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on Labour Economics |
| By: | Lopez-Mayan, Cristina (Universitat Autònoma de Barcelona); Nicodemo, Catia (Universitat Autònoma de Barcelona) |
| Abstract: | Using a specific micro-dataset with information on working histories, we analyse the labour market entry of Spanish youths who have completed vocational education. According to the education system, young people can enter the labour market with vocational high school (upper secondary education) or with vocational college (tertiary education). Both present a period of workplace training, although, as they belong two distinct schooling levels, they have different entry requirements. Those who complete vocational college has spent more years in education and we would expect more success in finding a first job. Surprisingly, results do not confirm this hypothesis. We do not find important differences in the estimates of the determinants of transitions across types of vocational education. Apprenticeship has a very important role on increasing the hazard rate to employment and this result holds after controlling for unobserved heterogeneity and previous labour experience. |
| Keywords: | duration models, vocational education, labour market entry, apprenticeship |
| JEL: | J13 J24 I20 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6309&r=lab |
| By: | BALDWIN Marjorie L.; CHOE Chung |
| Abstract: | We provide the first-ever estimates of wage discrimination against workers with sensory (hearing, speech, vision) disabilities. Workers with sensory disabilities have lower probabilities of employment and lower wages, on average, than nondisabled workers. Their poor labor market outcomes are explained, at least in part, by the negative productivity effects of sensory limitations in jobs that require good communication skills, but disabilityrelated discrimination may also be a contributing factor. To separate productivity vs. discrimination effects, we decompose the wage differential between workers with and without sensory disabilities into an „explained? part attributed to differences in productivity-related characteristics, and an „unexplained? part attributed to discrimination. The decomposition is based on human capital wage equations with controls for job-specific demands related to sensory abilities, and interactions between job demands and sensory limitations. The interactions are interpreted as measures of the extent to which a worker?s sensory limitations affect important job functions. The results indicate approximately 1/3 (1/10) of the disability-related wage differential for men (women) is attributed to discrimination. The estimates are quite different from estimates of discrimination against workers with physical disabilities obtained by the same methods, underscoring the importance of accounting for heterogeneity of the disabled population in discrimination studies. |
| Keywords: | Job demand; Sensory disability; Wage discrimination |
| JEL: | I10 J71 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-61&r=lab |
| By: | CHOE, Chung; BALDWIN, Marjorie |
| Abstract: | We provide the first-ever estimates of wage discrimination against workers with sensory (hearing, speech, vision) disabilities. Workers with sensory disabilities have lower probabilities of employment and lower wages, on average, than nondisabled workers. Their poor labor market outcomes are explained, at least in part, by the negative productivity effects of sensory limitations in jobs that require good communication skills, but disability-related discrimination may also be a contributing factor. To separate productivity vs. discrimination effects, we decompose the wage differential between workers with and without sensory disabilities into an ‘explained’ part attributed to differences in productivity-related characteristics, and an ‘unexplained’ part attributed to discrimination. The decomposition is based on human capital wage equations with controls for job-specific demands related to sensory abilities, and interactions between job demands and sensory limitations. The interactions are interpreted as measures of the extent to which a worker’s sensory limitations affect important job functions. The results indicate approximately 1/3 (1/10) of the disability-related wage differential for men (women) is attributed to discrimination. The estimates are quite different from estimates of discrimination against workers with physical disabilities obtained by the same methods, underscoring the importance of accounting for heterogeneity of the disabled population in discrimination studies. |
| Keywords: | Job demand ; Sensory disability ; Wage discrimination |
| JEL: | J71 I10 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36242&r=lab |
| By: | Pugatch, Todd (Oregon State University) |
| Abstract: | Re-enrollment in school following a period of dropout is a common feature of the South African school to work transition that has been largely ignored in both the literature on South Africa and the wider literature on sequential schooling choice. In this paper, I quantify the importance of the option to re-enroll in the school to work transition of South African youth. I estimate a structural model of schooling choice in South Africa using a panel dataset that contains the entire schooling and labor market histories of sampled youth. Estimates of the model's structural parameters confirm the hypothesis that enrollment choices reflect dynamic updating of the relative returns to schooling versus labor market participation. In a policy simulation under which re-enrollment prior to high school completion is completely restricted, the proportion completing at least 12 years of schooling rises 6 percentage points, as youth who would have dropped out under unrestricted re-enrollment reconsider the long-term consequences of doing so. The results suggest that the option to re-enroll is an important component of the incentives South African youth face when making schooling decisions. |
| Keywords: | human capital investment, labor supply, youth unemployment, dynamic discrete choice, South Africa |
| JEL: | I21 J24 O12 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6305&r=lab |
| By: | Darrell J. Glaser (United States Naval Academy); Ahmed S. Rahman (United States Naval Academy) |
| Abstract: | We analyze the job matching process for skilled labor using an extensive panel dataset of naval officer careers during the Second Industrial Revolution. We find strong separation effects for officers with accumulated skills in technology-focused work and/or those with formal training as engineers. In particular, technology-based human capital increases the probability of a job switch quite substantially, even after controlling for wage differences and seniority. In addition to providing tests of matching-models, our results have important implications for policy makers evaluating incentives for retaining technologically trained human capital. This is applicable to help understand effects of wage differences in labor markets experiencing rapid technological change. Estimates also indicate that a ceteris paribus increase in the distribution of external wage offers increases the probability of job separation. Controlling for seniority and the effects from accumulated human capital, a 1% increase in the wage gap of internal wage offers relative to wages in external labor markets decreases the hazard for job separations by 0.8%. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:usn:usnawp:37&r=lab |
| By: | Günseli Berik and Ebru Kongar |
| Abstract: | The U.S. economic crisis and recession of 2007-2009 accelerated the convergence of women’s and men’s employment rates as men experienced disproportionate job losses and women’s entry into the labor force gathered pace. Using the American Time Use Survey (ATUS) data for 2003-2010, this study examines whether the narrowing gap in paid work over this period was mirrored in unpaid work, personal care and leisure time. We find that the gender gap in unpaid work followed a U-pattern, narrowing during the recession but widening afterwards. Through segregation analysis we trace this U-pattern to the slow erosion of gender segregation in housework and through a standard decomposition analysis of time use by employment status we show that this pattern was mainly driven by movement towards gender equitable unpaid hours of women and men with the same employment status. In addition, over the business cycle gender inequality in leisure time increased. |
| Keywords: | J16, J22, J64 JEL Classification: Economics of Gender, Unemployment, Time Use, Economic Crises |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2011_16&r=lab |
| By: | Arntz, Melanie; Gregory, Terry; Lehmer, Florian |
| Abstract: | This paper examines the determinants of gross labour flows in a context where modeling the migration decision as a wage-maximizing process may be inadequate due to regional wage rigidities that result from central wage bargaining. In such a context, the framework that has been developed by Borjas et al. (1992) on the selectivity of internal migrants with respect to skills has to be extended to allow migrants to move to regions that best reward their skills in terms of both wages and employment. The extended framework predicts skilled workers to be disproportionately attracted to regions with higher mean wages and employment rates as well as higher regional wage and employment inequalities. Estimates from a labour flow fixed effects model and a GMM estimator show that these predictions hold, but only the effects for mean employment rates and employment inequality are robust and significant. The paper may thus be able to explain why earlier attempts to explain skill selectivity in Europe within a pure wage-based approach failed to replicate the US results. -- |
| Keywords: | gross migration,selectivity,wage inequality,employment inequality |
| JEL: | R23 J31 J61 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11074&r=lab |
| By: | Ahmed S. Rahman (United States Naval Academy) |
| Abstract: | This paper explores the eects of human capital on workers during the latter 19th century by examining the specic case of the U.S. Navy. During this time, naval ocers belonged either to a regular or an engineer corps and had tasks assigned for their specialized training and experience. To test the eects of specialized skills on career performance, we compile educational data from original-source Naval Academy records for the graduating classes of 1858 to 1905. We merge these with career data extracted from ocial Navy registers for the years 1859 to 1907. This compilation comprises one of the longest and earliest longitudinal records of labor market earnings, education and experience of which we are aware. Our results suggest that wage premia for \engineer-skilled" ocers rapidly deteriorated over their careers; more traditionally skilled ocers were better compensated and promoted more frequently as their careers progressed. This compelled those with engineering skills to leave the service early, contributing to the Navy's failure to keep up with the technological frontier of the time. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:usn:usnawp:34&r=lab |
| By: | Nicodemo, Catia (Universitat Autònoma de Barcelona); Nicolini, Rosella (Universitat Autònoma de Barcelona) |
| Abstract: | This study investigates the existence of hiring criteria associated with the degree of social connections between skill and low-skill workers. We provide evidence about to what extent managers rely on their social connections in recruiting low-skill workers rather than on random matching. As one unique feature we follow an approach for a posted wage setting that reflects the main features of the Spanish labor market. By working with sub-samples of high and low-skill workers we are able to assess that the recruitment of low-skill immigrants quite often follows a referral strategy and we identify interesting irregularities across the ethnic groups. As a common feature, referral hiring is usually influences by the ethnicity of the manager and the relative proportion of immigrants within the firm. Under these perspectives, our study outlines new insights to evaluate the future perspectives of the Spanish labor market. |
| Keywords: | ethnicity, hiring strategies, social networks |
| JEL: | J15 J21 J24 J61 J71 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6312&r=lab |
| By: | Niedergesäss, Markus |
| Abstract: | This paper investigates the form and magnitude of a variety of state dependence effects for prime-aged men in Germany. I differentiate between three labor market states: employment, unemployment, and out of labor force. Results indicate that all forms of state dependence are present in the data, in particular, there is strong duration dependence in employment and unemployment. Furthermore, past unemployment experiences are scarring and make future unemployment more likely while past employment experiences help to find new employment, but do not help to remain employed. Simulations are conducted in order to investigate the effects of possible interventions in the labor market. -- |
| Keywords: | state dependence,transition data,event history analysis,unobserved heterogeneity |
| JEL: | C33 C41 J64 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:26&r=lab |
| By: | Stephan K. S. Kampelmann; François Rycx |
| Abstract: | This paper examines the relationship between institutions and the remuneration of different jobs by comparing the German and Belgian labour markets with respect to a typology of institutions (social representations, norms, conventions, legislation, and organisations). The observed institutional differences between the two countries lead to the hypotheses of (I) higher overall pay inequality in Germany; (II) higher pay inequalities between employees and workers in Belgium; and (III) higher (lower) impact of educational credentials (work-post tenure) on earnings in Germany. We provide survey-based empirical evidence supporting hypotheses I and III, but find no evidence for hypothesis II. These results underline the importance of institutional details: although Germany and Belgium belong to the same "variety of capitalism", we provide evidence that small institutional disparities within Continental-European capitalism account for distinct structures of pay. |
| Keywords: | Labour productivity; wages; occupations; production function; matched employer-employ |
| JEL: | J31 J51 J52 J53 |
| Date: | 2011–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/98327&r=lab |
| By: | Jones, Stephen |
| Abstract: | Workers displaced from long-tenure jobs often have difficulty finding new employment and can take a substantial drop in earnings when they find reemployment. These losses are large and persistent, and can easily dwarf the transitory losses from the initial period of nonemployment. Policy response for these long-term problems has centred on education, training and skill development. This paper surveys and assesses a variety of strategies that have been employed to determine training effectiveness, using results from field experiments and from econometric work based on non-experimental data. Findings from this large research enterprise are not encouraging. Both experimental and non-experimental research shows that the returns to training for displaced workers are low, almost surely less than the (well-estimated) returns to formal schooling which lie in the 6-9% range. On a cost-benefit basis, the body of evidence does not show that training pays off for most of the displaced population. Alternative means to compensate the losers from economic adjustment might include modified or expanded EI coverage, without any necessary link to training expenditures, and perhaps consideration of alternative policies, such as Wage Insurance. Since evidence on training programs for displaced workers gives only limited promise, it is important to search for other creative ways to ensure that the costs of economic restructuring do not fall disproportionately on a narrow group. |
| Keywords: | labour market adjustment, training, displaced workers |
| JEL: | J60 J63 J63 J65 J68 |
| Date: | 2012–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:clssrn:clsrn_admin-2012-3&r=lab |
| By: | Per Krusell; Toshihiko Mukoyama; Richard Rogerson; Ayşegül Şahin |
| Abstract: | We build a general equilibrium model that features uninsurable idiosyncratic shocks, search frictions and an operative labor supply choice along the extensive margin. The model is calibrated to match the average levels of gross flows across the three labor market states: employment, unemployment, and non-participation. We use it to study the implications of two kinds of aggregate shocks for the cyclical behavior of labor market aggregates and flows: shocks to search frictions (the rates of job finding and job loss) and shocks to the return on the market activity (any factors affecting aggregate productivity). We find that both kinds of shocks are needed to explain the labor market data, and that an active labor supply channel is key. A model with friction shocks only, calibrated to match unemployment fluctuations, accounts for only a small fraction of employment fluctuations and has counterfactual cyclical predictions for participation. |
| JEL: | E24 J22 J64 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17779&r=lab |
| By: | Silva, José I. (Universitat de Girona); Vall Castello, Judit (Universitat de Girona) |
| Abstract: | Unlike other disability systems in developed economies, the Spanish system allows partially disabled individuals to work while receiving disability benefits. The puzzle is, however, that employment rates in this group of individuals are very low. The aim of this paper is to understand the incentives and disincentives to work provided by the partial disability scheme in Spain. We first present a theoretical job search model for partially disabled individuals and then estimate a complementary log-log duration model. According to both models, the probability of finding a job falls with the level of disability, the age at which the individual starts receiving disability benefits, and the increase in the local unemployment rate. Moreover, as a result of an increase in the level of disability benefits we find a strong substitution effect that reduces the probability of disabled individuals older than 55 years finding a job to almost zero, in both of the two models. We simulate that the strong substitution effect would be replaced by an equally large income effect even if the increase in the benefits would not be suspended if the individual finds a job. |
| Keywords: | job search model, disability benefits, duration analysis |
| JEL: | C41 I18 J64 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6317&r=lab |
| By: | Audra J. Bowlus (University of Western Ontario); Alexander Huju Liu (University of Western Ontario) |
| Abstract: | This paper presents and estimates a unified model where both human capital investment and job search are endogenized. This unification enables us to quantify the relative contributions of each mechanism to life cycle earnings growth, while investigating potential interactions between human capital investment and job search. Within the unified framework, the expectation of rising rental rates of human capital through job search gives workers more incentive to invest in human capital. In addition, unemployed workers reduce their reservation rental rates and increase their search effort to leave unemployment quickly to take advantage of human capital accumulation on the job. The results show both forces are important for earnings growth and the interactions are substantial: human capital accumulation accounts for 31% of total earnings growth, job search accounts for 46%, and the remaining 23% is due to the interactions of the two. |
| Keywords: | Human Capital; Job Search; Life Cycle, Earnings Growth |
| JEL: | J24 J64 D91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20122&r=lab |
| By: | Daron Acemoglu; David Autor |
| Abstract: | Goldin and Katz’s <i>The Race between Education and Technology</i> is a monumental achievement that supplies a unified framework for interpreting how the demand and supply of human capital have shaped the distribution of earnings in the U.S. labor market over the 20th century. This essay reviews the theoretical and conceptual underpinnings of this work and documents the success of Goldin and Katz’s framework in accounting for numerous broad labor market trends. The essay also considers areas where the framework falls short in explaining several key labor market puzzles of recent decades and argues that these shortcomings can potentially be overcome by relaxing the implicit equivalence drawn between workers’ skills and their job tasks in the conceptual framework on which Goldin and Katz build. The essay argues that allowing for a richer set of interactions between skills and technologies in accomplishing job tasks both augments and refines the predictions of Goldin and Katz’s approach and suggests an even more important role for human capital in economic growth than indicated by their analysis. |
| JEL: | J30 J31 O14 O31 O33 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17820&r=lab |
| By: | Glewwe, Paul; Park, Albert; Zhao, Meng |
| Abstract: | About 10% of primary school students in developing countries have poor vision, but very few of them wear glasses. Almost no research examines the impact of poor vision on school performance, and simple OLS estimates are likely to be biased because studying harder often adversely affect oneâs vision. This paper presents results from a randomized trial in Western China that offered free eyeglasses to 1,528 rural primary school students. The results indicate that wearing eyeglasses for one year increased average test scores of students with poor vision by 0.15 to 0.22 standard deviations, equivalent to the learning acquired from an additional 0.33-0.50 years of schooling, and that the benefits are greater for under-performing students. A simple cost-benefit analysis suggests very high economic returns to wearing eyeglasses, raising the question of why such investments are not made by most families. We find that girls are more likely to refuse free eyeglasses, and that lack of parental awareness of vision problems, mothersâ education, and economic factors (expenditures per capita and price) significantly affect whether children wear eyeglasses in the absence of the intervention. |
| Keywords: | Teaching/Communication/Extension/Profession, |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umciwp:120032&r=lab |
| By: | Oberhofer, Harald; Stöckl, Matthias; Winner, Hannes |
| Abstract: | We provide evidence on the impact of globalization on labor market outcomes analyzing pay differences between foreign-acquired and domestically-owned firms. For this purpose, we use firm level data from 16 European countries over the time period 1999-2006. Applying propensity score matching techniques we estimate positive wage premia of cross-boarder merger and acquisitions (M&As), suggesting that foreign acquired firms exhibit higher short-run (post-acquisition) wages than their domestic counterparts. The observed wage disparities are most pronounced for low paying firms (with average wages below the median). Finally, we find systematic wage premia in Western European countries, but not so in Eastern Europe. -- |
| Keywords: | Globalization,mergers and acquisitions,wage effects,propensity score matching |
| JEL: | C21 F15 G34 J31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20126&r=lab |
| By: | Tjaden, Volker (University of Bonn); Wellschmied, Felix (University of Bonn) |
| Abstract: | Standard search models are unreliable for structural inference of the underlying sources of wage inequality because they are inconsistent with observed residual wage dispersion. We address this issue by modeling skill development and duration dependence in unemployment benefits in a random on the job search model featuring two-sided heterogeneity. General human capital and search on the job are the main drivers behind our model's empirical success in replicating wage dispersion (residual and overall). A realistic quantitative appraisal of search efficiencies needs to account for one third of job to job transitions resulting in wage losses. Controlling for them has important implications for the inferred sources of wage inequality. We find that the search friction accounts for around 18 percent of observed wage inequality. |
| Keywords: | frictional wage dispersion, search model, heterogeneity |
| JEL: | J24 J31 J64 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6299&r=lab |
| By: | Francesca Bastagli; Kitty Stewart |
| Abstract: | This paper uses panel data from the British Families and Children Study to analyse the employment patterns of women with children and the ways in which part-time work and interruptions in paid employment influence the wages of working mothers. It pays particular attention to how the relationship between employment trajectory and wage progression compares for higher-skilled and lower-skilled mothers and for mothers of younger and older children. We find that mothers follow a wide variety of employment pathways, the majority working part-time, moving between full-time and part-time employment or moving in and out of work as they combine motherhood with paid employment. In support of results from existing research on the "part-time" wage penalty and the "motherhood gap", we find that there are wage penalties associated with unstable work trajectories. Our analysis also shows that such wage penalties are significantly smaller for lower-skilled than higher-skilled women and are experienced by mothers of children of all ages, although the impact appears larger for mothers of younger children. In the final sections, the paper discusses the policy implications that arise from these findings with reference to recent debates on maternal employment, wage progression and poverty reduction. |
| Keywords: | maternal employment, wages, mothers, employment trajectories |
| JEL: | J22 J24 J31 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:case157&r=lab |
| By: | Marcelo Bérgolo; Guillermo Cruces |
| Abstract: | This paper studies the incentive effects of social security benefits on labor market informality following a policy reform in Uruguay. The reform extended health benefits to dependent children of private sector salaried workers, and thus altered the incentive structure of holding formal jobs within the household. The identification strategy of the reform¿s effects relies on a comparison between workers with children (affected by the reform) and those without children (unaffected by the reform). Difference in differences estimates indicate a substantial effect of this expansion of coverage on informality rates, which fell significantly by about 1.3 percentage points (a 5 percent change) among workers in the treatment group with respect to those in the control group. The evidence also indicates that individuals within households jointly optimized their allocation of labor to the formal and informal sector. Workers responded to the increased incentives for only one member of the household to work in the formal sector. These findings provide evidence of the relevant and substantial incentive effects of social security benefits on the allocation of employment. |
| Keywords: | Labor :: Workforce & Employment, Labor :: Social Security, Health :: Health Policy, CEDLAS |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:62318&r=lab |
| By: | Boeters, Stefan; Savard, Luc |
| Abstract: | This chapter reviews options of labour market modelling in a CGE framework. On the labour supply side, two principal modelling options are distinguished and discussed: aggregated, representative households and microsimulation based on individual household data. On the labour demand side, we focus on the substitution possibilities between different types of labour in production. With respect to labour market coordination, we discuss several wage-forming mechanisms and involuntary unemployment. -- |
| Keywords: | computable general equilibrium model,labour market,labour supply,labour demand,microsimulation,involuntary unemployment |
| JEL: | C68 D58 J20 J64 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11079&r=lab |
| By: | Ronald Bachmann; Mathias Sinning |
| Abstract: | This paper analyzes the contribution of the socioeconomic and demographic composition of the pool of employed and unemployed individuals to the dynamics of the labor market in different phases of the business cycle. Using individual level data from the Current Population Survey (CPS), we decompose differences in employment status transition rates between economic upswings and downturns into composition effects and behavioral effects. We find that overall composition effects play a minor role for the cyclicality of the unemployment outflow rate, although the contribution of the duration of unemployment is significant. In contrast, composition effects dampen the cyclicality of the unemployment inflow rate considerably. We further observe that the initially positive contribution of composition effects to a higher unemployment outflow rate turns negative over the course of the recession. |
| JEL: | J63 J64 J21 E24 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2012-571&r=lab |
| By: | Han, Seungjin; Yamaguchi, Shintaro |
| Abstract: | This paper studies a stable job matching equilibrium and the implicit pricing of non-wage job characteristics. It departs from the previous literature by allowing worker heterogeneity in productivity instead of preferences, giving rise to a double transaction problem in a hedonic model. We show explicitly how wage differences across jobs can be decomposed into compensating wage differentials for non-wage job characteristics and differences in worker productivity. We also derive sufficient conditions for an assortative job matching and a stable matching condition in a model with continuous agent types. Empirical evidence from the U.S. Census and job amenity data from the Dictionary of Occupational Titles strongly supports our theory. |
| Keywords: | assortative matching, compensating wage differentials, hedonic model, stable matching equilibrium, worker productivity heterogeneity |
| JEL: | C78 J31 |
| Date: | 2012–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:ubc:pmicro:seungjin_han-2012-4&r=lab |
| By: | Jordi Galí (CREI, Universitat Pompeu Fabra and Barcelona GSE); Frank Smets (European Central Bank, CEPR and University of Groningen); Rafael Wouters (National Bank of Belgium) |
| Abstract: | We reformulate the Smets-Wouters (2007) framework by embedding the theory of unemployment proposed in Galí (2011a,b). We estimate the resulting model using postwar U.S. data, while treating the unemployment rate as an additional observable variable. Our approach overcomes the lack of identification of wage markup and labor supply shocks highlighted by Chari, Kehoe and McGrattan (2008) in their criticism of New Keynesian models, and allows us to estimate a "correct" measure of the output gap. In addition, the estimated model can be used to analyze the sources of unemployment fluctuations. |
| Keywords: | nominal rigidities, unemployment fluctuations, Phillips curve, wage markups shocks, output gap. |
| JEL: | D58 E24 E31 E32 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:106&r=lab |
| By: | Merkl, Christian (University of Erlangen-Nuremberg); van Rens, Thijs (CREI and Universitat Pompeu Fabra) |
| 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:iza:izadps:dp6294&r=lab |
| By: | Christoph Basten, Andreas Fagereng and Kjetil Telle (Statistics Norway) |
| Abstract: | We identify the causal effect of lump-sum severance payments on non-employment duration in Norway by exploiting a discontinuity in eligibility at age 50. We find that a severance payment worth 1.2 months' earnings at the median lowers the fraction re-employed after a year by six percentage points. Data on household wealth enable us to verify that the effect is decreasing in prior wealth, which supports the view that the severance pay effect should be interpreted as evidence of liquidity constraints. Finding liquidity constraints in Norway, despite its equitable wealth distribution and generous welfare state, means they are likely to exist also in other countries. |
| Keywords: | Unemployment; Optimal Unemployment Insurance; Liq-uidity Constraints; Mental Accounting; Severance Pay; Regression Dis-continuity Design |
| JEL: | C41 E21 E24 J65 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:679&r=lab |
| By: | Glewwe, Paul; Hanushek, Eric; Humpage, Sarah; Ravina, Renato |
| Abstract: | Developing countries spend hundreds of billions of dollars each year on schools, educational materials and teachers, but relatively little is known about how effective these expenditures are at increasing studentsâ years of completed schooling and, more importantly, the skills that they learn while in school. This paper examines studies published between 1990 and 2010, in both the education literature and the economics literature, to investigate which specific school and teacher characteristics, if any, appear to have strong positive impacts on learning and time in school. Starting with over 9,000 studies, 79 are selected as being of sufficient quality. Then an even higher bar is set in terms of econometric methods used, leaving 43 âhigh qualityâ studies. Finally, results are also shown separately for 13 randomized trials. The estimated impacts on time in school and learning of most school and teacher characteristics are statistically insignificant, especially when the evidence is limited to the âhigh qualityâ studies. The few variables that do have significant effects â e.g. availability of desks, teacher knowledge of the subjects they teach, and teacher absence â are not particularly surprising and thus provide little guidance for future policies and programs. |
| Keywords: | Teaching/Communication/Extension/Profession, |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umciwp:120033&r=lab |
| By: | Becchetti, Leonardo (Associazione Italiana per la Cultura della Cooperazione e del Non Profit); Pisani, Fabio (Associazione Italiana per la Cultura della Cooperazione e del Non Profit) |
| Abstract: | We analyze the effects of financial education on a large sample of secondary school students with a randomized experiment performed in the Center (Rome) and North (Milan and Genova) of Italy. Our main findings document that the course increases significantly financial literacy at both student and class level but the effect is different in different urban environments. More specifically, we document that the overall (questionnaire plus course) learning effect is significantly higher in the North than in Rome. We finally observe that high grades at final middle school exams, willingness to attend Economics at University and household borrowing status are three factors which significantly and positively affect financial education. |
| Keywords: | financial education; financial literacy; demand for money balances; randomized experiment |
| Date: | 2012–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:aiccon:2012_098&r=lab |
| By: | Gielen, Anne C. (IZA); van Ours, Jan C. (Tilburg University) |
| Abstract: | It is puzzling that people feel quite unhappy when they become unemployed, while at the same time active labor market policies are needed to bring unemployed back to work more quickly. Using data from the German Socio-Economic Panel, we investigate whether there is indeed such a puzzle. First, we find that nearly half of the unemployed do not experience a drop in happiness, which might explain why at least some workers need to be activated. In addition to that, we find that even though unemployed who experience a drop in happiness search more actively for a job, it does not speed up their job finding. Apparently, there is no link between unhappiness and the speed of job finding. Hence, there is no contradiction between unemployed being unhappy and the need for activation policies. |
| Keywords: | happiness, unemployment duration |
| JEL: | I31 J64 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6320&r=lab |
| By: | Koettl, Johannes (World Bank); Weber, Michael (World Bank) |
| Abstract: | The analysis presented in this paper defines three different synthetic measurements of disincentives for formal work: two standard measurements, namely the tax wedge and the marginal effective tax rate (METR); and a new, innovative measurement called formalization tax rate (FTR). The novelty of the latter is that it measures disincentives stemming not only from labor taxation, but also from benefit withdrawal due to formalization. A descriptive analysis across a large number of OECD and Eastern European countries reveals that the disincentives for formal work – when measured through the FTR – are especially high for low-wage earners. This suggests that formal work might not pay in this segment of the labor market, in particular for the so-called mini-jobs and midi-jobs (low paying part-time work). Another novelty of the paper is its empirical approach. Using EU-SILC 2008 data and OECD Tax and Benefit data for six Eastern European countries (Bulgaria, Czech Republic, Estonia, Latvia, Poland, and Slovakia), we match disincentives for formal work to individual observations in a large data set. Applying a probit regression, the analysis finds a significant positive correlation between FTR or METR and the incidence of being informal. In other words, controlling for individual and job characteristics, the higher the FTR or the METR that individuals are facing is, the more likely they are to work informally. The tax wedge, on the other hand, yields a negative correlation. This indicates that the tax wedge is not sufficiently capturing disincentives for formal work. We also conclude that in cross-country analysis, it might be more useful to use the tax wedge that applies to low wage earners as opposed to average wage earners. |
| Keywords: | tax evasion, non-wage labor costs and benefits, informal employment, measurement of work disincentives, formalization tax rate |
| JEL: | H26 J32 O17 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6313&r=lab |
| By: | Kaplanis, Ioannis |
| Abstract: | This paper examines the impact of local human capital on individuals’ wages through external effects. Employing wage regressions, it is found that changes in individuals’ wages are positively associated with changes in the shares of high-paid occupation workers in the British travel-to-work-areas for the late 1990s. I examine this positive association for different occupational groups (defined by pay) in order to disentangle between production function and consumer demand driven theoretical explanations. The wage effect is found to be stronger and significant for the bottom-paid occupational quintile compared to the middle-paid ones, and using also sectoral controls the paper argues to provide evidence for the existence of consumer demand effects. |
| Keywords: | Mercat de treball, Salaris, Recursos humans, 331 - Treball. Relacions laborals. Ocupació. Organització del treball, |
| Date: | 2011–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/179614&r=lab |
| By: | DOORLEY Karina; SIERMINSKA Eva |
| Abstract: | We apply an innovative technique to allow for differential effects of physical appearance across the wage distribution, as traditional methods confound opposing effects. Counterfactual wage distributions constructed using distribution regression,show that unattractive women are more likely to earn less than the median wage, particularly in professions where physical appearance is important. We also find a premium for well-paid attractive men in these professions. A comparison with results from traditional models shows that the characteristics of people in different physical appearance classes contributes to the effects identified using the latter and only a small portion could be discrimination. |
| Keywords: | Wages; Distribution; Physical Appearance; Discrimination |
| JEL: | D31 J24 J30 J70 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-62&r=lab |
| By: | AfDB |
| Date: | 2012–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:376&r=lab |
| By: | Bart COCKX (Sherppa,Ghent Universiteit,IZA and CESIfo); Muriel DEJEMEPPE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Andrey LAUNOV (University of Mainz, Mainz School of Management and Economics, IZA and CESIfo); Bruno VAN DER LINDEN (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES), FNRS and IZA) |
| Abstract: | We develop and estimate a non-stationary job search model to evaluate as scheme that monitors job search effort and sanctions insured unemployed whose effort is deemed insufficient. The model reveals that such schemes provide incentives to the unemployed to front-load search effort prior to monitoring. This causes the job finding rate to increase above the post sanction level. After validating the model both internally and externally, we conclude that the scheme is effective in raising the job finding rate with minor wage losses. A basic cost-benefit analysis demonstrates that welfare losses for the unemployed are compensated by net efficiency gains for public authorities and society. |
| Keywords: | Monitoring, sanctions, non-stationary job search, unemployment benefits, structural estimation |
| JEL: | J64 J68 C41 |
| Date: | 2011–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011042&r=lab |
| By: | Orrenius, Pia M. (Federal Reserve Bank of Dallas); Zavodny, Madeline (Agnes Scott College); Kerr, Emily (Federal Reserve Bank of Dallas) |
| Abstract: | The Tiananmen Square protests in 1989 and ensuing government crackdown affected Chinese nationals not only at home but around the world. The U.S. government responded to the events in China by enacting multiple measures to protect Chinese nationals present in the U.S. It first suspended all forced departures among Chinese nationals present in the country as of June 1989 and later gave them authorization to work legally. The Chinese Student Protection Act, passed in October 1992, made those Chinese nationals eligible for lawful permanent resident status. These actions applied to about 80,000 Chinese nationals residing in the U.S. on student or other temporary visas or illegally. Receiving permission to work legally and then a green card is likely to have affected recipients' labor market outcomes. This study uses 1990 and 2000 census data to examine employment and earnings among Chinese immigrants who were likely beneficiaries of the U.S. government's actions. Relative to immigrants from Hong Kong, Taiwan, and South Korea – countries not covered by the post-Tiananmen immigration policy measures – highly-educated immigrants from mainland China experienced significant employment and earnings gains during the 1990s. Chinese immigrants who arrived in the U.S in time to benefit from the measures also had higher relative earnings in 2000 than Chinese immigrants who arrived too late to benefit. The results suggest that getting legal work status and then a green card has a significant positive effect on skilled migrants' labor market outcomes. |
| Keywords: | immigration, Chinese Student Protection Act, employment, earnings |
| JEL: | J15 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6287&r=lab |
| By: | Corsini, Lorenzo |
| Abstract: | We examine how unemployment schemes and liquidity constraints affect re-employment probabilities and unemployment duration. In particular we investigate to which extent those schemes, through employment services and search requirements, can offset the expected perverse effect of benefits on reservation wages and search effort. Similarly, given that liquidity constraints and financial pressure should also affect reservation wage and search effort we analyze whether better economic conditions of individuals actually increase duration. We perform the analysis on Finland, Italy and Poland, countries that displays significant differences both in the UI schemes generosity and eligibility criteria and in the overall degree of social wealth and economic prosperity. Using a sample of newly unemployed from these countries, we perform and estimation of Cox hazard models and assess what variables are important in determining unemployment duration. Our findings suggest that even correctly designed UI schemes have a mixed effect: initially they give incentive to increase search effort, as the eligibility criteria impose certain search requirements, but with time they simply reduces liquidity constraints and thus increase duration. As for the direct effect of liquidity constraints and financial pressure we found that in Italy and Poland they appear to reduce unemployment duration but they are not relevant in Finland, suggesting that these aspects are not so important in countries that are particularly rich and with a developed welfare system. |
| Keywords: | Unemployment Insurance; Liquidity constraints; Re-employment; Unemployment Duration |
| JEL: | D31 C41 J65 J64 I38 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36572&r=lab |
| By: | Koutsampelas, Christos (University of Cyprus); Tsakloglou, Panos (Athens University of Economics and Business) |
| Abstract: | The present paper examines the short-run distributional impact of public education in Greece using the micro-data of the 2004/5 Household Budget Survey. The aggregate distributional impact of public education is found to be progressive although the incidence varies according to the level of education under examination. In-kind transfers of public education services in the fields of primary and secondary education lead to a considerable decline in relative inequality, whereas transfers in the field of tertiary education appear to have a small distributional impact whose size and sign depend on the treatment of tertiary education students living away from the parental home. When absolute inequality indices are used instead of the relative ones, primary education transfers retain their progressivity, while secondary education transfers appear almost neutral and tertiary education transfers become quite regressive. Finally, we use the EUROMOD tax-benefit microsimulation model in order to estimate the first-round distributional effects of a graduate tax imposed on the current stock of graduates. The main policy implications of the findings are outlined in the concluding section. |
| Keywords: | public education, redistribution, Greece |
| JEL: | I24 D31 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6283&r=lab |
| By: | Drydakis, Nick (University of Patras) |
| Abstract: | This study evaluates the effect of ethnic identity on the employment level of immigrants in Greece. Treating ethnic identity as a composite of key cultural elements the estimations suggest that employment is positively associated with assimilation and integration and negatively associated with separation and marginalization. In all cases, assimilation provides the highest employment returns, whilst, marginalization provides the highest employment losses. This study adds to the literature by setting up hypotheses, and directly measuring immigrants' ethnic identity commitments. The current results have potentially important implications for post-immigration policies indicating that assimilation and integration policies may be beneficial in terms of labor market outcomes. |
| Keywords: | ethnic identity, employment |
| JEL: | F22 J15 J16 Z10 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6314&r=lab |
| By: | Gueorgui Kambourov; Iourii Manovskii; Miana Plesca |
| Abstract: | The literature on the returns to training has pointed out that, immediately following a training episode, wages of participants in employer-sponsored training increase substantially while wages of participants in government-sponsored training hardly change. We argue that a clear selection issue has been overlooked by the literature - most of the government-sponsored trainees are occupation switchers while most participants in employer-sponsored training are occupation stayers. An occupational switch involves a substantial destruction of human capital, and once we account for the associated decline in wages we find a large positive impact of both employer- and government-sponsored training on workers' human capital. |
| Keywords: | Training, Human Capital, Occupational Mobility |
| JEL: | E24 H59 J24 J31 J62 J68 M53 |
| Date: | 2012–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-444&r=lab |
| By: | Ek, Susanne (Uppsala University) |
| Abstract: | This paper studies optimal unemployment benefit levels and optimal proportional income tax rates over the business cycle. Previous research suggests that policy makers should make unemployment insurance (UI) dependent on the business cycle because the UI system can be used to smooth consumption across different economic states. However, high benefits increase unemployment. An alternative way to redistribute income is to vary tax rates over the business cycle. In this paper, we develop an equilibrium search and matching model with risk-averse workers and two states, namely, a good and a bad state. The model yields potential ambiguity concerning the welfare effects of business cycle-dependent UI. The model is calibrated to United States (U.S.) labor market data. The numerical results suggest that higher benefits in the bad state are optimal, but the benefit differential is small. A more efficient way for policy makers to redistribute income over the business cycle is to decrease taxes in the bad state. Compared to an optimal uniform system, however, differentiation yields small welfare gains. Nevertheless, imposing two tax rates strictly dominates imposing two benefit levels. This finding is robust to a wide range of sensitivity checks. |
| Keywords: | job search, business cycles, unemployment insurance, time-varying benefits and taxes |
| JEL: | E32 H24 J64 J65 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6308&r=lab |
| By: | Sarah Brockhoff; Tim Krieger; Daniel Meierrieks |
| Abstract: | This contribution investigates the role of education in domestic terrorism for 133 countries between 1984 and 2007. The findings point at a nontrivial effect of education on terrorism. Lower education (primary education) tends to promote terrorism in a cluster of countries where the socioeconomic, political and demographic conditions are unfavorable, while higher education (university education) reduces terrorism in a cluster of countries where conditions are more favorable. This suggests that country-specific circumstances mediate the effect of education on the (opportunity) costs and benefits of terrorism. For instance, the prevalence of poor structural conditions in combination with advances in education may explain past and present waves of terrorism and political instability in the Middle East. The results of this study imply that promoting education needs to be accompanied by sound structural change so that it can positively interact with (individual and social) development, thereby reducing terrorism. |
| Keywords: | terrorism; education; negative binomial regression; revolution; conflict resolution |
| JEL: | D74 I21 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/108550&r=lab |
| By: | Gibbons, Steve (London School of Economics); McNally, Sandra (London School of Economics); Viarengo, Martina (Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | Improving the educational attainment of disadvantaged students in urban schools is a priority for policy worldwide, but existing research is equivocal about the effectiveness of additional funding for achieving this objective. This study exploits anomalies in the spatial dimension of school funding policy in England to provide new evidence on this question. An "area cost adjustment" and other aspects of the formula that allocates central grants to Local Authorities (school districts) means that neighbouring schools with similar intakes, operating in the same labour market and facing the same prices for inputs can receive very different incomes. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school. This shows that school resources have an important role to play in improving educational attainment. The results have direct implications for the current "Pupil Premium" policy in England. |
| Keywords: | urban schools, education, resources |
| JEL: | R0 I21 H52 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6281&r=lab |
| By: | Monastiriotis, Vassilis; Kaplanis, Ioannis |
| Abstract: | Employment flexibility is commonly associated to greater labour mobility and thus faster cross-regional adjustments. The literature however offers very little hard evidence on this and quite limited theoretical guidance. This paper examines empirically the relationship between employment flexibility and cross-regional adjustment (migration) at the regional and local levels in the UK. Employment flexibility is associated to higher labour mobility (but only at a rather localised scale) and at the same time seems to reduce the responsiveness of migration to unemployment. This suggest that rising flexibility may be linked to higher persistence in spatial disparities, as intra-regional adjustments are strengthened while extraregional adjustments weakened. Keywords: Employment flexibility, regional migration, labour market adjustment JEL Codes: R11, R23, J08, J61 |
| Keywords: | Ocupació, Mercat de treball, Migració interna, 331 - Treball. Relacions laborals. Ocupació. Organització del treball, |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/179671&r=lab |
| By: | Wrede, Matthias |
| Abstract: | Combining a spatial equilibrium model with a matching unemployment model, this paper analyzes the regional quality of life when wages, rents, and unemployment risk compensate for local amenities and disamenities. In particular, the paper shows for quasi-linear utility that the effects of any amenity on wages and unemployment rates are of opposite sign. Additionally, the wage rate and the labor market tightness increase and the unemployment ratio decreases in reaction to an increase in the level of an amenity if the amenity is marginally more beneficial to producers than to consumers per unit of land. Based on the model, quality of life of the unemployed in West German counties is estimated. -- |
| Keywords: | quality of life,unemployment,matching,mobility |
| JEL: | R12 R13 R14 H22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:012012&r=lab |
| By: | Kristensen, Nicolai (AKF, Danish Institute of Governmental Research) |
| Abstract: | This paper presents results on the effect of formal life-long learning on the decision to retire early. Specifically, I estimate an Option Value model based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years. Human capital theory predicts that the amount of training and the length of working life will be positively correlated in order to recoup investment and yield a higher return. Significant upper bound effects of training in prolonging working life are found for certain types of training and certain groups of workers. However, out-of-sample simulations indicate that on average one year of training only adds up to one month to the career length. This means that training in itself is not enough to substantially prolong careers and increase the workforce. |
| Keywords: | training, retirement, option value, upper bound identification |
| JEL: | H55 I21 J26 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6301&r=lab |
| By: | Steven J. Davis; R. Jason Faberman; John C. Haltiwanger |
| Abstract: | We measure job-filling rates and recruiting intensity per vacancy at the national and industry levels from January 2001 to September 2011 using data from the Job Openings and Labor Turnover Survey. Construction makes up less than 5 percent of employment but accounts for more than 40 percent of the large swings in the job-filling rate during and after the Great Recession. Leisure & Hospitality accounts for nearly a quarter of the large drop in recruiting intensity during the Great Recession. We show that industry-level movements in job-filling rates and recruiting intensity are at odds with the implications of the standard matching function in labor search theory but consistent with a generalized function that incorporates an important role for recruiting intensity per vacancy. |
| JEL: | E24 J63 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17782&r=lab |
| By: | Gilberto Turati (University of Torino); Daniel Montolio (Universitat de Barcelona & IEB); Massimiliano Piacenza (University of Torino) |
| Abstract: | The objective of the paper is to study the disciplining role of both market forces and regional governments own resources in the provision of educational services. The historical evolution of school regulation in Italy and Spain (in particular regarding the funding of private schools run by Roman Catholic Church, and the role of regional governments financing education) created different institutions in terms of both dimensions, private funds and regional governments funds. We take advantage of these institutional diversities to estimate the disciplining role of different sources of funds in the context of educational production function using PISA data. Our results provide support to these accountability drivers. Moreover, we find evidence on the role played by a national standardised test in providing adequate incentives to improve schools’ performance. |
| Keywords: | Public and private schools, accountability, fiscal federalism |
| JEL: | H75 I22 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2012/1/doc2011-44&r=lab |
| By: | Stevenson, Adam |
| Abstract: | Women are less likely than men to earn degrees from high-quality post-baccalaureate programs, and this tendency has been growing over time. I show that, aside from the biomedical sciences, this can not be explained by changes in the type of program where women tend to earn degrees. Instead, sorting by quality within field is the main contributor to the growing gap. Most of this sorting is due to the initial choice in which program type to apply to. No gender differences arise in terms of enrollment or attrition choices, and admissions committees in high-quality post-baccalaureate programs appear to favor women. |
| Keywords: | graduate school; professional school; gender; ability; program quality |
| JEL: | I23 I21 J16 |
| Date: | 2012–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36533&r=lab |
| By: | Stephanie Riegg Cellini; Claudia Goldin |
| Abstract: | We use administrative data from five states to provide the first comprehensive estimates of the size of the for-profit higher education sector in the U.S. Our estimates include schools that are not currently eligible to participate in federal student aid programs under Title IV of the Higher Education Act and are therefore missed in official counts. We find that the number of for-profit institutions is double the official count and the number of students is between one-quarter and one-third greater. Many for-profit institutions that are not Title IV eligible offer programs and certificates that are similar, if not identical, to those given by institutions that are part of Title IV. We find that the Title IV institutions charge tuition that is about 75 percent higher than that charged by comparable institutions whose students cannot apply for federal financial aid. The dollar value of the premium is about equal to the amount of financial aid received by students in eligible institutions, lending credence to the “Bennett hypothesis” that aid-eligible institutions raise tuition to maximize aid. |
| JEL: | I20 I22 I23 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17827&r=lab |
| By: | Ahrens, Steffen (Kiel Institute for the World Economy); Snower, Dennis J. (Kiel Institute for the World Economy) |
| 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 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:iza:izadps:dp6302&r=lab |
| By: | Braun, Sebastian; Spielmann, Christian |
| Abstract: | National labour market institutions interact across national boundaries when product markets are global. Labour market policies can thus entail spill-overs, which suggests that there are benefits from international policy coordination. This paper studies the effects of wage subsidies in an international duopoly model with unionised labour markets. The authors document both positive and negative spill-over effects and discuss the benefits and costs from international policy coordination both for the case of symmetric and asymmetric labour market institutions. The results suggest that institutional differences could sign responsible for the slow speed at which labour market policy coordination has progressed so far. -- |
| Keywords: | wage subsidies,policy spill-overs,international policy coordination,unionised labour markets,trade,asymmetric labour market institutions |
| JEL: | F16 F42 J38 H87 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20129&r=lab |
| By: | Andres Erosa; Luisa Fuster; Gueorgui Kambourov |
| Abstract: | We build a heterogeneous life-cycle model which captures a large number of salient features of individual labor supply, by education, over the life cycle. The model provides an aggregation theory of individual labor supply, firmly grounded on micro evidence, and is used to study the aggregate labor supply responses to changes in the economic environment. We find that the aggregate labor supply elasticity to a transitory wage shock is 1.27, with the extensive margin accounting for 54% of the response. Furthermore, we also simulate the 1987 tax holiday in Iceland - a quasi-natural experiment - and find that the aggregate labor supply responses in the model are similar to those actually observed in Iceland. |
| Keywords: | Aggregate labor supply, intensive margin, extensive margin, heterogeneous agents, life cycle |
| JEL: | D9 E2 E13 E62 J22 |
| Date: | 2011–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-443&r=lab |
| By: | Luca MARCHIORI (Central Bank of Luxembourg and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Olivier PIERRARD (Central Bank of Luxembourg and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Henri R. SNEESSENS (CREA, Université du Luxembourg and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and IZA, Bonn) |
| Abstract: | This paper contributes to the already vast literature on demography-induced international capital flows by examining the role of labor market imperfections and institutions. We setup a two-country overlapping generations model with search unemployment, which we calibrate on EU15 and US data. Labor market imperfections are found to significantly increase the volume of capital flows, because of stronger employment adjustments in comparison with a competitive economy. We next exploit themodel to investigate how demographic asymmetriesmay have contributed to unemployment and welfare changes in the recent past (1950-2010). We show that a policy reform in one country also has an impact on labor markets in other countries when capital is mobile. |
| Keywords: | demographics; capital flows; overlapping generations; general equilibrium; unemployment |
| JEL: | C68 D91 E24 F21 J11 |
| Date: | 2011–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011040&r=lab |
| By: | Atif R. Mian; Amir Sufi |
| Abstract: | A drop in aggregate demand driven by shocks to household balance sheets is responsible for a large fraction of the decline in U.S. employment from 2007 to 2009. The aggregate demand channel for unemployment predicts that employment losses in the non-tradable sector are higher in high leverage U.S. counties that were most severely impacted by the balance sheet shock, while losses in the tradable sector are distributed uniformly across all counties. We find exactly this pattern from 2007 to 2009. Alternative hypotheses for job losses based on uncertainty shocks or structural unemployment related to construction do not explain our results. Using the relation between non-tradable sector job losses and demand shocks and assuming Cobb-Douglas preferences over tradable and non-tradable goods, we quantify the effect of aggregate demand channel on total employment. Our estimates suggest that the decline in aggregate demand driven by household balance sheet shocks accounts for almost 4 million of the lost jobs from 2007 to 2009, or 65% of the lost jobs in our data. |
| JEL: | E2 E32 E51 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17830&r=lab |
| By: | Philipp Engler (Freie Universität Berlin) |
| 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, Luchinger, 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 Gali (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 high-lighted 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: | 2011–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:qut:auncer:2011_8&r=lab |
| By: | João Pereira (University of Évora, Department of Economics and CEFAGEUE); Aurora Galego (University of Évora, Department of Economics and CEFAGEUE) |
| Abstract: | TTypically, studies on regional wage differentials are based on OLS estimates and use Blinder (1973) and Oaxaca (1973) decomposition. Quantile regression is an alternative approach which allows for studying these differences across the whole wage distribution. In this study, the quantile regression framework is considered for the analysis of regional wage differences in Portugal. Our findings reveal significant differences in wage equations coefficients between regions for the various quantiles. Furthermore, we conclude that the regional wage differentials and the components explained by differences in endowments and differences in returns increase across the whole wage distribution. |
| Keywords: | Regions; Wage differentials; Quantile regression; Quantile-based decompositions. |
| JEL: | J31 J38 C21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cfe:wpcefa:2011_25&r=lab |
| By: | FAYE Ousmane; CISSÉ Fatou |
| Abstract: | This paper examines the repercussions of international migration on children?s time allocation in households at origin. We focus on children of age 7 to 12 and distinguish three activities: market work, French school attendance, and enrollment in Medersa (Arab/Islamic traditional school). In our analysis, we account for heterogeneities in migration constraints considering differences in migration destinations and the number of migrants within households. We instrument for migration using policy and governance facets in destination countries, precisely France, Spain, and Italy. Results show that – after controlling for endogeneity – migration has a positive and significant impact on enrollment in French curriculum school. However, once we account for the destination of the migrant, this positive and significant impact is only verified in households with migrants in Europe. We also note that when the number of migrants within a household increases, children of age 7 to 12 are less likely to attend French school and they are more likely to be involved in paid work activities. We draw evidence from the 2009 Senegalese household survey on migration and remittances (Enquête Ménage sur la Migration et les Transferts de Fonds). |
| Keywords: | International migration; Child Labour; Education; Time allocation; Left-behind; Senegal |
| JEL: | F22 J13 J22 O15 O55 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-58&r=lab |
| By: | Ahrens, Steffen; Snower, Dennis J. |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:201201&r=lab |
| By: | Asadullah, Niaz (University of Reading); Kambhampati, Uma (University of Reading); López Bóo, Florencia (Inter-American Development Bank) |
| Abstract: | This study documents the size and nature of "Hindu-Muslim" and "boy-girl" gaps in children's school participation and attainments in India. Individual-level data from two successive rounds of the National Sample Survey suggest that considerable progress has been made in decreasing the Hindu-Muslim gap. Nonetheless, the gap remains sizable even after controlling for numerous socio-economic and parental covariates, and the Muslim educational disadvantage in India today is greater than that experienced by girls and Scheduled Caste Hindu children. A gender gap still appears within as well as between communities, though it is smaller within Muslim communities. While differences in gender and other demographic and socio-economic covariates have recently become more important in explaining the Hindu-Muslim gap, those differences altogether explain only 25 percent to 45 percent of the observed schooling gap. |
| Keywords: | social disparity, religion, India, gender inequality |
| JEL: | I21 O15 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6329&r=lab |
| By: | Robert W. Fairlie; Dean Karlan; Jonathan Zinman |
| Abstract: | We use randomized program offers and multiple follow-up survey waves to examine the effects of entrepreneurship training on a broad set of outcomes. Training increases short run business ownership and employment, but there is no evidence of broader or longer run effects. We also test whether training mitigates market frictions by estimating heterogeneous treatment effects. Training does not have strong effects (in either relative or absolute terms) on those most likely to face credit or human capital constraints, or labor market discrimination. Training does have a relatively strong short-run effect on business ownership for those unemployed at baseline, but not at other horizons or for other outcomes. |
| JEL: | D04 D14 D22 H32 H43 I38 J21 J24 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17804&r=lab |
| By: | Johannes F. Schmieder; Till M. von Wachter; Stefan Bender |
| Abstract: | The majority of papers analyzing the employment effects of unemployment insurance (UI) benefit durations focuses on the duration of the first unemployment spell. In this paper, we make two contributions. First, we use a regression discontinuity design to analyze the long-term effects of extensions in UI durations. These estimates differ from standard estimates that they incorporate differences in UI benefit receipt and employment due to recurrent unemployment spells. Second, we derive a welfare formula of UI extensions that incorporates recurrent nonemployment spells. We find that accounting for nonemployment beyond the initial spell leads to a significant reduction in estimates of the nonemployment effect of UI extensions by about 25 percent. We show this effect is only partly explained by a mechanical effect due to finite follow-up durations, and mainly arises from a lower probability of days in nonemployment in months after end of the initial nonemployment spell. |
| JEL: | J64 J65 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17814&r=lab |
| By: | Cattaneo, Maria Alejandra (Swiss Co-ordination Center for Research in Education); Wolter, Stefan (University of Bern) |
| Abstract: | Switzerland radically changed its migration policy in the mid-nineties from a "non-qualified only" policy to one that favors the immigration of highly qualified migrants. To analyze the impact of this change on the schooling outcomes of migrants, this paper compares the PISA (OECD Programme for International Student Assessment) results from 2000, which were not yet affected by the change in the migration policy, with the PISA 2009 test. Using a Blinder-Oaxaca decomposition analysis, we find that almost 70% of the 43-point increase (more than one standardized school year) in the PISA scores of first-generation immigrant students in an environment with stagnant Swiss PISA results was due to changes in the individual background characteristics of the new immigrants (direct effect) and improved school composition (lower shares of students who did not speak the testing languages as an indirect effect). The indirect effects also indicate that internationally comparative analyses should more fully consider differences in national migration policies when assessing the success of migrant integration. |
| Keywords: | Blinder-Oaxaca decomposition, migration, natural experiment, PISA |
| JEL: | I21 I24 J15 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6300&r=lab |
| By: | Barrett, Alan (Trinity College Dublin); Mosca, Irene (Trinity College Dublin) |
| Abstract: | In March of 2010, the Irish government announced that the age at which the state pension is paid would be raised to 66 in 2014, 67 in 2021 and 68 in 2028. Also during 2010, the economic news became increasingly bad as the full scale of the fiscal and banking crises in Ireland emerged. The question we address in this paper is whether expected retirement ages of Irish individuals aged 50 to 64 changed as a result of the policy announcement and/or the bad economic news. The data we use are from the Irish Longitudinal Study on Ageing (TILDA). Between late 2009 and early 2011, over 8,500 people aged 50 and over in Ireland were interviewed about a wide range of issues including standard socio-economic items such as labour force status, earnings and education. Respondents were also asked at what age they expected to retire. Our findings show that there was no noticeable break in expected retirement ages before and after 3 March 2010 (the day on which the policy announcement was made). However, there was a clear shift of people into the categories "don't plan to retire" and "do not know" before and after September 30 2010. This was the day that the full scale of the banking crisis emerged (named by the media as "Black Thursday") and was followed by the set of events which led to the bailout of November 2010. Similarly, there was a shift away from modal expected retirement ages after that date. |
| Keywords: | expected retirement, recession, state pension age |
| JEL: | H55 J26 D84 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6325&r=lab |
| By: | Franta, Michal (Czech National Bank); Guzi, Martin (IZA) |
| Abstract: | We explore a potential source of human capital spatial disparities: the unequal access to tertiary education caused by the absence/presence of a local university. Because the entrance to a university is a sequential process in the Czech Republic we model both a student's decision to apply to a university and the admission process. Two possible sources of unequal access to university are distinguished: cost savings and informational advantages for those residing close to a university. Estimation results suggest that the presence of a university per se is not driving student's decision to apply. Further we find that information advantage due to university proximity plays a significant role in the admission process. However this advantage is specific to the field of study, and becomes stronger in the case of highly oversubscribed study fields. To equalize the chance of admission, policy makers should consider geographical expansion of the system of universities accompanied by the expansion of university programs. |
| Keywords: | human capital, spatial distribution, access to tertiary education |
| JEL: | I20 I21 J24 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6285&r=lab |
| By: | Andre C. Silva |
| Abstract: | I relate hours worked with taxes on consumption and labor for Portugal, France, Spain, United Kingdom and United States. From 1986 to 2001, hours per worker in Portugal decreased from 35.1 to 32.6. With the parameters for Portugal, the model predicts hours worked in 2001 with an error of only 12 minutes from the actual hours. Across countries, most predictions differ from the data by one hour or less. The model is not sensible to special assumptions on the parameters. I calculate the long run effects of taxes on consumption, hours, capital and welfare for Portugal. I extend the model to discuss implications for Social Security. I discuss the steady state and the transition from a pay-as-yougo to a fully funded system. JEL codes:E6, H3 |
| Keywords: | labor supply, consumption tax, labor income tax |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp561&r=lab |
| By: | Hammermann, Andrea (RWTH Aachen University); Mohnen, Alwine (Munich University of Technology) |
| Abstract: | Although a broad field of literature on incentive theory exists, employer-provided tangible goods (hereafter called benefits) have so far been neglected by economic research. A remarkable exception is an empirical study by Oyer (2008). In our study, we test some of his findings by drawing on a German data set. We use two waves of the GSOEP data (2006, 2008) to analyze the occurrence of benefits and their effects on employees' satisfaction. Our results provide evidence for economic as well as psychological explanations. Looking at differences in firms' and employees' characteristics we find that cost efficiency concerns, the purpose to signal good working conditions and the aim to ease employees' effort costs are evident reasons to provide benefits. Furthermore, analyzing the impact of tangible and monetary incentives on satisfaction and employees' feeling of being acknowledged by employers, we find different motivational effects. Our results support the psychological explanation that benefits are evaluated separately from other monetary wage components and are more likely to express employers' concern for their employees and recognition of their performance. |
| Keywords: | nonmonetary incentives, benefits, work motivation |
| JEL: | C83 J32 M52 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6284&r=lab |
| By: | Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | This paper critically discusses the theoretical and empirical literature on the quantitative and qualitative employment impact of technological change, compares the relative explanatory power of the competing theories, and explains in detail the macro and micro evidence on the issue, with reference both to the advanced economies and the developing countries (DCs). |
| Keywords: | technology, innovation, employment, skill, skill-biased technological change |
| JEL: | O33 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6291&r=lab |
| By: | Andre C. Silva |
| Abstract: | I relate hours worked with taxes on consumption and labor. I propose a model and compare its predictions for Portugal, France, Spain, United Kingdom and United States. Hours per worker in Portugal decreased from 35.1 in 1986 to 32.6 in 2001. With only the parameters and the taxes for Portugal, the model predicts the hours worked in 2001 with an error of only 12 minutes from the actual hours. Across countries, most predictions differ from the data by one hour or less. The model is able to explain the trend in hours with only the changes in taxes. JEL codes: |
| Keywords: | labor supply, consumption tax, labor income tax |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp560&r=lab |
| By: | Antonio Accetturo (Bank of Italy); Matteo Bugamelli (Bank of Italy); Andrea Lamorgese (Bank of Italy) |
| Abstract: | We assess the impact of low-skilled immigration on capital intensity. We first present a model characterized by frictions in the labor market and firms' asymmetric information on workers' skills and show that firms can react to the immigration-induced reduction of their workforce's skill level by increasing the capital-labor ratio. We test the predictions of the model on a sample of Italian manufacturing firms over the period 1996-2007, finding that increased immigration of low-skilled workers from developing countries, measured at the provincial level and instrumented with pre-existing enclaves of immigrants and network effects, raises capital intensity. In line with the predictions of the theoretical model, the impact of immigration, which is quite robust across empirical specifications, is stronger for larger firms and in skill-intensive sectors. |
| Keywords: | capital intensity, low-skilled migration, firm heterogeneity |
| JEL: | E22 J61 O33 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_846_12&r=lab |
| By: | Braun, Sebastian; Dwenger, Nadja; Kübler, Dorothea; Westkamp, Alexander |
| Abstract: | Quotas for special groups of students often apply in school or university admission procedures. This paper studies the performance of two mechanisms to implement such quotas in a lab experiment. The first mechanism is a simplified version of the mechanism currently employed by the German central clearinghouse for university admissions, which first allocates seats in the quota for top-grade students before allocating all other seats among remaining applicants. The second is a modified version of the student-proposing deferred acceptance (SDA) algorithm, which simultaneously allocates seats in all quotas. Our main result is that the current procedure, designed to give top-grade students an advantage, actually harms them, as students often fail to grasp the strategic issues involved. The modified SDA algorithm significantly improves the matching for top-grade students and could thus be a valuable tool for redesigning university admissions in Germany. -- |
| Keywords: | college admissions,experiment,quotas,matching,Gale-Shapley mechanism,Boston mechanism |
| JEL: | C78 C92 D78 I20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2012201&r=lab |
| By: | Friesen, Julia; Baten, Jörg; Prayon, Valeria |
| Abstract: | This paper traces the human capital development of 14 Asian countries for the period of 1900-60, using the age-heaping method. We place special emphasis on the gender gap in numeracy and its determinants. In particular, we test the validity of a U-hypothesis of gender equality, implying that gender equality in numeracy declines at initial stages of development and increases again with higher numeracy levels. The U-shaped pattern is strongly confirmed by our data. -- |
| Keywords: | human capital,age-heaping,education,gender inequality,numeracy,development,asia |
| JEL: | I21 N35 O15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:29&r=lab |
| By: | David Card (University of California-Berkeley); Christian Dustmann (University College London); Ian Preston (University College London) |
| Abstract: | There is strong public opposition to increased immigration throughout Europe. Given the modest economic impacts of immigration estimated in most studies, the depth of antiimmigrant sentiment is puzzling. Immigration, however, does not just affect wages and taxes. It also changes the composition of the local population, threatening the "compositional amenities" that natives derive from their neighborhoods, schools, and workplaces. In this paper we use a simple latent factor model, combined with data for 21 countries from the 2002 European Social Survey (ESS), to measure the relative importance of economic and compositional concerns in driving opinions about immigration policy. The ESS included a unique battery of questions on the labor market and social impacts of immigration, as well as on the desirability of increasing or reducing immigrant inflows. We find that compositional concerns are 2-5 times more important in explaining variation in individual attitudes toward immigration policy than concerns over wages and taxes. Likewise, most of the difference in opinion between more- and lesseducated respondents is attributable to heightened compositional concerns among people with lower education. |
| Keywords: | Immigration, Economic Effects, Attitudes |
| JEL: | F22 J01 I31 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012013&r=lab |
| By: | BARTOLINI Stefano; BILANCINI Ennio |
| Abstract: | We investigate the relationship between social participation and the hours worked in the market. Social participation is the component of social capital that measures individuals’ engagement in groups, associations and non-governmental organizations. We provide a model of consumer choice where social participation may be either a substitute or a complement to material consumption – depending on whether participation is instrumentally or non-instrumentally motivated – and where a local environment with greater social participation increases the return to individual participation. We carry out an empirical investigation of this framework using survey data on United States for the period 1972-2004. We find that non-instrumental social participation substantially decreases the hours worked, while instrumental social participation substantially increases them. Moreover, evidence is consistent with the idea that a local environment with greater social participation fosters individual social participation. |
| Keywords: | social participation; relational goods; social capital; work hours; instrumental and non-instrumental motivations |
| JEL: | A13 D62 J22 Z13 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-64&r=lab |
| By: | Lance Lochner (University of Western Ontario); Alexander Monge-Naranjo (Pennsylvania State University) |
| Abstract: | We review studies of the impact of credit constraints on the accumulation of human capital. Evidence suggests that credit constraints have recently become important for schooling and other aspects of households' behavior. We highlight the importance of early childhood investments, since their response largely determines the impact of credit constraints on the overall lifetime acquisition of human capital. We also review the intergenerational literature and examine the macroeconomic impacts of credit constraints on social mobility and the income distribution. A common limitation across all areas of the human capital literature is the impo- sition of ad hoc constraints on credit. We propose a more careful treatment of the structure of government student loan programs and the incentive problems underlying private credit. We show that endogenizing constraints on credit for human capital helps explain observed borrowing, schooling, and default patterns and o®ers new in- sights about the design of government policy. |
| Keywords: | Human Capital; Incentive Problems; Government Loans; Early Investments; Social Mobility |
| JEL: | D14 H52 I22 I23 J24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20121&r=lab |
| By: | Michael Burda (Humboldt University); Hamermesh Daniel (University of Texas); Weil Philippe (Observatoire Francais des Conjonctures Economiques) |
| Abstract: | Time-diary data from 27 countries show a negative relationship between GDP per capita and gender differences in total workfor pay and at home. In rich non-Catholic countries men and women average about the same amount of total work. Survey results show scholars and the general public believe that women work more. Widespread average equality does not arise from gender differences in the price of time, intra-family bargaining or spousal complementarity. Several theories, including ones based on social norms, might explain these findings and are consistent with evidence from the World Values Surveys and microeconomic data from Australia and Germany. |
| Keywords: | time use, gender differences,household production |
| JEL: | J22 J16 D13 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1203&r=lab |
| By: | Fritsch, Michael (University of Jena); Kritikos, Alexander S. (University of Potsdam, DIW Berlin); Rusakova, Alina (University of 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 2010, the first two decades after reunification. We investigate the socioeconomic 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 restarters), 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 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6326&r=lab |
| By: | Johannes F. Schmieder; Till M. von Wachter; Stefan Bender |
| Abstract: | One goal of extending the duration of unemployment insurance (UI) in recessions is to increase UI coverage in the face of longer unemployment spells. Although it is a common concern that such extensions may themselves raise nonemployment durations, it is not known how recessions would affect the magnitude of this moral hazard. To obtain causal estimates of the differential effects of UI in booms and recessions, this paper exploits the fact that, in Germany, potential UI benefit duration is a function of exact age which is itself invariant over the business cycle. We implement a regression discontinuity design separately for twenty years and correlate our estimates with measures of the business cycle. We find that the nonemployment effects of a month of additional UI benefits are, at best, somewhat declining in recessions. Yet, the UI exhaustion rate, and therefore the additional coverage provided by UI extensions, rises substantially during a downturn. The ratio of these two effects represents the nonemployment response of workers weighted by the probability of being affected by UI extensions. Hence, our results imply that the effective moral hazard effect of UI extensions is significantly lower in recessions than in booms. Using a model of job search with liquidity constraints, we also find that, in the absence of market-wide effects, the net social benefits from UI extensions can be expressed either directly in terms of the exhaustion rate and the nonemployment effect of UI durations, or as a declining function of our measure of effective moral hazard. |
| JEL: | J64 J65 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17813&r=lab |
| By: | Gibbs, Michael (University of Chicago) |
| Abstract: | A large, mature and robust economic literature on pay for performance now exists, which provides a useful framework for thinking about pay for performance systems. I use the lessons of the literature to discuss how to design and implement pay for performance in practice. |
| Keywords: | incentives, pay for performance, performance measurement, subjective evaluation |
| JEL: | M52 J33 M12 L81 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6322&r=lab |
| By: | Martine Mariotti |
| Abstract: | I exploit the sudden increase in employment in 1975, 1976 and 1977 in some former homelands by comparing the long term adult physical outcomes of children benefitting from the employment increase to those not subject to it. Using a standard difference in difference approach I find that there was some malnutrition in the homelands resulting in stunting in African men born during the shock providing support to the foetal origins hypothesis. The employment shock did not affect other long term outcomes such as education and general health, although there is some evidence of an improvement in long term health. This study provides previously unmeasured individual level information on the quality of life in the homelands during apartheid, an era when African living standards were neglected but unmeasured because of a lack of data collection. |
| JEL: | I31 N37 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2012-570&r=lab |
| By: | Andrea Schäfer; Ingrid Tucci; Karin Gottschall |
| Abstract: | Starting with a comparative assessment of different welfare regimes and political economies from the perspective of gender awareness and "pro-women" policies, this paper identifies the determinants of cross-national variation in women's chances of being in a high-status occupation in twelve West European countries. Special emphasis is given to size and structure of the service sector, including share of women in public employment and structural factors such as trade union density and employment protection. The first level of comparison between men and women concentrates on gender representation in the higher echelons of the job hierarchy, while in the second section we extend the scope of analysis, comparing women in high-status occupations and low-wage employment in order to allow for a more nuanced study of gender and class interaction. The first analysis is based on European Social Survey data for the years 2002, 2004, 2006, and 2008, capturing recent trends in occupational dynamics. Results indicate that in general a large service sector and a high trade union density enhance women's chances of being in high-status occupations while more specifically a large public sector helps to reduce channeling women into low-wage employment. Thus, equality at the top can well be paired with inequality at the bottom, as postindustrial countries with a highly polarized occupational hierarchy such as the UK show. |
| Keywords: | occupational sex segregation, gender equality, public sector employment, cross-national comparison |
| JEL: | P5 D6 J2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1183&r=lab |
| By: | Criscuolo, Chiara (OECD); Martin, Ralf (Imperial College London); Overman, Henry (London School of Economics); Van Reenen, John (CEP, London School of Economics) |
| Abstract: | Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific eligibility criteria for a major program to support manufacturing jobs ("Regional Selective Assistance"). Area eligibility is governed by pan-European state aid rules which change every seven years and we use these rule changes to construct instrumental variables for program participation. We match two decades of UK panel data on the population of firms to all program participants. IV estimates find positive program treatment effect on employment, investment and net entry but not on TFP. OLS underestimates program effects because the policy targets underperforming plants and areas. The treatment effect is confined to smaller firms with no effect for larger firms (e.g. over 150 employees). We also find the policy raises area level manufacturing employment mainly through significantly reducing unemployment. The positive program effect is not due to substitution between plants in the same area or between eligible and ineligible areas nearby. We estimate that "cost per job" of the program was only $6,300 suggesting that in some respects investment subsidies can be cost effective. |
| Keywords: | industrial policy, regional policy, employment, investment, productivity |
| JEL: | H25 L52 L53 O47 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6323&r=lab |
| By: | Valentina Calderón; Ioana Marinescu |
| Abstract: | This paper examines how changes in the legislation governing health and pension benefits that took place between 2003 and 2008 in Colombia affected the informal and formal labor markets. In particular, this paper examines two major changes in the legislation. First, it looks at the effects of imposing the requirement to use the same base income to contribute to both health insurance and pensions for independent workers using a difference-in-differences strategy. Second, this document addresses the effects of unifying health and pension system payments, which required employers to make contributions to these two plans through a unified payment system, making it more difficult to contribute differently to the one plan versus the other. The results presented in this paper suggest that this reform increased both full formality and full informality, but with larger positive effects on full formality. |
| Keywords: | Labor :: Social Security, Health :: Health Policy, Social Development :: Social Policy & Protection, Informal Sector, Pensions, Health Insurance, Social Protection |
| JEL: | I11 I18 O17 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:62338&r=lab |
| By: | Flores-Fillol, Ricardo; Iranzo, Susana; Mañé Vernet, Ferran |
| Abstract: | We investigate the determinants of teamwork and workers cooperation within the firm. Up to now the literature has almost exclusively focused on workers incentives as the main determinants for workers cooperation. We take a broader look at the firm's organizational design and analyze the impact that different aspects of it might have on cooperation. In particular, we consider the way in which the degree of decentralization of decisions and the use of complementary HRM practices (what we call the .rm.s vertical organizational design) can affect workers'collaboration with each other. We test the model's predictions on a unique dataset on Spanish small and medium size firms containing a rich set of variables that allows us to use sensible proxies for workers cooperation. We find that the decentralization of labor decisions (and to a less extent that of task planning) has a positive impact on workers cooperation. Likewise, cooperation is positively correlated to many of the HRM practices that seem to favor workers'interaction the most. We also confirm the previous finding that collaborative efforts respond positively to pay incentives, and particularly, to group or company incentives. |
| Keywords: | Treball en equip, Incentius laborals, 331 - Treball. Relacions laborals. Ocupació. Organització del treball, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/179606&r=lab |
| By: | Berthold, Norbert; Gründler, Klaus |
| Abstract: | Throughout the world, strong dispersions of both regional and national unemployment rates can be observed. The economic theory has developed various explanations on how this differences occur. Corresponding models mainly aim at institutional and political framework, insider effects, efficiency wages, collective bargaining and cyclical effects. However, the size of economies has received little attention in this discussion. In this paper, we will show that there is indeed a strong link between size and unemployment. Using data from 37 countries, 15 continents and trade areas as well as 496 federal states, we will demonstrate that larger economic regions tend to have higher unemployment rates. Subsequently, we show that this correlation is strongly determined by the degree of centralization of countries. Based on these findings, we develop a model that explains regional and national unemployment using size and centralization. We will point out that centralization parabolas can be derived for each country. These curves are strongly influenced by the size of economies in a way that different sizes lead to a shift of the parabolas. As we will demonstrate, country-specific parabolas explain the strong dispersion of unemployment rates quite accurately. -- |
| Keywords: | unemployment,size,centralization |
| JEL: | J64 J08 R10 F00 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wuewwb:116&r=lab |
| By: | Blattman, Christopher; Fiala, Nathan; Martinez, Sebastian |
| Abstract: | Can cash transfers promote employment and reduce poverty in rural Africa? Will lower youth unemployment and poverty reduce the risk of social instability? The authors experimentally evaluate one of Uganda's largest development programs, which provided thousands of young people nearly unconditional, unsupervised cash transfers to pay for vocational training, tools, and business start-up costs. Mid-term results after two years suggest four main findings. First, despite a lack of central monitoring and accountability, most youth invest the transfer in vocational skills and tools. Second, the economic impacts of the transfer are large: hours of non-household employment double and cash earnings increase by nearly 50 percent relative to the control group. The authors estimate the transfer yields a real annual return on capital of 35 percent on average. Third, the evidence suggests that poor access to credit is a major reason youth cannot start these vocations in the absence of aid. Much of the heterogeneity in impacts is unexplained, however, and is unrelated to conventional economic measures of ability, suggesting we have much to learn about the determinants of entrepreneurship. Finally, these economic gains result in modest improvements in social stability. Measures of social cohesion and community support improve mildly, by roughly 5 to 10 percent, especially among males, most likely because the youth becomes a net giver rather than a net taker in his kin and community network. Most strikingly, we see a 50 percent fall in interpersonal aggression and disputes among males, but a 50 percent increase among females. Neither change seems related to economic performance nor does social cohesion a puzzle to be explored in the next phase of the study. These results suggest that increasing access to credit and capital could stimulate employment growth in rural Africa. In particular, unconditional and unsupervised cash transfers may be a more effective and cost-efficient forming of large-scale aid than commonly believed. A second stage of data collection in 2012 will collect longitudinal economic impacts, additional data on political violence and behavior, and explore alternative theoretical mechanisms. |
| Keywords: | Debt Markets,Labor Policies,Economic Theory&Research,Primary Education,Educational Sciences |
| Date: | 2011–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hdnspu:66523&r=lab |
| By: | Eugenio Severin |
| Abstract: | There is a broad consensus regarding the need to improve student outcomes in the educational systems of Latin America and the Caribbean. After an attempt to institute various reforms and initiatives, the demand for quality and equity continues to be heard throughout the region. Meeting this demand will require significant changes, regarding not only the teaching of subjects that are relevant to needs of a knowledge society, but also teaching them in a way that takes full account of the educational context that 21st century society has generated. The present document presents a framework supporting the design, implementation, monitoring, and assessment of projects designed to incorporate technologies for the purpose of improving educational outcomes. |
| Keywords: | Education |
| JEL: | I20 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:62378&r=lab |
| By: | Bargain, Olivier; DeCoster, Andre; Dolls, Mathias; Neumann, Dirk; Peichl, Andreas; Siegloch, Sebastian |
| Abstract: | Following the report of the Stiglitz Commission, measuring and comparing well-being across countries has gained renewed interest. Yet, analyses that go beyond income and incorporate non-market dimensions of welfare most often rely on the assumption of identical preferences to avoid the difficulties related to interpersonal comparisons. In this paper, we suggest an international comparison based on individual welfare rankings that fully retain preference heterogeneity. Focusing on the consumption-leisure trade-off, we estimate discrete choice labor supply models using harmonized microdata for 11 European countries and the US. We retrieve preference heterogeneity within and across countries and analyze several welfare criteria which take into account that differences in income are partly due to differences in tastes. The resulting welfare rankings clearly depend on the normative treatment of preference heterogeneity with alternative metrics. We show that these differences can indeed be explained by estimated preference heterogeneity across countries rather than demographic composition |
| Date: | 2011–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:ese:emodwp:em5-11&r=lab |
| By: | Buda, Rodolphe |
| Abstract: | This paper presents the building of long run data series about the French employment by employment area (zone d'emploi) from 1989 to 2010. We have completed the data series expressed by INSEE from 1998 to 2007. In the paper we describe our methodology and we present the results. This work is included inside a long run data series building project (1983–today). That's the reason why we don't provide any comment at this step. |
| Keywords: | Long Run Time Series ; Retropolation ; Salaried Employment ; Non Salaried Employment ; Region ; Employment Area ; Branche |
| JEL: | R58 C82 J21 C19 R23 |
| Date: | 2011–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36523&r=lab |
| By: | Darrell J. Glaser (United States Naval Academy); Ahmed S. Rahman (United States Naval Academy) |
| Abstract: | This paper explores the roles of capital- and technology-skill complementarities in labor allocation decisions within the U.S. Navy. During the latter 19th century the ocer corps was highly specialized, and was split between groups of line and sta ocers. This was also a time of dramatic technological changes which aected nearly every facet of naval opera- tions. Specically, naval technological developments tended to be \engineering-biased," in that they raised the relative importance of engineer-oriented skills. This created a dilemma for the Navy, as it navigated the balance between the benets of a specialized workforce implementing increasingly complex technologies with rising communication and coordina- tion costs. We rst document the extent of capital- and technology-skill complementarities within the navy which fostered greater labor specialization. We then show how the Navy vitiated the specialized human capital of ocers by blending the corps. The study oers in- sights into how an industry undergoing wrenching technological changes managed its labor and human capital allocation to help the U.S. become a world class naval power. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:usn:usnawp:38&r=lab |
| By: | Liebenau, Jonathan; Kärrberg, Patrik; Grous, Alexander; Castro, Daniel |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ner:lselon:http://eprints.lse.ac.uk/41763/&r=lab |
| By: | Francesca Mameli; Simona Iammarino; Ron Boschma |
| Abstract: | This paper investigates the impact of regional sectoral diversity on regional employment growth in Italy over the period 1991-2001. Assuming that externalities may be stronger between industries selling similar products or sharing the same skills and technology (i.e. related industries), we analyze the role of different forms of sectoral variety at the Local Labour System (LLS) level. Our results show strong evidence of a general beneficial effect of a diversified sectoral structure but suggest also the need to differentiate the analysis between manufacturing and services. In particular, overall local employment growth seems to be favoured by the presence of a higher variety of related service industries, while no role is played by related variety in manufacturing. When looking at diversity externalities between macro-aggregates, the service industry is affected by related variety in manufacturing, while no evidence of externalities is found from tertiary sectors to manufacturing. |
| Keywords: | related variety, knowledge spillovers, agglomeration economies, regional growth, Italy |
| JEL: | D62 O18 O52 R11 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1203&r=lab |
| By: | LI Jinjing; SOLOGON Denisa |
| Abstract: | This paper advances a structural inter-temporal model of labour supply that is able to simulate the dynamics of labour supply in a continuous setting and to circumvent two main drawbacks of most of the existing models. The first limitation is the inability to incorporate individual heterogeneity as every agent is sharing the same parameters of the utility function. The second one is the strong assumption that individuals make decisions in a world of perfect certainty. Essentially, this paper offers an extension of marginal-utility-of-wealth-constant labour supply functions known as “Frisch functions” under certainty and uncertainty with homogenous and heterogeneous preferences. Two alternative models are proposed for capturing individual heterogeneity. First, a “fixed effect vector decomposition” model, which allows the individual specific effects to be correlated with the explanatory variables included in the labour supply model, and second, a mixed fixed and random coefficient model, which incorporates a higher degree of individual heterogeneity by specifying individual coefficients. Uncertainty is controlled for by introducing an expectation correction into the model. The validation of each simulation model is realized in comparison with the standard Heckman model. The lifetime models based on the fixed effect vector decomposition yield the most stable and unbiased simulation results, both under certainty and uncertainty. Due to its improved accuracy and stability, this lifetime labour supply model is particularly suitable for enhancing the performance of the pension models, thus providing a better reference for policymaking. |
| Keywords: | lifetime labour supply; dynamic microsimulation |
| JEL: | C20 D90 J22 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-57&r=lab |
| By: | Ruth Lupton; Martin Thrupp |
| Abstract: | This paper reports the accounts of fifteen headteachers of primary schools in one local authority in the South East of England, including headteachers of schools that are amongst the most advantaged five per cent of schools in England and those amongst the most disadvantaged twenty per cent. The headteachers reflect on the nature of the intakes and other local contextual factors, and their impact on day to day school processes and on decisions made about organization, curriculum and pedagogy. The findings give an insight into the extent of variation between schools and their capacity to respond to differing needs given budgetary constraints, performative pressures and the limits of professional knowledge. |
| Keywords: | schools, educational inequalities, deprivation, disadvantage, context |
| JEL: | I24 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:case158&r=lab |
| By: | FLEURY Charles; MAAS Roland; THOMAS Adrien |
| Abstract: | La présente étude a pour objectif de dresser un portrait du rapport que la population immigrante du Luxembourg entretient avec les syndicats, leurs modes d’action et leurs revendications. Partant du constat que les immigrants adhèrent moins aux syndicats que ne le font les non-immigrants, elle cherche plus spécifiquement à savoir dans quelle mesure la plus faible propension des immigrants à se syndiquer traduit des attitudes plus négatives vis-à-vis des syndicats et des diverses formes d’action collective et examine jusqu’à quel point elle s’inscrit dans le cadre d’une moindre participation sociale générale des immigrants. Distinguant ensuite trois thèmes susceptibles d’être abordés par les syndicats – à savoir les conditions de travail, l’avenir du système de pension luxembourgeois, ainsi que l’Union européenne et son élargissement – l’étude tente de savoir si les immigrants se caractérisent par des revendications particulières. Les résultats rendent compte de différences importantes entre les immigrants et les nonimmigrants, mais également entre les groupes d’immigrants eux-mêmes. Ces différences sont largement attribuables aux caractéristiques sociodémographiques des groupes d’immigrants mais une part non négligeable d’entre elles semblent provenir d’autres facteurs restant encore à examiner. L’étude conclut par conséquent sur la nécessité d’investigations plus poussées pour mieux saisir les spécificités des relations que les groupes d’immigrants entretiennent à l’égard de la syndicalisation et de l’action collective. |
| Keywords: | immigrants; syndicats; attitudes politiques; action collective; participation sociale; relations professionnelles |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2011-63&r=lab |