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on Labour Economics |
| By: | Riddell, W. Craig (University of British Columbia, Vancouver); Song, Xueda (York University, Canada) |
| Abstract: | This study assesses the effects of education on both job search intensity and re-employment success for unemployed workers. Given that the positive correlation between education and job search intensity or re-employment success is likely to be confounded by the endogeneity of education, we make use of data on compulsory schooling laws to create instrumental variables to assess the causal effects of education. Based on data from the Labour Force Survey and the Canadian Census, we find that education both significantly increases job search intensity and significantly improves re-employment success for the unemployed. The evidence on job search intensity provides insights into one potential mechanism through which education may increase the probability of re-employment following unemployment. |
| Keywords: | education, adaptability, unemployment, job search, causal effects, compulsory schooling laws |
| JEL: | I21 J64 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6134&r=lab |
| By: | Meschi, Elena (Università Ca’ Foscari di Venezia); Swaffield, Joanna (University of York); Vignoles, Anna (Institute of Education, University of London) |
| Abstract: | This paper assesses the relative importance of local labour market conditions and pupil educational attainment as primary determinants of the post-compulsory schooling decision. Using a nested logit model we formally incorporate the structured and sequential decision process pupils engage with. Our findings show that, on average, the key drivers of the schooling decision are pupil educational attainment and parental aspirations rather than local labour market conditions. However, there is some evidence that higher local unemployment rates encourage males to invest in education, and that interactions with educational attainment suggest local labour market conditions impact heterogeneously across the pupil population. |
| Keywords: | post-compulsory education, local labour markets, parental aspirations, educational attainment, nested logit |
| JEL: | I21 J18 J24 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6143&r=lab |
| By: | Dahl, Christian M. (University of Southern Denmark); le Maire, Daniel (University of Copenhagen); Munch, Jakob R. (University of Copenhagen) |
| Abstract: | This paper studies how decentralization of wage bargaining from sector to firm-level influences wage levels and wage dispersion. We use detailed panel data covering a period of decentralization in the Danish labor market. The decentralization process provides variation in the individual worker's wage-setting system that facilitates identification of the effects of decentralization. We find a wage premium associated with firm-level bargaining relative to sector-level bargaining, and that the return to skills is higher under the more decentralized wage-setting systems. Using quantile regression, we also find that wages are more dispersed under firm-level bargaining compared to more centralized wage-setting systems. |
| Keywords: | wage bargaining, decentralization, wage dispersion |
| JEL: | J31 J51 C23 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6176&r=lab |
| By: | Zorlu, Aslan (University of Amsterdam) |
| Abstract: | This paper examines ethnic wage differentials for the entire population of students enrolled in 1996 using unique administrative panel data for the period 1996 to 2005 from the Dutch tertiary education system. The study decomposes wage differentials into two components: a component which can be explained by the observed characteristics and unexplained component. The analysis provides novel evidence for the magnitude and the origin of ethnic wage differentials by gender. In general, ethnic wage gap is larger for migrant women than migrant men and larger for Western and Caribbean migrants than Mediterranean migrants. Ethnic minority students appear to have large wage surplus which is almost entirely explained from their favourable observed characteristics. Most notably, Mediterranean female graduates have significant positive wage discrimination while Western female graduates seem to face a small wage penalty. |
| Keywords: | college, university, wages, qualifications, dropout |
| JEL: | J15 J24 J31 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6159&r=lab |
| By: | Luc Behaghel (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); Julie Moschion (Melbourne Institute of Applied Economic and Social Research - Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | In this paper, we provide empirical evidence on the impact of IT diffusion on the stability of employment relationships. We document the evolution of the different components of job instability over a panel of 350 local labor markets in France, from the mid 1970s to the early 2000s. Although workers in more educated local labor markets adopt IT faster, they do not experience any increase in job instability. More specifically, we find no evidence that the faster diffusion of IT is associated with any change in job-to-job transitions, and we find that it is associated with relatively less frequent transitions through unemployment. Overall, the evidence goes against the view that the diffusion of IT has spurred job instability. Combining the local labor market variations with firm data, we argue that these findings can be explained by French firms' strong reliance on training and internal promotion strategies in order to meet the new skills requirement associated with IT diffusion. |
| Keywords: | Technical change; labor turnover; Skill bias; Job security; Internal labor markets |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-00646595&r=lab |
| By: | Cho, In Soo |
| Abstract: | This paper examines the extent to which differences in risk preferences between men and women explain why women have a lower entrepreneurship rate, earn less, and work fewer hours than men. Data from the NLSY79 confirms previous findings that women are more risk averse than men. However, while less risk averse men tend to become self-employed and more risk averse men are likely to choose paid-employment, there is no significant effect of risk preferences on women’s entrepreneurship decisions. Similarly, more risk aversion is associated with higher earnings for male entrepreneurs, but it has no effect on female entrepreneurial earnings. Rising rates of risk aversion lower earnings for women, consistent with theoretical effects of risk preferences on labor earnings, but the effects are of modest magnitude. Risk preferences do not explain variation in hours of work for either men or women. These findings suggest that widely reported differences in risk preferences across genders play only a trivial role in explaining differences in labor market outcomes between men and women. |
| Keywords: | risk aversion; earnings; labor supply; gender gap; self-employment; Blinder-Oaxaca decomposition |
| JEL: | J16 J22 J24 J31 |
| Date: | 2011–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:34651&r=lab |
| By: | Mosca, Irene (Trinity College Dublin); Wright, Robert (University of Strathclyde) |
| Abstract: | This paper examines the persistence of under-employment amongst UK higher education graduates. For the cohort of individuals who graduated in 2002/3, micro-data collected by the Higher Education Statistical Agency, are used to calculate the rates of "non-graduate job" employment 6 months and 42 months after graduation. A logit regression analysis suggests the underemployment is not a short-term phenomenon and is systematically related to a set of observable characteristics. It is also found that under-employment 6 months after graduation is positively related to under-employment 42 months after graduation, which is consistent with the view that the nature of the first job after graduation is important in terms of occupational attainment later in the life-cycle. |
| Keywords: | graduates, under-employment, over-education, persistence, United Kingdom |
| JEL: | I23 J24 J61 R23 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6177&r=lab |
| By: | Robert Metcalfe; Simon Burgess; Steven Proud |
| Abstract: | We use a sharp, exogenous and repeated change in the value of leisure to identify the impact of student effort on educational achievement. The treatment arises from the partial overlap of the world’s major international football tournaments with the exam period in England. Our data enable a clean difference-in-difference design. Performance is measured using the high-stakes tests that all students take at the end of compulsory schooling. We find a strongly significant effect: the average impact of a fall in effort is 0.12 SDs of student performance, significantly larger for male and disadvantaged students, as high as many educational policies. |
| Keywords: | student effort, educational achievement, schools |
| JEL: | I20 J24 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:11/276&r=lab |
| By: | Jones, Melanie K. (Swansea University); Mavromaras, Kostas G. (NILS, Flinders University); Sloane, Peter J. (Swansea University); Wei, Zhang (NILS, Flinders University) |
| Abstract: | We examine the relationship between disability, job mismatch, earnings and job satisfaction, using panel estimation on data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey (2001-2008). While we do not find any relationship between work-limiting disability and over-skilling, it appears that there is a positive relationship between work-limiting disability and over-education, which is consistent with disability onset leading to downward occupational movement, at least in relative terms. We find a negative correlation between work-limiting disability and both earnings and job satisfaction. However, there is only evidence of a causal relationship in terms of the latter, where the impact of disability is found to be multifaceted. |
| Keywords: | job mismatch, disability, earnings, job satisfaction |
| JEL: | I0 J2 J3 J7 J24 J31 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6152&r=lab |
| By: | Peter Siminski (University of Wollongong) |
| Abstract: | Public-private sectoral wage differentials have been studied extensively using quantile regression techniques. These typically find large public sector premiums at the bottom of the wage distribution. This may imply that low skill workers are ‘overpaid’, prompting concerns over efficiency. We note several other potential explanations for this result and explicitly test whether the premium varies with skill, using Australian data. We use a quasi-differenced GMM panel data model which has not been previously applied to this topic, internationally. Unlike other available methods, this technique identifies sectoral differences in returns to unobserved skill. It also facilitates a decomposition of the wage gap into components explained by differences in returns to all (observed and unobserved) skills and by differences in their stock. We find no evidence to suggest that the premium varies with skill. One interpretation is that the compressed wage profile of the public sector induces the best workers (on unobserved skills) to join the public sector in low wage occupations, vice versa in high wage occupations. We also estimate the average public sector premium to be 6% for women and statistically insignificant (4%) for men. |
| Keywords: | public sector, wages, quasi-differenced panel data, GMM, Australia |
| JEL: | J45 J31 J38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp11-10&r=lab |
| By: | Goux, Dominique; Maurin, Eric; Petrongolo, Barbara |
| Abstract: | We investigate cross-hour effects in spousal labor supply exploiting independent variation in hours worked generated by the introduction of the short workweek in France in the late 1990s. We find that female and male employees treated by the shorter legal workweek reduce their weekly labor supply by about 2 hours, and do not experience any reduction in their monthly earnings. While wives of treated men do not seem to adjust their working time at either the intensive or extensive margins, husbands of treated wives respond by cutting their labor supply by about half an hour to one hour per week, according to specifications and samples. Further tests reveal that husbands’ labor supply response did not entail the renegotiation of usual hours with employers or changes in earnings, but involved instead a reduction in (unpaid) work involvement, whether within a given day, or through an increase in the take-up rate of paid vacation and/or sick leave. These margins of adjustment are shown to have no detrimental impact on men’s (current) earnings. The estimated cross-hour effects are consistent with the presence of spousal leisure complementarity for husbands, though not for wives. |
| Keywords: | cross-hour effects; spousal labour supply; workweek reduction |
| JEL: | J12 J22 J48 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8666&r=lab |
| By: | Filiztekin, Alpay |
| Abstract: | There is a consensus that one of the most important ingredients for high and sustainable growth is human capital accumulation. Yet, a different strand of literature argues that there are some frictions in the labor markets of most countries that result in possible education-occupation mismatches, and consequently inefficiencies. Despite a significant amount of research using data from advanced economies there are very few studies on developing economies. Considering that human capital is scarce in these countries, whether it is efficiently allocated is arguably relatively more important. This paper using data from two different years examines the incidence of overeducation in Turkey. The findings show that there is a significant amount of over- and undereducated workers, and they are paid significantly less than those with the same level of education but working in jobs that require education levels that match their own. The magnitude of the incidence and the impact of mismatches on wages are, however, not too different than in most developed economies. |
| Keywords: | human capital; overeducation; returns to schooling; Turkey |
| JEL: | A20 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35123&r=lab |
| By: | Rob Euwals |
| Abstract: | <p>This paper investigates the impact of financial incentives on early-retirement behaviour for high and low wage earners. </p><p>Using a stylized life-cycle model, we derive hypotheses on the behaviour of the two types. We use administrative data and employ two identification strategies to test the predictions. First, we exploit exogenous variation in the replacement rate over birth cohorts of workers who are eligible to a transitional early retirement scheme. Second, we employ a regression discontinuity design by comparing workers who are eligible and non-eligible to the transitional scheme. The empirical results show that low wage earners are, as predicted by the model, more sensitive to financial incentives. The results imply that low wage earners will experience a stronger incentive to continue working in an optimal early retirement scheme.</p> |
| JEL: | J16 J22 J61 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:195&r=lab |
| By: | Schmelzer, Paul (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "The beginning of the employment career is often associated with phases of unemployment. We argue that unemployment has different implications for different educational groups on future employment career depending on institutional settings in the UK and Germany. While search and matching models argue that an unemployment phase might be used for an active job search and might result in a better position, human capital and signalling theory predict status losses. The strongly skill-based and rigid labour market in Germany creates a stigma attached to unemployment and therefore might have negative consequences upon the re-entry into the labour market for all educational groups. The 'trial and error' strategy at the beginning of an employment career in flexible labour markets is common and therefore search and matching models should predict positive outcomes in the UK, especially for high-educated persons. Using the German Socio-Economic Panel and British Household Panel we simultaneously estimate hazard rates and changes in the occupational status." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | J64 L50 |
| Date: | 2011–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201125&r=lab |
| By: | Lundborg, Petter (Lund University); Nilsson, Martin (Uppsala University); Vikström, Johan (Uppsala University) |
| Abstract: | In this paper, we estimate socioeconomic heterogeneity in the effect of unexpected health shocks on labor market outcomes, using register-based data on the entire population of Swedish workers. We effectively exploit a Difference-in-Difference-in-Differences design, in which we compare the change in labor earnings across treated and control groups with high and low education levels. If the anticipation effects are similar for individuals with high and low education, any difference in the estimates across socioeconomic groups could plausibly be given a causal interpretation. Our results suggest a large amount of heterogeneity in the effects, in which individuals with a low education level suffer relatively more from a given health shock. These results hold across a wide range of different types of health shocks and become more pronounced with age. Our results suggest that socioeconomic heterogeneity in the effect of health shocks offers one explanation for how the socioeconomic gradient in health arises. |
| Keywords: | health, health shocks, socioeconomic status, life-cycle |
| JEL: | I10 I12 I14 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6121&r=lab |
| By: | Hirsch, Barry T. (Georgia State University); Kaufman, Bruce E. (Georgia State University); Zelenska, Tetyana (Innovations for Poverty Action) |
| Abstract: | The economic impact of the 2007-2009 increases in the federal minimum wage (MW) is analyzed using a sample of quick-service restaurants in Georgia and Alabama. Store-level biweekly payroll records for individual employees are used, allowing us to precisely measure the MW compliance cost for each restaurant. We examine a broad range of adjustment channels in addition to employment, including hours, prices, turnover, training, performance standards, and non-labor costs. Exploiting variation in the cost impact of the MW across restaurants, we find no significant effect of the MW increases on employment or hours over the three years. Cost increases were instead absorbed through other channels of adjustment, including higher prices, lower profit margins, wage compression, reduced turnover, and higher performance standards. These findings are compared with MW predictions from competitive, monopsony, and institutional/behavioral models; the latter appears to fit best in the short run. |
| Keywords: | minimum wages, employment, labor market adjustments, labor market theories |
| JEL: | J20 J30 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6132&r=lab |
| By: | Ruhm, Christopher J. (University of Virginia); Waldfogel, Jane (Columbia University) |
| Abstract: | This paper critically reviews what we know about the long-term effects of parental leave and early childhood education programs. We find only limited evidence that expansions of parental leave durations improved long-run educational or labor market outcomes of the children whose parents were affected by them, perhaps because benefits are hard to measure or confined to sub-groups, or because leave entitlements were sufficiently long, even before recent extensions, to yield most potential benefits. By contrast, expansions of early education generally yield benefits at school entry, adolescence, and for adults, particularly for disadvantaged children; however the gains may be less pronounced when high quality subsidized child care was available prior to the program expansion or when subsidies increased the use of low quality care. |
| Keywords: | parental leave, early childhood care and education |
| JEL: | J13 J18 J48 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6149&r=lab |
| By: | R Freguglia; G Spricigo; Geraint Johnes; A Aggarwal |
| Abstract: | The effect of education on labour market outcomes is analysed using both survey and administrative data from The Brazilian PNAD and RAIS-MIGRA series, respectively. Occupational destination is examined using both multinomial logit analyses and structural dynamic discrete choice modelling. The latter approach is particularly useful as a means of evaluating policy impacts over time. We find that policy to expand educational provision leads initially to an increased take-up of education, and in the longer term leads to an increased propensity for workers to enter non-manual employment. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:4148&r=lab |
| By: | Wang, Le (University of New Hampshire) |
| Abstract: | China's phenomenal growth is accompanied by both relatively low level of standards of living and high inequality. It is widely believe that investing in education could be an effective strategy to promote higher standards of living as well as to reduce inequality. However, little is known about whether this belief is empirically supported. To this end, we employ a recently developed distributional approach to estimate returns to education across the whole earnings distribution in urban China during economic transition. We find that returns to education are generally more pronounced for individuals in the lower tail of the earnings distribution than for those in the upper tail, in stark contrast to the results found in developed countries. Our result implies that education indeed reduces earnings inequality while increasing individuals' earnings. We also find that the returns to education are uniformly larger for women than for men across the distribution. The results suggest the presence of added effects of education on earnings, as opposed to productivity-enhancing effects, for disadvantaged groups. Finally, we find that rates of educational return increased over time for all parts of the earnings distribution. |
| Keywords: | returns to education, inequality, gender gap, economic transition, instrumental variable quantile regression |
| JEL: | J24 J61 J31 J7 J15 C31 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6173&r=lab |
| By: | Grip Andries de; Sauermann Jan; Sieben Inge (ROA rm) |
| Abstract: | In this paper, we estimate tenure-performance profiles using unique panel data thatcontain detailed information on individual workers’performance. We find that 10per cent increase in tenure leads to an increase in performance of 5.5 per cent of astandard deviation. This translates to an average performance increase of about 75per cent within the first year of the employment relationship. Furthermore, we showthat there are peer effects in learning on-the-job: Workers placed in teams with moreexperienced and thus more productive peers perform significantly better than thoseplaced in teams with less experienced peers. An increase in the average team tenure byone standard deviation leads to an increase of 11 to 14 per cent of a standard deviationin performance. |
| Keywords: | education, training and the labour market; |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2011014&r=lab |
| By: | Raphaela Hyee (Queen Mary, University of London) |
| Abstract: | This paper demonstrates that a woman's propensity to separate from her husband or live-in partner depends positively on male wage inequality on her local marriage market - the more heterogeneous potential future mates are in terms of earnings power, the more likely a woman is to end her relationship. This effect is strongest for couples, were one has a college education but the other one does not. Because of the high degree of assortative matching according to education on the marriage market, college educated individuals are those most likely to marry a college graduate - if they are not currently married to one, they have the most to gain from divorcing and going back to the marriage market. This incentive becomes stronger if the college premium (the wage advantage college graduates enjoy over non-graduates) rises. The effect is robust to the inclusion of a variety of controls on the individual level, as well as state and time fixed effects and state specific time trends. |
| Keywords: | Education, Inequality, Divorce |
| JEL: | J12 J31 D31 I24 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp685&r=lab |
| By: | Juan F. Jimeno (Banco de España); Carlos Thomas (Banco de España) |
| Abstract: | We compare labor market outcomes under firm-level and sector-level bargaining in a one-sector Mortensen-Pissarides economy with firm-specific productivity shocks. Our main theoretical results are twofold. First, unemployment is lower under firm-level bargaining Second, introducing efficient opting-out of sector-level agreements suffices to bring unemployment down to its level under decentralized bargaining. For an archetypical contintental European calibration, we find that the unemployment rate is about 5 percentage points lower under firm-level bargaining or efficient opting out than under sector-level bargaining. |
| Keywords: | Collective bargaining, firm-specific shocks, wage compression, unemployment |
| JEL: | E10 J64 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1131&r=lab |
| By: | Das, Satya P. |
| Abstract: | The paper builds an argument that international trade can be one explanation behind polarization of employment in the labor market observed in developed countries such as U.K. and U.S. It considers a small open economy, having production sectors which use three types of labor: high-skill, middle-skill and low-skill. The economy faces an increase in the relative price of the high-skill intensive sector. Using decision rules for choosing middle-skill and low-skill education, it is shown that such a terms of trade shock can lead to higher shares of high-skill as well as low-skill workers in the total workforce. The effects off-shoring on wages and job composition are also studied. That of low-skill and high-skill tasks, not middle-skill tasks, is shown to contribute towards polarization in job composition. -- |
| Keywords: | polarization in labor markets,hollowing out,skill biased technical change,terms of trade,off-shoring |
| JEL: | F16 J21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201148&r=lab |
| By: | Blunch, Niels-Hugo (Washington and Lee University); Sulla, Victor (World Bank) |
| Abstract: | While results are starting to emerge, not much is known yet about the dynamics of the labor markets of the former Eastern economies, especially in the context of the current Financial Crisis. Arguably, this is mainly due to paucity of (panel) data. By examining labor market transitions, earnings levels, and earnings growth and their correlates using a recent panel data set for Serbia, this paper combines both of these issues. Estimation of gross transition probabilities reveals that females are disadvantaged in the Serbian labor market in terms of moving out of the two undesirable states, unemployment and economic inactivity, relative to males during the first year of the financial crisis – though males are harder hit than females in terms of the levels of unemployment. In terms of earnings, the picture is reversed, with females being worse off in terms of the levels of earnings, while they have experienced somewhat smaller earnings decreases than males (though, owing to the gender earnings gap, from a much lower base). Multinomial logit estimations of employment, unemployment, and inactivity transitions and OLS regressions of earnings and earnings growth reveal substantial gender differences related to individual, job, and firm characteristics. The overall results therefore hint at both males and females being hit in terms of employment and earnings, though in different ways. Finally, the paper discusses policy implications and provides suggestions for further research. |
| Keywords: | financial crisis, gender, labor market flows, transition probabilities, earnings growth, panel data, Serbia |
| JEL: | I31 J2 J24 J6 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6151&r=lab |
| By: | Morin, Louis-Philippe |
| Abstract: | In this paper, I use data from the Canadian Labour Force Surveys (LFS), and the 2001 and 2006 Canadian Censuses to estimate the impact of an important labor supply shock on the earnings of young high-school graduates. The abolition of Ontario’s Grade 13 generated a ‘double’ cohort of high-school graduates that simultaneously entered the Ontario labor market, generating a large and sudden increase in the labor supply. This provides a rare occasion to measure the impact of cohort size on earnings without the supply shock being possibly confounded with unobserved trends—a recurring problem in the literature. The Census findings suggest that the effect of the supply shock is statistically and economically important, depressing weekly earnings by 5 to 9 percent. The findings from Census are supported by the LFS results which suggest that the immediate impact of the supply shock—measured about six months after high-school graduation—is also important. |
| Keywords: | Labor Supply Shock, Youth |
| JEL: | J10 J20 J21 |
| Date: | 2011–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2011-28&r=lab |
| By: | Maitra, Pushkar (Monash University); Pal, Sarmistha (Brunel University); Sharma, Anurag (Monash University) |
| Abstract: | This paper examines the extent of gender gap in private school enrolment in India, an issue that has not been adequately addressed previously. Results based on individual level unit record data shows that a girl is less likely to be sent to private schools holding other factors constant and controlling for selection into school enrollment, and this disadvantage is particularly higher for younger girls in the family. The extent of gender bias in private school enrolment is double that of overall enrollment. Additionally, irrespective of policy reforms and overall economic growth, female disadvantage in rural private school enrolment appears to have increased over the decade 1993-94 to 2004-05. This can partly be attributed to the declining agricultural output as well as labour force participation rates among rural women over much of this period. Our results have important policy implications at a time when policy makers are eager to explore a potential role for private sector in delivering basic education. |
| Keywords: | policy reforms, economic growth, private school choice, gender gap, India |
| JEL: | I25 O10 C21 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6135&r=lab |
| By: | Steven J. Davis; Till M. von Wachter |
| Abstract: | We develop new evidence on the cumulative earnings losses associated with job displacement, drawing on longitudinal Social Security records for U.S. workers from 1974 to 2008. In present value terms, men lose an average of 1.4 years of pre-displacement earnings if displaced in mass-layoff events that occur when the national unemployment rate is below 6 percent. They lose a staggering 2.8 years of pre-displacement earnings if displaced when the unemployment rate exceeds 8 percent. These results reflect discounting at a 5% annual rate over 20 years after displacement. We also document large cyclical movements in the incidence of job loss and job displacement and present evidence on how worker anxieties about job loss, wage cuts and job opportunities respond to contemporaneous economic conditions. Finally, we confront leading models of unemployment fluctuations with evidence on the present value earnings losses associated with job displacement. The model of Mortensen and Pissarides (1994) extended to include search on the job generates present value losses only one-fourth as large as observed losses. Moreover, present value losses in the model vary little with aggregate conditions at the time of displacement, unlike the pattern in the data. |
| JEL: | E24 J3 J6 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17638&r=lab |
| By: | Manning, Alan (London School of Economics); Petrongolo, Barbara (London School of Economics) |
| Abstract: | This paper uses data on very small UK geographies to investigate the effective size of local labor markets. Our approach treats geographic space as continuous, as opposed to a collection of non-overlapping administrative units, thus avoiding problems of mismeasurement of local labor markets encountered in previous work. We develop a theory of job search across space that allows us to estimate a matching process with a very large number of areas. Estimates of this model show that the cost of distance is relatively high – the utility of being offered a job decays at exponential rate around 0.3 with distance (in km) to the job – so that labor markets are indeed quite 'local'. Also, workers are discouraged from applying to jobs in areas where they expect relatively strong competition from other jobseekers. The estimated model replicates fairly accurately actual commuting patterns across neighbourhoods, although it tends to underpredict the proportion of individuals who live and work in the same ward. Finally, we find that, despite the fact that labor markets are relatively 'local', local development policies are fairly ineffective in raising the local unemployment outflow, because labor markets overlap, and the associated ripple effects in applications largely dilute the impact of local stimulus across space. |
| Keywords: | job search, local labor markets, location-based policies, ripple effects |
| JEL: | J61 J63 J64 R12 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6178&r=lab |
| By: | Xiaodong Gong; Robert Breuing |
| Abstract: | The purpose of this paper is to improve our understanding of the relationship between child care price and women's labour supply. We specify and estimate a discrete, structural model of the joint household decision over women's labour supply and child care demand. Parents care about the well-being and development of their children and we capture this by including child care directly in household utility. Our model improves on previous papers in that we allow formal child care to be used for reasons other than freeing up time for mothers to work (such as child development) and we allow mothers’ work hours to exceed formal child care hours. As informal and paternal care are important features of the data, this second relaxation of previous hour constraints is particularly important. We estimate the model using data from 2005 to 2007 from the Household Income and Labour Dynamics in Australia (HILDA) Survey. We find that on average a one percent increase in the net price of child care leads to a decrease in hours of labour provided by partnered women of 0.10 per cent and a decrease in the employment rate of 0.06 per cent. These estimates are statistically significant. Furthermore, we find that labour supply responses are larger for women with lower wages, less education, and lower income. |
| Keywords: | Child care demand; child care price; women's labour supply; elasticities; discrete choice model |
| JEL: | C15 C35 J22 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:653&r=lab |
| By: | Eichhorst, Werner (IZA); Marx, Paul (University of Southern Denmark); Pastore, José (University of Sao Paulo) |
| Abstract: | This study gives a comparative overview of labor market dynamics and institutional arrangements in Germany and Brazil with particular emphasis on industrial relations, wage setting, unemployment benefits, employment protection and vocational training. The paper shows that institutions determine the mode of adjustment to changing economic conditions and the role of standard vs. non-standard contracts. Whereas internal flexibility via shorter working time was a dominant mode of adjustment during the 2008-09 crisis in the German manufacturing sector, in Brazil such plant-level flexibility to avoid dismissals was less prominent. |
| Keywords: | labor market flexibility, Germany, Brazil, working time, dismissal protection |
| JEL: | J21 J42 J52 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6137&r=lab |
| By: | A Aggarwal; R Freguglia; Geraint Johnes; G Spricigo |
| Abstract: | The impact of education on labour market outcomes is analysed using data from various rounds of the National Sample Survey of India. Occupational destination is examined using both multinomial logit analyses and structural dynamic discrete choice modelling. The latter approach involves the use of a novel approach to constructing a pseudo-panel from repeated cross-section data, and is particularly useful as a means of evaluating policy impacts over time. We find that policy to expand educational provision leads initially to an increased takeup of education, and in the longer term leads to an increased propensity for workers to enter non-manual employment. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:4149&r=lab |
| By: | Dinkelman, Taryn; Ranchhod, Vimal |
| Abstract: | What happens when a previously uncovered labour market is regulated? We exploit the introduction of a minimum wage in South Africa and variation in the intensity of this law to identify increases in wages for domestic workers and find no statistically significant effects on the intensive or extensive margins of work. These large, partial responses to the law are somewhat surprising, given the lack of monitoring and enforcement in this informal sector. We interpret these changes as evidence that strong external sanctions are not necessary for new labour legislation to have a significant impact on informal sectors of developing countries, at least in the short-run. |
| Keywords: | africa; domestic workers; informal sector; minimum wage |
| JEL: | J08 J23 J38 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8682&r=lab |
| By: | Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Children of immigrant parents constitute a growing share of school cohorts in many OECD countries, and their educational performance is vital for successful social and economic integration. This paper examines educational outcomes of first and second generation non- OECD immigrants in Norway. We show that children of immigrants, and particularly those born outside Norway, are much more likely to leave school early than native children. Importantly, this gap shrunk sharply over the past two decades and second generation immigrants are now rapidly catching up with the educational performance of natives. For childhood immigrants, upper secondary completion rates decline with age at arrival, with a particularly steep gradient after age seven. Finally, we find that immigrant-native attainment gaps disappear when we condition on grade points from compulsory school. |
| Keywords: | immigrant children, educational attainment, school performance |
| JEL: | J15 I21 I24 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6138&r=lab |
| By: | Meghir, Costas (Yale University); Palme, Mårten (Stockholm University); Schnabel, Marieke (University College London) |
| Abstract: | A number of studies have shown that education reforms extending compulsory schooling reduce criminal behavior of those affected by the reform. We consider the effects of a major Swedish educational reform on crime by exploiting its staggered implementation across Sweden. We first show that the reform reduced crime rates for the generation directly affected by the reform. We then show that the benefits extended to the next generation with large reductions in the crime rates of the children of those affected. The effect operates only through the father and points in the direction of improved parenting rather than resources. |
| Keywords: | comprehensive school, economics of crime, returns to education, returns to human capital |
| JEL: | I20 I21 I28 K42 N34 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6142&r=lab |
| By: | Arslan, Yavuz; Taskin, Temel |
| Abstract: | There is substantial heterogeneity in the gender gaps in unemployment across OECD countries. We incorporate labor market conditions, moral hazard and home production into a quantitative model of unemployment. The model can explain most of the gender gaps in unemployment across the OECD countries. We find that each component is quantitatively important to match the gender gaps in unemployment. |
| Keywords: | Unemployment; gender gap; home production |
| JEL: | D13 J65 E21 |
| Date: | 2011–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34873&r=lab |
| By: | Manning, Alan; Petrongolo, Barbara |
| Abstract: | This paper uses data on very small UK geographies to investigate the effective size of local labor markets. Our approach treats geographic space as continuous, as opposed to a collection of non-overlapping administrative units, thus avoiding problems of mismeasurement of local labor markets encountered in previous work. We develop a theory of job search across space that allows us to estimate a matching process with a very large number of areas. Estimates of this model show that the cost of distance is relatively high - the utility of being offered a job decays at exponential rate around 0.3 with distance (in km) to the job - so that labor markets are indeed quite `local'. Also, workers are discouraged from applying to jobs in areas where they expect relatively strong competition from other jobseekers. The estimated model replicates fairly accurately actual commuting patterns across neighbourhoods, although it tends to underpredict the proportion of individuals who live and work in the same ward. Finally, we find that, despite the fact that labor markets are relatively `local', local development policies are fairly ineffective in raising the local unemployment outflow, because labor markets overlap, and the associated ripple effects in applications largely dilute the impact of local stimulus across space. |
| Keywords: | job search; local labor markets; location-based policies; ripple effects |
| JEL: | J61 J63 J64 R12 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8686&r=lab |
| By: | Filiztekin, Alpay |
| Abstract: | This paper estimates social returns to education in Turkey. Most evidence on spillovers from human capital comes mostly from developed countries, and estimates vary from country to country. The paper finds that social returns to education are around 3-4%, whereas private returns per year of education amount to 5% in Turkey. Moreover, the findings indicate that workers with lower skills, or working in sectors with lower average wages benefit most from externalities. The results are robust to a series of checks, using a number of individual and regional controls, as well as instrumental variable estimation. |
| Keywords: | human capital externalities; returns to education; wages |
| JEL: | J31 A20 R23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35124&r=lab |
| By: | Myck, Michal (Centre for Economic Analysis, CenEA); Bohacek, Radim (CERGE-EI) |
| Abstract: | We analyze the extent and effects of job-related persecution under communist regimes in the Czech Republic and Poland using a representative sample of individuals aged 50+ from the Survey of Health, Ageing and Retirement in Europe. Retrospective information collected in the SHARELIFE interview offers a unique chance to relate past and current labor market outcomes to experiences of persecution reflecting the historical developments in Central Europe in the 20th century. Individual level data with details on labor market histories is matched with information on the experiences of state oppression. On-the-job persecution is found to have significant effect on job quality assessment and is strongly related to reporting of distinct periods of stress in both countries. Consequences of on-the-job persecution seem to have been much more severe and longer lasting in the Czech Republic, with significant financial effects of job loss or discrimination. This is explained by the greater degree of state control over the labour market in the former Czechoslovakia compared to Poland and different characteristics of the dissident groups in both countries. |
| Keywords: | labor discrimination, persecution, job satisfaction, life histories, history of Central Europe |
| JEL: | J71 J28 N44 I19 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6130&r=lab |
| By: | Berkhout, Peter (RIGO Research Institute); Hartog, Joop (University of Amsterdam); van Praag, Mirjam (University of Amsterdam) |
| Abstract: | There is no robust empirical support for the effect of financial incentives on the decision to work in self-employment rather than as a wage earner. In the literature, this is seen as a puzzle. We offer a focus on the opportunity cost, i.e. the wages given up as an employee. Information on income from self-employment is of inferior quality and this is not just a problem for the outside researcher, it is an imminent problem of the individual considering self-employment. We also argue that it is not only the location of an income distribution that matters and that dispersion and (a)symmetry should not be ignored. We predict that higher mean, lower variance and higher skew in the wage distribution in a particular employment segment reduce the inclination to prefer self-employment above employee status. Using a sample of 56,000 recent graduates from a Dutch college or university, grouped in approximately 120 labor market segments, we find significant support for these propositions. The results survive various robustness checks on specifications and assumptions. |
| Keywords: | entrepreneurship, self-employment, wage-employment, income distribution, income risk, income skew, income variance, occupational choice, labor market entry, labor market segments, opportunity cost |
| JEL: | J24 L26 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6166&r=lab |
| By: | Elsner, Benjamin (Trinity College Dublin) |
| Abstract: | The enlargement of the European Union provides a unique opportunity to study the impact of the lifting of migration restrictions on the migrant sending countries. With EU enlargement in 2004, 1.2 million workers from Eastern Europe emigrated to the UK and Ireland. I use this emigration wave to show that emigration significantly changed the wage distribution in the sending country, in particular between young and old workers. Using a novel dataset from Lithuania, the UK and Ireland for the calibration of a structural model of labor demand, I find that over the period of five years emigration increased the wages of young workers by 6%, while it had no effect on the wages of old workers. Contrary to the immigration literature, there is no significant effect of emigration on the wage distribution between high-skilled and low-skilled workers. |
| Keywords: | emigration, EU enlargement, European integration, wage distribution |
| JEL: | F22 J31 O15 R23 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6111&r=lab |
| By: | Verick, Sher (ILO International Labour Organization) |
| Abstract: | The global financial crisis deeply impacted the South African labour market resulting in the shedding of almost 1 million jobs over 2009 and 2010. Reflecting longer term structural problems, this employment loss translated into a much larger rise in the number of discouraged individuals rather than those defined as 'narrowly' unemployed. Drawing on estimates using the micro-data, this paper shows that this state of non-searching unemployment or discouragement has increased more during the recent crisis for uneducated African males. Moreover, individuals who have given up job search during the recession are statistically different than those who continue searching. At the same time, searching is a transitory state for some of the jobless with considerable movements between the two categories of unemployment. These findings from the first post-Apartheid recession underscore the importance in the South African context of analysing a broad measure of unemployment, which includes discouraged workers. In response to these labour market challenges, the government should further reduce barriers to job search through such measures as training for the low-skilled and transport subsidies, along with other interventions that boost demand and job creation in rural areas. |
| Keywords: | global financial crisis, unemployment, discouraged workers, South Africa |
| JEL: | G01 J21 J64 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6116&r=lab |
| By: | J. Ignacio García-Pérez (Universidad Pablo de Olavide); Marisa Hidalgo-Hidalgo (Universidad Pablo de Olavide); J. Antonio Robles-Zurita (Universidad Pablo de Olavide) |
| Abstract: | Grade retention practices are at the forefront of the educational debate. In this paper, we use PISA 2009 data for Spain to measure the effect of grade retention on students’achievement. One important problem when analyzing this question is that school outcomes and the propensity to repeat a grade are likely to be determined simultaneously. We address this problem by estimating a Switching Regression Model. We find that grade retention has a negative impact on educational outcomes, but we confirm the importance of endogenous selection, which makes observed differences between repeaters and non-repeaters appear 14.6% lower than they actually are. The effect on PISA scores of repeating is much smaller (-10% of non-repeaters’average) than the counterfactual reduction that non-repeaters would suffer had they been retained as repeaters (-24% of their average). Furthermore, those who repeated a grade during primary education suffered more than those who repeated a grade of secondary school, although the effect of repeating at both times is, as expected, much larger. |
| Keywords: | Grade retention, educational scores, PISA |
| JEL: | D63 I28 J24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/12/doc2011-37&r=lab |
| By: | Martha J. Bailey; Susan M. Dynarski |
| Abstract: | We describe changes over time in inequality in postsecondary education using nearly seventy years of data from the U.S. Census and the 1979 and 1997 National Longitudinal Surveys of Youth. We find growing gaps between children from high- and low-income families in college entry, persistence, and graduation. Rates of college completion increased by only four percentage points for low-income cohorts born around 1980 relative to cohorts born in the early 1960s, but by 18 percentage points for corresponding cohorts who grew up in high-income families. Among men, inequality in educational attainment has increased slightly since the early 1980s. But among women, inequality in educational attainment has risen sharply, driven by increases in the education of the daughters of high-income parents. Sex differences in educational attainment, which were small or nonexistent thirty years ago, are now substantial, with women outpacing men in every demographic group. The female advantage in educational attainment is largest in the top quartile of the income distribution. These sex differences present a formidable challenge to standard explanations for rising inequality in educational attainment. |
| JEL: | I21 I23 I24 J1 J24 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17633&r=lab |
| By: | Belzil, Christian (Ecole Polytechnique, Paris); Hansen, Jörgen (Concordia University); Liu, Xingfei (Concordia University) |
| Abstract: | We show that a calibrated dynamic skill accumulation model allowing for comparative advantages, can explain the weak (or negative) effects of schooling on productivity that have been recently reported (i) in the micro literature on compulsory schooling, ii) in the micro literature on estimating the distribution of ex-post returns to schooling, and (iii) in the macro literature on education and growth. The fraction of the population more efficient at producing skills in the market than in school is a pivotal quantity that determines the sign (and magnitude) of different parameters of interest. Our model reveals an interesting paradox; as low-skill jobs become more skill-enhancing (ceteris paribus), IV estimates of compulsory schooling become increasingly negative, and ex-post returns to schooling (inferred from a Roy model specification of the earnings equation) become negative for an increasing fraction of the population. This arises even if each possible input to skill production has a strictly positive effect. Finally, our model provides a foundation for the weak (or negative) effect education on growth measured in the empirical literature. |
| Keywords: | education and growth, returns to schooling, comparative advantages, dynamic skill accumulation, compulsory schooling reforms, dynamic discrete choice, dynamic programming |
| JEL: | I2 J1 J3 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6167&r=lab |
| By: | Cobb-Clark, Deborah A. (University of Melbourne); Sinning, Mathias (Australian National University); Stillman, Steven (University of Otago) |
| Abstract: | We use 2009 Programme of International Student Assessment (PISA) data to link institutional arrangements in OECD countries to the disparity in reading, math, and science test scores for migrant and native-born students. We find that achievement gaps are larger for those migrant youths who arrive later and for those who do not speak the test language at home. Institutional arrangements often serve to mitigate the achievement gaps of some migrant students while leaving unaffected or exacerbating those of others. For example, earlier school starting ages help migrant youths in some cases, but by no means in all. Limited tracking on ability appears beneficial for migrants' relative achievement, while complete tracking and a large private school sector appear detrimental. Migrant students' achievement relative to their native-born peers suffers as educational spending and teachers' salaries increase, but is improved when examination is a component of the process for evaluating teachers. |
| Keywords: | migrant youths, PISA test scores, schools, institutions, academic achievement |
| JEL: | F22 I24 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6150&r=lab |
| By: | S Bradley; Colin Green; J Mangan |
| Abstract: | A standard finding in the literature on gender wage gaps is that the public sector exhibits much lower gaps than in the private sector. This finding is generally attributed to the existence of less gender discrimination in the public sector. In this paper we show that this conclusion is flawed because the standard finding for the public sector is biased by the dominating influence of large feminised occupational groups, such as those in nursing and teaching, both of which have relatively flat job hierarchies and hence low overall wage variance. However, when we examine other occupations within the public sector, there is evidence of sizeable wage gaps, much of which cannot be explained by observable or unobservable workplace or worker characteristics. This finding implies that gender discrimination is substantial in some occupations in the public sector. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:2722&r=lab |
| By: | admin, clsrn |
| Abstract: | In this paper, we examine the effect of family co-residence and proximity on the labour force participation and working hours of Canadian women. Using Cycle 21 of the Canadian General Social Survey, we describe proximity patterns in Canada and show that the labour force attachment of women is related to the proximity of their mothers. Lower labour market attachment is found for married women without young children who co-reside with their mothers (those women most likely to care for their elderly mothers) and for married women with young children who live more than half a day away from their mothers (those women least likely to benefit from the availability of family provided childcare). On the intensive margin, both married and single women with children work fewer hours if they live far from their mothers. The results hold only for proximity to living mothers (as opposed to proximity to widowed fathers), suggesting that it is the mothers themselves, and not merely the home location, that drives the results. The results are consistent in IV estimations. To the extent that the positive effect of close proximity is related to the availability of grandchild care, policies that impact the labour force behaviour of grandmothers may also impact the labour force behaviour of their daughters. Moreover, the regional patterns in proximity suggest that national childcare and labour market policies may yield different results across the country. |
| Keywords: | Women’s labour supply; Family proximity; Childcare |
| JEL: | J11 J22 J13 |
| Date: | 2011–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2011-30&r=lab |
| By: | Tom Coupe (Kyiv School of Economics, Kyiv Economic Institute); Anna Olefir (World Bank); Juan Diego Alonso (World Bank) |
| Abstract: | Using a rich data set of almost the entire population of Ukrainian secondary schools, the authors estimatethe effect of school size and class size on the performance of secondary schools on Ukraine's External Independent Test. They find that larger schools tend to have somewhat better performance, both in terms of test scores and in terms of test participation. The size of this effect is relatively small, however, especially in rural areas for which the estimates are likely to be more clean estimates. Class size is found to be insignificant in most specifications and, if significant, of negligible size. |
| Keywords: | Tertiary Education, Secondary Education, Teaching and Learning, Education For All, Primary Education |
| JEL: | I28 I29 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:kse:dpaper:44&r=lab |
| By: | Carneiro, Pedro; Lokshin, Michael; Ridao-Cano, Cristobal; Umapathi, Nithin |
| Abstract: | This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling. |
| Keywords: | average return; Marginal return; marginal treatment effect; Return to Education |
| JEL: | J2 J3 J31 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8689&r=lab |
| By: | Daniel Montolio (University of Barcelona (UB) and Barcelona Institute of Economics (IEB)); Amedeo Piolatto (University of Barcelona (UB) and Barcelona Institute of Economics (IEB)) (Universitat de Barcelona) |
| Abstract: | Human capital and, therefore, education have an impact on the societys future welfare. In this paper we study the connection between the voters support to public education and the retirement concerns. We show that voters anticipate the positive effect of education on future pensions. The support for a publicly financed education system increases, the more redistributive the pension system is, and this is true also amongst citizens preferring a private school. We also show that the ends against the middle equilibrium can occur even when the voters preferred tax rate is decreasing in income. |
| Keywords: | olg, pension system, altruism, education, voting |
| JEL: | D72 H55 H31 H42 H52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2011268&r=lab |
| By: | de Grip, Andries (ROA, Maastricht University); Sauermann, Jan (ROA, Maastricht University); Sieben, Inge (Tilburg University) |
| Abstract: | In this paper, we estimate tenure-performance profiles using unique panel data that contain detailed information on individual workers' performance. We find that a 10 per cent increase in tenure leads to an increase in performance of 5.5 per cent of a standard deviation. This translates to an average performance increase of about 75 per cent within the first year of the employment relationship. Furthermore, we show that there are peer effects in learning on-the-job: Workers placed in teams with more experienced and thus more productive peers perform significantly better than those placed in teams with less experienced peers. An increase in the average team tenure by one standard deviation leads to an increase of 11 to 14 per cent of a standard deviation in performance. |
| Keywords: | tenure-performance profiles, experience, learning on-the-job, peer effects, productivity, call centres |
| JEL: | J24 D24 L89 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6164&r=lab |
| By: | Dostie, Benoit (HEC Montreal); Léger, Pierre Thomas (HEC Montreal) |
| Abstract: | We use longitudinal linked employer-employee data and find that the probability of participating in firm-sponsored classroom training diminishes rapidly for workers aged 45 years and older. Although the standard human capital investment model predicts such a decline, we also consider the possibility that returns to training decline with age. Taking into account endogenous training decisions, we find that the training wage premium diminishes only slightly with age. However, estimates of the impact of training on productivity decrease dramatically with age, suggesting that incentives for firms to invest in classroom training are much lower for older workers. |
| Keywords: | wages, productivity, linked employer-employee data, aging, firm-sponsored classroom training |
| JEL: | C23 D24 J31 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6123&r=lab |
| By: | Carole Brunet (LED, Université Paris 8. 2, rue de la Liberté 93 526 SAINT-DENIS CEDEX); Nathalie Havet (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France) |
| Abstract: | Our empirical study stems from previous research on the inter-relations between residential status and microeconomic labour market outcomes. It focuses on employees and assesses the a priori ambiguous e-ect of homeownership on job-match quality. We use the French data set of the 1995-2001 European Community Household Panel to build a subjective measure of job downgrading. We estimate a recursive trivariate probit with partial observability that simultaneously models the residential status choice, its impact on the probability of being downgraded, and the selection into employment. The comparison with simpler models indicates that taking into account the selection into employment and controlling unobservable individual heterogeneity are of prime necessity to obtain robust conclusions. |
| Keywords: | residential status; job downgrading; overeducation; job matching |
| JEL: | C35 J24 J28 R21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1131&r=lab |
| By: | Claudio Sapelli |
| Abstract: | We estimate the evolution of intergenerational mobility of education in Chile for synthetic cohorts born between 1930 and 1978. The correlation coefficient between children and parent education falls from 0.67 for the cohort born in 1930 to 0.41 for that born in 1956, a process of improvement that suddenly stops, followed by stagnation. We find that the stagnation is explained by the effect on tertiary education coverage of low incomes when the children were born (long-run credit constraints) and the restrictions to the supply side of tertiary education (that had a particularly strong effect on children from less educated parents) during the late seventies and early eighties. |
| Keywords: | Intergenerational mobility, synthetic cohorts, education |
| JEL: | J62 I20 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:400&r=lab |
| By: | Akbulut-Yuksel, Mevlude (Dalhousie University); Khamis, Melanie (Wesleyan University); Yuksel, Mutlu (Dalhousie University) |
| Abstract: | During World War II, more than one-half million tons of bombs were dropped in aerial raids on German cities, destroying about forty percent of the total housing stock nationwide. With a large fraction of the male population gone, the reconstruction process had mainly fallen on women in postwar Germany. This paper provides causal evidence on long-term legacies of postwar reconstruction and mandatory employment on women's labor market outcomes. We combine a unique dataset on city-level destruction in Germany caused by the Allied Air Forces bombing during WWII with individual survey data from the German Microcensus. Using difference-in-difference and instrumental-variable strategies, we find that postwar mandatory employment reduced female labor force participation and hours worked in the long-run. However, our results show that participating in postwar reconstruction efforts increased the female presence in medium-skill and female-dominated occupations. These results survive after accounting for labor supply side factors such as wealth and savings loss during WWII, war relief payments and change in the composition of population and labor demand side factors such as female share in industry, construction, service and public sectors. |
| Keywords: | postwar reconstruction, female labor force participation, occupational choice |
| JEL: | I21 I12 J24 N34 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6148&r=lab |
| By: | Grund, Christian (University of Duisburg-Essen) |
| Abstract: | Many previous studies try to discover job preferences by directly asking individuals. Since it is not sure, whether answers to these surveys are relevant for actual behaviour, this empirical examination offers a new approach based on representative German data. Employees who quit their job and find a new one, compare the two jobs with respect to eight job characteristics: type of work, pay, chances of promotion, work load, commuting time, work hour regulations, fringe benefits and security against loss of job. It is argued that the observation of many improvements (and few declines) for a certain attribute indicates a particular relevance and high preference for this attribute. It turns out that pay and type of work are most important for employees in this sense. Differences across subgroups of employees with respect to individual characteristics such as sex and age are explored. Those between East- and West-Germany diminish over time. |
| Keywords: | job characteristics, job changes, job preferences, quits |
| JEL: | M5 J28 J63 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6127&r=lab |
| By: | DeVaro, Jed |
| Abstract: | Applying a simultaneous-equations estimation approach that accounts for both worker and firm behavior, I show that six alternative promotion models can be empirically distinguished to a greater extent than previously thought. I show that classic tournaments, market-based tournaments, and performance standards can be sharply distinguished when promotions induce worker effort. I also show that market-based tournaments with effort choices can be sharply distinguished from those with human capital investments. A key insight is that an empirical test can be based on the “opposing responses” property whereby workers and firms adjust their choice variables in opposite directions when the stochastic component of worker performance changes. Finally, I propose a new approach – also requiring simultaneous equations – for empirically distinguishing between classic tournaments and market-based tournaments with human capital investments, showing that the two models differ in their predictions regarding the average wage between job levels. |
| Keywords: | tournaments; promotions; relative performance; internal promotion competitions; wage spreads; tests of tournament theory |
| JEL: | M5 M51 M50 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35175&r=lab |
| By: | Ahmed, Ali (Linnaeus University); Andersson, Lina (Linnaeus University); Hammarstedt, Mats (Linnaeus University) |
| Abstract: | This paper presents the first field experiment on sexual orientation discrimination in the hiring process in the Swedish labor market. Job applications were sent to about 4,000 employers in 10 different occupations in Sweden. Gender and sexual orientation were randomly assigned to applications. The results show that sexual orientation discrimi-nation exists in the Swedish labor market. The discrimination against gays and lesbian varies across different occupations and appears only in the private sector. The results also seem to suggest a new dimension of traditional gender roles; the gay applicant was discriminated against in typical male-dominated occupations whereas the lesbian applicant was discriminated against in typical female-dominated occupations. Thus, the results suggest that gays to some extent face the same obstacles on the labor market as heterosexual women. |
| Keywords: | Labor market discrimination; sexual orientation; field experiment |
| JEL: | C93 J15 J71 |
| Date: | 2011–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2011_025&r=lab |
| By: | Akay, Alpaslan (IZA); Khamis, Melanie (Wesleyan University) |
| Abstract: | Informality is a growing phenomenon in the developing and transition country labor market context. In particular, it is noticeable that working in an informal employment relationship is often not temporary. The degree of persistence of informality in the labor market might be due to different sources: structural state dependence due to past informality experiences and spurious state dependence due to time-invariant unobserved individual effects, which can alter the propensity of being in the informal sector independently from actual informality experiences. The purpose of our paper is to study the dynamics of informality using a genuine panel data set in the Ukrainian labor market. By estimating a dynamic panel data probit model with endogenous initial conditions, we find a highly significant degree of persistence due to previous informality experiences. This result implies that policies attempting to reduce current levels of informality may have a long-lasting effect on the labor market. |
| Keywords: | state dependence, unobserved heterogeneity, informality, transition countries |
| JEL: | D60 I31 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6163&r=lab |
| By: | Khan, Rana Ejaz Ali; Raza, Maryam |
| Abstract: | Government of Punjab is committed to attain the universalization of school education by providing free education and even in a number of districts the free books and through the programs of food for education. The stipends on the subsidized schooling are also part of the policy by Government of Punjab. The rapid increase in enrolment in private schools reflects the partial failure of these schemes and making the target of universalization of school education difficult. The paper examines the household choice of private versus public sector schools as an outcome of child, household and school characteristics by using logit model. Data has been collected from Bahawalpur city through stratified sampling of clusters and random sampling of households. A survey of 627 households having at least one school-going child made the data available. The study found that income of the household, education of the parents, English as medium of instruction in school and distance of public school from the household enhance the preference of private schools. To universalize the school education more public sector schools are required near to the households. The adaptation of English as medium of instruction may increase the school enrolment. |
| Keywords: | School Choice; Private Schools; Public sector schools; education; cost of schooling; Pakistan |
| JEL: | O15 I21 D1 R2 |
| Date: | 2011–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34794&r=lab |
| By: | Malte Reimers (Georg-August-Universität Göttingen / Germany); Stephan Klasen (Georg-August-Universität Göttingen / Germany) |
| Abstract: | While the majority of micro studies finds that rural education increases agricultural productivity, various recent cross‐country regressions analyzing the determinants of agricultural productivity were only able to detect an insignificant or even surprisingly negative effect of schooling. In this paper, we show that this failure to find a positive impact of education in the international context appears to be a data problem related to the inappropriate use of enrolment and literacy indicators. Using a panel of 95 developing and middle‐income countries from 1961 to 2002 that includes data on educational attainment, we show that education indeed has a highly significant, positive effect on agricultural productivity which is robust to the use of different control variables, databases and econometric methods. Distinguishing between different levels of education further reveals that only primary and secondary schooling attainment has a significant positive impact while the effect of tertiary education is insignificant. When distinguishing between income groups, our results indicate that even though the coefficient of the education variable is highly significant and positive for all quintiles, the returns to education are higher for the countries belonging to the richest three quintiles. This finding can be interpreted as support for the claim that education will have larger impacts on agricultural productivity in the presence of rapid technical change since it helps farmers to adjust more readily to the new opportunities provided by technological innovations. |
| Keywords: | Agricultural productivity, agricultural production function, cross‐country regression, education, human capital |
| JEL: | I20 I25 O13 O15 O47 Q10 |
| Date: | 2011–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:214&r=lab |
| By: | Jason M. Lindo; Isaac D. Swensen; Glen R. Waddell |
| Abstract: | We consider the effect of legal access to alcohol on student achievement. We first estimate the effect using an RD design but argue that this approach is not well suited to the research question in our setting. Our preferred approach instead exploits the longitudinal nature of the data, identifying the effect by measuring the extent to which a student’s performance changes after he gains legal access to alcohol, controlling flexibly for the expected evolution of grades as students make progress towards their degrees. We find that students’ grades fall below their expected levels upon being able to drink legally, but by less than previously documented. We also show that there are effects on women and that the effects are persistent. |
| JEL: | I18 I21 K32 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17637&r=lab |
| By: | Marga Peeters; Loek Groot |
| Abstract: | This paper investigates the fiscal pressure from demographic change in relation to the labour marketspace for fifty countries that cover 75% of the world population. The pressure-to-space indicator ranks Poland, Turkey and Greece high. Apart from Turkey and India, developing countries rank low due to low spending on the old (pensions, health care) and the young (education, family costs). Peculiarly, economies with higher pressure have more space. The hypothesis that ageing economies have started using their space in anticipation to higher demographic pressure is rejected. Raising the retirement age in developed economies by five years alleviates the pressure by almost 30% and creates 10% more labour market space. |
| Keywords: | Demography, dependency rates, labour market, social security, pensions, government spending. |
| JEL: | D6 E24 E62 H51 H52 H53 H55 J0 J11 J18 J21 J26 O57 |
| Date: | 2011–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2011_18&r=lab |
| By: | Ana Paula Martins |
| Abstract: | This research extends simple two-sector models in order to inquire the impact of the extent of coverage or enforcement of minimum wage legislation in one of the sectors on the equilibrium outcome. Two versions of institutional wage avoidance are presented. They may be seen as representing different institutional detection rules: one working through worker complaint, the other through firm sampling inspection (and enforcement) by the legal system. Both cases are modelled as enlargements of two dualistic models: Harris-Todaro (the wage in the other sector is market determined) and Bhagwati-Hamada (the wage in the other sector is institutionally fixed and coverage is complete). Impact on population flows of changes in degree of coverage (compliance) is also confronted with the effect of a change in the institutional wage for each scenario. |
| Keywords: | Migration, Mobility, Minimum Wages, Segmented Labor Markets, Informal Sector, Regional Labor Markets, Dualistic Models, Coverage. |
| JEL: | O15 O17 O18 R23 J38 J42 J61 J62 F22 K42 |
| Date: | 2011–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2011_15&r=lab |
| By: | Tsujita, Yuko |
| Abstract: | This paper examines the factors that prevent slum children aged 5 to 14 from gaining access to schooling in light of the worsening urban poverty and sizable increase in rural-to-urban migration. Bias against social disadvantage in terms of gender and caste is not clearly manifested in schooling, while migrated children are less likely to attend school. I argue that the lack of preparation for schooling in the pre-schooling ages and school admission procedures are the main obstacles for migrated children. The most important implication for universal elementary education in urban India is raising parental awareness and simplifying the admission procedures. |
| Keywords: | India, Elementary education, Slums, Household, Migration, Enrollment |
| JEL: | I20 N35 O15 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper317&r=lab |
| By: | Roberto Basile; Alessandro Girardi; Marianna Mantuano; Francesco Pastore |
| Abstract: | Using local labour systems data, this work aims at assessing the effects of sectoral shifts and industry specialisation patterns on regional unemployment in Italy over the years 2004-2008, when huge worker reallocation caused by changes in the international division of labour occurred. Italy represents an interesting case study because of the high degree of spatial heterogeneity in local labour market performance and the well-known north-south divide. Furthermore, the presence of strongly specialised local labour systems (industrial districts) allows us to test whether industrial districts perform better than highly diversified urban areas thanks to the effect of agglomeration economies, or vice versa. Building on a semiparametric spatial autoregressive framework, our empirical investigation documents that sectoral shifts and the degree of specialisation exert a negative effect on unemployment dynamics. By contrast, highly diversified areas turn out to be characterised by better labour market performances. |
| Date: | 2011–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2011:i:411&r=lab |
| By: | Carneiro, Pedro (University College London); Lokshin, Michael (World Bank); Ridao-Cano, Cristobal (World Bank); Umapathi, Nithin (World Bank) |
| Abstract: | This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model. Identification of the model is given by exogenous geographic variation in access to upper secondary schools. We find that the return to upper secondary schooling varies widely across individuals: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Average returns for the student at the margin are well below those for the average student attending upper secondary schooling. |
| Keywords: | returns to schooling, marginal return, average return, marginal treatment effect |
| JEL: | J31 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6162&r=lab |
| By: | Rajshri Jayaraman (ESMT European School of Management and Technology); Dora Simroth (ESMT European School of Management and Technology) |
| Abstract: | At the end of 2001, the Indian Supreme Court issued a directive ordering states to institute school lunches – known locally as “midday meals” – in government primary schools. This paper provides a large-scale assessment of the enrollment effects of India’s midday meal scheme, which offers warm lunches, free of cost, to 120 million primary school children across India and is the largest school feeding program in the world. To isolate the causal effect of the policy, we make use of staggered implementation across Indian states in government but not private schools. Using a panel data set of almost 500,000 schools observed annually from 2002 to 2004, we find that midday meals result in substantial increases in primary school enrollment, driven by early primary school responses to the program. Our results are robust to a wide range of specification tests. |
| Keywords: | primary school enrollment, school lunches, natural experiment, ITT |
| Date: | 2011–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:esm:wpaper:esmt-11-11&r=lab |
| By: | Robert Rudolf (Georg-August-University Göttingen); Sung-Jin Kang (Korea University, Seoul) |
| Abstract: | Using detailed longitudinal data from the Korean Labor and Income Panel Study (KLIPS) from 1998 to 2008, this paper analyzes gender-specific impacts as well as anticipation and adaptation to major life and labor market events. We focus on six major events: marriage, divorce, widowhood, unemployment, first job entry, and introduction of the five-day working week. While our results indicate full adaptation to some events, and even more so for women, to others we see no or only partial habituation. Yet, the results show striking gender-specific differences particularly regarding the impact of events related to marital status change. Husbands remain on a higher happiness level throughout marriage. They also suffer more from, and show less rapid or even no adaptation to widowhood and divorce. Women return to their baseline level of happiness relatively quick after marriage and divorce. Surprisingly, widowhood is not associated with negative effects for women. If anything, moderate positive effects can be found here. Husbands’ additional long-run happiness gain during marriage is equivalent to an (husband-only) increase of annual per-capita household income of approximately US$17,800. We show that the intra-marriage happiness gap between husband and wife is strongly related to the intra-couple earnings difference, providing evidence for both intra-household bargaining and the gender identity hypothesis. The studied labor market events point to a gender segregated labor market. The evidence shows that more effort is needed if Korea wants to achieve higher gender equity. |
| Keywords: | Life Satisfaction; Adaptation; Gender; Intra-marriage bargaining |
| JEL: | A13 D13 I31 J12 J16 J31 |
| Date: | 2011–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:101&r=lab |
| By: | Zorlu, Aslan (University of Amsterdam) |
| Abstract: | Using unique administrative individual data, this paper examines ethnic differences in degree performance in Dutch colleges and universities. The paper estimates parametric duration models and accounts for unobserved heterogeneity to assess the sources of ethnic disparities. The analysis shows that ethnic minorities from non-western countries have a significantly lower degree performance and higher risk of dropping-out. Especially, Turkish, Moroccan and Caribbean students are less likely to graduate, and graduates among them need much more time to complete their study. There is no evidence that this disadvantage stems from poor parental socioeconomic position and the choice of study subject. |
| Keywords: | tertiary education, drop-out |
| JEL: | I23 I24 J15 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6158&r=lab |
| By: | Lommerud, Kjell Erik; Meland, Frode; Straume, Odd Rune |
| Abstract: | We study how incentives for North-South technology transfers in multinational enterprises are affected by labour market institutions. If workers are collectively organised, incentives for technology transfers are partly governed by firms' desire to curb trade union power. This will affect not only the extent but also the type of technology transfer. While skill upgrading of southern workers benefits these workers at the expense of northern worker welfare, quality upgrading of products produced in the South may harm not only northern but also southern workers. A minimum wage policy to raise the wage levels of southern workers may spur technology transfer, possibly to the extent that the utility of northern workers decline. These conclusions are reached in a setting where a unionised multinational multiproduct firm produces two vertically differentiated products in northern and southern subsidiaries, respectively. |
| Keywords: | Minimum wages; Multinationals; North-South technology transfer; Trade unions |
| JEL: | F23 J51 O33 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8664&r=lab |
| By: | Maria De Paola; Vincenzo Scoppa (Dipartimento di Economia e Statistica, Università della Calabria) |
| Abstract: | We evaluate the effects on student achievement of a number of remedial courses provided by an Italian University. To identify the causal effect of remediation we use a Fuzzy Regression Discontinuity Design, relying on the fact that students whose performance at a placement test was below a certain cutoff were assigned to the treatment. We deal with partial compliance using the assignment rule as an instrumental variable for the effective attendance to remedial courses. From our analysis it emerges that students just below the cutoff, attending the remedial courses, acquire a higher number of credits compared to students just above the cutoff. We also find that remedial courses reduce the probability of dropping out from academic career. On the other hand, we do not find any statistically significant effect on the average grade obtained at passed exams. |
| Keywords: | Remedial Courses, Tertiary Education, Public Policy, Fuzzy Regression Discontinuity Design, Instrumental Variables |
| JEL: | I23 I21 I28 C26 J24 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201114&r=lab |
| By: | Alejandra Traferri |
| Abstract: | I study gender differences in major choice and college entrance probabilities in University of Campinas, a Brazilian public university dependent on the State of Sao Paulo. As with most Brazilian public universities, students select a major, and then compete for a place in that major by taking a major-specific entrance exam. This singular characteristic of the Brazilian case allows me to differentiate the effect of gender on major-specific entrance probabilities and preferences. I propose a model and econometric strategy which can account for two important issues, selectivity bias and the fact that expected utility depends on the probability of entering the different majors. I find evidence of gender differences in preferences and entrance probabilities. For most majors, gender differences in major choice are mostly explained by differences in preferences. However, for the most demanding majors (those that require higher grades from students), differences in major choice are explained in a large proportion by differences in entrance probabilities. Finally, I find that gender has important interactions with other variables. In particular, gender effects depend on education, socioeconomic characteristics and family background. |
| Keywords: | Major choice, gender differences, college entrance, test, vestibular, brazilian universities |
| JEL: | C35 I21 J24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:403&r=lab |
| By: | Simon Burgess; Marcela Umaña-Aponte |
| Abstract: | We use a unique longitudinal dataset on an adolescent friendship network to evaluate variations on educational aspirations of young people from disadvantaged and middle income backgrounds. We evaluate whether such people who have friends from wealthier backgrounds have higher aspirations than otherwise similar young people without such links. The results suggest that there are such effects. Individuals from low income families with friends from high income families are 15.2% more likely to expect to stay in full time education after they finish compulsory school. We find similar effects for the educational aspirations and expectations of middle income children. These effects are quantitatively and statistically significant, and robust to the inclusion of a wide range of control variables. We also show that friend’s mother’s aspirations matter too. Having friends whose mothers hope they will go to university increases the wish to carry on full time education by 30% points. This is conditional on the young person’s own mother’s aspirations for her/him. |
| Keywords: | Networks, Friendships, Aspirations, Adolescents, Income, Education. |
| JEL: | L14 C33 I24 Z13 I3 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:11/271&r=lab |
| By: | Renata Ivanova; Byeongju Jeong |
| Abstract: | The paper attempts to explain a U-shaped pattern of return migration rates with respect to educational attainment. We develop a two period OLG model with emigration and return migration decisions undertaken by agents heterogeneous in terms of educational attainment. The immigration policy is considered as an additional determinant for the migration decision. The model predicts that the combination of two forces - relative returns to schooling and uncertain opportunities for status adjustment - results in favorable conditions for migrants with secondary education to remain abroad permanently. |
| Keywords: | return migration; skilled migration; returns to education; |
| JEL: | F2 F22 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp449&r=lab |
| By: | Angela Cipollone (Department of Ecoomics and Finance, LUISS University) |
| Abstract: | By using data from the latest wave of the Indonesia Life Family Survey, this paper investigates whether child time allocation depends on the joint impact of liquidity constraints, risk attitudes and time preferences. We employ a double selection model of school hours to control for endogeneity of borrowing constraints and sample selection in school enrolment. Our measures of time preferences and risk attitudes are elicited from individuals’ responses to hypothetical gambles, and households’ risk profile is proxied by the past occurrence of shocks. It will be shown that, under liquidity constraints, risk averse parents raise a precautionary demand for education as an ex-ante risk coping strategy in order to insure future consumption through higher returns from children’s work. |
| JEL: | D10 D91 J01 J22 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lui:celegw:1108&r=lab |
| By: | Simon Burgess; Carol Propper; Marisa Ratto; Emma Tominey |
| Abstract: | This paper addresses a lack of evidence on the impact of performance pay in the public sector by evaluating a pilot scheme of incentives in a major government agency. The incentive scheme was based on teams and covered quantity and quality targets, measured with varying degrees of precision. We use data from the agency’s performance management system and personnel records plus matched labour market data. We focus on three main issues: whether performance pay matters for public service worker productivity, what the team basis of the scheme implies, and the impact of the differential measurement precision. We show that the use of performance pay had no impact at the mean, but that there was significant heterogeneity of response. This heterogeneity was patterned as one would expect from a free rider versus peer monitoring perspective. We found that the incentive had a substantial positive effect in small teams, and a negative response in large teams. We found little impact of the scheme on quality measures, which we interpret as due to the differential measurement technology. We show that the scheme in small teams had non-trivial effects on output, and our estimates suggest that the use of incentive pay is much more cost effective than a general pay rise. |
| Keywords: | Incentives, Public Sector, Teams, Performance, Personnel Economics |
| JEL: | J33 J45 D23 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:11/265&r=lab |
| By: | Gabriella Berloffa; Francesca Modena |
| Abstract: | In this paper we argue that the consequences of the unemployment risk may be quite different according to the number of persons who depend on the income of the active members, and propose new measures for the economic (in)security related to employment risk, that take into account the household composition of the unemployed: a per-earner actuarially-fair insurance premium corresponding to the aggregate equivalent expected loss, and the inactive-unemployed dependency rate (IUDR), i.e. the average number of persons that each unemployed individual has to provide for (beyond herself). Both have a simple interpretation but the latter has an advantage in terms of data-requirement. Adding the IUDR in the measure of employment security used by Osberg and Sharpe, the relative position of various countries change, suggesting that the overall level of insecurity associated to similar unemployment and replacement rates may be quite different if we consider all the individuals in the households that are potentially affected by this risk. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:1111&r=lab |
| By: | Hirsch, Boris; Konietzko, Thorsten |
| Abstract: | This paper presents evidence on the impact of hours spent on housework activities on individuals' wages for Germany using data from both the German Socio-Economic Panel and the German Time Use Survey. In contrast to most of the international literature, we find no negative effect of housework on wages. This holds for men and women, for married and single individuals, and for part-time and full-time workers both in West and East Germany. Our insights do not change when we distinguish different types of housework activities or address the endogeneity of housework in our wage regressions by using instrumental variables estimators. -- Auf Grundlage zweier deutscher Datensätze, des Sozio-oekonomischen Panels und der Zeitbudgeterhebung, untersucht dieser Beitrag den Einfluss der für Hausarbeit aufgewandten Zeit auf die Löhne. Im Gegensatz zum Gros der internationalen Forschungsliteratur findet sich kein negativer Effekt der Hausarbeit auf die Löhne. Dieses Ergebnis zeigt sich in West- wie Ostdeutschland sowohl für Frauen und Männer, für verheiratete Individuen und Singles als auch für Teilzeit- und Vollzeitbeschäftigte. Unsere Ergebnisse ändern sich zudem nicht, wenn wir verschiedene Formen von Hausarbeit unterscheiden oder die Endogenität der geleisteten Hausarbeit in den Lohnregressionen mithilfe von Instrumentvariablenschätzungen berücksichtigen. |
| Keywords: | housework,time use,gender pay gap,Germany |
| JEL: | J16 J31 J22 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:faulre:74&r=lab |
| By: | S Bradley; Jim Taylor |
| Abstract: | This paper investigates the extent to which exam performance at the end of compulsory education has been affected by three major education reforms: the introduction of a quasi-market following the Education Reform Act (1988); the specialist schools initiative introduced in 1994; and the Excellence in Cities programme introduced in 1999. We use data for all state-funded secondary schools in England over the period 1992-2006. The empirical analysis, which is based on the application of panel data methods, indicates that the government and its agencies have substantially overestimated the benefits flowing from these three major reforms. Only about one-third of the improvement in GCSE exam scores during 1992-2006 is directly attributable to the combined effect of the education reforms. The distributional consequences of the policy, however, are estimated to have been favourable, with the greatest gains being achieved by schools with the highest proportion of pupils from poor families. But there is evidence that resources have not been allocated efficiently. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:916&r=lab |
| By: | Bentolila, Samuel; Dolado, Juan J.; Jimeno, Juan F |
| Abstract: | This paper presents a case study on reforming a very dysfunctional labour market with a deep insider-outsider divide, namely the Spanish case. We show how a dual market, with permanent and temporary employees makes real reform much harder, and leads to purely marginal changes that do not alter the fundamental features of labour market institutions. While the Great Recession and the start of the sovereign debt crisis triggered two labour reforms, the political economy equilibrium has not allowed them to be transformational enough. |
| Keywords: | dualism; Great Recession; labour market reform; political economy; temporary contracts |
| JEL: | H29 J23 J38 J41 J64 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8691&r=lab |
| By: | Schüller, Simone (IZA) |
| Abstract: | A lack of cultural integration is often blamed for hindering immigrant families' economic progression. This paper is a first attempt to explore whether immigrant parents' ethnic identity affects the next generation's human capital accumulation in the host country. Empirical results based on data from the German Socio-Economic Panel (GSOEP) indicate that maternal majority as well as paternal minority identity are positively related to the educational attainment of second-generation youth – even controlling for differences in ethnicity, family background and years-since-migration. Additional tests show that the effect of maternal majority identity can be explained by mothers' German language proficiency, while the beneficial effect of fathers' minority identity is not related to language skills and thus likely to stem from paternal minority identity per se. |
| Keywords: | ethnic identity, second-generation immigrants, education |
| JEL: | I21 J15 J16 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6155&r=lab |
| By: | Antonella Mennella |
| Abstract: | This paper’s purpose is to show a new informal social networks interpretation, according to which social networks change their nature if they are located in social contexts where organised crime is relevant. Here the perusal of a social network is just a necessary condition to enter the labour market rather than a deliberate choice. Moreover this labour market is the ground where favouritisms and social and electoral consensus policies take place |
| Keywords: | social networks, organised crime, labour market |
| JEL: | D85 J64 K00 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0126&r=lab |
| By: | Aysit Tansel (Department of Economics, Middle East Technical University); Zeynel Abidin Ozdemir (Department of Economics, Gazi University); Mehmet Balcilar (Department of Economics, Eastern Mediterranean University) |
| Abstract: | This paper examines the possibility of unit roots in the presence of endogenously determined multiple structural breaks in the total, female and male labour force participation rates (LFPR) for Australia, Canada and the USA. We extend the procedure of Gil-Alana (2008) for single structural break to the case of multiple structural breaks at endogenously determined dates using the principles suggested by Bai and Perron (1998). We use the Robinson (1994) LM test to determine the fractional order of integration. We find that endogenously determined structural breaks render the total, female and male LFPR series stationary or at best mean-reverting. |
| Keywords: | Labour Force Participation Rates; Gender; Fractional Integration, Structural Breaks. |
| JEL: | C22 E24 J16 J21 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1130&r=lab |
| By: | Carpio, Miguel Angel |
| Abstract: | This paper proposes a nested model, based on an additive random utility model, to analyze whether pension wealth and pension cost affect the probability that a worker affiliates to a pension program, and to observe differentiated effects regarding the nature of the pension system (pay-as-you-go or funded). The analysis focuses on Peru because the peculiar coexistence of a pay-as-you-go and a funded system allows observing first whether a worker is subscribed or not, and then his choice between pay-as-you-go and funded system. The data consists in five cross sections from the ENAHO between 2005 and 2009. Results show that changes on costs have a greater impact over the probability of affiliation than changes on benefits, and that changes affect more when applied to the funded system than when applied to the pay-as-you-go. Variables related with the contracting firm have a large impact. Hence, this paper provides a tool to evaluate measures to solve the coverage problems of pension programs. |
| Keywords: | nested model; pension wealth; coverage; pay-as-you-go; funded |
| JEL: | H55 J32 J82 |
| Date: | 2011–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34926&r=lab |
| By: | Graziella Bertocchi; Arcangelo Dimico |
| Abstract: | We study the evolution of racial educational inequality across US states from 1940 to 2000. We show that throughout this period, despite evidence of convergence, the racial gap in attainment between blacks and whites has been persistently determined by the initial gap. We obtain these results with 2SLS estimates where slavery is used as an instrument for the initial gap. The excludability of slavery is preliminarily established by instrumenting it with the share of disembarked slaves from the Trans-Atlantic Slave Trade. Using the same approach we also find that income growth is negatively affected by the initial racial gap in education and that slavery affects growth indirectly through this channel. |
| Keywords: | Race; inequality; education; slavery; development |
| JEL: | I24 N31 O11 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:mod:recent:075&r=lab |
| By: | Ahmed Ennasri; Marc Willinger |
| Abstract: | We investigate the effects of competition on managerial incentives and effort in a laboratory experiment. Each owner offers compensation to his manager in two different contexts: monopoly and Cournot duopoly. After accepting the compensation, the manager chooses an effort level to increase the probability of reduced costs of his firm. Theory predicts that the entry of a rival firm in a monopolistic industry affects negatively both the incentive compensation and the effort level. Our experimental findings confirm that the entry of a rival firm reduces the incentive compensation but not the manager’s effort level. However, despite the reduction of the incentive compensation, the manager continues to accept the contract offers and exert the same level of effort. |
| Keywords: | Managerial Incentives, Effort, Competition, Moral hazard, Experiments |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:11-12&r=lab |
| By: | Gans, Joshua S. (University of Melbourne); Leigh, Andrew (Australian National University) |
| Abstract: | We provide a new method of identifying the level of relative bargaining power in bilateral negotiations using exogenous variation in the degree of conflict between parties. Using daily births data, we study negotiations over birth timing. In doing so, we exploit the fact that fewer children are born on the "inauspicious" dates of February 29 and April 1; most likely, we argue, reflecting parental preferences. When these inauspicious dates abut a weekend, this creates a potential conflict between avoiding the inauspicious date (the parents' likely preference), and avoiding the weekend (the doctor's likely preference). Using daily births data, we estimate how often this conflict is resolved in favor of the physician. We show how this provides an estimate of how bargaining power is distributed between patients and physicians. |
| Keywords: | timing of births, weekend effect, bargaining power |
| JEL: | I11 J13 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6165&r=lab |
| By: | Katsuhiko Hori (Institute of Economic Research, Kyoto University); Katsunori Yamada (Institute of Social and Economic Research, Osaka University) |
| Abstract: | This study augments a second-generation Schumpeterian growth model to employ human capital explicitly. We clarify the general-equilibrium interactions of subsidy policies to R&D and human capital accumulation in a unified framework. Despite a standard intuition that subsidizing these growth-enhancing activities is always mutually growth promoting, we find asymmetric effects for subsidies on R&D and those on education. Our theoretical result of asymmetric policy effects provides an important empirical caveat that empirical researchers may find false negative relationships between education subsidies and the output growth rate, if they merely rely on the standard human capital model. |
| Keywords: | Schumpeterian growth model; human capital accumulation; subsidies |
| JEL: | O15 O32 O41 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:798&r=lab |
| By: | Francisco H. G. Ferreira (The World Bank and IZA); Jérémie Gignoux (Paris School of Economics) |
| Abstract: | This paper proposes two related measures of educational inequality: one for educational achievement and another for educational opportunity. The former is the simple variance (or standard deviation) of test scores. Its selection is informed by consideration of two measurement issues that have typically been overlooked in the literature: the implications of the standardization of test scores for inequality indices, and the possible sample selection biases arising from the Program of International Student Assessment (PISA) sampling frame. The measure of inequality of educational opportunity is given by the share of the variance in test scores that is explained by pre-determined circumstances. Both measures are computed for the 57 countries in which PISA surveys were conducted in 2006. Inequality of opportunity accounts for up to 35 percent of all disparities in educational achievement. It is greater in (most of) continental Europe and Latin America than in Asia, Scandinavia, and North America. It is uncorrelated with average educational achievement and only weakly negatively correlated with per capita gross domestic product. It correlates negatively with the share of spending in primary schooling, and positively with tracking in secondary schools. |
| Keywords: | Educational inequality, educational achievement, inequality of opportunity. |
| JEL: | D39 D63 I29 O54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2011-240&r=lab |
| By: | Schlicht-Schmälzle, Raphaela; Teltemann, Janna; Windzio, Michael |
| Abstract: | This article analyses from a cross-national comparative perspective how deregulation of compulsory education affects two central educational outcomes: efficiency and equality. The conflict between public regulation on the one hand and the market model on the other hand describes one of the most fundamental political struggles. In several fields of societal life, such as compulsory education, the state traditionally holds a strong monopoly in almost all capitalist societies. However, using three waves of PISA school level data we show that the degree of public regulation varies cross-nationally. The central finding of our analyses is that deregulation of education increases educational achievement of individual students across all social classes and thereby fosters the educational efficiency of the national education systems. Nevertheless, it also becomes evident that higher social classes benefit more strongly from deregulation, which increases the degree of educational inequality. These results indeed confirm that deregulation of education provokes an efficiency-versus-equality trade-off in national education systems. -- Der Konflikt zwischen einer staatlichen Regulation schulischer Bildung auf der einen Seite und einem deregulierten Marktmodell auf der anderen Seite stellt eine der fundamentalsten politischen Auseinandersetzungen der letzten Jahrzehnte dar. Traditionellerweise hält der Staat das Monopol der Bildungsorganisation, doch seit einigen Jahren haben verschiedene Länder verstärkt auf eine Privatisierung und Flexibilisierung schulischer Bildung gesetzt. Allerdings variiert der Grad der Standardisierung bzw. Deregulierung über verschiedene nationale Bildungssysteme deutlich. Der Beitrag untersucht mithilfe eines internationalen Vergleichs wie sich eine Deregulierung des schulischen Sektors auf die zentralen bildungspolitischen Outcomes Effizienz (bzw. Leistung) und Chancengleichheit auswirkt. Mit Daten aus drei Wellen der OECD PISA-Studie zeigen wir, dass sich eine Deregulierung des schulischen Sektors positiv auf die Leistungen aller Schüler auswirkt und somit die Effizienz von Bildungssystemen steigert. Allerdings wird auch deutlich, dass höhere soziale Schichten stärker von einer Deregulierung profitieren. Damit bestätigt sich die Annahme, dass die Deregulierung schulischer Bildung zu einem Trade-off zwischen Effizienz und Gleichheit führt. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:sfb597:157&r=lab |
| By: | Giulietti, Corrado; Guzi, Martin; Kahanec, Martin; Zimmermann, Klaus F |
| Abstract: | The paper studies the impact of unemployment benefits on immigration. A sample of 19 European countries observed over the period 1993 to 2008 is used to test the hypothesis that unemployment benefit spending (UBS) is correlated with immigration flows from EU and non-EU origins. While OLS estimates reveal the existence of a moderate correlation for non-EU immigrants only, IV and GMM techniques used to address endogeneity issues yield, respectively, a much smaller and an essentially zero causal impact of UBS on immigration. All estimates for immigrants from EU origins indicate that flows within the EU are not related to unemployment benefit generosity. This suggests that the so-called 'welfare migration' debate is misguided and not based on empirical evidence. |
| Keywords: | European Union; immigration; unemployment benefit spending; welfare magnets |
| JEL: | H53 J61 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8672&r=lab |
| By: | Cervini-Plá, María |
| Abstract: | This paper contributes to the large number of studies on intergenerational earnings and income mobility by providing new evidence for Spain. Since there are no Spanish surveys covering long-term information on both children and their fathers' income or earnings, we deal with this selection problem using the two-sample two-stage least squares estimator. We find that intergenerational mobility in Spain is similar to France, lower than in the Nordic countries and Britain and higher than in Italy and the United States. Furthermore, we use the Chadwick and Solon (2002) approach to explore the intergenerational mobility in the case of daughters overcoming employment selection, and we find similar results by gender. |
| Keywords: | Intergenerational earnings and income mobility; two sample two stage least squares estimator; Spain |
| JEL: | D31 J62 J31 |
| Date: | 2011–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34942&r=lab |