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on Labour Economics |
| By: | Hartmut Lehmann; Tiziano Razzolini; Anzelika Zaiceva |
| Abstract: | Having unique data we investigate the link between job separations (displacement and quits) and informal employment, which we define in several ways posing the general question whether the burden of informality falls disproportionately on job separators in the Russian labor market. After we have established positive causal effects of displacement and quits on informal employment we analyze whether displaced workers experience more involuntary informal employment than their non-displaced counterparts. Our main results confirm our contention that displacement entraps some of the workers in involuntary informal employment. Those who quit, in turn, experience voluntary informality for the most part, but there seems a minority of quitting workers who end up in involuntary informal jobs. This scenario does not fall on all the workers who separate but predominantly on workers with low human capital. We also pursue the issue of informality persistence and find that informal employment is indeed persistent as some workers churn from one informal job to the next. Our study contributes to the debate in the informality literature regarding segmented versus integrated labor markets. It also contributes to the literature on displacement by establishing informal employment as an important cost of displacement. We also look at the share of undeclared wages in formal jobs and find that these shares are larger for separators than for incumbents, with displaced workers bearing the brunt of this manifestation of informality |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:mod:depeco:0674&r=lab |
| By: | Zhou, Li (University of Alberta, Department of Economics) |
| Abstract: | This paper proposes a general equilibrium model with non-pro fit publicly subsidized universities to show that native applicants do not have to lose from exporting higher education, as suggested by standard trade models. The gains from exporting higher education that initially accrue to universities will be redistributed to natives through increased investment in research and teaching. With Australian university-level data from 2001 to 2007, the empirical investigation identifi es the impact of exporting higher education on native enrollment using the instrumental variable approach: the enrollment of one more foreign student leads to the enrollment of about 0.75 more Australian native students. |
| Keywords: | higher education; gains from trade; native students |
| JEL: | F14 H52 I23 |
| Date: | 2012–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2012_003&r=lab |
| By: | Benjamin Elsner (Trinity College Dublin, Department of Economics and IIIS) |
| Abstract: | This paper studies the impact of a large emigration wave on real wages in the source country. Following EU enlargement in 2004, a large share of the workforce of the Central and Eastern Europe emigrated to Western Europe. Using data from Lithuania for the calibration of a factor demand model I show that emigration had a significant short-run impact on real wages in the source country. In particular, emigration led to a change in the wage distribution between young and old workers. The wages of young workers increased by 6%, whereas the wages of old workers decreased by around 1%. On the contrary, I find no effect on the wage distribution between workers of different education levels. |
| Keywords: | Emigration, EU Enlargement, European Integration, Wage Distribution |
| JEL: | F22 J31 O15 R23 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.76&r=lab |
| By: | Harald Fadinger (University of Vienna); Karin Mayr (University of Vienna) |
| Abstract: | We develop a general equilibrium model of technological change and migration to examine the effects of a change in skill endowments on wages, employment rates and emigration rates of skilled and unskilled workers. We find that, depending on the elasticity of substitution between skilled and unskilled workers, an increase in the skill ratio can increase the expected wage of the skilled and decrease the brain drain. We provide empirical estimates and simulations to support our findings and show that effects are empirically relevant and potentially sizeable. Our findings fit the stylized facts on educational upgrading in developing countries during the 1980s and the subsequent decrease in the brain drain from those countries during the 1990s. |
| Keywords: | Technological Change, Skill Premia, Unemployment, Brain Drain. |
| JEL: | F22 J61 J64 O33 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012011&r=lab |
| By: | Ponzo, Michela |
| Abstract: | Using data from the Progress in International Reading Literacy Study (2006-PIRLS) and the Trends in International Mathematics and Science Study (2007-TIMSS), we investigate the impact of being a victim of school bullying on educational achievement for Italian students enrolled at the fourth and eighth grade levels. Firstly, we apply an OLS estimator controlling for a number of individual characteristics and school fixed effects. Secondly, in order to attenuate the impact of confounding factors, we use propensity score matching techniques. Our empirical findings based on average treatment effects suggest that being a victim of school bullying has a considerable negative effect on student performance at both the fourth and the eighth grade level. Importantly, the adverse effect of bullying on educational achievement is larger at age 13 than at age 9. Hence, school violence seems to constitute a relevant factor in explaining student performance. |
| Keywords: | Bullying; Educational Achievement; School; TIMSS; PIRLS |
| JEL: | J13 I21 I28 |
| Date: | 2012–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36064&r=lab |
| By: | Humburg Martin; Grip Andries de; Velden Rolf van der (ROA rm) |
| Abstract: | This paper explores the relationship between graduates’ skill levels and the risk ofovereducation and unemployment in 17 European countries. We distinguish betweenfield-specific and general skills and between two labour market segments, theoccupational domain of a particular field of study and the labour market segmentwhich requires general skills. In line with the predictions of the crowding out hypothesis,we find that the level of protection afforded by field-specific skills against the risk ofovereducation increases with the degree of excess labour supply in the occupationaldomain of the graduate’s field of study. Conversely, general skills offer more protectionagainst the risk of overeducation when excess labour supply in the labour marketsegment which requires general skills is higher. Field-specific skills also protect graduatesagainst the risk of unemployment, whereas graduates’ level of general skills appears tobe unrelated to the risk of becoming unemployed. |
| Keywords: | education, training and the labour market; |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2012001&r=lab |
| By: | Tom Kornstad, Ragnar Nymoen and Terje Skjerpen (Statistics Norway) |
| Abstract: | Macroeconomic theories take polar views on the importance of choice versus chance. At the micro level, it seems realistic to assume that both dimensions play a role for individual employment outcomes, although it might be difficult to separate these two effects. Nevertheless the choice and chance dimension are seldom treated symmetrically in models that use micro data. We estimate a logistic model of the probability of being employed among married or cohabitating women that are in the labor force. Besides variables that measure individual characteristics (choice), we allow a full set of indicator variables for observation periods that represent potential effects of aggregate shocks (chance) on job probabilities. To reduce the number of redundant indicator variables as far as possible and in a systematic way, an automatic model selection is used, and we assess the economic interpretation of the statistically significant indicator variables with reference to a theoretical framework that allows for friction in the Norwegian labor market. In addition, we also estimate models that use the aggregate female and male unemployment rates as ‘sufficient’ variables for the chance element in individual employment outcomes. Data are for Norway and span the period 1988q2-2008q4. |
| Keywords: | Job probability; Automatic model selection; Random utility modeling |
| JEL: | C21 J21 J64 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:675&r=lab |
| By: | Christian Merkl, Thijs van Rens |
| Abstract: | Firms select not only how many, but also which workers to hire. Yet, in standard search models of the labor market, all workers have the same probability of being hired. We argue that selective hiring crucially affects welfare analysis. Our model is isomorphic to a search model under random hiring but allows for selective hiring. With selective hiring, the positive predictions of the model change very little, but the welfare costs of unemployment are much larger because unemployment risk is distributed unequally across workers. As a result, optimal unemployment insurance may be higher and welfare is lower if hiring is selective |
| Keywords: | labor market models, welfare, optimal unemployment insurance |
| JEL: | E24 J65 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1752&r=lab |
| By: | Sara Lemos |
| Abstract: | Using the underexplored, sizeable and long Lifetime Labour Market Database (LLMDB) we estimated the immigrant-native earnings gap across the entire earnings distribution, across continents of nationality and across cohorts of arrival in the UK between 1978 and 2006. We exploited the longitudinal nature of our data to separate the effect of observed and unobserved individual characteristics on earnings. This helped us to prevent selectivity biases such as cohort bias and survivor bias, which have been long standing unresolved identification issues in the literature. In keeping with the limited existing UK literature, we found a clear and wide dividing line between whites and non-whites in simple comparable models. However, in our more complete models we found a much narrower and subtler dividing line. This confirms the importance of accounting for unobservable individual characteristics, which is an important contribution of this paper. It also suggests that the labour market primarily rewards individual characteristics other than immigration status. We also found that the lowest paid immigrants, whom are disproportionately non-white, suffer an earnings penalty in the labour market, whereas higher paid immigrants, whom are disproportionately white, do not. Finally, we found less favourable earning gaps for cohorts that witnessed proportionately larger non-white and lower paid white immigration. |
| Keywords: | Immigration; wages; earnings; earnings-gap; UK |
| JEL: | J24 J31 J61 J71 J82 F22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:11/38&r=lab |
| By: | Lambrechts, Wim (Hogeschool-Universiteit Brussel (HUB), Belgium); Ceulemans, Kim (Hogeschool-Universiteit Brussel (HUB), Belgium) |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:hub:wpecon:201111&r=lab |
| By: | Lorenzo Cappellari; Konstantinos Tatsiramos |
| Abstract: | Social interactions are believed to have important consequences for labor market outcomes. Yet the growing literature has been forced to rely on indirect definitions of a network. We present what we believe to be the first evidence that is able to use direct information on the role of close friends. In doing so, we address issues of correlated effects with instrumental variables and panel data. Our estimates suggest that there are large effects from friendship networks, which persist even after controlling for family networks. One additional employed friend increases a person’s job finding probability by approximately 13 percent. This is a result of endogenous social interactions. By testing among alternative mechanisms, our study provides the first evidence that network effects seem to be due to information transmission rather than to social norms or leisure complementarities. |
| Keywords: | Social Interactions; Unemployment; Friendship ties |
| JEL: | J64 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:11/40&r=lab |
| By: | Egger, Hartmut; Egger, Peter; Kreickemeier, Udo |
| Abstract: | This paper formulates a structural empirical model of heterogeneous firms whose workers exhibit fair-wage preferences. In the underlying theoretical framework, such preferences lead to a link between a firm's operating profits on the one hand and wages of workers employed by this firm on the other hand. The latter establishes an exporter wage premium, since exporters have higher profits, given their productivity, than non-exporting firms. We estimate the parameters of the model in a data-set of five European economies and find that, when evaluated at these parameter values, the model has a high level of explanatory power. The estimates also enable us to quantify the exporter wage premium and the consequences of trade for the main variables of interest. According to our results, openness to international trade contributes to greater inequality across firms in terms of both operating profits and average wages. We also find evidence for gains from trade for all five countries, which go along with negative, but quantitatively moderate, aggregate employment effects. -- |
| Keywords: | structural models,heterogeneous firms,fair wages,labour market imperfections,exporter wage premium |
| JEL: | C31 F12 F16 J31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:23&r=lab |
| By: | Benno Torgler (The School of Economics and Finance, Queensland University of Technology, research fellows of CREMA – Center for Research in Economics, Management and the Arts, Switzerland and associated with CESifo) |
| Abstract: | The paper reports on work values in Europe. At the country level we find that job satisfaction is related to lower working hours, higher well-being, and a higher GDP per capita. Moving to the micro level, we turn our attention from job satisfaction to analyse empirically work centrality and work value dimensions (without exploring empirically job satisfaction) related to intrinsic and extrinsic values, power and social elements. The results indicate substantial differences between Eastern and Western Europe. Socio-demographic factors, education, income, religiosity and religious denomination are significant influences. We find additional differences between Eastern and Western Europe regarding work-leisure and work-family centrality that could be driven by institutional conditions. Furthermore, hierarchical cluster analyses report further levels of dissimilarity among European countries. |
| Keywords: | Work Values, Job Satisfaction, Work-Leisure Relationship, Work-Family Centrality, Eastern Europe, Western Europe |
| JEL: | P20 D10 J28 J17 J22 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.94&r=lab |
| By: | Dwenger, Nadja; Rattenhuber, Pia; Steiner, Viktor |
| Abstract: | This study assesses the burden of capital income tax passed onto labor through wage bargaining over economic rents, using estimations based on a unique pseudo-panel data set from Germany for the period 1998 to 2006. Tax return data cover the universe of corporations subject to corporate income tax, and labor market variables reflect the full record of employees covered by Social Security. We find that wage bargaining after a reduction in tax rates does not increase the wage bill if employment effects neglected by previous empirical studies are taken into account. Any increase in the total wage bill by higher wage rates set is equally compensated for by lower levels of employment. If adjustments in employment due to the increased user cost of capital are taken into account, a cut in corporate income taxes by 1 euro increases the wage bill by 0.47 euro. The identification of these effects comes from variation in the firm-specific average corporate tax rate across firms and over time resulting from two substantial tax reforms. The endogeneity of the firmspecific tax rate is controlled for by an instrumental variable approach. The instrument for the observed average tax rate is the counterfactual tax rate that a corporation would have faced in a particular period, had there been no endogenous change of its tax base, constructed using a detailed microsimulation model. -- |
| Keywords: | tax incidence,wage determination,corporate income taxation,corporate tax return data |
| JEL: | H22 H25 J21 J31 H32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201119&r=lab |
| By: | Laenen, Wout; Moons, Cindy (Hogeschool-Universiteit Brussel (HUB), Belgium); Persyn, Damiaan (LICOS and VIVES, KULeuven, Faculty of Business and Economics, Leuven, Belgium) |
| Abstract: | This study examines the evolution of labour costs and taxes in Belgium and neighbouring countries. We try to clarify the common issues in the current debate concerning labour costs and labour demand in Belgium and neighbouring countries and investigate the influence of labour costs on employment by using macroeconomic OECD data. We conclude that the tax wedge in Belgium is one of the highest of all OECD countries. Labour costs in Belgium rose at a moderate tempo, but labour productivity evolved less favourably compared with neighbouring countries. Belgian unit labour costs, considered as an indicator of competitiveness, evolved unfavourably. By using a dynamic error correction model we find a statistically significant but limited negative relation between labour costs and employment. A decrease in labour costs of 10% results in an increase of employment of only 1.3%, which indicates a strongly inelastic labour demand. In contrast to studies based on microeconomic data, which find generally higher wage elasticities, on the basis of this study no decisive elements can be found to question the rationale of the current wage indexation mechanism. |
| Keywords: | economic history; ECSC; European Integration; regional concentration |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:hub:wpecon:201125&r=lab |
| By: | G. Guerra; R. Patuelli; R. Maggi |
| Abstract: | Immigrant self-employment rates vary considerably across regions in Switzerland. Business ownership provides an alternative to wage labour, where immigrants have to face structural barriers such as the limited knowledge of the local language, or difficulties in fruitfully making use of their own human capital. Despite their historically high unemployment rates with respect to natives, immigrants in Switzerland are less entrepreneurial. It is therefore important to uncover factors that may facilitate the transition from the status of immigrant to the one of economic agent. Among others factors, concentration in ethnic enclaves, as well as accumulated labour market experience and time elapsed since immigration, have been associated to higher business ownership rates. In this paper, we use a cross-section of 2,490 Swiss municipalities in order to investigate the role played by the ethnic concentration of immigrants, as well as cultural factors, in determining self-employment rates. |
| JEL: | C21 J24 J61 O15 R23 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp808&r=lab |
| By: | Bastagli, Francesca; Stewart, Kitty |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/41624/&r=lab |
| By: | Bojnec, Štefan |
| Abstract: | This paper provides an overview and comparison of labour markets in agricultural and rural areas in the three candidate countries for the EU membership: Croatia, the Former Yugoslav Republic of Macedonia and Turkey. We analyse and compare the labour market structures and the factors driving them. The analyses are based on the available cross-section and time-series data on agricultural labour structures and living conditions in rural areas. Considerable differences are found among the candidate countries in the importance of the agricultural labour force, between rural and urban labour, and in poverty and living conditions in rural areas. Agricultural and rural labour market structures are the result of demographic and education processes, in addition to labour flows between agricultural and non-agricultural activities, from rural areas to urban ones and migration flows abroad. Declines in the agricultural labour force and rural population are foreseen for each of the candidate countries, but with significant variations between them. Showing different patterns over time, labour market developments in the sector and rural areas have been shaped by the overall labour market institutions, conditions and other factors in each country, such as the legal basis, educational attainment and migration flows, as well as the presence of non-agricultural activities in rural areas. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:102&r=lab |
| By: | Shigeru Fujita; Garey Ramey |
| Abstract: | This paper assesses how various approaches to modeling the separation margin affect the ability of the Mortensen-Pissarides job matching model to explain key facts about the aggregate labor market. Allowing for realistic time variation in the separation rate, whether exogenous or endogenous, greatly increases the unemployment variability generated by the model. Specifications with exogenous separation rates, whether constant or time-varying, fail to produce realistic volatility and productivity responsiveness of the separation rate and worker flows. Specifications with endogenous separation rates, on the other hand, succeed along these dimensions. In addition, the endogenous separation model with on-the-job search yields a realistic Beveridge curve correlation and performs well in accounting for the productivity responsiveness of market tightness. While adopting the Hagedorn-Manovskii calibration approach improves the behavior of the job finding rate, the volume of job-to-job transitions in the on-the-job search specification becomes essentially zero. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:12-2&r=lab |
| By: | Douglas Almond; Bhashkar Mazumder; Reyn van Ewijk |
| Abstract: | We consider the effects of daytime fasting by pregnant women during the lunar month of Ramadan on their children's test scores at age seven. Using English register data, we find that scores are .05 to .08 standard deviations lower for Pakistani and Bangladeshi students exposed to Ramadan in early pregnancy. These estimates are downward biased to the extent that Ramadan is not universally observed. We conclude that the effects of prenatal investments on test scores are comparable to many conventional educational interventions but are likely to be more cost effective and less subject to "fade out". |
| Keywords: | educational outcomes, pregnancy, fasting |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0134&r=lab |
| By: | Ronald P. Wolthoff (University of Toronto) |
| Abstract: | Much of the job search literature assumes bilateral meetings between workers and firms. This ignores the frictions that arise when meetings are actually multilateral. I analyze the magnitude of these frictions by presenting an equilibrium job search model with an endogenous number of contacts. Workers contact firms by applying to vacancies, whereas firms contact applicants by interviewing them. Sending applications and interviewing applicants are costly activities but increase the probability to match. In equilibrium, contract dispersion arises and workers spread their applications over the different contract types. Estimation of the model on the Employment Opportunities Pilot Projects data set provides values for the cost of an application, the cost of an interview, and the value of non-market time. Frictions on the worker and the firm side are estimated to each cause approximately half of the 4.7% output loss compared to a Walrasian world. I show that in the estimated equilibrium welfare is improved if unemployed workers increase their search intensity. |
| Keywords: | Directed Search, Recruitment, Stable Matching, Labor Market Frictions, Structural Estimation, Efficiency, Policy Analysis |
| JEL: | J64 J31 D83 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.86&r=lab |
| By: | Asako Ohinata (Tilburg University); Jan C van Ours (Tilburg University) |
| Abstract: | In this paper, we analyze how the share of immigrant children in the classroom affects the educational attainment of native Dutch children. Our analysis uses data from various sources, which allow us to characterize educational attainment in terms of reading literacy, mathematical skills and science skills. We do not find strong evidence of negative spill-over effects from immigrant children to native Dutch children. Immigrant children themselves experience negative language spill-over effects from a high share of immigrant children in the classroom but no spill-over effects on maths and science skills. |
| Keywords: | educational attainment, immigrant children, peer effects. |
| JEL: | I21 J15 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012012&r=lab |
| By: | Hippolyte D'Albis (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Paul Lau Sau-Him (HKU - School of Economics and Finance - University of Hong Kong); Miguel Sanchez-Romero (mpidr - Max Planck Institute for Demographic Research - Max Planck Institute) |
| Abstract: | Many studies specify human mortality patterns parametrically, with a parameter change affecting mortality rates at different ages simultaneously. Motivated by the stylized fact that a mortality decline affects primarily younger people in the early phase of mortality transition but mainly older people in the later phase, we study how a mortality change at an arbitrary age affects optimal retirement age. Using the Volterra derivative for a functional, we show that mortality reductions at older ages delay retirement unambiguously, but that mortality reductions at younger ages may lead to earlier retirement due to a substantial increase in the individual's expected lifetime human wealth. |
| Keywords: | mortality decline; incentive for early retirement; years-to-consume effect; lifetime human wealth effect |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00659868&r=lab |
| By: | Goodman, Joshua (Harvard University) |
| Abstract: | Left- and right-handed individuals have different brain structures, particularly in relation to language processing. Using five data sets from the US and UK, I show that poor infant health increases the likelihood of a child being left-handed. I argue that handedness can thus be used to explore the long-run impacts of differential brain structure generated in part by poor infant health. Even conditional on infant health and family background, lefties exhibit economically and statistically significant human capital deficits relative to righties. Compared to righties, lefties score a tenth of a standard deviation lower on measures of cognitive skill and, contrary to popular wisdom, are not over-represented at the high end of the distribution. Lefties have more emotional and behavioral problems, have more learning disabilities such as dyslexia, complete less schooling, and work in less cognitively intensive occupations. Differences between left- and right-handed siblings are similar in magnitude. Most strikingly, lefties have six percent lower annual earnings than righties, a gap that can largely be explained by these differences in cognitive skill, disabilities, schooling and occupational choice. Lefties work in more manually intensive occupations than do righties, further suggesting that lefties' primary labor market disadvantage is cognitive rather than physical. Those likely be left-handed due to genetics show smaller or no deficits relative to righties, suggesting the importance of environmental shocks as the source of disadvantage. Handedness provides parents and schools a costlessly observable characteristic with which to identify young children whose cognitive and behavioral development may warrant additional attention. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-002&r=lab |
| By: | Lucas Ronconi; Jorge Colina |
| Abstract: | This paper describes the reforms aimed at simplifying the administrative procedures for labor registration and the payment of social security contributions that were carried out in Argentina in 2005 and 2007. Analysis of the legislation, as well as a survey conducted among accountants, reveals that although the reforms did reduce the administrative burden, the effect was only partial. By using microdata gathered from household surveys conducted quarterly between 2003 and 2009, and the discontinuities according to company size that the legislation engenders, differences-in-differences coefficients have been estimated regarding the impact of the simplification reforms on the labor market. The results indicate that the simplification reforms had a positive, although limited, effect on the labor registration rate (of approximately two percentage points for all workers and nine percentage points for newly-hired workers), but that there was no effect on employment levels. Finally, policy recommendations are put forward aimed at deepening the administrative simplification process and thereby improving its effectiveness as a labor registration promotion mechanism. |
| Keywords: | Labor :: Labor Policy, Labor :: Social Security, Labor :: Labor Relations, taxes, the labor market, informality |
| JEL: | J3 O17 J8 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:62158&r=lab |
| By: | Steffen Ahrens, Dennis Snower |
| Abstract: | We incorporate inequity aversion into an otherwise standard New Keynesian dynamic equilibrium model with Calvo wage contracts and positive inflation. Workers with relatively low incomes experience envy, whereas those with relatively high incomes experience guilt. The former seek to raise their income, and the latter seek to reduce it. The greater the inflation rate, the greater the degree of wage dispersion under Calvo wage contracts, and thus the greater the degree of envy and guilt experienced by the workers. Since the envy effect is stronger than the guilt effect, according to the available empirical evidence, a rise in the inflation rate leads workers to supply more labor over the contract period, generating a significant positive long-run relation between inflation and output (and employment), for low inflation rates. This Phillips curve relation, together with an inefficient zero-inflation steady state, provides a rationale for a positive long-run inflation rate. Given standard calibrations, optimal monetary policy is associated with a long-run inflation rate around 2 percent |
| Keywords: | inflation, long-run Phillips curve, fairness, inequity aversion |
| JEL: | D03 E20 E31 E50 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1754&r=lab |
| By: | Eleonora Patacchini (Universita di Roma "La Sapienza", EIEF and CEPR); Yves Zenou (Stockholm University) |
| Abstract: | This paper explores the relationship between residential proximity of individuals from the same ethnic group and the probability of finding a job through social networks, relative to other search methods. Using individual-level data from the UK Labour Force survey and spatial statistics techniques, we find that (i) the higher is the percentage of a given ethnic group living nearby, the higher is the probability of finding a job through social contacts; (ii) this effect decays very rapidly with distance. The magnitude, statistical significance and spatial decay of such an effect differ depending on the ethnic group considered. We provide an interpretation of our findings using the network model of Calvó-Armengol and Jackson (2004). |
| Keywords: | Ethnic minorities, population density, social interactions, weak and strong ties,spatial statistics. |
| JEL: | A14 C21 J15 R12 R23 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1202&r=lab |
| By: | Tor Eriksson (Department of economics - University of Aarhus); Marie-Claire Villeval (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon) |
| Abstract: | Assuming that people care not only about what others do but also on what others think, we study respect in a labor market context where the length of the employment relationship is endogenous. In our three-stage gift-exchange experiment, the employer can express respect by giving the employee costly symbolic rewards after observing his level of effort. We study whether symbolic rewards are used by the employers mainly to praise employees or as a coordination device to build relational contracts by manipulating the balance between labor demand and supply in the market. We find that a high proportion of long-term relationships have been initiated by the assignment of symbolic rewards. However, the assignment of symbolic rewards decreases when it becomes clear that the relationship is durable, suggesting that employers mainly use symbolic rewards as a coordination device to initiate relational contracts. Compared to the balanced market condition, assigning symbolic rewards in initial relationships is less likely when there is excess demand in the market and more likely when there is excess supply, i.e. when the relationship is more valuable. Receiving symbolic rewards increases the employees' likelihood of accepting to continue the relationship with the same employer. It also motivates them to increase their effort further but only when the market is balanced. Overall, the ability to assign symbolic rewards does not give rise to higher profits because it is associated with lower rents offered to the employees on average, leading to lower effort levels. |
| Keywords: | Respect; Symbolic rewards; Coordination; Signaling; Labor market; Experiment |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00642527&r=lab |
| By: | Schreurs, Bert (Maastricht University School of Business and Economics Department of Organization and Strategy, Maastricht, The Netherlands); van Emmerik, IJ. Hetty (Maastricht University School of Business and Economics Department of Organization and Strategy, Maastricht, The Netherlands); Guenter, Hannes (Maastricht University School of Business and Economics Department of Organization and Strategy, Maastricht, The Netherlands); Germeys, Filip (Hogeschool-Universiteit Brussel (HUB), Belgium) |
| Abstract: | In this article, the authors used a within-person design to examine the relationship between job insecurity and employee in-role and extra-role performance, and the buffering role of time-varying work-based support (i.e., supervisor and colleague support) in this relationship. Weekly diary data gathered over the course of three weeks from 56 employees confronted with organizational restructuring and analyzed with a hierarchical linear modeling approach showed that weekly fluctuations in job insecurity negatively predicted week-level in-role performance. As predicted, supervisor support moderated the intra-individual relationship between job insecurity and in-role performance, so that employees‘ in-role performance suffered less from feeling job insecurity during weeks in which they received more support from their supervisor. No relationship between job insecurity and extra-role performance was observed. This within-person study contributes to research on job insecurity that has primarily focused on inter-individual differences in job insecurity and their associations with job performance. Theoretical and practical implications for human resource management are discussed. |
| Keywords: | job insecurity; job demands; job stress; social support; uncertainty management |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:hub:wpecon:201127&r=lab |
| By: | José Mustre-del-Río |
| Abstract: | This paper examines the Frisch elasticity at the extensive margin of labor supply in an economy consistent with the observed dispersion in average employment rates across individuals. An incomplete markets economy with indivisible labor is presented where agents differ in their disutility of labor and market skills. The model's key parameters are estimated using indirect inference with panel data from the National Longitudinal Survey of the Youth-NLSY. The estimated model implies an elasticity of aggregate employment of 0.71. A simple decomposition reveals that labor disutility dierences, which capture the dispersion in employment rates, are crucial for this quantitative result. These differences alone generate an elasticity of 0.69. Meanwhile, skill differences alone imply an elasticity of 1.1. These results suggest that the literature generates large employment elasticities by ignoring individual labor supply differences. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp11-09&r=lab |
| By: | Martin Foureaux Koppensteiner |
| Abstract: | This paper examines the effect of the introduction of automatic grade promotion on student performance in 1,993 public primary schools in the Brazilian state of Minas Gerais. A difference-in-difference approach that exploits variation over time in the adoption of the policy allows the identification of the treatment effect of automatic promotion. I find a negative and significant effect of about 6% of a standard deviation. Under plausible identifying assumptions the estimates can be interpreted as the disincentive effect on student effort associated with the introduction of automatic promotion. |
| Keywords: | Grade retention; automatic promotion; incentives for effort. |
| JEL: | I28 I21 O15 H52 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:11/52&r=lab |
| By: | Sara Lemos |
| Abstract: | We exploit a large and long longitudinal dataset to estimate the immigrant-native earnings gap at entry and over time for the UK between 1978 and 2006. That is, we attempt to separately estimate cohort and assimilation effects. We also estimate the associated immigrant earnings growth rate and immigrant-native earnings convergence rate. Our estimates suggest that immigrants from more recent cohorts fare better than earlier ones at entry. Furthermore, the earnings of immigrants from more recent cohorts catch up faster with natives' earnings. While the convergence took over 30 years for those entering in the post-war, it only took half as long for those entering in the early 2000s. This earnings growth is fastest in the first 10 years, and it considerably slows down after 30 years. |
| Keywords: | Immigration; assimilation; wages; earnings; earnings-gap; UK. |
| JEL: | J24 J31 J61 J71 J82 F22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:11/39&r=lab |
| By: | Timo Baas (Institute for Employment Research (IAB) and Free University of Berlin); Herbert Brücker (University of Bamberg, Institute for Employment Research (IAB) and IZA) |
| Abstract: | This paper examines the macroeconomic consequences of the diversion of migration flows away from Germany towards the UK in the course of the EU’s Eastern Enlargement. The EU has agreed transitional periods for the free movement of workers with the new member states from Central and Eastern Europe. The selective application of migration restrictions during the transitional periods has resulted in a reversal of the pre-enlargement allocation of migration flows from the new member states across the EU. Based on a forecast of the migration potential under the conditions of free movement and of the transitional arrangements, we employ a CGE model with imperfect labour markets to analyse the macroeconomic effects of this diversion process. We find that EU Eastern enlargement has increased in the GDP per capita in the UK substantially, but that the diversion of migration flows towards the UK has reduced wage gains and the decline in unemployment there. The effects of the EU Eastern enlargement are less favourable for Germany, but the diversion of migration flows has protected workers there against a detrimental impact on wages and unemployment. |
| Keywords: | EU Eastern enlargement, international migration, computable equilibrium model, wage-setting. |
| JEL: | F15 F22 C68 J61 J30 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012010&r=lab |
| By: | Riccardo Leoni |
| Keywords: | education; competencies; employability |
| JEL: | I21 I24 J24 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:brg:wpaper:1101&r=lab |
| By: | Simone Bertoli (University of Florence and IAB (Institute for Employment Research)); Herbert Brücker (University of Bamberg and IAB (Institute for Employment Research)) |
| Abstract: | The recent literature about the so-called beneficial brain drain assumes that destination countries are characterized not only by higher wages than the source country, but also by a higher or at least not lower relative return to education. However, it is a well known stylized fact that the returns to education are higher in rich than in poor countries. Against this background, we assess whether the main prediction of this literature, namely the possibility of a beneficial brain gain, still holds under the reverse assumption. We show that there is a still a strong case for a beneficial brain drain, even if the returns to education in the source country exceed those in the destination country. Immigration policies that are biased against unskilled workers are not necessary for a beneficial brain drain to occur once one considers that agents face heterogeneous migration costs. |
| Keywords: | migration; brain drain; skill premium; heterogeneous agents; selective immigration policies |
| JEL: | F22 J24 O15 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012008&r=lab |
| By: | Lee E. Ohanian; Andrea Raffo |
| Abstract: | We build a dataset of quarterly hours worked for 14 OECD countries. We document that hours are as volatile as output, that a large fraction of labor adjustment takes place along the intensive margin, and that the volatility of hours relative to output has increased over time. We use these data to reassess the Great Recession and prior recessions. The Great Recession in many countries is a puzzle in that labor wedges are small, while those in the U.S. Great Recession - and those in previous European recessions - are much larger. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1039&r=lab |
| By: | Engler, Philipp |
| Abstract: | After an expansionary monetary policy shock employment increases and unemployment falls. In standard New Keynesian models the fall in aggregate unemployment does not affect employed workers at all. However, Lüchinger, Meier and Stutzer (2010) found that the risk of unemployment negatively affects utility of employed workers: An increases in aggregate unemployment decreases workers' subjective well-being, which can be explained by an increased risk of becoming unemployed. I take account of this effect in an otherwise standard New Keynesian open economy model with unemployment as in Galí (2010) and find two important results with respect to expansionary monetary policy shocks: First, the usual wealth effect in New Keynesian models of a declining labor force, which is at odds with the data as highlighted by Christiano, Trabandt and Walentin (2010), is shut down. Second, the welfare effects of such shocks improve considerably, modifying the standard results of the open economy literature that set off with Obstfeld and Rogoff's (1995) redux model. -- |
| Keywords: | open economy macroeconomics,monetary policy,unemployment |
| JEL: | E24 E52 F32 F41 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201124&r=lab |
| By: | Cervini-Plá, María |
| Abstract: | This paper explores the mechanisms behind the intergenerational earnings mobility in Spain by means of three exercises: calculating the transition matrix, decomposing the sources of earnings elasticity and estimating quantile earnings regressions. By calculating the transition matrices we find a strong degree of persistence in educational attainment and especially in occupation. By decomposing the sources of earnings elasticity across generations, we find that the correlation between children's and their fathers' occupations is the most important component. Finally, quantile regressions estimates show that the influence of the father's earnings is greater when we move to the lower tail of the offspring's earnings distribution, especially in the case of daughters' earnings. |
| Keywords: | Intergenerational mobility; earnings; transition matrix; quantile regression; two sample two stage least square estimator; Spain |
| JEL: | D31 J62 J31 |
| Date: | 2012–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36093&r=lab |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Alexander Kritikos (German Institute for Economic Research (DIW Berlin), University of Potsdam, IZA Bonn, and o IAB, Nuremberg); Alina Rusakova (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | Based on representative data, the German Micro-Census, we provide an overview of the development of self-employment and entrepreneurship in Germany between 1991 and 2011, the first two decades after reunification. We investigate the socio-economic background of these individuals, their education, previous employment status, and their income level. We observe a unique increase in self-employment in Germany by 40 percent which can partly be attributed to the transformation process of East Germany and to the shift to the service sector. We notice a yearly start-up rate of 1 percent among the working population (almost 20 percent of them being re-starters), a decision that pays for the majority of individuals in terms of income. Contrary to other countries, in Germany there is a positive relationship between educational levels and the probability of starting a business. |
| Keywords: | Entrepreneurship, Self-Employment, Start-ups, Germany |
| JEL: | L26 D22 |
| Date: | 2012–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-001&r=lab |
| By: | Aaron J. Sojourner; Robert J. Town; David C. Grabowski; Michelle M. Chen |
| Abstract: | This paper studies the effects of unions in private-sector nursing homes on a broad range of labor, firm, and consumer outcomes. We link national data on nursing home characteristics from the Centers for Medicare and Medicaid Services to records on establishment-level unionization from federal labor agencies, and employ a regression discontinuity design to identify union effects by contrasting outcomes in nursing homes where unions closely won representation elections to outcomes in facilities where unions closely lost such elections. After showing that these two sets of homes are similar leading up to the election, we estimate union effects on staffing levels, care quality, and other outcomes. We find negative effects of unions on staffing levels and no decline in care quality, suggesting positive productivity effects. Consistent with these results, supplementary analysis shows significant increases in wages for some classes of nursing labor. Some evidence suggests that nursing homes in local product markets that were less competitive and had lower union density at the time of election experienced stronger union employment effects. We find no impact of unionization on facility survival. By combining credible identification of union effects, a comprehensive set of outcomes over time with measures of market-level characteristics, this study generates some of the best evidence available on many controversial questions in the economics of unions. Furthermore, it generates evidence from the service sector, which has grown in importance and where evidence on these questions has been thin. |
| JEL: | I12 J51 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17733&r=lab |