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on Labour Economics |
| By: | Stephan Humpert (Institute of Economics, Leuphana University Lueneburg, Germany); Christian Pfeifer (Institute of Economics, Leuphana University Lueneburg, Germany) |
| Abstract: | This paper takes a labor supply perspective (neoclassical labor supply, job search) to explain the lower employment rates of older workers and women. The basic rationale is that workers choose non-employed if their reservation wages are larger than the offered wages. Whereas the offered wages depend on workers' productivity and firms' decisions, reservation wages are largely determined by workers' endowments and preferences for leisure. To shed some empirical light on this issue, we use German survey data to analyze age and gender differences in reservation and entry wages, preferred and actual working hours, and satisfaction with leisure and work. |
| Keywords: | Age; Family gap; Gender; Job search; Labor supply; Reservation wages |
| JEL: | J14 J22 J64 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:214&r=lab |
| By: | Carrillo-Tudela, Carlos (University of Essex); Kaas, Leo (University of Konstanz) |
| Abstract: | We consider a model of on-the-job search where firms offer long-term wage contracts to workers of different ability. Firms do not observe worker ability upon hiring but learn it gradually over time. With sufficiently strong information frictions, low-wage firms offer separating contracts and hire all types of workers in equilibrium, whereas high-wage firms offer pooling contracts designed to retain high-ability workers only. Low-ability workers have higher turnover rates, they are more often employed in low-wage firms and face an earnings distribution with a higher frictional component. Furthermore, positive sorting obtains in equilibrium. |
| Keywords: | adverse selection, on-the-job search, wage dispersion, sorting |
| JEL: | D82 J63 J64 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5936&r=lab |
| By: | Yusuf Soner Baskaya; Timur Hulagu |
| Abstract: | Using individual level data from Turkstat Household Labor Force Survey for 2005-2009 period, we analyze whether there is a wage gap between formal and informal workers with comparable observable characteristics, where the formality of employment is defined with respect to individuals' registry status to compulsory Social Security System. We find that both standard Mincerian regressions and the propensity score matching exercises indicate a sizable formal employment wage premium in Turkey. This contrasts with earlier studies stating that findings on wage gap between formal and informal workers is not robust to estimation methodology. However, we find that the estimation methodology matters for the relative size of formal employment wage premium across demographic groups : While Mincerian regressions give similar estimates for formal-informal wage gap across males and females or old and young workers, the propensity score matching suggest that earning inequality due to differences in formality status is higher among females and young workers. |
| Keywords: | Formal/Informal Employment, Formal Employment Wage Premium, Propensity Score Matching |
| JEL: | C14 J30 J42 J60 O17 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1115&r=lab |
| By: | Cockx, Bart (Ghent University); Picchio, Matteo (Tilburg University) |
| Abstract: | This study investigates whether and to what extent further unemployment experience for youths who are already long-term unemployed imposes a penalty on subsequent labor market outcomes. We propose a flexible method for analyzing the effect on wages aside of transitions from unemployment and employment within a multivariate duration model that controls for selection on observables and unobservables. We find that prolonging unemployment drastically decreases the chances of finding employment, but hardly affects the quality of subsequent employment. The analysis suggests that negative duration dependence in the job finding rate is induced by negative signaling and not by human capital depreciation. |
| Keywords: | scarring effect of unemployment duration, employment quality, wage in multivariate duration model, selectivity |
| JEL: | C33 C41 J62 J64 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5937&r=lab |
| By: | Yukawa, Shiho |
| Abstract: | Using data from the Japanese Panel Survey of Consumers (JPSC)1994-2006, we examine the effect of child birth on fathers’ wage rates and labor supply in Japan. We also compare effects of fatherhood among different cohorts by dividing the JPSC sample into two birth year cohorts (born in or before 1960 and born after 1960). We find that birth of child significantly increase hourly wage rates by 2.8 percents and annual work by 65 hours. Comparing with results in the U.S. (Lundberg and Rose 2002), the effect of child birth on labor supply is large but the effect on wage rates are relatively small in Japan. We also find that child birth have different impact on labor market outcome between the early and the later cohorts. In the early cohort, birth of child significantly increases wage rates but has no significant effect on labor supply. On the contrary, birth of child does not increases wage rates but significantly increases labor supply in the later cohort. Finally, we examine how gender difference of children matters. Although the impact of gender difference is not so large, the effect of birth of sons is larger than the effect of birth of daughters. |
| Keywords: | child birth; labor supply; wage premium |
| JEL: | J13 C23 J22 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33049&r=lab |
| By: | Mussida, Chiara (University of Milan); Picchio, Matteo (Tilburg University) |
| Abstract: | We analyse gender wage inequalities in Italy in the mid-1990s and in the mid-2000s. In this period important labour market developments occurred: institutional changes have loosened the use of flexible and atypical contracts; the female employment rates and educational levels have substantially increased. We identify the time trends of different components of the gender wage gap by estimating wage distributions in the presence of covariates and sample selection and by counterfactual microsimulations. We find that women swam against the tide: whilst the trend in female qualifications slightly reduced the gender wage gap, the gender relative trends in the wage structure significantly increased it. |
| Keywords: | gender wage gap, counterfactual distributions, decompositions, hazard function, labour market reforms |
| JEL: | C21 C41 J16 J31 J71 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5932&r=lab |
| By: | Westling, Tatu |
| Abstract: | This paper explores the effect of incentive pay on gender pay gaps in Finland, Norway and Sweden among professionals and managers within MNCs. Mercer 2009 Total Remuneration Survey data is utilised. Uniform job ladder, occupation, industry and wage definitions enable consistent cross-country comparisons. In addition to the between-country variation, the within-country variation of gender gap with respect to incentive pay is analysed. The results indicate that gender pay gaps differ among the Nordics and that occupation and industry controls have dissimilar effects across countries. Irrespective of wage element, Finland and Norway are characterised by higher gender gaps than Sweden. Incentives tend to accentuate gender pay gaps. In intention to alleviate the absence of job performance data, this study utilises a rudimentary, promotion-based measure for job performance. In Finland it does affect the gender gap. However, irrespective of gender, high-performers are penalised in Sweden but not in Finland or Norway. The Finnish data also allows the identification of low-performers. Low job performance is rewarded in Finland. Nonetheless, the job performance findings should be interpreted with cautions. |
| Keywords: | Wage differential; incentive pay; job ladder; gender; job performance |
| JEL: | J31 J70 |
| Date: | 2011–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33083&r=lab |
| By: | Kalenkoski, Charlene M. (Ohio University); Lacombe, Donald J. (West Virginia University) |
| Abstract: | The authors employ spatial econometrics techniques and Annual Averages data from the U.S. Bureau of Labor Statistics for 1990-2004 to examine how changes in the minimum wage affect teen employment. Spatial econometrics techniques account for the fact that employment is correlated across states. Such correlation may exist if a change in the minimum wage in a state affects employment not only in its own state but also in other, neighboring states. The authors show that state minimum wages negatively affect teen employment to a larger degree than is found in studies that do not account for this correlation. Their results show a combined direct and indirect effect of minimum wages on teen employment to be -2.1% for a 10% increase in the real effective minimum wage. Ignoring spatial correlation underestimates the magnitude of the effect of minimum wages on teen employment. |
| Keywords: | minimum wage, teen employment, spatial econometrics |
| JEL: | J08 J21 J38 J48 C31 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5933&r=lab |
| By: | Mussida, C.; Picchio, M. (Tilburg University, Center for Economic Research) |
| Abstract: | We analyse gender wage inequalities in Italy in the mid-1990s and in the mid-2000s. In this period important labour market developments occurred: institutional changes have loosened the use of flexible and atypical contracts; the female employment rates and educational levels have substantially increased. We identify the time trends of different components of the gender wage gap by estimating wage distributions in the presence of covariates and sample selection and by counterfactual microsimulations. We find that women swam against the tide: whilst the trend in female qualifications slightly reduced the gender wage gap, the gender relative trends in the wage structure significantly increased it. |
| Keywords: | gender wage gap;counterfactual distributions;decompositions;hazard function;labour market reforms. |
| JEL: | C21 C41 J16 J31 J71 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011093&r=lab |
| By: | Olivetti, Claudia (Boston University); Petrongolo, Barbara (London School of Economics) |
| Abstract: | The gender wage gap varies widely across countries and across skill groups within countries. Interestingly, there is a positive cross-country correlation between the unskilled-to-skilled gender wage gap and the corresponding gap in hours worked. Based on a canonical supply and demand framework, this positive correlation would reveal the presence of net demand forces shaping gender differences in labor market outcomes across skills and countries. We use a simple multi-sector framework to illustrate how differences in labor demand for different inputs can be driven by both within-industry and between-industry factors. The main idea is that, if the service sector is more developed in the US than in continental Europe, and unskilled women tend to be over-represented in this sector, we expect unskilled women to suffer a relatively large wage and/or employment penalty in the latter than in the former. We find that, overall, the between-industry component of labor demand explains more than half of the total variation in labor demand between the US and the majority of countries in our sample, as well as one-third of the correlation between wage and hours gaps. The between-industry component is relatively more important in countries where the relative demand for unskilled females is lowest. |
| Keywords: | gender gaps, education, demand and supply, industry structure |
| JEL: | E24 J16 J31 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5935&r=lab |
| By: | Melissa A. Boyle (Department of Economics, College of the Holy Cross); Joanna N. Lahey (Department of Economics, Texas A&M University) |
| Abstract: | Although government expansion of health insurance to older workers leads to labor supply reductions for recipients, there may be spillover effects on the labor supply of affected spouses who are not covered by the programs. In the simplest model, health insurance on the job is paid for in terms of lower compensation on the job. Receiving health insurance exogenous to employment is akin to a positive income shock for the household, causing total household labor supply to drop. However, it is not clear within the household whether this decrease in labor supply will be borne by both spouses or by a specific spouse. We use a mid-1990s expansion of health insurance for U.S. veterans to provide evidence on the effects of expanding health insurance availability on the labor supply of spouses. Using data from the Current Population Survey, we employ a difference-in-differences strategy to compare the labor market behavior of the wives of older male veterans and non-veterans before and after the VA health benefits expansion to test the impact of public health insurance on these spouses. Our findings suggest that although household labor supply may decrease because of the income effect, the more flexible labor supply of wives allows the wife’s labor supply to increase, particularly for those with lower education levels. |
| Keywords: | Health Economics, Labor force participation |
| JEL: | I11 I18 H51 J26 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1111&r=lab |
| By: | Sumon Bhaumik; Manisha Chakrabarty |
| Abstract: | In this paper we examine the issue of high dropout rates in India which has adverse implications for human capital formation, and hence for the country’s long term growth potential. Using the 2004-05 National Sample Survey employment-unemployment survey data, we estimate transition probabilities of moving from a number of different educational levels to higher educational levels using a sequential logit model. Our results suggest that the overall probability of reaching tertiary education is very low. Further, even by the woeful overall standards, women are significantly worse-off, particularly in rural areas. |
| Keywords: | Education; Transitional probability; India |
| JEL: | I21 |
| Date: | 2011–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2010-1019&r=lab |
| By: | Hamaaki, Junya; Hori, Masahiro; Maeda, Saeko; Murata, Keiko |
| Abstract: | Exploiting annual career records of female workers constructed from the Japanese Panel Survey of Consumers (JPSC), this paper examines how the first job matters for an individual’s future job career. Using the regional unemployment rate in the year of graduation as an instrument for the first job status (i.e., regular job or not), we confirm that an individual’s first job status matters significantly for the future job status even for female workers in Japan, although the effect gradually declines over the years and effectively disappears within around ten years from graduation. However, the observed first job effect appears to depend on the post-graduation career path taken by an individual, in the sense that someone who was unsuccessful during the first job hunt at the time of graduation can make up for the negative effect if she is lucky enough to secure a job as a regular employee within a reasonable time period. |
| Keywords: | youth labor market, initial labor market conditions, cost of recessions, Japan |
| JEL: | J13 J62 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cisdps:516&r=lab |
| By: | Wharton, Kate (Georgia Institute of Technology); Uwaifo Oyelere, Ruth (Georgia Tech) |
| Abstract: | Forty years of low-intensity internal armed conflict has made Colombia home to the world's second largest population of Internally Displaced Persons (IDPs). The effect of being directly impacted by conflict on a child's educational accumulation and enrollment is of particular concern because of the critical role that education plays in increasing human capital and productivity. This paper explores the educational accumulation and enrollment gap created by being directly affected by conflict. First, we show that children living in municipality with high conflict have a gap in education enrollment and accumulation. However, this gap is much smaller than the attainment and enrollment gap for those directly affected by the conflict (IDPs). We estimate the education accumulation and enrollment gaps for IDPs in comparison to non-migrants and other migrants respectively. Our results suggest significant education accumulation and enrollment gaps for children of IDPs that widens to over half a year in secondary school. The disparity in effects when we focus on direct exposure to conflict versus living in a municipality with conflict suggests a need to be careful when using the latter to estimate the impact of conflict. |
| Keywords: | educational attainment, school enrollment, Colombia, internal displacement, conflict |
| JEL: | O12 O15 J10 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5939&r=lab |
| By: | Tonin, Mirco (University of Southampton) |
| Abstract: | This paper documents a positive correlation within European labour markets between the proportion of full-time employees with earnings on the minimum wage and the extent of underreporting of earnings in the economy. Using a simple model of a competitive labour market, I show how this correlation can emerge as a result of the common dependence of both quantities on the strength of enforcement of fiscal regulation. This suggests that a high spike in the wage distribution at the minimum wage level is, in some contexts, an issue of fiscal enforcement, more than a labour market issue. |
| Keywords: | minimum wage, spike, underreporting, lighthouse effect |
| JEL: | J38 H26 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5942&r=lab |
| By: | Depew, Briggs (University of Arizona); Sorensen, Todd (University of California, Riverside) |
| Abstract: | A body of recent empirical work has found strong evidence that the labor elasticity of supply to the firm is finite, implying that firms may have wage setting power. However, these studies capture only snapshots of the parameter. We study this parameter over a period that provides substantial variation in the business cycle. Using a rich employee level dataset from the inter-war period, we are able to estimate the elasticity of supply to the firm during several recessions and expansions. Our analysis suggests that the elasticity is indeed lower during recessions, consistent with the comparative statics from the Burdett-Mortensen search model. This differential wage setting power over the business cycle provides an alternative explanation of the pro-cyclicality of wages. |
| Keywords: | business cycles, labor market frictions, monopsony |
| JEL: | J42 J31 J64 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5928&r=lab |
| By: | Naércio Aquino Menezes-Filho; Marc-Andreas Muendler |
| Abstract: | Tracking individual workers across jobs after Brazil’s trade liberalization in the 1990s shows that tariff cuts trigger worker displacements, but neither exporters nor comparative-advantage sectors absorb trade-displaced labor. On the contrary, exporters separate from significantly more and hire fewer workers than the average employer. Trade liberalization increases transitions to services, unemployment, and out of the labor force. Results are consistent with faster labor productivity growth than sales expansions so that output shifts to more productive firms while labor does not. Higher rates of failed reallocations and longer durations of complete reallocations result, associated with a costly incidence of idle resources. |
| JEL: | F14 F16 J23 J63 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17372&r=lab |
| By: | Cataldi, Alessandra (Sapienza University of Rome); Kampelmann, Stephan (University of Lille 1); Rycx, Francois (Free University of Brussels) |
| Abstract: | Using longitudinal matched employer-employee data for the period 1999-2006, we investigate the relationship between age, wage and productivity in the Belgian private sector. More precisely, we examine how changes in the proportions of young (16-29 years), middle-aged (30-49 years) and older (more than 49 years) workers affect the productivity of firms and test for the presence of productivity-wage gaps. Results (robust to various potential econometric issues, including unobserved firm heterogeneity, endogeneity and state dependence) suggest that workers older than 49 are significantly less productive than prime age and young workers. In contrast, the productivity of middle-age workers is not found to be significantly different compared to young workers. Findings further indicate that average hourly wages within firms increase significantly and monotonically with age. Overall, this leads to the conclusion that young workers are paid below their marginal productivity while older workers appear to be "overpaid" and lends empirical support to theories of deferred compensation over the life-cycle (Lazear, 1979). |
| Keywords: | wages, productivity, aging, matched panel data |
| JEL: | J14 J24 J31 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5938&r=lab |
| By: | François Gerard (UC Berkeley); Gustavo Gonzaga (Department of Economics PUC-Rio) |
| Abstract: | Few developing countries have adopted an Unemployment Insurance (UI) program but the list of countries considering its implementation is growing. Focusing on the Brazilian UI program and using administrative data covering the universe of formal employment, we provide empirical evidence documenting two relevant facts for the debate around the design of such program in countries characterized by a large informal sector and a lack of administrative and enforcement capacity. First, UI benefits strongly affects the timing of formal job finding for those workers able to find a formal job soon after job-loss. Second, those workers constitute a small share of the overall pool of UI beneficiaries, since most job-losers do not find a formal job rapidly. Therefore, offering UI is costly (most beneficiaries would exhaust their benefits for typical lengths of benefit duration) and UI benefits have little distortionary effect on the job-finding behavior of the average (formal) job-loser: they constitute pure income transfers for 3/4 of the potential beneficiaries. We further discuss implications of these 2 facts and highlight some interactions with job protection legislations (hiring costs), the main policy instrument used to protect workers from labor demand fluctuations in those countries. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:rio:texdis:593&r=lab |
| By: | Wolfgang Maennig (Chair for Economic Policy, University of Hamburg); Markus Wilhelm (Chair for Economic Policy, University of Hamburg) |
| Abstract: | Becoming unemployed has negative effects on life satisfaction; a transition from unemployment to employment, however, has only small positive effects. This asymmetry indicates a potential “omitted variable bias” in previous empirical happiness studies, with the consequence of underesti-mated effects of unemployment on life satisfaction. There are also gender-specific effects of asymmetry. |
| Keywords: | Happiness; life satisfaction; asymmetric effect; labour status; employment; unemployment |
| JEL: | I31 J01 Z13 |
| Date: | 2011–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:hce:wpaper:041&r=lab |
| By: | Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)); Theodoropoulos, Nikolaos (University of Cyprus) |
| Abstract: | We estimate the effect of variable pay schemes on workplace absenteeism using two cross sections of British establishments. Private sector establishments that explicitly link pay with individual performance are found to have significantly lower absence rates. This effect is stronger for establishments that offer variable pay schemes to a greater share of their non-managerial workforce. Matched employer-employee data suggest that the effect is robust to a number of sensitivity tests. We also find that firms that tie a greater proportion of employees’ earnings to variable pay schemes are also found to experience lower absence rates. Further, quintile regression results suggest that variable pay schemes have a stronger effect on establishments with an absence rate that is higher than an average or “sustainable” level. Finally, panel data suggest that a feedback mechanism is present, whereby high absenteeism in the past is related to a greater future incidence of individual variable pay schemes, which, in turn, is correlated with lower absence rates. |
| Keywords: | performance-related pay, absenteeism, incentives, Britain |
| JEL: | J22 J33 C21 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5941&r=lab |
| By: | MIKUCKA Malgorzata; VALENTOVA Marie |
| Abstract: | In survey research the parental leave beneficiaries are usually coded as either employed or inactive. One of the exceptions is the European Labor Force Survey (EU-LFS), which (from 2006) includes parental leave among other forms of being employed but temporarily not working. This paper explores classification of parental leave takers in EU-LFS, focusing on cross-country discrepancies and their consequences. Our results show that classification rules differ cross-nationally: in some countries parental leave takers are considered inactive, in others – employed but temporarily not working. In particular in the Czech Republic, Estonia, Hungary and Slovakia the EU-LFS data do not reflect the actual use of parental leaves because beneficiaries are coded as inactive. We estimate the actual number of mothers on parental leave in these countries and show that EU-LFS employment rates of women aged 18-40 are biased downwards 2-7 percentage points; for mothers of children aged 0-2 the bias reaches 12-45 percentage points . Our study shows the limited comparability of EU-LFS employment rates, warns about possible bias in cross-national studies and shows the importance of transparent and consistent survey measurement of employment status. |
| Keywords: | parental leave; labor market status; employment status; cross-country comparability; Labour Force Survey; Czech Republic; Estonia; Hungary; Slovakia |
| JEL: | J21 J28 J48 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-45&r=lab |
| By: | Stephan K. S. Kampelmann; François Rycx |
| Abstract: | Labour economists typically assume that pay differences between occupations can be explained with variations in productivity. The empirical evidence on the validity of this assumption is surprisingly thin and subject to various potential biases. The authors use matched employer-employee panel data from Belgium for the years 1999-2006 to examine occupational productivity-wage gaps. They find that occupations play distinct roles for remuneration and productivity: while the estimations indicate a significant upward-sloping occupational wage-profile, the hypothesis of a flat productivity-profile cannot be rejected. The corresponding pattern of over- and underpayment stands up to a series of robustness tests. |
| Keywords: | Labour productivity; wages; occupations; production function; matched employer-employee data |
| JEL: | J24 J31 J44 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/96525&r=lab |
| By: | Valentina Calderón; Margarita Gáfaro; Ana María Ibáñez |
| Abstract: | Civilian displacement is a common phenomenon in developing countries confronted with internal conflict. While displacement directly affects forced migrants, it also contributes to deteriorating labor conditions of vulnerable groups in receiving communities. For the displaced population, the income losses are substantial, and as they migrate to cities, they usually end up joining the informal labor force. Qualitative evidence reveals that displaced women are better suited to compete in urban labor markets, as their labor experience is more relevant with respect to certain urban low-skilled occupations. Our study uses this exogenous change in female labor force participation to test how it affects female bargaining power within the household. Our results show that female displaced women work longer hours, earn similar wages and contribute in larger proportions to household earnings relative to rural women who remain in rural areas. However, as measured by several indicators, their greater contribution to households’ earnings does not strengthen their bargaining power. Most notably, domestic violence have increased among displaced women. The anger and frustration of displaced women also increases the level of violence directed at children. Because the children of displaced families have been the direct victims of conflict and domestic violence, the intra-generational transmission of violence is highly likely. |
| Date: | 2011–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:008912&r=lab |
| By: | Brilli, Ylenia (Catholic University Milan); Del Boca, Daniela (University of Turin); Pronzato, Chiara (University of Essex) |
| Abstract: | This paper investigates the effects of public childcare availability in Italy on mothers' working status and children's scholastic achievements. We use a newly available dataset containing individual standardized test scores of pupils attending second grade of primary school in 2008-09 in conjunction with data on public childcare availability. Public childcare coverage in Italy is scarce (12.7 percent versus the OECD average of 30 percent) and the service is “rationed”: each municipality allocates the available slots according to eligibility criteria. We contribute to the existing literature taking into account rationing in public childcare access and the functioning of the childcare market. Our estimates indicate that childcare availability has positive and significant effects on both mothers' working status and children's language test scores. The effects are stronger when the degree of rationing is high and for low educated mothers and children living in lower income areas of the country. |
| Keywords: | childcare, female employment, child cognitive outcomes |
| JEL: | J13 D1 H75 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5918&r=lab |
| By: | Fernando Mesa |
| Abstract: | This paper constructs a trade general equilibrium model for a less developed country with three sectors. One is the informal and un-tradable sector characterized by flexible wages, while the other two sectors are tradable, export and import sectors. The model imposes a binding minimum wage over the unskilled labour and efficient wage distortions on the skilled labour. Comparative statics is driven to analyze the effects on the labour market as consequence of opening the economy, raising the minimum wage and the introduction of an augmenting productivity in the export sector. |
| Date: | 2011–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:008908&r=lab |
| By: | Juan Pablo Medina; Alberto Naudon |
| Abstract: | In this paper we explore the channels through which the terms of trade affect labor market variables in an emerging economy such as Chile. In doing so, we analyze the cyclical properties of labor market variables and use a structural vector autoregressive model to analyze the empirical responses of variables such as unemployment rate, job finding rate, sectoral employment and sectoral average labor productivity to terms of trade shocks in the case of Chile, which come from two main sources: the mining and the non-mining sector. We then develop a multi-sector model with search frictions that generates fluctuations in the unemployment rate. Using a calibrated version of this model for Chile, we analyze the ability of the model to replicate the observed responses of labor market variables to terms of trade shocks. We find that the model can predict quantitatively the effects of labor market variables to non-mining terms of trade shocks. Although the model is able to obtain responses to mining price changes qualitatively similar to what is estimated in the data, it falls short to the estimated magnitude of reduction in unemployment that follows a rise in mining prices. The presence of very high wage rigidity can help to generate a sharper fall in unemployment after a mining terms of trade rise. Finally, the model remarks a more intense sectoral labor reallocation in response to terms of trade shocks than the amount estimated in the data. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:chb:bcchwp:637&r=lab |
| By: | Peter Haan; Victoria Prowse |
| Abstract: | How can public pension systems be reformed to ensure fiscal stability in the face of increasing life expectancy? To address this pressing open question in public finance, we estimate a life-cycle model in which the optimal employment, retirement and consumption decisions of forward-looking individuals depend, inter alia, on life expectancy and the design of the public pension system. We calculate that, in the case of Germany, the fiscal consequences of the 6.4 year increase in age 65 life expectancy anticipated to occur over the 40 years that separate the 1942 and 1982 birth cohorts can be offset by either an increase of 4.34 years in the full pensionable age or a cut of 37.7% in the per-year value of public pension benefits. Of these two distinct policy approaches to coping with the fiscal consequences of improving longevity, increasing the full pensionable age generates the largest responses in labor supply and retirement behavior. |
| Keywords: | Life expectancy, public pension reform, retirement, employment, life-cycle models, consumption, tax and transfer system |
| JEL: | D91 J11 J22 J26 J64 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp396&r=lab |
| By: | Cory Koedel (Department of Economics, University of Missouri-Columbia; Department of Economics, University of Missouri-Columbia) |
| Abstract: | Teacher pension systems impose large penalties on individuals who separate too soon or remain employed too long. The penalties result in the retention of some teachers who would otherwise choose to leave, and the premature exit of some teachers who would otherwise choose to stay. We examine how these compositional effects of teacher pension systems influence the quality of the teaching workforce, conditional on individuals who initially select into teaching. We find no evidence that the pull and push incentives raise teacher quality, and if anything, we find modest negative effects. Our results support future experimentation with compensation schemes for educators that are not so heavily backloaded. |
| Keywords: | Educator Pensions, Teacher Pensions, Backloaded Compensation, Teacher Pensions and Teacher Quality, Teacher Compensation, Selection into Teaching |
| JEL: | I20 J30 J45 |
| Date: | 2011–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1109&r=lab |
| By: | David Marsden |
| Abstract: | This article considers the role of individual employee voice in regulating the 'zone of acceptance' within the employment relationship, and examines the extent to which different models of collective voice inhibit or foster the operation of individual voice. It focuses especially on the role of representatives who deal with job-level grievances who operate within contrasted frameworks of collective voice. In one, representation is negotiated with the employer, and in the other, it is based on rights established in employment law. The former is commonly associated with shop stewards and unions, and the latter with employee delegates and works councils. It is argued that whereas in the negotiated model individual and collective voice are substitutes, in the rights-based one they are complements. The article also considers how this may alter under dual-channel representation based on both unions and councils, which is very common in European workplaces. Britain provides an example of the negotiated model, and France of both the rights-based and dual-channel models. These ideas are tested using data from the 2004 British and French workplace employment relations surveys, and confirmed using data from the 1998 surveys. |
| Keywords: | Labor-management relations, industrial jurisprudence, individual and collective voice, works councils |
| JEL: | J53 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1070&r=lab |
| By: | Grodner, Andrew (East Carolina University); Kniesner, Thomas J. (Syracuse University); Bishop, John A. (East Carolina University) |
| Abstract: | We examine theoretically and empirically social interactions in labor markets and how policy prescriptions can change dramatically when there are social interactions present. Spillover effects increase labor supply and conformity effects make labor supply perfectly inelastic at a reference group average. The demand for a good may also be influenced by either a spillover effect or a conformity effect. Positive spillover increases the demand for the good with interactions, and a conformity effect makes the demand curve pivot to become less price sensitive. Similar social interactions effects appear in the associated derived demands for labor. Individual and community factors may influence the average length of poverty spells. We measure local economic conditions by the county unemployment rate and neighborhood spillover effects by the racial makeup and poverty rate of the county. We find that moving an individual from one standard deviation above the mean poverty rate to one standard deviation below the mean poverty rate (from the inner city to the suburbs) lowers the average poverty spell by 20–25 percent. We further consider overall labor market outcomes by examining theoretically the socially optimal wealth distribution. Interdependence in utility can mitigate the need to transfer wealth to low-wage individuals and may require them to be poorer by all objective measures. Finally, we quantify how labor market policy changes when there are household social interactions. Labor supply estimates indicate positive economically important spillovers for adult U.S. men. Ignoring or incorrectly considering social interactions can mis-estimate the labor supply response of tax reform in the United States by as much as 60 percent. |
| Keywords: | social interactions, spillover, conformity, inequality, poverty, labor supply, reference group, social multiplier, income tax, PSID |
| JEL: | D11 J22 Z13 D31 D63 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5934&r=lab |
| By: | Eggert, Håkan (Department of Economics, School of Business, Economics and Law, Göteborg University); Kahui, Viktoria (University of Otago, Dept of Economics) |
| Abstract: | We study dynamic labour supply using data on paua (abalone) divers in New Zealand. The divers face stable, flat prices per kilogram after each catch, but experience transitory wage changes due to varying weather and water conditions, and are free to vary their daily working hours and display an intermittent working pattern. We find non-linear wage elasticities, rejecting the standard neo-classical prediction. We explore potentially distorting factors, but find little evidence. Applying Kszegi and Rabin’s (2006) theory where workers have both income and hours targets could explain our result. In particular, our divers appear to be primarily guided by the hours target. http://hdl.handle.net/2077/26589 |
| Keywords: | labour supply; wage elasticity; income e target; reference-dependent |
| JEL: | J01 J22 |
| Date: | 2011–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0513&r=lab |
| By: | Leuven, Edwin (University of Oslo); Rønning, Marte (Statistics Norway) |
| Abstract: | This paper exploits discontinuous grade mixing rules in Norwegian junior high schools to estimate how classroom grade composition affects pupil achievement. Pupils in mixed grade classrooms are found to outperform pupils in single grade classrooms on high stake central exit tests and teacher set and graded tests. This effect is driven by pupils benefiting from sharing the classroom with more mature peers from higher grades. The presence of lower grade peers is detrimental for achievement. Pupils can therefore benefit from de-tracking by grade, but the effects depend crucially on how the classroom is balanced in terms of lower and higher grades. These results reconcile the contradictory findings in the literature. |
| Keywords: | educational production, combination classes, class size, peer effects |
| JEL: | I2 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5922&r=lab |
| By: | Laurence Ball; Nicolás De Roux; Marc Hofstetter |
| Abstract: | This study constructs a new data set on unemployment rates in Latin America and the Caribbean and then explores the determinants of unemployment. We compare different countries, finding that unemployment is influenced by the size of the rural population and that the effects of government regulations are generally weak. We also examine large, persistent increases in unemployment over time, finding that they are caused by contractions in aggregate demand. These demand contractions result from either disinflationary monetary policy or the defense of an exchange-rate peg in the face of capital flight. Our evidence supports hysteresis theories in which short-run changes in unemployment influence the natural rate. |
| Date: | 2011–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:008917&r=lab |
| By: | Hian Teck Hoon (School of Economics, Singapore Management University) |
| Abstract: | This paper is in three parts. The first part discusses the workings of a wage subsidy scheme in boosting employment and earnings of workers. The second part reviews the empirical evidence on the effectiveness of wage subsidy schemes in countries that have implemented them both as countercyclical policies as well as structural programs to boost long-term earnings and employment of low wage workers. The third part looks at Singapore as a case study of how wage subsidies have been used in a program for generating economic inclusion both in the context of growth as well as in the context of business fluctuations. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:02-2011&r=lab |
| By: | Malte Reimers (Georg-August-University Göttingen); Stephan Klasen (Georg-August-University Göttingen) |
| Abstract: | While the majority of micro studies finds that rural education increases agricultural productivity, various recent cross-country regressions analysing the determinants of agricultural productivity were only able to detect insignificant or even surprising negative effects of schooling. In this paper, we argue and show that this failure to find a positive impact of education in the international context is rather a data problem related to the use of enrolment and literacy indicators. Using a panel of 95 developing and middle-income countries from 1961 to 2002 together with the newest version of the Barro-Lee educational attainment dataset, we show that education indeed has a highly significant, positive effect on agricultural productivity which is robust to changes in the control variables and in the econometric methods applied. Distinguishing between different levels of education further reveals that only primary and secondary schooling have significant positive impacts while tertiary education remains insignificant. Finally, the effect of education is estimated separately for countries with different income levels. Results indicate that the coefficient of the education variable remains insignificant for countries from the poorest three income quintiles, while it is positive and highly significant for the richest two quintiles. This finding can be interpreted as support for the prominent argument claiming that education leads to higher agricultural productivity only in the presence of rapid technical change where education will help farmers to adjust more readily to the new opportunities. |
| Keywords: | Agricultural productivity; agricultural production function; cross‐country regression; education; human capital |
| JEL: | I20 O13 O15 O47 Q10 |
| Date: | 2011–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:090&r=lab |
| By: | Cappellari, Lorenzo; Tatsiramos, Konstantinos |
| Abstract: | Social interactions have important consequences for labour market outcomes. Yet the growing literature has relied on indirect definitions of networks. We present the first evidence based on direct information on friends networks. We address issues of correlated effects with instrumental variables and panel data. We find large network effects, which persist even after controlling for family networks. One additional employed friend increases a persons job finding probability by approximately 13 percent. This is a result of endogenous social interactions. We also provide the first evidence that network effects operate through information transmission rather than through social norms or leisure complementarities. |
| Date: | 2011–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2011-21&r=lab |
| By: | Pao-Li Chang (School of Economics, Singapore Management University); Fali Huang (School of Economics, Singapore Management University) |
| Abstract: | This paper presents a theory on the endogenous choice of a country's education policy and the two-way causal relationship between trade and education systems. The setting of a country's education system determines its talent distribution and comparative advantage in trade; the possibility of trade by raising the returns to the sector of comparative advantage in turn induces countries to further differentiate their education systems and reinforces the initial pattern of comparative advantage. Speci cally, the Nash equilibrium choice of education systems by two countries interacting strategically are necessarily more divergent than their autarky choices,although the difference is still less than what is socially optimal for the world. We provide some preliminary empirical evidence on the relationship between education, talent distribution, and trade. |
| Keywords: | Education System, Talent Distribution, Comparative Advantage, Trade Pattern |
| JEL: | F16 I20 J24 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:33-2010&r=lab |
| By: | David Gill; Victoria Prowse |
| Abstract: | We present experimental evidence which sheds new light on why women may be less competitive than men. Specifically, we observe striking differences in how men and women respond to good and bad luck in a competitive environment. Following a loss, women tend to reduce effort, and the effect is independent of the monetary value of the prize that the women failed to win. Men, on the other hand, reduce effort only after failing to win large prizes. Responses to previous competitve outcomes explain about 11% of the variation that we observe in women’s efforts, but only about 4% of the variation in the effort of men, and differential responses to luck account for about half of the gender performance gap in our experiment. These findings help to explain both female underperformance in environments with repeated competition and the tendency for women to select into tournaments at a lower rate than men. |
| Keywords: | Real effort experiment, gender differences, gender gap, competition aversion, tournament, luck, win, loss, competitive outcomes |
| JEL: | C91 J16 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:564&r=lab |
| By: | Ericson, Peter (Empirica); Flood, Lennart (Göteborg University) |
| Abstract: | This paper presents estimates of individuals' responses in hourly wages to changes in marginal tax rates. Estimates based on register panel data of Swedish households covering the period 1992 to 2007 produce significant but relatively small net-of-tax rate elasticities. The results vary with family type, with the largest elasticities obtained for single males and the smallest for married/cohabitant females. Despite these seemingly small elasticities, evaluation of the effects of a reduced state tax using a microsimulation model shows that the effort effect matters. The largest effect is due to changes in number of working hours yet including the effort effect results in an almost self-financed reform. As a reference to the earlier literature we also estimate taxable income elasticities. As expected, these are larger than for the hourly wage rates. However, both specifications produce significantly and positive income effects. |
| Keywords: | income taxation, hourly wage rates, work effort, micro simulation |
| JEL: | C8 D31 H24 J22 J31 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5930&r=lab |
| By: | John Beshears; James J. Choi; David Laibson; Brigitte C. Madrian; Katherine L. Milkman |
| Abstract: | We measure how receiving information about coworkers’ savings behavior affects recipients’ savings choices. Employees of a large company who were not participating in or contributing little to the company’s retirement savings plan were sent a simplified enrollment or contribution rate increase form. A randomized subset of forms included information on the fraction of coworkers either participating in or contributing at least 6% of pay to the plan. We find that peer information increased savings of non-unionized recipients but decreased savings of unionized recipients. Our results highlight the possibilities and limitations of peer information interventions. |
| JEL: | D14 D83 D91 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17345&r=lab |
| By: | Breau, Sébastien; Brown, W. Mark |
| Abstract: | Do exporters and foreign-controlled establishments pay their workers higher wages than non-exporters and domestic-controlled establishments? This paper draws on an employer-employee dataset to explore the existence of exporter and foreign-controlled wage premiums in the Canadian manufacturing sector. Trade and foreign direct investment (FDI) are central to the process of globalization. Over the last 50 years, advocates of greater trade and FDI liberalization have been guided by the notion that removing barriers to both stimulates economic growth. An extensive body of work using newly available micro-data files has emerged comparing the productivity levels of exporters against those of non-exporters, and of foreign-controlled firms against those of domestic firms. |
| Keywords: | Business performance and ownership, Manufacturing, Business ownership |
| Date: | 2011–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp1e:2011021e&r=lab |
| By: | James Buchan; Steven Black |
| Abstract: | Nurses are usually the most numerous professionals in the healthcare workforce, and their contribution is a core component in attaining the policy objectives of improved productivity, quality of care and effectiveness in the health sector. The recent global economic crisis, and its related impacts on health sector funding and health labour market dynamics, has reinforced these policy priorities. This report reviews the impact of pay increases on nurses’ labour market indicators. It presents background data on trends in the numbers of nurses and the remuneration of nurses in OECD countries; summarises the limited evidence base on pay and labour market behaviour; reports on four case study countries where a significant pay raise was awarded to at least some categories of nurses in recent years in response to perceived labour market challenges – the United Kingdom (UK), New Zealand, Finland and the Czech Republic – using a variety of indicators to illustrate impact; and concludes with key points for policy makers. There has been variable growth in nurses’ employment levels in OECD countries in recent years, and nurses’ pay rates, in comparison to other earnings in national economies, vary markedly across OECD countries. The country case studies in this report highlight that there were several main drivers for the implementation of a pay rise for nurses, and also identified a range of possible indicators that can be used to assess the impact of changes to nurses’ pay. The main impetus for a pay increase came from: labour market concerns (geographic or specialty shortages), which were reported in all four countries; pay equity issues (New Zealand and the UK); structural changes in the pay systems (e.g., increased flexibility) (Finland, New Zealand and the UK); attempts to improve organizational productivity and the quality of care (UK); and improving international pay competitiveness (Czech Republic after EU accession). The review concludes by arguing that how nurses are paid - as well as how much they are paid – is an issue worthy of more detailed examination. While the same policy drivers exist in most OECD countries, nurses’ pay systems are very different. The findings suggest that, in the short term at least, the pay increases in the four countries contributed to an increase in the potential “new” supply of entrants to nurse education; the effect on those already in work is more difficult to assess, as their behaviour is also impacted by the complex interaction of other aspects, such as working environment and working conditions, career possibilities, and individuals' priorities.<BR>Le personnel infirmier est habituellement la catégorie la plus nombreuse des professionnels de santé, et leur contribution joue un rôle essentiel dans l’atteinte des objectifs d’amélioration de la productivité, de la qualité des soins et de l’efficacité dans le secteur de la santé. La crise économique mondiale récente, et ses impacts sur le financement des dépenses de santé et sur la dynamique du marché du travail dans ce secteur, est venue renforcer ces objectifs. Ce rapport examine l’impact des augmentations de salaire sur les indicateurs du marché du travail du personnel infirmier. Il présente des données de base sur les tendances concernant le nombre d’infirmières et leur rémunération dans les pays de l’OCDE ; résume les résultats des travaux de recherche disponibles sur les liens entre la rémunération des infirmières et les comportements sur le marché du travail ; présente de façon plus détaillée quatre études de cas de pays (Royaume-Uni, Nouvelle-Zélande, Finlande et République tchèque) où des augmentations significatives de salaire ont été octroyées à au moins certaines catégories d’infirmières et analyse l’impact de ces augmentations en utilisant différents indicateurs ; et conclut par quelques points clés à l’attention des décideurs politiques. La croissance de l’emploi du personnel infirmier a été variable au cours des dernières années dans les pays de l’OCDE, et les salaires des infirmières, en comparaison avec le salaire moyen dans chacun des pays, varient fortement d’un pays à l’autre, Les études de cas présentées dans ce rapport mettent en évidence plusieurs facteurs ayant entraîné une augmentation significative des salaires des infirmières dans les quatre pays en question, et identifient une série d’indicateurs susceptibles d’être utilisés pour mesurer l’impact de ces augmentations. Les principaux moteurs de ces augmentations de salaire sont venus : d’inquiétudes concernant le marché du travail dans les quatre pays (des pénuries sur le plan géographique ou au niveau de certaines spécialités) ; de questions entourant l’équité salariale (Nouvelle-Zélande et Royaume-Uni) ; des changements structurels dans les systèmes de paiements, notamment la mise en place d’une plus grande flexibilité (Finlande, Nouvelle- Zélande et Royaume-Uni) ; de tentatives d’amélioration de la productivité et de la qualité des soins (Royaume-Uni) ; et de l’amélioration de la compétitivité internationale des salaires (République tchèque après son entrée dans l’UE). Une des conclusions de ce rapport est que non seulement le niveau moyen de rémunération des infirmières mais aussi les méthodes de paiement mériteraient des études plus approfondies. Ces méthodes de paiement varient fortement d’un pays à l’autre alors que les mêmes défis se posent dans la plupart des pays. Les résultats des études de cas suggèrent qu’au moins à court terme, les augmentations de salaire des infirmières dans les quatre pays ont contribué à accroitre le nombre de personnes intéressées à étudier et travailler dans ce domaine. Il est toutefois difficile d’évaluer l’impact que ces augmentations ont eu sur les infirmières déjà sur le marché du travail, étant donné que leur comportement est aussi affecté par de nombreux facteurs tel que l’environnement et les conditions de travail ainsi que les priorités individuelles. |
| JEL: | I10 I18 J2 |
| Date: | 2011–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:57-en&r=lab |
| By: | Filipe R. Campante (Harvard Kennedy School, Harvard University); Davin Chor (School of Economics, Singapore Management University) |
| Abstract: | We examine several hypotheses regarding the determinants and implications of political protest, motivated by the wave of popular uprisings in Arab countries starting in late 2010. While the popular narrative has emphasized the role of a youthful demography and political repression, we draw attention back to one of the most fundamental correlates of political activity identified in the literature, namely education. Using a combination of individual-level micro data and cross-country macro data, we highlight how rising levels of education coupled with economic under-performance jointly provide a strong explanation for participation in protest modes of political activity as well as incumbent turnover. Political protests are thus more likely when an increasingly educated populace does not have commensurate economic gains. We also find that the implied political instability is associated with heightened pressures towards democratization. |
| JEL: | D72 D78 I20 I21 O15 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:03-2011&r=lab |
| By: | Monica Brezzi; Lewis Dijkstra; Vicente Ruiz |
| Abstract: | To account for differences among rural and urban regions, the OECD s established a regional typology, classifying TL3 regions as predominantly urban (PU), intermediate (IN) or predominantly rural (PR) (OECD, 2009). This typology, based essentially on the percentage of regional population living in urban or rural communities, has proved to be meaningful to better explain regional differences in economic and labour market performance. However this typology does not take into account the presence of economic agglomerations if they happen to be in neighbouring regions. For example, a region is classified as rural or intermediate regardless its distance from a large urban centre where labour market, access to services, education opportunities and logistics for firms can be wider. Previous work reveals great heterogeneity in economic growth among rural regions and the distance from a populated centre could be a significant factor explaining these differences. For the latter, the OECD regional typology is extended to include an accessibility criterion. This criterion is based on the driving time needed for at least half of the population in a region to reach a populated centre of with 50 000 or more inhabitants. The resulting classification consists of four types of regions: Predominantly Urban (PU), Intermediate (IN), Predominantly Rural Close to a city (PRC) and Predominantly Rural Remote (PRR). For the time being, the extended typology has only been computed for regions in North America (Canada, Mexico and the United States) and Europe. The extended typology is used to compare the dynamics of population and labour markets. Remote rural regions show a stronger decline in population and a faster ageing process than rural regions close to a city. The remoteness of rural regions is in fact a significant factor explaining regional outflows of working age population, confirming that this extended typology captures the economic distance from market and services. Remote rural regions appear economically more fragile: lower employment rates (Canada and Mexico) and economic output (Europe).<BR>Afin de prendre en compte les différences entre les régions rurales et urbaines, l’OCDE a établi une typologie régionale qui classe les régions TL3 en 3 catégories : régions majoritairement urbaines (PU), intermédiaires (IN) ou à prédominance rurale (PR), (OCDE, 2009). Cette typologie, qui repose essentiellement sur le pourcentage de la population régionale vivant dans des communautés urbaines ou rurales, s'est révélée significative pour mieux expliquer les différences régionales au niveau de la performance économique et du marché du travail. Toutefois, cette typologie ne tient pas compte de la présence de grandes agglomérations, si celles-ci se trouvent dans des régions voisines. Par exemple, une région est considérée comme rurale ou intermédiaire indépendamment de sa distance d'un grand centre urbain, où le marché du travail, l'accès aux services, les possibilités d'éducation et l’offre logistique pour les entreprises peuvent être meilleurs. Des travaux antérieurs révèlent une grande hétérogénéité de croissance économique entre les régions rurales, et la distance d'un centre fortement peuplé pourrait être un facteur important pour expliquer ces différences. C’est pour cette raison que la typologie régionale de l'OCDE a été élargie afin d’y inclure un critère d'accessibilité. Ce critère est basé sur le temps de trajet que doit réaliser au moins la moitié de la population d’une région pour atteindre un centre urbain de 50 000 habitants ou plus. La classification qui en résulte se compose de quatre types de régions: Majoritairement Urbaines (PU), Intermédiaires (IN), à prédominance rurale proches d'une ville (RPC) et à prédominance rurale éloignées (PRR). Pour l'heure, la typologie élargie n'a été calculée que pour les régions en Amérique du Nord (Canada, Mexique, États-Unis) et en Europe. La typologie élargie est utilisée pour comparer la dynamique de la population et celle des marchés du travail. Elle montre que les régions rurales éloignées ont une baisse plus importante de leur population et un processus de vieillissement plus rapide que les régions rurales proches d'une ville. L'éloignement des régions rurales est en effet un facteur important pour expliquer les migrations régionales de la population en âge de travailler, ce qui confirme que cette typologie élargie prend bien en compte la distance économique du marché et des services. Les régions rurales éloignées apparaissent plus fragiles au niveau économique : des taux d'emploi inférieurs (Canada et Mexique) et une production économique moindre (Europe). |
| Keywords: | ageing, rural regions, distance to markets, OECD regional typology, labour market mobility, road networks |
| JEL: | C80 J61 R1 R4 |
| Date: | 2011–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2011/6-en&r=lab |
| By: | Amil Petrin; Jagadeesh Sivadasan |
| Abstract: | We propose a new measure of allocative efficiency based on unrealized increases in aggregate productivity growth. We show that the difference in the value of the marginal product of an input and its marginal cost at any plant - the plant-input "gap" - is exactly equal to the change in aggregate output that would occur if that plant changed that input's use by one unit. The mean absolute gap across plants for any input can then be interpreted as an approximation to the gain to society that would occur if every plant had a one-unit change in that input in the efficient direction, holding everything else constant. We show how to estimate this average gap using plant-level data for 1982-1994 from Chilean manufacturing, a sector largely viewed as being one of South America's least distorted. We find the gaps for blue and white collar labor are quite large in absolute value and imply that a one-unit move in the correct direction for blue collar would increase aggregate value added by almost 0.5%. We also find that the gaps for blue and white collar workers are increasing over time while the gaps for materials and electricity are not. The timing of the two separate increases in firing costs and the sharpest increases in the labor gaps is suggestive that the increases in average within-firm labor gaps may be related to the increases in severance pay. |
| JEL: | D24 J65 O47 O54 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17373&r=lab |
| By: | Gábor Kátay (Magyar Nemzeti Bank, Department of Economics, 1850 Budapest, Szabadság tér 8-9, Hungary.) |
| Abstract: | Following the approach recently developed for the International Wage Flexibility Project (IWFP), the paper presents new estimates of downward real and nominal wage rigidity for Hungary. Results suggest that nominal rigidity is more prominent in Hungary than real rigidity. When compared to other countries participating in the IWFP, Hungary ranks among the countries with the lowest degree of downward real rigidity. The estimated downward nominal rigidity for Hungary is higher, the measure is close to but still below the overall cross-country average. Using the same methodology, the paper also con firms the widespread view that the wage growth bargained at the national level has little compulsory power in Hungary. On the other hand, the minimum wage remains an important source of potential downward wage rigidity in Hungary. JEL Classification: C23, E24, J3, J5. |
| Keywords: | Downward nominal and real wage rigidity, wage change distributions, wage flexibility. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20111372&r=lab |
| By: | Judith Niehues; Andreas Peichl |
| Abstract: | Previous estimates of unfair inequality of opportunity (IOp) are only lower bounds because of the unobservability of the full set of endowed circumstances beyond the sphere of individual responsibility. In this paper, we suggest a new estimator based on a fixed effects panel model which additionally allows identifying an upper bound. We illustrate our approach by comparing Germany and the US based on harmonized micro data. We find significant and robust differences between lower and upper bound estimates ¿ both for gross and net earnings based either on periodical or permanent income ¿ for both countries. We discuss the cross-country differences and similarities in IOp in the light of differences in social mobility and persistence. |
| Keywords: | Equality of opportunity, fairness, redistribution, wage inequality |
| JEL: | D31 D63 H24 J62 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp395&r=lab |
| By: | Viard, Brian; Fu, Shihe |
| Abstract: | We evaluate the environmental and economic effects of Beijing’s driving restrictions. Based on daily data from multiple monitoring stations, air pollution falls 19% during every-other-day and 8% during one-day-per-week restrictions. Based on hourly viewership data, the number of television viewers during the restrictions increases 1.7 to 2.3% for workers with discretionary work time but is unaffected for workers without, consistent with the restrictions’ higher per-day commute costs reducing daily labor. Causal effects are identified from both time-series and spatial variation in air quality and intra-day variation in viewership. We provide possible reasons for the policy’s success, including evidence of high compliance based on parking garage entrance records. Our results contrast with previous findings of no pollution reductions from driving restrictions and provide new evidence on commute costs and labor supply. |
| Keywords: | Driving restrictions; externalities; environmental economics; pollution |
| JEL: | R40 J22 H23 |
| Date: | 2011–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33009&r=lab |
| By: | Harry P. Bowen (McColl School of Business, Queens University of Charlotte); Jennifer Pedussel Wu (Berlin School of Economics) |
| Abstract: | Studies routinely document that the nature of immigrant employment is largely specific: it often concentrates in non-traded goods sectors and many immigrants often have low inter-sectoral mobility. We consider these observed characteristics of immigrant employment for the question of how immigration affects a nation’s pattern of production and trade. We model an economy producing three goods; one is non-traded. Domestic labor and capital are domestically mobile but internationally immobile. Any new wave of immigration is assumed to comprise some workers who become specific to the non-traded goods sector. The model indicates that the output and trade effects of immigration depend importantly on the sectoral pattern of employment by existing and new immigrants. Empirical investigation of the model’s prediction for the relationship between immigration and trade flows in a panel dataset of OECD countries supports the prediction that trade and immigration are complements. The implications of the model and empirical findings for immigration policy are then discussed. |
| Keywords: | immigration, international factor mobility, specific factor, trade, non-traded goods |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:msb:wpaper:2011-01&r=lab |
| By: | Peter Bardsley; Nisvan Erkal; Nikos Nikiforakis; Tom Wilkening |
| Abstract: | This paper investigates the relationship between firm longevity and rat races in an environment where long-lived firms are operated by overlapping generations of short-lived players. We first present a complete information model in which workers in the young generation are offered employment contracts designed by the firms' owners who belong to the old generation. When old, employed workers are granted ownnership rights as long as the firm continues to operate. We test the theoretical predictions of the model in a laboratory experiment. In line with our model's predictions, as firm longevity increases, the recursive nature of the contracts leads to a rat race characterized by low wages, high effort levels, and rent dissipation |
| Keywords: | Overlapping-generations models; Recursive contracts; Rat races; Experiments |
| JEL: | C91 D02 D21 D86 D92 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:1122&r=lab |
| By: | Rainer Lanz; Sébastien Miroudot; Hildegunn Kyvik Nordås |
| Abstract: | Specialisation or division of labour is an important source of economic growth, but the degree of division of labour is constrained by the extent of the market. Trade in tasks represents the latest turn in a virtuous cycle of deepening specialisation, expansion of the market and productivity growth. It has attracted a lot of attention in the policy debate not for its contribution to international division of labour and productivity growth, but for its possible detrimental impact on labour markets, particularly in high income countries. This paper analyses the task content of goods and services and sheds light on structural changes that take place following trade liberalisation. The task content of goods and services is estimated by combining information from the O*Net database on the importance of a set of 41 tasks for a large number of occupations and information on employment by occupation and industry. The study shows that tasks that can be digitised and offshored are often complementary to tasks that cannot. Therefore, the assessment of the offshorability of a job requires that one take into account all tasks being performed. The paper finds that import penetration in services has a small, but positive effect on the share of tasks related to getting and processing information being performed in the local economy. In other words, offshoring complements rather than replaces local information processing. As distortions in the market for intermediate inputs, including offshored tasks, have a larger negative impact the more diversified and complex the economy, possible adverse effects of offshoring on the labour market should be dealt with through social and labour market policy measures, not trade restrictions. In addition, if trade restrictions are imposed, they should be levied on imported value added, not on the total import value. |
| Keywords: | employment, cluster analysis, trade in tasks |
| JEL: | F16 |
| Date: | 2011–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:117-en&r=lab |
| By: | Rachel A. Razza (Syracuse University); Anne Martin (Columbia University); Jeanne Brooks-Gunn (Columbia University) |
| Abstract: | This study examined the longitudinal associations between sustained attention in preschool and children’s school success in later elementary school within a low-income sample (N = 2,403). Specifically, two facets of sustained attention (focused attention and lack of impulsivity) at age 5 were explored as independent predictors of children’s academic and behavioral competence across eight measures at age 9. Overall, the pattern of results indicates specificity between the facets of attention and school success, such that focused attention was primarily predictive of academic outcomes while impulsivity was mainly predictive of behavioral outcomes. Both facets of attention predicted teacher ratings of children’s academic skills and approaches to learning, which suggests that they jointly influence outcomes that span both domains of school success. Patterns of association were similar for children above and below the poverty line. Implications of these findings for interventions targeting school readiness and success among at-risk children are discussed. |
| Keywords: | sustained attention, academic achievement, behavioral competence, low-income children |
| JEL: | D19 D69 I21 I32 J13 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:pri:crcwel:1330&r=lab |
| By: | Maarten van Rooij; Annamaria Lusardi; Rob Alessie |
| Abstract: | There is ample empirical evidence documenting widespread financial illiteracy and limited pension knowledge. At the same time, the distribution of wealth is widely dispersed and many workers arrive on the verge of retirement with few or no personal assets. In this paper, we investigate the relationship between financial literacy and household net worth, relying on comprehensive measures of financial knowledge designed for a special module of the DNB (De Nederlandsche Bank) Household Survey. Our findings provide evidence of a strong positive association between financial literacy and net worth, even after controlling for many determinants of wealth. Moreover, we discuss two channels through which financial literacy might facilitate wealth accumulation. First, financial knowledge increases the likelihood of investing in the stock market, allowing individuals to benefit from the equity premium. Second, financial literacy is positively related to retirement planning, and the development of a savings plan has been shown to boost wealth. Overall, financial literacy, both directly and indirectly, is found to have a strong link to household wealth. |
| Keywords: | Financial education; Savings and wealth accumulation; Retirement preparation; Knowledge of finance and economics; Overconfidence; Stock market participation |
| JEL: | D91 D12 J26 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:313&r=lab |
| By: | John Coleman; Daniel Hale; Richard Layard |
| Abstract: | Personal Social Health and Economic (PSHE) education is a non-statutory school subject designed to facilitate the delivery of a number of key competencies relevant to health, safety and wellbeing. As well as contributing to learning objectives in regards to these topics PSHE education has been ascribed with weighty expectations for outcomes well beyond the classroom relating to physical, mental, sexual and emotional health and safety. This paper reviews a programme of research aimed at providing guidance for the evidence-based provision of PSHE education, including a summary of the major impediments and facilitators of evidence-based programming, as well as a model curriculum for the delivery of evidence-based PSHE. An extensive literature review was conducted along with a series of interviews with programme developers, researchers, teachers and other school practitioners with the aim of developing a cohesive rationale for PSHE education and identifying evidence-based programmes which could be implemented to contribute to PSHE aims. The proposed model curriculum is comprised of evidence-based programmes which are PSHE-relevant and applicable or adaptable to the PSHE-education implementation context. While the provision of evidence-based PSHE presents a number of challenges and is limited by a lack of resources and evidence of effectiveness, with appropriate guidance PSHE education can be improved so that a comprehensive syllabus of evidence-based programmes is enacted in secondary schools. This will increase the likelihood that PSHE has the intended effect on adolescent mental and physical health and wellbeing. |
| Keywords: | Health education, social-emotional learning, life-skills, prevention |
| JEL: | I1 I18 I2 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1071&r=lab |
| By: | Anja Sautmann |
| Abstract: | If women marry younger than men, increased population growth causes a sur- plus of women in the marriage market. This paper introduces search frictions into a matching model with transferable utility and age-dependent match payos to study if this so-called marriage squeeze has caused a dowry \in ation" in India. Using data from Karnataka it is shown that the observed shifts in the age distributions and sex ratio of unmarried men and women during the marriage squeeze lead to higher dowries conditional on the partners' ages. A GMM estimate of the model parameters suggests that average dowries have increased as well. |
| Keywords: | # |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2011-12&r=lab |
| By: | Brice Corgnet (Economic Science Institute, Chapman University); Roberto Hernán-González (Economic Science Institute, Chapman University); Stephen Rassenti (Economic Science Institute, Chapman University) |
| Abstract: | We propose a novel approach to the analysis of organizations by developing a computerized platform that reproduces relevant features of existing organizations such as real-effort tasks and real-leisure alternative activities (Internet). In this environment, we find strong incentives effects as organizations using individual incentives significantly outperform those relying on team incentives. Combining real-time peer monitoring with team incentives, we report striking evidence of positive peer effects as production increases by 50% and Internet usage decreases by 54% compared with organizations using team incentives alone. Peer monitoring allows virtual organizations using team incentives to perform as well as those using individual incentives. However, the positive effect of peer monitoring does not apply to low performers. |
| Keywords: | team incentives, free-riding, monitoring, peer pressure, virtual organization |
| JEL: | C9 D23 J0 J41 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:11-05&r=lab |
| By: | Vítor João Pereira Domingues Martinho (Polytechnic Agricultural School of Viseu) |
| Abstract: | This work aims mainly to present a project of research about the identification of the determinants that affect the mobility of labor. The empirical part of the work will be performed for the NUTS II and NUTS III of Portugal, from 1996 to 2002 and for 1991 and 2001, respectively (given the availability of statistical data). As main conclusion it can be said, for the NUTS II (1996-2002), which is confirmed the existence of some labor mobility in Portugal and that regional mobility is mainly influenced positively by the output growth and negatively by the unemployment rates and by the weight of the agricultural sector. NUTS III level (1991 and 2001) is something similar, but with this level of spatial disaggregation (and in this period) the basic equipment (amenities), particularly in terms of availability of housing, are the main determinants of migration. |
| Keywords: | net migration; Portuguese regions; panel and cross-section estimations |
| JEL: | J0 J1 J2 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:pil:wpaper:80&r=lab |
| By: | Juan-Camilo Cárdenas; Anna Dreber; Emma von Essen; Eva Ranehill |
| Abstract: | We explore gender differences in preferences for competition and risk among children aged 9-12 in Colombia and Sweden, two countries differing in gender equality according to macro indices. We include four types of tasks that vary in gender stereotyping when looking at competitiveness: running, skipping rope, math and word search. We find that boys and girls are equally competitive in all tasks and all measures in Colombia. Unlike the consistent results in Colombia, the results in Sweden are mixed, with some indication of girls being more competitive than boys in some tasks in terms of performance change, whereas boys are more likely to choose to compete in general. Boys in both countries are more risk taking than girls, with a smaller gender gap in Sweden. |
| Date: | 2011–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:008910&r=lab |
| By: | Elena Del Rey (University of Girona, Campus de Montilivi, 17071 Girona, Spain); Fernanda Estevan (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | We investigate the relative merits of unconditional cash transfers (UCT), conditional cash transfers (CCT), and improvements in education quality on efficiency and welfare. In our setting some parents under-invest in their children's education because capital market imperfections prevent them from borrowing. When credit constrained households can be perfectly targeted by the government, we show that CCT are more effective than UCT in enhancing efficiency and equivalent in terms of welfare. When public education quality is very low, raising quality is welfare improving, but is never efficiency enhancing. If the government cannot target constrained households, UCT may be the best policy both in terms of efficiency and welfare. |
| Keywords: | conditional cash transfers, public education, education quality, unconditional cash transfers, credit constraint, efficiency, welfare |
| JEL: | H31 H42 H52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1108e&r=lab |