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on Labour Economics |
| By: | Benedikt Herz and Thijs van Rens |
| Abstract: | Structural unemployment is due to mismatch between available jobs and workers. We formalize this concept in a simple model of a segmented labor market with search frictions within segments. Worker mobility, job mobility and wage bargaining costs across segments generate structural unemployment. We estimate the contribution of these costs to fluctuations in US unemployment, operationalizing segments as states or industries. Most structural unemployment is due to wage bargaining costs, which are large but nevertheless contribute little to unemployment fluctuations. Structural unemployment is as cyclical as overall unemployment and no more persistent, both in the current and in previous recessions. |
| Keywords: | structural unemployment, mismatch, dispersion labor market conditions, worker mobility, job mobility, wage rigidities |
| JEL: | E24 J61 J62 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:568&r=lab |
| By: | Dube, Arindrajit; Lester, T. William; Reich, Michael |
| Abstract: | We provide the first estimates of the effects of minimum wages on employment flows in the U.S. labor market, identifying the impact using policy discontinuities at state borders. We find that minimum wages have a sizable negative effect on employment flows but not stocks: separations and accessions fall among affected workers. We interpret our findings using a job-ladder model, in which minimum wage increases can reduce job-to-job transitions. We find that a standard calibration of the model generates predicted relative magnitudes of the employment stock and flow elasticities that are very close to our reduced-form estimates. |
| Keywords: | Economics, Applied Economics, Minimum Wage, Labor Market Flows, Job Turnover, Search Frictions, Monopsony |
| Date: | 2012–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:indrel:qt76p927ks&r=lab |
| By: | Hugh Macartney |
| Abstract: | Recent education accountability reforms feature school-level performance targets that condition on prior scores to account for student heterogeneity. Yet doing so introduces potential dynamic distortions to incentives: teachers may be less responsive to the reform today to avoid more onerous future targets--an instance of the so-called `ratchet effect.' Guided by a dynamic model and utilizing rich educational panel data from North Carolina, I exploit school grade span variation to identify any dynamic gaming, finding compelling evidence of ratchet effects. I then directly estimate the structural parameters of the corresponding model, uncovering complementarities between teacher effort and student ability. |
| Keywords: | Public, Education, Personnel, Dynamic Gaming, Dynamic Incentives, Ratchet Effects, Education Production, Educational Accountability |
| JEL: | D82 I21 J24 J33 M52 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:duk:dukeec:12-09&r=lab |
| By: | Sekyu Choi; Alexandre Janiak; Benjamín Villena-Roldán |
| Abstract: | We estimate and report life-cycle transition probabilities between employment, unemployment and inactivity for male and female workers using Current Population Survey monthly files. We assess the relative importance of each probability in explaining the life-cycle profiles of participation and unemployment rates using a novel decomposition method. A key robust finding is that most differences in participation and unemployment over the life-cycle can be attributed to the probability of leaving employment and the probability of transiting from inactivity to unemployment, while transitions from unemployment to employment (the job finding probability) play secondary roles. We conclude that search models that seek to explain life-cycle work patterns should not ignore transitions to and from inactivity. |
| Keywords: | life-cycle, unemployment, participation, worker flows |
| JEL: | D91 E24 J64 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:617&r=lab |
| By: | Davide Furceri |
| Abstract: | The aim of this paper is to analyze unemployment and labor market developments in Algeria and assess the factors that may hamper employment creation. The results of the paper suggest that the relative low output-employment elasticities and rigid labor market are the main factors behind the still high level of unemployment, particularly among the youth. Simulation analyses, based on the results on the relation between labor market institutions and unemployment, show that improvement in labor market conditions in Algeria would be key in reducing unemployment both in the short- and medium-term. |
| Keywords: | Labor markets , Unemployment , Wage bargaining , |
| Date: | 2012–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/99&r=lab |
| By: | Pierre, Gaelle |
| Abstract: | This paper provides an overview of the recent performance of the labor market in Vietnam during the Great Recession. The analysis uses data from the Labor Force Survey and the Vietnam Household Living Standard Survey. The author finds that, notwithstanding the global crisis and domestic volatility, job creation has been sustained in Vietnam, especially in the formal sector, but that the overall quality of employment has suffered. Gender differentials are found to affect older women especially, while educated women benefit from a skills wage premium. Reassuringly given the large youth share of the total workforce, the youth labor market is dynamic and outcomes for youths have improved. Meanwhile, participation in poverty alleviation programs and labor market programs has not changed, and few workers use the newly created employment services and unemployment benefits. |
| Keywords: | Labor Markets,Population Policies,Labor Policies,Gender and Development,Work&Working Conditions |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6056&r=lab |
| By: | Chiara MUSSIDA (Department of Economics and Social Sciences, Università Cattolica del Sacro Cuore, Piacenza, Italy); Matteo PICCHIO (Research Foundation - Flanders (FWO); Sherppa, Ghent University; Department of Economics, CentER,Tilburg University; IZA, Bonn) |
| Abstract: | This paper studies the gender wage gap by educational attainment in Italy using the 1994–2001 ECHP data. We estimate wage distributions in the presence of covariates and sample selection separately for highly and low educated men and women. Then, we decompose the gender wage gap across all the wage distribution and isolate the part due to gender differences in the remunerations of the similar characteristics. We find that women are penalized especially if low educated. When we control for sample selection induced by unobservables, the penalties for low educated women become even larger, above all at the bottom of the wage distribution. |
| Keywords: | gender wage gap, education, counterfactual distributions, decompositions, hazard function |
| JEL: | C21 C41 J16 J31 J71 |
| Date: | 2012–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2012008&r=lab |
| By: | Baumgarten Skogstrøm, Jens Fredrik (Ragnar Frisch Centre for Economic Research,) |
| Abstract: | I present a theory on the relationship between educational choice and entrepreneurship in a labour market with asymmetric information. The model shows that, in a labour market where education is used as a signalling device, an imperfect relationship between productivity in education and in the labour market can lead to an equilibrium where a fraction of the high-ability individuals choose to quit school and become entrepreneurs. Using a comprehensive set of Norwegian register data, I find that this is prediction is confirmed empirically: Individuals combining low education with high ability have the highest entrepreneurship rates in the population. |
| Keywords: | Entrepreneurship; self-employment; education; ability |
| JEL: | J24 L26 M13 |
| Date: | 2012–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2012_010&r=lab |
| By: | Hugo Benétez-Silva; J. Ignacio Garcéa-Pérez; Sergi Jiménez-Martén |
| Abstract: | Unemployment rates in developed countries have recently reached levels not seen in a generation, and workers of all ages are facing increasing probabilities of losing their jobs and considerable losses in accumulated assets. These events likely increase the reliance that most older workers will have on public social insurance programs, exactly at a time that public finances are suffering from a large drop in contributions. Our paper explicitly accounts for employment uncertainty and unexpected wealth shocks, something that has been relatively overlooked in the literature, but that has grown in importance in recent years. Using administrative and household level data we empirically characterize a life-cycle model of retirement and claiming decisions in terms of the employment, wage, health, and mortality uncertainty faced by individuals. Our benchmark model explains with great accuracy the strikingly high proportion of individuals who claim benefits exactly at the Early Retirement Age, while still explaining the increased claiming hazard at the Normal Retirement Age. We also discuss some policy experiments and their interplay with employment uncertainty. Additionally, we analyze the effects of negative wealth shocks on the labor supply and claiming decisions of older Americans. Our results can explain why early claiming has remained very high in the last years even as the early retirement penalties have increased substantially compared with previous periods, and why labor force participation has remained quite high for older workers even in the midst of the worse employment crisis in decades. |
| Keywords: | employment uncertainty, wealth shocks, retirement, labor supply, life-cycle models |
| JEL: | J14 J26 J65 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:564&r=lab |
| By: | Jennifer Hunt |
| Abstract: | Using a state panel based on census data from 1940-2010, I examine the impact of immigration on the high school completion of natives in the United States. Immigrant children could compete for schooling resources with native children, lowering the return to native education and discouraging native high school completion. Conversely, native children might be encouraged to complete high school in order to avoid competing with immigrant high-school dropouts in the labor market. I find evidence that both channels are operative and that the net effect is positive, particularly for native-born blacks, though not for native-born Hispanics. An increase of one percentage point in the share of immigrants in the population aged 11-64 increases the probability that natives aged 11-17 eventually complete 12 years of schooling by 0.3 percentage points, and increases the probability for native-born blacks by 0.4 percentage points. I account for the endogeneity of immigrant flows by using instruments based on 1940 settlement patterns. |
| JEL: | J15 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18047&r=lab |
| By: | Zuzana Brixiova; Balazs Egert |
| Abstract: | The unemployment rate in Estonia rose sharply in 2010 to one of the highest levels in the EU, after the country entered a severe recession in 2008. While the rate declined relatively rapidly in 2011, it remained high especially for the less educated. In 2009, the Employment Contract Law relaxed employment protection legislation and sought to raise income protection of the unemployed to facilitate transition from less to more productive jobs while mitigating social costs. Utilizing a search model, this paper shows that increasing further labour market flexibility through reducing the tax wedge on labour would facilitate the structural transformation and reduce the long-term unemployment rate. Linking increases in unemployment benefits to participation in job search or training programmes would improve the unemployed workers’ incentives to search for jobs or retrain and the medium term labour market outcomes. Social protection schemes for the unemployed should be also strengthened as initially intended to give the unemployed sufficient time to search for adequate jobs or retrain for new opportunities. |
| Keywords: | Labour market reforms, search model, Estonia, OECD countries |
| JEL: | J08 J64 E24 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2011-1027&r=lab |
| By: | Neil Foster |
| Abstract: | This report considers the impact of offshoring on labour markets. The report begins by surveying the empirical literature linking offshoring activities to changes in employment and the relative wage and employment of high- to low-skilled workers. The report moves on to consider recent developments in offshoring activities and in labour markets for a sample of 40 developing and developed countries. Based on these developments the report draws conclusions on the likely developments in offshoring and its impact on labour markets. |
| JEL: | F14 J31 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:fiwspe:y:2012:i:003&r=lab |
| By: | Dana Burde; Leigh L. Linden |
| Abstract: | We conduct a randomized evaluation of the effect of village-based schools on children’s academic performance using a sample of 31 villages and 1,490 children in rural northwestern Afghanistan. The program significantly increases enrollment and test scores among all children, eliminates the 21 percentage point gender disparity in enrollment, and dramatically reduces the disparity in test scores. The intervention increases formal school enrollment by 42 percentage points among all children and increases test scores by 0.51 standard deviations (1.2 standard deviations for children that enroll in school). While all students benefit, the effects accrue disproportionately to girls. Evidence suggests that the village-based schools provide a comparable education to traditional schools. Estimating the effects of distance on academic outcomes, children prove very sensitive: enrollment and test scores fall by 16 percentage points and 0.19 standard deviations per mile. Distance affects girls more than boys—girls’ enrollment falls by 6 percentage points more per mile (19 percentage points total per mile) and their test scores fall by an additional 0.09 standard deviations (0.24 standard deviations total per mile). |
| JEL: | I25 I28 O12 O22 O38 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18039&r=lab |
| By: | Büchner Charlotte; Smits Wendy; Velden Rolf van der (ROA rm) |
| Abstract: | This paper analyzes the relationship between cognitive skills, measured at age 12, andearnings of males and females at the age of 35, conditional on their attained educationallevel. Employing a large data set that combines a longitudinal school cohort survey withincome data from Dutch national tax files, our findings show that cognitive skills andspecifically math skills are rewarded on the labor market, but more for females thanfor males. The main factor driving this result is that cognitive skills appear to be betterpredictors of schooling outcomes for males than for females. Once males have achievedthe higher levels of education, they more often choose programs with high earningperspectives like economics and engineering, even if their level of math skills is relativelylow. |
| Keywords: | labour market entry and occupational careers; |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2012002&r=lab |
| By: | Deakin, S.; Sarkar, P. |
| Abstract: | We analyse a recently developed leximetric dataset on Indian labour law over the period 1970 to 2006. Indian labour law is seen to be highly protective of workers' interests by international standards, particularly in the area of dismissal regulation. We undertake a time-series econometric analysis to estimate the impact of the strengthening of labour laws on unemployment and industrial output in the formal economy. We find no evidence that pro-worker labour legislation leads to unemployment or industrial stagnation. Rather, pro-worker labour laws are associated with low unemployment, with the direction of causality running from unemployment and output to labour regulation. |
| Keywords: | slabour law, unemployment, India |
| JEL: | K31 J08 J50 J60 J83 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp428&r=lab |
| By: | Facundo Albornoz; Antonio Cabrales; Esther Hauk |
| Abstract: | Immigration is an important problem in many societies, and it has wide-ranging effects on the educational systems of host countries. There is a now a large empirical literature, but very little theoretical work on this topic. We introduce a model of family immigration in a frame- work where school quality and student outcomes are determined endogenously. This allows us to explain the selection of immigrants in terms of parental motivation and the policies which favor a positive selection. Also, we can study the effect of immigration on the school system and how school quality may self-reinforce immigrants' and natives' choices. |
| Keywords: | education, immigration, school resources, parental involvement, immigrant sorting |
| JEL: | I20 I21 I28 J24 J61 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:590&r=lab |
| By: | Kumar, Rajnish; Mitra, Arup; Murayama, Mayumi |
| Abstract: | Child labour in several low income households is rather pursued for gaining experience and at times for meagre incomes, which are possibly spent on household food expenditure. Though the contribution made by the child labour to the overall wellbeing does not turn out to be substantial, without child labour these households would have been much worse off than the households which can afford not to have child labour. The probability of working is higher for a male child compared to a girl child. This is because the girl children are often engaged in household activities and even when they are engaged in income earning jobs they are shown as helpers. Parents' income as such may not be having a positive impact on child's education rather it is the educational level of the parents which matters in determining whether the child would go to school and continue her/his education. To substantiate the gender bias, the probability of falling ill among the girl children is found to be higher compared to the boys. Parents' educational attainments beyond a certain level again tend to reduce the probability of falling ill. |
| Keywords: | India, Child labor, Gender, Household, Slums, Education, Health |
| JEL: | J13 J16 J24 J31 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper352&r=lab |
| By: | Fella, Giulio |
| Abstract: | This paper studies the effect mandated severance pay in a matching model featuring wage rigidity for ongoing, but not new, matches and Pareto efficient spot renegotiation of mandated severance pay. Severance pay matters only if real wage rigidities imply inefficient separation under employment at will. In such a case, large enough severance payments reduce job destruction and increase job creation and social efficiency, under very mild conditions. Efficient renegotiation implies that severance pay never results in privately inefficient labour hoarding and that its marginal effect is zero when its size exceeds that which induces the same allocation that would prevail in the absence of wage rigidity. These results hold under alternative micro-foundations for wage rigidity. |
| Keywords: | Severance pay; renegotiation; wage rigidity |
| JEL: | E24 J65 J64 |
| Date: | 2012–02–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38638&r=lab |
| By: | Maurizio Baussola (DISCE, Università Cattolica); Chiara Mussida (DISCE, Università Cattolica) |
| Abstract: | Recent labour market developments include an increase in labour market mismatches, in that high unemployment rates coexist with significant levels of vacancies. This pattern is particularly evident in the US economy, but is also significant within the European Union; it implies that the natural rate of unemployment may rise significantly, thus suggesting that even if policies aimed at reducing it are implemented, the unemployment rate may remain steady if not increase. An important factor possibly influencing such an increase is related to the gender differential in employment opportunities. This is particularly relevant wherever such a differential represents a structural characteristic of the labour market, as in the case of Italy. The present work focuses on this issue and presents a methodology to decompose the natural rate of unemployment by gender, thus defining it in terms of equilibrium labour market flows between the aggregate states of the labour market (Employment, Unemployment, Non Labour Force). In addition, we propose estimates of the determinants of the unemployment gender gap, in order to pinpoint the relative roles of individual characteristics and structural factors in determining this difference. |
| Keywords: | unemployment gender gap, differentials, multinomial models, transition probability matrix. |
| JEL: | C21 C41 J16 J31 J71 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1180&r=lab |
| By: | Donnellan,Trevor; Hanrahan,Kevin; Hennessy,Thia |
| Abstract: | Following the identification of relevant labour market characteristics in Deliverable 9.1 (Factor Markets Working Paper No. 25), a survey was designed and implemented across the participant countries in the Factor Markets project. These survey results are detailed in this paper, Deliverable 9.3. The focus is of the survey, which was completed with the assistance of project partner teams, included, employment market, labour legislation, wage-setting mechanisms, unions, taxation and social benefits, education and training, labour mobility and general features of agriculture. Based on the questions posed and the responses received in the survey, in broad terms the agricultural labour market characteristics in the countries under study are not as heterogeneous as one might anticipate. . Some of the differences, such as minimum rates of pay, are common to sectors other than agriculture also. There is a notable lack of a regional pattern to the labour market characteristics, i.e. no strong evidence of a north/south or east/west divide. Moreover, the labour market characteristics of one country are not necessarily a good indicator of the labour market characteristics of neighbouring countries. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:130&r=lab |
| By: | Thijs van Rens |
| Abstract: | Using new quarterly data for hours worked in OECD countries, Ohanian and Raffo (2011) argue that in many OECD countries, particularly in Europe, hours per worker are quantitatively important as an intensive margin of labor adjustment, possibly because labor market frictions are higher than in the US. I argue that this conclusion is not supported by the data. Using the same data on hours worked, I nd evidence that labor market frictions are higher in Europe than in the US, like Ohanian and Raffo, but also that these frictions seem to affect the intensive margin at least as much as the extensive margin of labor adjustment. |
| Keywords: | hours worked, intensive margin labor adjustment |
| JEL: | E24 E32 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:579&r=lab |
| By: | Peri, Giovanni; D'Amuri, Francesco |
| Abstract: | In this paper we analyze the effect of immigrants on native jobs in fourteen Western European countries. We test whether the inflow of immigrants in the period 1996-2007 decreased employment rates and/or if it altered the occupational distribution of natives with similar education and age. We find no evidence of the first but significant evidence of the second: immigrants took “simple†(manual-routine) type of occupations and natives moved, in response, toward more “complex†(abstract-communication) jobs. The results are robust to the use of an IV strategy based on past settlement of different nationalities of immigrants across European countries. We also document the labor market flows through which such a positive reallocation took place: immigration stimulated job creation, and the complexity of jobs offered to new native hires was higher relative to the complexity of destructed native jobs. Finally, we find evidence that the occupation reallocation of natives was significantly larger in countries with more flexible labor laws. This tendency was particularly strong for less educated workers. |
| Keywords: | European Studies/Civilization, International Economics, Applied Economics, Immigration, Task specialization, European Labor Markets |
| Date: | 2010–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:bineur:qt9rp2j8m1&r=lab |
| By: | Christian Merkl; Thijs van Rens |
| Abstract: | Firms select not only how many, but also which workers to hire. Yet, in standard labor market models, all workers have the same probability of being hired. We argue that selective hiring crucially affects welfare analysis. Our model is isomorphic to a standard search and matching 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: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:570&r=lab |
| By: | Michela Braga (University of Milan); Marco Paccagnella (Bank of Italy); Michele Pellizzari (Bocconi University, IGIER and IZA) |
| Abstract: | This paper contrasts measures of teacher effectiveness with the students’ evaluations of the same teachers using administrative data from Bocconi University (Italy). The effectiveness measures are estimated by comparing the subsequent performance in follow-on coursework of students who are randomly assigned to teachers in each of their compulsory courses. We find that, even in a setting where the syllabuses are fixed, teachers still matter substantially. Additionally, we find that our measure of teacher effectiveness is negatively correlated with the students’ evaluations of professors: in other words, teachers who are associated with better subsequent performance receive worse evaluations from their students. We rationalize these results with a simple model where teachers can either engage in real teaching or in teaching-to-the-test, the former requiring greater student effort than the latter. Teaching-to-the-test guarantees high grades in the current course but does not improve future outcomes. Hence, if students are short-sighted and give better evaluations to teachers from whom they derive higher utility in a static framework, the model is capable of predicting our empirical finding that good teachers receive bad evaluations. |
| Keywords: | teacher quality, postsecondary education |
| JEL: | I20 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_825_11&r=lab |
| By: | Elizabeth U. Cascio; Douglas O. Staiger |
| Abstract: | Educational interventions are often evaluated and compared on the basis of their impacts on test scores. Decades of research have produced two empirical regularities: interventions in later grades tend to have smaller effects than the same interventions in earlier grades, and the test score impacts of early educational interventions almost universally “fade out” over time. This paper explores whether these empirical regularities are an artifact of the common practice of rescaling test scores in terms of a student’s position in a widening distribution of knowledge. If a standard deviation in test scores in later grades translates into a larger difference in knowledge, an intervention’s effect on normalized test scores may fall even as its effect on knowledge does not. We evaluate this hypothesis by fitting a model of education production to correlations in test scores across grades and with college-going using both administrative and survey data. Our results imply that the variance in knowledge does indeed rise as children progress through school, but not enough for test score normalization to fully explain these empirical regularities. |
| JEL: | I20 I21 I28 J24 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18038&r=lab |
| By: | Simon Sturn (Macroeconomic Policy Institute (IMK) at the Hans Boeckler Foundation) |
| Abstract: | Until now there exists no consensus view on the determinants of unemployment. Whereas some empirical papers find that mainly labour market institutions explain unemployment, others argue that this correlation is not robust. One explanation for these contradictory results is that labour market institutions affect unemployment in varying labour market regimes differently. Due to institutional complementarities and a trade-off between external and internal flexibility, certain labour market institutions show different impacts on unemployment depending on the general institutional arrangement. Support for this is found when testing for the impact of labour market institutions on unemployment in different labour market regimes with panel data for 20 OECD countries in the period 1982 to 2003. While external labour market flexibility shows the expected impact on unemployment in some countries, this is not the case in corporatist countries, which are characterised by high internal flexibility and good labour relations. Taking account of the regime is therefore crucial for successful labour market policy. Additionally, high real interest rates and restrictive monetary and fiscal policy in downturns are found to increase unemployment, suggesting that policy makers should react actively to economic downturns. |
| JEL: | E3 E6 H1 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:6-2011&r=lab |
| By: | Werner Hernani; Maria Villegas; Ernesto Yanez |
| Abstract: | This paper attempts to evaluate the effectiveness of Bolivia’s labor market institutions, particularly the Plan Nacional de Empleo de Emergencia (PLANE). It is found that unemployment as conventionally defined may not be the most important problem in Bolivia’s labor market, as the non-salaried market is always an alternative. While un- employment durations and unemployment scarring consequences are relatively low, labor market regulations and labor market programs do not help to increase the size of the formal market, apparently as a result of Bolivia’s rigid labor markets and labor policies based mainly on temporary employment programs. Such programs, however, may have helped to smooth consumption. Given the country’s high level of infor- mality, protection policies are second best to active policies specifically designed to increase the productivity/employability of vulnerable populations. |
| JEL: | J08 J21 J64 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4758&r=lab |
| By: | Leonid V. Azarnert? |
| Abstract: | This work focuses on a temporary guest-worker-type migration of individuals from the middle class of the wealth distribution. The article demonstrates that the possibility of a low-skilled guest-worker employment in a higher wage foreign country lowers the relative attractiveness of the skilled employment in the home country. Thus it prevents a fraction of individuals from acquiring human capital. Therefore, even if all individuals who acquired education remain in the home country, the actual number of educated workers in the source economy decreases, and the aggregate level of human capital in this economy would thus be negatively affected. |
| Keywords: | Migration, Human Capital, Fertility, Brain Drain, Economic Growth |
| JEL: | F22 F43 J13 J24 J61 O15 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_031&r=lab |
| By: | Martín Gonzalez Rozada; Lucas Ronconi; Hernan Ruffo |
| Abstract: | This paper takes advantage of several reforms that provide time and cross sectional variation to identify the effects of unemployment insurance and severance payments on the duration of unemployment and on the separation probability in Argentina. Administrative data permits analysis of the duration of unemployment of covered spells with detailed information about transfers and their duration, while household surveys permit the study of separation probability and transitions to informal jobs, which are not observed in administrative data. It is found that unemployment duration increases significantly when unemployment insurance transfers are higher or are provided for a longer period; the effects of severance pay on unemployment duration are less robust. On the other hand, higher severance pay is found to reduce separation probability, while unemployment insurance transfers have a positive but small effect on separations. |
| JEL: | I38 J64 J65 J68 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4759&r=lab |
| By: | Anne Busch; Elke Holst |
| Abstract: | The paper analyzes the gender pay gap in private-sector management positions based on German panel data and using fixed-effects models. It deals with the effect of occupational sex segregation on wages, and the extent to which wage penalties for managers in predominantly female occupations are moderated by firm size. Drawing on economic and organizational approaches and the devaluation of women's work, we find wage penalties for female occupations in management only in large firms. This indicates a pronounced devaluation of female occupations, which might be due to the longer existence, stronger formalization, or more established "old-boy networks" of large firms. |
| Keywords: | Gender pay gap, managerial positions, occupational sex segregation, gendered organization, firm size |
| JEL: | B54 J16 J24 J31 J71 L2 M51 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1206&r=lab |
| By: | Kenneth Beauchemin; Murat Tasci |
| Abstract: | We construct a multiple shock, discrete time version of the Mortensen-Pissarides labor market search model to investigate the basic model’s well-known tendency to underpredict the volatility of key labor market variables. In addition to the standard labor productivity shock, we introduce shocks to matching effi ciency and job separation. We conduct two set of experiments. First, we estimate the joint probability distribution of shocks that simultaneously satisfy the observed data and the fi rst-order conditions of the multiple-shock model, and then simulate its properties. Although the multiple-shock model generates significantly more volatility while preserving the Beveridge curve relationship, it generates counterfactual implications for the cyclicality of job separations. Using a business cycle accounting approach, we design the second set of experiments to isolate the sources of model incompleteness and show that the model requires significant procyclical and volatile matching efficiency and counterfactually procyclical job separations to render the observed data without error. We conjecture that the basic Mortensen-Pissarides model lacks mechanisms to generate sufficiently strong labor market reallocation over the business cycle, and suggest nontrivial labor force participation and job-to-job transitions as promising avenues of research. |
| Keywords: | Employment ; Labor market ; Labor turnover |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1211&r=lab |
| By: | Alice M. Henriques |
| Abstract: | A majority of women receive most of their Social Security benefits based upon their husbands' earnings history, but previous research has shown that husbands' benefit claiming is inconsistent with maximizing lifetime benefits for the couple. However, that research assumes husbands choose their claim age based on all Social Security incentives facing the household. I show that husbands' claiming behavior responds to the actuarial incentives built into their own retired worker benefit formula, but not to the incentives built into the spouse and survivor formulas that determine their wives' benefits. This failure to incorporate his spouses' incentives reduces wives' lifetime benefits. Variation in incentives comes from rule changes to the Social Security benefit calculation in addition to the age difference between spouses and the relative strength of the wife's labor force history. A variety of robustness checks looking at segments of the population predicted to be more responsive to incentives provide similar results to the main specification. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2012-19&r=lab |
| By: | Dusan Paredes (IDEAR - Department of Economics, Universidad Católica del Norte - Chile) |
| Abstract: | This paper presents a methodology to estimate the individual gender wage gap as the difference between wages of the women and their counterfactuals defined by Coarsened Exact Matching. If the women show a higher wage than comparable men, then it is called positive gap. Using eight surveys between 1992 and 2009 for Chile, a stable average of 44% of women show positive gap. This group is considered interesting from the policy perspective because they can provide lessons to decrease the negative discrimination observed on women. Additional analysis shows that the occupations such as Managers, Professionals and Technicians and Associated Professionals always increase the positive gap. Finally, the most successful economic activity to increase the positive gap is Finance and Insurance Activities. |
| Keywords: | Gender earnings gap, statistical discrimination, occupational sorting |
| JEL: | J01 J20 J31 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:cat:dtecon:dt201208&r=lab |
| By: | Nicolas Antheaume (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Marie Catalo (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Howayda Ismail (UFE - Université française d'Egypte - Université française d'Egypte) |
| Abstract: | In this article we demonstrate, through the case of Egypt, how the emphasis on one specific learning mode from primary through to secondary school, and to a lesser extent, culture, impact learning abilities. We describe how Egyptian students are impaired when confronted to learning modes they have not encountered prior to University, when they join a businessadministration, bi-national, double-degree programme. We explain how a "globalized" method (computer based business simulation) was blended with a local context, and turned into a glocal one to respond to a learning challenge and to the needs of a double degree curriculum (French and Egyptian). |
| Keywords: | Management education ; experiential learning ; learning modes ; culture ; computer-based business simulations ; Egypt ; France ; Globalization of Business and Management Education |
| Date: | 2012–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00694411&r=lab |
| By: | Inés Macho-Stadler; David Pérez-Castrillo; Nicolés Porteiro |
| Abstract: | We consider a market where firms hire workers to run their projects and such projects differ in profitability. At any period, each firm needs two workers to successfully run its project: a junior agent, with no specific skills, and a senior worker, whose effort is not verifiable. Senior workers differ in ability and their competence is revealed after they have worked as juniors in the market. We study the length of the contractual relationships between firms and workers in an environment where the matching between firms and workers is the result of market interaction. We show that, despite in a one-firm-one-worker set-up long-term contracts are the optimal choice for firms, market forces often induce firms to use short-term contracts. Unless the market only consists of firms with very profitable projects, firms operating highly profitable projects offer short-term contracts to ensure the service of high-ability workers and those with less lucrative projects also use short-term contracts to save on the junior workers wage. Intermediate firms may (or may not) hire workers through long-term contracts. |
| Keywords: | Moral Hazard, long-term contracts, equilibrium contracts |
| JEL: | D86 C78 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:557&r=lab |
| By: | Ghazala Azmat; Rosa Ferrer |
| Abstract: | This paper documents and studies the gender gap in performance among associate lawyers in the United States. Unlike most high-skilled professions, the legal profession uses widely-accepted and objective methods to measure and reward lawyers productivity: the number of hours billed to clients and the amount of new client revenue generated. We find clear evidence of a gender gap in annual performance. Male lawyers bill ten-percent more hours and bring in more than double the new client revenue. We show that the differential impact across genders in the presence of young children and the differences in aspirations to become a law-firm partner account for a large part of the difference in performance. These gaps in performance have important consequences for gender gaps in earnings. While individual and firm characteristics explain up to 50 percent of the gap in earnings, the inclusion of performance measures explains most of the remainder. |
| Keywords: | performance measures, gender gaps, lawyers |
| JEL: | M52 J16 K40 J44 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:604&r=lab |
| By: | Giorgio Brunello; Guglielmo Weber; Christoph Weiss |
| Abstract: | We estimate the effect of education on lifetime income in Europe, by distinguishing between individuals who lived in rural or urban areas during childhood and between individuals who had access to many or few books at age ten. We instrument years of education using reforms of compulsory education in nine different countries, and find that individuals in rural areas were most affected by the reforms. Among those affected, individuals with many books at home at age ten enjoyed substantially higher returns to their additional education. We argue that the long — lasting beneficial effects of having books at home are due to the cultural environment in the household and the development of cognitive skills rather than to the presence of short - term liquidity constraints. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0842&r=lab |
| By: | Luca Marchiori (Central Bank of Luxembourg and IRES Université catholique de Louvain); Olivier Pierrard (Central Bank of Luxembourg and IRES Université catholique de Louvain); Henri R. Sneessens (and IRES Université catholique de Louvain) |
| 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 the model to investigate how demographic asymmetries may 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 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:11-14&r=lab |
| By: | Giuseppe Bertola (Edhec Business School and CEPR); Paolo Sestito (Bank of Italy) |
| Abstract: | This paper reviews the evolution of educational institutions and outcomes over the 150 years since Italy's unification, and discusses their interaction with national and regional growth patterns. While initial educational conditions contributed to differentiate across regions the early industrial take off in the late 19th century, and formal education does not appear to have played a major role in the postwar economic boom, the slowdown of Italy's economy since the 1990s may be partly due to interactions between its traditionally low human capital intensity and new comparative advantage patterns, and to the deterioration since the 1970s of the educational system's organization. |
| Keywords: | Education systems, tracking, economic growth, regional convergence |
| JEL: | N30 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:workqs:qse_06&r=lab |
| By: | Joseph A. Clougherty (University of Illinois at Urbana-Champaign and CEPR-London); Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Lars Sørgard (Department of Economics, Norwegian School of Economics) |
| Abstract: | The existing literature concerning the impact of cross-border merger activity on domestic wages can be split into two camps: 1) those focusing on positive ‘spillover’ effects; 2) those focusing on negative ‘bargaining’ effects. Motivated in part by the lack of scholarship spanning these two literatures, we provide a theoretical model that nests these two mechanisms in one conceptual framework. From our theoretical model we are able to predict that ‘spillover’ effects tend to be more dominant under low unionization rates, while ‘bargaining’ effects tend to be more dominant under high unionization rates; furthermore, ‘spillover’ effects tend to be more dominant with inward cross-border mergers, while ‘bargaining’ effects tend to be more dominant with outward cross-border mergers. We employ comprehensive panel data on wages, unionization and merger activity for US industry sectors over the 1986-2001 period in order to test the impact of cross-border merger activity on domestic wages. We find support for our propositions in that higher unionization rates make it more likely that cross-border mergers generate wage decreases, while outward cross-border mergers more likely involve wage decreases than do inward cross-border mergers. |
| Keywords: | International mergers, wages, unionisation |
| JEL: | L21 J31 F23 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp136&r=lab |
| By: | Kevin S. Milligan |
| Abstract: | Governments around the world are reacting to extended lifespans and troubled pension finances by increasing the age of retirement benefit entitlement. One concern that arises is how those who are not working before reaching entitlement age are able to bridge their consumption to the age of entitlement. This paper studies those who retire before the age of full pension entitlement in the United States using data drawn from the Health and Retirement Study. The major finding is that four out of five people who have zero earnings at pre-entitlement ages are able to find a way to lift their incomes over the poverty line. For men, pension and annuity income is important while for women, spousal income helps most to get them over the line. Reaching the early retirement entitlement age at 62 also has a significant impact on poverty avoidance. |
| JEL: | J14 J26 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18051&r=lab |
| By: | Savchenko, Yevgeniya; Acevedo, Gladys Lopez |
| Abstract: | The end of the Multi-fiber Arrangement/Agreement on Textiles and Clothing in 2005 was a major policy change that affected the allocation of global apparel productions well as the lives of workers involved in this sector. Since the apparel industry is often the major female employer in developing countries, this policy change was expected to have major implications for women. This paper analyzes the wages and working conditions of women in the apparel sector in Cambodia and Sri Lanka following the phase-out the Multi-fibre Arrangement. In both countries, apparel is a major source of exports, and women constitute 70 to 80 percent of the workers employed in the apparel industry. The paper finds that after the removal of the Multi-fibre Arrangement, apparel prices declined as a result of the increased competition. The theoretical model suggests that a decrease in prices would lead to a decrease in apparel wage premiums relative to other industries in the short run and the widening of the male-female wage gap in the long run. The empirical findings support these theoretical predictions. Wage premiums in the apparel sector relative to other industries went down post-Multi-fibre Arrangement in Cambodia and Sri Lanka and the male-female wage gap increased. The paper finds mixed results in terms of working conditions in Cambodia and Sri Lanka. |
| Keywords: | Free Trade,Labor Policies,Labor Markets,Water and Industry,Work&Working Conditions |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6061&r=lab |
| By: | Rieck, Karsten Marshall E. (University of Bergen, Norway); Telle, Kjetil (Statistics Norway) |
| Abstract: | Using registry data on every employed Norwegian woman giving birth to her first child during the period 1995–2008, we describe patterns of certified and paid sick leave before, during and after pregnancy. By following the same women over time, we can explore how observed sick leave patterns are – or are not – related to the women’s exiting (or reentering) employment. The results show that sick leave increases abruptly in the month of conception, and continues to grow throughout the term of pregnancy. Sick leave during pregnancy has been rising substantially compared with pre-pregnancy levels over the period 1995–2008, but this increase seems unrelated to women’s growing age at first birth. In line with hypotheses of women’s “double burden”, observed sick leave rates increase in the years after birth. However, when we handle some obvious selection issues – like sick leave during a succeeding pregnancy – the increase in women’s sick leave in the years after birth dissolves. Overall, we find little, if any, sign of the relevance of “double burden” hypotheses in explaining the excessive sick leave of women compared with men. |
| Keywords: | Sick leave; pregnancy; female employment; double burden. |
| JEL: | C23 H55 I18 J13 J22 |
| Date: | 2012–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2012_006&r=lab |
| By: | Yoshino, Hisao |
| Abstract: | It seems like that backward- bending of labor supply function can be observed in Central Asian Countries such as Uzbekistan and Kazakhstan. People’s basic needs of life are satisfied and they do not increase labor supplies even if wage increases. It is possible to find some cases in which slowdowns increase, when a manager in a firm enforces penalties for workers have slowdowns. This phenomenon occurs because a worker prefers the position of equilibrium on the labor supply function always in the upper direction. This article explains the increase of free-riders by penalties and how to avoid them. |
| Keywords: | Central Asia, Labor problems, Labor market, Backward- bending, Labor Supply Function, Free Riders |
| JEL: | C70 J20 J22 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper350&r=lab |
| By: | Simone Schüller |
| Abstract: | A lack of cultural integration is often blamed for hindering immigrant families' economic progression. This paper is a first attempt to explore whether immigrant parents' ethnic identity affects the next generation's human capital accumulation in the host country. Empirical results based on data from the German Socio-Economic Panel (SOEP) indicate that maternal majority as well as paternal minority identity are positively related to the educational attainment of second-generation youth - even controlling for differences in ethnicity, family background and years-since-migration. Additional tests show that the effect of maternal majority identity can be explained by mothers' German language proficiency, while the beneficial effect of fathers' minority identity is not related to language skills and thus likely to stem from paternal minority identity per se. |
| Keywords: | Ethnic Identity, Second-Generation Immigrants, Education |
| JEL: | I21 J15 J16 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp443&r=lab |
| By: | Peng, Fei; Kang, Lili |
| Abstract: | This paper analyzes the links between labour market institutions and skill premiums in the UK, controlling for other explanatory variables such as market conditions, international trade and skill-biased technology. We find that the trade union decline in unskilled workers can explain more than half of degree premium’ increase over the period 1979-1998 in the private sector, while the overall effect of trade union on degree premiums is only one third during the same period. Decline of trade union has less significant effect on skill premiums in the public sector. |
| Keywords: | skill premiums; trade union; panel data |
| JEL: | J51 J31 K31 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38541&r=lab |
| By: | Deakin, S.; McLaughlin, C.; Chai, D.H. |
| Abstract: | We review the different regulatory mechanisms which have been used in the UK context to promote gender equality in employment over the past decade, including legal enforcement based on claimant-led litigation, collective bargaining, pay audits, and shareholder pressure. Evidence is drawn from case studies examining the effects of these different mechanisms on organisations in the public and private sectors, and from econometric analysis of the impact of stock market pressures on firms' human resource practices. We argue that there is scope for reflexive solutions to improve the effectiveness in practice of UK equality law, by inducing efficient disclosure by employers, setting default rules, and encouraging bargaining in the shadow of the law. |
| Keywords: | equal pay, gender equality, reflexive law |
| JEL: | J53 J78 K31 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp426&r=lab |
| By: | Girard, Magali |
| Abstract: | The role played by immigrants in the American economy is well documented and, to a lesser extent, the effect of the migration experience on the families of immigrants. However, little is known of the connections between work and family when it comes to immigrants, especially immigrants in low-skilled jobs, whether it is the effect of labour market experiences on the family or the effect of family patterns on integration into the labour market. Yet, the issue of balancing personal life with professional responsibilities is of growing interest among scholars and policy makers, given the increasing participation of women in the labour market, the increase in non-standard work and the high proportion of immigrants in these work arrangements. |
| Keywords: | Sociology, Applied Economics, Economics, General, Ethnic, Cultural Minority, Gender, and Group Studies, family life, immigration, low skilled labor, economics, united states |
| Date: | 2012–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:bineur:qt0mb045tt&r=lab |
| By: | Nils Kornder (University of Maastricht); Jaap Dronkers (University of Maastricht) |
| Abstract: | As a follow-up of earlier analyses of the educational performance of all pupils with a migration background with Programme for International Student Assessment (PISA) waves 2003 and 2006, we analyze the differences between the educational performance of 15-year old daughters and sons of migrants from specific regions of origin countries living in different destination countries. We use the newest PISA 2009 wave. Instead of analyzing only Western countries as destination countries, we analyze the educational performance of 16,612 daughters and 16,804 sons of migrants in destination countries across Asia, Europe, Latin America, and Oceania. We distinguish 62 origin countries and 12 origin areas in 30 destination countries. We test three hypotheses: 1) The daughters of migrants from poorer, more traditional regions perform much better in reading than comparable sons of migrants from the same origin regions, while the daughters of migrants from more affluent and liberal regions perform slightly better in reading than comparable sons of migrants from the same regions. 2) Individual socioeconomic background has a stronger effect on the educational performance of daughters of migrants than on the performance of sons of migrants. 3) The performance of female native pupils has a higher influence on the performance of migrant daughters than the performance of male native pupils has on the performance of migrant sons. The first hypothesis can only partly be accepted. Female migrant pupils have both higher reading and math scores than comparable male migrant pupils, and these gender differences among migrant pupils are larger than among comparable native pupils. The additional variation in educational performance by region of origin is, however, not clearly related to the poverty or traditionalism of regions. Neither the second nor the third hypothesis can be accepted, given our results. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1214&r=lab |
| By: | Martin, Philip |
| Abstract: | Most Americans and Europeans in opinion polls say that governments are doing a poor job of selecting wanted newcomers, preventing the entry and stay of unwanted foreigners, and integrating settled immigrants and their children. This seminar reviewed the evidence, asking about the economic and socio-political integration of low-skilled immigrants and their children. The context for links between immigration and integration is that most European nations have shrinking populations and extensive welfare states that provide support to the elderly and poor from the contributions of currently employed workers. If immigrants and their children add to employment, they can achieve the higher wages and more opportunities most sought inEuropeand help to preserve generous welfare states. However, if immigrants and their children are mostly jobless or out of the labor force, they may add burdens to welfare states. |
| Keywords: | Area Studies, European Studies/Civilization, American/United States Studies/Civilization, migration, workers, economics, immigration |
| Date: | 2012–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:bineur:qt6wv4s6q4&r=lab |
| By: | Engström, Per (Department of Economics, Uppsala University); Hägglund, Pathric (The Swedish Social Insurance Inspectorate (ISF)); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | This paper estimates the effects of early interventions in the Swedish sickness insurance system. The aim of the interventions is to screen and, further to, rehabilitate sick listed individuals. We find that the early interventions – in contrast to what is expected – increase the inflow into disability benefits by around 20 percent. In order to explain the results, we develop a simple theoretical model based on asymmetric information of the health status. The model predicts that the treatment effect is larger for individuals with low incentives to return to work. In order to test this prediction we estimate effects for sick listed employed and unemployed separately. Consistent with the model’s prediction, we find that the effect is larger for the unemployed than for the employed. |
| Keywords: | Monitoring; screening; vocation rehabilitation; disbility insurance; sickness insurances; unemployment insurance; randomized experiment |
| JEL: | C93 H51 H55 I18 J22 |
| Date: | 2012–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2012_009&r=lab |
| By: | Alessia LO TURCO (Universita Politecnica delle Marche, Department of Economics and Social Sciences, Ancona, Italy); Daniela MAGGIONI (Universita Politecnica delle Marche, Department of Economics and Social Sciences, Ancona, Italy); Matteo PICCHIO (Research Foundation - Flanders (FWO); Sherppa, Ghent University; Department of Economics, CentER,Tilburg University; IZA, Bonn) |
| Abstract: | We study the relationship between offshoring and job stability in Italy in the period 1995–2001 by using an administrative dataset on manufacturing workers. We find that the international fragmentation of production negatively affects job stability. Service offshoring and material purchases from developed countries foster job-to-job transitions within manufacturing of all workers and white collars, respectively. However, the most detrimental effects for job stability come from material offshoring to low income countries which drives blue collar workers out of manufacturing. Therefore, policy interventions should especially focus on this latter category of workers more exposed to fragmentation processes and foreign competition. |
| Keywords: | Offshoring, job stability, manufacturing, duration analysis, proportional hazard |
| JEL: | C41 F14 F16 J62 |
| Date: | 2012–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2012007&r=lab |
| By: | Yu-Fu Chen; Gylfi Zoega |
| Abstract: | Floating exchange rates allow central banks to respond to aggregate demand fluctuations by changing their interest rates. However, such fluctuations create inertia in the labour market by increasing the cost of hiring and firing workers. A regime of flexible exchange rates can cause rigidities in labour markets similar to those caused by legalised firing restrictions. Exchange rate volatility makes firms wait before hiring new workers and firing existing ones. Thus the adoption of a common currency has effects very similar to the removal of employment-protection legislation and other direct restrictions on hiring and firing. Exchange-rate volatility is more harmful for the entry of new firms than employment-protection legislation, particularly promising, high-risk ventures. |
| Keywords: | Floating Exchange Rates, Labour-market Flexibility |
| JEL: | E32 J23 J24 J54 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_038&r=lab |
| By: | Emran, M. Shahe; Shilpi, Forhad |
| Abstract: | India experienced sustained economic growth for more than two decades following the economic liberalization in 1991. While economic growth reduced poverty significantly, it was associated with an increase in inequality. Does this increase in inequality reflect deep-seated inequality of opportunity or efficient incentive structure in a market oriented economy? This paper provides evidence on economic mobility in post-reform India by focusing on the educational attainment of children. It uses two related measures of immobility: sibling and intergenerational correlations. The paper analyzes the trends in and patterns of educational mobility from 1992/93 to 2006, with a special emphasis on the roles played by gender and geography. The evidence shows that family background plays a strong role; the estimated sibling correlation in India in 2006 is higher than the available estimates for Latin American countries. There is a persistent gender gap in rural and less-developed areas. The only group that experienced substantial improvements is women in urban and developed areas, with the lower caste women benefiting the most. Almost 70 percent of the variance in children's education can be accounted for by parental education and geographic location. The authors provide possible explanations for the apparently puzzling improvements for urban women in a country with strong son preference. |
| Keywords: | Population Policies,Primary Education,Education and Society,Population&Development,Rural Development Knowledge&Information Systems |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6055&r=lab |
| By: | Jhon James Mora; Juan Muro |
| Abstract: | Informality is a common phenomenon in developing countries and an unusual one in industrialized countries. The persistence of informal employment is indicative of the impossibility of moving out of this status for a certain period of time. Using pseudo panel data, empirical evidence is presented to show that this phenomenon occurs in a developing country like Colombia where education helps mitigate said persistent occurrence. The authors also present evidence that a minimum salary increase does not only result in increased informality, but also increases the persistence of informality. This kind of evidence can be used for discussing the persistence of informality in other developing countries. |
| Date: | 2012–02–29 |
| URL: | http://d.repec.org/n?u=RePEc:col:000130:009593&r=lab |
| By: | Almut Balleer; Thijs van Rens |
| Abstract: | Over the past two decades, technological progress in the United States has been biased towards skilled labor. What does this imply for business cycles? We construct a quarterly skill premium from the CPS and use it to identify skill-biased technology shocks in a VAR with long-run restrictions. Hours fall in response to skill-biased technology shocks, indicating that at least part of the technology-induced fall in total hours is due to a compositional shift in labor demand. Skill-biased technology shocks have no effect on the relative price of investment, suggesting that capital and skill are not complementary in aggregate production. |
| Keywords: | skill-biased technology, skill premium, VAR, long-run restrictions, capital-skill complementarity, business cycle |
| JEL: | E24 E32 J24 J31 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:560&r=lab |
| By: | Jellal , Mohamed; Bouzahzah, Mohamed |
| Abstract: | This paper highlights formally the interaction existing between the quality of institutional governance, the education sector and economic growth. More fundamentally, we show how the quality of institutional governance matters in giving directly the appropriate incentives for human capital accumulation, which positively impact the profile of economic growth. |
| Keywords: | Institutions; Governance; Education; Economic Growth |
| JEL: | O43 I21 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38687&r=lab |
| By: | Nagore Iriberri; Pedro Rey-Biel |
| Abstract: | We study how gender differences in performance under competition are affected by the provision of information regarding rivals gender and/or differences in relative ability. In a laboratory experiment, we use two tasks that differ regarding perceptions about which gender outperforms the other. We observe womens underperformance only under two conditions: 1) tasks are perceived as favoring men and 2) rivals gender is explicitly mentioned. This result can be explained by stereotype-threat being reinforced when explicitly mentioning gender in tasks in which women already consider they are inferior. Omitting information about gender is a safe alternative to avoid womens underperformance in competition. |
| Keywords: | gender differences, competition, feedback information, gender perception, stereotype-threat |
| JEL: | C72 C91 D81 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:583&r=lab |
| By: | James Wickham (Institute for International Integration Studies, Trinity College Dublin) |
| Keywords: | Ireland employment crisis |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp367&r=lab |
| By: | Antonio Ciccone; Giovanni Peri |
| Abstract: | We find that over the period 1950-1990, US states absorbed increases in the supply of schooling due to tighter compulsory schooling and child labor laws mostly through within-industry increases in the schooling intensity of production. Shifts in the industry composition towards more schooling-intensive industries played a less important role. To try and understand this finding theoretically, we consider a free trade model with two goods/industries, two skill types, and many regions that produce a fixed range of differentiated varieties of the same goods. We find that a calibrated version of the model can account for shifts in schooling supply being mostly absorbed through within-industry increases in the schooling intensity of production even if the elasticity of substitution between varieties is substantially higher than estimates in the literature. |
| Keywords: | Schooling supply, Within-industry absorption, Industry composition |
| JEL: | F1 J3 R1 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:595&r=lab |
| By: | Camille Logeay; Sabine Stephan (IMK at the Hans Boeckler Foundation); Rudolf Zwiener (IMK at the Hans Boeckler Foundation) |
| Abstract: | In 2004, Eurostat starts publishing new figures on hourly wage costs for all European countries. These figures are new in several respects: It is the first time that internationally comparable hourly figures on wage costs are available covering a quite important time period (1995-2005), so that not only cross-country comparisons but also dynamic analyzes are possible. Furthermore, these figures are fairly detailed at the sectoral level, therefore allowing for inter-sectoral comparisons. Concerning Germany, the Eurostat statistics provide quite unexpected insights; the gap between wage costs in the manufacturing sector and the (private and business) services sector is much larger than in other countries. This study aims at giving some explanations. According to theory, various explanations are possible. First, the neo-classical theory emphasizes factors affecting or indicating the level of individual productivity, as well as firm or sectoral productivity; indicators corresponding to this approach are tested. Second, dropping the assumption of perfect competition on both labor and goods markets allows for other factors (mark-up, market power) to influence the wage costs levels; these potential determinants are also tested. Finally, we think that the structure of demand (driven by domestic or foreign demand) could also have a major impact on wages in the industry and the services sector and indeed this factor seems to play an important role. This paper is structured as follows: First, the new Eurostat statistics is presented focussing on some interesting descriptive results. In the second section, we present a list of potential determinants of wage differentials between the industry and the services sector derived from theory and literature. A bivariate analysis (correlation) is then performed and conclusions are drawn. In a third step, a multivariate analysis (panel estimation) is performed. The final section concludes. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:imk:wpaper:10-2011&r=lab |
| By: | Uri Gneezy; Pedro Rey-Biel |
| Abstract: | In contrast to the simplifying assumption of selfishness, social incentives have been shown to play a role in economic interactions. Before incorporating social incentives into models and policies, however, one needs to know their efficiency relative to standard pay-for-performance incentives. We report evidence from a large field experiment comparing the effectiveness of contingent and non-contingent (social) incentives in eliciting costly effort. The company with which we worked sent 7,250 letters asking customers to complete a survey. Some letters contained cash amounts ranging from $1 to $30, whereas others promised to pay upon compliance. We compare the response rates and cost effectiveness of these contingent and social incentives with each other and with a no-incentives control. In line with previous findings, we find that social incentives generated some effort: small amounts increased the response rate with respect to the control, but the size of the reward had a relatively minor effect. In contrast, the response rate for contingent incentives was low for small amounts but increased rapidly as incentives increased. Importantly, for (almost) any given response rate social incentives were more costly than contingent incentives. |
| Keywords: | contingent incentives; gift exchange |
| JEL: | C72 C91 D81 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:585&r=lab |
| By: | Jose Apesteguia; Miguel A. Ballester |
| Abstract: | Two main school choice mechanisms have attracted the attention in the literature: Boston and deferred acceptance (DA). The question arises on the ex-ante welfare implications when the game is played by participants that vary in terms of their strategic sophistication. Abdulkadiroglu, Che and Yasuda (2011) have shown that the chances of naive participants getting into a good school are higher under the Boston mechanism than under DA, and some naive participants are actually better off. In this note we show that these results can be extended to show that, under the veil of ignorance, i.e. students not yet knowing their utility values, all naive students may prefer to adopt the Boston mechanism. |
| Keywords: | School Choice; Naive Players; Welfare; Veil of Ignorance |
| JEL: | C7 D0 D6 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:575&r=lab |
| By: | Richard C. Barnett; Marco A. Espinosa-Vega |
| Abstract: | The World Bank documents an inverse relationship between GDP per-capita and child labor participation rates. We construct a life-cycle model with human and physical capital in which parents make a time allocation choice for their child. The model considers two features that have shown potential in explaining differences in states of development across nations. These are: i) a minimum consumption requirement, and ii) barriers to physical capital accumulation. We find the introduction of capital barriers alone is not enough to replicate the aforementioned observation by the World Bank. However, we find the interplay of a minimum consumption requirement and barriers to capital may enhance our understanding of child labor, human capital, and the poverty of nations. Additionally, we find support for policies aimed at reducing capital barriers as means to reduce child labor over an out and out ban on it. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_014&r=lab |
| By: | Carlos Bethencourt; Fernando Perera-Tallo |
| Abstract: | This paper proposes a new mechanism based on the allocation of labor to help understand why differences among countries have remained stable. We formulate a neoclassical growth model in which agents devote time either to produce or to commit predation. Labor share is the key variable which determines in equilibrium the time devoted to each activity: an increase in the labor share raises the incentive to devote time to production and discourages predation. When the elasticity of substitution between labor and capital is lower than one, the labor share rises throughout the transition while the per capita capital is lower than the steady state level. This increase in the labor share reduces the incentive to predate and increases the incentive to work for production. Empirical evidence supports these results: low per capita income countries have larger portions of predation and present lower labor shares. The standard effects of an increase in the productivity are amplified by the indirect effects of productivity on the reallocation of labor from predation to production. Institutional improvements play a key role in reducing predation and increasing the level of per capita income. |
| Keywords: | Predation, Rent-seeking, Labor share, Growth, Development |
| JEL: | O15 O17 O29 O30 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:deg:conpap:c016_039&r=lab |
| By: | Rijkers, Bob; Costa, Rita |
| Abstract: | Despite their increasing prominence in policy debates, little is known about gender inequities in non-agricultural labor market outcomes in rural areas. Using matched household-enterprise-community data sets from Bangladesh, Ethiopia, Indonesia and Sri Lanka, this paper documents and analyzes gender differences in the individual portfolio choice and productivity of non-farm entrepreneurship. Except for Ethiopia, women are less likely than men to become nonfarm entrepreneurs. Women's nonfarm entrepreneurship isn't strongly correlated with household composition or educational attainment, but is especially prevalent amongst women who are the head of their household. Female-led firms are much smaller and less productive on average, though gender differences in productivity vary dramatically across countries. Mean differences in log output per worker suggest that male firms are roughly 10 times as productive as female firms in Bangladesh, three times as those in Ethiopia and twice as those in Sri Lanka. By contrast, no significant differences in labor productivity were detected in Indonesia. Differences in output per worker are overwhelmingly accounted for by sorting by sector and size. They can't be explained by differences in capital intensity, human capital or the local investment climate, nor by increasing returns to scale. |
| Keywords: | Access to Finance,Gender and Development,Housing&Human Habitats,Economic Theory&Research,Population Policies |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6066&r=lab |
| By: | Corsini, Lorenzo; Spataro, Luca |
| Abstract: | Pension systems often entail some compulsory saving over which individuals have some degree of choice in terms of the pension plan in which to invest. Our contribution analyses whether the choice between alternative plans is affected by the presence of liquidity constraints during working life. We show that liquidity constraints obviously affect the amount saved and consumed during working life but they do not affect the decision on which pension plan to choose. In fact we prove that the analytical conditions that determine the choice between different plans are the same in the constrained and unconstrained case. |
| Keywords: | Choice on pension plans; optimal portfolio composition; incomplete markets; liquidity constraints |
| JEL: | G11 H55 G23 D91 D52 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38668&r=lab |
| By: | Wessel N. Vermeulen (CREA, University of Luxembourg) |
| Abstract: | Relaxing the assumption of fixed labour in a general equilibrium model studying the impact of resource income on the allocation of labour across sectors offers insights on how labour mobility may mitigate adverse effects such as de-industrialisation caused by resource income. The theoretical model suggests clear signs of the impact of labour (downward) and the resource income (upward) on the relative size of the service sector. Indirect effects are visible through the interactions of both variables on each other. The model is estimated in a fixed effect panel model, which offers support to the model’s direct and indirect effects. |
| Keywords: | Booming sectors, Migration, de-industrialisation |
| JEL: | C33 J61 L16 Q33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:11-20&r=lab |
| By: | Kodama, Yuka |
| Abstract: | In rural Ethiopia, livelihood diversification is essential for households to be able to sustain themselves. Declining agricultural profits and a land shortage have accelerated this diversification. While the past literature has ignored young women's economic contributions in its discussions about livelihood diversification, this research indicates that the current rapid educational expansion for girls has changed their economic role in their households. This has resulted in changes in the conventional life courses of women in rural Ethiopia as they have more choices in terms of education, marriage, and the types and location of their economic activities, due to the increasing importance of young women's economic contributions to their households and their improved educational opportunities. The aim of this paper is to elucidate how the economic environment and government educational policy have affected young women's lives in terms of education, marriage, economic activities, and intra-household power relationships, especially with their parents. |
| Keywords: | Ethiopia, Female labor, Women, Rural societies, Household |
| JEL: | J16 J21 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper344&r=lab |
| By: | Bratberg, Espen (Universitetet i Bergen,); Nilsen, Øivind Anti (Norwegian School of Economics,); Vaage, Kjell (University of Bergen) |
| Abstract: | This paper addresses whether children’s exposure to parents receiving disability benefits induces a higher probability of receiving such benefits themselves. Most OECD countries experience an increasing proportion of the working-age population receiving permanent disability benefits. Using data from Norway, a country where around 10% of the working-age population rely on disability benefits, we find that the amount of time that children are exposed to their fathers receiving disability benefits affects their own likelihood of receiving benefits positively. This finding is robust to a range of different specifications, including family fixed effects. |
| Keywords: | Disability; intergenerational correlations; siblings fixed effects |
| JEL: | H55 J62 |
| Date: | 2012–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2012_007&r=lab |
| By: | Congdon Fors, Heather (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | In recent years, a growing number of authors have turned their focus to the question of why children work. While much of the research focuses on household level factors, macroeconomic factors have gained increasing attention. This is particularly true in the case of globalization. The purpose of this paper is to contribute to the literature on the role of globalization in child labor by examining a specific aspect of globalization: social globalization. The results of the empirical analysis indicate that social globalization does have a significant impact on the average incidence of child labor in the cross-country sample of developing countries.<p> |
| Keywords: | child labor; globalization; norms |
| JEL: | J20 O11 |
| Date: | 2012–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0533&r=lab |
| By: | Jesús Gonzalo; Abderrahim Taamouti |
| Abstract: | We empirically investigate the short-run impact of anticipated and unanticipated unemployment rates on stock prices. We particularly examine the nonlinearity in stock market’s reaction to unemployment rate and study the effect at each individual point (quantile) of stock return distribution. Using nonparametric Granger causality and quantile regression based tests, we find that, contrary to the general findings in the literature, only anticipated unemployment rate has a strong impact on stock prices. Quantile regression analysis shows that the causal effects of anticipated unemployment rate on stock return are usually heterogeneous across quantiles. For quantile range [0.35, 0.80], an increase in the anticipated unemployment rate leads to an increase in the stock market price. For the other quantiles the impact is statistically insignificant. Thus, an increase in the anticipated unemployment rate is in general a good news for stock prices. Finally, we offer a reasonable explanation of why unemployment rate should affect stock prices and how it affects them. Using Fisher and Phillips curve equations, we show that high unemployment rate is followed by monetary policy action of Federal Reserve (Fed). When unemployment rate is high, the Fed decreases the interest rate, which in turn increases the stock market prices. |
| Keywords: | Stock market returns, Anticipated unemployment, Unanticipated unemployment, Nonparametric tests, Conditional independence, Granger causality in distribution, Granger causality in quantile, Locla bootstrap, Monetary policy, Federal funds rate, Money supply |
| JEL: | C14 C58 E44 G12 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1145&r=lab |
| By: | Oriana Bandiera; Luigi Guiso; Andrea Prat; Raffaella Sadun |
| Abstract: | We develop a methodology to collect and analyze data on CEOs' time use. The idea - sketched out in a simple theoretical set-up - is that CEO time is a scarce resource and its allocation can help us identify the firm's priorities as well as the presence of governance issues. We follow 94 CEOs of top-600 Italian firms over a pre-specified week and record the time devoted each day to different work activities. We focus on the distinction between time spent with insiders (employees of the firm) and outsiders (people not employed by the firm). Individual CEOs differ systematically in how much time they spend at work and in how much time they devote to insiders vs. outsiders. We analyze the correlation between time use, managerial effort, quality of governance and firm performance, and interpret the empirical findings within two versions of our model, one with effective and one with imperfect corporate governance. The patterns we observe are consistent with the hypothesis that time spent with outsiders is on average less beneficial to the firm and more beneficial to the CEO and that the CEO spends more time with outsiders when governance is poor. |
| Keywords: | CEOs, corporate governance, time use |
| JEL: | D2 G3 G34 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1145&r=lab |
| By: | Michael Boehm; Martin Watzinger |
| Abstract: | It is well documented that graduates enter different occupations in recessions than in booms. In this article, we examine the impact of this reallocation for long-term productivity and output across sectors. We develop a model in which talent flows to stable sectors in recessions and to cyclical sectors in booms. We find evidence for the predicted change in productivity caused by the business cycle in a setting where output can be readily measured: economists starting or graduating from their PhD in a recession are significantly more productive over the long term than economists starting or graduating in a boom. |
| Keywords: | Talent allocation, sectoral productivity, business cycle, roy model, PhDeconomists |
| JEL: | J24 E32 I23 J22 J23 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1143&r=lab |
| By: | Donnellan,Trevor; Hanrahan,Kevin; Hennessy,Thia |
| Abstract: | This paper describes a conceptual framework for the empirical analysis of farmers’ labour allocation decisions. The paper presents a brief overview of previous farm household labour allocation studies. Following this, the agricultural household model, developed by Singh, Squire and Strauss (1986), which has been frequently applied to the study of labour allocation, is described in more depth. The agricultural household model, the theoretical model to be used in this analysis, is based on the premise that farmers behave to maximise utility, which is a function of consumption and leisure. It follows that consumption is bound by a budget constraint and leisure by a time constraint. The theoretical model can then be used to explain how farmers decide to allocate their time between leisure, farm work and off-farm work within the constraints of a finite time endowment and a budget constraint. Work, both farm and off-farm, provides a return to labour which in turn relaxes the budget constraint allowing the farm household to consume more. The theoretical model can also be used to explore the impact on government policies on labour allocation. It follows that subsidies that decrease commodity prices, such as reductions in intervention prices, mean that farmers have to work more (either on or off the farm) to maintain income and consumption levels. On the other hand, income support subsidies that are not linked to output or labour, such as decoupled subsidies, are a source of non-labour income and as such allow farmers to work less while maintaining consumption levels, known as the wealth effect. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eps:fmwppr:129&r=lab |
| By: | Ian Gordon; Ioannis Kaplanis |
| Abstract: | Growth of 'global cities' in the 1980s was supposed to have involved an occupational polarisation, including growth of low paid service jobs. Though held to be untrue for European cities, at the time, some such growth did emerge in London a decade later than first reported for New York. The question is whether there was simply a delay before London conformed to the global city model, or whether another distinct cause was at work in both cases. This paper proposes that the critical factor in both cases was actually an upsurge of immigration from poor countries providing an elastic supply of cheap labour. This hypothesis and its counterpart based on growth in elite jobs are tested econometrically for the British case with regional data spanning 1975-2008, finding some support for both effects, but with immigration from poor countries as the crucial influence in late 1990s London. |
| Keywords: | regional labour markets, wages, employment, international migration, consumer demand |
| JEL: | J21 J23 F22 R12 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0106&r=lab |
| By: | Libertad González |
| Abstract: | I study the impact of a universal child benefit on fertility and family well-being. I exploit the unanticipated introduction of a new, sizeable, unconditional child benefit in Spain in 2007, granted to all mothers giving birth on or after July 1, 2007. The regression discontinuity-type design allows for a credible identification of the causal effects. I find that the benefit did lead to a significant increase in fertility, as intended, part of it coming from an immediate reduction in abortions. On the unintended side, I find that families who received the benefit did not increase their overall expenditure or their consumption of directly child-related goods and services. Instead, eligible mothers stayed out of the labor force significantly longer after giving birth, which in turn led to their children spending less time in formal child care and more time with their mother during their first year of life. I also find that couples who received the benefit were less likely to break up the year after having the child, although this effect was only short-term. Taken together, the results suggest that child benefits of this kind may successfully increase fertility, as well as affecting family well-being through their impact on maternal time at home and family stability. |
| Keywords: | Child benefit, policy evaluation, fertility, regression discontinuity, labor supply, consumption |
| JEL: | D1 H5 J1 J2 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:574&r=lab |