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on Labour Economics |
| By: | Haefke, Christian; Sonntag, Marcus; van Rens, Thijs |
| Abstract: | Recent research in macroeconomics emphasizes the role of wage rigidity in accounting for the volatility of unemployment fluctuations. We use worker-level data from the CPS to measure the sensitivity of wages of newly hired workers to changes in aggregate labor market conditions. The wage of new hires, unlike the aggregate wage, is volatile and responds almost one-to-one to changes in labor productivity. We conclude that there is little evidence for wage stickiness in the data. We also show, however, that a little wage rigidity goes a long way in amplifying the response of job creation to productivity shocks. |
| Keywords: | business cycle; search and matching models; wage rigidity |
| JEL: | E24 E32 J31 J41 J64 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8968&r=lab |
| By: | Badi H. Baltagi; Yusuf Soner Baskaya; Timur Hulagu |
| Abstract: | This paper presents wage curves for formal and informal workers using a rich individual level data for Turkey over the period 2005-2009. The wage curve is an empirical regularity describing a negative relationship between regional unemployment rates and individuals' real wages. While this relationship has been well documented for a number of countries including Turkey, less attention has focused on how this relationship differs for informal versus formal employment. This is of utmost importance for less developed countries where informal employment plays a signifcant role in the economy. Using the Turkish Household Labor Force Survey observed over 26 NUTS-2 regions, we find that real hourly wages of informal workers in Turkey are more sensitive to variations in regional unemployment rates than wages of formal workers. This is true for all workers as well as for different gender and age groups. |
| Keywords: | Formal/Informal Employment, Wage Curve, Regional Labor Markets |
| JEL: | C26 J30 J60 O17 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1216&r=lab |
| By: | Michelle Rendall |
| Abstract: | This paper examines the evolution of female labor market outcomes from 1987 to 2008 by assessing the role of changing labor demand requirements in four developing countries: Brazil, Mexico, India and Thailand. The results highlight the importance of structural change in reducing gender disparities by decreasing the labor demand for physical attributes. The results show that India, the country with the greatest physical labor requirements, exhibits the largest labor market gender inequality. In contrast, Brazil's labor requirements have followed a similar trend seen in the United States, reducing gender inequality in both wages and labor force participation. |
| Keywords: | Structural change, job tasks, female employment, wage gap, Latin America, Asia |
| JEL: | J20 J23 J24 J31 O31 O33 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:077&r=lab |
| By: | Tansel, Aysit (Middle East Technical University); Kan, Elif Oznur (Cankaya University) |
| Abstract: | In this study, we examine the formal/informal sector earnings differentials in the Turkish labor market using detailed econometric methodologies and a novel panel data set drawn from the 2006-2009 Income and Living Conditions Survey (SILC). In particular, we test if there is evidence of traditional segmented labor markets theory which postulates that informal workers are typically subject to lower remuneration than similar workers in the formal sector. Estimation of standard Mincer earnings equations at the mean using OLS on a pooled sample of workers confirms the existence of an informal penalty, but also shows that almost half of this penalty can be explained by observable variables. Along wage/self-employment divide, our results are in line with the traditional theory that formal-salaried workers are paid significantly higher than their informal counterparts. Confirming the heterogeneity within informal employment, we find that self-employed are often subject to lower remuneration compared to those who are salaried. Moreover, using quantile regression estimations, we show that pay differentials are not uniform along the earnings distribution. More specifically, we find that informal penalty decreases with the earnings level, implying a heterogeneous informal sector with upper-tier jobs carrying a significant premium and lower-tier jobs being largely penalized. Finally, fixed effects estimation of the earnings gap depict that unobserved individual fixed effects when combined with controls for observable individual and employment characteristics explain the pay differentials between formal and informal employment entirely, thereby implying that formal/informal segmentation may not be a stylized fact of the Turkish labor market as previously thought. |
| Keywords: | formal/informal employment, labor market dynamics, panel data, Turkey, earnings gap |
| JEL: | J21 J31 J40 O17 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6556&r=lab |
| By: | Aysit Tansel (Middle East Technical University); Elif Oznur Kan (Cankaya Universityy) |
| Abstract: | In this study, we examine the formal/informal sector earnings differentials in the Turkish labor market using detailed econometric ethodologies and a novel panel data set drawn from the 2006-2009 Income and Living Conditions Survey (SILC). In particular, we test if there is evidence of traditional segmented labor markets theory which postulates that informal workers are typically subject to lower remuneration than similar workers in the formal sector. Estimation of standard Mincer earnings equations at the mean using OLS on a pooled sample of workers confirms the existence of an informal penalty, but also shows that almost half of this penalty can be explained by observable variables. Along wage/self-employment divide, our results are in line with the traditional theory that formal-salaried workers are paid significantly higher than their informal counterparts. Confirming the heterogeneity within informal employment, we find that self-employed are often subject to lower remuneration compared to those who are salaried. Moreover, using quantile regression estimations, we show that pay differentials are not uniform along the earnings distribution. More specifically, we find that informal penalty decreases with the earnings level, implying a heterogeneous informal sector with upper-tier jobs carrying a significant premium and lower-tier jobs being largely penalized. Finally, fixed effects estimation of the earnings gap depict that unobserved individual fixed effects when combined with controls for observable individual and employment characteristics explain the pay differentials between formal and informal employment entirely, thereby implying that formal/informal segmentation may not be a stylized fact of the Turkish labor market as previously thought. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:1210&r=lab |
| By: | R Freguglia; G Spricigo; Geraint Johnes; A Aggarwal |
| Abstract: | The effect of education on labour market outcomes is analysed using both survey and administrative data from The Brazilian PNAD and RAIS-MIGRA series, respectively. Occupational destination is examined using both multinomial logit analyses and structural dynamic discrete choice modelling. The latter approach is particularly useful as a means of evaluating policy impacts over time. We find that policy to expand educational provision leads initially to an increased take-up of education, and in the longer term leads to an increased propensity for workers to enter non-manual employment. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:4464&r=lab |
| By: | Nora Prean (University of Vienna); Karin Mayr (University of Vienna) |
| Abstract: | We analyze differences in unemployment between natives and immigrants over the business cycle. Using matched employer-employee data for Austria, we find that immigrants' unemployment rate and flows into and out of unemployment are significantly more sensitive to labor market shocks than those of comparable natives. This is particularly true for immigrants from outside the European Economic Area. We find that our results are not driven by a potential selection of immigrant workers into specific industries or temporary jobs. |
| Keywords: | Unemployment rate; Immigration, Guestworker, Immigrant Labor |
| JEL: | J64 J61 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012019&r=lab |
| By: | Luc Behaghel (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); Julie Moschion (Melbourne Institute of Applied Economic and Social Research - Melbourne Institute of Applied Economic and Social Research) |
| Abstract: | In this paper, we provide empirical evidence on the impact of IT diffusion on the stability of employment relationships. We document the evolution of the different components of job instability over a panel of 350 local labor markets in France, from the mid 1970s to the early 2000s. Although workers in more educated local labor markets adopt IT faster, they do not experience any increase in job instability. More specifically, we find no evidence that the faster diffusion of IT is associated with any change in job-to-job transitions, and we find that it is associated with relatively less frequent transitions through unemployment. Overall, the evidence goes against the view that the diffusion of IT has spurred job instability. Combining the local labor market variations with firm data, we argue that these findings can be explained by French firms' strong reliance on training and internal promotion strategies in order to meet the new skills requirement associated with IT diffusion. |
| Keywords: | Technical change; labor turnover; Skill bias; Job security; Internal labor markets |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00646595&r=lab |
| By: | Dell'Aringa, Carlo (Università Cattolica del Sacro Cuore); Lucifora, Claudio (Università Cattolica del Sacro Cuore); Pagani, Laura (University of Milan Bicocca) |
| Abstract: | This paper investigates earnings differentials between immigrants and natives. We focus on returns and on the (imperfect) international transferability of human capital. Data are drawn from the 2009 Italian Labour Force Survey (LFS). We show that returns to human capital are considerably lower for immigrants as compared to natives and that there is no return to pre-immigration work experience, suggesting imperfect transferability of human capital. We also explored the role of human capital, for immigrants and natives, in explaining inter-occupational and intra-occupational earnings progression (differentials). Our findings suggest that the returns on human capital (main source of wage progression) for immigrants (is) are mainly driven by intra-occupational earnings progression. Moreover, and contrary to what is observed for natives, we detect through quantile analysis a "glass-ceiling" effect for immigrant workers, who appear to face a large penalty in accessing high paying occupations. A number of robustness checks confirm our main results. |
| Keywords: | migration, earnings, human capital portability, occupational attainment, wage differentials, human capital |
| JEL: | J31 J24 J61 F22 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6555&r=lab |
| By: | Marco Leonardi; Giovanni Pica |
| Abstract: | This paper estimates the effect of employment protection legislation (EPL) on workers' individual wages in a quasi-experimental setting, exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees and left firing costs unchanged for bigger firms. Accounting for the endogeneity of the treatment status, we find that the slight average wage reduction (between -0:4 and -0:1 percent) that follows the increase in EPL hides highly heterogeneous effects. Workers who change firm during the reform period suffer a drop in the entry wage, while incumbent workers are left unaffected. Results also indicate that the negative wage effect of the EPL reform is stronger on young blue collars and on workers at the low-end of the wage distribution. Finally, workers in low-employment regions suffer higher wage reductions after the reform. This pattern suggests that the ability of the employers to shift EPL costs onto wages depends on workers' and firms' relative bargaining power. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:436&r=lab |
| By: | A Aggarwal; R Freguglia; Geraint Johnes; G Spricigo |
| Abstract: | The impact of education on labour market outcomes is analysed using data from various rounds of the National Sample Survey of India. Occupational destination is examined using both multinomial logit analyses and structural dynamic discrete choice modelling. The latter approach involves the use of a novel approach to constructing a pseudo-panel from repeated cross-section data, and is particularly useful as a means of evaluating policy impacts over time. We find that policy to expand educational provision leads initially to an increased takeup of education, and in the longer term leads to an increased propensity for workers to enter non-manual employment. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:4465&r=lab |
| By: | Catherine Pollak (IRDES institut for research and information in health economics); Nicolas Sirven (IRDES institut for research and information in health economics) |
| Abstract: | “Active Ageing” strategies aim to foster the participation of seniors in the society. Although economic literature has extensively studied the incentives for seniors to increase their labour supply, little is known about the motivations for older people to complement labour with other forms of social participation. Using data from the Survey of Health, Ageing and Retirement in Europe, this article provides empirical evidence of the motivational role of the work environment in the supply of formal and informal productive activities of 50 to 65 year old workers. The results show that intrinsic rewards received at work, such as skill development opportunities and decision latitude, form an incentive for older workers to invest time in social activities outside the labour market. Extrinsic rewards on the other hand, like advancement perspectives, job security and pay, appear independent from non-market outcomes. Therefore, the opportunity for work time arrangements but also intrinsic rewards in the work environment should be developed if one aims to foster participation of older workers in the society. |
| Keywords: | Labour supply, Job quality, Social capital, Informal care. |
| JEL: | J81 J22 J14 C35 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt48&r=lab |
| By: | Jean-Olivier Hairault (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, IZA - Institute for the Study of Labor); François Langot (IZA - Institute for the Study of Labor, GAINS-TEPP - Université du Mans, CEPREMAP - Centre pour la recherche économique et ses applications); Sébastien Ménard (GAINS - Université du Maine); Thepthida Sopraseuth (CEPREMAP - Centre pour la recherche économique et ses applications, GAINS-TEPP - Université du Maine) |
| Abstract: | This paper studies the optimal unemployment insurance for older workers in a repeated principal-agent model, where the search intensity of risk-averse workers (the agents) is not observed by the risk-neutral insurance agency (the principal). When unemployment benefits are the only available tool, the insurance agency is not able to induce older workers to search for a job. This is because of the short time-horizon of workers close to retirement. We propose to introduce a pension tax dependent on the length of the unemployment spell. We show that this device performs better than a wage tax after re-employment. First, it makes jobs more attractive, as they are free of tax. Second, because re-employment will be short-lived, a pension tax is a more powerful incentive than a wage tax, and provides more substantial fiscal gains to the agency. Finally, a pension tax allows those workers near retirement who still do not exercise job search to smooth their consumption during their unemployment spell, as if they could borrow against their future pension. |
| Date: | 2012–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00668989&r=lab |
| By: | Luo, Mi; Zhang, Chuanchuan |
| Abstract: | Using data from a most recent national household survey in China, we provide new evidence for the relationship between body mass index (BMI) and labor market attainments. In contrast to previous studies, we find a non-linear relationship between BMI and employment / wages, especially for women. There is no substantial heterogeneity across occupation in the effect of BMI on women’s wages. |
| Keywords: | Body mass index; Unemployment; Wage; Non-linear correlation |
| JEL: | J31 I12 J64 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38936&r=lab |
| By: | Ganguli Prokopovych, Ina; Hausmann, Ricardo; Viarengo, Martina |
| Abstract: | In this paper we examine several dimensions of gender disparity for a sample of 40 countries using micro-level data. We start by documenting the reversal of the gender education gap and ranking countries by the year in which it reversed. Then we turn to an analysis of the state of other gaps facing women: we compare men and women’s labor force participation (the labor force participation gap), married and single women’s labor force participation (the marriage gap), and mothers’ and non-mother’s labor force participation (the motherhood gap). We show that gaps still exist in these spheres in many countries, though there is significant heterogeneity among countries in terms of the size of and the speed at which these gaps are changing. We also show the relationship between the gaps and ask how much the participation gap would be reduced if the gaps in other spheres were eliminated. In general, we show that while there seems to be a relationship between the decline of the education gap and the reduction of the other gaps, the link is rather weak and highly heterogeneous across countries. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:5027209&r=lab |
| By: | Harald Fadinger; Karin Mayr |
| Abstract: | We develop a model of directed technological change, frictional unemployment and migration to examine the effects of a change in skill endowments on wages, employment rates and emigration rates of skilled and unskilled workers. We find that, depending on the elasticity of substitution between skilled and unskilled workers and the elasticity of the matching function, an increase in the skill ratio can reduce the relative unemployment rate of skilled workers and decrease the relative emigration rate of skilled workers (brain drain). We provide empirical estimates and simulations to support our findings and show that effects are empirically relevant and potentially sizeable. |
| Keywords: | Directed Technological Change, Skill Premia, Unemployment, Brain Drain |
| JEL: | F22 J61 J64 O33 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:wpaper:y:2012:i:089&r=lab |
| By: | Lionel Fontagné (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Michela Limardi (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA) |
| Abstract: | Many Developing Countries ratified ILO Fundamental Conventions and authorized local labour unions. Multinational companies producing in these countries pay more when NGOs campaigns take place and reputation counts. However, whether this external pressure from NGOs benefit local workers outside MNEs affiliates in host countries remains an open issue. Segmented and weak local labour unions often rely on external funding from the North and technical assistance by labour NGOs. They need to increase their visibility in the labour intensive sectors targeted by Northern donations and activism. To address these issues we develop a bargaining model adapted to peculiarities of labour market institutions in developing countries, i.e. external funding and the complementarity with labour NGOs. This model is estimated on data on Indonesian manufacturing firms, before and after the authorisation of labour unions, in sensitive and non sensitive sectors. We find that, in sectors with visibility for labour unions, the net outcome on wages of the presence of NGOs is negative. The external fundings imply a distortion in the objective of labour unions, confronted with the constraint of increasing the employment in the formal sector. |
| Keywords: | Labour standards ; NGOs ; Wage determination |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00630096&r=lab |
| By: | Abel Brodeur; Marie Connolly |
| Abstract: | In this paper, we investigate the effect of a change in childcare subsidies on parental subjective well-being. Starting in 1997, the Canadian province of Québec implemented a generous program providing $5-a-day childcare to children under the age of 5. By 2007, the percentage of children attending subsidized day care had tripled and mothers’ labor force participation had increased substantially. Objectively, more labor force participation is seen as a positive improvement, bringing with it higher income, independence and bargaining power. Yet a decrease in women’s subjective well-being over previous decades has been documented, perhaps due to a Second Shift effect where women work more but still bear the brunt of housework and childrearing (Hochschild and Machung, 1989). Using data from the Canadian General Social Survey, we estimate a triple-differences model using differences pre- and post- reforms between Québec and the rest of Canada and between parents with young children and those with older children. Our estimates suggest that Québec’s family policies led to a small decrease in parents’ subjective well-being. Of note, though, we find large and positive effects for poor household families and high school graduates and negative effects for middle household income families. We find similar negative effects on life satisfaction for both men and women, but different effects on satisfaction with work-life balance. This suggests that fathers’ life satisfaction could be influenced by their wives’ labor supply while their work-life balance is not. |
| Keywords: | Childcare, labor supply, subjective well-being, life satisfaction, happiness, work-life balance |
| JEL: | I31 J20 J28 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1223&r=lab |
| By: | Enel Pungas (University of Tartu); Ott Toomet (University of Tartu); Tiit Tammaru (University of Tartu); Kristi Anniste (University of Tartu) |
| Abstract: | This study examines the relationship between migrants' education and their intentions to return. Previous research has presented mixed evidence on the association between the level of education and return migration. This study takes a multidimensional approach by analysing, aside from the level of education, the type and country of education and over-education as predictors of intentions to return based on a unique survey of Estonian migrants in Finland. The results indicate that the level of education is not related to the tendency to return. The most important education variable that shapes return migration is over-education ―migrants who work below their training express higher intentions to return back home. We also find some evidence that education obtained in the host country improves the socialisation prospects later on. |
| Keywords: | Education, return migration, East-West migration, Estonia, Finland |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nor:wpaper:2012018&r=lab |
| By: | Shuaizhang Feng; Yingyao Hu |
| Abstract: | Using recent results in the measurement error literature, we show that the official U.S. unemployment rate substantially underestimates the true level of unemployment, due to misclassification errors in the labor force status in the Current Population Survey. During the period from January 1996 to August 2011, the corrected monthly unemployment rates are between 1 and 4.4 percentage points (2.1 percentage points on average) higher than the official rates, and are more sensitive to changes in business cycles. The labor force participation rates, however, are not affected by this correction. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:jhu:papers:595&r=lab |
| By: | Gastón Illanes; Claudio Sapelli |
| Abstract: | Using student evaluations as a learning measure, we estimate and compare class size and teacher effects for higher education, with emphasis on determining whether a comprehensive class size reduction policy that draws on the hiring of new teachers is likely to improve educational outcomes. We find that teacher effects far outweigh class size effects, and that young teachers and first time teachers perform significantly worse than their peers. Furthermore, we study whether teacher effects are correlated with observables, and find no significant variables beyond being a full time teacher. Overall, these findings suggest that at the higher education level the optimal strategy is to have large classrooms with highly qualified teachers. |
| Keywords: | Class size, teacher effects, student evaluations |
| JEL: | I21 I23 I28 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:418&r=lab |
| By: | Black, Sandra; Devereux, Paul J.; Løken, Katrine; Salvanes, Kjell G |
| Abstract: | Given the wide use of childcare subsidies across countries, it is surprising how little we know about the effect of these subsidies on children’s longer run outcomes. Using a sharp discontinuity in the price of childcare in Norway, we are able to isolate the effects of childcare subsidies on both parental and student outcomes. We find very small and statistically insignificant effects of childcare subsidies on childcare utilization and parental labor force participation. Despite this, we find significant positive effect of the subsidies on children’s academic performance in junior high school, suggesting the positive shock to disposable income provided by the subsidies may be helping to improve children’s scholastic aptitude. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8981&r=lab |
| By: | Melinda Sandler Morrill (North Carolina State University); Sabrina Wulff Pabilonia (U.S. Bureau of Labor Statistics) |
| Abstract: | We examine family time together using data from the 2003-2010 American Time Use Survey combined with Bureau of Labor Statistics data on state-level unemployment rates. Couple time together is U-shaped; while fathers spend more time engaging in enriching childcare activities without a spouse present as the unemployment rate rises. Patterns are similar for dual-earner couples, but appear concentrated among demographic groups most affected by recessions. We also find that mothers are less likely to work standard hours and more likely to work on weekends as employment crises deepen, which is consistent with both sets of results for family time together. |
| Keywords: | Unemployment, Time Use, Time Together, Great Recession, Nonstandard Work Hours |
| JEL: | D1 J22 J12 E32 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec120030&r=lab |
| By: | Paz, Lourenco |
| Abstract: | Several developing countries that underwent trade liberalization experienced an increase in the share of informal workers in manufacturing industries. This phenomenon deserves careful examination because informal jobs are not only generally viewed as low-quality and low-paying jobs, but they also account for more than 30% of the workforce in some countries. In this paper, I examine the effects of the Brazilian trade liberalization episode (1989-2001) on the industry-level share of informal workers and on the average formal and informal wages. I find that a percentage point decrease in import tariffs increases the informality share by 0.09 percentage points and the average informal wage by 0.06%, and decreases the average formal wage by 0.05%. A similar change in foreign import tariffs decreases the informality share by 0.17 percentage points and the average informal wage by 0.34%, and increases the average formal wage by 0.32%. The results are found to be robust to endogeneity and self-selection concerns, which are addressed using instrumental variables and a switching regressions approach. |
| Keywords: | informal labor markets; trade liberalization; Brazil |
| JEL: | F16 O17 F12 H26 |
| Date: | 2012–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38858&r=lab |
| By: | Sandra E. Black; Paul J. Devereux; Katrine V. Løken; Kjell G. Salvanes |
| Abstract: | Given the wide use of childcare subsidies across countries, it is surprising how little we know about the effect of these subsidies on children’s longer run outcomes. Using a sharp discontinuity in the price of childcare in Norway, we are able to isolate the effects of childcare subsidies on both parental and student outcomes. We find very small and statistically insignificant effects of childcare subsidies on childcare utilization and parental labor force participation. Despite this, we find significant positive effect of the subsidies on children’s academic performance in junior high school, suggesting the positive shock to disposable income provided by the subsidies may be helping to improve children’s scholastic aptitude. |
| JEL: | J13 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18086&r=lab |
| By: | Michael Lettau (U.S. Bureau of Labor Statistics) |
| Abstract: | The Employment Cost Index for wages and salaries is based on a comparison of the average wage rates for the same set of jobs across a three-month interval. Employment for the majority of the jobs remains the same over the three months. However, if the index were based solely on the jobs for which their number of workers decreased, it would have shown wage growth of over 50 percent from December 2001 to December 2011. Conversely, if the index were based solely on the jobs for which their number of workers increased, it would have almost no wage growth over the same ten years. Therefore, this article describes how the jobs are defined and chosen for the ECI sample, and it explores how such high wage growth for jobs losing workers, along with such low wage growth for jobs gaining workers, affects the growth in the Employment Cost Index for wages and salaries overall. |
| Keywords: | ECI, index numbers, wage rates |
| JEL: | C8 J3 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec120040&r=lab |
| By: | Goodman, Joshua Samuel |
| Abstract: | Left- and right-handed individuals have different brain structures, particularly in relation to language processing. Using five data sets from the US and UK, I show that poor infant health increases the likelihood of a child being left-handed. I argue that handedness can thus be used to explore the long-run impacts of differential brain structure generated in part by poor infant health. Even conditional on infant health and family background, lefties exhibit economically and statistically significant human capital deficits relative to righties. Compared to righties, lefties score a tenth of a standard deviation lower on measures of cognitive skill and, contrary to popular wisdom, are not over-represented at the high end of the distribution. Lefties have more emotional and behavioral problems, have more learning disabilities such as dyslexia, complete less schooling, and work in less cognitively intensive occupations. Differences between left- and right-handed siblings are similar in magnitude. Most strikingly, lefties have six percent lower annual earnings than righties, a gap that can largely be explained by these differences in cognitive skill, disabilities, schooling and occupational choice. Lefties work in more manually intensive occupations than do righties, further suggesting that lefties’ primary labor market disadvantage is cognitive rather than physical. Those likely be left-handed due to genetics show smaller or no deficits relative to righties, suggesting the importance of environmental shocks as the source of disadvantage. Handedness provides parents and schools a costlessly observable characteristic with which to identify young children whose cognitive and behavioral development may warrant additional attention. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:7779971&r=lab |
| By: | Aysit Tansel (Middle East Technical University); Nil Demet Güngör (Atýlým University) |
| Abstract: | Several recent empirical studies have examined the gender effects of education on economic growth or on steady-state level of output using the much exploited, familiar cross-country data in order to determine their quantitative importance and the direction of correlation. This paper undertakes a similar study of the gender effects of education using province level data for Turkey. The main findings indicate that female education positively and significantly affects the steady-state level of labor productivity, while the effect of male education is in general either positive or insignificant. Separate examination of the effect of educational gender gap was negative on output. The results are found to be robust to a number of sensitivity analyses, such as elimination of outlier observations, controls for simultaneity and measurement errors, controls for omitted variables by including regional dummy variables, steady-state versus growth equations and considering different samples. |
| Keywords: | Labor Productivity, Economic Development, Education, Gender, Turkey |
| JEL: | O11 O15 I21 J16 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2012/19&r=lab |
| By: | Ýdil Göksel (Department of Economics, Izmir University of Economics) |
| Abstract: | The aim of this paper is to investigate the main determinants of the participation decision of females in the labour force in Turkey. Turkey is a particularly important case as, unlike in many other countries, female labour force participation has shown a decreasing trend in the last 50 years. This paper aims to elaborate on the causes of this decrease. In addition to the main determinants found in previous literature, this paper adds a new variable that influences female labour force participation in Turkey: Conservatism and the role of traditional and social norms. An original proxy for conservatism is created by using a unique data set about perceptions. Four indices that might influence conservatism are formed: Tradition, social norms, men's decision power, and conservatism. The results are in accordance with the previous literature in emphasizing that urbanization, and education level play an important role in the participation decision of women. However, these factors are not sufficient to explain the decline in female labour force participation. This paper presents a new concept by showing that social norms, tradition and men's higher bargaining power play a negative role in the probability of women working in urban areas, while they do not have any significant influence in rural areas. Furthermore, this paper shows a new possible explanation for the link between urbanization and female labour force participation. Higher urbanization causes higher conservatism, which leads to lower female labour force participation. |
| Keywords: | female labour force participation, gender, conservatism |
| JEL: | J16 J21 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:izm:wpaper:1205&r=lab |
| By: | Clément Imbert (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA); John Papp (Princeton University - Princeton University) |
| Abstract: | This paper presents evidence on the equilibrium labor market impacts of a large rural workfare program in India. We use the gradual roll out of the program to estimate changes in districts that received the program earlier relative to those that received it later. Our estimates reveal that following the introduction of the program, public employment increased by .3 days per prime-aged person per month (1.3% of private sector employment) more in early districts than in the rest of India. Casual wages increased by 4.5%, and private sector work for low-skill workers fell by 1.6%. These effects are concentrated in the dry season, during which the majority of public works employment is provided. Our results suggest that public sector hiring crowds out private sector work and increases private sector wages. We use these estimates to compute the implied welfare gains of the program by consumption quintile. Our calculations show that the welfare gains to the poor from the equilibrium increase in private sector wages are large in absolute terms and large relative to the gains received solely by program participants. We conclude that the equilibrium labor market impacts are a first order concern when comparing workfare programs with other anti-poverty programs such as a cash transfer. |
| Keywords: | Workfare ; Rural labor markets ; Icome redistribution |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00680451&r=lab |
| By: | Thomas Breda (CEP - Centre for Economic Performance - LSE); Son Thierry Ly (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | Stereotypes, role models played by teachers and social norms are known to push girls to choose humanities rather than science. Do professors directly contribute to this strong selection by discriminating more against girls in more scientific subjects? Using the entrance exam of a French higher education institution (the Ecole Normale Supérieure) as a natural experiment, we show the opposite: discrimination goes in favor of females in more male-connoted subjects (e.g. math, philosophy) and in favor of males in more female-connoted subjects (e.g. literature, biology), inducing a rebalancing of sex ratios between science and humanities majors. We identify discrimination by systematic differences in students' scores between oral tests (non-blind toward gender) and anonymous written tests (blind toward gender). By making comparisons of these oral/written scores differences between different subjects for a given student, we are able to control both for a student's ability in each subject and for her overall ability at oral exams. The mechanisms likely to drive this positive discrimination toward the minority gender are also discussed. |
| Keywords: | Discrimination ; Gender Stereotypes ; Natural Experiment ; Sex and Science |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00677438&r=lab |
| By: | S Bradley; Jim Taylor |
| Abstract: | This paper investigates the extent to which exam performance at the end of compulsory education has been affected by three major education reforms: the introduction of a quasi-market following the Education Reform Act (1988); the specialist schools initiative introduced in 1994; and the Excellence in Cities programme introduced in 1999. We use data for all state-funded secondary schools in England over the period 1992-2006. The empirical analysis, which is based on the application of panel data methods, indicates that the government and its agencies have substantially overestimated the benefits flowing from these three major reforms. Only about one-third of the improvement in GCSE exam scores during 1992-2006 is directly attributable to the combined effect of the education reforms. The distributional consequences of the policy, however, are estimated to have been favourable, with the greatest gains being achieved by schools with the highest proportion of pupils from poor families. But there is evidence that resources have not been allocated efficiently. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:984&r=lab |
| By: | Ken Yamada (School of Economics, Singapore Management University) |
| Abstract: | This paper studies a life-cycle model of home production to examine how married women change their allocation of time in response to evolutionary movements along the life-cycle wage profile in Japan. After accounting for the potential bias due to heterogeneity, measurement error, weak instruments, and missing data, the estimates of intertemporal substitution elasticity obtained from the home production model are moderate and similar to those obtained from the standard labor supply model. |
| Keywords: | labor supply, home production, intertemporal substitution |
| JEL: | J22 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:24-2012&r=lab |
| By: | Raphael Boleslavsky (Department of Economics, University of Miami); Christopher F. Parmeter (Department of Economics, University of Miami) |
| Abstract: | We consider a game in which schools compete to place graduates in two distinct ways: by investing in the quality of education, and by strategically designing grading policies. In equilib- rium, schools issue grades that do not perfectly reveal graduate abilities. This leads evaluators to have less-accurate information. However, compared to fully-revealing assessments, strategic grading motivates greater investment in educating students. Although strategic grading distorts placement decisions, it can also increase graduate ability. Allowing grade in ation and related grading strategies can increase the probability that the evaluator selects a high-ability graduate. |
| Keywords: | Grade Inflation; Effort, Education Investment |
| JEL: | D01 I2 |
| Date: | 2012–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:mia:wpaper:2012-2&r=lab |
| By: | Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)) |
| Abstract: | How have reforms in French doctoral education and academic research been implemented? How do changing doctoral education practices lead to changing research practices? New practice adoption among academics usually happens incrementally in the course of their everyday activity. Top-down organizational change requires these autonomous professionals to adopt new practices willingly, so as to comply with the reform. Understanding the microlevel conditions under which this adoption happens is critical to the management of change in universities and research organizations. Drawing on the empirical analysis of a reform seeking to improve PhD supervision in French universities, we find that academics adopt new practices only once they have performed a cognitive reframing of the situation, and under the condition that new practices are - or can be made - compatible with their autonomy of judgment and their extant professional role and identity. Otherwise, the reform leads to ceremonial adoption, hesitation or rejection of new practice. Paradoxically, coercive features of the reform may support new practice adoption, but only when they are taken over by professionals themselves and support them in the building of a leader figure compatible with professional values. |
| Keywords: | University policy; Science policy, Change implementation; Practice adoption; PhD, Research Practices |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00658038&r=lab |
| By: | Kuddo, Arvo |
| Abstract: | One of the responses to new challenges in the labor market has been the development and expansion of employment services and active labor market policies based on activation principles. The objective of this study is to document and review international experiences, predominantly from selected emerging market economies and developing countries, with the design and implementation of activation programs, provided by Public Employment Services, through the prism of incentives and sanctions. Employment promotion legislation from the reviewed countries is a major source of information. Participation of beneficiaries in relevant services and programs is also analyzed. The study finds that the countries use a variety of instruments, be it specific employment services, active labor market programs, or benefit and other sanctions, to'activate'jobseekers with an aim to encourage them to become more active in their efforts to find work and/or improve their employability. In practice, the activation policies vary considerably across countries. |
| Keywords: | Labor Markets,Labor Policies,Labor Management and Relations,Labor Standards,Work&Working Conditions |
| Date: | 2012–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hdnspu:68938&r=lab |
| By: | Chor, Davin; Campante, Filipe Robin |
| Abstract: | We examine several hypotheses regarding the determinants and implications of political protest, motivated by the wave of popular uprisings in Arab countries starting in late 2010. While the popular narrative has emphasized the role of a youthful demography and political repression, we draw attention back to one of the most fundamental correlates of political activity identified in the literature, namely education. Using a combination of individual-level micro data and cross-country macro data, we highlight how rising levels of education coupled with economic under-performance jointly provide a strong explanation for participation in protest modes of political activity as well as incumbent turnover. Political protests are thus more likely when an increasingly educated populace does not have commensurate economic gains. We also find that the implied political instability is associated with heightened pressures towards democratization. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:4876868&r=lab |
| By: | Francesco Nucci (Universit… di Roma "La Sapienza"); Alberto Franco Pozzolo (University of Molise, Centro Studi Luca d'Agliano) |
| Abstract: | We estimate the effect of exchange rate movements on firm-level wages, using a representative panel of manufacturing firms. We show that the direction and size of wage adjustment is shaped by the international exposure of each firm on both the sale and cost side of the balance sheet, similar to the response of employment documented in Nucci and Pozzolo (2010). Through the revenue side, wages tend to rise after a currency depreciation and the effect is more pronounced the higher is the firm's exposure to sales from exports. Through the expenditure side, a depreciation induces a cut in the firm's wages, and the effect is larger the higher is the incidence of imported inputs in total production costs. For a given degree of external orientation, both these effects are larger for firms with a lower market power. Moreover, we document that the effect of exchange rates on wages is shaped by (i) the extent of sectoral import penetration in the domestic market; (ii) the proportion of newly hired workers in each firm in a given year; and (iii) the composition of the firm's workforce by occupational category. |
| Keywords: | Exchange Rate, Firms' Foreign Exposure, Wages |
| JEL: | E24 F16 F31 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wmofir:70&r=lab |
| By: | Engström, Per (Uppsala University); Hägglund, Pathric (SOFI, Stockholm University); Johansson, Per (IFAU) |
| 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, disability insurance, sickness insurances, unemployment insurance, randomized experiment |
| JEL: | C93 H51 H55 I18 J22 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6553&r=lab |
| By: | Marco de Pinto |
| Abstract: | Trade liberalization is no Pareto-improvement - there are winners (high-skilled) and losers (low-skilled). To compensate the losers the government is assumed to introduce unemployment benefits (UB). These benefits are financed by either a wage tax, a payroll tax, or a profit tax. Using a Melitz-type model of international trade with unionized labor markets and heterogeneous workers we show that: (i) there is a threshold level of UB where all trade gains are destroyed, (ii) this threshold differs between different kind of taxes, (iii) there is a clearcut ranking in terms of welfare for the chosen funding of the UB: 1. wage tax, 2. profit tax, 3. Payroll tax. |
| Keywords: | trade liberalization, heterogeneous firms, trade unions, skillspecific unemployment, unemployment benefits, taxes |
| JEL: | F1 F16 H2 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:wpaper:y:2012:i:092&r=lab |
| By: | Paulo Bastos (Inter-American Development Bank); Natália Pimenta Monteiro (Universidade do Minho - NIPE); Odd Rune Straume (Department of Economics, University of Minho) |
| Abstract: | We examine corporate restructuring following privatization using uncommonly rich data on the population of Portuguese firms from 1991-2009. We find that privatization leads to sizable job losses, reflecting reductions in both the number of establishments and in the number of workers per establishment. We find no robust evidence of impacts on the structure of the workforce. The estimated job losses following privatization are consistent with a theory in which the shift in ownership increases the degree of profi t orientation and leads to lower job security. |
| Keywords: | Privatization; employment structure; panel data |
| JEL: | J45 D21 C23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:10/2012&r=lab |
| By: | Gerards, Ruud (Maastricht University) |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ner:maastr:urn:nbn:nl:ui:27-29158&r=lab |
| By: | Bartz, Kevin; Fuchs-Schündeln, Nicola |
| Abstract: | Based on a modified Spatiotemporal Autoregressive Model (STAR), we analyze whether borders still constitute significant impediments to labor market integration in the European Union, despite the formal law of free movement of labor. Using regional data from the EU-15 countries over 21 years, we find that this is the case. We further investigate whether the abolishment of border checks through the Schengen agreement or the introduction of the Euro improved our measure of labor market integration across borders, and do not find evidence in favor. Last, we investigate the role of languages, and potentially cultures, as obstacles to labor market integration. We find that indeed language borders play a larger role than country borders in explaining the lack of labor market integration across borders. |
| Keywords: | European integration; labor market integration; spatial econometrics |
| JEL: | C4 J4 J6 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8987&r=lab |
| By: | Chani, Muhammad Irfan; Shahid, Muhammad; Hassan, Mahboob Ul |
| Abstract: | This study is aimed at empirical investigation of the role that various socio-economic factors like female education, urbanization and female labour force participation play in determining fertility of women in Pakistan. ARDL bound testing approach to co-integration is used to analyze the long run relationship of the variables by using the data for the period of 1980 to 2009. Empirical results show that there exists a long run as well as short run relationship between fertility and urbanization, female labour force participation and female education in Pakistan. The analysis indicates that there is negative relationship between all three determinants with fertility. Female education and urbanization of the society play significant role in reducing fertility but the role of female participation in labour force seems to be in insignificant in fertility reduction in Pakistan. |
| Keywords: | Fertility; female education; population; female labour force participation; urbanization |
| JEL: | J13 J10 E24 J15 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38742&r=lab |
| By: | Francesco Furlanetto (Norges Bank (Central Bank of Norway)); Nicolas Groshenny (Reserve Bank of New Zealand) |
| Abstract: | A large decline in the e¢ ciency of the U.S. labor market in matching unemployed workers and vacant jobs has been documented during the Great Recession. We use a simple New Keynesian model with search and matching frictions in the labor market to study the propagation of matching e¢ ciency shocks. We show that the transmission of these disturbances and their importance for business cycle fluctuations depend crucially on the form of hiring costs and on the presence of nominal rigidities. |
| Keywords: | Resource curse, Political economy. |
| JEL: | E32 C51 C52 |
| Date: | 2012–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2012_07&r=lab |
| By: | Isabelle Chort (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | Comparing intentions to migrate and actual migration of Mexicans, I intend to assess the impact of unexpected shocks and misevaluated costs on the materialization of migration plans. I show that both sets of reasons may explain discrepancies between intentions and subsequent actions without denying the rationality of intentions by resorting to the theoretical framework of the Roy model. I use intention and migration data from the Mexican Family Life Survey, together with precipitations monthly series, hurricane and crime data to represent different sets of shocks. Correlations between intentions and migration on the one hand, and between intentions and individual labor market characteristics show that intentions are not devoid of informational content. Then, modelling intentions and migration with a bivariate probit, I find that shocks, and in particular rainfall and hurricanes, affect the probability to migrate conditional on initial intentions. The key finding is nonetheless the much lower propensity for women to migrate abroad conditional on intentions, which suggests that women incur specic costs or constraints misestimated at the intention stage. Alternative explanations, such as gendered preferences are discussed, but convergent empirical evidence suggest that women are more constrained than men on the international migration market. Moreover the data suggest that migrants are positively selected with respect to their unobserved characteristics whereas those with intention to migrate abroad are negatively selected. The shift in selection between the two stages of the migration process may be due to the cost reducing effect of individuals' unobserved characteristics that explain their higher local wages. Mots-clés : Migration, Roy model, migrant self-selection, subjective data, shocks, Mexico |
| Keywords: | Migration ; Roy Model ; Migrant Self-Selection ; Subjective Data ; Shocks ; Mexico |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00689467&r=lab |
| By: | Jordi Galí; Frank Smets; Rafael Wouters |
| Abstract: | An analysis of the performance of GDP, employment and other labor market variables following the troughs in postwar U.S. business cycles points to much slower recoveries in the three most recent episodes, but does not reveal any significant change over time in the relation between GDP and employment. This leads us to characterize the last three episodes as slow recoveries, as opposed to jobless recoveries. We use the estimated New Keynesian model in Galí-Smets-Wouters (2011) to provide a structural interpretation for the slower recoveries since the early nineties. |
| JEL: | E32 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18085&r=lab |
| By: | Francesco Bogliacino (JRC-IPTS); Mariacristina Piva (Università Cattolica de Milano); Marco Vivarelli (Università Cattolica de Milano) |
| Abstract: | In this paper we assess the job creation effect of R&D expenditures, using a unique longitudinal database of 677 European companies over the period 1990-2008. We estimate a dynamic labour demand specification using a Least Squares Dummy Variable Corrected (LSDVC) technique. The labour-friendly nature of R&D emerges from the empirical analysis on the overall sample. However, this positive significant effect corresponds to the high-tech sector and services, while the effect is not significant for traditional manufacturing. The results support the policy agenda of promoting structural change in European economies. |
| Keywords: | innovation, employment, manufacturing, services, LSDVC |
| JEL: | O33 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201110&r=lab |
| By: | Laibson, David I.; Madrian, Brigitte; Beshears, John; Choi, James J. |
| Abstract: | We describe the pension plan features of the states and the largest cities and counties in the U.S. Unlike in the private sector, defined benefit (DB) pensions are still the norm in the public sector. However, a few jurisdictions have shifted towards defined contribution (DC) plans as their primary savings plan, and fiscal pressures are likely to generate more movement in this direction. Holding fixed a public employee‘s work and salary history, we show that DB retirement income replacement ratios vary greatly across jurisdictions. This creates large variation in workers‘ need to save for retirement in other accounts. There is also substantial heterogeneity across jurisdictions in the savings generated in primary DC plans because of differences in the level of mandatory employer and employee contributions. One notable difference between public and private sector DC plans is that public sector primary DC plans are characterized by required employee or employer contributions (or both), whereas private sector plans largely feature voluntary employee contributions that are supplemented by an employer match. We conclude by applying lessons from savings behavior in private sector savings plans to the design of public sector plans. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:4723207&r=lab |
| By: | Gutknecht, Daniel (Department of Economics, University of Warwick) |
| Abstract: | This paper develops a test for monotonicity of the regression function under endogeneity. The novel testing framework is applied to study monotonicity of the reservation wage as a function of elapsed unemployment duration. Hence, the objective of the paper is twofold : from a theoretical perspective, it proposes a test that formally assesses monotonicity of the regression function in the case of a continuous, endogenous regressor. This is accomplished by combining different nonparametric conditional mean estimators using either control functions or unobservable exogenous variation to address endogeneity with a test statistic based on a functional of a second order U-process. The modified statistic is shown to have a non-standard asymptotic distribution (similar to related tests) from which asymptotic critical values can directly be derived rather than approximated by bootstrap resampling methods. The test is shown to be consistent against general alternatives. From an empirical perspective, the paper provides a detailed investigation of the effect of elapsed unemployment duration on reservation wages in a nonparametric setup. This effect is difficult to measure due to the simultaneity of both variables. Despite some evidence in the literature for a declining reservation wage function over the course of unemployment, no information about the actual form of this decline has yet been provided. Using a standard job search model, it is shown that monotonicity of the reservation wage function, a restriction imposed by several empirical studies, only holds under certain (rather restrictive) conditions on the variables in the model. The test from above is applied to formally evaluate this shape restriction and it is found that reservation wage functions (conditional on different characteristics) do not decline monotonically. JEL classification: C14 ; C36 ; C54 ; J64 |
| Keywords: | Reservation Wages ; Test for Montonicity ; Endogeneity ; Control Function ; Unobservable Instruments. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:991&r=lab |
| By: | Lozano, Fernando A. (Pomona College) |
| Abstract: | Are American workers less likely to observe a religious holiday now than they were 30 years ago? In this paper I use evidence from religious holidays to explore the evolution of market hours' flexibility and religious observance during the last thirty years. To do so, I take advantage of three different sources of exogenous variation: the first is the timing of the Current Population Survey, which allows me to observe data that is collected during different holidays in different years. The second is the timing of the religious holiday, as most are scheduled either with the lunar or the solar calendar. The third is the required observance of the holiday: in some holidays believers are called to abstain from work (Yom Kippur), in other holidays not (Tu b'Shevat), some holidays have been secularized (Saint Patrick's Day), and other holidays not (Good Friday). Additionally, I differentiate between any changes in hours of work during religious holidays across time and changes across cohorts. My results suggest that work schedules' flexibility has changed little during the sample period, yet less people are taking time off from work during Good Friday, while more people take time off from work during Yom Kippur, Rosh Hashanah, Mardigras and Saint Patrick's Day. These results are consistent with the increasing secularization of Christians in America, the Baal Teshuva movement among Jewish Americans, and the commercialization of Mardigras or Saint Patrick's Day. These results suggest a change in which holidays workers choose to observe. |
| Keywords: | hours flexibility, religious holidays, secularization, work week |
| JEL: | J22 Z12 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6552&r=lab |
| By: | Johan Fourie; Robert Ross; Russel Viljoen |
| Abstract: | Accurate measures of education quality — primarily, years of schooling or literacy rates — are widely used to ascertain the contribution of human capital formation on long-run economic growth and development. This paper, using a census of 4500 missionary station residents in 1849 South Africa, documents, for the first time, literacy and numeracy rates of non-White citizens in nineteenth-century South Africa. The census allows for an investigation into the causes of literacy at missionary stations. We find that age, residency, the missionary society operating the stations and numeracy, as a proxy for parental education, matter for literacy performance. The results provide new insights into the comparative performance of missionary societies in South Africa and contribute to the debate about the role of missionary societies in the economic development of colonial settings. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:284&r=lab |
| By: | Paz Castillo-Ruiz |
| Abstract: | Women account for 66% of the global workforce and earn 10% of the income. They produce 50% of the food globally and own 1% of the property. Besides, women represent the majority of the global poor, 70%, and it has been proven that ownership is one of the most effective means of improving their economic well-being. Therefore, promoting women economic opportunities and equal participation in the labor market is the right thing to do. But it is also good business. This reference note discusses the role that gender plays in labor market participation, access to finance, training and education, and other legal and social barriers. This document then goes on to describe policies and promising practices for promoting real economic opportunity for women. |
| Keywords: | Social Development :: Women, compete caribbean |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:69198&r=lab |
| By: | Vasilaky, Kathryn |
| Abstract: | This paper investigates the effects of school quality on fertility in a transition country. It aims to explain the slowing fertility and shrinking rural sector of a post Soviet country, Ukraine, through the decline in the quality of public services, in particular, school quality. It builds on earlier work of Rosenzweig (1982), which tests for the effects of a change in the price of child quality, measured here by school quality. Estimates from a generalized Poisson model of fertility show that school quality has a positive and significant effect on household fertility. Specifically, a 10 % increase in teacher quality is associated with a 3+% rise in fertility. This positive relationship between education and fertility distinguishes itself from the negative relationship that is commonly observed between these two factors. It also suggests that Ukraine should reconsider its population policies that are aimed at increasing fertility, from short term income transfers for rural families to long term investments into the quality and equality of their education system. |
| Keywords: | school quality; transition economy; quality quantity tradeoff |
| JEL: | D13 D7 |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38965&r=lab |
| By: | Engström, Per (Uppsala Center for Labor Studies); Hägglund, Pathric (The Swedish Social Insurance Inspectorate); Johansson, Per (Uppsala Center for Labor Studies) |
| 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; disability insurance; sickness insurances; unemployemnt insurance; randomized experiment |
| JEL: | C93 H51 H55 I18 J22 |
| Date: | 2012–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uulswp:2012_010&r=lab |
| By: | Ramosaj, Argjiro |
| Abstract: | This study aims to analyze the implementation of Labor Law in Kosovo, with a particular attention towards Article 49th which regulates the issue of maternity leave. Labor Law in Kosovo has been in force only for a year, and as such it has been a matter of discussion because of the challenges that have hampered its successful implementation. The study begins with an analysis of the chronological order of labor documents that aimed to regulate labor relationships in Kosovo. Moreover the analysis continues with the exploration of developments of the new Labor law and challenges that is facing while being implements in both public and private sector. Labor Law regulates the labor relationships in both private and public sector in Kosovo. Drafting of Labor Law in Kosovo has been considered a positive process towards establishing legal guidelines in order to ensure sustainable employment relationships in Kosovo. Moreover, the purpose of this law was to provide a legal document which would have the power to fill all the gaps that were left by the previous UNMIK regulation in regards to labor relationships. However, despite the positive expectations that were created towards this law, several challenges that are encountered during its implementation process have consequently produced negative effects in the society where we live. Therefore, when referring to the issue of maternity leave, there are several factors that are harming its successful implementation. Thus, the maternity leave system (6+3+3), together with the limited resources of labor inspectorate, lack of a health insurance fund, and weak judicial system are constantly affecting the success of this regulation in public and private sector in Kosovo. Moreover the confusion between the application of Labor Law and Civil Service law in terms of maternity leave has been another barrier of the proper implementation of this law. According to Article 49 of the labor law, women in Kosovo have the right of 12 months of maternity leave. While analyzing the legal provisions of this regulation, the 12 month period which is prescribed by law ranks Kosovo among countries with the highest maternity leave period. However, the most challenging part of this regulation remains the compensation plan which is divided between the employer and the Government of Kosovo. According to the compensation plan (6+3+3) the first 6 months are paid by the employer with the compensation of 70% of basic salary, and the following 3 months are paid by the government with the compensation of 50% of the average salary in Kosovo. This formula seems to be the root of many problems. Employees in this case are the ones that feel that are discriminated by such a regulation by paying 70 % of the basic salary. Moreover, at the same time they incur additional costs when implementing this regulation, since replacement of the worker who receives maternity should also be paid as well. Taking into consideration all these concerns, majority of businesses have decided to be very selective while hiring people, consequently violating the rights of women. As such, double contracts, contracts with an undetermined period, and other illegal forms are used in order to discourage women that are pregnant to continue working. On the other hand, labor inspectorate which has the authority to supervise the implementation process of the labor law lacks the necessary resources to do so. Some of the barriers that are preventing labor inspectorate to perform their job are: limited number of labor inspectors, insufficient budget, and limited technical resources. Moreover, another challenge it is considered the low capacity of the Municipal Court of Prishtina to deal with cases from all regions of Kosovo that derive from labor relationships. Thus, in the end of the study, further recommendations are presented which need to be implemented in the short-run in order to ensure the successful implementation of labor law. Thus, increase in awareness about the labor law and its regulations in Kosovo should be done in order for employers and employees to be better informed ; creation of the health insurance fund is an urgent need and as such the success story of Albania and other countries in the region are taken into consideration; Strengthening monitoring mechanism that control the implementation of the labor law in private and public sector is needed; and finally the creation of labor courts is considered essential for the successful implementation of the labor law and maternity leave in Kosovo. |
| Keywords: | Maternity leave; labor law; regulation; implementation; monitoring; employment relationships; health insurance |
| JEL: | J13 K3 J01 K31 J16 J08 I18 J00 J0 I1 |
| Date: | 2012–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38913&r=lab |
| By: | Chaudhuri, Sarbajit; Bandopadhyay, Titas Kumar |
| Abstract: | The purpose of this paper is to extend the Fields’ (1989) multi sector job-search model in a three sector general equilibrium framework by introducing international trade and an input, capital. The three sectors are the rural sector, the urban informal sector and the urban formal sector. The rural sector and the urban informal sector use one type of mobile capital while the urban formal sector uses sector-specific another type of capital. We find that the effects of the inflow of foreign capital in the urban formal sector on unemployment and social welfare crucially hinge on the relative factor intensities of the rural and the urban informal sectors. We show that there is a possibility of a trade-off between the government’s twin objectives of improvement in social welfare and mitigation of the urban unemployment problem. These results are extremely crucial from the view of policymaking in an unemployment plagued, low-income developing economy. |
| Keywords: | Job search; foreign capital; unemployment; ex-post labour; ex-ante labour; general equilibrium |
| JEL: | J10 F11 J21 I28 |
| Date: | 2012–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38921&r=lab |
| By: | Marco Castillo; Ragan Petrie; Máximo Torero; Lise Vesterlund |
| Abstract: | We examine gender differences in bargaining outcomes in a highly competitive and commonly used market: the taxi market in Lima, Peru. Examining the entire path of negotiation we find that men face higher initial prices and rejection rates. These differentials are consistent with both statistical and taste-based discrimination. To identify the source of the inferior treatment of men we conduct an experiment where passengers send a signal on valuation before negotiating. The signal eliminates gender differences and the response is shown only to be consistent with statistical discrimination. Our study secures identification within the market of interest and demonstrates that there are environments where sophisticated statistical inference is the sole source of differential gender outcomes. |
| JEL: | C78 C93 J16 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18093&r=lab |
| By: | Ogorevc, Marko; Verbič, Miroslav |
| Abstract: | The aim of our paper is to disentangle the relationship between ownership and wages using cross-section data for Slovenian medium size and large companies, where we account for spatial dependencies in wage determination. Space here is not considered in geographical context, but as a set of relations between firms originating from the same owner. Using a detailed database on Slovenian ownership, we apply a spatial econometric approach to detect any ownership-based wage spillovers, while accounting for different standard factors, such as size, capital intensity and productivity, and also some ownership-based variables, such as ownership concentration and ratio of cash-flow to control rights. Our results indicate that ownership is an important factor in explaining differences in wage levels. Many large owners divert cash-flow into their own pockets which has a detrimental effect on wages and indicates that this behaviour induced by owners is not sustainable. |
| Keywords: | spatial econometrics; ownership; wage differentials; sustainability |
| JEL: | J31 G32 C21 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38915&r=lab |
| By: | Borjas, George J. |
| Abstract: | Researchers have long known that poverty in childhood is linked with a range of negative adult socioeconomic outcomes, from lower educational achievement and behavioral problems to lower earnings in the labor market. But few researchers have explored whether exposure to a disadvantaged background affects immigrant children and native children differently. George Borjas uses Current Population Survey (CPS) data on two specific indicators of poverty—the poverty rate and the rate of participation in public assistance programs—to begin answering that question. He finds that immigrant children have significantly higher rates both of poverty and of program participation than do native children. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:8052147&r=lab |
| By: | Francis, Bill (Rensselaer Polytechnic Institute); Hasan, Iftekhar (Fordham University and Bank of Finland); John, Kose (Stern School of Business, New York University); Waisman , Maya (Fordham University – Finance Area) |
| Abstract: | An underlying assumption in the executive compensation literature is that there is a national labor market for CEOs. The urban economics literature, however, documents higher ability among workers in large metropolitans, which results in a real and stable urban wage premium. In this paper, we investigate the link between the spatial clustering of firms in big, central cities (i.e., urban agglomeration) and the level and structure of CEO compensation. Using CEO compensation data for the period 1992–2004, we document a positive relation between the size and centrality of the city in which the firm is headquartered and the total, as well as the equity based portion of CEO pay. Our results are robust to a host of control variables, sensitivity and endogeneity tests, indicating that urban agglomeration may reflect positive externalities, such as knowledge spillovers, business connections and improved access to private information that have a positive effect on CEO pay and incentive driven compensation for good performance. We document gradual human capital gains acquired from big city work experience that are transferable to the rural area, and rewarded for, once the CEO relocates into a smaller, less central community. Our tests provide novel evidence of information spillovers and networking opportunities in big cities that can directly affect how CEOs are compensated. Such sources of information and influence represent something for which firms are willing to pay higher and more incentive driven pay, evidence in favor of a market-based explanation for CEO compensation. |
| Keywords: | agglomeration; CEO; compensation; incentive; geography |
| JEL: | D83 G30 J31 R12 |
| Date: | 2012–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2012_017&r=lab |
| By: | Choi, James J; Beshears, John; Laibson, David I.; Madrian, Brigitte |
| Abstract: | We document the loan provisions in 401(k) savings plans and how participants use 401(k) loans. Although only about 22% of savings plan participants who are allowed to borrow from their 401(k) have such a loan at any given point in time, almost half had used a 401(k) loan over a longer, seven-year horizon. The probability of having a loan follows a hump-shaped pattern with respect to age, job tenure, account balance, and salary, but conditional on having a loan, loan size as a fraction of 401(k) balances declines with respect to these variables. Participants are less likely to use loans in plans that charge a higher interest rate, and loans are smaller when plans allow fewer simultaneously outstanding loans, impose a shorter maximum possible loan duration, or charge a lower interest rate. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:5027953&r=lab |
| By: | Jérémie Gignoux (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Francisco H. G. Ferreira (The World Bank - The World Bank, IZA - Institute for the Study of Labor - IZA) |
| Abstract: | This paper proposes two related measures of educational inequality: one for educational achievement and another for educational opportunity. The former is the simple variance (or standard deviation) of test scores. It is selected after careful consideration of two measurement issues that have typically been overlooked in the literature: the implications of the standardization of test scores for inequality indices, and the possible sample selection biases arising from the PISA sampling frame. The measure of inequality of educational opportunity is given by the share of the variance in test scores which is explained by pre-determined circumstances. Both measures are computed for the 57 countries in which PISA surveys were conducted in 2006. Inequality of opportunity accounts for up to 35% of all disparities in educational achievement. It is greater in (most of) continental Europe and Latin America than in Asia, Scandinavia and North America. It is uncorrelated with average educational achievement and only weakly negatively correlated with per capita GDP. It correlates negatively with the share of spending in primary schooling, and positively with tracking in secondary schools. |
| Keywords: | Educational inequality ; Educational achievement ; Inequality of opportunity |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00646594&r=lab |