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on Labour Economics |
| By: | Pinheiro, Roberto B.; Visschers, Ludo |
| Abstract: | Workers in less secure jobs are often paid less than identical-looking workers in more secure jobs. We show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical, and firms differ, but do so only in offered job security (the probability that the worker is not sent into unemployment). In a setting where workers search on and off the job, wages paid increase with job security for at least all firms in the risky tail of the distribution of firm-level unemployment risk. As a result, unemployment spells become persistent for low-wage and unemployed workers, a seeming pattern of ‘unemployment scarring’, that is created entirely by firm heterogeneity alone. Higher in the wage distribution, workers can take wage cuts to move to more stable employment. |
| Keywords: | Unemployment risk; Wage Differentials; Unemployment Scarring |
| JEL: | J63 J31 J64 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36907&r=lab |
| By: | Cepeda Emiliani, Laura (Banco de la República de Colombia); Barón, Juan D. (Banco de la República de Colombia) |
| Abstract: | In this paper we show the importance of subject of degree in explaining the gender wage gap in Colombia. In order to minimize the influence of gender differences in experience, promotions, and job changes on the wage gap, we focus on college graduates who have a formal job and who have been in the labor market at most one year. Using unique, administrative datasets with detailed subjects of degree, we find that the wage gap against women is on average 11% and that 40% of it can be explained by differences in subject of degree. Using a distributional decomposition, we find an increasing gender wage gap across the distribution of wages (from 2% at the bottom to 15% at the top), although subject of degree explains a lower 30% of the gap at the top. Policies designed to reduce the gender wage gap need to address the differing gender educational choices and the factors that influence them. These policies would be more effective in reducing the gap for median wage earners. |
| Keywords: | gender wage gap, subject of degree, decomposition |
| JEL: | J24 J31 J71 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6361&r=lab |
| By: | Robin, Jean-Marc (Département d'économie) |
| Abstract: | Postel-Vinay and Robin’s (2002) sequential auction model is extended to allow for aggregate productivity shocks. Workers exhibit permanent differences in ability while firms are identical. Negative aggregate productivity shocks induce job destruction by driving the surplus of matches with low ability workers to negative values. Endogenous job destruction coupled with worker heterogeneity thus provides a mechanism for amplifying productivity shocks that offers an original solution to the unemployment volatility puzzle (Shimer (2005)). Moreover, positive or negative shocks may lead employers and employees to renegotiate low wages up and high wages down when agents’ individual surpluses become negative. The model delivers rich business cycle dynamics of wage distributions and explains why both low wages and high wages are more procyclical than wages in the middle of the distribution. |
| Keywords: | Unemployment dynamics, wage distribution, inequality, search-matching; |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ner:sciepo:info:hdl:2441/eu4vqp9ompqllr09j003nctkn&r=lab |
| By: | Riddell, W. Craig (University of British Columbia, Vancouver); Song, Xueda (York University, Canada) |
| Abstract: | Adoption of innovations by firms and workers is an important part of the process of technological change. Many prior studies find that highly educated workers tend to adopt new technologies faster than those with less education. Such positive correlations between the level of education and the rate of technology adoption, however, do not necessarily reflect the true causal effect of education on technology adoption. Relying on data from the Workplace and Employee Survey, this study assesses the causal effects of education on technology use and adoption by using instrumental variables for schooling derived from Canadian compulsory school attendance laws. We find that education increases the probability of using computers in the job and that employees with more education have longer work experiences in using computers than those with less education. However, education does not influence the use of computer-controlled and computer-assisted devices or other technological devices such as cash registers and sales terminals. Our estimates are consistent with the view that formal education increases the use of technologies that require or enable workers to carry out higher order tasks, but not those that routinize workplace tasks. |
| Keywords: | technology use and adoption, education, causal effects, compulsory schooling laws, heterogeneity in technology |
| JEL: | I20 O33 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6377&r=lab |
| By: | Vincenzo Scoppa (Dipartimento di Economia e Statistica, Università della Calabria) |
| Abstract: | We use longitudinal data based on administrative archives from 1985 to 2002 to estimate the relationship between wages and firm size for Italy. Controlling for individual fixed effects we find that larger firms pay significantly higher wages, although the individual unmeasured ability component accounts for about one half of the uncovered size-wage premium. To reduce potential self-selection problems arising from endogenous job changes, we focus on a sample of workers displaced by plant closings. Using this sample, we confirm that larger firms pay higher wages in part for unmeasured workers’ abilities and in part for true size effects. |
| Keywords: | Firm Size, Wage Differentials, Panel Data, Exogenous Job Changes |
| JEL: | J41 M51 J45 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201201&r=lab |
| By: | Riddell, Chris (Cornell University); Riddell, W. Craig (University of British Columbia, Vancouver) |
| Abstract: | This paper investigates whether policies that encourage recipients to exit welfare for full-time employment influence participation in educational activity. The Self-Sufficiency Project ('SSP') was a demonstration project where long-term welfare recipients randomly assigned to the treatment group were offered a generous earnings supplement if they exited welfare for full-time employment. We find that treatment group members were less likely to upgrade their education along all dimensions: high-school completion, enrolling in a community college or trade school, and enrolling in university. Thus, 'work-first'; policies that encourage full-time employment may reduce educational activity and may have adverse consequences on the long-run earnings capacity of welfare recipients. We also find that there was a substantial amount of educational upgrading in this population. For instance, among high-school dropouts at the baseline, 19% completed their diploma by the end of the demonstration. Finally, we simulate the consequences of the earnings supplement in the absence of adverse effects on educational upgrading. Doing so alters the interpretation of the lessons from the SSP demonstration. |
| Keywords: | welfare policy, human capital, experimental methods, earnings supplementation |
| JEL: | I38 J08 J24 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6378&r=lab |
| By: | Carrillo-Tudela, Carlos (University of Essex); Smith, Eric (University of Essex) |
| Abstract: | We construct a simple equilibrium search model in which workers accumulate information about previously met employment contacts. We term the latter search capital. Here search capital (partially) insures workers against adverse shocks. The model provides a theory of job-to-job transitions that are associated with voluntary or involuntary mobility and with wage rises or wage cuts. It also shows why low wage and younger workers are associated with a higher probability of becoming unemployed. |
| Keywords: | search capital, turnover, wage cuts |
| JEL: | J62 J63 J64 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6366&r=lab |
| By: | Cerejeira, João (University of Minho); Kızılca, Kemal (Ankara University); Portela, Miguel (University of Minho); Sá, Carla (University of Minho) |
| Abstract: | Using linked employer-employee data for Portugal, we explore an amendment to the minimum wage law which increased from 75% to 100% of the full minimum wage applied to employees younger than 18. Our results show a widening of the gender wage gap following the amendment: the wage gap for minors increased 2.7 percentage points more than for other groups. This change was mainly determined by a redistribution of fringe benefits and overtime payments. We discuss three possible sources of redistribution: (i) a change in the skill composition of the working males and females after the increase in the minimum wage, (ii) industrial differences in response to the changes in the wage floor, and (iii) discrimination. Estimations support the second channel as the main contributing factor, while possible discrimination effects cannot be eliminated. |
| Keywords: | minimum wage, overtime payments, fringe benefits, gender wage gap, minors |
| JEL: | J31 J32 J71 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6370&r=lab |
| By: | Huttunen, Kristiina; Kellokumpu, Jenni |
| Abstract: | This paper analyzes the effects of job displacement on fertility using Finnish longitudinal employer-employee data (FLEED) matched to birth records. We distinguish between male and female job losses. We focus on couples where one spouse lost his/her job due to a plant closure or mass lay off event and follow them several years before and after the job loss. As a comparison group we use similar couples that were not affected by job displacement. In order to examine the possible channels through which job loss affects fertility we examine also the effect on earnings, employment and divorce. The results show that woman’s own job loss decreases fertility mainly for highly educated women. For every 100 displaced females there are approximately 4 less children born. Male job loss has no significant impact on completed fertility. |
| Keywords: | Plant closure; employment; earnings; divorce; fertility |
| JEL: | J13 J65 J12 |
| Date: | 2012–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36964&r=lab |
| By: | Bachmann, Ronald (RWI); Sinning, Mathias (Australian National University) |
| 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. |
| Keywords: | gross worker flows, unemployment duration, decomposition analysis, Blinder-Oaxaca |
| JEL: | J63 J64 J21 E24 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6362&r=lab |
| By: | C. Kirabo Jackson |
| Abstract: | I analyze the longer-run effects of a college-preparatory program implemented in inner-city schools that included payments to eleventh- and twelfth- grade students and their teachers for passing scores on Advanced Placement exams. Affected students attended college in greater numbers, were more likely to remain in college beyond their first year, more likely to earn a college degree, more likely to be employed, and earned higher wages. This is the first credible evidence that implementing college-preparatory programs in existing urban schools can improve both the long-run educational and labor market outcomes of disadvantaged students. |
| JEL: | H0 I20 J01 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17859&r=lab |
| By: | Eva O. Arceo-Gomez (Centro de Investigación y Docencia Económicas); Raymundo M. Campos-Vazquez (El Colegio de México) |
| Abstract: | We analyze the consequences of a teenage pregnancy event in the short- and long-run in Mexico. Using longitudinal and cross-section data, we match females who got pregnant and those that did not based on a propensity score. Several balancing tests and specifications indicate that the main assumptions to estimate the average treatment effect on the treated using a propensity score are satisfied. In the short-run, we find that a teenage pregnancy causes a decrease of 0.6-0.8 years of schooling, lower attendance to school, less hours of work and a higher marriage rate. At the household level, we do not find any effect in parental hours of work or income per capita. In the long-run, we find a loss in years of education of 1-1.2 and a higher probability of being married, but also higher probability of being separated or divorced. We also find that household income per capita is lower at least in the long-run. |
| Keywords: | teenage, pregnancy, labor outcomes, propensity score, matching |
| JEL: | I00 J10 J11 O54 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2012-03&r=lab |
| By: | John Schmitt |
| Abstract: | This paper uses data from the Current Population Surveys for 1980 through 2011 to review trends in health-insurance coverage rates for low-wage workers (defined as workers in the bottom fifth of the wage distribution in each survey year). In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979. The biggest reason for the decline in coverage is the erosion of employer-provided health insurance, either through a worker's own employer or as a dependent on another family member's employer-provided policy. Over the last three decades, the role of public insurance in providing coverage for low-wage workers has increased, though not nearly enough to offset the declines in private insurance. In 2010, about 10 percent of low-wage workers had coverage through Medicaid, double the share in 1979. While a great deal of uncertainty still surrounds the Affordable Care Act (ACA) and its likely impact on employers and workers, reasonable estimates based on consensus projections suggest that the ACA will have a substantial positive effect on health-insurance coverage rates for low-wage workers. Even so, the ACA will likely leave an important share of low-wage workers, especially low-wage Latino, African American, and Asian workers, as well as many immigrant workers, without coverage. At the same time, if the ACA is blocked – in the courts or in Congress – there is every indication that coverage rates for low-wage workers will continue their long, steady decline. |
| Keywords: | low-wage work, health insurance |
| JEL: | J I I1 I18 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2012-06&r=lab |
| By: | Carolina Castagnetti (Department of Economics and Quantitative Methods, University of Pavia); Silvia Dal Bianco (Department of Economics and Quantitative Methods, University of Pavia); Luisa Rosti (Department of Economics and Quantitative Methods, University of Pavia) |
| Abstract: | Italian university system was reformed in 2001. This paper tests the screening role of degree scores for 2004-Italian graduates. We find support of the strong screening hypothesis for prereform type degrees, while we do not find any evidence of signalling effects for post-reform 3-years degrees. We gauge that the shutting down of the signal can be partially ascribed to the poor quality of students who obtained a 3-years degree without taking any further education. |
| Keywords: | Screening, Italy, Higher Education |
| JEL: | I23 J08 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:pav:wpaper:146&r=lab |
| By: | Chloe Duvivier (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Shi Li (School of Economics and Business Administration - School of Economics and Business Administration - Beijing Normal University); Mary-Françoise Renard (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | This paper analyzes the effect of urban proximity on rural non-agricultural wages. Using the 2002 Chinese Household Income Project data, we study the determinants of rural non-agricultural workers' hourly wages. We find strong evidence that rural workers close to cities benefit from higher hourly wages, indicating that there is a spatial differentiation in wages across rural areas. Specifically, workers living close to cities are paid about 15% more for one hour worked. This is true even after controlling for living costs, suggesting that urban proximity leads to higher non-agricultural wages in real terms. We also find that migration enables remote workers to partially compensate for lower local wages, suggesting that restrictions on migration hurt remote workers more than other workers. |
| Keywords: | Wages;Remoteness;regional labor market;China Codes |
| Date: | 2012–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00673698&r=lab |
| By: | Humburg Martin; Grip Andries de; Velden Rolf van der (METEOR) |
| Abstract: | This paper explores the relationship between graduates’ skill levels and the risk of overeducationand unemployment in 17 European countries. We distinguish between field-specific and generalskills and between two labour market segments, the occupational domain of a particular field ofstudy and the labour market segment which requires general skills. In line with the predictions ofthe crowding out hypothesis, we find that the level of protection afforded by field-specificskills against the risk of overeducation increases with the degree of excess labour supply in theoccupational domain of the graduate’s field of study. Conversely, general skills offer moreprotection against the risk of overeducation when excess labour supply in the labour marketsegment which requires general skills is higher. Field-specific skills also protect graduatesagainst the risk of unemployment, whereas graduates’ level of general skills appears to beunrelated to the risk of becoming unemployed. |
| Keywords: | labour market entry; |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2012002&r=lab |
| By: | Charlotte Senftleben; Hanna Wielandt |
| Abstract: | This paper uses the task-based view of technological change to study employment and wage polarization at the level of local labor markets in Germany between 1979 and 2007. In order to directly relate technological change to subsequent employment trends, we exploit variation in the regional task structure which reflects a region’s potential of being affected by computerization. We build a measure of regional routine intensity to test whether there has been a reallocation from routine towards non-routine labor conditional on a region’s initial computerization potential. We find that routine intensive regions have witnessed a differential reallocation towards non-routine employment and an increase in low- and medium-skilled service occupations. Our results corroborate the predictions of the task-based framework and confirm previous evidence on employment polarization in Germany in the sense that employment growth deteriorates at the middle of the skill distribution relative to the lower and the upper tail of the distribution. |
| Keywords: | Job Tasks, Polarization, Technological Change, Service Occupations, Regional Labor Markets |
| JEL: | J24 J31 J62 O33 R23 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2012-013&r=lab |
| By: | Drange, Nina (UiS) |
| Abstract: | This paper expands our understanding of possible specialization effects of extended parental leave policies. Identification is based on the introduction of the Cash-for-Care program in Norway in 1998, which increased mothers’ incentives to withdraw from the labor market when their child was one and two years old. I estimate difference-in-differences models exploiting differences in individuals' exposures to the program among families with similar structures. Consistent with Schøne (2004) I find that the cash-for-care program decreased mothers’ labor force participation by about four percentage points. Notably, however, I find no evidence that the fathers work more to compensate for the mothers declined labor supply. |
| Keywords: | . |
| JEL: | J13 J22 J24 |
| Date: | 2012–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2012_003&r=lab |
| By: | Emmanuel Duguet (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée); Chr. Le Clainche (LAMETA - Laboratoire Montpellierain d'économie théorique et appliquée - CNRS : UMR5474 - INRA : UR1135 - CIHEAM - Université Montpellier I - Montpellier SupAgro) |
| Abstract: | This paper investigates whether chronic illnesses and injuries have a significant impact on the individual's performance in the labor market. We use the "Santé et Itinéraires Professionnels" (SIP, "Health and Labor Market Histories") survey, conducted in France in 2006-2007. We use the propensity score method in order to evaluate the impact of chronic illnesses and accidents on labor market participation and earnings. We find that both health events have a negative effect on professional careers and earnings, and that accidents have a greater impact on women's earnings. |
| Keywords: | chronic illness, accident, labor |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00674553&r=lab |
| By: | Pillai, Rajasekharan |
| Abstract: | Labour laws shape industrial relations addressing the socio-economic security of the working class. The legislative framework of labour conditions the working conditions, employer-employee relations, mode of wage payments, provide social security, class and protect the interests of special categories of working class. The paper discusses various labour statutes of India that are applicable to tourism. Almost all labour laws prevailing in the country were enacted even before tourism attained industrial status. This will enable us to examine how far this prospective sector complies with labour legislations in the country. A statutory coverage for the socio-economic security of workers is a need of the hour in the wake of growing casualisation, feminisation and marginalisation of labour and growing unemployment. |
| Keywords: | labour legislation; labour laws; labour welfare; labour statutes; socio-economic security of labour |
| JEL: | J08 J81 J38 J68 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36999&r=lab |
| By: | Cahuc, Pierre (Ecole Polytechnique, Paris); Charlot, Olivier (University of Cergy-Pontoise); Malherbet, Franck (University of Rouen) |
| Abstract: | This paper provides a simple model which explains the choice between permanent and temporary jobs. This model, which incorporates important features of actual employment protection legislations neglected by the economic literature so far, reproduces the main stylized facts about entries into permanent and temporary jobs observed in Continental European countries. We show that the stringency of legal constraints on the termination of permanent jobs has a strong positive impact on the turnover of temporary jobs. We also find that job protection has very small effects on total employment but induces large substitution of temporary jobs for permanent jobs which significantly reduces aggregate production. |
| Keywords: | temporary jobs, employment protection legislation |
| JEL: | J63 J64 J68 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6365&r=lab |
| By: | Antman, Francisca M (University of Colorado, Boulder) |
| Abstract: | This paper addresses the effects of migration on families left behind and offers new evidence on the impact of migration on elderly parents. After discussing the identification issues involved in estimation, I review the literature on the effects of migration on the education and health of non-migrant children as well as the labor supply of non-migrant spouses. Finally, I address the impact of adult child migration on contributions toward non-migrant parents as well as the effects on parental health. Results show that elderly parents receive lower time contributions from all of their children when one child migrates. |
| Keywords: | migration, left behind, elderly, children |
| JEL: | O15 D13 J13 J14 F22 I15 I25 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6374&r=lab |
| By: | Michael Burda; Daniel S. Hamermesh; Philippe Weil |
| Abstract: | Time-diary data from 27 countries show a negative relationship between real GDP per capita and female-male differences in total work time—work for pay and work at home. In rich non-Catholic countries on four continents men and women do about the same average amount of total work. Survey results demonstrate, however, that labor economists, macroeconomists, sociologists and the general public believe that women work more. The widespread average equality does not arise from gender differences in the price of time, from intra-family bargaining or from spousal complementarity. Several theories, including ones based on social norms, might explain these findings and are consistent with cross-national evidence from the World Values Surveys and sets of microeconomic data from Australia and Germany. |
| Keywords: | time use, gender differences, household production, paid work |
| JEL: | J22 J16 D13 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2012-007&r=lab |
| By: | Emmanuel Duguet (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée); Christine Le Clainche (LAMETA - Laboratoire Montpellierain d'économie théorique et appliquée - CNRS : UMR5474 - INRA : UR1135 - CIHEAM - Université Montpellier I - Montpellier SupAgro) |
| Abstract: | We studied the effect of health events (accidents and chronic diseases) on the occupation probabilities at the individual level, while accounting for both correlated individual and time effects. Using difference-in-differences with exact matching estimators, we found that health events have a strong impact on individual labor market histories. The workers affected by a healt event have a stronger probability of entering inactivity and a lower probability of keeping their jobs. We also found that the less quali ed workers, women, and workers with short term jobs are the most negatively affected by health events. |
| Keywords: | chronic illness, health, labor, difference in differences |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00674560&r=lab |
| By: | Picot, Garnett<br/> Piraino, Patrizio |
| Abstract: | This paper studies the effect of selective attrition on estimates of immigrant earnings growth based on repeated cross-sectional data in Canada. Longitudinal tax data linked to immigrant landing records are used in order to estimate the change in immigrant earnings and the immigrant-Canadian-born earnings gap. The results are compared with those from repeated cross-sectional data. This approach eliminates differences in results that may stem from variation in collection modes and procedures across datasets. |
| Keywords: | Labour, Ethnic diversity and immigration, Wages, salaries and other earnings, Ethnic groups and generations in Canada, Immigrants and non-permanent residents, Labour market and income |
| Date: | 2012–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2012340e&r=lab |
| By: | Sarah Brockhoff (University of Freiburg); Tim Krieger (University of Paderborn); Daniel Meierrieks (University of Paderborn) |
| 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 I25 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:wpaper:47&r=lab |
| By: | KOISSY KPEIN Sandrine; KUEPIE Mathias; TENIKUE Michel |
| Abstract: | This paper uses Demographic and Health Surveys data from about 30 sub-Saharan African countries to investigate the link between the birth of an “unintended child” and schooling decisions of children (dropout and entry). After controlling for local unobserved heterogeneity, we show that, the birth of an “unintended child” hinders child schooling. It reduces the probability of current school enrolment. As for school dynamics, it increases the probability that a child aged 6 to 18 years drops out of school and it decreases the probability that a child aged 6 to 9 years starts schooling. This result suggests that, the unexpected birth of a child strengthens household’s resources constraints and reduces human capital investments. The results also highlight the importance of the timing of the unexpected birth and the heterogeneity of the effect according to child characteristics. |
| Keywords: | unwanted fertility; education school dropout; school enrollment |
| JEL: | I20 J13 O12 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2012-12&r=lab |
| By: | Alessandro Bucciol (University of Verona); Marco Piovesan (Harvard Business School) |
| Abstract: | The effect of intra-firm pay dispersion on work performance is controversial and the empirical evidence is mixed. High pay dispersion may act as an extra incentive for employees' effort or it may reduce motivation and team cohesiveness. These effects can also coexist and the prevalence of one effect over the other may depend on the use of different definitions of what constitutes a "team." For this paper we collected a unique dataset from the men's major soccer league in Italy. For each match we computed the exact pay dispersion of each work team and estimated its effect on team performance. Our results show that when the work team is considered to consist of only the players who contribute to the result, high pay dispersion has a detrimental impact on team performance. Several robustness checks confirm this result. In addition, we show that enlarging the definition of work team causes this effect to disappear or even become positive. Finally, we find that the detrimental effect of pay dispersion is due to worst individual performance, rather than a reduction of team cooperation. |
| Keywords: | Team productivity, Incentives, Pay dispersion. |
| JEL: | J31 J33 J44 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:12-075&r=lab |
| By: | Van Vliet, Olaf; Nijboer, Henk |
| Abstract: | Flexicurity is at the heart of European policy debates. Its aim is to overcome the tensions between labour market flexibility on the one hand, and the provision of social security for workers on the other hand. To date, there is little insight into whether flexicurity policies have been adopted across the European Union. Therefore, the aim of this paper is to analyse to what extent labour market policies have been reformed along the lines of the flexicurity concept across 18 European countries over the period 1985-2008. Focusing on the main axes of the flexicurity concept, new datasets are used to examine changes in employment protection legislation, unemployment benefits and active labour market policies. Data on the strictness of employment regulation indicate that reforms have been influenced by labour market insiders, since the level of flexibility has been increased more for temporary employment, the labour market outsiders, than for regular employment, the insiders. Although gross unemployment replacement rates suggest that unemployment benefits have become more generous, net replacement rates indicate that the level of income security from benefits actually has been decreased. Moreover, data illustrate that larger shares of European labour forces have temporary contracts. As such, the gap between insiders and outsiders on the labour market has been increased. This development is contrary to the goals of the European Commission. |
| Keywords: | Flexicurity; insider-outsider theory; labour market policy; welfare state; political economy |
| JEL: | J08 J58 H53 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37012&r=lab |
| By: | Sebastian Braun; Nadja Dwenger; Dorothea Kübler; Alexander Westkamp |
| 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 modied 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: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2012-005&r=lab |
| By: | Burks, Stephen V. (University of Minnesota, Morris); Guy, Frederick (Birkbeck College, University of London) |
| Abstract: | Using evidence from recent work on truckers and disaggregated older data prior researchers did not have, we revisit a classic topic and find some new answers. We focus on differentials in average annual earnings at the firm level among mileage-paid over-the-road tractor-trailer drivers ("road drivers") employed by US for-hire trucking companies, before and after economic deregulation. Road driver output is individualized, and pay is on the basis of a piece rate (mileage). However, road drivers work under two distinct logistical systems – less-than-truckload [LTL], and truckload [TL] – associated with two different forms of work organization. We find that – contrary to the predictions of Rose (1987) – not only are road drivers for LTL companies paid more than those for TL companies, but in LTL the union earnings premium was maintained following deregulation and union coverage fell slowly, while in TL both the union differential and union coverage fell sharply. We review relevant theoretical explanations: payment for cognitive abilities or non-pecuniary disamenities; standard efficiency wage models based on independent utilities; sharing of product market rents; equity concerns resulting from social comparisons between employee groups; and differences in work organization as a source of union rents or quasi-rents. Only equity concerns, for the LTL earnings differential, and quasi rents (but not a union threat effect, contrary to Henrickson and Wilson (2008)), for union coverage and premium in LTL, are consistent with our empirical results. Both earnings differentials are based on differences in work organization, rather than differences in the workers or the work itself. |
| Keywords: | fair wage, equity, compensating differential, cognitive ability, quasi-rent, rent-sharing, work organization, trucking, trucker, less-than-truckload (LTL), truckload (TL), regulation, deregulation, union premium |
| JEL: | J31 J42 L92 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6375&r=lab |
| By: | García-Morán, Eva; Kuehn, Zoe |
| Abstract: | Grandparents are regular providers of free child care. Similar to any other form of child care, availability of grandparent-provided child care affects fertility and labor market decisions of women positively. We find that women in Germany, residing close to parents or in-laws are more likely to have children and that as mothers they are more likely to hold a regular part-or fulltime job. However, different from any other type of child care, for individuals to enjoy grandparent-provided child care on a regular basis, residence choices must coincide with those of parents or in-laws. Thus while living close provides access to free child care, it imposes costly spatial restrictions. We find that hourly wages of mothers residing close to parents or in-laws are lower compared to those residing further away, and having relatives taking care of ones' children increases the probability of having to commute. We build a general equilibrium model of residence choice, fertility decisions, and female labor force participation that can account for the relationships between grandparent-provided child care, fertility and labor market outcomes. We simulate our model to analyze how women's decisions regarding residence, fertility, and labor force participation change under different family policies. |
| Keywords: | informal child care; fertility; labor force participation; spatial restrictions; regional labor markets |
| JEL: | H42 J13 J61 R23 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37001&r=lab |
| By: | Kuehn, Zoe; Landeras, Pedro |
| Abstract: | We take a dierent look at the PISA 2006 data set considering time input as the main ingredient for scholarly achievement. Across countries, absolute time spent studying is negatively related to scholarly achievement, while a larger fraction of total study time spent in the classroom is associated to better performance. However, at the country level more total study time (class time plus homework time) is associated to better performance. When considering dierent groups of students, this positive relationship between time input and scholarly achievement breaks down. In particular girls and students with a migratory background spend more time in class rooms and doing homework but perform worse. We estimate a non-linear production function for education which allows us to consider marginal rates of substitution among various input factors for the production of education: dierent time inputs, family characteristics, and aspects of school environment. We nd that compensating for less class time or lower socio-economic background by individual study time, is enormously time-costly or even impossible for students in Spain, as well as for students in the three best and the three worst performing OECD countries. Our results also show that in particular additional hours of class time rather than more teachers or better-equipped schools can compensate for a less advantageous family background. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2012-02&r=lab |
| By: | Eddy Bekkers; Joseph Francois |
| Abstract: | We study the labor market effects of bilateral exchange rate realignment. We place emphasis on the composition of trade, the role of intermediates, and the underlying conditions of the labor market. Employment effects hinge on the fraction exported to and imported from the trading partner. A larger fraction exported to and a smaller fraction imported from the trading partner make it more likely that appreciation has beneficial effects. Furthermore, more sticky price expectations in wage formation, a smaller fraction of intermediates in the production process, and a lower rate of importer pass through make it more likely that appreciation of the exchange rate of the trade partner has positive employment effects. At a more technical level, the scope for substitution away from higher priced inputs, either toward other sources of supply, or toward value added, is also important to the direction and magnitude of changes in employment. |
| Keywords: | bilateral exchange rates, devaluation, exchange rates and trade, trade and employment |
| JEL: | F32 F41 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:jku:econwp:2012_02&r=lab |
| By: | Nicolas Gérard Vaillant (LEM - Lille - Economie et Management - CNRS : UMR8179 - Université des Sciences et Technologies de Lille - Lille I - Fédération Universitaire et Polytechnique de Lille, Université Catholique de Lille - Université Catholique de Lille, ISTC - Institut des Stratégies et Techniques de Communication - Université Catholique de Lille); François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, INED - Institut National d'Etudes Démographiques Paris - INED) |
| Abstract: | This paper investigates the effect of self-assessed health on retirement plans of older migrants. As immigration is primarily associated with labor considerations, the role of economic incentives in the migration decision suggests that health could play a minor effect in immigrants' decision to retire. Using detailed data on immigrants living in France collected in 2003, we examine the role of health on early retirement intentions using simultaneous, recursive models that account for the fact that subjective health is potentially endogenous. Being in poor health increases the intention of migrant workers to retire early, but the subjective health outcomes have little influence on retirement plans. |
| Keywords: | Retirement intention ; self-assessed health ; immigrants ; France |
| Date: | 2012–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00671527&r=lab |
| By: | Hanan Morsy; Florence Jaumotte |
| Abstract: | While inflation differentials in a monetary union can be benign, reflecting a catch-up process, or an adjustment mechanism to asymmetric shocks or different business cycles, they may also indicate distortions related to inefficiencies in domestic product and labor markets that amplify or make more persistent the impact of shocks on inflation. The paper examines the determinants of inflation differentials in the euro area, with emphasis on the role of country specific labor and product market institutions. The analysis uses a traditional backward-looking Phillips curve equation and augments it to explore the role of collective bargaining systems, union density, employment protection, and product market regulation. The model is estimated over a panel dataset of 10 euro area countries over the period 1983-2007. Results show that high employment protection, intermediate coordination of collective bargaining, and high union density increase the persistence of inflation. Oil and raw materials price shocks are also more likely to be accommodated by wage increases when the degree of coordination in collective bargaining is intermediate. These results are robust to different estimation methods, model specifications, and outliers. The paper suggests that reforming labor market institutions may improve the functioning of the euro area by reducing the risk of persistent inflation differentials. |
| Date: | 2012–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/37&r=lab |
| By: | Frederiksen, Anders (Aarhus School of Business); Lange, Fabian (Yale University); Kriechel, Ben (ROA, Maastricht University) |
| Abstract: | Firms commonly use supervisor ratings to evaluate employees when objective performance measures are unavailable. Supervisor ratings are subjective and data containing supervisor ratings typically stem from individual firm level data sets. For both these reasons, doubts persist on how useful such data are for evaluating theories in personnel economics and whether findings from such data generalize to the labor force at large. In this paper, we examine personnel data from six large companies and establish how subjective ratings, interpreted as ordinal rankings of employees within narrowly defined peer-groups, correlate with objective career outcomes. We find many similarities across firms in how subjective ratings correlate with earnings, base pay, bonuses, promotions, demotions, separations, quits and dismissals and cautiously propose these as empirical regularities. |
| Keywords: | subjective performance ratings, personnel data, employee careers, career outcomes, incentives, employer learning |
| JEL: | M5 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6373&r=lab |
| By: | Raymundo M. Campos-Vazquez (El Colegio de México); Gerardo Esquivel (El Colegio de México); Nora Lustig (Tulane University) |
| Abstract: | Inequality in Mexico rose between 1989 and 1994 and declined between 1994 and 2010. We examine the role of market forces (demand and supply of labour by skill), institutional factors (minimum wages and unionization rate), and public policy (cash transfers) in explaining changes in inequality. We apply the ‘re-centered influence function’ method to decompose changes in hourly wages into characteristics and returns. The main driver is changes in returns. Returns rose (1989-1994) due to institutional factors and labor demand. Returns declined (1994-2006) due to changes in supply and --to a lesser extent--in demand; institutional factors were not relevant. Government transfers contributed to the decline in inequality, especially after 2000. |
| Keywords: | inequality, wages, disposable income, labor markets, Mexico |
| JEL: | D31 D60 J20 J31 O54 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:emx:ceedoc:2012-04&r=lab |
| By: | Benjamin A. Olken; Junko Onishi; Susan Wong |
| Abstract: | This paper reports an experiment in over 3,000 Indonesian villages designed to test the role of performance incentives in improving the efficacy of aid programs. Villages in a randomly-chosen one-third of subdistricts received a block grant to improve 12 maternal and child health and education indicators, with the size of the subsequent year’s block grant depending on performance relative to other villages in the subdistrict. Villages in remaining subdistricts were randomly assigned to either an otherwise identical block grant program with no financial link to performance, or to a pure control group. We find that the incentivized villages performed better on health than the non-incentivized villages, particularly in less developed areas, but found no impact of incentives on education. We find no evidence of negative spillovers from the incentives to untargeted outcomes, and no evidence that villagers manipulated scores. The relative performance design was crucial in ensuring that incentives did not result in a net transfer of funds toward richer areas. Incentives led to what appear to be more efficient spending of block grants, and led to an increase in labor from health providers, who are partially paid fee-for-service, but not teachers. On net, between 50-75% of the total impact of the block grant program on health indicators can be attributed to the performance incentives. |
| JEL: | I15 I25 O38 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17892&r=lab |
| By: | Stefania Marcassa; Fabrizio Colonna (THEMA, Universite de Cergy-Pontoise; Banca d'italia, Economic Structure and Labor Market Division.) |
| Abstract: | Italy has the lowest labor force participation of women among OECD countries. Moreover, the participation rate of married women is positively correlated to their husbands' income. We show that a high tax schedule together with tax credits and transfers raise the burden of two-earner house- holds, generating disincentives to work. We estimate a structural labor supply model for women, and use the estimated parameters to simulate the eects of alternative revenue-neutral tax systems. We nd that joint taxation implies a drop in the participation rate. Conversely, working tax credit and gender-based taxation boost it, with the eects of the former concentrated on low educated women. |
| Keywords: | female labor force participation, Italian tax system, second earner tax rate, joint taxa- tion, gender-based taxation, working tax credit JEL Classication: J21, J22, H31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2011-22&r=lab |
| By: | Andrea Colciago (Department of Economics, University of Milano Bicocca); Lorenza Rossi (Department of Economics and Quantitative Methods, University of Pavia) |
| Abstract: | We propose a model characterized by strategic interactions among an endogenous number of producers and search and matching frictions in the labor market. In line with U.S. data: (i) new firms account for a relatively small share of overall employment, but they create a relevant fraction of new jobs; (ii) firms’ entry is procyclical; (iii) price mark ups are countercyclical, while aggregate profits are procyclical. In response to a technology shock the labor share decreases on impact and overshoots its long run level. Also the propagation on labor market variables is stronger than in the standard search model. We argue that the countercyclicality of the price mark up is the key mechanism for our results. |
| Keywords: | Endogenous Market Structures, Job Creation, Firms’ Entry, Search and Matching Frictions |
| JEL: | E24 E32 L11 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:pav:wpaper:155&r=lab |
| By: | Mather, David |
| Abstract: | During the last decade, the Zambian government has dramatically increased expenditures on primary and secondary schooling, and enrollment rates have risen dramatically. At the same time, Zambia has faced the challenge of rising HIV prevalence and the possibility that recent gains in long-term human capital development could be eroded if households which suffer the death of a working-age (WA) adult pull their children out of school due to family labor shortages or financial constraints. This paper uses panel survey data from rural Zambia to measure the impact of WA adult mortality and morbidity on primary school attendance and school advancement, and separately tests the extent to which orphan status affects these schooling outcomes. There are five principal findings from our analysis. |
| Keywords: | Zambia, Adult Mortality, Orphan, Schooling, Community/Rural/Urban Development, Food Security and Poverty, Health Economics and Policy, |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midiwp:120740&r=lab |
| By: | Rodriguez-Planas, Nuria (IZA); Vegas, Raquel (FEDEA, Madrid) |
| Abstract: | An important immigration policy question is to identify the best criteria to select among potential migrants. At least two methodological problems arise: the host country's immigration policy regime endogeneity, and immigrants' unobserved heterogeneity. To address the first problem, we focus in a country with an unprecedented immigration boom that lets immigrants freely into a country: Spain. To address the second problem, we focus on a large and homogenous group of immigrants: Moroccans. Using the 2007 Encuesta Nacional de Immigración (ENI), we find that, even when focusing on a very homogenous group of migrants (Moroccans) who tend to be low-skilled, and after controlling for migrants' self-selection with employment history prior to and at arrival, family-based immigrants are less likely to work than their labor-based counterparts both at arrival and ten years later. Our Heckman-corrected estimates highlight that there are no monthly earnings differences by reason of arrival, and that failure to correct for labor force participation strongly biases these results. |
| Keywords: | Southern and Eastern Mediterranean men and women, legal and employment assimilation |
| JEL: | J15 J24 J61 J62 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6368&r=lab |
| By: | Joshua Congdon-Hohman (Department of Economics, College of the Holy Cross) |
| Abstract: | Health insurance has previously been shown to be an important determinant of retirement timing among older Americans. While previous literature has largely ignored the inter-spousal dependence of health insurance benefits, this study examines the relationship of both spouses’ health insurance options to the household’s timing of the husband’s retirement. Using data from the Health and Retirement Study, I find that a wife’s health insurance options have an independent impact on the timing of her husband’s exit from the labor force. This impact is not distinguishable in magnitude to that of a husband’s own health insurance options. Differences for each spouse do arise when each spouse’s health is interacted with his or her health insurance options following a husband’s retirement. The impact of a wife’s health insurance needs on the timing of a husband’s retirement is dependent on her health while the impact of the husband’s insurance options is seemingly unrelated to his health. The omission of inter-spousal health insurance dependency may lead to an underestimation of the cost and the employment response to changes in the health insurance system from newly legislated health care reform. |
| Keywords: | Retirement, health insurance, household decision-making |
| JEL: | H55 J26 J32 J44 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:1115&r=lab |
| By: | Poeschel, Friedrich (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "We revisit the puzzling finding that labour market performance appears to deteriorate, as suggested by negative time trends in empirical matching functions. We investigate whether these trends simply arise from omitted variable bias. Concretely, we consider the omission of job seekers beyond the unemployed, the omission of inflows as opposed to stocks, and the failure to account for vacancy dynamics. We first build a model of all labour market flows and use it to construct series for these flows from aggregate data on the U.S. labour market. Using these series, we obtain a measure for employed and non-participating job seekers. When we thus include all job seekers, the estimated time trend remains unchanged. We similarly obtain measures for inflows into unemployment and vacancies. When these are included, the magnitude of the time trend is halved but remains significant. When we account for basic vacancy dynamics, the estimated time trend can be fully explained by omitted variable bias. As suggested by this result, we present evidence that empirical matching functions can be interpreted as versions of the law of motion for vacancies: the coefficients in matching functions coincide with the coefficients in the law of motion after correcting for omitted variable bias." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Zeitreihenanalyse, matching, Arbeitsmarktindikatoren, offene Stellen, Arbeitsuchende, Arbeitslose, Nichterwerbstätige, USA, Bundesrepublik Deutschland, Bundesrepublik Deutschland |
| JEL: | J63 J64 |
| Date: | 2012–02–29 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201203&r=lab |
| By: | Dean Baker |
| Abstract: | There is a growing chorus of policy analysts and pundits telling the country that we could have millions more jobs in manufacturing, if only we had qualified workers. This claim has the interesting feature that it places responsibility for the lack of jobs on workers, not on the people who get paid to manage the economy (e.g. the Fed, Congress, the White House). This issue brief looks at data that contradicts the suggestion that so many people are out of work because they lack skills. |
| Keywords: | manufacturing, employment, skills, education |
| JEL: | E E2 E24 L6 J J2 J21 J24 J3 J31 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2012-08&r=lab |
| By: | Jordi Domenech |
| Abstract: | This paper looks at the causes of rural conflict in 1930s Spain. Rather than stressing bottom-up forces of mobilisation linked to poor harvests and rural unemployment or the inability of the state to enforce reformist legislation, this paper explores the role of state policy in sorting out the acute coordination and collective action problems of mobilising rural labourers. I do so by looking at the effects of intervention on rural labour markets in dry-farming areas of Spain (parts of Castile and of Andalusia). Given the difficulties of constructing a conclusive test of my hypothesis, I follow three indirect testing strategies. Firstly, I look at the qualitative evidence on the functioning of labour markets in dry-farming areas of Spain. Secondly, because my argument implies the existence of severe restrictions to the labour supply of rural labourers during the harvest in the early 1930s, I study the evolution of harvest-to-winter wage ratios before and after the passing of legislation. Thirdly, in order to show that alternative hypotheses to explain rural conflict are not consistent with the historical record, I study the diffusion of union offices and general strikes in the early 1930s in several dry-farming provinces of Spain. |
| Keywords: | Agricultural labour markets, collective action, conflict, unions, wage differentials, migration, Spain |
| JEL: | N34 K31 J22 J31 J38 J43 J51 J52 J61 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:wp12-01&r=lab |
| By: | Bruze, Gustaf (University of Aarhus); Svarer, Michael (University of Aarhus); Weiss, Yoram (Tel Aviv University) |
| Abstract: | We formulate and estimate a dynamic model of marriage, divorce, and remarriage using 27 years of panel data for the entire Danish cohort born in 1960. The marital surplus is identified from the probability of divorce, and the surplus shares of husbands and wives from their willingness to enter marriage. Education and marriage order are complements in generating gains from marriage. Educated men and women receive a larger share of the marital gains but this effect is mitigated when their proportion rises. Education stabilizes marriage and second marriages are less stable. As the cohort ages, uneducated men are the most likely to be single. |
| Keywords: | marriage, divorce, sorting |
| JEL: | J12 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6379&r=lab |
| By: | Koehne, Sebastian; Kuhn, Moritz |
| Abstract: | A series of empirical studies has documented that job search behavior depends on the financial situation of the unemployed. Starting from this observation, we ask how unemployment insurance policy should take the individual financial situation into account. We use a quantitative model with a realistically calibrated unemployment insurance system, individual consumption-saving decision and moral hazard during job search to answer this question. We find that the optimal policy provides unemployment benefits that increase with individual assets. By implicitly raising interest rates, asset-increasing benefits encourage self-insurance, which facilitates consumption smoothing during unemployment but does not exacerbate moral hazard for job search. Asset-increasing benefits also have desirable properties from a dynamic perspective, because they emulate key features of the dynamics of constrained efficient allocations. We find welfare gains from introducing asset-increasing benets that are substantial and amount to 1.5% of consumption when comparing steady states and 0.8% of consumption when taking transition costs into account. More generous replacement rates or benefits targeted to asset-poor households, by contrast, have a negative effect on welfare. |
| Keywords: | unemployment insurance; asset testing; incomplete markets; consumption and saving |
| JEL: | H21 J65 E21 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36973&r=lab |
| By: | Luciano Fanti (Department of Economics, University of Pisa, Italy); Nicola Meccheri (Department of Economics, University of Pisa, Italy) |
| Abstract: | Can a merger from duopoly to monopoly be detrimental for profits? This paper deals with this issue by focusing on the interaction between decreasing returns to labour (which imply firms’ convex production costs) and centralised unionisation in a differentiated duopoly model. It is pointed out that the wage fixed by a monopoly central union in the post-merger case is higher than in the pre-merger/Cournot equilibrium, opening up the possibility that merger reduces profits. Indeed, it is shown that this “reversal result” actually applies when the central union is sufficiently little interested to wages with respect to employment. Moreover, the lower the degree of substitutability between firms’ products and the higher the workers’ reservation wage, the higher ceteris paribus the probability that profits decrease as a result of the merger. |
| Keywords: | merger profitability, unionised duopoly, convex costs |
| JEL: | D43 L13 J50 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:05_12&r=lab |
| By: | Javier García-Estévez (Universitat de Barcelona & IEB); Néstor Duch-Brown (Universitat de Barcelona & IEB) |
| Abstract: | Human capital is one of the most important channels via which universities positively affect regional development. This paper analyzes the relationship between university characteristics and graduation rates, and the role of regional characteristics in this process. We assemble a dataset for the entire public university system in Spain over the last decade. Observing the same university over several years helps us address the problem of unobserved heterogeneity. The main findings that can be drawn from our results are that university features, such as expenditure, student-teacher ratio and financial-aid to students are important in accounting for graduation rates. Likewise, regional characteristics such as labour market conditions appear to matter when generating graduate students. |
| Keywords: | Universities, graduation, human capital, regional economy |
| JEL: | C31 I23 O18 R11 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2012/3/doc2012-4&r=lab |
| By: | Cette, G.; Chouard, V.; Verdugo, G. |
| Abstract: | This study investigates the impact of minimum wage (SMIC) increases on the average wage in France. We use two series of average wage: the average hourly blue-collar wage rate (SHBO) and the average wage per capita (SMPT). We combine these series with aggregate data for the overall economy over four decades from 1970 to 2009, going from the SMIC first implementation (in 1970) to the change in the annual calendar of mandatory increases (in 2009) from the 1st of July to the 1st of January by the law of the 3rd December 2008. We provide three original contributions with respect to the existing literature. First, our study is based on data from a much longer period of time which gives us more information. Second, the models we estimate allow for a very gradual impact of the minimum wage on the average wage, while previous studies often assumed only an immediate impact. Third, we differentiate the impact of minimum wage increases on the average wage by distinguishing between the effects of each of the three sources of increase. Our results confirm the advantages of this approach. Because of the discretionary increases of the minimum wage from the government (the so-called “coup de pouces”), the minimum wage increased more rapidly than the average wage over the period 1970-2009. Our estimates suggest that the impact on the average wage of minimum wage increases is strong. This impact is larger than in previous studies because our models take into account the existence of dynamic diffusion effects. Finally, minimum wage increases related to the legal indexation to half of the increase in the purchasing power of the SHBO have a large effect on the SHBO itself. This result suggests that a feedback effect between the minimum wage and the SHBO is possible and could trigger the dynamics between these series. As a consequence of the legal system of revaluation of the minimum wage and of the impact of these increases on the average wage, France is probably one of the industrialized countries where competitiveness is the most threatened by inflation volatility. |
| Keywords: | Minimum Wage, Average Wage, France. |
| JEL: | E24 J31 J58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:366&r=lab |
| By: | John B. Shoven; Sita Nataraj Slavov |
| Abstract: | Social Security benefits may be commenced at any time between age 62 and age 70. As individuals who claim later can, on average, expect to receive benefits for a shorter period, an actuarial adjustment is made to the monthly benefit amount to reflect the age at which benefits are claimed. We investigate the actuarial fairness of this adjustment. Our simulations suggest that delaying is actuarially advantageous for a large subset of people, particularly for real interest rates of 3.5 percent or below. The gains from delaying are greater at lower interest rates, for married couples relative to singles, for single women relative to single men, and for two-earner couples relative to one-earner couples. In a two-earner couple, the gains from deferring the primary earner’s benefit are greater than the gains from deferring the secondary earner’s benefit. We then use panel data from the Health and Retirement Study to investigate whether individuals’ actual claiming behavior appears to be influenced by the degree of actuarial advantage to delaying. We find no evidence of a consistent relationship between claiming behavior and factors that influence the actuarial advantage of delay, including gender and marital status, interest rates, subjective discount rates, or subjective assessments of life expectancy. |
| JEL: | D14 H55 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17866&r=lab |
| By: | Sproten, Alec N.; Schwieren, Christiane |
| Abstract: | The “aging employee” has recently become a hot topic in many fields of behavioural research. With the aim to determine the effects of different incentive schemes (competition, social or increased monetary incentives) on performance of young and older subjects, we look at behaviour of a group of younger and older adults on a well-established real effort task. We show that older adults differ from younger adults in their performance in all conditions, but not in the improvement between conditions. The age difference in performance is however driven by women. While we replicate the gender difference in competitiveness found in the literature, we do not find a significant age difference in competitiveness. Social incentives have an at least as strong or even stronger effect on performance than increased monetary incentives. This effect is driven by men; women do not show an increase in performance with social incentives. |
| Keywords: | aging; competition; social production functions; experiment; incentives |
| JEL: | C72 C91 J10 J33 |
| Date: | 2012–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0522&r=lab |
| By: | Halliday, Timothy (University of Hawaii at Manoa) |
| Abstract: | We employ data from the Panel Study of Income Dynamics to investigate income to health causality. To account for unobserved heterogeneity, we focus on the relationship between earnings growth and changes in self-reported health status. Causal claims are predicated upon appropriate moment restrictions and specification tests of their validity. We find evidence of Granger-type causality running from income to health for married men but not for women or single men. These effects are more pronounced for younger men and the bottom quartile of the earnings distribution. The former may be the consequence of permanent earnings shocks, whereas the latter may be the consequence of job loss. |
| Keywords: | gradient, health, dynamic panel data models |
| JEL: | I0 I12 J1 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6367&r=lab |
| By: | Iftikhar Hussain |
| Abstract: | Performance measurement in the public sector is largely based on objective metrics, which may be subject to gaming behaviour. This paper investigates a novel subjective performance evaluation system where independent inspectors visit schools at very short notice, publicly disclose their findings and sanction schools rated fail. First, I demonstrate that inspection ratings can aid in distinguishing between more and less effective schools, even after controlling for standard observed school characteristics. Second, exploiting a natural experiment, I show that a fail inspection leads to test score gains; at least some of these gains persist in the medium term. I find no evidence to suggest that fail schools are able to inflate test score performance by gaming the system. Oversight by inspectors may play an important role in mitigating such strategic behaviour. |
| Keywords: | subjective performance evaluation, gaming behavior, school inspections. |
| JEL: | H11 I20 I28 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0135&r=lab |
| By: | Kudo, Yuya |
| Abstract: | Given the migration premium previously identified in an impact evaluation approach, this paper asks the question of why migration is not more prominent, given such high premium associated with it. Using long-term household panel data drawn from rural Tanzania, Kagera for the period 1991-2004, this study aims to answer this question by exploring the contribution of education in the migration premium. By separating migrants into those that moved out of original villages but remained within Kagera and those who left the region, this study finds that, in consumption, the return on investment in education is higher at both destinations. However, whilst the higher return on education fully explains the gains associated with migration within Kagera, it only partly explains those of external migration. These findings suggest that welfare opportunities are higher at the destination and that an individual's limited investment in education plays a major role in preventing short-distance migration from becoming a significant source of raising welfare, which is not the case for long-distance migration. While education plays a role, it appears that other mechanisms may prohibit rural agents from exploiting the arbitrage opportunity when they migrate to the destination at a great distance from the source. |
| Keywords: | Tanzania, Population movement, Migration, Education, Rural societies, Africa, Internal migration, School Investment, Return to education, Welfare growth |
| JEL: | J61 J62 O15 R23 I25 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper322&r=lab |
| By: | Luciano Fanti (Department of Economics, University of Pisa, Italy); Nicola Meccheri (Department of Economics, University of Pisa, Italy) |
| Abstract: | In this paper, we aim at investigating if the conventional wisdom, that an increase of competition linked to a decrease in the degree of product differentiation always reduces firms’ profits, remains true in a unionized duopoly model with labour decreasing returns. In this context, mixed results emerge. In particular, we show that a decrease in the degree of product differentiation may affect wages, hence profits, differently, depending on both the mode of competition in the product market (Cournot or Bertrand competition) and the particular unionization structure (firm-specific or industry-wide union(s)). Interestingly, it is shown that the conventional wisdom can actually be reversed, even if under Bertrand competition only. |
| Keywords: | unionized duopoly, labour decreasing returns, product differentiation, profits |
| JEL: | J43 J50 L13 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:06_12&r=lab |
| By: | Emin Dinlersoz (Bureau of the Census); Jeremy Greenwood (University of Pennsylvania) |
| Abstract: | Union membership displayed an inverted-U-shaped pattern over the 20th century, while the distribution of income sketched a U. A model of unions is developed to analyze these phenomena. There is a distribution of firms in economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a costly process. A union decides how many firms to organize and its members' wage rate. Simulation of the developed model establishes that skilled-biased technological change, which affects the productivity of skilled labor relative to unskilled labor, can potentially explain the above facts. Statistical analysis suggests that skill-biased technological change is an important factor in de-unionization. |
| Keywords: | Computers; Distribution of Income; Flexible Manufacturing; Mass Production; Numerically Controlled Machines; Panel-Data Regression Analysis; Relative Price of New Equipment; Skill-Biased Technological Change; Simulation Analysis; Union Coverage; Union Membership; Deunionization |
| JEL: | J51 J24 L23 L11 L16 O14 O33 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eag:rereps:19&r=lab |
| By: | Jonathan Meer; Harvey S. Rosen |
| Abstract: | We investigate how undergraduates’ financial aid packages affect their subsequent donative behavior as alumni. The empirical work is based upon micro data on alumni giving at an anonymous research university. We focus on three types of financial aid, scholarships, loans, and campus jobs. A novel aspect of our modeling strategy is that, consistent with the view of some professional fundraisers, we allow the receipt of a given form of aid per se to affect alumni giving. At the same time, our model allows the amount of the support to affect giving behavior nonlinearly. Our main findings are: 1) Individuals who took out student loans are less likely to make a gift, other things being the same. We conjecture that this phenomenon is caused by an “annoyance effect” — alumni resent the fact that they are burdened with loans. 2) Scholarship aid reduces the size of a gift, but has little effect on the probability of donating. The negative effect of receiving a scholarship on donations decreases in absolute value with the size of the scholarship. We do not find any evidence that scholarship recipients give less because they have relatively low incomes post graduation. 3) Aid in the form of campus jobs does not have a strong effect on donative behavior. |
| JEL: | I22 I23 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17861&r=lab |
| By: | Jose Luis Groizard (Department of Economics, Universitat de les Illes Balears); Priya Ranjan (Department of Economics, University of California-Irvine); Jose Antonio Rodriguez-Lopez (Department of Economics, University of California-Irvine) |
| Abstract: | We present theory and evidence of the impact of input trade costs on job flows. Our heterogeneous-firm model with heterogeneous offshoring costs derives effects of input trade costs on both the extensive (due to births and deaths of firms) and intensive (due to expansions and contractions of firms) margins of employment. After a decline in input trade costs, the model predicts job destruction by death and contraction for non-offshoring firms, an ambiguous response for offshoring firms, a decline in the number of firms, and overall job destruction. Using a longitudinal database containing the universe of manufacturing establishments in California from 1992 to 2004, we find strong support for the model's establishment-level predictions, and mild support for the industry-level predictions. |
| Keywords: | Input trade costs; Offshoring; Heterogeneous firms; Job flows |
| JEL: | F12 F14 F16 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:111208&r=lab |
| By: | Uri Gneezy; John List; Michael K. Price |
| Abstract: | Social scientists have presented evidence that suggests discrimination is ubiquitous: women, nonwhites, and the elderly have been found to be the target of discriminatory behavior across several labor and product markets. Scholars have been less successful at pinpointing the underlying motives for such discriminatory patterns. We employ a series of field experiments across several market and agent types to examine the nature and extent of discrimination. Our exploration includes examining discrimination based on gender, age, sexual orientation, race, and disability. Using data from more than 3000 individual transactions, we find evidence of discrimination in each market. Interestingly, we find that when the discriminator believes the object of discrimination is controllable, any observed discrimination is motivated by animus. When the object of discrimination is not due to choice, the evidence suggests that statistical discrimination is the underlying reason for the disparate behavior. |
| JEL: | C93 J71 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17855&r=lab |