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on Labour Economics |
| By: | Paul J Devereux (University College Dublin); Wen Fan (University College Dublin) |
| Abstract: | We study the effects of the large expansion in British educational attainment that took place for cohorts born between 1970 and 1975. Using the Quarterly Labour Force Survey, we find that the expansion caused men to increase education by about a year on average and gain about 8% higher wages; women obtained a slightly greater increase in education and a similar increase in wages. Clearly, there was a sizeable gain from being born late enough to take advantage of the greater educational opportunities offered by the expansion. Treating the expansion as an exogenous increase in educational attainment, we obtain instrumental variables estimates of returns to schooling of about 6% for both men and women. |
| Keywords: | return to education; higher education expansion |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201111&r=lab |
| By: | Longhi, Simonetta (ISER, University of Essex); Taylor, Mark P. (University of Essex) |
| Abstract: | The job search literature suggests that on-the-job search reduces the probability of unemployed people finding a job. However, there is no evidence that employed and unemployed job seekers are similar or apply for the same jobs. We combine the Labour Force Survey and the British Household Panel Survey to compare employed and unemployed job seekers in terms of individual characteristics, preferences over working hours, job-search strategies, and employment histories. We find substantial differences, which persist over the business cycle and remain after controlling for unobserved heterogeneity. We conclude that the unemployed do not directly compete with employed job seekers. |
| Keywords: | on-the-job search, unemployment, job competition, employment histories, panel data |
| JEL: | J29 J60 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5827&r=lab |
| By: | Anghel, Brindusa (FEDEA, Madrid); de la Rica, Sara (University of the Basque Country); Dolado, Juan José (Universidad Carlos III de Madrid) |
| Abstract: | This paper addresses the role played by Public Sector (PS) employment across different OECD labour markets in explaining: (i) gender differences regarding choices to work in either PS or private sector, and (ii) subsequent changes in female labour market outcomes. To do so, we provide some empirical evidence about cross-country gender differences in choice of employment in the PS vs. the private sector, using the European Community Household Panel (ECHP), in the light of different theories on gender behaviour in the labour market. We also analyze the main determinants of the hourly wage gaps across these two sectors for males and females separately. Finally, we document the main stylized facts about labour market transitions by male and female workers among inactivity, unemployment, working in the PS and working in the private sector. |
| Keywords: | labour market transitions, gender gaps, public sector employment |
| JEL: | J45 J16 J31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5825&r=lab |
| By: | Jones, Melanie K. (Swansea University); Latreille, Paul L. (Swansea University); Sloane, Peter J. (Swansea University) |
| Abstract: | This paper uses matched employee-employer data from the British Workplace Employment Relations Survey (WERS) 2004 to examine the determinants of employee job anxiety and work-related psychological illness. Job anxiety is found to be strongly related to the demands of the job as measured by factors such as occupation, education and hours of work. Average levels of employee job anxiety, in turn, are positively associated with work-related psychological illness among the workforce as reported by managers. The paper goes on to consider the relationship between psychological illness and workplace performance as measured by absence, turnover and labour productivity. Work-related psychological illness is found to be negatively associated with several measures of workplace performance. |
| Keywords: | job anxiety, stress, absence, labour productivity |
| JEL: | I0 J28 J81 J20 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5809&r=lab |
| By: | Guido Menzio; Shouyong Shi |
| Abstract: | The paper develops a model of directed search on the job where transitions of workers between unemployment, employment and across employers are driven by heterogeneity in the quality of firm-worker matches. The equilibrium is such that the agents' value and policy functions are independent of the distribution of workers across employment states. Hence, the model can be solved outside of steady-state and used to measure the effect of cyclical productivity shocks on the labor market. Productivity shocks are found to generate large fluctuations in workers' transitions, unemployment and vacancies when matches are experience good, but not when matches are inspection goods. |
| Keywords: | Directed search; On the Job Search; Business Cycles; Unemployment |
| JEL: | E24 E32 J64 |
| Date: | 2011–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-437&r=lab |
| By: | Schuenemann, Benjamin; Lechner, Michael; Wunsch, Conny |
| Abstract: | Wage subsidies are often suggested as a particularly effective policy to improve labor market chances of economically disadvantaged groups. We empirically evaluate an employer-side wage subsidy scheme targeted at the long-term unemployed in Germany. Based on program regulations and a large data set we estimate the impact of program existence locally at the eligibility threshold using an RDD framework in differences. The results suggest no significant effect of the subsidy on exit rates out of unemployment or employment stability. Employment rates up to three years after eligibility show no significant improvement. In conclusion, our findings are in contrast to previous empirical results justifying such policies. |
| Keywords: | Wage subsidy, Long-term unemployment, Regression discontinuity |
| JEL: | J08 J23 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2011:26&r=lab |
| By: | Anghel, Brindusa; de la Rica, Sara; Dolado, Juan J. |
| Abstract: | This paper addresses the role played by Public Sector (PS) employment across different OECD labour markets in explaining: (i) gender differences regarding occupational choices in either PS or private sector, and (ii) subsequent changes in female labour market outcomes. To do so, we provide some empirical evidence about cross-country gender differences in choice of employment in the PS vs. the private sector using the European Community Household Panel (ECHP), in the light of several theories about patterns of gender behaviour in the labour market. We also analyze the main determinants of the hourly wage gaps across these two sectors for males and females separately. Finally, we document the main stylized facts about gender differences in labour market transitions of workers among inactivity, unemployment, working in the PS and working in the private sector. |
| Keywords: | Gender gaps; Labour market transitions; Public sector employment |
| JEL: | J16 J31 J45 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8468&r=lab |
| By: | Paul Gomme (Concordia University and CIREQ); Damba Lkhagvasuren (Concordia University and CIREQ) |
| Abstract: | Reasonably calibrated versions of the Diamond-Mortensen-Pissarides search and matching model of unemployment underpredict, by a wide margin, the volatility of vacancies, unemployment, and the vacancies-unemployment ratio - variables at the heart of this model. These shortcomings motivate two modifications to the Diamond-Mortensen-Pissarides model. First, wages are determined via competitive search (wage posting by firms along with directed search on the part of workers) rather than the usual Nash bargaining. This change is motivated by the fact that most unemployment variation in the U.S. is due to non-college educated individuals, and that wages of newly-hired non-college educated workers are predominantly set by wage posting. Second, workers are permitted to take direct action to affect the outcome of their labor market search through search effort. With these modifications in place, the benchmark model captures 70% of the standard deviation of unemployment and the vacancies-unemployment ratio, and almost 80% of the volatility of vacancies. A recalibration of the model that targets the variability of the vacancies-unemployment ratio results in reasonable parameters, and can account for almost all of the cyclical variability in unemployment and vacancies. |
| Keywords: | Variable Search Effort, Educational Differences in Unemployment Volatility, Endogenous Matching Technology, Time Use, Wage Posting, Competitive Search |
| JEL: | E24 E32 J63 J64 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:crd:wpaper:11003&r=lab |
| By: | Arellano, F. Alfonso |
| Abstract: | This study analyses the effects on unemployment and the quality of employment of the Spanish labour market reform in 2001 for the most important age groups. The content of the reform was based on the implementation of two policies: (i) a new permanent contract with lower firing costs than the ordinary one, and (ii) the reduction of the payroll taxes paid by firms to foster creation/ conversion of/ into permanent contracts. This reform extended to further groups of workers similar measures adopted in a previous reform in 1997. Using a data base of unemployed workers in the region of Madrid from January 1997 up to September 2003, and methods for non-experimental data, the results suggest that, regardless of gender, workers below 30 years are negatively affected by the reform, and workers above 55 years show positive but small effects. The influence of the reform for workers between 45 and 50 years is negligible. As regards education, graduates are more sensitive to the reform than workers with a lower level of education (primary and secondary education). |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/334&r=lab |
| By: | Kosovka Ognjenovic |
| Abstract: | In this paper is estimated the wage gap between the public and the private sector in Serbia, for women and men separately. The results show that, with advance of the transition, the public sector generates wage premium for those who work in that sector compared to the employed in the private sector. The public sector overpaid both men and women compared to their counterparts in the private sector, but the estimated wage premium for women is lower compared to the estimated wage premium for men (22.3 percent and 25.4 percent, respectively; both estimates are statistically significant). The only group of workers who are penalized for working in the public sector is comprised of women and men who have higher education. In order to estimate the sectoral wage gap by gender several regression models were used: the quantile regressions, the pooled OLS regression and the fixed-effects panel data model. The data that are used in the analysis are taken from the Serbian Living standard measurement surveys for 2003 and 2007. |
| Keywords: | transition, wage differences, public and private sectors, living standard measurement survey data |
| JEL: | J21 J31 J38 P2 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:wii:bpaper:bowp:091&r=lab |
| By: | Hof, Stefanie (Swiss Co-ordination Center for Research in Education); Strupler, Mirjam (University of Bern); Wolter, Stefan (University of Bern) |
| Abstract: | This study investigates the determinants and motives of professionals who change career to vocational teaching. The framework for this study is the Swiss vocational education system, which requires that teachers of vocational subjects must have a prior career in that specific field. Thus, to work in teaching, every vocational teacher has to change his or her initial career. This paper focuses on the relevance of monetary motives for changing a career to teaching. Using a unique data set of trainee teachers, we show that professionals who change their careers to teaching earned on average more in their first career than comparable workers in the same occupation. Our findings additionally demonstrate that the average career changer still expects to earn significantly more as a teacher than in the former career. However, the study shows substantial heterogeneity and a zero wage elasticity of the teacher supply, suggesting that non-monetary motives are more relevant for career change than monetary factors. |
| Keywords: | career change, occupational change, rate of return to education, wage differentials, teacher wages, vocational education and training |
| JEL: | C21 I20 J24 J45 J62 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5806&r=lab |
| By: | Michael W. L. Elsby; Jennifer C. Smith; Jonathan Wadsworth |
| Abstract: | Unemployment varies substantially over time and across subgroups of the labour market. Worker flows among labour market states act as key determinants of this variation. We examine how the structure of unemployment across groups and its cyclical movements across time are shaped by changes in labour market flows. Using novel estimates of flow transition rates for the UK over the last 35 years, we decompose unemployment variation into parts accounted for by changes in rates of job loss, job finding and flows via non-participation. Close to two-thirds of the volatility of unemployment in the UK over this period can be traced to rises in rates of job loss that accompany recessions. The share of this inflow contribution has been broadly the same in each of the past three recessions. Decreased jobfinding 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: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1058&r=lab |
| By: | Sara Cools, Jon H. Fiva and Lars Johannessen Kirkebøen (Statistics Norway) |
| Abstract: | In this paper we use a parental leave reform directed towards fathers to identify the causal effects of paternity leave on children's and parents' outcomes. We document that paternity leave causes fathers to become more important for children's cognitive skills. School performance at age 16 increases for children whose father is relatively higher educated than the mother. We find no evidence that fathers' earnings and work hours are affected by paternity leave. Contrary to expectation, mothers' labor market outcomes are adversely affected by paternity leave. Our findings do therefore not suggest that paternity leave shifts the gender balance at home in a way that increases mothers' time and/or effort spent at market work. |
| Keywords: | parental leave; labor supply; child development |
| JEL: | J13 J22 J24 I21 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:657&r=lab |
| By: | Burda, Michael C. (Humboldt University, Berlin); Hunt, Jennifer (McGill University) |
| 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 of time. We find that this provided disincentives for employers to lay off workers in the downturn. Although 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 E32 J6 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5800&r=lab |
| By: | Longhi, Simonetta; Taylor, Mark P. |
| Abstract: | We use individual data for Great Britain over the period 1992-2009 to compare the probability that employed and unemployed job seekers find a job, and the quality of the job they find. The job finding rate of unemployed job seekers is 50 percent higher than that of employed job seekers, and this difference seems to be due to behavioural differences between employed and unemployed job seekers rather than differences in characteristics. Consistent with search theory, we find that employed job seekers are more selective in evaluating job offers; for example, they are less likely to accept low-wage and temporary jobs, or jobs that do not meet their working hour requirements. |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2011-17&r=lab |
| By: | Zabel, Cordula (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "This paper examines participation in labor market programs such as job subsidies, workfare, and training programs by lone mothers receiving means-tested unemployment benefits in Germany. Since the 2005 Hartz IV labor market policy reforms, expectations that non-employed parents responsible for caring for young children should be ready for employment or labor market program participation have grown stronger. However, discretion for program assignments is left to individual case managers in employment offices. Thus, lone mothers' participation in labor market programs is studied empirically here. This can contribute to determining the extent to which lone mothers are treated as adult workers in interactions with welfare state institutions in Germany. Entries into labor market programs are analyzed on the basis of large-scale administrative data using event-history analysis. Findings are that lone mothers' participation rates in workfare programs and class-room training programs closely approach or even surpass those of single childless women by the time their youngest child is 3 - 5 years old. In the case of programs that give more direct support for entering regular employment, like job subsidies and in-firm training programs, however, lone mothers' participation rates do not reach those of childless single women until their children are 6 - 9 or even 15 - 17 years old." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | allein Erziehende, Mütter, arbeitsmarktpolitische Maßnahme - Erfolgskontrolle, Teilnehmer, Arbeitslosengeld II-Empfänger, Langzeitarbeitslose, Trainingsmaßnahme, Einstiegsgeld, Eingliederungszuschuss, Arbeitsgelegenheit, Kinder, altersspezifische Faktoren |
| JEL: | C41 J12 J13 J68 I38 |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201114&r=lab |
| By: | Kamil Galuščắk (Czech National Bank); Mary Keeney (Central Bank and Financial Services Authority of Ireland); Daphne Nicolitsas (Bank of Greece); Frank Smets (European Central Bank); Pawel Strzelecki (National Bank of Poland); Matija Vodopivec (Bank of Slovenia) |
| Abstract: | This paper uses information from a rich firm-level survey on wage and price-setting procedures, in around 15,000 firms in 15 European Union countries, to investigate the relative importance of internal versus external factors in the setting of wages of newly hired workers. The evidence suggests that external labour market conditions are less important than internal pay structures in determining hiring pay, with internal pay structures binding even more often when there is labour market slack. When explaining their choice firms allude to fairness considerations and the need to prevent a potential negative impact on effort. Cross-country differences, that do exist, are found to depend on institutional factors (bargaining structures); countries in which collective agreements are more prevalent and collective agreement coverage is higher report to a greater extent internal pay structures as the main determinant of hiring pay. Within-country differences are found to depend on firm and workforce characteristics; strong association between the use of external factors in hiring pay, on the one hand, and skills (positive) and tenure (negative) on the other. |
| Keywords: | wage rigidity; newly hired workers; internal pay structure; employee turnover; business cycle; survey data |
| JEL: | J31 J41 J51 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:129&r=lab |
| By: | Dube, Arindrajit (University of Massachusetts Amherst); Lester, T. William (University of North Carolina, Chapel Hill); Reich, Michael (University of California, Berkeley) |
| Abstract: | We measure labor market frictions using a strategy that bridges design-based and structural approaches: estimating an equilibrium search model using reduced-form minimum wage elasticities identified from border discontinuities and fitted with Bayesian and LIML methods. We begin by providing the first test of U.S. minimum wage effects on labor market flows and find negative effects on employment flows, but not levels. Separations and accessions fall among restaurants and teens, especially those with low tenure. Our estimated parameters of a search model with wage posting and heterogeneous workers and firms imply that frictions help explain minimum wage effects. |
| Keywords: | minimum wage, labor market flows, monopsony, Bayesian estimation |
| JEL: | C11 C63 J23 J38 J42 J63 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5811&r=lab |
| By: | Martin Halla; Martina Zweimüller |
| Abstract: | This paper interprets accidents occurring on the way to and from work as negative health shocks to identify the causal effect of health on labor market outcomes. We argue that in our sample of exactly matched treated and control workers, these health shocks are quasi-randomly assigned. A fixed-effects difference-in-differences approach estimates a negative and persistent effect on subsequent employment and income. After initial periods with a higher incidence of sick leave, treated workers are more likely unemployed, and a growing share of them leaves the labor market via disability retirement. Those treated workers, who manage to stay in employment, incur persistent income losses. The effects are stronger for sub-groups of workers who are typically less attached to the labor market. |
| Keywords: | Health, employment, income |
| JEL: | I10 J22 D31 J31 J24 J26 J64 J28 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2011_04&r=lab |
| By: | Russo, Giovanni (European Centre for the Development of Vocational Training (Cedefop)); Hassink, Wolter (Utrecht University) |
| Abstract: | Both vertical (between job levels) and horizontal (within job levels) mobility can be sources of wage growth. We find that the glass ceiling operates at both margins. The unexplained part of the wage gap grows across job levels (glass ceiling at the vertical margin) and across the deciles of the intra-job-level wage distribution (glass ceiling at the horizontal margin). This implies that women face many glass ceilings, one for each job level above the second, and that the glass ceiling is a pervasive phenomenon. In the Netherlands it affects about 88% of jobs, and 81% of Dutch women in employment work in job levels where a glass ceiling is present. |
| Keywords: | glass ceiling, wage gap, gender |
| JEL: | J31 J24 J22 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5828&r=lab |
| By: | Buddin, Richard |
| Abstract: | This study uses longitudinal student-level test score data to examine the effectiveness of elementary teachers and schools in Los Angeles. The results show that teacher effectiveness varies widely both across the Los Angeles school district and within district schools. Controlling for student background and preparation, we find only modest difference across schools in improving student achievement. We explore the sensitivity of teacher and school effectiveness measures to alternative regression controls. We find that teacher and school effectiveness measures are relatively insensitive to detailed controls for student and peer heterogeneity. |
| Keywords: | Student achievement; Teacher effectiveness; Value-added; |
| JEL: | J08 I2 J01 I21 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31963&r=lab |
| By: | Euwals, Rob (CPB Netherlands Bureau for Economic Policy Analysis); van Vuren, Annemiek (CPB Netherlands Bureau for Economic Policy Analysis); van Vuuren, Daniel (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | 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. 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. 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. |
| Keywords: | early retirement, disability insurance, labour supply |
| JEL: | C35 J26 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5810&r=lab |
| By: | Susanna Loeb; Demetra Kalogrides; Tara Béteille |
| Abstract: | The literature on effective schools emphasizes the importance of a quality teaching force in improving educational outcomes for students. In this paper, we use value-added methods to examine the relationship between a school’s effectiveness and the recruitment, assignment, development and retention of its teachers. We ask whether effective schools systematically recruit more effective teachers; whether they assign teachers to students more effectively; whether they do a better job of helping their teachers improve; whether they retain more effective teachers; or whether they do a combination of these processes. Our results reveal four key findings. First, we find that more effective schools are able to attract and hire more effective teachers from other schools when vacancies arise. Second, we find that more effective schools assign novice teachers to students in a more equitable fashion. Third, we find that teachers who work in schools that were more effective at raising achievement in a prior period improve more rapidly in a subsequent period than do those in less effective schools. Finally, we find that more effective schools are better able to retain higher-quality teachers, though they are not differentially able to remove ineffective teachers. The results point to the importance of personnel, and perhaps, school personnel practices, for improving student outcomes. |
| JEL: | I21 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17177&r=lab |
| By: | Osuna, Victoria |
| Abstract: | This paper proposes a model of job creation and destruction of the search and matching type. The model is able to replicate the magnitude and cyclical behavior of job creation, destruction and reallocation rates in a segmented labor market like the one in Spain. The motivation is the similarity in the cyclical behavior of US and Spanish job reallocation (JR) rates despite the differences in job security regulations. This behavior contrasts to what is observed in the rest of continental Europe, where JR is acyclical. The model, by introducing a segmented labor market, makes is plausible to obtain a countercyclical JR rate in a high firing cost economy. In addition, we quantify the effects of a 40 % reduction in the firing costs associated with permanent contracts. The main results are (i) negligible effects on permanent job destruction rates, (ii) significant effects on job creation and destruction (permanetltemporary) cyclical behavior, (iii) a 57 % increase in the job conversion rate from temporary into permanetjobs and a 12 % reduction in the temporary employment rate. |
| Keywords: | Reallocation; Firing costs; Bargaining; Matching; Search; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/6163&r=lab |
| By: | Arnaud Chevalier (Royal Holloway, University of London, IZA); Colm Harmon (University College Dublin, Australian National University, IZA); Vincent O'Sullivan (TILDA, Trinity College Dublin, The ESRI); Ian Walker (Lancaster University Management School, IZA) |
| Abstract: | This paper addresses the intergenerational transmission of education and investigates the extent to which early school leaving (at age 16) may be due to variations in parental background. An important contribution of the paper is to distinguish between the causal effects of parental income and parental education levels. Least squares estimation reveals conventional results – weak effects of income (when the child is 16), stronger effects of maternal education than paternal, and stronger effects on sons than daughters. We find that the education effects remain significant even when household income is included. However, when we use instrumental variable methods to simultaneously account for the endogeneity of parental education and paternal income, only maternal education remains significant (for daughters only) and becomes stronger. These estimates are consistent across various sets of instruments. The impact of paternal income varies between specifications but becomes insignificant in our favored specifications. Our results provide only limited support for policies that alleviate income constraints at age 16 in order to alter schooling decisions. In contrast, our results do suggest that policies which increase permanent income would lead to increased participation (especially for daughters). |
| Keywords: | Early school leaving, intergenerational transmission |
| JEL: | I20 J62 |
| Date: | 2011–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:2011/12&r=lab |
| By: | Kory Kroft; Matthew J. Notowidigdo |
| Abstract: | We study how the level of unemployment insurance (UI) benefits that trades off the consumption smoothing benefit with the moral hazard cost of distorting job search behavior varies over the business cycle. Empirically, we find that the moral hazard cost is procyclical, greater when the unemployment rate is relatively low. By contrast, our evidence suggests that the consumption smoothing benefit of UI is acyclical. Using these estimates to calibrate our model, we find that a one standard deviation increase in the unemployment rate leads to a roughly 14 to 27 percentage point increase in the welfare-maximizing wage replacement rate. |
| JEL: | H5 J64 J65 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17173&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 of time. We find that this provided disincentives for employers to lay off workers in the downturn. Although 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. |
| JEL: | E24 E32 J6 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17187&r=lab |
| By: | Alba, Alfonso |
| Abstract: | We use the Spanish Labor Force Survey (EPA) for the period 1987-1996 to study trends, characteristics, and labor force transitions of temporary workers. These are workers who hold fixed-term contracts, which the Spanish labor law distinguishes from indefinite contracts. Since the EPA questionnaire allows us to identify permanent from temporary workers, we are able to compare their characteristics. More importantly, we can use matched fIles from the same data source to analyze transitions from temporary to permanent employment. The aim is to test the extent to which temporary workers tend to be trapped in temporary employment relationships. Indeed, we fmd some evidence of this. |
| Keywords: | Permanent and temporary employment; Fixed-term contract; Transition rate; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/7215&r=lab |
| By: | Becker, Sascha O; Cinnirella, Francesco; Woessmann, Ludger (University of Warwick, University of Munich) |
| Abstract: | While women’s employment opportunities, relative wages, and the child quantity quality trade-off have been studied as factors underlying historical fertility limitation, the role of parental education has received little attention. We combine Prussian county data from three censuses—1816, 1849, and 1867—to estimate the relationship between women’s education and their fertility before the demographic transition. Despite controlling for several demand and supply factors, we find a negative residual effect of women’s education on fertility. Instrumental variable estimates, using exogenous variation in women's education driven by differences in landownership inequality, suggest that the effect of women's education on fertility is casual. |
| Keywords: | Demographic transition; female education; fertitility; Nineteenth Century Prussia |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:41&r=lab |
| By: | Lundborg, Petter (Lund University); Nilsson, Anton (Lund University); Rooth, Dan-Olof (Linneaus University) |
| Abstract: | A large number of studies in labor economics estimate the returns to schooling using data on monozygotic twins, under the assumption that educational attainment is random within twin pairs. This exogeneity assumption has been commonly questioned, however, but there is to date little evidence on the topic. Using a large dataset of twins, including comprehensive information on their health status at the age of 18 and later educational attainment, we investigate whether educational attainment is related to early health status within monozygotic twin pairs. In general, we obtain no indication of this being so. As a result, we find little evidence that early health differences between twins would bias the estimates of the returns to schooling available in the literature. |
| Keywords: | twins, twin-fixed effects, schooling, returns to schooling, ability bias, health |
| JEL: | I1 I2 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5803&r=lab |
| By: | Mahmood Arai; Moa Bursell; Lena Nekby |
| Abstract: | We examine differences in the intensity of employer priors against men and women with Arabic names in Sweden by testing how much more work experience is needed to eliminate the disadvantage of having an Arabic name on job applications. Employers are first sent CVs of equal merits in a field-experiment setup. Arabic-named CVs are thereafter enhanced with more relevant work experience than Swedishnamed CVs. Results indicate a reverse gender gap in employer priors as initial differences in call-backs disappear for female applicants when CVs for Arabic-named applications are enhanced, but remain strong and significant for male applicants. Thus, contrary to what is often assumed about the interaction of gender and ethnicity, we find that Arabic men face stronger discrimination in the labor market than Arabic women. |
| Keywords: | Employment Gaps; Gender; Ethnicity,; Field Experiments; Discrimination |
| JEL: | J15 J16 J71 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/91901&r=lab |
| By: | Jacoby, Hanan G.; Mansuri, Ghazala |
| Abstract: | Can communal heterogeneity explain persistent educational inequities in developing countries? The paper uses a novel data-set from rural Pakistan that explicitly recognizes the geographic structure of villages and the social makeup of constituent hamlets to show that demand for schooling is sensitive to the allocation of schools across ethnically fragmented communities. The analysis focuses on two types of social barriers: stigma based on caste affiliation and female seclusion that is more rigidly enforced outside a girl's own hamlet. Results indicate a substantial decrease in primary school enrollment rates for girls who have to cross hamlet boundaries to attend, irrespective of school distance, an effect not present for boys. However, low-caste children, both boys and girls, are deterred from enrolling when the most convenient school is in a hamlet dominated by high-caste households. In particular, low-caste girls, the most educationally disadvantaged group, benefit from improved school access only when the school is also caste-concordant. A policy experiment indicates that providing schools in low-caste dominant hamlets would increase overall enrollment by almost twice as much as a policy of placing a school in every unserved hamlet, and would do so at one-sixth of the cost. |
| Keywords: | Primary Education,Education For All,Disability,Adolescent Health,Tertiary Education |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5710&r=lab |
| By: | Dongshu Ou |
| Abstract: | The high school exit exam (HSEE) is rapidly becoming a standardized assessment procedure for educational accountability in the United States. I use a unique state-specific dataset to identify the effect of failing the HSEE on the likelihood that a student drops out early based on a Regression Discontinuity design. It shows that students who barely fail the exam are more likely to exit than those who barely pass despite being offered retest opportunities. The discontinuity amounts to a large proportion of the dropout probability of barely-failers, particularly for minority and low-income students, suggesting that the potential benefit of raising educational standards might come at the cost of increasing inequalities in the educational system. |
| Keywords: | high school exit exam, student dropout, regression discontinuity |
| JEL: | I21 I28 J24 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0107&r=lab |
| By: | Diego Restuccia; Guillaume Vandenbroucke |
| Abstract: | Consider the following facts. In 1950 the richest ten-percent of countries attained an average of 8.1 years of schooling whereas the poorest ten-percent of countries attained 1.3 years, a 6-fold difference. By 2005, the difference in schooling declined to 2-fold. The fact is that schooling has increased faster in poor than in rich countries even though the per-capita income gap has generally not decreased. What explains educational attainment across countries and their evolution over time? We develop a model of human capital accumulation that emphasizes productivity and life expectancy differences across countries and time. Calibrating the parameters of the model to reproduce historical data for the United States, we find that the model accounts for 95 percent of the difference in schooling levels between rich and poor countries in 1950 and 78 percent of the increase in schooling over time in poor countries. The model generates a faster increase in schooling in poor than in rich economies even when their income gap does not decrease. These results have important implications for educational policy. |
| Keywords: | Educational attainment, productivity, life expectancy, education policy, labor supply. |
| JEL: | O1 O4 E24 J22 J24 |
| Date: | 2011–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-433&r=lab |
| By: | Alonso Ortiz, Jorge; Leal Ordóñez, Julio C. |
| Abstract: | The informal sector accounts for a substantial fraction of employed population in Mexico and other Latin American countries. In this paper we study the interaction between the tax and transfers system and the size and composition of informal sector. To do that we build a search model that can be calibrated to the Mexican data. Our model features two employment statuses: employed and unemployed; and two sectors: formal and informal. We estimate our model to data from Encuesta Nacional de Ocupaci ́on y empleo (ENOE) by simulated GMM. Then we perform three different policy analyses: changes in the distribution of the transfers between formal and informal sector workers, changes in the size of the transfer system, and changes in the progressivity of taxes and transfers (pending). Our model is able to capture key features of Mexican labor markets, such as the distribution of the labor force across sectors and the distribution of accepted wage offers. Dividing transfers equally between formal and informal sector workers increases the size of the informal sector by 5 percentage points, it also increases average wages in the formal sector by 6% whereas wages in the informal sector fall by 4%. When we double the size of transfers, the size of informal sector falls by 5 percentage points. However, it has a big effect on the distribution of accepted wage offers: average wages increase by 10% in the formal sector and they raise by 16% in the informal sector. |
| Keywords: | Informal Sector; Mexico; Taxes; Transfers; General Equilibrium; Frictions |
| JEL: | E62 E24 J31 J21 H30 H53 |
| Date: | 2011–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32014&r=lab |
| By: | Peeters, Marga; Den Reijer, Ard |
| Abstract: | This paper discusses the endeavours of policy makers to come to some degree of wage coordination among EU countries, aiming at aligning wage growth with labour productivity growth at the national levels. In this context, we analyse the wage and productivity developments in Germany, the European Union’s periphery countries Greece, Ireland, Portugal, and Spain along with the US for the period 1980-2010. Apart from the contribution of productivity to wages, we take into account the contributions of prices, unemployment, replacement rates and taxes by means of an econometrically estimated non-linear wage equation resulting from a wage bargaining model. We further study the downward rigidities of wages in depth. The findings show that in past times of low productivity, price inflation and reductions in unemployment put significant upward pressure on wage growth, also in the low inflationary period of the 2000s. Greece, Ireland, Portugal and Spain are far from aligning wage growth with productivity growth. German productivity is a major German wage determinant, but surely not the only one. To steer wages, policy makers can effectively use the replacement rate. |
| Keywords: | wages; compensation per employee; unit labour costs; productivity; wage formation; wage coordination; labour market; wage flexibility; unemployment; prices; replacement rate; monetary union; |
| JEL: | E24 J3 E5 C22 E6 |
| Date: | 2011–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31102&r=lab |
| By: | M. BACHELET (Insee); M. BEFFY (Insee); D. BLANCHET (Insee) |
| Abstract: | A specific attention is devoted to the 55+ age group when building global labour force projections regularly updated by Insee. This requires taking into account individual heterogeneity, because the impact of pension reforms on behavior is potentially very different across individuals. For instance, increasing to 62 the minimum age of eligibility, as decided in 2010, will be neutral for people who already planned to retire after this age. It will be constraining for other people, but the impact on global labour force will depend upon employment status before retirement: postponing pension claiming for individuals who have already left the labour market does not affect this labour force, at least as long as it does not change labour market behavior before retirement age. Simulating individual transitions to retirement raises however considerable problems, to which models only bring imperfect and uncertain answers. This argues in favor of scenarized projections based on alternative assumptions. We present here results based on three options offered by the Destinie 2 microsimulation model. Depending upon these assumptions, cumulated impacts of past reforms on labour force participation rates for the 60-64 age group range, in the long run, between 10 and 40%, but starting from no-reform trends that are themselves very different from one scenario to the next. On the whole, after reforms, the long run labour force participation rate for the 60-64 group would lie within the 40%-50% bracket. This corresponds to mean ages at pension claiming lying between 64 and 65 years, and to mean ages at exit from the labour force fluctuating between 61 and 63 years, depending upon possible retroactions on career paths before full retirement. |
| Keywords: | pension reform, age at retirement, microsimulation, labour force projection |
| JEL: | C53 J22 J26 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpdeee:g2011-08&r=lab |
| By: | Fernández-Kranz, Daniel (IE Business School, Madrid); Paul, Marie (University of Freiburg); Rodriguez-Planas, Nuria (Universitat Autònoma de Barcelona) |
| Abstract: | Using data from Spanish Social Security records, we investigate the returns to experience in different flexible work arrangements, including part-time and full-time work, and permanent and fixed-term contracts. We use a trivariate random effects model which consists of a three-equation system that is estimated simultaneously by Markov Chain Monte Carlo techniques. Our results indicate that there is a large pay gap for working part-time which persists many years after having resumed full-time work. We also find that working part-time involves lower returns to experience than standard full-time employment and thus a substantial negative wage differential for those employed part-time accumulates over time. Finally, we find that heterogeneity exist by contract type and motherhood status. |
| Keywords: | fixed-term and permanent contracts, part-time employment, returns to experience of differential work histories, random effects models, MCMC, motherhood |
| JEL: | J16 J24 J31 J41 C11 C33 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5815&r=lab |
| By: | Kok, Suzanne (CPB Netherlands Bureau for Economic Policy Analysis); Bosch, Nicole (CPB Netherlands Bureau for Economic Policy Analysis); Deelen, Anja (CPB Netherlands Bureau for Economic Policy Analysis); Euwals, Rob (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | The behaviour of migrant women on the labour market is influenced by a variety of factors, among which the culture of the home and host country. 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. |
| Keywords: | female labour force participation, immigration, cultural transmission |
| JEL: | J16 J22 J61 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5817&r=lab |
| By: | Francesco Nucci (La Sapienza University of Rome); Marianna Riggi (Bank of Italy) |
| Abstract: | A coincidence in time between the volatility break associated with the "Great Moderation" and large changes in the pattern of conditional and unconditional correlations between output, hours and labor productivity was detected by Galà and Gambetti (2009). We provide a novel explanation for these findings, based on the major changes that occurred in the U.S. design of labor compensation around the mid-1980s. These include a substantial increase in the incidence of performance pay coupled with a higher responsiveness of real wages to the business cycle. We capture this shift in the structure of labor compensation in a Dynamic New Keynesian (DNK) model and show that, by itself, it generates the disappearance of the procyclical response of labor productivity to non-technology shocks and a reduction of the contractionary effects of technology shocks on hours worked. Moreover, it accounts for a large share of the observed drop in output volatility after 1984 and for most of the observed changes in unconditional correlations. |
| Keywords: | procyclical productivity, wage rigidities, performance pay. |
| JEL: | E24 E32 J3 J22 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_800_11&r=lab |
| By: | Borowczyk Martins, Daniel (University of Bristol); Jolivet, Grégory (University of Bristol); Postel-Vinay, Fabien (University of Bristol) |
| Abstract: | We show that equilibrium matching models imply that standard estimates of the matching function elasticities are exposed to an endogeneity bias, which arises from the search behavior of agents on either side of the market. We offer an estimation method which, under certain assumptions, is immune from that bias. Application of our method to the estimation of a basic version of the matching function using aggregate U.S. data from the Job Openings and Labor Turnover Survey (JOLTS) suggests that the bias is quantitatively important. |
| Keywords: | matching function estimation, unemployment, vacancies, job finding |
| JEL: | J63 J64 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5807&r=lab |
| By: | Krishna, Pravin; Poole, Jennifer P.; Senses, Mine Zeynep |
| Abstract: | In this paper, the authors use a linked employer-employee database from Brazil to examine the impact of trade reform on the wages of workers employed at heterogeneous firms. The analysis of the data at the firm-level confirms earlier findings of a differential positive effect of trade liberalization on the average wages at exporting firms relative to non-exporting firms. However, this analysis of average firm-level wages is incomplete along several dimensions. First, it cannot fully account for the impact of a change in trade barriers on workforce composition especially in terms of unobservable (time-invariant) characteristics of workers (innate ability) and any additional productivity that obtains in the context of employment in the specific firm (match specific ability). Furthermore, the firm-level analysis is undertaken under the assumption that the assignment of workers to firms is random. This ignores the sorting of worker into firms and leads to a bias in estimates of the differential impact of trade on workers at exporting firms relative to non-exporting firms. Using detailed information on worker and firm characteristics to control for compositional effects and using firm-worker match specific effects to account for the endogenous mobility of workers, the authors find the differential effect of trade openness on wages in exporting firms relative to domestic firms to be insignificant. Consistent with the models of Helpman, Itskhoki, and Redding (2010) and Davidson, Matusz and Schevchenko (2008), they also find that the workforce composition improves systematically in exporting firms in terms of innate (time invariant) worker ability and in terms the quality of the worker-firm matches. |
| Keywords: | Labor Markets,Microfinance,Free Trade,Trade Policy,Economic Theory&Research |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5711&r=lab |
| By: | Lugo, Maria Ana |
| Abstract: | Socioeconomic segregation is often decried for denying poorer children the benefits of positive'peer effects'. Yet standard, linear-in-means models of peer effects (a) implicitly assume that segregation is zero sum, with gains and losses to rich and poor perfectly offsetting, and (b) rule out theories of'social distance'whereby peer effects are strongest among similar pairings. The paper exploits the random assignment of pupils between classes to identify more general peer effects in Argentine test-score data. Estimates violate both assumptions (a) and (b), and provide micro foundations for the correlations between school segregation, average test-scores, and test-score inequality in municipality-level data. |
| Keywords: | Tertiary Education,Education For All,Secondary Education,Primary Education,Teaching and Learning |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5718&r=lab |
| By: | Andrew Sharpe; Simon Lapointe |
| Abstract: | The goal of this report is to investigate the relationship between educational attainment, remoteness, and labour market and economic performance at the reserve level for Aboriginal Canadians. The report uses reserve-level data on average earnings, GDP per capita, labour market indicators and distance to a service centre for 312 reserves. Using descriptive statistics, simple correlation and multiple regression analysis, the report draws conclusion on four important questions. First, the report finds that a higher level of educational attainment, on average, has a positive effect on the labour market performance of a reserve. Then, a positive link is found between educational attainment and economic performance (average earnings and GDP per capita). Also, the report finds evidence that remoteness of a reserve plays a role in its labour market and economic performance. Specifically, reserves situated near urban centres fare better than the ones in rural/remote areas and those not connected by road to a service centre all year long (special access). However, when controlling for characteristics of reserves, the very remote reserves seem to fare better than expected in comparison to urban reserves. Yet, when an instrumental variable is used to account for the possibility that educational attainment is endogenous in the model, the remoteness of a reserve appears to play no role in determining reserve labour market or economic performance. Finally, the report also analyses the role of governance on labour market and economic performance. It finds that better governance is correlated to better labour market performance, higher average earnings and higher GDP per capita. |
| Keywords: | Aboriginal Canadians, reserves, educational attainment, remoteness, governance, labour market, economic performance |
| JEL: | I21 J15 O10 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1105&r=lab |
| By: | Catia Montagna; Antonella Nocco |
| Abstract: | We study how unionisation affects competitive selection between heterogeneous firms when wage negotiations can occur at the firm or at the profit-centre level. With productivity specific wages, an increase in union power has: (i) a selection-softening; (ii) a counter-competitive; (iii) a wage-inequality; and (iv) a variety effect. In a two-country asymmetric setting, stronger unions soften competition for domestic firms and toughen it for exporters. With profit-centre bargaining, we show how trade liberalisation can affect wage inequality among identical workers both across firms (via its effects on competitive selection) and within firms (via wage discrimination across destination markets). |
| Keywords: | firm selection, unionisation, wage inequality, trade liberalisation |
| JEL: | F12 F16 R13 J51 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:dun:dpaper:257&r=lab |
| By: | T. BUYSE; F. HEYLEN; R. VAN DE KERCKHOVE |
| Abstract: | We study the effects of pension reform in a four-period OLG model for an open economy where hours worked by three active generations, education of the young, the retirement decision of older workers, and aggregate per capita growth, are all endogenous. Next to the characteristics of the pension system, our model assigns an important role to the composition of fiscal policy. We find that the model explains the facts remarkably well for many OECD countries.<br> Our simulation results prefer an intelligent pay-as-you-go pension system above a fully-funded private system. When it comes to promoting employment, human capital, growth, and welfare, positive effects in a PAYG system are the strongest when it includes a tight link between individual labor income (and contributions) and the pension, and when it attaches a high weight to labor income earned as an older worker to compute the pension assessment base. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:11/719&r=lab |
| By: | Peter Hicks |
| Abstract: | The paper reviews evidence that suggests that, over the coming two decades, people are likely to stay in the work force at least five years longer, possibly by considerably more. The implications for policy are surprisingly large and surprisingly unrecognized. Recent trends, if extended into the future, suggest that changes of this magnitude are quite likely given a continuation of past labour market conditions. However, these past trends do not reflect new pressures that will work strongly in the direction of even shorter durations of retirement and longer durations of work. These new pressures will result from changes in labour supply and demand that will result from the baby boom generation moving into traditional retirement years in large numbers, increasing the demand for older workers. On the supply side, there will be a large in increase in the educational levels and skills of older people. The effect of market forces could be further enhanced by policy action. In other words, a five year extension of working life is the minimum that should be included in most future labour market scenarios. Delaying work-retirement transitions by even this amount would have large, positive economic and fiscal effects, significantly reducing the well-known negative effects of population ageing. They would have particularly important consequences for pension policy, with a dramatic reduction in the need for retirement savings and, particularly if accompanied by flexible work-toretirement pathways, would reduce the risk of changed income needs in old age. A range of other social benefits, including greater individual choice and well-being, also seem likely – if harder to quantify. However, as with any large social change, distributional consequences are inevitable. A few groups could be relatively worse off in a world where the norm was for work to be extended later in life. In the absence of strategy for addressing the needs of these potential losers, there may well be reluctance to take policy action, despite the likelihood of large gains for most, and on many fronts. |
| Keywords: | Income replacement, pension systems, pensions, retirement, retirement age, life expectancy, older workers, aging, Canada, projections, public policy |
| JEL: | D78 H53 H55 H60 J08 J10 J18 J20 J26 J32 L38 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:284&r=lab |
| By: | Jose Ignacio García Pérez (Department of Economics, Universidad Pablo de Olavide & FEDEA); Victoria Osuna (Department of Economics, Universidad Pablo de Olavide) |
| Abstract: | This paper quantifies the effects of introducing a single open-ended contract for new hires, with increasing severance payments as an alternative to the current situation in Spain, where both temporary and permanent contracts are available. One of the reasons for the excessive job destruction in this economy is the intensive use of temporary contracts. The main driving force behind firm behaviour is the large gap in severance payments between temporary and permanent contracts (8 vs. 45 days of wages per year of seniority). We use a search and matching type model of job creation and destruction that is able to generate the main properties of a segmented labour market like the Spanish one. We use this model to simulate the effects of introducing this new design in severance payments. Our results show that this contract decreases unemployment (by 21%) and job destruction (which is almost halved in contracts with a tenure of fewer than four years) and tempers both the probability of being fired and tenure distribution as severance payments are reduced. Almost 15% more workers have a tenure of more than 3 years, and there are 23% fewer one-year contracts. The transition shows that the single open-ended contract would be highly beneficial for a majority of workers (only 8% would be jeopardised) because job stability would substantially increase. Firms, would also benefit from a reduction in their expected severance costs by about 9%. |
| Keywords: | Single Contract; Permanent and Temporary contracts; Severance Payments; Job seniority; Tenure distribution; Job destruction. |
| JEL: | J32 J63 J65 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:1107&r=lab |
| By: | Bargain, Olivier (University College Dublin); Orsini, Kristian (K.U.Leuven); Peichl, Andreas (IZA) |
| Abstract: | Despite numerous studies on labor supply, the size of elasticities is rarely comparable across countries. In this paper, we suggest the first large-scale international comparison of elasticities, while netting out possible differences due to methods, data selection and the period of investigation. We rely on comparable data for 17 European countries and the US, a common empirical approach and a complete simulation of tax-benefit policies affecting household budgets. We find that wage-elasticities are small and vary less across countries than previously thought, e.g., between .2 and .6 for married women. Results are robust to several modeling assumptions. We show that differences in tax-benefit systems or demographic compositions explain little of the cross-country variation, leaving room for other interpretations, notably in terms of heterogeneous work preferences. We derive important implications for research on optimal taxation. |
| Keywords: | household labor supply, elasticity, taxation, Europe, US |
| JEL: | C25 C52 H31 J22 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5820&r=lab |
| By: | Garrouste, Christelle |
| Abstract: | This report presents the macro data on educational reforms collected for the Survey on Health, Ageing and Retirement in Europe (SHARE). The first and chore part provides an analytical overview of the educational reforms that may have affected the skill level of Europe’s elderly population. More specifically, it targets the national institutional plans or movements that have brought (or attempted to bring) systemic change in educational practices during the last century (e.g., pedagogical theories, curriculum reforms and operational structures). Furthermore, through a simple application correlating compulsory education laws and the evolution of the number of years of education, this report demonstrates the scope and potentialities of the database. Finally, the appendix lists all the data collected by country and level of education. |
| Keywords: | SHARELIFE; contextual data; education reforms |
| JEL: | I2 Y1 J1 J24 H52 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31853&r=lab |
| By: | Yamamura, Eiji |
| Abstract: | This paper explores the relationship between social capital and self-rated health status in Japan, and how this is affected by the labor market. Data of 3075 adult participants in the 2000 Social Policy and Social Consciousness (SPSC) survey were used. Controlling for endogenous bias, the main finding is that social capital has a significant positive influence on health status for people without a job but not for those with. This empirical study provides evidence that people without a job can afford to allocate time to accumulate social capital and thereby improve their health status. |
| Keywords: | health status; social capital; labor market. |
| JEL: | I19 J22 Z13 |
| Date: | 2011–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32064&r=lab |
| By: | Maria Laura Alzua; Hernan Ruffo |
| Abstract: | In 1994, Argentina introduced Pension Reform and Unemployment Benefits as a major reform component to its social security system. This papers analyzes the effects of introducing new individual accounts in the pension system -which was under effect between 1994 and 2008- over wages, employment and poverty. While the macroeconomic effects of a change in the pension system is an issue that is relatively well addressed by the literature, its microeconomic effects are often neglected in the analysis. We use a CGE model to evaluate the effects of the reform on labor market and poverty. Our result indicate that if private pension funds are allocated to physical investment, labor demand and wages increase and poverty goes down. However, these effects fade out if funds of private accounts are used to buy government debt. |
| Keywords: | Social security, Poverty, Argentina |
| JEL: | H53 H55 D39 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:mpiacr:2011-11&r=lab |
| By: | Hannes Koppel (Max Planck Institute of Economics, Jena); Tobias Regner (Max Planck Institute of Economics, Jena) |
| Abstract: | We analyze the effect of investments in corporate social responsibility (CSR) on workers' motivation. In our experiment, a gift exchange game variant, CSR is captured by donating a certain share of profits to a charity. We are testing for CSR effects by varying the possible share of profits given away. Additionally, we investigate the effect of a mission match, i.e., a worker prefering the same charity the firm is actually donating to. Our results show that on average workers reciprocate investments into CSR with increased effort. A mission match does result in higher effort, but only when investment into CSR is high. |
| Keywords: | Corporate Social Responsibility, gift-exchange game, experiment, labor market, incentives |
| JEL: | C73 C91 J01 M14 M52 |
| Date: | 2011–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2011-030&r=lab |
| By: | Roy, Sanchari (University of Warwick) |
| Abstract: | This paper examines the impact of property inheritance rights on education of women. Using plausibly exogenous variation created by amendments to female inheritance laws in India, I nd that exposure to improved inheritance rights increased mean female educational attainment by approximately one additional year. I also provide suggestive evidence that the mechanism behind such an e ect may be explained by the existence of complementarity between female inheritance rights and education in the context of household property management rather than by a relaxation of the household budget constraint owing to reduction in dowry payments following the reform. |
| Keywords: | Property rights; education; gender; dowry |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:45&r=lab |
| By: | Emanuele Millemaci (Università di Messina); Dario Sciulli (Università di Chieti-Pescara and CEEAplA) |
| Abstract: | A propensity score matching approach and the National Child Development Study cohort database are used to evaluate the total causal effect of family difficulties during childhood on adult labour market outcomes. We find statistically significant evidence of a negative and long-lasting impact on employment probabilities and wages. Our estimates suggest that the occurrence of family problems in childhood reduces the chances of being employed by about 6 % and employees’ hourly wages by about 8.4 percent. Moreover, this effect appears not to decline over the cohort working life. Looking at specific family difficulties, we find that economic difficulties determine the greatest disadvantages in terms of future labour market outcomes. These results are consistent with respect to estimations with standard parametric methods. Economic and social policies aimed to prevent poor labour market performances, and possibly consequent social exclusion and immobility in adulthood, should also take into account the role of the various factors affecting family environment during childhood. |
| Keywords: | family difficulties, childhood, propensity score matching, labour market outcomes, causal effects |
| JEL: | J12 J13 C21 |
| Date: | 2011–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:203&r=lab |
| By: | M.-É. CLERC (Insee); O. MONSO (Insee); E. POULIQUEN (Insee) |
| Abstract: | Cohorts born until the late 1940s benefited from a clear generational progress: from one generation to the next, the conditions for entering the labour market were more favourable, living standards increased regularly, access to education and homeownership was more common. These progresses strongly slowed down and even stopped, for generations born in the 1950s and 1960s. Early in their life course, the latter had to face the two oil shocks and the bad economic context that followed. The most recent generations are experiencing a mixed picture. Several years of good economic performance at the turn of the 2000s helped to increase again their standard of living in comparison to previous generations at the same age. Then, they benefited from low interest rates that facilitated again access to the property, despite rising property prices. However, this improvement appears to be very dependent on the macroeconomic environment, which can easily turn around. Inequalities between generations go together with inequalities within generations. In particular, access to employment is closely linked to educational level. Graduate people are more protected from unemployment and get a stable job more easily, but such an improvement is at the cost of a downgrading as regards wages and employment position. Non-graduates, meanwhile, are more dependent on economic conditions, not only at the end of their studies but also during the beginning of their careers. Finally, the fragility of this generational progress, and the increased importance of intergenerational transfers of wealth, could possibly lead to a widening of the gap between social classes or social origins. For instance, since the beginning of the 2000s, the access of younger generations to property has been improving again but the gap in property rates between social categories has been increasing. |
| Keywords: | intergenerational inequalities, social inequalities, cohorts |
| JEL: | D63 E24 J1 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpdeee:g2011-11&r=lab |
| By: | Robert E. Hall |
| Abstract: | General-equilibrium models for studying monetary influences in general and the zero lower bound on the nominal interest rate in particular contain implicit theories of unemployment. In some cases, the theory is explicit. When the nominal rate is above the level that clears the current market for output, the excess supply shows up as diminished output, lower employment, and higher unemployment. Quite separately, the Diamond-Mortensen-Pissarides model is a widely accepted and well-developed account of turnover, wage determination, and unemployment. The DMP model is a clashing theory of unemployment, in the sense that its determinants of unemployment do not include any variables that signal an excess supply of current output. In consequence, a general-equilibrium monetary model with a DMP labor market generally has no equilibrium. After demonstrating the clash in a minimal but adequate setting, I consider modifications of the DMP model that permit the complete model to have an equilibrium. No fully satisfactory modification has yet appeared. |
| JEL: | E12 E22 E32 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17179&r=lab |
| By: | Giulietti, Corrado (IZA); Ning, Guangjie (Nankai University); Zimmermann, Klaus F. (IZA and University of Bonn) |
| Abstract: | This paper focuses on the determinants of self-employment among rural to urban migrants in China. Two self-selection mechanisms are analysed: the first relates to the manner in which migrants choose self-employment or paid work based on the potential gains from either type of employment; the second takes into account that the determinants of the migration decision can be correlated with employment choices. Using data from the 2008 Rural-Urban Migration in China and Indonesia (RUMiCI) survey, a selection model with endogenous switching is estimated. Earnings estimates are then used to derive the wage differential, which in turn is used to model the employment choice. The procedure is extended to account for migration selectivity and to compare individuals with different migration background and employment histories. The results indicate that self-employed individuals are positively selected with respect to their unobserved characteristics. Furthermore, the wage differential is found to be an important driver of the self-employment choice. |
| Keywords: | self-employment, wages, rural to urban migration, selection bias magnets, European Union |
| JEL: | J23 J61 O15 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5805&r=lab |
| By: | Jordi Guilera (Universitat de Barcelona) |
| Abstract: | Recent decades have been characterized by a steep increase in wage inequality globally. In order to explain this phenomenon, this paper extends the classic Kuznets Curve to include post-industrial economies. According to this Extended Kuznets Curve (EKC) hypothesis, wage inequality may follow an N-curve. If the inverted U-shape of the EKC is attributable to the structural changes associated with industrialization, its right-hand side reflects the boom in human capital formation registered in modern and post-industrial economies. Thus, the main candidates to explain the recent upsurge in wage inequality, namely skill-biased technical change, globalisation and institutional factors, may be embodied in the evolution of the skill composition of the labour force. The available empirical evidence, albeit limited, tends to support the EKC hypothesis. |
| Keywords: | wage inequality, portugal, kuznets curve |
| JEL: | O15 J24 N34 J21 D31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2011257&r=lab |
| By: | Kohei Kubota |
| Abstract: | There is evidence that young mothers do not have the opportunity to accumulate human capital for themselves, which can have a negative effect on theirchildren's outcomes. This study investigates the effect of young maternal ageon children's educational level. No significant direct effect of young maternalage was found, but it did have a significant indirect effect on parental economic conditions and maternal preferences. Our results suggest that young maternal age has no negative effect on children's educational level. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0811&r=lab |
| By: | Alessia Campolmi (Central European University; Magyar Nemzeti Bank (central bank of Hungary)); Stefano Gnocchi (Universitat Autonoma de Barcelona) |
| Abstract: | In the present paper we examine how the introduction of endogenous participation in an otherwise standard DSGE model with matching frictions and nominal rigidities affects business cycle dynamics and monetary policy. The contribution of the paper is threefold: first, we show that the model provides a good fit for employment and unemployment volatility, as well as participation volatility and its correlation with output for US data. Second, we show that in such a model, and contrary to a model with exogenous participation, a monetary authority that becomes more aggressive in fighting inflation decreases the volatility of employment and unemployment. Finally, we show the role of search costs in shaping those results. |
| Keywords: | matching frictions, endogenous participation, monetary policy |
| JEL: | E24 E32 E52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2011/4&r=lab |
| By: | Bircan, Çağatay (University of Michigan) |
| Abstract: | This paper examines the relationship between foreign equity participation and average wages at the plant level. I show that using a binary measure for foreign ownership, as is the traditional practice in the literature, leads to biased estimates of the foreign ownership wage premium, compared to the use of a continuous mea- sure if the true relationship is linear. Using nonparametric and semi-parametric techniques I find this is the case: the relationship between the level of foreign ownership and average wages is better approximated as linear rather than binary. I find that a ten percentage point increase in foreign equity participation is asso- ciated with an approximately 4% increase in the average wage of non-production workers. These results are the first to show that the wage premium due to foreign ownership varies with the level of foreign ownership in a continuous manner. |
| Keywords: | Foreign Direct Investment; Wages; Censoring; Dynamic Panel Data |
| JEL: | C33 F23 J31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:618&r=lab |
| By: | Mariya Aleksynska; Ahmed Tritah |
| Abstract: | This paper analyses occupational matching of immigrants from over seventy countries of origin to 22 European countries. Using European Social Survey for the years 2002-2009 and the multinomial logit framework, we show that, relative to the native born, immigrants are more likely to be both under- and overeducated for the jobs that they perform. This mismatch is due to individual-specific factors, such as labor market experience and its transferability. Immigrants’ outcomes converge to those of the native born with the years of labor market experience. The mismatch is also due to immigrants’ selection and sorting across countries. Notably, we show that origin countries’ degree of income inequality and the quality of human capital, by affecting selection, mostly matter for undereducation of immigrants. Overeducation is determined to a greater extent by destination-country economic conditions and labor market institutions. Immigrant-specific policies in destination countries, such as those improving eligibility and fighting discrimination, also positively affect overall matching, while policies promoting integration decrease undereducation. |
| Keywords: | Immigration; occupational mismatch; overeducation; ORU realized matches; migration policies |
| JEL: | I21 J24 J61 F22 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2011-16&r=lab |
| By: | Anton Bekkerman (Montana State University); Gregory Gilpin (Montana State University) |
| Abstract: | Extensive literature has shown that student attainment outcomes are affected by schools’ decisions to alter student-to-teacher ratios and overall teacher aptitude levels. However, these findings provide little information to policymakers and school administrators for understanding which teacher input decision provides the greatest student attainment return relative to the associated costs. This study estimates cost-effective teacher input strategies for U.S. high schools seeking to either increase graduation rates or four-year college attendance rates by graduating students. Empirical results indicate that reducing student-to-teacher ratios is the most cost-effective teacher input decision for high schools seeking to improve graduation rates. However, for schools whose objective is to increase four-year college attendance rates, it is more cost-effective to allocate funds to improving teacher quality levels. These results put into question policies such as class size reduction mandates, which disregard schools’ student attainment objectives and institute generalized teacher hiring constraints. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2011-007&r=lab |
| By: | Temel, Tugrul |
| Abstract: | This study investigates convergence in hired farm wages in U.S. counties over the period 1978-92. The time-invariant distribution of wages is characterized using Markov chains. This study is concerned with two questions: Are regional hired farm wages moving in the same direction? If so, are they consistent with the direction of the entire U.S. farm wages? Concerning with e¢ ciency in agricultural labor markets, the study approximates it to the extent that it is reected in farm wages. Time-invariant distributions of wages are calculated for the Northeast, Midwest, South, and West region, and for the entire U.S. The results support the hypothesis of convergence at regional level to lower-than-respective regional average wage. Convergence is the strongest in the Northeast and the weakest in the South. Likewise, convergence to lower-than-average wage is present at the U.S. level, but it is stronger than that at the regional level. |
| Keywords: | farm wage movements; labor markets; convergence; Markov chains; U.S. agriculture. |
| JEL: | Q15 Q01 Q12 C21 R14 Q18 |
| Date: | 2011–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31930&r=lab |
| By: | Samanvitha Swaminathan; P. David Jawahar (Bharathidasan Institute of Management, Tiruchirapalli, Tamil Nadu, India) |
| Abstract: | Job Satisfaction at work has a gross influence on the level of Organizational Citizenship Behavior and in turn on work performance. This study aims at determining and establishing a relationship between Job Satisfaction and Organizational Citizenship Behavior among faculty in higher learning institutions. The study has employed the Wong’s Job Satisfaction (Wong, 2010) and Organ’s Organizational Citizenship Behavior (Organ, 1988) inventories to quantify the Job Satisfaction and Organizational Citizenship Behavior levels respectively. Samples from 252 faculty members in Tamil Nadu, India were used to obtain the empirical base for the study. Correlation and multiple regression analyses were used to interpret the data |
| Keywords: | Job satisfaction, Organizational Citizenship Behavior |
| JEL: | M00 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cms:1icm11:2011-025_214&r=lab |
| By: | Christian Morrisson; Fabrice Murtin |
| Abstract: | This paper presents a historical database on educational attainment in 74 countries for the period 1870-2010, using perpetual inventory methods before 1960 and then the Cohen and Soto (2007) database. The correlation between the two sets of average years of schooling in 1960 is equal to 0.96. We use a measurement error framework to merge the two databases, while correcting for a systematic measurement bias in Cohen and Soto (2007) linked to differential mortality across educational groups. Descriptive statistics show a continuous spread of education that has accelerated in the second half of the twentieth century. We find evidence of fast convergence in years of schooling for a sub-sample of advanced countries during the 1870-1914 globalization period, and of modest convergence since 1980. Less advanced countries have been excluded from the convergence club in both cases. |
| Keywords: | Education, school enrolment, inequality |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0109&r=lab |
| By: | Tom Coupe (Kyiv School of Economics, Kyiv Economic Institute); Hanna Vakhitova (Kyiv School of Economics, Kyiv Economic Institute) |
| Abstract: | This study provides recent estimates of returns to education in transition countries, investigating how the economic boom in the region has affected these returns. We find that transition countries continue to have relatively low returns to education and that the economic boom did not lead to a clear change in these returns. A more detailed investigation for one specific country, Ukraine, confirms these results. |
| Keywords: | returns to education, transition countries |
| JEL: | J24 J31 P2 P3 P5 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:kse:dpaper:39&r=lab |
| By: | Adrian Chadi |
| Abstract: | While rising unemployment generally reduces people’s happiness, researchers argue that there is a compensating social-norm effect for the unemployed individual, who might suffer less when it is more common to be unemployed. This empirical study, however, rejects this thesis for German panel data and finds individual unemployment to be even more hurtful when aggregate unemployment is higher. On the other hand, an extended model that separately considers individuals who feel stigmatised from living off public funds yields strong evidence that this group of people does in fact suffer less when the normative pressure to earn one’s own living is lower. |
| Keywords: | social norms, unemployment, well-being, social benefits, labour market policies |
| JEL: | I3 J6 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp387&r=lab |
| By: | Andrietti, Vincenzo; Hildebrand, Vincent |
| Abstract: | This paper uses the Tax Reform Act of 1986 (TRA86) as a natural experiment to evaluate the job mobility response of prime aged US employees participating into employer sponsored defined benefit (DB) pension plans to a reduction in the vesting period for pension rights accrual. The repeated panel data design of the Survey of Income and Program Participation (SIPP) allows us to implement a "difference-in-difference" identification strategy using data from pre and post-reform periods. The effect of the policy change is identified as the difference between the change in predicted voluntary job mobility of the treated group and the change in predicted voluntary job mobility of the control group, over the period under study. We find that the reform had no significant effects on voluntary job mobility of the treated group. Our findings are robust to the use of different control groups and different pre/post reform samples. |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/327&r=lab |
| By: | Hansen, Casper Worm (Department of Business and Economics); Lønstrup, Lars (Department of Business and Economics) |
| Abstract: | In this paper we show that it may be optimal for individuals to educate themselves more and decrease future labor supply (choose earlier retirement) when life expectancy increases. This result reconciles the findings of Hazan [Hazan, M., 2009. Longevity and Lifetime Labor Supply: Evidence and Implications. Econometrica 77, 1829.1863] with theory. Further, the paper contributes to a better understanding of the conflicting empirical findings on the causal effect on income per capita from increased life expectancy. |
| Keywords: | Life-cycle model; life expectancy; schooling; retirement |
| JEL: | D91 J22 J24 J26 O11 |
| Date: | 2011–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2011_003&r=lab |
| By: | Jiménez-Martín, Sergi; Labeaga, José M.; Martínez-Granado, Maite |
| Abstract: | In this paper we use data the European Community Household Panel (ECHP) to describe and analyse the dynamics of joint labour force behaviour of older couples for the EUI2 countries. We focus on three main issues: the relanvance of joint retirement across EUI2 countries, the existence of complementarities in leisure and/or assortative matting and the effects of health variables. Concerning the evidence, we first find that a working spouse is more likely to retire the more recently the other spouse has retired; this effect is stronger if the wife is the working spouse. Second, there is evidence of assortative mating and/or complementarities in leisure; the effects of all relevant factors on the retirement decision of one spouse depend strongly on whether the other one is working, unemployed, or retired. Third, besides the standard evidence that poor health increases the retirement probabiliby, we find that the husband's health affects the couple's retirement decisions much more strongly than the wife's health does. Additional asymmetric effects are detected with respect to income related variables. |
| Keywords: | Joint retirement decisions; Labour force transitions; Health variables; Asymmetric effects; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/6170&r=lab |
| By: | Matthew Ronfeldt; Hamilton Lankford; Susanna Loeb; James Wyckoff |
| Abstract: | Researchers and policymakers often assume that teacher turnover harms student achievement, but recent evidence calls into question this assumption. Using a unique identification strategy that employs grade-level turnover and two classes of fixed-effects models, this study estimates the effects of teacher turnover on over 600,000 New York City 4th and 5th grade student observations over 5 years. The results indicate that students in grade-levels with higher turnover score lower in both ELA and math and that this effect is particularly strong in schools with more low-performing and black students. Moreover, the results suggest that there is a disruptive effect of turnover beyond changing the composition in teacher quality. |
| JEL: | I21 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17176&r=lab |
| By: | Abeberese, Ama Baafra (Columbia University); Kumler, Todd J. (Columbia University); Linden, Leigh L. (University of Texas at Austin) |
| Abstract: | We evaluate a program that aims to improve children's reading skills by providing classes with age-appropriate reading material and incentivizing children to read through a 31 day read-a-thon. During the read-a-thon, the program significantly increases the propensity of children to read, causing 20 percent more children to have read a book in the last week at school and increasing the number of books read by 2.3 in the last week and 7.2 in the last month. These increases extend both after the end of the program and outside of school, although at lower rates. The program also increased students’ scores on a reading assessment, causing students’ scores to improve by 0.13 standard deviations immediately after the program. The effect persisted even after the program ended with an effect of 0.06 standard deviations three months later. |
| Keywords: | education, reading, development |
| JEL: | I21 I28 O15 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5812&r=lab |
| By: | Juan Luis Jiménez (Facultad de Economía, Empresa y Turismo, Universidad de Las Palmas de Gran Canaria); Jordi Perdiguero (Departament de Política Econòmica i Estructura Econòmica Mundial, University of Barcelona.); Ancor Suárez (Facultad de Economía, Empresa y Turismo, Universidad de Las Palmas de Gran Canaria) |
| Abstract: | The creation of the European Higher Education Area has meant a number of significant changes to the educational structures of the university community. In particular, the new system of European credits has generated the need for innovation in the design of curricula and teaching methods. In this paper, we propose debating as a classroom tool that can help fulfill these objectives by promoting an active student role in learning. To demonstrate the potential of this tool, a classroom experiment was conducted in a bachelor’s degree course in Industrial Economics (Regulation and Competition), involving a case study in competition policy and incorporating the techniques of a conventional debate (presentation of standpoints, turns, right to reply and summing up). The experiment yielded gains in student attainment and positive assessments of the subject. In conclusion, the incorporation of debating activities helps students to acquire the skills, be they general or specific, required to graduate successfully in Economics. |
| Keywords: | European Higher Education Area; Debating; Industrial Organization; Academic Success; European Credit Transfer System. JEL classification:A23, B4, I2. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201109&r=lab |
| By: | Sara Flisi; Marcello Morciano |
| Abstract: | The empirical analysis carried out in this paper represents the basis for the construction of the labour market module in the dynamic microsimulation model CAPP_DYN. Using LFS longitudinal data for the period 1993-2007, we describe the recent trends on the Italian labour market and provide an international comparison with other European countries. In order to investigate the determinants of labour market transitions, multinomial logistic regressions are implemented, and the estimated parameters are then used to model transition probabilities in the dynamic microsimulation model. |
| Keywords: | Labour Mobility, Multinomial Logit |
| JEL: | C25 C40 J60 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:mod:cappmo:0091&r=lab |
| By: | Andrew Sharpe; Alexander Murray |
| Abstract: | This report has two aims. The first is to provide a descriptive overview of the services offered by private sector electronic labour exchanges (ELEs) in Canada. The second is to assess those services in terms of their likely effects on labour market matching, their accessibility, and the degree to which they satisfy the needs of all Canadian jobseekers and employers. The report finds that there is a robust private sector in ELE services in Canada. The private sector provides a broader range of services than the main public sector alternative, Job Bank. However, there are key areas in which the private sector does not deliver adequate services. The public sector, through Job bank, can take the lead in providing specialized job-search services tailored toward groups with unique labour market needs. |
| Keywords: | labour market matching, electronic labour exchange services, private sector, public sector |
| JEL: | J20 J64 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1101&r=lab |
| By: | Frank T. Denton; Ross Finnie; Byron G. Spencer |
| Abstract: | Measures of retirement that take a cohort perspective are appealing since retirement patterns may change, and it would be useful to have consistent measures that would make it possible to compare retirement patterns over time and between countries or regions. We propose and implement two measures. One is based on administrative income tax records and relates to actual cohorts; the other is based on a time-series of cross sectional labour force surveys and relates to pseudo-cohorts. We conclude that while the tax-based observations for actual cohorts provide a richer data set for analysis, the estimated measures of retirement and transition from work to retirement based on the two data sets are quite similar. |
| Keywords: | Measures of retirement, cohort perspective |
| JEL: | J14 J26 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:sedapp:283&r=lab |
| By: | Karina Gose (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Abdolkarim Sadrieh (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | We study the behavior of employers and employees in a gift exchange game and find that employers offer lower wages when there is the risk of losing money. This, however, does not lead to lower effort level choices. In fact, effort per wage unit is significantly higher in the treatment with potential employer losses. This result can be in line with social comparison theories that are based on relative payoff differences. Alternatively, this result is also in line with the hypothesis that the risk of losing money increases the credibility of the employer's trust signal and, thus, the employee's reciprocity. |
| Keywords: | fair wage, efficiency wage, social comparison, loss aversion |
| JEL: | C92 J41 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:110009&r=lab |
| By: | Fiorillo, D;; Nappo, N; |
| Abstract: | This paper investigates the determinants of job satisfaction in Italy with particular emphasis on social relations. Our econometric analysis is based on four waves (1993, 1995, 1998 and 2000) of the Multipurpose Household Survey conducted annually by the Italian Central Statistics Office. The results of ordered probit regressions and robustness tests show that volunteering and meetings with friends are significantly and positively correlated with job satisfaction, with religious participation playing the biggest role. Our findings also show that meetings with friends increase job satisfaction through self-perceived health. |
| Keywords: | Job satisfaction, social relations, social capital, health, statistical matching, Italy |
| JEL: | C31 J28 Z1 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:11/09&r=lab |
| By: | Chongwoo Choe; Ratbek Dzhumashev; Asadul Islam; Zakir H. Khan |
| Abstract: | We examine the causes and consequences of corruption in the provision of education service in Bangladesh. Our empirical analysis is based on the 2007 household survey data collected by Transparency International Bangladesh (TIB), which measure actual corruption. Our main findings are (i) both the incidence of corruption and the amount of bribe increase in the level of red tape, (ii) poorer households, households with less educated household head, and households with girls studying in school are more likely to be victims of corruption, (iii) households with higher social status are more likely to rely on informal network to bypass the red tape or pay less amount of bribe and, as a result, (iv) corruption in the education sector is likely to be regressive. |
| Keywords: | education, corruption, bribery, Bangladesh |
| JEL: | K4 O1 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2011-08&r=lab |
| By: | Groot, Loek; Peeters, Marga |
| Abstract: | Demographic change across the globe puts pressure on labour markets and public finances. Most studies on ageing focus on the projected development of the old age dependency ratio, being the ratio of persons 65 or older relative to the working age population. This ratio gives a very incomplete picture of the (fiscal) pressure from demographic changes. In this study, besides the share of the dependent population composed of the young and the old, we also include the share of the working age population that is not active on the labour market, labelled as the labour market space. By analysing 21 developing and 29 developed economies across the globe, we cover 75% of the 9.3 billion people that the United Nations projects for the whole world in 2050. A new indicator, relating demographic pressure from fiscal spending to the available space at the labour market, enables us to quantify and compare the pressure-to-space across countries over the time span 2010-2050. The indicator points out that Poland, Turkey and Greece are most under pressure. Developing countries, such as Uganda, the Democratic Republic of Congo and Tanzania will experience a very low pressure up to 2050 in case their fiscal spending per young and elderly person remains at the current levels. In most of the countries under high pressure there seems to be room for using the labour market space by, for instance, working more hours or increasing the retirement age, as this will alleviate the fiscal pressure. This suggests a policy trade-off between maintaining publicly financed services to the dependent population and maintaining labour market space. |
| Keywords: | demography; dependency rates; labour market; unemployment; social security; pensions; government spending; |
| JEL: | H55 E24 N3 J21 J0 |
| Date: | 2011–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32057&r=lab |
| By: | Pallegedara, Asankha |
| Abstract: | Private tuition classes are growing phenomenon in Sri Lanka especially among students who prepare for competitive national school qualifying examinations. It is one of major education issues under the free education policy in Sri Lanka. It can tarnish the real purpose of free education policy. In this paper, we examine the demand for private tuition classes in Sri Lanka by using two waves of Household Income and Expenditure Surveys (HIES) conducted by the Department of Census and Statistics (DCS) of Sri Lanka in 1995/96 and 2006/07. We find that the demand for private tuition classes has increased in recent time among households. It seems that the private tuition expenditure has changed from a luxury good in 1995/96 to a necessity good in 2006/07. If the increased demand for private tuition classes is reflecting parents’ concerns on inadequate and poor, but free education in public schools, the Sri Lanka government needs to reconsider its free education policy. |
| Keywords: | Economics of education; Private tutoring; Tobit model;Demand analysis |
| JEL: | O1 D1 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31969&r=lab |
| By: | Seyed Ahmad Hashemi (Vice-president for education, Islamic Azad University, Lamerd Branch, Iran) |
| Abstract: | Rapid changes in information age has faced all organizations and human based associations like education departments with challenges such as globalization, heavy competition, lack of supplies as well as unpredictable fluctuations. So to meet the new conditions education has to reform and use more information and communication technology, as ICT plays an important role in education. Thus for changing communications technology to public culture, a detailed analysis of this important subject with a systematic attitude in education, establishment of virtual schools, cooperation and coordination in all official organizations, private sectors and legislation is required. This essays discusses how the application of ICT would lead to efficiency in education systems, equal educational opportunities for students in all levels, quantitative and qualitative progress in education, creating a research spirit among teachers and students, enrichment of self-assessment, improvement of decision making and understanding knowledge, educating experts and finally the prevention of brain drain |
| Keywords: | Quality, technology, Information, Communication and brain drain |
| JEL: | M00 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cms:1icm11:2011-019_191&r=lab |
| By: | Coad, Alex (Science and Technology Policy Research (SPRU), Freeman Centre, University of Sussex); Daunfeldt, Sven-Olov (The Swedish Retail Institute (HUI) and Dalarna University); Johansson, Dan (The Ratio Institute); Wennberg, Karl (The Ratio Institute and Stockholm School of Economics) |
| Abstract: | The purpose of this paper is to study who high- growth firms (HGFs) hire using a matched employer-employee dataset for all knowledge intensive industries in Sweden, where high growth is measured over the period 1999-2002. The results indicate that HGFs to a larger extent employ young people, immigrants, and individuals with longer unemployment periods. However, these patterns seem contingent on the stage of firm evolution. HGFs that have already realized rapid growth seem to start focusing on hiring individuals from other companies, even though immigrants are still overrepresented among new employees. |
| Keywords: | Gazelles; firm growth; rapid firm growth; high-impact firms |
| JEL: | D24 L25 L26 |
| Date: | 2011–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0169&r=lab |
| By: | MESPLE-SOMPS, Sandrine; DE VREYER, Philippe; GUILBERT, Nathalie |
| Abstract: | This paper estimates the long run impact of a large income shock, by exploiting the regional variation of the 1987-1989 locust invasion in Mali. Using exhaustive Population Census data, we construct birth cohorts of individuals and compare those born and living in the years and villages a ected by locust plagues with other cohorts. We assert that in-utero and early childhood exposure to income shock had a larger negative effects on the probability to go to school than later childhood exposure. Indeed, the proportion of boys born during the shock and who later enrolled at school is reduced by 4.9% if they lived in a community invaded by locusts, and by 3.5% for girls. This impact goes up to 6% for boys and 5% for girls living in rural areas. Concerning the number of years of education and the probability to achieve primary school, no real impact is found for boys while girls who lived in a community a ected by locusts have completed between 0.25 and 0.67 lower grades than if they had lived in another community. Finally, we nd that children living in rural localities and belonging to farmer households appear to have been much more affected than other children, living in urban localities or belonging to cattle breeder or shopkeeper households. |
| Keywords: | Locust.; Mali; Shocks; Education; |
| JEL: | O55 O12 I21 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/6638&r=lab |
| By: | Henkens, C.J.I.M. (Universiteit van Tilburg); Dalen, H.P. van (Universiteit van Tilburg) |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-4807650&r=lab |
| By: | Cawley, John (Cornell University); Maclean, Johanna Catherine (Cornell University) |
| Abstract: | This paper contributes to the literature on the labor market consequences of unhealthy behaviors and poor health by examining a previously underappreciated consequence of the rise in obesity in the United States: challenges for military recruitment. Specifically, this paper estimates the percent of the U.S. military-age population that meets, and does not meet, current active duty enlistment standards for weight-for-height and percent body fat for the U.S. Army, using data from the series of National Health and Nutrition Examination Surveys that spans 1959-2008. We calculate that the percentage of military-age adults ineligible for enlistment because they are overweight and overfat doubled for men and tripled for women during that time. We document disparities across race, education, and age in meeting the standards, and finds that a further rise of just 1% in weight and body fat would further reduce eligibility for military service by over 600,000 men and 1 million women of military age. The paper concludes with a discussion of the implications for military recruitment and military policy. |
| Keywords: | obesity, military, labor |
| JEL: | I1 H56 J11 J18 J2 J45 N32 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5822&r=lab |
| By: | Daniel Pop |
| Abstract: | Targeted seasonal guest-worker program replace wider scope immigration policy and are expected to formalize irregular migration flows, to recruit sufficient numbers of seasonal migrants, and to provide critical revenues of source countries following the return of migrants with their earnings. Understating temporary migrant selectivity, the experience of engaging in work-and-travel abroad programs (for instance, in contrast to the existing evidence of study-abroad programs) is important for capturing the role temporary guest-worker programs could have in the extent at which the supposed “triple win” achieved. This research found that college students that participated in the work & study abroad seasonal guest-worker programs for college students are 38% less likely to emigrate compared to those that did not participate in the program. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:wii:bpaper:bowp:082&r=lab |
| By: | Michel Beine (CREA, University of Luxembourg, IRES, CREAM and CES-Ifo); Sara Salomone (IRES, Université catholique de Louvain and Tor Vergata University) |
| Abstract: | This paper analyzes the impact of networks on the structure of international migration flows. In particular, we investigate whether diaspora externalities are dif- ferent across education levels and gender. Using new data including both dimensions, we analyze the respective impact of networks on the proportion of each category of migrant. Therefore, in contrast to the preceding literature on macro determinants of international migration, we can identify the factors that influence the selection in terms skills and in terms of gender. We find that network effects vary by education level but not by gender. |
| Keywords: | Migration, Human capital, network/diaspora externalities, Gender |
| JEL: | F22 O15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:11-08&r=lab |
| By: | ICHIDA Toshihiro |
| Abstract: | Specialization and the division of labor are the sources of high productivity in modern society. When worker skills are multi-dimensional, workers may face a choice between general versus specific human capital investment. Given that individual agents face uncertainty in the relative output price, what are the optimal strategies for heterogeneous individual agents in human capital investment? In the absence of insurance markets, general investment gives an option value for changes in the environment. We analyze a model in which workers are born heterogeneous and are endowed with two-dimensional skills in different sectors, to determine if incentives exist for workers to invest in skills in which they had originally excelled or struggled. We find that some workers choose to invest in their weaker skill, via specific human capital investment, provided that the scale of the risk is big and that the parameter of relative risk aversion is greater than one. We find that there exist agents whose optimal human capital investment decisions reverse their ex ante comparative advantages ex post. |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11056&r=lab |
| By: | Ama Baafra Abeberese; Todd J. Kumler; Leigh L. Linden |
| Abstract: | We evaluate a program that aims to improve children’s reading skills by providing classes with age-appropriate reading material and incentivizing children to read through a 31 day read-a-thon. During the read-a-thon, the program significantly increases the propensity of children to read, causing 20 percent more children to have read a book in the last week at school and increasing the number of books read by 2.3 in the last week and 7.2 in the last month. These increases extend both after the end of the program and outside of school, although at lower rates. The program also increased students’ scores on a reading assessment, causing students’ scores to improve by 0.13 standard deviations immediately after the program. The effect persisted even after the program ended with an effect of 0.06 standard deviations three months later. |
| JEL: | I21 I28 O15 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17185&r=lab |
| By: | Ivo Bićanić; Oriana Vukoja |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:wii:bpaper:bowp:083&r=lab |
| By: | Andrea Cammelli (AlmaLaurea Inter-University Consortium) |
| Abstract: | Eleven years after the Bologna Declaration and nine since Italy implemented its University reform, it is not too soon to assess its results. We can now look at “the way we were” and compare the characteristics and performance of graduates under the old and the new systems. The aim is to examine the changes that have occurred over this long transition period and determine to what extent and in what areas the reform has attained the objectives of improving performance and bringing Italy closer to European standards, or whether the reform has fallen short of these goals. |
| Keywords: | university reform, Bologna Process, graduates’ performance, graduates’ employment condition |
| JEL: | I2 J2 J6 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:laa:wpaper:2&r=lab |
| By: | Cozzi, Guido; Galli, Silvia |
| Abstract: | The incentives to conduct basic or applied research play a central role for economic growth, and this question has not been explored in much detail so far. How does increasing early innovation appropriability affect basic research, applied research, education, and wage inequality? In the US, what does the common law system imply on the macroeconomic responses to institutional change? This paper analyzes the macroeconomic effects of patent protection by incorporating a two-stage cumulative innovation structure into a quality-ladder growth model with skill acquisition. We consider three issues (a) the over-protection vs. the under-protection of intellectual property rights; (b) the evolution of jurisprudence shaping the bargaining power of the upstream innovators; and (c) the implications of strengthening patent protection on wage inequality and growth. We show analytically and numerically how the jurisprudential changes in intellectual property rights witnessed in the US after 1980 can be related to the well-known changes in wage inequality and in education attainments. Basic research patents may have grown disproportionately due increasing jurisdictional protection, eventually compromising applied innovation, education, and growth. By simulations, we show that the dynamic general equilibrium interations may mislead the econometric assessment of the temporary vs persistent effects IPR policy. |
| Keywords: | Basic and Applied R&D; Two-Stage Sequential Innovation; Skill Premium; Inequality and Education; Common Law. |
| JEL: | K40 O34 O31 |
| Date: | 2011–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31902&r=lab |
| By: | William R. Melick |
| Abstract: | Entrepreneurial activity is a key driver of job creation, and entrepreneurs and their financiers are especially sensitive to capital gains taxes. As a result, a cut in the capital gains tax rate should be expected to stimulate job creation to some degree. We measure the magnitude of this effect by examining the treatment of capital gains across the 50 states over roughly the past 40 years. Our results suggest that a complete elimination of the taxation of capital gains realized by Ohio taxpayers would lead to the creation of 40,000 new jobs. Applying this estimate to proposals currently under discussion suggests a somewhat smaller effect. |
| Keywords: | capital gains tax rate, employment |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:ken:wpaper:1101&r=lab |
| By: | Alessia Campolmi (Central European University; Magyar Nemzeti Bank (central bank of Hungary)); Ester Faia (Goethe University Frankfurt; Kiel Institute for the World Economy (IfW); CEPREMAP); Roland Winkler (Goethe University Frankfurt; Kiel Institute for the World Economy (IfW)) |
| Abstract: | During the Great Recession following the recent financial crisis large fiscal stimuli were implemented to counteract labor market sclerosis. We explore the effectiveness of various fiscal packages in a matching model featuring inefficient unemployment and a rich fiscal sector employing distortionary taxation and government debt. Results show that only stimuli directed toward the labor market, such as hiring subsidies, deliver large multipliers. Those policies can, indeed, abate the congestion externality, pervasive in the labor market. Various robustness checks confirm the results. The results obtained in the calibrated model are also confirmed through Bayesian estimation. |
| Keywords: | fiscal calculus, taxation, matching frictions, bayesian estimation |
| JEL: | E62 E63 E24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2011/5&r=lab |
| By: | Pfau, Wade Donald |
| Abstract: | The aim of traditional retirement planning is to set a wealth accumulation target for your retirement date so that your desired expenditures can be obtained using a “safe” withdrawal rate. But it is quite difficult to know if you are making progress toward this target. Volatility over short periods of time strongly limits the usefulness of using your current wealth accumulation at ten or even five years before retirement to predict your final retirement wealth. Fortunately, it is not necessary to focus on a retirement wealth accumulation target. The accumulation and retirement phases should not be treated separately in this way. This paper outlines a framework for considering if someone in mid-career is on track for a sustainable retirement. It investigates what combinations of savings rates and years of continued work would have allowed someone to have always accumulated enough by retirement to afford one’s desired retirement expenditures in all of the rolling periods from the historical data. A strategy is “safe” if it worked in the worst-case offered thus far by history. I consider a 55 year old as a case study to show what savings rate will be needed to retire 10 years later, or how much longer one should work with a variety of other savings rates. Results are shown for a wide variety of situations. These findings can potentially serve as a reality check about the sustainability of one’s retirement plans. |
| Keywords: | retirement planning; lifetime perspective; safe savings rate; safe retirement age; wealth accumulation targets; retirement spending goals; safe withdrawal rates |
| JEL: | G11 N22 C15 N21 D14 |
| Date: | 2011–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31900&r=lab |
| By: | Jo Blanden |
| Abstract: | This paper summarises research on the relative level of intergenerational mobility - whether classified by income, social class, social status or education - considering observations from 65 countries. With the exception of social class, the different approaches reveal similar patterns. South America, other developing nations, southern European countries and France tending to have rather limited mobility while the Nordic countries exhibit strong mobility. Evidence for the US and Germany differs across the measures, with Germany immobile on education and class and fairly mobile on income and the reverse true for the US. These differences are likely explained by greater within-group income inequality and persistence in the US. The second part of the paper finds that mobility is negatively correlated with inequality and the returns to education and positively correlated with a nation's education spending. |
| Keywords: | Intergenerational mobility, public policy, inequality |
| JEL: | J62 J68 D63 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0111&r=lab |
| By: | Boldrin, Michele; Montes Alonso, Ana |
| Abstract: | In a world in which credit markets to finance investments in human capital are rare, the competitive equilibrium allocation generally cannot achieve either static or dynamic efficiency. When generations overlap, this inefficiency can be overcome by properly designed institutions. We study the working of two such institutions: Public Education and Public Pensions. We argue that, when established jointly, they implement an intergenerational dynamic game of taxes and transfers through which public education for the young and public pensions for the elderly support each other. Through the public financing of education, the young borrow from the middle age to invest in human capital. When employed, they pay back their debt by means of a social security tax on labor income. The proceedings of the latter are used to finance pension payments to the now elderly lenders. We also show that such intergenerational agreement can be supported as a sub game perfect equilibrium of, relatively straightforward, majority voting games. While the intertemporal allocation so obtained does not necessarily reach full dynamic efficiency it does so under certain restrictions and it always improves upon the laissez-faire allocation. We test the main predictions of our model by using micro and macro data from Spain. The results are surprisingly good. |
| Keywords: | Intergenerational contract; Efficiency; Human capital; Political equilibria; |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/6148&r=lab |
| By: | Ciriaci, Daria |
| Abstract: | Universities are increasingly recognized as key driver of economic development through their role in knowledge production and human capital accumulation, and as attraction poles for talents. That is why this paper analyses the sequential migration behaviour of Italian students-graduates before their enrolment at university, and after graduation, and the role that university quality has in these choices. From a regional development perspective, a better understanding of the causes of Italian interregional brain drain may help to guide policy intervention aimed at reversing or partially compensating for its negative effects on the source regions. The results confirm ‘university quality’ as a «supply» tool for policy makers to counterbalance the negative effects of the brain drain on human capital accumulation. |
| Keywords: | Brain-drain; labour mobility; university quality; regional economic disparities. |
| JEL: | R58 J61 R23 |
| Date: | 2009–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30015&r=lab |
| By: | Steven Nafziger (Williams College); Latika Chaudhary (Scripps College); Aldo Musacchio (Harvard Business School); Se Yan (Peking University) |
| Abstract: | Our paper provides a comparative perspective on the development of public primary education in four of the largest developing economies circa 1910: Brazil, Russia, India and China (BRIC). These four countries encompassed more than 50 percent of the world’s population in 1910, but remarkably few of their citizens attended any school by the early 20th century. We present new, comparable data on school inputs and outputs for BRIC drawn from contemporary surveys and government documents. Recent studies emphasize the importance of political decentralization, and relatively broad political voice for the early spread of public primary education in developed economies. We identify the former and the lack of the latter to be important in the context of BRIC, but we also outline how other factors such as factor endowments, colonialism, serfdom, and, especially, the characteristics of the political and economic elite help explain the low achievement levels of these four countries and the incredible amount of heterogeneity within each of them. |
| Keywords: | Brazil, Russia, India, China, economic history, education, political economy, elites |
| JEL: | N30 O15 I22 I28 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2011-06&r=lab |