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on Labour Economics |
| By: | Nakabayashi, Masaki |
| Abstract: | Schooling, an observable signal, decreases its impact on wages as employers “publicly” learn workers’ true types from workers’ experience in the market. This symmetric employer learning hypothesis has been empirically questioned as, first, current and potential employers in fact asymmetrically learn, and second, complementarity between schooling and work experience could enshroud learning effect. Microanalysis of Japanese steel industry shows, 1) experience before entering the long-term employment is complementary to schooling, 2) employer learning effect dominates the complementarity effect after workers’ joining the long-term employment. It suggests that previous evidences of employer learning have in fact captured internal labor market effect. |
| Keywords: | employer learning, schooling and wages, internal labor market effect |
| JEL: | N35 J31 J24 |
| Date: | 2011–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30748&r=lab |
| By: | Clemens Noelke (Department of Sociology, Harvard University); Daniel Horn (Institute of Economics of the Hungarian Academy of Sciences) |
| Abstract: | Social research has long pointed to the apparent effectiveness of vocational education and training (VET) at the secondary level combining school-based vocational education with employer-provided training (so called "dual systems") in preparing non-college bound youth for the labor market. This study uses the Hungarian transformation process to better understand what makes dual system VET sustainable and effective. The two key questions we address are: Can employer involvement in dual system VET be sustained in the context of liberal labor market reforms? Is employer involvement required for the effectiveness of VET? Hungary had inherited an extensive dual system VET sector, but the liberal reform approach in the course of transformation has created a hostile environment for voluntary employer provision of training places for VET students. The decline in employer-provided training places has, however, been compensated by increasing training provision inside vocational schools. Results from differences-in-differences and triple-differences analyses show that the substitution of employer- with school-provided training did not affect the quality of VET graduates' jobs. However, the shift in training provision between 1994 and 2000 alone has raised young male VET graduates unemployment rate by 10 percentage points in the first year after graduation. |
| Keywords: | school to work transition, VET, on-the-job training |
| JEL: | I21 J24 J64 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:has:bworkp:1105&r=lab |
| By: | Dustmann, Christian (University College London); Glitz, Albrecht (Universitat Pompeu Fabra); Schönberg, Uta (University College London) |
| Abstract: | This paper develops a model and derives novel testable implications of referral-based job search networks in which employees provide employers with information about potential job market candidates that they otherwise would not have. Using unique matched employer-employee data that cover the entire workforce in one large metropolitan labor market over a 20 year period, we find strong support for the predictions of our model. We first show that firms are more likely to hire minority workers from a particular group if the existing share of workers from that group employed in the firm is higher. We then provide evidence that workers earn higher wages, and are less likely to leave their firms, if they were hired by a firm with a larger share of minority workers from their own group and are therefore more likely to have obtained the job through a referral. The effects are particularly strong at the beginning of the employment relationship and decline with tenure in the firm. These findings have important implications in suggesting that job search networks help to reduce informational deficiencies in the labor market and lead to productivity gains for workers and firms. |
| Keywords: | networks, referrals, uncertainty |
| JEL: | J61 J63 J31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5777&r=lab |
| By: | René Böheim (WIFO); Klemens Himpele; Helmut Mahringer (WIFO); Christine Zulehner (WIFO) |
| Abstract: | Policies to reduce the gender pay gap feature prominently on the political agenda and interventions in the labour market are frequently proposed, claiming a persistent wage gap. We examine the change of the gender wage gap in Austria between 2002 and 2007 with new data from administrative records and find that it declined from 24 percent in 2002 to 19 percent in 2007. We observe that women's improved educational attainments were partly offset by a shift in the demand for skilled workers that disadvantaged unskilled labour. The main determinant of this decline is however the improvement of women's relative position in unobserved characteristics. |
| Keywords: | gender wage differentials, wage inequality, decomposition, matched employer-employee data |
| Date: | 2011–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2011:i:394&r=lab |
| By: | Elsby, Michael (University of Edinburgh); Smith, Jennifer C. (University of Warwick); Wadsworth, Jonathan (Royal Holloway, University of London) |
| 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. 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. |
| Keywords: | labour market, unemployment, worker flows |
| JEL: | E24 J6 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5784&r=lab |
| By: | Christian Dustmann (University College London); Albrecht Glitz (Universitat Pompeu Fabra and Barcelona GSE); Uta Schoenberg (University College London and Institute for Employment Research (IAB)) |
| Abstract: | This paper develops a model and derives novel testable implications of referral-based job search networks in which employees provide employers with information about potential job market candidates that they otherwise would not have. Using unique matched employeremployee data that cover the entire workforce in one large metropolitan labor market over a 20 year period, we find strong support for the predictions of our model. We first show that firms are more likely to hire minority workers from a particular group if the existing share of workers from that group employed in the firm is higher. We then provide evidence that workers earn higher wages, and are less likely to leave their firms, if they were hired by a firm with a larger share of minority workers from their own group and are therefore more likely to have obtained the job through a referral. The effects are particularly strong at the beginning of the employment relationship and decline with tenure in the firm. These findings have important implications in suggesting that job search networks help to reduce informational deficiencies in the labor market and lead to productivity gains for workers and firms. |
| Keywords: | Networks, Referrals, Uncertainty |
| JEL: | J61 J63 J31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:201114&r=lab |
| By: | Benoît Mahy; François Rycx; Mélanie Volral |
| Abstract: | This article puts the relationship between wage dispersion and firm productivity to an updated test, taking advantage of access to detailed Belgian linked employer-employee panel data. Controlling for simultaneity issues, time-invariant workplace characteristics and dynamics in the adjustment process of productivity, empirical results reveal the existence of a positive impact from conditional intra-firm wage dispersion to firm productivity (measured by the average value added per hour worked), which however decreases for higher dispersion levels. Findings thus suggest that the incentive effect of wage dispersion, predicted for instance by the ‘tournament’ model, dominates ‘fairness’ and/or ‘sabotage’ considerations. Further results reveal that the influence of wage dispersion on firm productivity is stronger among firms with a larger proportion of highly skilled workers but does not depend on whether wages are collectively renegotiated at the firm level. |
| Keywords: | Wage Dispersion; Labour Productivity; Personnel Economics; Matched Employer-Employee Panel Data |
| JEL: | J31 J24 M50 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/89486&r=lab |
| By: | Mélanie Volral; François Rycx; Benoît Mahy |
| Abstract: | This article puts the relationship between wage dispersion and firm productivity to an updated test, taking advantage of access to detailed Belgian linked employer-employee panel data. Controlling for simultaneity issues, time-invariant workplace characteristics and dynamics in the adjustment process of productivity, empirical results reveal the existence of a positive impact from conditional intra-firm wage dispersion to firm productivity (measured by the average value added per hour worked), which however decreases for higher dispersion levels. Findings thus suggest that the incentive effect of wage dispersion, predicted for instance by the ‘tournament’ model, dominates ‘fairness’ and/or ‘sabotage’ considerations. Further results reveal that the influence of wage dispersion on firm productivity is stronger among firms with a larger proportion of highly skilled workers but does not depend on whether wages are collectively renegotiated at the firm level. |
| Keywords: | Wage Dispersion; Labour Productivity; Personnel Economics; Matched Employer-Employee Panel Data. |
| JEL: | J31 J24 M50 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/89489&r=lab |
| By: | Anna Lovasz (Institute of Economics of the Hungarian Academy of Sciences); Barbara Pertold-Gebicka (School of Economics and Management Aarhus University) |
| Abstract: | Public funding drives much of the recent growth of college degree supply in Europe, but few indicators are available to assess its optimal level. In this paper, we investigate an indicator of college skills usage - the fraction of college graduates employed in "college" occupations. Gottschalk and Hansen (2003) propose to identify "college" occupations based on withinoccupation college wage premia; we build on their strategy to study the local-labor-market relationship between the share of college graduates in the population and the use of college skills. Empirical results based on worker-level data from NUTS-4 districts in the Czech Republic, Hungary and Slovakia suggest a positive relationship, thus supporting the presence of an endogenous influence of the number of skilled workers on the demand for them. |
| Keywords: | education, labor demand, college degree supply, occupational allocation, productivity spillovers |
| JEL: | I28 J24 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:has:bworkp:1103&r=lab |
| By: | Lagerström, Jonas (Åbo Akademi University) |
| Abstract: | Caseworkers at the Swedish Public Employment Office (PES) have an important role in helping the unemployed to find a job. In this study, I estimate the effect of caseworkers on jobseekers' future employment rates, earnings, and wages. To take into account that the average characteristics of the unemployed can vary between caseworkers, I only use information from local employment offices that randomly allocate caseworkers to clients. The results indicate that caseworkers have an effect on the jobseekers' future employment and earnings. For example, the probability of being employed within a year is about 13 percent higher if the caseworker is one standard deviation higher in the distribution of caseworkers. Distinctive of a successful caseworker is that they assist in job search rather than assigning their jobseekers to various training programs. |
| Keywords: | Caseworker; program evaluation; active labour market policy |
| JEL: | J68 |
| Date: | 2011–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2011_010&r=lab |
| By: | M. Sartarelli; A. Tampieri |
| Abstract: | The paper examines whether meeting performance targets in tests at school has an effeect on students' subsequent achievement in education and the take-up by schools of financial support from the government for students. We build a theoretical model to describe the channels through which students' belief of their ability, as proxied by previous performance in tests, affect their current effort in preparing for a test, and how previous performance affects the effort in teaching by a school. We find that an increase in the performance target in the first test has an ambiguous effect on the effort exerted for the second test. A higher performance target in the current test increases the effort of low-ability students and teaching effort for low ability students, while it has an ambiguous effect on high ability ones. Finally, an increase in government funding per student increases the effort by students. |
| JEL: | I22 I28 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp760&r=lab |
| By: | Rob Euwals; Daniel van Vuuren; Annemiek van Vuren |
| Abstract: | <p>Early retirement schemes and disability insurance in the Netherlands have both been reformed during the past decades. The reforms have increased incentives to continue working and have decreased the substitution between early retirement and disability. This study investigates the impact of the reforms on labour market exit probabilities</p><p>We use administrative data for workers in the Dutch health care sector between 1999 and 2006. We estimate a multinomial Logit model for transitions out of the labour force.</p><p>The empirical results suggest that the reforms have been effective, as the labour market participation rate of the elderly has increased. The concept of substitute pathways into retirement seems less relevant today as the results confirm that disability insurance is closed off as an early retirement exit route.</p><p><em>Key words: early retirement, disability insurance, labour supply</em></p><p> </p> |
| JEL: | C35 J26 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:179&r=lab |
| By: | Schneider, Friedrich (University of Linz) |
| Abstract: | In this paper the main focus lies on the development and the size of the shadow economy and of undeclared work (or shadow economy labor force) in OECD, developing and transition countries. Besides informal employment in the rural and non-rural sector also other measures of informal employment like the share of employees not covered by social security, own account workers or unpaid family workers are shown. The most influential factors on the shadow economy and/or shadow labor force are tax policies and state regulation, which, if they rise, increase both. Furthermore the discussion of the recent literature underlines that economic opportunities, the overall situation on the labor market, and unemployment are crucial for an understanding of the dynamics of the shadow economy and especially the shadow labor force. |
| Keywords: | shadow economy, undeclared work, shadow labor force, tax morale, tax pressure, state regulation |
| JEL: | K42 H26 D78 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5769&r=lab |
| By: | Frederiksen, Anders (Aarhus School of Business); Kato, Takao (Colgate University) |
| Abstract: | Denmark's registry data provide accurate and complete career history data along with detailed personal characteristics (e.g., education, gender, work experience, tenure and others) for the population of Danish workers longitudinally. By using such data from 1992 to 2002, we provide rigorous evidence for the first time for the population of workers in an entire economy (as opposed to case study evidence) on the effects of the nature and scope of human capital on career success (measured by appointments to top management). First, we confirm the beneficial effect of acquiring general human capital formally through schooling for career success, as well as the gender gap in career success rates. Second, broadening the scope of human capital by experiencing various occupations (becoming a generalist) is found to be advantageous for career success. Third, initial human capital earned through formal schooling and subsequent human capital obtained informally on the job are found to be complements in the production of career success. Fourth, though there is a large body of the literature on the relationship between firm-specific human capital and wages, the relative value of firm-specific human capital has been rarely studied in the context of career success. We find that it is more beneficial to broaden the breadth of human capital within the firm than without, pointing to the significance of firm-specific human capital for career success. |
| Keywords: | human capital, career development, occupations, internal promotion, external recruitment, top management |
| JEL: | J24 M5 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5764&r=lab |
| By: | Campbell, Carl M. |
| Abstract: | While much work in macroeconomics considers the formation of price expectations, there has been relatively little work analyzing wage expectations. This study develops models in which workers form expectations of average wages in choosing levels of effort and on-the-job search, under the assumption that information on lagged average wages is free but other information is costly. Under reasonable conditions, workers’ expectations are likely to be at least partly adaptive. It is argued that wage expectations may be more important than price expectations in explaining unemployment fluctuations. |
| Keywords: | Imperfect information; Wage expectations |
| JEL: | D84 J41 |
| Date: | 2011–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31590&r=lab |
| By: | Alice Fabre; Stéphane Pallage |
| Abstract: | In this paper, we measure the welfare effects of banning child labor in an economy with strong idiosyncratic shocks to employment. We then design two different policies: an unemployment insurance program and a universal basic income system. We show that they can often lead to an endogenous elimination of child labor. We work within a dynamic, general equilibrium model calibrated to South Africa in the 1990s. |
| Keywords: | Child labor, Idiosyncratic shocks, Unemployment insurance, Universal basic income, Heterogeneous agents, Child labor ban |
| JEL: | E20 D58 J65 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1115&r=lab |
| By: | Baez, Javier E.; Camacho, Adriana |
| Abstract: | Conditional cash transfers are programs under which poor families get a stipend provided they keep their children in school and take them for health checks. Although there is significant evidence showing that they have positive impacts on school participation, little is known about the long-term impacts of the programs on human capital. This paper investigates whether cohorts of children from poor households that benefited up to nine years from Familias en Acción, a conditional cash transfer program in Colombia, attained more school and performed better on academic tests at the end of high school. Identification of program impacts is derived from two different strategies using matching techniques with household surveys, and regression discontinuity design using a census of the poor and administrative records of the program. The authors show that, on average, participant children are 4 to 8 percentage points more likely than nonparticipant children to finish high school, particularly girls and beneficiaries in rural areas. Regarding long-term impact on tests scores, the analysis shows that program recipients who graduate from high school seem to perform at the same level as equally poor non-recipient graduates, even after correcting for possible selection bias when low-performing students enter school in the treatment group. Although the positive impacts on high school graduation may improve the employment and earning prospects of participants, the lack of positive effects on test scores raises the need to further explore policy actions to couple the program's objective of increasing human capital with enhanced learning. |
| Keywords: | Education For All,Tertiary Education,Primary Education,Secondary Education,Teaching and Learning |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5681&r=lab |
| By: | Christopher Reicher |
| Abstract: | In this paper, I discuss three sets of links which I uncover in the data on aggregate US job and worker flows. Job flows are strongly related to aggregate employment growth, while worker flows are strongly related to employment growth and the unemployment rate. I show that a simple frictionless business cycle model with heterogeneity and a simple form of on-the-job search can explain these links. Job flows respond simply to the cross-section of firm growth, which responds to aggregate employment growth. Worker flows are related to both employment growth and the unemployment rate, and quits and hires are particularly tightly related to each other. Quits and hires interact to form a hiring chain—hires beget quits through on-the-job search, and quits beget hires to replace quitters. High unemployment crowds out quits, shortens the hiring chain, reduces the number of hires, and also results in an elevated layoff rate. The simple hiring chain model fits the data surprisingly well |
| Keywords: | Job flows, worker flows, heterogeneity, on-the-job search, hiring chain |
| JEL: | E32 J63 J21 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1709&r=lab |
| By: | Alfonso Miranda (Department of Quantitative Social Science, Institute of Education, University of London. 20 Bedford Way, London WC1H 0AL, UK.); Sophia Rabe-Hesketh (Graduate School of Education and Graduate Group in Biostatistics, University of California, Berkeley, USA. Institute of Education, University of London, London, UK.); Lorraine Dearden (Institute for Fiscal Studies, 7 Ridgmount Street, London, WC1E 7AE; Institute of Education, University of London, 20 Bedford Way, London WC1H 0AL, UK.) |
| Abstract: | The UK Department for Education (DfE) calculates contextualised value added (CVA) measures of school performance using administrative data that contain only a limited set of explanatory variables. Differences on schools’ intake regarding characteristics such as mother’s education are not accounted for due to the lack of background information in the data. In this paper we use linked survey and administrative data to assess the potential biases that missing control variables cause in the calculation of CVA measures of school performance. We find that ignoring the effect of mother’s education leads DfE to erroneously over-penalise low achieving schools that have a greater proportion of mothers with low qualifications and to over-reward high achieving schools that have a greater proportion of mothers with higher qualifications. This suggests that collecting a rich set of controls in administrative records is necessary for producing reliable CVA measures of school performance. |
| Keywords: | contextualised value added, missing data, informative sample selection, administrative data, UK |
| JEL: | I21 |
| Date: | 2011–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1105&r=lab |
| By: | SENOU, Barthélemy Mahugnon |
| Abstract: | This article aims to identify factors that influence the integration of graduates of higher education on the labor market in Benin. To this end, we adopted a methodology based on an analysis of empirical data collected from graduates from universities and higher education centers over the past decade. Processing and analysis of results show the mismatch between training opportunities in higher education in Benin, and constraints related to employability of graduates. Among these constraints is the lack of professional training, poor quality of education both in public universities than in private higher education centers and the lack of multidisciplinary graduate. |
| Keywords: | marché du travail; emploi; insertion professionnelle ; adéquation ; chômage ; formation professionnelle. |
| JEL: | E24 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31553&r=lab |
| By: | Michael T. Rauh (Department of Business Economics and Public Policy, Indiana University Kelley School of Business) |
| Abstract: | We extend the classical teams framework to the case where team size is endogenous and workers can specialize within a division of labor. We consider two institutions: equal-division partnerships and the firm with a budget-breaker. In contrast with the previous literature, we show that effort and team size in partnerships can be greater or less than first best. Our results for the firm are driven by two main insights. First, the budgetbreaker can increase effort with an increase in incentives and/or specialization. Second, incentives and employment are strategic substitutes. We show that the budget-breaker offers incentives that are weaker than first best or equal-division partnership incentives, so that shirking is more prevalent in the firm. Since incentives and team size are substitutes, the budget-breaker increases employment above the first best and partnership levels, so the firm is inefficiently large. The role of the budget-breaker is therefore to reduce agents' exposure to risk and to promote and coordinate specialization and the division of labor. The comparative statics of the firm are consistent with several institutional stylized facts (e.g., the size-wage effect) and recent organizational trends. |
| Keywords: | budget-breaker, division of labor, endogenous team size, incentives, moral hazard, partnerships, size-wage eect, specialization, teams, theory of the rm |
| JEL: | D02 D21 D86 L25 M5 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:iuk:wpaper:2011-03&r=lab |
| By: | Francesco D'Amuri; Giovanni Peri |
| Abstract: | In this paper we analyze the effect of immigrants on native jobs in fourteen Western European countries. We test whether the inflow of immigrants in the period 1996-2007 decreased employment rates and/or if it altered the occupational distribution of natives with similar education and age. We find no evidence of the first but significant evidence of the second: immigrants took "simple" (manual-routine) type of occupations and natives moved, in response, toward more "complex" (abstract-communication) jobs. The results are robust to the use of an IV strategy based on past settlement of different nationalities of immigrants across European countries. We also document the labor market flows through which such a positive reallocation took place: immigration stimulated job creation, and the complexity of jobs offered to new native hires was higher relative to the complexity of destructed native jobs. Finally, we find evidence that the occupation reallocation of natives was significantly larger in countries with more flexible labor laws. This tendency was particularly strong for less educated workers. |
| JEL: | J24 J61 J62 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17139&r=lab |
| By: | Kathrin Goeggel (Berlin); Thomas Zwick (Ludwig-Maximilians University LMU, Munich School of Management) |
| Abstract: | Relatively small average wage effects of employer and occupation changes after apprenticeship training mask large differences between occupation groups and apprentices with different schooling backgrounds. Employer and occupation changers in industrial occupations enjoy large wage advantages, whereas apprentices in commerce and trading occupations, as well as in construction and crafts occupations, face wage losses from an occupation change. Differences between the firms that provide the apprenticeship training are found to be small or insignificant. This paper reconciles differences between previous findings by comparing and replicating their empirical estimation strategies. It demonstrates that selectivity in occupations and changes, unobserved heterogeneity between occupations, and sample selection matter. |
| Keywords: | Wage mark-up, occupations |
| JEL: | J24 J31 M53 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0062&r=lab |
| By: | Andrés Erosa (IMDEA Social Sciences Institute); Luisa Fuster (IMDEA Social Sciences Institute); Gueorgui Kambourov (University of Toronto) |
| Abstract: | There are substantial cross-country differences in labor supply late in the life cycle (age 50+). A theory of labor supply and retirement decisions is developed to quantitatively assess the role of social security, disability insurance, and taxation for understanding differences in labor supply late in the life cycle across European countries and the United States. The findings support the view that government policies can go a long way towards accounting for the low labor supply late in the life cycle in the European countries relatively to the United States, with social security rules accounting for the bulk of these effects. |
| Keywords: | social security; disability insurance; labor supply; heterogeneity; life cycle |
| JEL: | D9 E2 E6 H2 H3 H5 J2 |
| Date: | 2011–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2011-08&r=lab |
| By: | Ekert-Jaffe, Olivia (Institut National d’Etudes Demographiques); Grossbard, Shoshana (San Diego State University, California) |
| Abstract: | This article uses data from the 1998-1999 French INSEE time use survey to estimate the time costs of children. The focus is on couples with two spouses working Full-Time in the labor force in order to avoid issues of substitution between home production and labor supply. Time costs are computed in terms of hours of foregone leisure. The model accounts for selection into full-time employment and controls for use of hired childcare workers. We find that the foregone leisure cost of one child under age 3 is 1.9 hour for mothers and 2.2 hours for fathers. We find economies of scale for mothers but not for fathers. The presence of a childcare worker per child reduces the time cost of children to a couple of parents by 5%. |
| Keywords: | children, time costs, leisure |
| JEL: | J13 J22 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5760&r=lab |
| By: | Ryouichi Ikeda (Graduate School of Economics, Osaka University) |
| Abstract: | Recently, as low birth rates and the aging of society have intensified, considerable analysis is being conducted using overlapping generations models with endogenous birth rates. However, most previous studies have assumed full employment. Since it is the case that unemployment does exist in reality, this paper employs a labor-union wage-negotiation model that models unemployment to analyze the effects of child-support tax on employment and number of children. First, an increase in child-support tax increases the unemployment rate and decreases capital stock. A new finding is that an increase in unemployment decreases the number of children through decreasing disposable income. Also, when certain conditions are satisfied the number of children per capita in the economy as a whole also decreases with introduction of child-support tax. This paper concludes that excessive child-support tax can have opposite the intended effect. Another new finding is that an increase in the unemployment insurance benefits rate decreases the number of children by decreasing disposable income through increasing unemployment. |
| Keywords: | Child-support, The number of children, Unemployment, Union, Overlapping generations model |
| JEL: | J13 J64 J51 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1122&r=lab |
| By: | Messina, Julián (World Bank); Sanz-de-Galdeano, Anna (Universitat Autònoma de Barcelona) |
| Abstract: | This paper examines the consequences of rapid disinflation for downward wage rigidities in two emerging countries, Brazil and Uruguay, relying on high quality matched employer-employee administrative data. Downward nominal wage rigidities are more important in Uruguay, while wage indexation is dominant in Brazil. Two regime changes are observed during the sample period, 1995-2004: (i) in Uruguay wage indexation declines, while workers' resistance to nominal wage cuts becomes more pronounced; and (ii) in Brazil, the introduction of inflation targeting by the Central Bank in 1999 shifts the focal point of wage negotiations from changes in the minimum wage to expected inflation. These regime changes cast doubts on the notion that wage rigidity is structural in the sense of Lucas (1976). |
| Keywords: | downward wage rigidity, indexation, matched employer-employee data, emerging economies |
| JEL: | J30 E24 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5778&r=lab |
| By: | Liviu Voinea; Flaviu Mihaescu |
| Abstract: | This paper studies the public-private wage inequality in Romania. Although public sector employment is perceived as safer and offers more benefits, we find that in Romania it also offers higher wages, after controlling for experience, education, and gender. Decomposing the public-private wage premium into the effect of personal characteristics, coefficients, and residuals, we show that only about half of this premium can be attributed to personal characteristics. The premium is increasing across the wage distribution, leading to more inequality in the public sector. We also find the effects of self-selection are negligible, the premium being still positive and significant after controlling for this. |
| Keywords: | Romania, wage premium, public sector |
| JEL: | J45 J31 J24 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:bpaper:bowp:093&r=lab |
| By: | Gregory Gilpin (Montana State University); Michael Kaganovich (Indiana University) |
| Abstract: | The paper addresses the two-fold rise in teacher-student ratio in the American K-12 school system in the post-World War II period accompanied by the evidence of a decline in the relative quality of teachers. We develop a dynamic general equilibrium framework for analyzing the teacher quantity-quality trade-off and offer an explanation to the observed trends. Our OLG model features two stages of education: basic and advanced (college), the latter required of teachers. The cost of hiring teachers is influenced by the outside opportunities for college graduates in the production sector. We show that the latter factor strengthens in the process of endogenous growth and that it affects the optimal trade-off between quantity and quality of teachers such that the number of teachers hired will grow over time while their relative, but not the absolute, human capital attainment will fall. This is accompanied by increasing inequality, among the group of college educated workers in particular. We show that this effect, which we call the rising talent premium, applies whether teacher salaries are determined based on merit pay or, alternatively, by collective bargaining. Moreover, the salary compression characterizing the collective bargaining regime has an additional effect exacerbating the loss of the more talented workers by the teaching profession. Further, we analyze a comparative dynamics effect of exogenous skill-biased technological change which raises the college premium. We show that the effect is detrimental to the aggregate quality of teachers and to the quality of basic education. An important insight from this analysis is that in the process of human capital driven economic growth the rise in premium for high ability outpaces that for the average, whereby this effect is accelerated by technological change. This puts a downward pressure on the “real” quality of education inputs and therefore can create a negative feedback effect on human capital development as a factor of economic growth. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2011-006&r=lab |
| By: | Fox, Liana (Columbia University); Han, Wen-Jui (Columbia University); Ruhm, Christopher J. (University of Virginia); Waldfogel, Jane (Columbia University) |
| Abstract: | Utilizing data from the 1967-2009 years of the March Current Population Surveys, we examine two important resources for children's well-being: time and money. We document trends in parental employment, from the perspective of children, and show what underlies these trends. We find that increases in family work hours mainly reflect movements into jobs by parents who, in prior decades, would have remained at home. This increase in market work has raised incomes for children in the typical two-parent family but not for those in lone-parent households. Time use data from 1975 and 2003-2008 reveal that working parents spend less time engaged in primary childcare than their counterparts without jobs but more than employed peers in previous cohorts. Analysis of 2004 work schedule data suggests that non-daytime work provides an alternative method of coordinating employment schedules for some dual-earner families. |
| Keywords: | parental employment, child care time, work family balance, coordinated work schedules |
| JEL: | J13 J22 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5761&r=lab |
| By: | Arnaud Lefranc (THEMA, Universite de Cergy-Pontoise) |
| Abstract: | This paper analyzes long-term trends in intergenerational earnings mobility in France. I estimate intergenerational earnings elasticities for male cohorts born between 1931 and 1975. This time period has witnessed important changes in the French labor market and educational system, in particular a large expansion in access to secondary and higher education as well as an important compression of earnings differentials. Intergenerational mobility is estimated using a two-sample instrumental variables approach. Over the period, intergenerational earnings mobility exhibits a V-shaped pattern. Mobility falls between cohorts born in the mid 1930s and those born in the mid 1950s, but subsequently rises. For cohorts born in the first half of the 1970s, age-adjusted intergenerational earnings elasticity amount to around .55. This value is significantly higher than the elasticity estimated for the baby-boom cohorts. It is also slightly lower than the elasticity estimated for cohorts born in the 1930s but the difference is not statistically significant. Changes in the extent of mobility mostly reflects the evolution of cross-section earnings inequality, rather than variations in positional mobility. |
| Keywords: | Intergenerational mobility, earnings, inequality, trends, elasticity, correlation, education, France. |
| JEL: | D1 D3 J3 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2011-11&r=lab |
| By: | Benjamin Crost |
| Abstract: | While a large body of evidence suggests that unemployment and self-reported happiness are negatively correlated, it is not clear whether this reflects a causal effect of unemployment on happiness and whether subsidized employment can increase the happiness of the unemployed. To close this gap, this paper estimates the causal effect of a type of subsidized employment projects - Germany's Arbeitsbeschaffungsmaßnahmen - on self-reported happiness. Results from matching and fixed effects estimators suggest that subsidized employment has a large and statistically significant positive effect on the happiness of individuals who would otherwise have been unemployed. Detailed panel data on pre- and post-project happiness suggests that this effect can neither be explained by self-selection of happier individuals into employment nor by the higher incomes of the employed. |
| Keywords: | Happiness, life satisfaction, unemployment, subsidized employment |
| JEL: | J28 J68 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp384&r=lab |
| By: | Parsons, Donald O. (George Washington University) |
| Abstract: | Severance pay mandates are an appealing job displacement insurance strategy in developing countries, which have only modest government administrative capacities, but they carry the threat of adverse indirect effects. A critical review of the empirical literature reveals that severance benefit mandates, unaccompanied by other labor regulations, have little apparent impact on labor market behaviors. Indeed many severance mandates in the industrialized world do not greatly exceed those provided voluntarily in larger firms in the U.S. Benefit mandates in the developing world are sometimes more extravagant, and the absence of substantial effects may result from limited enforcement. Broader economic regulations do appear to have substantial, adverse effects on the labor market, but it is important not to equate these with simple severance insurance plans. |
| Keywords: | severance pay, firing costs, hiring costs, separation rate, employment |
| JEL: | J08 J65 J33 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5776&r=lab |
| By: | Rees, Daniel I. (University of Colorado Denver); Sabia, Joseph J. (San Diego State University, California) |
| Abstract: | A number of studies have shown that childhood speech impairments such as stuttering are associated with lower test scores and educational attainment. However, it is unclear whether this result is causal in nature or whether it can be explained by difficult-to-measure heterogeneity at the community, family, or individual level. Using data from the National Longitudinal Study of Adolescent Health and ordinary least squares, we show that stuttering is negatively associated with high school grades, the probability of high school graduation, and the probability of college attendance. However, empirical specifications with family fixed effects or controls for learning disabilities such as Attention Deficit Hyperactivity Disorder suggest that these associations can, in large part, be explained by difficult-to-measure heterogeneity. |
| Keywords: | speech impairment, stuttering, human capital, educational attainment |
| JEL: | I1 I2 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5781&r=lab |
| By: | Silvia Fabiani (Banca d'Italia); Roberto Sabbatini (Banca d'Italia) |
| Abstract: | The study analyses wage adjustment by Italian firms on the basis of information collected through a coordinated survey carried out in 17 European countries in two waves (at the beginning of 2008 and in the summer of 2009). The pre-crisis evidence indicates that the degree of wage rigidity is relatively high in Italy: wages remain unchanged on average for about two years, against an average of just over one year in the other countries. Italian firms hardly cut nominal wages, reflecting not only institutional constraints, but also an attempt to avoid a negative impact on their productivity. During the economic recession the firms most severely affected by the fall in demand reduced their costs mainly by adjusting the input of labour (in terms of both employment and hours worked). A higher incidence of skilled and white-collar workers was accompanied by greater recourse to strategies aimed at containing non-labour costs, presumably in order to preserve the human capital accumulated. |
| Keywords: | survey, wage rigidity, economic recession |
| JEL: | D21 E30 J31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_94_11&r=lab |
| By: | Odd Eiken |
| Abstract: | Kunskapsskolan is a chain of independent secondary schools which functions as a comprehensive platform for personalised education, known as the Kunskapsskolan programme (KED). What is special about this programme is that students set their own objectives, work independently and are assessed against their personal academic goals. |
| Keywords: | personalising education, personal coaching, individual goals, monitoring, multiple function areas |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2011/1-en&r=lab |
| By: | Joanna Sikora; Artur Pokropek |
| Abstract: | This paper provides a comprehensive overview of adolescent career plans reported in PISA 2006. Its main focus is on the differences in the status and area of employment expected by girls and boys in high school. In almost all countries, girls lead boys in their interest in non-manual, high status professional occupations. This can be seen as a vertical dimension of gender segregation in occupational preferences. Students also differ by gender in selecting particular fields of employment within status categories. These differences make up the horizontal segregation of students' expectations and, in PISA 2006, are prominent in the gendered choices of specific subfields of science. Both the vertical and the horizontal dimensions must be considered to appreciate the cultural and institutional factors which promote and reinforce systematic divides in career choices of adolescent boys and girls. |
| Date: | 2011–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaab:57-en&r=lab |
| By: | Facundo Sepulveda; Fabio Mendez |
| Abstract: | This paper presents new empirical evidence regarding the cyclicality of skill acquisition activities. The paper studies both training and schooling episodes at the individual level using quarterly data from the NLSY79 for a period of 19 years. We find that aggregate schooling is strongly countercyclical, while aggregate training is acyclical. Several training categories however behave procyclically. The results also indicate that firm-financed training is procyclical while training financed through other means is countercyclical; and that the cyclicality of skill acquisition investments depends significantly on the educational level and the employment status of the individual. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2011-13&r=lab |
| By: | Wasmer, Etienne (Sciences Po, Paris) |
| Abstract: | Unemployment may depend on equilibrium in other markets than the labor markets. This paper adresses this old idea by introducing search frictions on several markets: in a model of credit and labor market imperfections as in Wasmer and Weil (2004), I further introduce search on the goods market. The model can be solved by blocks: on two of the three markets, the relevant "market tightness" is a constant of parameters. In particular, goods market tightness, expressed as the ratio of unmatched consumers to unmatched firms, is equal to 1 which corresponds to a stochastic Say's law: demand and supply are stochastically in equilibrium. Financial market tightness is also a function of three parameters related to financial frictions. Job creation and employment depend on the equilibrium in the other markets. Reciprocally, higher job destruction implies more volatility of income of individual consumers and higher destruction of consumption matches. This lowers profits and further reduces job creation. Finally, there are complementarities between frictions in each market: in particular, the marginal effect of financial frictions on equilibrium unemployment is amplified by goods market frictions and vice versa. |
| Keywords: | search, matching, unemployment, goods market imperfections |
| JEL: | J6 E12 E13 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5758&r=lab |
| By: | Suzanne Kok; Nicole Bosch; Anja Deelen; Rob Euwals |
| Abstract: | <p>The behaviour of migrant women on the labour market is influenced by a variety of factors, among which the culture of the home and the host country. </p><p>Part of the literature investigates the role of home-country culture. This study extends the literature by including a measure for the influence of host-country culture as an additional determinant of the participation of migrant women. The empirical model explains participation from demographics and educational attainment, and uses home- and host-country female participation as proxies for culture. Evidence on the basis of the Dutch Labour Force Survey 1996 – 2007 suggests that both differences in home-country female participation and the trend in native female participation, as a measure for host-country culture, affect the participation of migrant women. The results suggest that host-country participation is at least as important as home-country participation.</p><p><em><em>Keywords: female labour force participation, immigration, cultural transmission</em></em></p> |
| JEL: | J16 J22 J61 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:180&r=lab |
| By: | Arnaud Lefranc; Fumiaki Ojima; Takashi Yoshida (THEMA, Universite de Cergy-Pontoise; Department of Sociology, Doshisha University; Institute of Social Science, Tokyo University) |
| Abstract: | This paper estimates the extent of intergenerational income mobility in Japan among sons and daughters born between 1935 and 1975. Our estimates rely on a two-sample instrumental variables approach using representative data from the Japanese Social Strat- ification and Mobility (SSM) surveys, collected between 1965 and 2005. Father's income is predicted on the basis of a rich set of variables including education, occupation and job characteristics and we discuss changes in the Japanese earnings structure for cohorts born between the early 1900s and the 1960s. Our main results indicate that the intergenerational income elasticity (IGE) in Japan is around .3 for both sons and daughters, a rather low figure in comparative perspective. We discuss the sensitivity of the IGE to using either personal or family income as the income variable for both fathers and children. Laslty, we also examine changes across cohorts in the IGE, as well as the existence of non-linearities in the intergenerational transmission of income. Results indicate that intergenerational mobility has been roughly stable over the last decades and point to a convex relationship between parental income and child's achievement. |
| Keywords: | Intergenerational mobility, earnings differentials, income, inequality, trends, Japan, assortative mating, education. |
| JEL: | D1 D3 J3 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2011-10&r=lab |
| By: | Brenke, Karl (DIW Berlin); Rinne, Ulf (IZA); Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: | Short-time work was the "German answer" to the economic crisis. The number of short-time workers strongly increased in the recession and peaked at more than 1.5 million. Without the extensive use of short-time work, unemployment would have risen by approximately twice as much as it actually did. Short-time work has certainly contributed to the mild response of the German labor market to the crisis, but this is likely due to the country-specific context. Although the crisis has been overcome and employment is strongly expanding, modified regulations governing short-time work are still in place. This leads to undesired side effects. |
| Keywords: | labor market policy, partially unemployed workers, short-time work compensation, economic crisis |
| JEL: | J65 J68 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5780&r=lab |
| By: | Elisa Birch (UWA Business School, The University of Western Australia); Phil Hancock (UWA Business School, The University of Western Australia) |
| Abstract: | The use of online lecture recordings as a supplement to physical lectures is an increasingly popular tool at many universities. As its popularity grows, however, there is increasing evidence that some students are using these recordings as a substitute to attending the actual lectures, rather than as a complement that helps them revisit difficult content, or for study purposes. Does this trend matter? If students receive as much (if not more) benefit from viewing their lectures online as they do by attending in person, then this is surely the student’s right. However, this has potentially significant consequences for the delivery of lecture content in higher education. This paper combines survey data with student record data for students in a first year Microeconomics class to examine this issue. The main finding is that, whilst there are indeed some students using online lecture recordings as a substitute to attending lectures, they are ultimately at a fairly severe disadvantage in terms of their final marks. Controlling for a wide variety of student characteristics, we find that, relative to attending zero to six lectures (out of 26), those attending essentially all lectures in person (25 or 26 lectures) have a direct advantage of nearly eight marks. Moreover, students attending zero to six lectures do not close this gap by viewing more lectures online, despite having double the number of lecture recording hits as their colleagues who attended 25-26 lectures. In contrast to this, students who attend the majority of lectures in person do receive a benefit from additional use of the lecture recordings. The results provide evidence that, when used as a complementary tool, lecture recordings are a valuable supplement for students. However, when used as a substitute, lecture recordings provide no additional benefit. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:11-09&r=lab |
| By: | Sun-Young Rieh; Jin-Wook Kim; Woong-Sang Yu |
| Abstract: | The Korean Educational Development Institute (KEDI) has recently initiated a pilot project to develop a new prototype school, involving users in the design phase. This is the first time in Korea that users have been consulted on issues relating to school design. |
| Keywords: | design process, user participation, educational facilities, feedback |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaac:2011/4-en&r=lab |
| By: | Liana E. Fox; Wen-Jui Han; Christopher Ruhm; Jane Waldfogel |
| Abstract: | Utilizing data from the 1967-2009 years of the March Current Population Surveys, we examine two important resources for children’s well-being: time and money. We document trends in parental employment, from the perspective of children, and show what underlies these trends. We find that increases in family work hours mainly reflect movements into jobs by parents who, in prior decades, would have remained at home. This increase in market work has raised incomes for children in the typical two-parent family but not for those in lone-parent households. Time use data from 1975 and 2003-2008 reveal that working parents spend less time engaged in primary childcare than their counterparts without jobs but more than employed peers in previous cohorts. Analysis of 2004 work schedule data suggests that non-daytime work provides an alternative method of coordinating employment schedules for some dual-earner families. |
| JEL: | J13 J22 J38 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17135&r=lab |
| By: | Paul Bingley; Nabanita Datta Gupta; Peder J. Pedersen |
| Abstract: | This paper investigates the interaction between measures of health, disability pension take up and labor market performance in Denmark by charting their development over time and by examining how they are affected by key policy reforms in the area of early retirement. The main emphasis is on the long-run development of the Social Disability Pension (SDP) program, and whether it concurs with trends in population health based on mortality indicators (both overall and cause-specific) and with self-reported health. A strong relationship is found between labor force activity measures and non-health related programs for early retirement for those 60 and older. However, no clear relationship is evident between SDP take up and the health indicators. One reason for the lack of a correlation is most probably that SDP is “on its own track” due to program innovations and reforms creating competing risks or program substitution especially for the 50+ population. |
| JEL: | H51 H55 I18 J26 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17138&r=lab |
| By: | Ana Llena-Nozal; Theodora Xenogiani |
| Abstract: | This paper investigates the dynamic effects of health shocks on labour market transitions to disability, employment and other non-employment pathways. It uses longitudinal data to estimate time discrete duration models for three countries: Australia, Switzerland and the United Kingdom. Both current and lagged health status are important predictors of exit to disability benefits and the effect of health problems varies by age group, education and income across countries. The results are robust to the inclusion of different socio-demographic variables and to instrumenting health status.<BR>Ce papier analyse les effets dynamiques des chocs de santé sur les transitions du marché du travail vers des prestations d’invalidité, l’emploi et d’autres voies de non-emploi. Il utilise des données longitudinales pour estimer des modèles de durée à temps discret pour trois pays: l’Australie, la Suisse et le Royaume Uni. L’état de santé courante et celui de la période précédente ont un impact important sur la probabilité des sorties vers les régimes d’invalidité, et l’effet des problèmes de santé varie avec l’âge, l’éducation et le revenu à travers les pays. Les résultats sont robustes à l’inclusion des variables sociodémographiques et à l’instrumentation de l’état de santé. |
| JEL: | H55 I10 J14 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:117-en&r=lab |
| By: | Joan Wilson |
| Abstract: | In 2002 the former Labour government launched the Academies Programme of school improvement. This scheme has targeted entrenched issues of pupil underachievement within state secondary schools located in deprived areas, by enabling private sponsors to run the renewed schools and by granting Academies independence from local authority control. A total of 203 institutions were established by the end of Labour's time in power (April 2010). This paper considers the efficacy of the scheme in delivering on an objective determined at its inception - that requiring Academies to feature a more inclusive and mixed-ability background of pupils. Administrative information in the National Pupil Database is combined with school-level data to assess how the academic quality and composition of pupils entering year 7 of Academies and how their whole school composition has compared to those in predecessor and non-Academy schools. Difference-in-differences regression analysis is applied to a sample of 33 Academies and 326 control schools over the period 1997-2007. Findings reveal an immediate boost to intake quality among Academies once the policy came into effect and a fall in entry by pupils of weaker prior ability, while sampled Academies have also taken in fewer pupils from underprivileged backgrounds. Thus Academies have actually featured a more 'exclusive' pupil profile. The Coalition government - formed since May 2010 - has extended the policy to allow all state schools to become Academies. Newer Academies, like the original ones, may adapt their admissions in a performance-favouring way, implying a worsening of educational opportunity under both policy versions. |
| Keywords: | Academies, school improvement, school renewal, institutional change, pupil profile, pupil intake, pupil composition |
| JEL: | I2 I21 I28 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0125&r=lab |
| By: | Czernich, Nina |
| Abstract: | Online job search is becoming increasingly prominent and is viewed to improve the efficiency of the search process. OLS results suggest a negative association of DSL availability with unemployment rates across German municipalities. However, the roll-out of DSL networks is not random. This paper exploits the fact that the availability of DSL connections depends on a municipality’s distance to the closest interconnection point to the pre-existing voice-telephony network. Instrumental-variable results using this distance as an instrument for DSL availability do not confirm the effect of DSL availability on unemployment. |
| Keywords: | Unemployment; job search; broadband internet |
| JEL: | J64 L96 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:12279&r=lab |
| By: | Asali, Muhammad; Cristobal-Campoamor, Adolfo |
| Abstract: | This paper gives both theoretical arguments and econometric support to the notion of optimal FDI levels, from the viewpoint of human-capital formation in the host country. The optimality of a limited FDI level depends on the local incentives to get trained. Those incentives are formed in the face of uncertainty and asymmetric information between the multinational and its potential workers. Our estimates confirm the significance of a negative, non-linear impact of FDI per capita on tertiary schooling, both in developed and developing countries. |
| Keywords: | FDI; Human-Capital Formation; Education; Skill Heterogeneity |
| JEL: | F23 J24 |
| Date: | 2011–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31460&r=lab |
| By: | Eric P. Bettinger; Brent J. Evans; Devin G. Pope |
| Abstract: | Colleges rely on the ACT exam in their admission decisions to increase their ability to differentiate between students likely to succeed and those that have a high risk of under-performing and dropping out. We show that two of the four sub tests of the ACT, English and Mathematics, are highly predictive of positive college outcomes while the other two subtests, Science and Reading, provide little or no additional predictive power. This result is robust across various samples, specifications, and outcome measures. We demonstrate that focusing solely on the English and Mathematics test scores greatly enhances the predictive validity of the ACT exam. |
| JEL: | I23 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17119&r=lab |
| By: | Bissonnette, Luc (Tilburg University); van Soest, Arthur (Tilburg University) |
| Abstract: | We analyze expectations of the Dutch population of ages 25 and older concerning the future generosity state and occupational pensions, the two main pillars of the Dutch pension system. Since the summer of 2006, monthly survey data were collected on the expectations of Dutch households concerning purchasing power of occupational pensions, eligibility and purchasing power of old age social security benefits, and the average retirement age ten or twenty years from now. We investigate how these expectations have changed over time and how they vary with socio-economic characteristics. Exploiting the fact that we have data until September 2010, we also analyze the effect of the recent financial and economic crisis. We find significant differences in expectations of different socio-economic groups, mainly suggesting that groups who are probably better informed were also more pessimistic. |
| Keywords: | subjective probabilities, old age social security, occupational pensions |
| JEL: | D84 H55 J26 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5759&r=lab |
| By: | Luis Beccaria; Roxana Maurizio; Ana Laura Fernandez; Paula Monsalvo; Mariana Alvarez |
| Abstract: | Latin America experienced six years of sustained growth from 2003-2008. The high rate of economic growth over these years – before the 2008-2009 crisis – positively impacted social and labour market indicators. Evidence of these positive impacts can be seen in the form of job creation (particularly formal occupations), reduced unemployment and a slight recovery of average wages. During the period of interest, the rates of poverty and extreme poverty in the region respectively fell by 11 and 6 percentage points (p.p.). It is highly pertinent, in this context, to study the dynamics of poverty in the region and to analyze the flows into and out of poverty that accompanied this significant reduction in poverty. The main objective of this paper is to carry out a comparative study of poverty dynamics in five Latin American countries. The study specifically aims to analyze the extent to which countries with various levels of poverty incidence differ in terms of the intensity of poverty exits and entries, identify the relative importance of events associated with poverty transitions (such as factors in the labour market, demographic change and public policy), and finally, this study aims to examine the ways in which these events affect households with different characteristics.In order to achieve these objectives, we perform a dynamic analysis of panel data from regular household surveys. Of the five countries included in the study, Argentina and Costa Rica are found to have a relatively low incidence of poverty, Brazil is in an intermediary situation in this regard, while relatively high rates of poverty are found in Ecuador and Peru. This heterogeneous selection gives us a varied picture of social deprivation in the region.This dynamic analysis is useful for policy recommendations to overcome high poverty levels in the region, both by reducing the probability of falling into poverty and increasing the chances of moving out of poverty. |
| Keywords: | Poverty dynamics, Latin America, Labour market, Social policy |
| JEL: | I32 I38 J68 O54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2011-05&r=lab |
| By: | Xavier Raurich; Fernando Sanchez-Losada; Montserrat Vilalta-Bufi (Universitat de Barcelona) |
| Abstract: | Growth models of learning-by-doing assume that knowledge learned in produc- tion gets freely and instantly spread to the whole economy. As a result, the econ- omy exhibits aggregate increasing returns and the total factor productivity (TFP) growth is endogenous. However, the assumption of instant diusion of knowledge seems unrealistic. Diusion of knowledge takes time and requires some channel of transmission. In this paper we assume this transmission channel is learning-by- hiring, since knowledge is embodied in workers. We present a model where the free and instant diusion of knowledge may exist only within sectors, but not across sectors. Diusion of knowledge across sectors can only occur through the mobility of labor and, therefore, the labor market determines both the level and growth of TFP. We investigate how labor mobility costs modify the equilibrium outcome of such an economy considering two scenarios: endogenous and exogenous growth. Moreover, we show that other labor market ine ciencies, such as labor income taxes or labor search costs, may reduce labor mobility and therefore modify TFP. |
| Keywords: | labor mobility, economic growth, learning-by-hiring, learning-by-doing |
| JEL: | O41 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2011254&r=lab |
| By: | Nordin , Martin (Department of Economics, Lund University); Rooth, Dan-Olof (School of Business and Economics, Linnaeus University) |
| Abstract: | A rich data set gives a unique opportunity to study heterogeneity in intergenerational mobility. Here, we explore whether the intergenerational association in education and income is the same for children with different results in a cognitive ability test (the Swedish Military Enlistment test). Despite an endogenous test score, the argument is that this is the policy relevant case to analyze, i.e. whether children of a certain cognitive ability level are influences by their parents’ socioeconomic status and not whether they are influenced by some random parent. The intergenerational associations vary a great deal with the results in the cognitive ability test. The intergenerational association is highest for the middle ability groups and lower for both the higher ability and (particularly) the lower ability groups. The overall conclusion is that adding the cognitive ability dimension to studies of intergenerational mobility contributes new and important insights. For example, since the average child (cognitively speaking) seems to be most receptive to parental influence, intergenerational mobility is primarily increased by targeting the average child. |
| Keywords: | Intergenerational associations; education; incomes; cognitive ability; interaction |
| JEL: | J24 J62 |
| Date: | 2011–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2011_018&r=lab |
| By: | Kerwin Charles; Jonathan Guryan |
| Abstract: | We discuss research on discrimination against blacks and other racial minorities in labor market outcomes, highlighting fundamental challenges faced by empirical work in this area. Specifically, for work devoted to measuring whether and how much discrimination exists, we discuss how the absence of relevant data, the potential noncomparability of blacks and whites, and various conceptual concerns peculiar to race may frustrate or render impossible the application of empirical methods used in other areas of study. For work seeking to arbitrate empirically between the two main alternative theoretical explanations for such discrimination as it exists, we distinguish between indirect analyses, which do not directly study the variation in prejudice or the variation in information, the mechanisms at the heart of the two types of models we review, and direct analyses, which are more recent and much less common. We highlight problems with both approaches. Throughout, we discuss recent work, which, the various challenges notwithstanding, permits tentative conclusions about discrimination. We conclude by pointing to areas that might be fruitful avenues for future investigation. |
| JEL: | J01 J7 J71 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17156&r=lab |
| By: | Kanas, Agnieszka (Utrecht University); Chiswick, Barry R. (George Washington University); van der Lippe, Tanja (Utrecht University); van Tubergen, Frank (Utrecht University) |
| Abstract: | Using data from the German Socio-Economic Panel, we examined the impact of social contacts on immigrant occupational status and income. In addition to general social contacts, we also analyzed the effects of bonding (i.e., co-ethnic) and bridging (i.e., interethnic) ties on economic outcomes. Results show that general social contacts have a positive effect on the occupational status and, in particular, annual income of immigrants. We also find that bridging ties with Germans lead to higher occupational status, but not to increased income. These effects remain visible even when social contacts are measured (at least) one year prior to the economic outcomes, as well as when earlier investments in German human capital are considered. Finally, we show that co-ethnic concentration in the region of residence weakly affects economic returns to German language proficiency and schooling. |
| Keywords: | occupational status, social contacts, immigrants, income, panel data |
| JEL: | F22 J61 Z13 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5775&r=lab |
| By: | Emerson, Patrick M. (Oregon State University); McGough, Bruce (Oregon State University) |
| Abstract: | Limited human capital investment is a common characteristic of low-income countries despite the fact that estimated returns to educational investment in low-income countries are generally higher than in high-income countries. Empirical evidence suggests that income and credit constraints can only account for a small part of this underinvestment. Recent experimental evidence shows that families' misperceptions about the returns to education play a large role in their low investment levels. This paper builds a model of human capital and growth that incorporates an adaptive learning mechanism to capture the way agents form perceptions about returns to education. In an economy where human capital investments have both private and public returns, we find multiple learnable equilibria, including those which are characterized by low investment and low returns. We also find that even when the rational equilibrium corresponds to a high level of human capital investment, the learning mechanism, influenced by the agents' priors and cultural bias, may impart low human capital investment for extended periods. Policies that can speed up the learning process are examined and it is found that faster rates of growth can be achieved through interventions. |
| Keywords: | growth, education, learning |
| JEL: | O40 O15 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5756&r=lab |
| By: | Francavilla, Francesca (University of Westminster); Giannelli, Gianna Claudia (University of Florence); Grotkowska, Gabriela (Warsaw University); Socha, Mieczyslaw (Warsaw University) |
| Abstract: | This study provides a comparison of the size and value of unpaid family care work in two European member States, Italy and Poland. Using the Italian and Polish time use surveys, both the opportunity cost and the market replacement approaches are employed to separately estimate the value of family childcare and care of the elderly. The results show that, overall, in Italy the number of people performing family care work is higher, also due to the larger population. Italians participate somewhat less than Poles in child care, but substantially more in care of the elderly because of demographic factors. However, the huge difference in the value of unpaid family care work, which in Italy exceeds the value of Poland by about eight times, is largely to be attributed to the discrepancy in hourly earnings, average earnings of Poles being about one fifth of those of Italians. In GDP terms, instead, the value of unpaid family care work is more similar, ranging between 3.7 and 4.4 per cent of the Polish GDP and 4.1 and 5 per cent of the Italian GDP, depending on the estimation approach. The national values of these activities are discussed and an interpretation of the country differentials in the family care-taking gender gaps is given in terms of differences in culture, economic development and institutions. |
| Keywords: | unpaid work, time use, child care, care of the elderly, adult care, Poland, Italy, satellite accounts |
| JEL: | E01 E26 J13 J14 J16 J22 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5771&r=lab |
| By: | Ahmed Ennasri; Marc Willinger |
| Abstract: | We investigate the effects of competition on managerial incentives and effort in a laboratory experiment. Each owner offers compensation to his manager in two different contexts: monopoly and Cournot duopoly. After accepting the compensation, the manager chooses an effort level to increase the probability of reduced costs of his firm. Theory predicts that the entry of a rival firm in a monopolistic industry affects negatively both the incentive compensation and the effort level. Our experimental findings confirm that the entry of a rival firm reduces the incentive compensation but not the manager’s effort level. However, despite the reduction of the incentive compensation, the manager continues to accept the contract offers and exert the same level of effort. |
| Keywords: | Managerial Incentives, Effort, Competition, Moral hazard, Experiments |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:12-11&r=lab |
| By: | Di Maro, V. |
| Abstract: | This thesis studies the impact of different types of policy interventions on demand for human capital in Latin America. Chapter 1 focuses on the unintended consequence (spillover effects) of the Oportunidades program in rural Mexico. We show that the program has an indirect effect on cervical cancer screening rates of women who were not eligible for the program but lived in areas where the program was in operation. These effects - health externalities - can dramatically change the assessment of the impacts of a program as well as considerations about its design. In addition to this, we show evidence of the mechanism through which the program operates being the weakening of the social norm of husbands' opposition to their spouses being screened by male doctors. In Chapter 2 we show that Oportunidades is bringing families out of poverty, which is considered here as a necessary condition to allow them to invest in human capital. We also discuss why CCT programs can have perverse incentives on the labor supply of eligible individuals and show that the program is not having this effect. In chapter 3 and 4 we contribute to the evidence on the impact of Early Childhood interventions. In chapter 3 we discuss how conditional cash transfers can increase the caloric intake of very young children and young mothers. This chapter also has some methodological content, in that it shows how to apply a technique for estimating individual caloric intake when only household aggregate data is available to a program evaluation setting. Results show that Oportunidades is successful at increasing the caloric intake of young children and young mothers, while it does not seem to have an effect at other age ranges. Chapter 4 focuses on the evaluation of the impact of a preschool nursery program in Colombia: Hogares Comunitarios. When compared to a CCT program, this program can be thought as a direct attack to children development, as participants (kids age 0 to 6) in the Hogares Comunitarios receive daycare services and food at the house of a community mother. Our evidence shows that this program can have a positive and sizeable effect on child growth, with this result being robust to different instruments for participation into the program and different samples. In chapter 5 we deal with the long-standing debate about in-kind transfers vs. cash transfers and with how this relates to child nutrition. In particular, we study how nutrient intake responds to changes in income in a sample of rural Mexican households. This increase in income can be thought as an unconditional cash transfer to households. Our evidence is mixed: while consumption of some key nutrients (vitamins A and C, heme iron, calcium and fats) responds positively to an increase in income, other nutrients (energy, zinc and protein) seem not to be affected by a change in income, with this supporting the case for conditionalities and/or in-kind transfers. |
| Date: | 2011–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucllon:http://discovery.ucl.ac.uk/1301990/&r=lab |
| By: | Peter Huber (WIFO); Harald Oberhofer; Michael Pfaffermayr (WIFO) |
| Abstract: | Based on a structural model for initial firm size, survival and firm growth we estimate firm-specific transition probabilities between size classes of the firm size distribution. This allows an assessment of the impact of different (counterfactual) economic policy measures on intra-distribution dynamics of the firm size distribution. We find that policies increasing the life span of firms reduce the exit hazard of young firms, but also reduce the probability to be a Gazelle. An increase in the industry-wide entry rate increases the exit hazards of incumbent firms and has no strong impact on the likelihood of firms to become Gazelles. Increasing market growth, by contrast, decreases the exit hazards for incumbent firms and slightly increases the likelihood of firms to be Gazelles. Finally, an increase in the birth size of firms increases the probability of young firms to be Gazelles with strongest effects for the smallest firms. |
| Keywords: | Firm growth, survival, entry size, Gazelles, economic policy |
| Date: | 2011–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2011:i:395&r=lab |