payments but not long-term oriented compensation in German corporations. |
| Keywords: | Pay for Performance, Executive Compensation, Incentives |
| JEL: | G30 J33 M12 |
| Date: | 2010–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1120&r=lab |
| By: | Pierre-Andre Chiappori (Columbia University - Department of Economics); Sonia Oreffice (Universitat d.Alacant and IZA - Department of Economics); Climent Quintana-Domeque (Universitat d.Alacant - Department of Economics) |
| Abstract: | We construct a matching model on the marriage market along more than one characteristic, where individuals have preferences over physical attractiveness and socioeconomic characteristics that can be summarized by a one-dimensional index combining these various attributes. We show that under a (testable) separability assumption, the indices are ordinally identified. We estimate the model using data from the PSID. Our separability tests do not reject. We find that among men, a 10% increase in BMI can be compensated by a higher wage of around 3%. Similarly, for women, an additional year of education may compensate up to three BMI units. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:clu:wpaper:1011-06&r=lab |
| By: | Firpo, Sergio Pinheiro; Fortin, Nicole M; Lemieux, Thomas |
| Abstract: | This paper argues that changes in the returns to occupational tasks have contributed to changes in the wage distribution over the last three decades. Using Current Population Survey (CPS) data, we first show that the 1990s polarization of wages is explained by changes in wage setting between and within occupations, which are well captured by tasks measures linked to technological change and offshorability. Using a decomposition based on Firpo, Fortin, and Lemieux (2009), we find that technological change and deunionization played a central role in the 1980s and 1990s, while offshorability became an important factor from the 1990s onwards. |
| Date: | 2011–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:04&r=lab |
| By: | Dennis Wesselbaum |
| Abstract: | This paper documents a puzzling fact, namely that there is a significant negative relation between employment protection legislation and the usage of the intensive margin of labor market adjustments. We then make use of a Real Business Cycle model and introduce search and matching frictions as well as adjustment costs along the extensive and the intensive labor market margins. We show that the model is able to replicate the observed pattern, if we assume low firing costs and relatively large hours adjustment costs. Furthermore, the model requires those values to replicate the U.S. business cycle statistics |
| Keywords: | Adjustment Costs, Extensive Margin, Intensive Margin |
| JEL: | C10 E32 J41 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1701&r=lab |
| By: | Owen Thompson (University of Massachusetts Amherst) |
| Abstract: | On average, the parental practices adopted by African American parents of young children are much less cognitively stimulating than those of their white counterparts. This paper argues that these differences stem from the low rates of return to human capital historically experienced by African Americans. To study the relationship between the race-specific returns to skill and parenting, I use intergenerational data containing direct measures of parental behaviors, and examine the child rearing practices of mothers who came of age in the wake of the Civil Rights Movement, during a period of rapidly increasing returns to skill for African Americans in the US South. I find that among Southern African American mothers born between 1957 and 1964, each yearly birth cohort increased their parental investment levels by over .07 standard deviations, but that there was no increase among Southern whites or non-Southern African Americans. These differences are interpreted as being due to the disproportionately large increase in the rate of return to skill experienced by Southern African Americans, suggesting a strong relationship between the returns to human capital and parental behaviors. JEL Categories: J01; I24; J24; J71 |
| Keywords: | race, parenting, returns to skill, achievement gap and human capital development |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2011-06&r=lab |
| By: | Richard Harris (Department of Economics, University of Glasgow); Qian Cher Li (Imperial College, London); John Moffat (University of Strathclyde) |
| Abstract: | This paper estimates whether sourcing knowledge from and/or cooperating on innovation with higher education institutions impacts on establishment-level TFP and whether this impact differs across domestically-owned and foreign-owned establishments and across the regions of Great Britain. Using propensity score matching, the results show overall a positive and statistically significant impact although there are differences in the strength of this impact across production and non-production industries, across domestically-owned and foreign-owned firms, and across regions. These results highlight the importance of absorptive capacity in determining the extent to which establishments can benefit from linkages with higher education institutions. |
| Keywords: | Universities; University-Industry knowledge links; Firm-level productivity |
| JEL: | D24 I23 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1018&r=lab |
| By: | Christos Bilanakos |
| Abstract: | This paper studies the provision of firm-sponsored general training in the presence of workers’ career concerns. We use a model building on the argument that the acquisition of general skills increases the worker’s bargaining power vis-a-vis the employer. In this context, we show that the worker’s implicit incentives to provide effort increase with the level of acquired general training. The employer takes this reciprocal effect into account and is thus more willing to invest in general human capital in the first place. When the positive effect of training on worker’s incentives is strong enough, the equilibrium outcome may even involve overinvestment in general training. It is also shown that a sharper increase in worker’s power associated with additional training may strengthen the employer’s investment incentives and have beneficial effects on welfare. |
| Keywords: | General Training, Career Concerns, Power. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:07-2011&r=lab |
| By: | Sebastian Nielen (Schumpeter School of Business and Economics at the University of Wuppertal); Alexander Schiersch (German Institute for Economic Research, Berlin) |
| Abstract: | This paper addresses the relationship between the utilization of temporary agency workers by firms and their competitiveness measured by unit labor costs, using a rich, newly built, data set of German manufacturing enterprises. The analysis is conducted by applying different panel data models while taking the inherent selection problem into account. Making use of dynamic panel data models allows us to control for firm specific fixed effects as well as for potential endogeneity of explanatory variables. The results indicate a U-shaped relationship between the extent that temporary agency workers are used and the competitiveness of firms. |
| Keywords: | temporary agency work, competitiveness, firm performance, manufacturing |
| JEL: | D24 J24 L60 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp11006&r=lab |
| By: | William Brown; David Marsden |
| Abstract: | At a time when the economic recession is more severe, and trade unions are weaker, than at any time since the War, it would be unproductive to speculate about the extent to which these changes have been imposed, acquiesced, or agreed by the workers concerned. Instead we focus on recent changes in employment relationships in Britain, and their consequences, and then on the winners and losers, which provides a cue for considering the longer term desirability of some of these developments for social justice and cohesion. |
| Keywords: | Labour-management relations, individual and collective voice |
| JEL: | J53 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1037&r=lab |
| By: | Andrea Brandolini (Bank of Italy, Department for Structural Economic Analysis); Alfonso Rosolia (Bank of Italy, Department for Structural Economic Analysis); Roberto Torrini (Bank of Italy, Department for Structural Economic Analysis) |
| Abstract: | This paper studies the distribution of labour earnings among employees within the EU using data from Wave 2007-1 of the Community Statistics on Income and Living Conditions (EUSILC). The review of available information and the comparisons with external sources show that the EU-SILC data are not exempt from problems, particularly in some countries, yet can be fruitfully used to study the distribution of earnings in the EU; they also allow researchers to assess the sensitivity of results to various concepts of labour earnings. The ranking of countries by median full-time equivalent monthly gross earnings shows Eastern European nations at the bottom and Luxembourg at the top; earnings differences are sizeable, both across and within countries. Taking the euro area and the EU-25 (excluding Malta, for which data are unavailable) as a whole, inequality is higher when earnings are measured in euro at market rates rather than at purchasing power parities. The wage distribution is wider in the EU-25 than in the euro area, which is not surprising given that the former includes the poorer Eastern European countries that joined the Union in 2004. The higher inequality observed in the EU-25 is largely attributable to differences between countries, which are essentially due to the returns to individual attributes rather than to a different composition of the workforce with respect to these attributes. |
| Keywords: | wage inequality, EU and euro area labour markets. |
| JEL: | J31 D33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2011-198&r=lab |
| By: | Ponczek, Vladimir Pinheiro; Rocha, Maúna Baldini |
| Date: | 2011–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:05&r=lab |
| By: | Alesina, Alberto F; Giuliano, Paola; Nunn, Nathan |
| 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: | beliefs; Culture; gender roles.; values |
| JEL: | J16 N30 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8418&r=lab |
| By: | Petrongolo, Barbara |
| Abstract: | The 2010 Nobel Prize in Economics was awarded to Chris Pissarides of the LSE Centre for Economic Performance, jointly with Peter Diamond and Dale Mortensen, ‘for their analysis of markets with search frictions’. As Barbara Petrongolo explains, their research has deeply enhanced our understanding of how labour markets work and how policy-makers should respond. |
| Date: | 2011–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/35425/&r=lab |
| By: | Bernard Fingleton (Department of Economics, University of Strathclyde); Simonetta Longhi (Institute for Social and Economic Research (ISER), University of Essex.) |
| Abstract: | effects of agglomeration on wages: evidence from the micro-level |
| Abstract: | This paper estimates individual wage equations in order to test two rival non-nested theories of economic agglomeration, namely New Economic Geography (NEG), as represented by the NEG wage equation and urban economic (UE) theory , in which wages relate to employment density. The paper makes an original contribution by evidently being the first empirical paper to examine the issue of agglomeration processes associated with contemporary theory working with micro-level data, highlighting the role of gender and other individual-level characteristics. For male respondents, there is no significant evidence that wage levels are an outcome of the mechanisms suggested by NEG or UE theory, but this is not the case for female respondents. We speculate on the reasons for the gender difference. |
| Keywords: | urban economics, new economic geography, household panel data. |
| JEL: | C21 C31 C33 D1 O18 R20 R12 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1124&r=lab |
| By: | John T. Addison (Moore School of Business, University of South Carolina, GEMF, and IZA); Alex Bryson (National Institute of Economic and Social Research and CEP); Paulino Teixeira (Faculdade de Economia/GEMF, University of Coimbra, and IZA); André Pahnke (Institut für Arbeitsmarkt- und Berufsforschung, Bundesagentur für Arbeit); Lutz Bellmann (Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Arbeitsmarkt- und Berufsforschung, Bundesagentur für Arbeit, and IZA) |
| Abstract: | This paper investigates trends in collective bargaining and worker representation in the German private sector from 2000 to 2008. It seeks to update and widen earlier analyses pointing to a decline in collective bargaining, while providing more information on the dual system as a whole. Using data from the IAB Employment Panel and the German Employment Register, we report evidence of a systematic and continuing erosion of the dual system. Not unnaturally the decline is led by developments in western Germany. One conjecture is that the path of erosion will continue until rough and ready convergence is reached with eastern Germany in a sharp reversal of other post-unification trends. |
| Keywords: | Trends in collective bargaining and worker representation; Transitions, establishment data. |
| JEL: | J51 J53 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2011-09&r=lab |
| By: | Balleer, Almut; van Rens, Thijs |
| Abstract: | Over the past two decades, technological progress in the United States has been biased towards skilled labor. What does this imply for business cycles? We construct a quarterly skill premium from the CPS and use it to identify skill-biased technology shocks in a VAR with long-run restrictions. Hours fall in response to skill-biased technology shocks, indicating that at least part of the technology-induced fall in total hours is due to a compositional shift in labor demand. Skill-biased technology shocks have no effect on the relative price of investment, suggesting that capital and skill are not complementary in aggregate production. |
| Keywords: | business cycle; capital-skill complementarity; long-run restrictions; skill premium; skill-biased technology; VAR |
| JEL: | E24 E32 J24 J31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8410&r=lab |
| By: | Elizabeth Powers |
| Abstract: | This paper uses data from the Mexican Family Life Survey to estimate the impact of a household member’s migration to the United States on the cognitive development of children remaining in Mexico. While there is no developmental effect of a child’s sibling migrating to the United States, there is an adverse effect when another household member—typically the child’s parent—migrates. This is particularly true for pre-school to early-school-age children with older siblings, for whom the effect of parental migration is comparable to speaking an indigenous language at home or having a mother with very low educational attainment. Additionally, household-member migration to the United States affects how children spend their time in ways that may influence and/or be influenced by cognitive development. |
| JEL: | I12 I38 J11 J61 O15 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4721&r=lab |
| By: | Richard Harris (Department of Economics, University of Glasgow); Qian Cher Li (Imperial College, London.); john.moffat@strath.ac.uk John (Strathclyde University) |
| Abstract: | This paper estimates whether knowledge links with universities impacts on establishment-level TFP. Using propensity score matching, the results show a positive and statistically significant impact although there are across production and non-production industries and domestically- and foreign-owned firms. |
| Keywords: | Universities, Firm-level productivity |
| JEL: | D24 I23 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1017&r=lab |
| By: | Rodrigues, Clarissa G.; Rios-Neto, Eduardo L G; Pinto, Cristine Campos de Xavier |
| Abstract: | To assess the quality of school education, much of educational research is concernedwith comparisons of test scores means or medians. In this paper, we shift this focus andexplore test scores data by addressing some often neglected questions. In the case ofBrazil, the mean of test scores in Math for students of the fourth grade has declinedapproximately 0,2 standard deviation in the late 1990s. But what about changes in thedistribution of scores? It is unclear whether the decline was caused by deterioration instudent performance in upper and/or lower tails of the distribution. To answer thisquestion, we propose the use of the relative distribution method developed by Handcockand Morris (1999). The advantage of this methodology is that it compares twodistributions of test scores data through a single distribution and synthesizes all thedifferences between them. Moreover, it is possible to decompose the total differencebetween two distributions in a level effect (changes in median) and shape effect(changes in shape of the distribution). We find that the decline of average-test scores ismainly caused by a worsening in the position of all students throughout the distributionof scores and is not only specific to any quantile of distribution. |
| Date: | 2011–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:02&r=lab |
| By: | Ma. Cecilia Calderón; John Hoddinott |
| Abstract: | This paper examines early childhood development (ECD) outcomes and their association with family characteristics, investments, and environmental factors, with particular emphasis on the inter-generational transmission of cognitive abilities. The paper examines the causal relationship between parental cognitive abilities and ECD outcomes of their offspring using a rich data set from rural Guatemala that can account for such unobservable factors. A 10 percent increase in maternal Raven’s scores increase children’s Raven’s scores by 7. 8 percent. A 10 percent increase in maternal reading and vocabulary skills increases children’s score on a standard vocabulary test by 5 percent. Effects are larger for older children, and the impact of maternal cognitive skills is larger than for paternal skills. |
| JEL: | J12 J24 N36 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4722&r=lab |
| By: | Cceilia Iona Lasino (Istat and Luiss Lab); Giovanna Vallanti (Università Luiss "Guido Carli") |
| Abstract: | Over the last two decades Italy registered notable improvements in the functioning of labour market. However, such improvements have been accompanied by a deterioration in terms of productivity and competitiveness. This paper provides some evidence in this respect evaluating to what extent labour market reforms might have influenced the poor productivity performance of the Italian economy over the period 1980-2008. We show that labour market deregulation had a negative effect on aggregate labour productivity through both the within and the reallocative components. Our results show that the increased flexibility in the use of temporary contract has led to a lower productivity (level and to a lesser extent growth rate) in all sectors, with a higher impact on those industries with a higher flexibility need. Conversely, the use of temporary contracts has a significant lower effect in industries with higher skill content. The negative effect of the reforms on the reallocative capacity is stronger in those industries with a higher flexibility need that are also the relatively lower productivity sectors in the period 1993-2008. |
| Keywords: | Productivity, Growth, Labour Market Institutions |
| JEL: | J08 J23 J24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lui:lleewp:1193&r=lab |
| By: | Feldmann, Horst |
| Abstract: | Using data on 17 industrial countries from 1982 to 2003 and controlling for a wide array of factors, this paper finds that higher exchange rate volatility increases the unemployment rate. The magnitude of the effect is small. The results are robust to variations in specification. |
| Keywords: | exchange rate volatility; unemployment |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:eid:wpaper:01/11&r=lab |
| By: | Juan Sebastián Pereyra (El Colegio de México) |
| Abstract: | This paper considers a real-life assignment problem faced by the Mexican Ministry of Public Education. Inspired by this situation, we introduce a dynamic school choice problem that consists in assigning positions to overlapping generations of teachers. From one period to another, agents are allowed either to retain their current position or to choose a preferred one. In this framework, a solution concept that conciliates the fairness criteria with the individual rationality condition is introduced. It is then proved that a fair matching always exists and that it can be reached by a modified version of the deferred acceptance algorithm of Gale and Shapley. We also show that the mechanism is dynamic strategy-proof, and respects improvements whenever the set of orders is lexicographic by tenure. |
| Keywords: | school choice, overlapping agents, dynamic matching, deferred acceptance algorithm |
| JEL: | C71 C78 D71 D78 I28 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2011-05&r=lab |
| By: | Laura Cavalli |
| Abstract: | Over recent decades the family formation process radically changed in Europe. Even though similar trends have been observed across the continent there are still important differences between countries. Using the theoretical approach and conceptual definitions given by Ajzen’s (1991) theory of planned behavior without applying its empirical model, the main focus of the present paper is on the way in which paid job and unpaid work and women’s attitudes towards them influence the decision to have a second child. The study uses a qualitative approach, by means of the investigation of in-depth interviews with 27 women in reproductive ages in Cagliari, one of the lowest-low fertility contexts in Italy, itself a lowest-low fertility country. Mothers were divided into six different groups on the basis of their intentions to have a second child. The results demonstrate that the theoretical framework is able to highlight substantial differences in attitudes and perceived behavioural controls among the women with different intentions for childbearing. |
| Keywords: | fertility intentions, second birth, paid work, unpaid jobs, theory of planned behavior, qualitative research methods |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:don:donwpa:047&r=lab |
| By: | Michael Baker; Kevin S. Milligan |
| Abstract: | We investigate the impact of maternity leave on the cognitive and behavioral development of children at ages 4 and 5. The impact is identified by legislated increases in the duration of maternity leave in Canada, which significantly increased the amount of maternal care children received in the second half of their first year. We carefully document that other observable inputs to child development do not vary across cohorts of children exposed to different maternity leave regimes. Our results indicate that these changes had no positive effect on indices of children’s cognitive and behavioral development. We uncover a small negative impact on PPVT and Who Am I? scores, which suggests the timing of the mother/child separation due to the mother’s return to work may be important. |
| JEL: | I18 J13 J32 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17105&r=lab |
| By: | Almas, Ingvild; Havnes, Tarjei; Mogstad, Magne |
| Abstract: | In this paper, we demonstrate how age-adjusted inequality measures can be used to evaluate whether changes in inequality over time are due to changes in the age-structure. To this end, we use administrative data on earnings for every male Norwegian over the period 1967-2000. We find that the substantial rise in earnings inequality over the 1980s and into the early 1990s, is to some extent driven by the fact that the large baby boom cohorts are approaching the peak of the age-earnings profile. We further demonstrate that the impact of age-adjustments on the trend in inequality during the period 1993-2000 is highly sensitive to the method used: While the most widely used age-adjusted inequality measure indicates little change in inequality over this period, a new and improved age-adjusted measure suggest a decline in inequality. |
| Keywords: | age structure; age-earnings profile; Gini coefficient; inequality trend |
| JEL: | D31 D63 D91 E21 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8393&r=lab |
| By: | José Irineu Rangel Rigotti (Cedeplar-UFMG); Renato Moreira Hadad (PUC-Minas) |
| Abstract: | Demographic censuses usually contain information about a graded education system, i.e. age and grade declarations. This information can be used to estimate a series of indicators, useful for diagnostics and prognostics of the educational system. One of the principal goals of this paper is to provide a new technical framework to forecast population by levels of schooling, in a country or region. It follows in the tradition of formal demographic methodologies used in analyzing and projecting population, such as Life Tables. Thus, one could study the probable social consequences of the implementation of any educational policies related to promotion and retention practices, over the medium and long runs. The methodological procedures were applied to the five Brazilian Regions, although it could be applied to other countries or regions that have the information of grades concluded by age. |
| Keywords: | Demographic analysis, trends and forecast of educational indicators, regional inequalities. |
| JEL: | J11 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td422&r=lab |
| By: | Eric J. Bartelsman; Pieter A. Gautier; Joris de Wind |
| Abstract: | We show empirically that high-risk innovative sectors are relatively small in countries with strict employment protection legislation (EPL). To understand the mechanism, we develop a two-sector matching model where firms endogenously choose between safe and risky technology. Simulations with our calibrated model are consistent with the data: Strict EPL discourages choosing the emerging risky technology because it is more costly to shed workers upon receiving a bad productivity draw. This mechanism helps explain the lowdown in productivity in the EU relative to the US since the mid-1990s that often is associated with lagging adoption of information technology in the EU. |
| Keywords: | employment protection legislation; exit costs; information and communication technologies; heterogeneous productivity; risky technology; innovation; sectoral allocation |
| JEL: | J65 O38 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:295&r=lab |
| By: | Christos Bilanakos |
| Abstract: | This paper studies contracts and incentives to invest in general human capital under common agency. Both the worker and the employer have too weak investment incentives in equilibrium. The employer’s underinvestment results from his failure to internalize the positive impact of his investment on other firms’ productivity as well as from the fact that he gives a share of output to the worker in order to induce a higher effort contribution. The worker anticipates that she will not be the full residual claimant of benefits and underinvests in equilibrium, too. A benevolent government will choose a set of subsidies such that the worker’s investment relative to the employer is equal to the first-best relative investment intensity. If the number of employers is small, then the worker’s investment level is relatively low and the government must give a relatively higher subsidy to the worker in order to stimulate her investment incentives. |
| Keywords: | General Human Capital, Common Agency, Contracts. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:08-2011&r=lab |