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on Labour Economics |
| By: | Li, Ian W. (University of Western Australia); Miller, Paul W. (Curtin University of Technology) |
| Abstract: | This paper examines gender discrimination in the Australian graduate labour market, using data from the Graduate Destination Surveys 1999-2009. A framework of analysis provided by the overeducation/required education/undereducation literature is applied. A smaller gender wage gap is found for university graduates than that reported for all workers in earlier studies. It is shown, however, that the gender wage gap widens with the age at graduation. This pattern is argued to reflect the influence of the mismeasurement of actual labour market experience in the conventional education and experience earnings equation on the standardised gender pay gap. Female graduates are less likely to be overeducated, compared to male graduates. Overeducation, while associated with substantial penalties, is not a substantial contributor to the gender wage gap. |
| Keywords: | gender, graduates, overeducation, discrimination |
| JEL: | J24 J31 J70 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6595&r=lab |
| By: | Rulof Burger; Servaas van der Berg and Dieter von Fintel; Dieter von Fintel |
| Abstract: | In the late 1990s the South African Department of Education implemented two policies that were meant to reduce the large number of over-age learners in the school system: schools were no longer allowed to accept students who were more than two years older than the correct grade-age and students could not be held back more than once in each of four schooling phases. Our analysis uses school administrative data and household survey data to show that these policies coincided with a decrease in school enrolment of at least 400,000 and possibly as many as 900,000 learners. This effect was most noticeable for over-aged learners who remained in school due to their poor labour market prospects. Most of these students seem to have been pushed into the labour market by these policies, which could explain much of the sudden increase in labour force participation and unemployment over this period. However, since these individuals would probably have entered the labour market sooner if not for their poor employment prospects, we argue that the increase in unemployment signifies a more accurate reflection of disguised unemployment that already existed in the mid-1990s rather than a deterioration of labour market conditions. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:289&r=lab |
| By: | Karaoglan, Deniz (Middle East Technical University); Okten, Cagla (Bilkent University) |
| Abstract: | This article analyzes married women's labor supply responses to their husbands' job loss (added worker effect) and worsening of unemployment conditions (discouraged worker effect). We find that married women whose husbands are unemployed or underemployed are more likely to participate in the labor force and work more hours using yearly cross-sectional data from Turkey for the 2000-2010 period. We also construct two year panels based on questions on previous year's labor market outcomes. Panel results provide further support for the added worker effect. Wives whose husbands experience a job loss are more likely to increase their labor force participation. However, a worsening of overall unemployment conditions appears to have a discouraging effect on wives' labor supply response, wives tend to decrease their labor participation when unemployment rate in their region increases. |
| Keywords: | female labor force participation, added worker effect, Turkey |
| JEL: | J21 J60 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6616&r=lab |
| By: | Kristof De Witte; Chris Van Klaveren |
| Abstract: | A combination of school mismanagement, weak financial situation and low student attainments led to a permanent closure of primary schools in Amsterdam, the Netherlands, in 2007. This study examines if the school closure positively affected the test scores that children achieved on a standardized and national test and if secondary school level advices children received at the end of primary education are higher. More specifically, we examine if receiving more years of education on a new and presumably better primary school leads to higher test scores and better secondary school level advices. In doing so, we compare children who switched schools because of the school closure with a control group of children at receiving schools and with a similar ideological background. The results indicate that student test scores are unaffected by the school closure. Secondary school advices, however, tend to be higher for children who received one year of education on a new primary school, but this effect fades out, and eventually becomes negative, for students who are enrolled for a longer period in the receiving school. |
| Keywords: | School closure; Student attainments; Education Inspectorate; Primary education |
| JEL: | I20 I28 R28 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:tir:wpaper:42&r=lab |
| By: | Afridi, Farzana (Indian Statistical Institute); Mukhopadhyay, Abhiroop (Indian Statistical Institute); Sahoo, Soham (Indian Statistical Institute) |
| Abstract: | We study the impact of India's National Rural Employment Guarantee Scheme (NREGS) on children's educational outcomes via women's labour force participation. Using data from the Young Lives Study and taking advantage of the spatial and temporal variation in the intensity of implementation of the NREGS, we find that greater participation of mothers in the program is associated with better educational outcomes of their children. Father's participation in the NREGS, on the other hand, has a negative effect on children's education. Further, the estimated impact of mother's program participation is over and above any income effect induced by the scheme and is robust to concerns about endogeneity of labour force participation and differences in economic trends between districts. We provide evidence which suggests that the mechanism through which children's educational outcomes improve is empowerment of mothers resulting from better labour market opportunities for females. |
| Keywords: | labour, education, gender, bargaining |
| JEL: | I21 I38 J16 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6593&r=lab |
| By: | Lindley, Joanne (University of Surrey); Machin, Stephen (University College London) |
| Abstract: | In this paper, we discuss the quest for more and more education and its implications for social mobility. We document very rapid educational upgrading in Britain over the last thirty years or so and show that this rise has featured faster increases in education acquisition by people from relatively rich family backgrounds. At the same time, wage differentials for the more educated have risen. Putting these two together (more education for people from richer backgrounds and an increase in the payoff to this education) implies increasing within generation inequality and, by reinforcing already existent inequalities from the previous generation, this has hindered social mobility. We also highlight three important aspects that to date have not been well integrated into the social mobility literature: the acquisition of postgraduate qualifications; gender differences; and the poor education performance of men at the lower end of the education distribution. |
| Keywords: | wage differentials, wages, inequality, social mobility, education, educational inequality |
| JEL: | J24 J31 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6581&r=lab |
| By: | Baert, Stijn (UGent); Cockx, Bart (UGent, Université Catholique de Louvain); Verhaest, Dieter (Hogeschool-Universiteit Brussel (HUB), UGent) |
| Abstract: | This study investigates whether young unemployed graduates who accept a job below their level of education accelerate or delay the transition into a job that matches their level of education. We adopt the Timing of Events approach to identify this dynamic treatment effect using monthly calendar data from a representative sample of Flemish (Belgian) youth who started searching for a job right after leaving formal education. We find that overeducation is a trap. This trap is especially important early in the unemployment spell. Our results are robust across various specifications and for two overeducation measures. |
| Keywords: | overqualification, underemployment, school-to-work transitions, duration analysis, dynamic treatment |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:hub:wpecon:201227&r=lab |
| By: | de Hoop, Jacobus (Understanding Children's Work); Rosati, Furio C. (University of Rome Tor Vergata) |
| Abstract: | Using data from BRIGHT, an integrated program that aims to improve school participation in rural communities in Burkina Faso, we investigate the impact of school subsidies and increased access to education on child work. Regression discontinuity estimates demonstrate that, while BRIGHT substantially improved school participation, it increased children's participation in economic activities and chores. This combination of increased school participation and work can be explained by the introduction of a simple non convexity in the standard model of altruistic utility maximizing households. If education programs are implemented to achieve a combination of increased school participation and a reduction in child work, they may either have to be combined with different interventions that effectively reduce child work or they may have to be tuned more carefully to the incentives and constraints the child laborer faces. |
| Keywords: | Burkina Faso, child labour, regression discontinuity, school participation |
| JEL: | I25 J22 J24 O12 O55 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6601&r=lab |
| By: | Phan, Diep; Coxhead, Ian A. |
| Abstract: | “Shock therapy” transitions in Eastern Europe facilitated movement of skilled workers into privatized industries offering high wage premia relative to state industries. Other transitional economies (notably China and Vietnam) have been slower to relinquish control over key industries and factor markets. Some costs of this piecemeal approach are now becoming apparent. We examine the spillover of continuing capital market distortions into the market for a complementary factor, skilled labor. Using Vietnamese data we find that capital market segmentation creates a two-track market for skills, in which state sector workers earn high salaries while non-state workers face lower demand and lower compensation. Growth is reduced directly by diminished allocative efficiency and incentives to acquire education, and indirectly by higher wage inequality and rents for workers with access to state jobs. |
| Keywords: | Labor, skills, state-owned, inequality, wages, Vietnam, International Development, Labor and Human Capital, J31, P23, F16, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124207&r=lab |
| By: | Andersson Joona, Pernilla (SOFI, Stockholm University); Wadensjö, Eskil (Stockholm University) |
| Abstract: | Temporary agency employment has grown rapidly in Sweden as in many other countries. The sector was deregulated in the early 1990s and there are now only few remaining restrictions. Even though there are collective agreements covering a large part of the workers in the sector, the unions are worried about low wages and poor working conditions in the sector. This paper analyzes the development of the temporary agency wage gap during the period 1998-2008 using Swedish register data. We find that from a nearly non-existent gap in 2001 and a positive wage gap for women, both male and female temp agency workers received between 16 and 18 percent lower wages in 2008. This development appears partly to be explained by a lower return to university education among temp agency workers than among those employed in other sectors. |
| Keywords: | temporary agency employment, wages |
| JEL: | J31 J42 J62 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6587&r=lab |
| By: | Eichhorst, Werner (IZA) |
| Abstract: | Most Continental European labour markets and welfare states underwent a substantial transformation over the last two decades moving from a situation of low employment and limited labour market inequality to higher employment, but also more inequality. Germany is a case in point as it exhibits growing employment figures and growing shares of low pay and non-standard work. Furthermore, the German labour market has been remarkably resilient during the recent crisis. How can this be explained? The paper claims that changes in labour market institutions such as unemployment benefits, active labour market policies and employment protection play a major role, but changes in industrial relations at the sectoral level and individual firms' staffing practices are equally important in explaining actual labour market outcomes. Regarding labour market institutions, the pattern found in Germany shows sequences of de- and re-regulatory reforms of employment protection and increasing or decreasing unemployment benefit generosity, both mostly addressing the margins of the labour market, i.e. 'outsiders', and contributing to a growing dualisation of the employment system. The institutional status of 'insiders' was hardly affected by legislative changes. This dualisation trend was reinforced by micro-level dynamics in industrial relations and company employment practices where we can observe growing reliance on mechanisms of internal flexibility for the skilled core work force and increasing use of non-standard types of employment in less specifically skilled occupations. |
| Keywords: | Germany, employment growth, labor market reforms, dualisation, flexibility |
| JEL: | J21 J31 J52 J68 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6625&r=lab |
| By: | Ferraz, Claudio (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Finan, Frederico S. (University of California, Berkeley); Moreira, Diana B. (Harvard University) |
| Abstract: | This paper examines if money matters in education by looking at whether missing resources due to corruption affect student outcomes. We use data from the auditing of Brazil's local governments to construct objective measures of corruption involving educational block grants transferred from the central government to municipalities. Using variation in the incidence of corruption across municipalities and controlling for student, school, and municipal characteristics, we find a significant negative association between corruption and the school performance of primary school students. Students residing in municipalities where corruption in education was detected score 0.35 standard deviations less on standardized tests, and have significantly higher dropout and failure rates. Using a rich dataset of school infrastructure and teacher and principal questionnaires, we also find that school inputs such as computer labs, teaching supplies, and teacher training are reduced in the presence of corruption. Overall, our findings suggest that in environments where basic schooling resources are lacking, money does matter for student achievement. |
| Keywords: | corruption, test scores, local governments, Brazil |
| JEL: | D73 I21 H72 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6634&r=lab |
| By: | Thede, Susanna (Department of Economics, Lund University) |
| Abstract: | We provide a simple model of trade, job task offshoring and social insurance to identify economic mechanisms through which the interplay between insurance design, (final-goods) trade and job task offshoring determine domestic producer conditions. A skill-abundant home country that may have more productive workers relocates low-skill job tasks to a labor-abundant foreign country. Only the home country provides social insurance to its citizens. Using a simple conceptualization of social insurance targeting the main mechanisms through which insurance design impacts on producer conditions, we formalize productivity, wage-restrictive, compensation, cost-enhancing, cost-redistributive and labor-supply effects of insurance. The home country’s labor productivity is superior if the health status of the labor force is improved by health insurance. Generous unemployment insurance trigger binding reservation wages, giving rise to labor-supply effects that lead to a domestic overspecialization of production in trade equilibrium. This tendency is stronger with an insurance design that incorporates a cost-coverage link. Offshoring can introduce, enhance or reduce unemployment in the unskilled labor market depending on a combination of market-related factors and insurance design. In particular, offshoring may give rise to a combination of market-related effects that offset unskilled worker dependency on generous unemployment insurance. An insurance regulation that provides generous unemployment benefits and stipulates cost-redistribution can give rise to a compensation effect through which offshoring generates a high-skill wage reduction. |
| Keywords: | Heckscher-Ohlin; Producer conditions; Labor-market adjustments; Insurance design |
| JEL: | F11 F16 I18 J65 |
| Date: | 2012–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2012_016&r=lab |
| By: | Francesc Dilme (Department of Economics, University of Pennsylvania); Fei Li (Department of Economics, University of Pennsylvania) |
| Abstract: | We present a dynamic signaling model where wasteful education takes place over several periods of time. Workers pay an education cost per unit of time and cannot commit to a fixed education length. Workers face an exogenous dropout risk before graduation. Since low-productivity workers' cost is high, pooling with early dropouts helps them to avoid a high education cost. In equilibrium, low-productivity workers choose to endogenously drop out over time, so the productivity of workers in college increases along the education process. We find that (1) wasteful education signals exist even when job offers are privately made and the length of the period is small, (2) the maximum education length is decreasing in the prior about a worker being highly productive, and (3) the joint dynamics of returns to education and the dropout rate are characterized, which is consistent with previous empirical evidence. |
| Keywords: | Dynamic Education Signaling, Dropout |
| JEL: | D83 J31 |
| Date: | 2012–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:12-023&r=lab |
| By: | Tello, Claudia (University of Barcelona); Ramos, Raul (University of Barcelona); Artís, Manuel (University of Barcelona) |
| Abstract: | This paper conducts an empirical analysis of the relationship between wage inequality, employment structure, and returns to education in urban areas of Mexico during the past two decades (1987-2008). Applying Melly's (2005) quantile regression based decomposition, we find that changes in wage inequality have been driven mainly by variations in educational wage premia. Additionally, we find that changes in employment structure, including occupation and firm size, have played a vital role. This evidence seems to suggest that the changes in wage inequality in urban Mexico cannot be interpreted in terms of a skill-biased change, but rather they are the result of an increasing demand for skills during that period. |
| Keywords: | wage inequality, quantile regressions, decomposition |
| JEL: | J31 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6576&r=lab |
| By: | Michele Gori (Dipartimento di Matematica per le Decisioni, Universita' degli Studi di Firenze); Antonio Villanacci (Dipartimento di Matematica per le Decisioni, Universita' degli Studi di Firenze) |
| Abstract: | The purpose of the paper is to argue that exogenous changes lowering wages may imply an increase of unemployment. To support that viewpoint, we use a general equilibrium approach. In that framework, we substitute the labour market clearing equation, which by very definition insures full employment, with the assumption that wages depend on employment and a variable representing all the other exogenous factors influencing the outcome of wage setting. We assume that an increase of that variable determines a decrease of wage for any given level of employment. We further assume that firms compete strategically in the labour market. After having proved there is a unique equilibrium for each economy, we show that an increase of the above mentioned residual variable may cause in equilibrium a decrease in real wages and wage bill along with an increase in unemployment rates and profits. That result suggests what are the effects of a large variety of policies analyzed in the current debate on the role of labour market institution. |
| Keywords: | unemployment; wage setting function; income distribution; general equilibrium. |
| JEL: | C72 D31 D51 J21 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:flo:wpaper:2012-04&r=lab |
| By: | Wozniak, Abigail (University of Notre Dame) |
| Abstract: | Nearly half of U.S. employers test job applicants and workers for drugs. I use variation in the timing and nature of drug testing regulation to study discrimination against blacks related to perceived drug use. Black employment in the testing sector is suppressed in the absence of testing, consistent with ex ante discrimination on the basis of drug use perceptions. Adoption of pro-testing legislation increases black employment in the testing sector by 7-30% and relative wages by 1.4-13.0%, with the largest shifts among low skilled black men. Results suggest that employers substitute white women for blacks in the absence of testing. |
| Keywords: | employer drug testing, discrimination, black employment, labor market outcome disparities |
| JEL: | J7 J15 K2 K3 M5 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6605&r=lab |
| By: | Paul Beaudry; Ethan Lewis |
| Abstract: | Over the 1980s and 1990s the wage differentials between men and women (with similar observable characteristics) declined significantly. At the same time, the returns to education increased. It has been suggested that these two trends may reflect a common change in the relative price of a skill which is more abundant in both women and more educated workers. In this paper we explore the relevance of this hypothesis by examining the cross-city co-movement in both male-female wage differentials and returns to education over the 1980-2000 period. In parallel to the aggregate pattern, we find that male-female wage differentials at the city levels moved in opposite direction to the changes in the return to education. We also find this relationship to be particularly strong when we isolate data variation which most likely reflects the effect of technological change on relative prices. We take considerable care of controlling for potential selection issues which could bias our interpretation. Overall, our cross-city estimates suggest that most of the aggregate reduction in the male-female wage differential observed over the 1980-2000 period was likely due to a change in the relative price of skill that both females and educated workers have in greater abundance. |
| JEL: | J16 J24 J31 O33 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18159&r=lab |
| By: | Sumon Bhaumik; Ralitza Dimova |
| Abstract: | The stylized literature on foreign direct investment suggests that developing countries should invest in the human capital of their labour force in order to attract foreign direct investment. However, if educational quality in developing country is uncertain such that formal education is a noisy signal of human capital, it might be rational for multinational enterprises to focus more on job-specific training than on formal education of the labour force. Using cross-country data from the textiles and garments industry, we demonstrate that training indeed has greater impact on firm efficiency in developing countries than formal education of the work force. |
| Keywords: | Human capital; Training; Firm-level efficiency; Multinational enterprises |
| JEL: | F23 I25 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2012-1030&r=lab |
| By: | Chan, Gavin (Macquarie University, Sydney); Heaton, Christopher (Macquarie University, Sydney); Tani, Massimiliano (Macquarie University, Sydney) |
| Abstract: | We study whether Australian employers recognise immigrants' education acquired abroad, and if so how. Using data from the Longitudinal Surveys of Immigrants in Australia, we apply interval regression to model migrant hourly earnings. We find substantially higher returns from human capital obtained in Australia and other OECD countries compared with non-OECD countries. These results suggest that the transfer of human capital acquired abroad is mediated by the country in which it was acquired, as found for Israel (Friedberg (2000) and the US (Bratsberg and Ragan (2002)). The results also suggest that immigrants from non-OECD countries are the ones who can gain the most from obtaining further education in Australia, and that targeted rather than generic policies in this area could reduce the extent of the education-occupation mismatch amongst immigrants. |
| Keywords: | immigration, education, economic assimilation |
| JEL: | C34 J24 J61 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6578&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:2012-1027&r=lab |
| By: | Sakellariou, Chris |
| Abstract: | This paper attempts to explore certain aspects underlying the substantial improvement in 8th grade student performance in Ghana on the Trends in International Mathematics and Science Study from2003 to 2007. The improvement was largely heterogeneous; in mathematics, performance improved more for students already performing well, while the opposite was the case for science, where students at the bottom of the score distribution experienced a spectacular increase in science scores. Most of the increase in scores for both mathematics and science is explained by over-time changes in coefficients (and a smaller part by improvements in characteristics). Contributors not accounted for (and therefore captured by changes in the constant) dominate the effects of the coefficients. One potentially important piece of information missing from the Ghana data is whether a school is private or public; this could potentially explain part of the over-time improvement. This is because over the short period between the two surveys, there was a large increase in the number of private schools in Ghana (by 36 percent between 2005/6 and 2007/8). Finally, an analysis of the over-time change in the test score gap by location (between large and small communities) revealed that the gap became more heterogeneous, narrowing for worse performing students and widening for better performing students. |
| Keywords: | Tertiary Education,Education For All,Secondary Education,Teaching and Learning,Primary Education |
| Date: | 2012–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6084&r=lab |
| By: | Javier Vázquez-Grenno (Universitat de Barcelona & IEB) |
| Abstract: | This paper uses Spanish Labor Force Survey data for the period 2005 to 2010 to examine the use of job search methods and the intensity of the job search strategies of unemployed natives and immigrants. We focus on the determinants of the job search methods and search effort. Additionally, we examine the impact of the methods selected and of the search intensity on the job-finding probabilities of native and immigrant groups in a period that covers the transition from economic growth to crisis. Our findings suggest that, irrespective of the job search methods adopted, the probability of employment is higher among immigrants than it is among natives. However, this gap is closed following the onset of the current crisis in 2008. We find that most job search methods have a positive impact on the probability of finding a job, with the exception of registration at a public employment office. Search effort (measured as the number of methods adopted) seems to matter in finding work. |
| Keywords: | Job search methods, search intensity, unemployment, employment, immigration |
| JEL: | J15 J61 J64 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2012/6/doc2012-19&r=lab |
| By: | Hart, Robert; Moro, Mirko; Roberts, Elizabeth |
| Abstract: | Research into socio-economic impacts of the 1944 Education Act in England and Wales has been considerable. We concentrate on its two most fundamental innovations. First, it provided free universal secondary education. Second, state-funded pupils were placed into grammar schools or technical schools or secondary modern schools depending on IQ tests at age 11. The secondary modern school pupils experienced relatively poor educational opportunities. This tripartite system dominated secondary education from 1947 to 1964. For this period, we use the British Household Panel Survey to investigate the influences of date of birth and family background on (a) the probability of attending grammar or technical schools, (b) the attainment of post-school qualifications, (c) the longer-term labour market outcomes as represented by job status and earnings. We link results to research into the effects of increasing the school minimum leaving age from 14 to 15, also introduced under the 1944 Act. |
| Keywords: | 1944 Education Act; date of birth; family background; qualifications; earnings |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2012-10&r=lab |
| By: | Bargain, Olivier (University of Aix-Marseille II); El Badaoui, Eliane (University Paris Ouest-Nanterre); Kwenda, Prudence (University College Dublin); Strobl, Eric (Ecole Polytechnique, Paris); Walsh, Frank (University College Dublin) |
| Abstract: | We develop a model where formal sector firms pay tax and informal ones do not, but informal firms risk incurring the penalty associated with non-compliance. Workers may enter self-employment or search for jobs as employees. Workers with higher managerial skills will run larger firms while workers with lower will manage smaller firms and will be in self-employment only when they cannot find a salary job. For these workers self-employment is a secondary/informal form of employment. The Burdett and Mortensen (1998) equilibrium search model turns out to be a special case that we amend by incorporating taxes and a penalty for non-payment of taxes. Our model is also consistent with some of the empirical literature in that the informal wage penalty does appear to be limited to low wage/skill workers while firm size is an important determinant of the employee formal sector premium. We test theoretical predictions using empirical evidence from Mexico and find that firm size wage effects for employees and self-employed workers are broadly consistent with the model. |
| Keywords: | informality, self-employment, Burdett and Mortensen model |
| JEL: | J31 O17 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6604&r=lab |
| By: | Machin, Stephen (University College London); Marie, Olivier (ROA, Maastricht University); Vujić, Sunčica (University of Bath) |
| Abstract: | We present new evidence on the causal impact of education on crime, by considering a large expansion of the UK post-compulsory education system that occurred in the late 1980s and early 1990s. The education expansion raised education levels across the whole education distribution and, in particular for our analysis, at the bottom end enabling us to develop an instrumental variable strategy to study the crime-education relationship. At the same time as the education expansion, youth crime fell, revealing a significant cross-cohort relationship between crime and education. The causal crime reducing effect of education is estimated to be negative and significant, and considerably bigger in (absolute) magnitude than ordinary least squares estimates. The education boost also significantly impacted other productivity related economic variables (qualification attainment and wages), demonstrating that the incapacitation effect of additional time spent in school is not the sole driver of the results. |
| Keywords: | education expansion, youth crime |
| JEL: | I2 K42 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6582&r=lab |
| By: | Giulia Faggio; Henry G. Overman |
| Abstract: | This paper considers the impact of public sector employment on local labour markets. Using English data at the Local Authority level for 2003 to 2007 we find that public sector employment has no identifiable effect on total private sector employment. However, public sector employment does affect the sectoral composition of the private sector. Specifically, each additional public sector job creates 0.5 jobs in the nontradable sector (construction and services) while crowding out 0.4 jobs in the tradable sector (manufacturing). When using data for a longer time period (1999 to 2007) we find no multiplier effect for nontradables, stronger crowding out for tradables and, consistent with this, crowding out for total private sector employment. |
| Keywords: | Local labour markets, public and private sector employment, wages |
| JEL: | J31 J45 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0111&r=lab |
| By: | Light, Audrey (Ohio State University); McGee, Andrew (Simon Fraser University) |
| Abstract: | We ask whether the role of employer learning in the wage-setting process depends on skill type and skill importance to productivity. Combining data from the NLSY79 with O*NET data, we use Armed Services Vocational Aptitude Battery scores to measure seven distinct types of pre-market skills that employers cannot readily observe, and O*NET importance scores to measure the importance of each skill for the worker's current three-digit occupation. Before bringing importance measures into the analysis, we find evidence of employer learning for each skill type, for college and high school graduates, and for blue and white collar workers. Moreover, we find that the extent of employer learning – which we demonstrate to be directly identified by magnitudes of parameter estimates after simple manipulation of the data – does not vary significantly across skill type or worker type. Once we allow parameters identifying employer learning and screening to vary by skill importance, we find evidence of distinct tradeoffs between learning and screening, and considerable heterogeneity across skill type and skill importance. For some skills, increased importance leads to more screening and less learning; for others, the opposite is true. Our evidence points to heterogeneity in the degree of employer learning that is masked by disaggregation based on schooling attainment or broad occupational categories. |
| Keywords: | employer learning |
| JEL: | J31 D83 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6623&r=lab |
| By: | Duleep, Harriet (College of William and Mary); Sanders, Seth G. (Duke University) |
| Abstract: | In contrast to their relative standing in today's labor market, in 1960 U.S.-born men in all Asian groups earned substantially less than comparable whites. We explore explanations for the wage gap and find that all of the variables that might plausibly account for it, such as Asian/white differences in schooling, labor force participation, entrepreneurial and agricultural employment, English proficiency, enclave activity, and foreign-born parentage, have either no effect or only modest effects on the 1960 wage gap and its subsequent reduction. Our findings suggest that anti-Asian labor market discrimination was the predominate cause of the 1960 wage gap and that most of the 1960 to 1980 improvement in the relative wages of U.S.-born Asian men stemmed from a decline in anti-Asian discrimination. Although much of the policy focus of the civil rights era was directed at reducing discrimination against blacks, our findings suggest a prominent post-Civil Rights Act labor market effect for Asians. If these results hold up to further scrutiny, one interpretation is that the Civil Rights Act and accompanying activities, and/or concomitant changes in societal attitudes, benefited all minorities. |
| Keywords: | anti-discrimination legislation, minority economic progress, Asian Americans, Civil Rights Act |
| JEL: | J48 J71 J78 J15 J18 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6639&r=lab |
| By: | Bohn, Sarah (Public Policy Institute of California); Lofstrom, Magnus (Public Policy Institute of California) |
| Abstract: | We analyze the impact of the 2007 Legal Arizona Workers Act (LAWA) on employment outcomes of low-skilled Arizona workers, with a focus on the states' unauthorized population. The intent of LAWA was to limit unauthorized workers' economic opportunities as a way to deter further illegal immigration and as such is likely to increase poverty among an already marginalized population. Specifically, we assess whether the legislation reduced the formal employment opportunities of the targeted population. We also look for evidence of an unintended consequence of the policy: whether LAWA pushed workers into informal employment, and if so what are the likely consequences for these workers and their families. Using the synthetic control method developed by Abadie, Diamond and Hainmueller (2010), we find no statistically significant pre-post LAWA differences in wage and salary employment rate for the vast majority of workers in Arizona. Only among the workers most likely to be unauthorized – non-citizen Hispanic men with at most a high school education – do we observe a statistically significant relative decline in the probability of wage and salary employment. We also identify a substantial and statistically significant relative increase in the rate of self-employment among the same group of likely unauthorized workers, and not among other groups. Our data suggests that this shift is likely associated with an increase in poverty among unauthorized immigrants. |
| Keywords: | illegal, unauthorized, undocumented, immigration, Hispanic, Arizona |
| JEL: | J8 J11 J15 J18 J48 J61 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6598&r=lab |
| By: | Jan Babecky; Kamil Dybczak |
| Abstract: | This paper presents evidence on the extent of real wage flexibility in 24 EU member countries based on the Eurostat labour cost data covering 2000Q1-2010Q2. The term 'wages' refers, for brevity, to total hourly labour costs and their two main components, namely wages and salaries per hour, and non-wage costs. Following the structural VAR approach, real wage flexibility is measured as the responsiveness of real wages to real (permanent) versus nominal (temporary) shocks. The data shows that the impact of the 2008/2009 crisis on real wage adjustment has not been uniform across the sample countries, with some evidence for an increase in real wage rigidity. A strong negative correlation is observed between our aggregate measure of wage flexibility and both the ESCB Wage Dynamics Network firm-level survey estimates of downward real wage rigidity and the International Wage Flexibility Project microeconomic estimates of downward real wage rigidity. Finally, we find that institutional features of labour markets could help explain the variation in the results across countries; for example, stricter employment protection legislation and stronger presence of unions go hand in hand with higher real wage rigidity. |
| Keywords: | Labour cost indices, real wage rigidity, structural VAR. |
| JEL: | C22 E24 F02 J30 P20 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2012/01&r=lab |
| By: | Dal Bó, Ernesto (University of California, Berkeley); Finan, Frederico S. (University of California, Berkeley); Rossi, Martín A. (Universidad de San Andrés) |
| Abstract: | We study a recent recruitment drive for public sector positions in Mexico. Different salaries were announced randomly across recruitment sites, and job offers were subsequently randomized. Screening relied on exams designed to measure applicants' intellectual ability, personality, and motivation. This allows the first experimental estimates of (i) the role of financial incentives in attracting a larger and more qualified pool of applicants, (ii) the elasticity of the labor supply facing the employer, and (iii) the role of job attributes (distance, attractiveness of the municipal environment) in helping fill vacancies, as well as the role of wages in helping fill positions in less attractive municipalities. A theoretical model guides each stage of the empirical inquiry. We find that higher wages attract more able applicants as measured by their IQ, personality, and proclivity towards public sector work – i.e., we find no evidence of adverse selection effects on motivation; higher wage offers also increased acceptance rates, implying a labor supply elasticity of around 2 and some degree of monopsony power. Distance and worse municipal characteristics strongly decrease acceptance rates but higher wages help bridge the recruitment gap in worse municipalities. |
| Keywords: | state building, state capabilities, state capacity, public sector personnel, bureaucracy, public service motivation, labor markets, wages, elasticity of the labor supply, personality |
| JEL: | H1 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6645&r=lab |
| By: | Viktor Slavtchev (Friedrich-Schiller-University Jena, School of Economics and Business Administration); Stavroula Laspita (Technical University Munich, TUM School of Management, and EBS European Business School, Chair for Entrepreneurship, Strascheg Institute for Innovation and Entrepreneurship (SIIE)); Holger Patzelt (Technical University Munich, TUM School of Management) |
| Abstract: | This study analyzes the impact of entrepreneurship education at universities on the intentions of students to become entrepreneurs or self-employed in the short-term (immediately after graduation) and in the long-term (five years after graduation). A difference-in-differences approach is applied that relates changes in entrepreneurial intentions to changes in the attendance of entrepreneurship classes in the same period. To account for a potential bias due to self-selection into entrepreneurship classes, only individuals having no prior entrepreneurial intentions are analyzed. Our results indicate a stimulating effect of entrepreneurship education on students' intentions to become entrepreneurs or self-employed in the long-term but a discouraging effect on their intentions in the short-term. These results support the conjecture that entrepreneurship education provides more realistic perspectives on what it takes to be an entrepreneur, resulting in 'sorting'. Overall, the results indicate that entrepreneurship education may improve the quality of labor market matches, the allocation of resources and talent, and increase social welfare. Not distinguishing between short- and long-term intentions may lead to misleading conclusions regarding the economic and social impact of entrepreneurship education. |
| Keywords: | entrepreneurship education, university, entrepreneurial intentions, academic entrepreneurship, difference-in-differences approach |
| JEL: | A20 I20 J24 L26 M13 H43 |
| Date: | 2012–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-025&r=lab |
| By: | Anghel, Brindusa; Cabrales, Antonio; Carro, Jesus |
| Abstract: | We evaluate a program that introduced bilingual education in English and Spanish in primary education in some public schools of the Madrid region in 2004. Under this program students not only study English as a foreign language but also some subjects (at least Science, History and Geography) are taught in English. Spanish and Mathematics are taught only in Spanish. The first class receiving full treatment finished Primary education in June 2010 and they took the standardized test for all 6th grade students in Madrid on the skills considered 'indispensable' at that age. This test is our measure of the outcome of primary education to evaluate the program. We have to face a double self-selection problem. One is caused by schools who decide to apply for the program, and a second one caused by students when choosing school. We take several routes to control for these selection problems. The main route to control for self-selected schools is to take advantage of the test being conducted in the same schools before and after the program was implemented in 6th grade. To control for students self-selection we combine the use of several observable characteristics (like parents’ education and occupation) with the fact that most students were already enrolled at the different schools before the program was announced. Our results indicate that there is a clear negative effect on learning the subject taught in English for children whose parents have less than upper secondary education, and no clear effect for anyone on mathematical and reading skills, which were taught in Spanish. |
| Keywords: | Bilingual education; Program evaluation; teaching in English |
| JEL: | H40 I21 I28 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8995&r=lab |
| By: | Bertoni, Marco (University of Padova); Brunello, Giorgio (University of Padova); Rocco, Lorenzo (University of Padova) |
| Abstract: | We use a natural experiment to show that the presence of an external examiner in standardized school tests reduces the proportion of correct answers in monitored classes by 5.5 to 8.5% – depending on the grade and the test – with respect to classes in schools with no external monitor. We find that the effect of external monitoring in a class spills over to other classes in the same school. We argue that the negative effect of external supervision is due to reduced cheating (by students and/or teachers) rather than to distraction from having a stranger in the class. |
| Keywords: | education, testing, external monitoring |
| JEL: | C31 H52 I2 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6629&r=lab |
| By: | Pfeiffer, Friedhelm (ZEW Mannheim); Pohlmeier, Winfried (University of Konstanz) |
| Abstract: | In this paper, human capital investments are evaluated by assuming heterogeneous returns to schooling. We use the potential outcome approach to measure the causal effect of human capital investments on earnings as a continuous treatment effect. Empirical evidence is based on a sample of West German full-time employed males (BIBB/IAB survey on educational and vocational attainment and career 1998/99). Our estimate of the average partial effect (APE) of an additional year of schooling amounts to 8.7%, which is higher than OLS estimates and quite similar to conventional instrumental variable estimates. |
| Keywords: | returns to schooling, human capital, heterogeneity |
| JEL: | J21 J24 J31 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6588&r=lab |
| By: | Maria Manuel Campos; Mário Centeno |
| Abstract: | This paper analyses the evolution of public wages and the public-private wage gaps in the period prior to the adoption of the euro in the countries then engaged on the fulfillment of the Maastricht criteria. The wage gaps are estimated controlling for employees’ observed and unobservable individual attributes, using a novel methodology of fixed effects quantile regressions. The results suggest, on the one hand, a relative moderation in the growth of public sector wages in several European countries in the 1990s. On the other hand, estimates obtainedfor the public-private wage differential imply an increase in the same period in the majority of countries in the sample, with public employees generally becoming more beneficiated vis-à-vis private sector employees with the same observed and unobservable characteristics. Therefore, the fact that European countries were undertaking efforts to comply with the requirements for adopting the single currency does not seem to have contributed to the reduction of the wage premium that the literature has typically associated with public sector employment. It is noteworthy that the countries where the wage differential is higher are Portugal, Ireland, Greece and Spain. This differential is, to a large extent, an actual wage premium associated with the public sector, but self-selection effects determining that the best workers prefer the public sector can not be neglected. Nevertheless, the wage premia tend to be smaller in the case of individuals with higher earnings, making it difficult to attract the more qualified workers to the public sector. This difficulty may be worsened by accross-the-board measures to reduce wages and employees. |
| JEL: | J31 J45 C21 C23 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201201&r=lab |
| By: | Ernesto Dal Bó; Frederico Finan; Martín Rossi |
| Abstract: | We study a recent recruitment drive for public sector positions in Mexico. Different salaries were announced randomly across recruitment sites, and job offers were subsequently randomized. Screening relied on exams designed to measure applicants' intellectual ability, personality, and motivation. This allows the first experimental estimates of (i) the role of financial incentives in attracting a larger and more qualified pool of applicants, (ii) the elasticity of the labor supply facing the employer, and (iii) the role of job attributes (distance, attractiveness of the municipal environment) in helping fill vacancies, as well as the role of wages in helping fill positions in less attractive municipalities. A theoretical model guides each stage of the empirical inquiry. We find that higher wages attract more able applicants as measured by their IQ, personality, and proclivity towards public sector work – i.e., we find no evidence of adverse selection effects on motivation; higher wage offers also increased acceptance rates, implying a labor supply elasticity of around 2 and some degree of monopsony power. Distance and worse municipal characteristics strongly decrease acceptance rates but higher wages help bridge the recruitment gap in worse municipalities. |
| JEL: | H1 J24 J3 J42 J45 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18156&r=lab |
| By: | Guarino, Cassandra (Indiana University); Reckase, Mark D. (Michigan State University); Wooldridge, Jeffrey M. (Michigan State University) |
| Abstract: | We investigate whether commonly used value-added estimation strategies can produce accurate estimates of teacher effects. We estimate teacher effects in simulated student achievement data sets that mimic plausible types of student grouping and teacher assignment scenarios. No one method accurately captures true teacher effects in all scenarios, and the potential for misclassifying teachers as high- or low-performing can be substantial. Misspecifying dynamic relationships can exacerbate estimation problems. However, some estimators are more robust across scenarios and better suited to estimating teacher effects than others. |
| Keywords: | education, teacher labor markets, value-added, student achievement |
| JEL: | I20 J08 J24 J44 J45 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6602&r=lab |
| By: | Ranjan, Priya (University of California, Irvine); Prakash, Nishith (University of Connecticut) |
| Abstract: | This paper assesses the status of education, both quantity and quality, in Bihar in both absolute terms and relative to other states in India. It then performs a regression exercise using a panel data of Indian states to identify the correlates of educational outcomes. It also surveys the broader literature on education policies which provides a perspective on the current policies in the field of education in Bihar. Finally, it makes a case for several policy initiatives that should be accorded priority by the policymakers in Bihar. |
| Keywords: | education, enrollment, out-of-school, Bihar, India |
| JEL: | I2 J31 O15 O22 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6614&r=lab |
| By: | Borcan, Oana (University of Gothenburg); Lindahl, Mikael (Uppsala University); Mitrut, Andreea (Uppsala University) |
| Abstract: | This paper aims to understand how corruption responds to financial incentives and, in particular, it is an attempt to identify the causal impact of a wage loss on the prevalence of corruption in the education sector. Specifically, we exploit the unexpected wage cut in May 2010 that affected all Romanian public sector employees, including the public education staff, and examine its effect on students' scores on the high-stakes national exam which occurs at the end of high school – the Baccalaureate. To exploit the effect of an income shock on corruption, we use a difference-in-difference strategy and compare the change in the exam outcomes between the public schools – the treatment group – and the private schools – the control group, which were unaffected by the wage cut. Our findings suggest that the wage loss led the public schools to have better exam outcomes than the private schools in 2010 relative to 2009. We attribute this difference to the increased involvement in corrupt activities by public school staff, which was driven by financial incentives. These results match an unprecedentedly high number of allegations of fraud and bribery against school principals, which earned the 2010 Baccalaureate the title of the Xeroxed exam – akin to identical test answers found to have been distributed to numerous students. |
| Keywords: | high-stakes tests, bribes, school principals |
| JEL: | I2 H7 J3 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6646&r=lab |
| By: | Jellal , Mohamed; Tarbalouti , Essaid |
| Abstract: | We presented a theory that attempts to explain the stylized fact of the persistence of child labor in developing countries. Our model shows the importance of the role of institutions in explaining the level of education of these countries. These institutions can be formal as the quality of educational governance or informal social norms as incentives for more education. Our main result showed the existence of a strategic complementarity between the formal institution and informal institution which may create a poverty trap.In particular our theoretical model is a conceptual framework for analyzing our preliminary studies in progress on the determinants of child labor in Morocco. |
| Keywords: | formal institution; informal institution; social norm; education; child labor |
| JEL: | I21 Z13 K31 J2 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39384&r=lab |
| By: | Tuukka Toivonen (RIEB, Kobe University (Japan) and Green Templeton College, University of Oxford (UK)); Junya Tsutsui (Graduate School of Sociology, Ritsumeikan University, Japan); Haruka Shibata (Faculty of Policy Studies, Doshisha University, Japan) |
| Abstract: | Not unlike many European societies in the 1970s and 1980s, Japan went through a rapid process of postindustrialization in the 1990s and 2000s. Whilst the implications were wide-ranging, young (would-be) labour market entrants were among the most affected groups: youth unemployment more than doubled, as did the prevalence of non-standard employment. Simultaneously, how to remain in employment and achieve work-life balance became serious concerns for women especially. This article builds on existing research as well as interviews with 38 university students in Kyoto to capture key features of such 'new risks' in Japan. Alongside intriguing gender and class differences, we find that the short- and long-term anxieties many students face have not yet been countered with public policy innovations. Emerging support measures outside the context of the family and the company remain not only inadequate but also largely unknown to students. |
| Keywords: | Youth, Risk, Post-industrialization, University students, Employment, School-to-work transition, Work-life balance |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2012-17&r=lab |
| By: | Martins, Pedro S. (Queen Mary, University of London); Piracha, Matloob (University of Kent); Varejão, José (University of Porto) |
| Abstract: | Using matched employer-employee data, we analyse the impact of immigrants on natives' employment in Portugal. Using different model specifications, we show that the natives and immigrants are 'complements' at most occupation levels, in the sense that they are jointly hired and fired. Controlling for different skill-level groups as well as for temporary and permanent jobs, the estimates show that, contrary to the evidence from some existing literature, the natives at the lower end of the skills spectrum are not affected by the presence of immigrants as well. |
| Keywords: | matched employer-employee data, displacement, immigrants |
| JEL: | J15 J61 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6644&r=lab |
| By: | Borcan, Oana (Department of Economics, School of Business, Economics and Law, Göteborg University); Lindahl, Mikael (Department of Economics, Uppsala University, CESifo); Mitrut, Andreea (Department of Economcis, Uppsala University, UCLS) |
| Abstract: | This paper aims to understand how corruption responds to financial incentives and, in particular, it is an attempt to identify the causal impact of a wage loss on the prevalence of corruption in the education sector. Specifically, we exploit the unexpected wage cut in May 2010 that affected all Romanian public sector employees, including the public education staff, and examine its effect on students’ scores on the high-stakes national exam which occurs at the end of high school—the Baccalaureate. To exploit the effect of an income shock on corruption, we use a difference-in-difference strategy and compare the change in the exam outcomes between the public schools—the treatment group—and the private schools—the control group, which were unaffected by the wage cut. Our findings suggest that the wage loss led the public schools to have better exam outcomes than the private schools in 2010 relative to 2009. We attribute this difference to the increased involvement in corrupt activities by public school staff, which was driven by financial incentives. These results match an unprecedentedly high number of allegations of fraud and bribery against school principals, which earned the 2010 Baccalaureate the title of the Xeroxed exam—akin to identical test answers found to have been distributed to numerous students. |
| Keywords: | school principles; bribes; high-stakes tests |
| JEL: | H75 I20 J31 |
| Date: | 2012–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0535&r=lab |
| By: | Helmut Mahringer (WIFO); Christine Zulehner (WIFO) |
| Abstract: | The availability of affordable institutional child-care is increasingly discussed as an important determinant of the labour force participation of parents, particularly of mothers. This paper examines the impact of child-care costs on the employment rates of mothers with children younger than 15 years. Using data from the 1995 and 2002 Austrian Microcensus, combined with wage information from Austrian tax records, we estimate the impact of net wages and child-care costs on mothers' employment probabilities. In line with theoretical considerations and most of the international sub-literature, we find a negative elasticity of mothers' employment rates to child-care costs as well as positive elasticity with regard to wages. The point estimates for the impact of net-wages and child-care costs are of similar absolute size. Additionally, empirical results indicate that higher family income (without the earned income of the mother) reduces the employment probabilities of mothers. |
| Date: | 2012–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2012:i:429&r=lab |
| By: | Jayanta Sarkar (QUT); Dipanwita Sarkar (QUT) |
| Abstract: | The paper develops a theory of intergenerational persistence of child labour. Using an overlapping generations model with heterogeneous agents, we highlight the interaction between human capital inequality, health and child labour. The intergenerational evolution of human capital distribution is shown to generate multiple equilibria, leading to child-labour traps and polarisation of human capital. The results suggest that public provision of education can lead to perfect equality in the long run, but a ceteris paribus ban on child labour is likely to exacerbate both health and schooling outcomes for the poor. |
| Keywords: | Child labour, Health, Human capital, Inequality, Multiple equilibria, Polarisation |
| JEL: | I1 J2 O1 |
| Date: | 2012–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:qut:auncer:2012_7&r=lab |
| By: | Gregory Kurtzon (U.S. Bureau of Labor Statistics) |
| Abstract: | If higher ability individuals are more likely to attend college and if there is significant ability bias in the college education premium, then a significant portion of the observed complementarity between the college and non-college educated is due to changes in the ability composition of education groups. If college attainment rose to over half the population, this composition e¤ect would reverse, as is illustrated with high school attainment. If there is little ability bias, the ability distribution is nearly degenerate, with the awkward implication that the most productive in- dividuals would earn barely more without a college education than the least. |
| Keywords: | composition effects, ability bias, college attainment |
| JEL: | H52 J31 I21 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:bls:wpaper:ec120050&r=lab |
| By: | Daniel Dias; Carlos Robalo Marques; Fernando Martins |
| Abstract: | <br />This paper uses firm level survey data from Portugal to investigate how firms adjust their labour costs in the presence of wage rigidities. We document that Portuguese firms, besides reducing employment or freezing nominal base wages, also make frequent use of other cost-cutting strategies, like freezing or cutting bonus and other monetary or non-monetary benefits, slowing down or freezing the rate at which promotions are filled, or recruiting new employees at wageslower than those received by the employees that have left the firm. We show that the utilization of these different adjustment strategies is affected by workers’ and firms’ attributes, as well as by some indicators of the economic environment in which firms operate. More importantly, we provide evidence that firms with more flexible base wages are less likely to reduce employment, and that such effect may be significantly strengthened by the availability of alternative labourcost adjustment margins that firms can use in bad times. |
| JEL: | J32 J60 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201212&r=lab |
| By: | Gunseli Berik; Ebru Kongar |
| Abstract: | The recession precipitated by the US financial crisis of 2007 accelerated the convergence of women's and men's employment rates, as men experienced disproportionate job losses and women's entry into the labor force gathered pace. Using the American Time Use Survey (ATUS) data for 2003-10, this study examines whether the recession also occasioned a decline in disparity in unpaid work burdens and provided impetus for overall progress toward equity in the workloads, leisure time, and personal care hours of mothers and fathers. Controlling for the prerecession trends, we find that the recession contributed to the convergence of both paid and unpaid work only during the December 2007-June 2009 period. The combined effect of the recession and the jobless recovery was a move toward equity in the paid work hours of mothers and fathers, a relative increase in the total workload of mothers, and a relative decline in their personal care and leisure time. |
| Keywords: | Economics of Gender; Unemployment; Time Use; Economic Crises |
| JEL: | D13 J16 J22 J64 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_726&r=lab |
| By: | Kuhnen, Camelia M.; Oyer, Paul |
| Abstract: | Drawing on insights from corporate finance and personnel economics, we show that firms consider potential employees using a real options approach, much as they do when making other types of capital investment decisions. Theoretically we find that firms’ hiring decisions are influenced by the uncertainty in workers’ productivity, competition in the labor market, adjustment costs, and redeployability concerns. Firms value probationary employment arrangements that provide the option to learn about the productivity of potential hires before permanent investment occurs. Higher uncertainty and adjustment costs hinder permanent investment and increase the value of the option to learn. Greater competition for workers speeds up firm investment and increases the value of probationary employment. Higher worker redeployability leads to more investment, if firms face sufficiently low competition. We test and confirm these predictions empirically using a novel dataset with detailed recruiting information from the labor market for MBA graduates. |
| Keywords: | investment; hiring; human capital; real options; exploration; MBA labor market |
| JEL: | G31 J44 M51 |
| Date: | 2012–06–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39411&r=lab |
| By: | Thomas Breda; Son Thierry Ly |
| Abstract: | Stereotypes, role models played by teachers and social norms influence girls' academic self-concept and push girls to choose humanities rather than science. Do recruiters reinforce 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 students recruited for a research career in 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 |
| JEL: | I23 J16 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0138&r=lab |
| By: | Susan E. Chen (University of Alabama, Tuscaloosa) |
| Abstract: | Disability is a permanent unexpected shock to labor supply which according to the theory of the added worker effect should induce a large spousal labor supply response. The Disability Insurance (DI) program is designed to mitigate the income lost due to disability. To the extent that it does this, it can crowd out the spousal labor supply response predicted by the added worker effect theory. Using a unique data that matches administrative data combining worker’s earnings histories and disability insurance applications, this study finds that DI crowds out spousal labor force participation by 6 percent and the displacement spans multiple years. The estimated crowd-out effects are also larger for younger wife cohorts and cohorts with particular types of impairments such as musculoskeletal disease. |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:mrr:papers:wp261&r=lab |
| By: | OECD |
| Abstract: | At a time when having more education is increasingly necessary for success in the labour market, how is the talent pool of young higher education graduates changing around the world? According to the OECD’s latest analysis, not only has it exploded over the last decade – it’s likely to grow far larger by the year 2020. <p>As detailed in the new issue of the OECD’s brief series Education Indicators in Focus, by the year 2020, more than 200 million 25-34 year-olds in OECD and G20 countries will have higher education degrees, and 40% of them will be from China and India alone. By contrast, the United States and the European Union countries are expected to account for just over a quarter of young people with higher education degrees in OECD and G20 countries. <p>What’s more, the rapid expansion of higher education in non-OECD G20 countries has significantly altered the distribution of the talent pool among countries. A decade ago, one in six 25-34 year-olds with a higher education degree was from the United States, a similar proportion was from China, 12% came from the Russian Federation, and about 10% each were from Japan and India. But according to OECD estimates, in 2010 China moved to the head of the pack, accounting for 18% of 25-34 year-olds with higher education. The United States followed with 14%, the Russian Federation and India each had 11%, and Japan had 7%. <p>These trends are likely to only intensify further in the years ahead – raising key questions as to how the labour market will absorb the swelling number of better-educated people in the future. <p>Be sure to check your inbox for future issues of Education Indicators in Focus, which each month provides analysis and policy insights into the most pressing issues in education today, using evidence from Education at a Glance, the flagship publication of the OECD’s Indicators of Education Systems (INES) programme. |
| Date: | 2112–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:eduaaf:5-en&r=lab |
| By: | Ghazala Azmat; José Garcia-Montalvo |
| Abstract: | This paper studies the determinants of school choice, focusing on the role of information. We consider how parents’ search efforts and their capacity to process information (i.e., to correctly assess schools) affect the quality of the schools they choose for their children. Using a novel dataset, we are able to identify parents’ awareness of schools in their neighborhood and measure their capacity to rank the quality of the school with respect to the official rankings. We find that parents’ education and wealth are important factors in determining their level of school awareness and information gathering. Moreover, these search efforts have important consequences in terms of the quality of school choice. |
| Keywords: | school choice, education in developing country, information gathering, household behavior |
| JEL: | I21 O12 D1 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:639&r=lab |
| By: | Antman, Francisca M. (University of Colorado, Boulder) |
| Abstract: | Estimation of the causal effect of parental migration on children's educational attainment is complicated by the fact that migrants and non-migrants are likely to differ in unobservable ways that also affect children's educational outcomes. This paper suggests a novel way of addressing this selection problem by looking within the family to exploit variation in siblings' ages at the time of parental migration. The basic assumption underlying the analysis is that parental migration will have no effect on the educational outcomes of children who are at least 20 because they have already completed their educations. Their younger siblings, in contrast, may still be in school, and thus will be affected by the parental migration experience. The results point to a statistically significant positive effect of paternal U.S. migration on education for girls, suggesting that pushing a father's U.S. migration earlier in his daughter's life can lead to an increase in her educational attainment of up to 1 year relative to delaying migration until after she has turned 20. In contrast, paternal domestic migration has no statistically significant effect on educational attainment for girls or boys, suggesting that father absence does not play a major role in determining children's educational outcomes. Instead, these results suggest that the marginal dollars from U.S. migrant remittances appear to enable families to further educate their daughters. Thus, policymakers should view international migration as a potential pathway by which families raise educational attainments of girls in particular. |
| Keywords: | migration, father absence, education, gender |
| JEL: | O15 J12 J13 J16 J24 F22 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6640&r=lab |
| By: | Fei Li (Department of Economics, University of Pennsylvania); Can Tian (Department of Economics, University of Pennsylvania) |
| Abstract: | We consider the impact of job rotation in a directed search model in which firm sizes are endogenously determined and match quality is initially unknown. A large firm benefits from the opportunity of rotating workers so as to partially overcome loss of mismatch. As a result, in the unique symmetric equilibrium, large firms have higher labor productivity and lower separation rates. In contrast to the standard directed search model with multi-vacancy firms, this model can generate a positive correlation between firm size and wage without introducing any ex ante productivity differences or imposing any non-concave production function assumption. |
| Keywords: | Directed Search, Job Rotation, Firm Size and Wage, Firm Size and Labor Productivity |
| JEL: | L11 J31 J64 |
| Date: | 2012–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:12-024&r=lab |
| By: | Jarko Fidrmuc (Zeppelin University Friedrichshafen, CESifo Munich, Institute for Eastern European Studies, Regensburg, Comenius University Bratislava, and Mendel University in Brno); Matus Senaj (National Bank of Slovakia, Research Department) |
| Abstract: | This paper focuses on human capital and housing in Slovakia during the economic reforms of the last two decades. We compare households that entered the labour market before and after the economic reforms in 1990. On the one hand, we study the returns to education in different labour market cohorts using household consumption surveys. On the other hand, we analyse the determinants of housing wealth and its impact on consumption. We show that old cohorts are characterised by lower returns to human capital and consumption levels, but higher housing wealth. Thus, we do not identify a clear pattern of winners and losers from transition. |
| Keywords: | consumption function, housing wealth effect, human capital, survey data |
| JEL: | C31 D12 J24 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:svk:wpaper:1017&r=lab |
| By: | Rita van Deuren (Maastricht School of Management, Maastricht, the Netherlands (deuren@msm.nl)); Sicco C. Santema (Technische Universiteit Delft, Delft, the Netherlands) |
| Abstract: | In recent years the higher education sector (HE) has been influenced by a marketised approach in which students are perceived as customers and in which student satisfaction is used as a measure of educational quality. Demand-driven education can be looked at as one of the consequences of this marketisation. In response to this phenomenon Dutch universities of applied science have designed their undergraduate professional bachelor programs education in majors and minors thereby offering students the possibility to customize their educational program. However, hardly any knowledge is available on minor choices of students. This paper presents the results of a survey looking into decision making variables influencing the minor choice of undergraduate students from a consumer behaviour perspective. Bachelor students from a large university of applied sciences in the Netherlands participated in the survey. Analysis of the data led to the discovery of nine decision making attributes and five sources of information & advice. The learning value of the minor proved to be the most important minor characteristic students take into consideration when selecting a minor. The contribution of the minor to the future career opportunities of the student and to the broadening horizon of the student also proved important when choosing a minor. The same goes for the contribution of the minor to the development of the competences required for the bachelor degree. Students use several sources of information & advice to form an impression of the minor of their choice. The digital information & advice from the department that offers the minor programme is most important in finding out about the relevant minor characteristics. Students use the information that is in the digital minor catalogue and they consult minor-specific websites. Non-digital information & advice seems less important. These results contribute to the theoretical knowledge about minor selection specifically and about student choices in higher education in general. The results of this study can be used by universities of applied sciences in developing the minor portfolio, in providing information and in coaching students. This study is one of the first into minor decision making variables. Further research is needed to test its results and to elaborate on aspects of minor-selection not dealt with in this study. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:msm:wpaper:2012/06&r=lab |
| By: | Menatallah Darrag (Faculty of Management Technology, The German University in Cairo); Dina Mohamed Yousri (Faculty of Management Technology, The German University in Cairo); Ahmed Badreldin (Faculty of Management, University of Marburg, Germany) |
| Abstract: | Academic dishonesty (AD) is an ongoing concern for authorities in higher education, where its importance is manifested in two folds. First, AD negatively affects the integrity and quality of research of individuals and institutions; and secondly it negatively affects the honesty level of the youth with far-reaching consequences for ethics and performance. Although AD is a challenge for all societies, there is strong evidence that developing countries are more prone to suffer from AD than developed countries. This exploratory paper follows similar studies for other countries, addressing the dimension of AD within higher education in Egypt. The results confirm significant levels of AD, with the top practice being to work cooperatively on individually assigned tasks. Interestingly, there are differences between the faculties, but not between public and private institutions. Management students, for example, showed by far the highest willingness to cheat on exams or to plagiarize. |
| Keywords: | Academic dishonesty, higher education, Egypt |
| JEL: | I20 I23 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:guc:wpaper:31&r=lab |
| By: | Najam us Saqib (Pakistan Institute of Development Economics, Islamabad.); G. M. Arif (Pakistan Institute of Development Economics, Islamabad.) |
| Abstract: | Time is an important economic resource that can be spent in a variety of ways. Diverse demands on a person’s time may reach a point where the individual may be categorized as time poor. Time poverty may vary across gender, occupational groups, industries, regions, and income levels. The present study focuses on measurement of time poverty and its incidence among these categories using Time Use Survey (TUS) 2007, the first nationwide time use survey for Pakistan. The results of this study provide some important insights into the phenomenon of time poverty in Pakistan and lead to some interesting conclusions. In the entire TUS sample, the incidence of time poverty is 14 percent. Women are found to be more time poor than men whether they are employed or not. A closer look at time use statistics reveals the reason behind this occurrence. There are certain women-specific activities that they have to perform irrespective of their employment status. This additional time burden plays a key role in making them more time poor. Working women are far more time poor as compared to not working women. Thus, while accepting a job, women have to deal with a major tradeoff between time poverty and monetary poverty. People in certain professions and industries are more time poor as compared to people in other professions and industries. These professions and industries generally require extended hours from the workers, while offering low wage rates. This entails a situation of double jeopardy for the workers who tend to be monetary and time poor at the same time. The close association of time poverty with low income found in this study corroborates this conclusion. In the light of these findings, several policy areas emerge where we need to focus. First thing that needs to be done is to generate awareness about a fair distribution of responsibilities between men and women. Government can also play its part in reducing time poverty by enforce minimum wage laws and mandatory ceiling on work hours in the industries which have high concentration of time poverty. Eradication of monetary poverty can also go a long way in this respect by eliminating the need to work long hours at the lowest wage rate just to survive. Improving education also has significant potential in this regard, as high education is found to be associated with low time poverty. |
| Keywords: | Time Poverty, Gender Disparities, Time Use, SNA Activities, Time Use Survey, Pakistan |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2012:81&r=lab |
| By: | Elisabetta Magnani (School of Economics and ARC Centre for Population Ageing Research, Australian School of Business, University of New South Wales) |
| Abstract: | Training (for workers) and innovation (for workplaces) are not free lunches. From the viewpoint of the firm, training is also highly risky, because there is uncertainty over the size of any future returns from employer-provided training. Stylized facts stress that constraints in achieving preferred working hours have major impacts on job satisfaction. Consequently hour constraints may lead to workers' job mobility and older workers' retirement. Firms internalize the risk of workers' mobility by reducing their training investments in these workers. I contrast this model with a signalling model of hour constraints where, in the face of asymmetric information over workers' quality and reliability, and so over profitability of training, workers may trade present hour constraints (at the current wage), for training (and future wage) opportunities. This set of reasoning implies that, empirically, we should observe a positive correlation between training and hour constraints at the individual level. I use two matched employer-employee datasets, for Australia and Canada respectively, to test the competing empirical implications of these two models for the link between hour constraints and training. The main result of this study is that there is little support for hour constraints as a signal of future reliability and productivity. Rather, hour constrained individuals appear to have less chance to receiving training. This result survives a number of robustness exercises that attempt to control for selection on observables and selection on unobservables that determine the hour constraint outcome. Institutional differences in the retirement funding system, and the differential appeal of outside option (the option of exiting the labour force) in Australia and Canada in the two survey years contribute to explain the different patterns of training and hour constraints older workers face in these two countries. |
| Keywords: | Employer-provided training, hour constraints, older workers, technological change, organizational change |
| JEL: | J1 J2 J6 O3 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:asb:wpaper:201205&r=lab |
| By: | Eliaz, Kfir; Spiegler, Rani |
| Abstract: | We incorporate reference-dependent preferences into a search-and-matching model of the labor market, in which firms have all the bargaining power and productivity follows an AR(1) process. Motivated by Akerlof (1982) and Bewley (1999), we assume that existing workers are willing to exert unobserved, |
| Keywords: | Negative-Reciprocity; Reference-Dependence; Search and Matching; Shimer Puzzle; Social Preferences; Wage Rigidity |
| JEL: | C72 D03 E24 E32 J64 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8997&r=lab |
| By: | Ibarrarán, Pablo (Inter-American Development Bank); Ripani, Laura (Inter-American Development Bank); Taboada, Bibiana (Inter-American Development Bank); Villa, Juan Miguel (University of Manchester); García, Brígida (Universidad Autónoma de Santo Domingo) |
| Abstract: | This paper presents an impact evaluation of a revamped version of the Dominican youth training program Juventud y Empleo. The paper analyzes the impact of the program on traditional labor market outcomes and on outcomes related to youth behavior and life style, expectations about the future and socio-emotional skills. In terms of labor market outcomes, the program has a positive impact on job formality for men of about 17 percent and there is also a seven percent increase in monthly earnings among those employed. However, there are no overall impacts on employment rates. Regarding non-labor market outcomes, the program reduces teenage pregnancy by five percentage points in the treatment group (about 45 percent), which is consistent with an overall increase in youth expectations about the future. The program also has a positive impact on non-cognitive skills as measured by three different scales. Scores improve between 0.08 and 0.16 standard deviations with the program. Although recent progress noted in the literature suggests that socio-emotional skills increase employability and quality of employment, the practical significance of the impacts is unclear, as there is only weak evidence that the life skills measures used are associated to better labor market performance. This is an area of growing interest and relevance that requires further research. |
| Keywords: | impact evaluation, Dominican Republic, youth training programs, labor market outcomes, employment, life skills |
| JEL: | J24 J64 O15 O17 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6617&r=lab |
| By: | Bart Hertveldt; Bernhard Klaus Michel |
| Abstract: | A major concern regarding the consequences of offshoring is about the labour market position of low‐skilled workers. This paper provides evidence for Belgium that offshoring has had a negative impact on the employment share of low‐skilled workers in the manufacturing sector between 1995 and 2007. The main contribution to the fall in the low‐skilled employment share came from materials offshoring to Central and Eastern Europe (21%), followed by business services offshoring (8%). In manufacturing industries with a higher ICT capital intensity the impact of offshoring is smaller. For market services industries, no robust conclusions regarding the impact of offshoring on low‐skilled employment could be drawn. |
| JEL: | J24 F16 |
| Date: | 2012–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:1207&r=lab |
| By: | Stafford, Tess |
| Abstract: | When income eects are small, standard life-cycle models of labor supply predict a positive response in hours worked to increases in remuneration. However, several re- cent studies have found negative wage elasticities, casting doubt on the standard labor supply model. This paper aims to resolve some of this controversy by examining the responsiveness of the daily labor supply of shermen to transitory variations in the wage using rich data from the Florida spiny lobster shery. The data include complete records of all shing trips made by Florida lobster shermen over a twenty-year period and include two measures of effort - hours at sea and, when relevant, number of traps pulled - which makes it possible to look at the intensive labor supply margin in addition to the extensive margin. Results suggest that the wage elasticity of labor supply (par- ticipation) is positive and statistically different from zero, with a range of 1.05 to 1.31 for commercial trappers and 0.76 to 1.82 for commercial divers. Results also suggest that the wage elasticity of hours worked is positive and statistically different from zero, although quite small for trappers. Specifically, the elasticity ranges from 0.06 to 0.09 for trappers and 0.82 to 0.94 for divers. Although I do not specically test a model of reference dependent preferences, these results support the standard neoclassical model of intertemporal substitution. |
| Keywords: | Labor and Human Capital, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare12:124450&r=lab |
| By: | Garduno-Rivera, Rafael; Baylis, Katherine R. |
| Abstract: | This paper studies how the North American Free Trade Agreement (NAFTA) affected income distribution within Mexico given internal migration. In low-skilled labor-abundant developing countries, trade liberalization should theoretically increase the income of low-skilled workers, decreasing income disparity. However, anecdotal evidence indicates that NAFTA increased the gap between rich and poor in Mexico, and empirical evidence is mixed (Chiquiar, 2005; Nicita, 2009; Hanson, 2007). Because trade may affect wages differently across regions within the country, accurate measures of wage effects must incorporate intra-national migration. We specifically consider rural to urban migration and find that working age men with low incomes get a boost from the NAFTA in their wages while NAFTA has a negative effect for those with high incomes. There is a slight increase in migration in the years after NAFTA. We also find that, workers far away from the US-Mexico border earn significantly lower wages in comparison to their counterparts in the border. But this effect diminishes after NAFTA, when tariffs decrease. As a result, we find that in urban areas, trade liberalization has reduced income inequalities among working age men. |
| Keywords: | Income Distribution, Regional Disparities, Trade Liberalization, Internal-Migration, International Relations/Trade, Labor and Human Capital, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124740&r=lab |
| By: | Prifti, Ervin (University of Rome Tor Vergata); Vuri, Daniela (University of Rome Tor Vergata) |
| Abstract: | The aim of this paper is to investigate the effect of Employment Protection Legislation (EPL) on fertility decisions of Italian working women using administrative data. We exploit a reform that introduced in 1990 costs for dismissals unmotivated by a 'fair cause' or 'justified motive' in firms below 15 employees and left firing costs unchanged for bigger firms. We use this quasi-experimental setup to study the hypothesis that increased EPL reduces future job insecurity and positively affects a female worker's proneness to take childbearing decisions. We use a difference in difference (OLS-DID) model to control for possible period-invariant sorting bias and an instrumental variable (IV-DID) model to account for time-varying endogeneity of the treatment status. We find that reduced economic insecurity following a strengthening of the EPL regime has a positive and sizable effect on fertility decisions of Italian working women. This result is robust to a number of checks regarding possible interactions with other policy reforms occurring around 1990, changes in the sample of workers and firms, and use of an alternative set of exclusion restrictions. |
| Keywords: | fertility, employment protection, difference-in-difference, instrumental variables, policy evaluations |
| JEL: | J2 J13 J65 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6608&r=lab |
| By: | Steven D. Levitt; John A. List; Susanne Neckermann; Sally Sadoff |
| Abstract: | A long line of research on behavioral economics has established the importance of factors that are typically absent from the standard economic framework: reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to influence educational performance. Several insights emerge. First, we find that incentives framed as losses have more robust effects than comparable incentives framed as gains. Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older students. Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to underinvestment. For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps. |
| JEL: | C9 C93 H75 I20 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18165&r=lab |
| By: | Del Bono, Emilia (ISER, University of Essex); Pronzato, Chiara (University of Turin) |
| Abstract: | This paper asks whether the availability of breastfeeding facilities at the workplace helps to reconcile breastfeeding and work commitments. Using data from the 2005 UK Infant Feeding Survey, we model the joint probability to return to work and breastfeeding and analyse its association with the availability of breastfeeding facilities. Our findings indicate that the availability of breastfeeding facilities is associated with a higher probability of breastfeeding and a higher probability to return to work by 4 and 6 months after the birth of the child. The latter effects are only found for women with higher levels of education. |
| Keywords: | breastfeeding, cognitive development, child outcomes |
| JEL: | J13 C26 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6619&r=lab |
| By: | Iacob, Constanta; Brabete , Valeriu |
| Abstract: | Option for a knowledge society requires investment in human resources development to encourage employees to acquire new skills and accept occupational mobility. Effective strategies to improve access to learning and training throughout life, in order to eliminate the deficit of competence, shared responsibilities to ensure coordination of public authorities, social partners and individuals with relevant contribution from civil society. The social partners are requested to negotiate measures to improve education and training continue and to increase their resilience. Investing in human resource development and use of their high contribution to competitiveness, to increase quality jobs and avoid job losses. In a society where every individual will be determined by the ability to learn and master fundamental skills. "Learning relationship" will become dominant in the structure of future society and the relationship between universities and professional bodies will become more apparent. |
| Keywords: | initial training; continuing education; practice; universities; professional bodies |
| JEL: | L38 I21 |
| Date: | 2012–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39336&r=lab |
| By: | Manuela Bosch-Princep (Universitat de Barcelona); Daniel Vilalta (Independent Pension Consultant) (Universitat de Barcelona) |
| Abstract: | The aim of this paper is to analyse the effect of the recent Social Security reform on public retirement benefits. The main measures af- fecting the calculation of pensions are: 1) extension of the retirement age from 65 to 67 years, 2) changes in covered earnings of the retirement pension, 3) changes in the weighting factor associated with the number of years of contributions to the system at date of retirement and 4) changes in the early retirement rules. The study distinguishes three group of pensioners and compares be- tween previous pension (benchmark pension) and the pension calculated under the new legislation. The reduction in public retirement benefits ranges between 0% and 16% depending on wages and the number of years of contributions at the time of retirement. |
| Keywords: | social security reforms, public retirement pension |
| JEL: | H55 J62 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2012281&r=lab |
| By: | Cunningham, Rosemary (Agnes Scott College); Zavodny, Madeline (Agnes Scott College) |
| Abstract: | The proportion female in the economics profession in the U.S. has been low historically compared with other disciplines. Although the percentage of Ph.D. degrees awarded to women and the representation of women on faculties have increased over time, economics still lags many other fields. Previous research has documented gender gaps in tenure, promotion and publication, some of which have narrowed over time. This study examines another aspect of women's representation within the economics profession: their participation in a session at the American Economic Association annual meeting. We examine the gender of participants on the program at the 1985-2010 meetings to determine how women's participation at this important venue has changed over the past 25 years. The results show that women's participation has increased over time, particularly since 2002. However, women appear to be underrepresented on the program relative to other measures of their representation in the profession. |
| Keywords: | women in economics, economics profession, academic labor market |
| JEL: | A1 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6597&r=lab |
| By: | Larochelle, Catherine; Alwang, Jeffrey R. |
| Keywords: | Labor and Human Capital, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124838&r=lab |
| By: | Satyajit Chatterjee; Felicia Ionescu |
| Abstract: | Participants in student loan programs must repay loans in full regardless of whether they complete college. But many students who take out a loan do not earn a degree (the dropout rate among college students is between 33 to 50 percent). We examine whether insurance, in the form of loan forgiveness in the event of failure to complete college, can be offered, taking into account moral hazard and adverse selection. To do so, we develop a model that accounts for college enrollment and graduation rates among recent US high school graduates. In our model students may fail to earn a degree because they either fail college or choose to leave voluntarily. We find that if loan forgiveness is offered only when a student fails college, average welfare increases by 2.40 percent (in consumption equivalent units) without much effect on either enrollment or graduation rates. If loan forgiveness is offered against both failure and voluntarily departure, welfare increases by 2.15 percent and both enrollment and graduation are higher. |
| Keywords: | Student loans ; Insurance |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:12-15&r=lab |
| By: | Mikhail Golosov (Department of Economics, Princeton University and NBER); Pricila Maziero (Department of Finance, Wharton School, University of Pennsylvania); Guido Menzio (Department of Economics, University of Pennsylvania) |
| Abstract: | This paper studies the optimal redistribution of income inequality caused by the presence of search and matching frictions in the labor market. We study this problem in the context of a directed search model of the labor market populated by homogenous workers and heterogeneous firms. The optimal redistribution can be attained using a positive unemployment benefit and an increasing and regressive labor income tax. The positive unemployment benefit serves the purpose of lowering the search risk faced by workers. The increasing and regressive labor tax serves the purpose of aligning the cost to the firm of attracting an additional applicant with the value of an application to society. |
| Keywords: | Unemployment benefit, Income tax, Search frictions, Mechanism design |
| JEL: | H21 J64 J65 |
| Date: | 2012–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:12-022&r=lab |
| By: | Mendolicchio, Concetta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Paolini, Dimitri; Pietra, Tito |
| Abstract: | "We consider an economy where production may use labor of two different skill levels. Workers are heterogeneous and, by investing in education, self-select into one of the two skills. Ex-ante, when firms choose their investments in physical capital, they do not know the level of human capital prevailing in the labor market they will be active in. We prove existence and constrained inefficiency of competitive equilibria, which are always characterized by overeducation. An increase in total expected surplus can be obtained by shrinking, at the margin, the set of workers investing in high skill. This can be implemented by imposing taxes on the cost of investing in high skill or by imposing a progressive labor earning tax." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | ökonomische Theorie, Humankapital, Bildungsinvestitionen, Gleichgewichtstheorie |
| JEL: | J24 H2 |
| Date: | 2012–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201214&r=lab |
| By: | Larochelle-Côté, Sébastien<br/> Myles, John F.<br/> Picot, Garnett |
| Abstract: | The financial security of widowed and divorced women during their retirement years has long been a concern. This paper places this issue within the context of research on replacement rates, the extent to which family income during the working years (here, the mid-50s) is "replaced" as individuals move into their late 70s. Using a longitudinal database and fixed-effects econometric models, the paper assesses the effect of widowhood/widowerhood and divorce after age 55 on replacement rates during the retirement years. |
| Keywords: | Seniors, Labour, Wages, salaries and other earnings, Income, pensions and wealth |
| Date: | 2012–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2012343e&r=lab |
| By: | Emma Gorman; Grant M Scobie; Andy Towers (The Treasury) |
| Abstract: | Increasing life expectancies and uncertainty about future retirement incomes are likely to lead to various changes in behaviour. As expectations are revised, one potentially important adjustment mechanism is in labour force participation rates. There is already evidence these are rising for those beyond the age of eligibility for New Zealand Superannuation. This paper uses a new source of longitudinal data on the health, labour force participation and retirement decisions of older New Zealanders. The central question addressed is the extent to which labour force participation of older New Zealanders is influenced by their health status (both mental and physical), in addition to a wide range of economic, social and demographic variables. Discrete choice models are employed, and particular attention is given to the potential effects of unobserved heterogeneity. We find a range of factors to be associated with the decision to retire, notably health status, marital status and financial incentives. After accounting for the confounding influence of unobservables, we find that physical health remains a determinant of labour force exit for older males. Further, we estimate both the marginal and aggregate effects of specific chronic conditions on labour force participation. |
| Keywords: | Labour force participation; Health; Retirement; New Zealand; Longitudinal survey |
| JEL: | J26 J14 J21 I10 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nzt:nztwps:12/02&r=lab |
| By: | Debopam Bhattacharya; Shin Kanaya; Margaret Stevens |
| Abstract: | Selective universities are often accused of unfair admissions practices which favour applicants from specific socioeconomic groups. We develop an empirical framework for testing whether such admissions are academically fair, i.e., they admit students with the highest academic potential. If so, then the expected performance of the marginal admitted candidates - the admissions threshold - should be equalized across socioeconomic groups. We show that such thresholds are nonparametrically identified from standard admissions data if unobserved officers’ heterogeneity affecting admission decisions is median-independent of applicant covariates and the density of past-admits’ conditional expected performance is positive around the admission threshold for each socioeconomic group. Applying these methods to admissions data for a large undergraduate programme at Oxford and using blindly-marked, first-year exam-performance as the outcome of interest, we find that the admission-threshold is about 3.7 percentage-points (0.6 standard-deviations) higher for males than females and about 1.7 percentage-points (0.3 standard-deviations) higher for private-school than state-school applicants. In contrast, average admission-rates are equal across gender and school-type, both before and after controlling for applicants’ background characteristics. |
| Keywords: | University admissions, Academic fairness, Economic efficiency, Marginal admit, Conditional median restriction, Nonparametric identification |
| JEL: | C13 C14 I20 J15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:608&r=lab |
| By: | Jürges, Hendrik (Mannheim Research Institute for the Economics of Aging (MEA)) |
| Abstract: | We use data from the West German 1970 census to explore the link between being born during or shortly after World War II and educational and labor market outcomes 25 years later. We document, for the first time, that men and women born in the relatively short period between November 1945 and May 1946 have significantly and substantially lower educational attainment and occupational status than cohorts born shortly before or after. Several alternative explanations for this new finding are put to test. Most likely, a short but severe spell of quantitative and qualitative malnutrition immediately around the end of the war has impaired intrauterine conditions in first trimester pregnancies and resulted in longterm detriments among the affected cohorts. This conjecture is corroborated by evidence from Austria. |
| JEL: | J24 N34 |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:mea:meawpa:12253&r=lab |
| By: | Wolf, Marianne McGarry; Wolf, Mitch; Frawley, Tom; Torres, Ann; Wolf, Shane |
| Abstract: | This research shows that when faculty in higher education engage their students by using a social media platform that is specially designed for higher education to bring their courses up to date with current information and combine knowledge management with social media the students experience enhanced critical thinking, written communication, and learning by collaborating with classmates. The social platform used for this research is ValuePulse. |
| Keywords: | social media, higher education, ValuePulse, learning enhancements, Teaching/Communication/Extension/Profession, |
| Date: | 2012–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124597&r=lab |
| By: | Paz, Lourenco |
| Abstract: | Several developing countries that underwent trade liberalization experienced changes 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, they also account for more than 30% of the workforce in some countries. In this paper, I develop a theoretical model of the impacts of trade liberalization on labor markets in which domestic and foreign import tariffs affect firms’ payroll tax compliance decisions, which in turn determine the types of jobs (i.e., formal or informal) created. The model is able to replicate several stylized facts such as some small firms hiring formal and informal workers and large firms hiring only formal workers. Moreover, it predicts that a decrease in domestic import tariffs decreases both the share of informal workers and the average formal wage, whereas a decrease in foreign (i.e., trading partner) import tariffs decreases the informality share but increases the average formal wage. The effect on the average informal wage is ambiguous. |
| Keywords: | informal labor markets; trade liberalization; payroll tax evasion |
| JEL: | F16 O17 F12 H26 |
| Date: | 2012–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39545&r=lab |
| By: | Hvide, Hans K. (University of Aberdeen); Kristiansen, Eirik Gaard (Norwegian School of Economics (NHH)) |
| Abstract: | We study how firm-specific complementary assets and intellectual property rights affect the management of knowledge workers. The main results show when a firm will wish to sue workers that leave with innovative ideas, and the effects of complementary assets on wages and on worker initiative. We argue that firms protected weakly by complementary assets must sue leaving workers in order to obtain positive profits. Moreover, firms with more complementary assets pay higher wages and have lower turnover, but the higher pay has a detrimental effect on worker initiative. Finally, our analysis suggests that strengthening firms' property rights protection reduces turnover costs but weakens worker initiative. |
| Keywords: | entrepreneurship, innovation, intellectual property rights, litigation, personnel economics, R&D, start-ups, worker mobility |
| JEL: | J30 J60 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6609&r=lab |
| By: | Ghazala Azmat; Rosa Ferrer Zarzuela |
| 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 has widely-used 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 with respect to both measures. 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 performance gaps have important consequences for gender gaps in earnings. While individual and firm characteristics explain up to 50 percent of earnings gap, the inclusion of performance measures explains most of the remainder. |
| Keywords: | performance measures, gender gaps, lawyers |
| JEL: | M52 J16 K40 J44 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1300&r=lab |
| By: | Francesco Nucci (La Sapienza University of Rome); Alberto Franco Pozzolo (Universita' degli Studi del Molise) |
| 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 firmÕs exposure to sales from exports. Through the expenditure side, a depreciation induces a cut in the firmÕs 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 firmÕs workforce by occupational category.. |
| Keywords: | Exchange Rate, FirmsÕ Foreign Exposure, Wages. |
| JEL: | E24 F16 F31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lui:casmef:1208&r=lab |
| By: | Charles T. Clotfelter; Helen F. Ladd; Jacob L. Vigdor |
| Abstract: | In 2002/03, the Charlotte-Mecklenburg Schools in North Carolina initiated a broad program of accelerating entry into algebra coursework. The proportion of moderately-performing students taking algebra in 8th grade increased from half to 85%, then reverted to baseline levels, in the span of just five years. We use this policy-induced variation to infer the impact of accelerated entry into algebra on student performance in math courses as students progress through high school. Students affected by the acceleration initiative scored significantly lower on end-of-course tests in Algebra I, and were either significantly less likely or no more likely to pass standard follow-up courses, Geometry and Algebra II, on a college-preparatory timetable. Although we also find that the district assigned teachers with weaker qualifications to Algebra I classes in the first year of the acceleration, this reduction in teacher quality accounts for only a small portion of the overall effect. |
| JEL: | I21 J24 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18161&r=lab |
| By: | Mikhail Golosov; Pricila Maziero; Guido Menzio |
| Abstract: | This paper studies the optimal redistribution of income inequality in a model with search and matching frictions in the labor market. We study this problem in the context of a directed search model of the labor market populated by homogeneous workers and heterogeneous firms. The optimal redistribution in this model, which is associated with the constrained efficient allocation, can be attained using a positive unemployment benefit and an increasing and regressive labor income tax. The positive unemployment benefit serves the purpose of lowering the search risk faced by workers. The increasing and regressive labor tax serves the purpose of aligning the cost to the firm of attracting an additional applicant with the value of an application to society. |
| JEL: | H21 J64 J65 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18151&r=lab |
| By: | Alex Bryson; John Forth; Minghai Zhou |
| Abstract: | Using panel data for all of China's public listed firms over the period 2001-2010 we examine how firms have recruited and rewarded their executives over a decade of huge growth and turbulence. CEO pay is sensitive to firm performance, although the elasticities are lower than for the United States and Europe, especially with respect to returns on assets (ROA). CEO pay rises with firm size and growth, with elasticities resembling those for the United States. We find no dramatic response to the stock market crash of 2007/08. The elasticity of pay to stock returns falls to zero after the crash, while elasticities with respect to sales and ROA remain significant. Executive cash compensation rose steeply throughout the period - in contrast to the United States. There are steep gradients in executive compensation within firms, consistent with tournament prizes, and around two-thirds of CEO appointments are internal promotions. Within-firm executive compensation rose at a faster rate than executive compensation across firms, helping to explain why CEO turnover rates declined a little over the decade. Turnover rates did not spike with the stock market crash. Privatisation and reforms to corporate governance contributed to growth in executive compensation. A picture emerges of an executive labour market in which firms are linking pay to performance and relying on incentive structures within firms to foster executive talent. |
| Keywords: | executive compensation, CEOs, corporate governance, tournaments, firm-specific human capital, China |
| JEL: | G34 J31 J33 M12 M52 O16 P31 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1148&r=lab |
| By: | Oguzoglu, Umut (University of Manitoba) |
| Abstract: | Canadian disability policy has come a long way in the past century. However, in contrast with the evidence that disability is not permanent for most, current disability support programs still carry the old static view of permanent disability. By employing a dynamic panel data model of labour force participation, the findings of this paper suggest that labour force exposure is crucial for better return-to-work outcomes for persons with a disability. Without labour force exposure, the effect of a temporary disability is prolonged and participation efforts of the disabled community are slowed down. |
| Keywords: | disability, labour force participation, dynamic panel data models |
| JEL: | J14 J21 C23 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6603&r=lab |
| By: | John K. Dagsvik, Zhiyang Jia, Tom Kornstad and Thor O. Thoresen (Statistics Norway) |
| Abstract: | Models of labor supply derived from stochastic utility representations and discretized sets of feasible hours of work have gained popularity because they are more practical than standard approaches based on marginal calculus. In this paper we argue that practicality is not the only feature that can be addressed by means of stochastic choice theory. This theory also offers a powerful framework for developing a more realistic model for labor supply choices, founded on individuals having preferences over jobs and facing restrictions on the choice of jobs and hours of work. We discuss and clarify how this modeling framework deviates from both the conventional discrete approach (van Soest, 1995), as well as the standard textbook approach based on marginal calculus (Hausman, 1985). We furthermore discuss how the model based on job choice offers the possibility of conducting a richer set of simulations of alternative policies. |
| Keywords: | Labor supply; Random utility models; Tax reforms |
| JEL: | C51 J22 H24 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:692&r=lab |
| By: | Mário Centeno; Álvaro A. Novo |
| Abstract: | Portuguese firms engage in intense reallocation, most employers simultaneously hire and separate from workers, resulting in high excess worker turnover flows. These flows are constrained by the employment protection gap between open-ended and fixed-term contracts. We explore a reform that increased the employment protection of open-ended contracts and generated a quasi-experiment. The causal evidence points to an increase in the share and in the excess turnover of fixed-term contracts in treated rms. The excess turnover of open-ended contracts remained unchanged. This result is consistent with a high degree of substitution between open-ended and fixed-term contracts. At the firm level, we also show that excess turnover is quite heterogeneous and quantify its association with firm, match, and worker characteristics. |
| JEL: | J21 J23 J63 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201205&r=lab |
| By: | Hamermesh, Daniel S. (University of Texas at Austin) |
| Abstract: | Using several microeconomic data sets from the United States and the Netherlands, and the examples of height and beauty, this study examines whether: 1) Absolute or relative differences in a characteristic are what affect labor-market and other outcomes; and 2) The effects of a characteristic change when all agents acquire more of it – become taller or better-looking. Confronted with a choice among individuals, decision-makers respond more to absolute than to relative differences among them. Also, an increase in the mean of a characteristic's distribution does not alter market responses to differences in it. |
| Keywords: | beauty, height, discrimination, market responses |
| JEL: | J71 J78 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6579&r=lab |
| By: | Mario Liebensteiner |
| Abstract: | In recent years, a new trend of seasonal labour migration from Armenia to Russia has emerged. Based on a novel household survey, this paper analyses how successful seasonal migrants are in increasing their incomes. Applying matching operators allows addressing endogenous self-selection to migration. We identify negative selection based on education, employment and pre-migration income. This is reflected by a premium for low skills in Russia relative to Armenia, luring seasonal migrants into low-skill jobs, mainly in the construction sector. The income gain for a migrant is estimated at $ 480 relative to the approximately $ 50 that the same individual would have earned in Armenia. The results are robust to various matching techniques and specifications. |
| Date: | 2012–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2012:i:430&r=lab |
| By: | Jellal , Mohamed |
| Abstract: | In this paper, we introduce firm heterogeneity in the context of a model of non-compliance with minimum wage legislation. The introduction of heterogeneity in the ease with which firms can be monitored for non compliance allows us to show that non-compliance will persist in sectors which are relatively difficult to monitor, despite the government implementing non stochastic monitoring. Moreover, we show that the incentive not to comply is an increasing function of the level of the minimum wage and increasing function of the gap between the minimum wage and the competitive wage rate |
| Keywords: | Minimum wage legislation; Employment ; Informal sector in LDCs ; Government Policy |
| JEL: | J8 O17 J3 K31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39499&r=lab |
| By: | Grossmann, Volker (University of Fribourg); Stadelmann, David (University of Fribourg) |
| Abstract: | This paper argues that international migration of high-skilled workers triggers productivity effects at the macro level such that the wage rate of skilled workers may rise in host countries and decline in source countries. We exploit a recent data set on international bilateral migration flows and provide evidence which is consistent with this hypothesis. We propose different instrumentation strategies to identify the causal effect of skilled migration on log differences of GDP per capita, total factor productivity, and wages of skilled workers between pairs of source and destination countries. These address the endogeneity problem which potentially arises when international wage differences affect migration decisions. |
| Keywords: | international high-skilled migration, wage effects, total factor productivity |
| JEL: | F22 O30 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6611&r=lab |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Alina Rusakova (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | Drawing on representative household data from the German Socio-Economic Panel, we examine the role of an early precursor of entrepreneurial development - parental role models - for the individual decision to become self-employed in the post-unified Germany. The findings suggest that the socialist regime significantly damaged this mechanism of an intergenerational transmission of entrepreneurial attitudes among East Germans with a tertiary degree that have experienced a particularly strong ideological indoctrination. However, we find a significant and positive relationship between the presence of a parental role model and the decision to become self-employed for less-educated people. For West Germans the positive relationship holds irrespective of the level of education. |
| Keywords: | Entrepreneurship, parental role models, human capital |
| JEL: | L26 Z1 D03 |
| Date: | 2012–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-022&r=lab |
| By: | Costas Meghir; Mårten Palme; Marieke Schnabel |
| Abstract: | The intergenerational transmission of human capital and the extent to which policy interventions can affect it is an issue of importance. Policies are often evaluated on either short term outcomes or just in terms of their effect on individuals directly targeted. If such policies shift outcomes across generations their benefits may be much larger than originally thought. We provide evidence on the intergenerational impact of policy by showing that educational reform in Sweden reduced crime rates of the targeted generation and their children by comparable amounts. We attribute these outcomes to improved family resources and to better parenting. |
| JEL: | I24 J1 J18 J24 J62 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18145&r=lab |
| By: | Heckman, James J. (University of Chicago); Kautz, Tim (University of Chicago) |
| Abstract: | This paper summarizes recent evidence on what achievement tests measure; how achievement tests relate to other measures of "cognitive ability" like IQ and grades; the important skills that achievement tests miss or mismeasure, and how much these skills matter in life. Achievement tests miss, or perhaps more accurately, do not adequately capture, soft skills – personality traits, goals, motivations, and preferences that are valued in the labor market, in school, and in many other domains. The larger message of this paper is that soft skills predict success in life, that they causally produce that success, and that programs that enhance soft skills have an important place in an effective portfolio of public policies. |
| Keywords: | personality, achievement tests, IQ, cognition |
| JEL: | I20 D01 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6580&r=lab |
| By: | David Cuberes (Department of Economics, The University of Sheffield); Marc Teignier (Department of Economics, University of Alicante) |
| Abstract: | The gaps between male and female outcomes and opportunities are present in several different dimensions and many countries, especially in developing ones. These gaps are likely to result in lower aggregate productivity because of an inefficient use of women potential. In this paper we examine the quantitative effects of gender gaps in entrepreneurship and labor force participation on aggregate income. To do the analysis, we first present a simple theoretical framework illustrating the negative impact of gender gaps on resource allocation and aggregate labor productivity. We then calibrate and simulate the model to study the quantitative effects of gender inequality. We show that gender gaps in entrepreneurship have important effects on aggregate productivity and labor force gender gaps on income per capita. Specifically, our model predicts that if all women are excluded from entrepreneurship, average output per worker drops by more than 10% and wages fall by even more, while if all women are excluded from the labor force, income per capita falls by almost 40%. Our cross-country analysis shows that gender gaps and income losses are quite similar across income groups but differ importantly across geographical regions, with a total income loss of 27% in Middle East and North Africa, a 23% loss in South Asia, and a loss of around 15% in the rest of the world. |
| Keywords: | gender inequality; entrepreneurial talent; factor allocation; aggregate productivity |
| JEL: | E2 O40 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2012017&r=lab |
| By: | Guerriero, Marta (University of Manchester); Sen, Kunal (University of Manchester) |
| Abstract: | Recent evidence on functional income distribution suggests that the shares of capital and labour in national income vary considerably both over time and across countries. Specifically, there seems to be a general reduction in the labour share around the world, in particular from the mid-1980s onwards. Using fixed effects regression methods on a panel dataset covering 89 countries – both developing and developed – over the period 1970-2009, this study examines the mechanisms underlying the variability in the labour share. In particular, it focuses on the relationships between the labour share and measures of international trade and technological change. The results are robust across different specifications, for yearly data as well as 3- and 5-year averages, and after performing instrumental variable estimation. They suggest that trade openness and technological innovation have a positive and significant effect on the labour share. However, Foreign Direct Investments inflows and mechanisation seem to be negative drivers. Moreover, other factors, such as the level of economic development, education, and the strength of the regulations in the labour market, seem to also significantly influence functional distribution of income. |
| Keywords: | labour share of income, functional income distribution, globalisation, technological progress |
| JEL: | E25 F16 J30 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6643&r=lab |
| By: | Takeuchi, Nobuyuki |
| Abstract: | We reconsider the effect of economic development on urban unemployment by introducing households with non-homothetic preferences into a sector-specific capital version of the Harris-Todaro model. Contrary to previous studies, this work shows that, while urban development reduces urban unemployment, rural development expands it. As for labor growth, it normally increases urban unemployment. |
| Keywords: | sector-specific capital; Harris-Todaro model; economic development; non-homothetic preference; urban unemployment |
| JEL: | O10 J60 O15 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39378&r=lab |
| By: | Eric Schneider (History Faculty and Nuffield College, University of Oxford, UK) |
| Abstract: | This paper uses demographic data drawn from Wrigley et al.’s (1997) family reconstitutions of 26 English parishes to adjust Allen’s (2001) real wages to the changing demography of early modern England. Using parity progression ratios (a fertility measure) and age specific mortality for children and parents, model families are predicted in two reference periods 1650-1700 and 1750-1800. These models yield two levels of interesting results. At the individual family level, we can measure how different families’ real wages changed over the family life cycle as additional children were born. At the aggregate level, we can predict thousands of families using Monte Carlo simulation, creating a realistic distribution of median family real wages in the economy. There are two main findings. First, pregnancy and lactation do not create cyclical effects in the family’s income. Instead, most families’ welfare ratios decline steadily across the family life cycle until children begin to leave the household, increasing the welfare ratios. Second, Allen’s real wages understate or match the median of the predicted demography-adjusted distributions. |
| Date: | 2012–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:esohwp:_099&r=lab |
| By: | Gong, Xiaodong (NATSEM, University of Canberra); Breunig, Robert (Australian National University) |
| Abstract: | We evaluate price subsidies and tax credits for child care. We focus on partnered women's labor supply, household income and welfare, demand for formal and informal child care and government expenditure. Using Australian data, we estimate a joint, discrete structural model of labor supply and child care demand. We introduce two methodological innovations: a quantity constraint that total formal and informal child care hours is at least as large as the mother's labor supply and child care explicitly included in the utility function as a proxy for child development. We find that tax credits are better than subsidies in terms of increasing average hours worked and household income. However, tax credits disproportionately benefit wealthier and more educated women. Price subsidies, while less efficient, have positive re-distributional effects. |
| Keywords: | child care, labor supply, elasticities, discrete choice model |
| JEL: | C15 C35 J22 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6606&r=lab |
| By: | Bashir, Saima; Herath, Janaranjana; Gebremedhin, Tesfa |
| Abstract: | Investment in education to increase economic growth, as one form of human development, has gained economists‟ and policy makers‟ interest. It establishes human capital that makes a substantial contribution to economic and income growth and preserves returns in the form of skilled labor which leads to increased development and improved quality of life. Different theories and models have used to examine the relationship between education and economic growth. Most of them paid attention to human capital accumulation as source of acceleration in economic growth. Some of them used human capital as an engine of economic growth to technological change. But for human accumulation, a country should invest more on education. Thus, the main objective of the study is to analyze higher education growth and economic growth in West Virginia. A set of simultaneous equations with three endogenous variables of per capita income change, education change and population change was used for the analysis. Results indicate that income growth and education growth are positively related while education growth reduces population growth in West Virginia. |
| Keywords: | Higher Education, Income, Growth, West Virginia, Community/Rural/Urban Development, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea12:124829&r=lab |
| By: | Mann, Stefan; Wüstemann, Henry |
| Abstract: | Work and labour describe activities with a redistributional and a reproductive component. In addition, the terms have gained the function of creating social status and self-esteem. This paper argues that the shifts on the labour market during the past decades question both the redistributive and the reproductive functions of labour. An increasing number of activities are taking place both in paid and unpaid settings simultaneously. And the productivity of employed persons, particularly in the growing management sector, is increasingly difficult to judge. Moreover, the strong social esteem of paid work has led to economic misjudgements, inefficient political measures and consequences for our individual well-being. While it would be helpful to speak of paid and unpaid activities instead of labour, it is likely that the term will continue to be used due to its esteem-generating function. |
| Keywords: | labor; redistributional/reproductive function; paid work; unpaid work |
| JEL: | B52 J00 J20 |
| Date: | 2012–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39401&r=lab |
| By: | Vincenzo Galasso (CEPRA, Institute of Economics, Universita' della Svizzera Italiana); Paola Profeta (Econpubblica, Bocconi University, Milan) |
| Abstract: | We study how the prevailing internal organization of the family affected the initial design of pension systems. Our theoretical framework predicts that, in society with weak family ties, pensions systems were introduced to act as a safety net, while in societies with strong ties they replicate the tight link between generations by providing generous benefits. Using a historical classification of family ties, we show that in societies dominated by (weak ties) absolute nuclear families (f.i. Anglo-Saxon countries), safety net pension systems emerged; and viceversa in societies dominated by strong families. These results are robust to controlling for alternative legal, religious, and political explanations. Evidence on individual data confirm these findings: US citizens whose ancestors came from countries featuring strong ties (communitarian or egalitarian nuclear) families prefer to rely on the government as a provider of old age security through generous retirement benefits. |
| Keywords: | culture; family ties, pension design |
| JEL: | Z10 Z13 N30 H10 H55 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wcepra:1201&r=lab |
| By: | Christa N. Brunnschweiler (Norwegian University of Science and Technology, Norway and OxCarre, University of Oxford, U.K.); Colin Jennings (University of Strathclyde, U.K.); Ian A. MacKenzie (ETH Zurich, Switzerland) |
| Abstract: | In this paper we challenge the conventional view that strikes are caused by asymmetric information regarding firm profitability such that union members are uninformed. Instead, we build an expressive model of strikes where the perception of unfairness provides the expressive benefit of voting for a strike. The model predicts that larger union size increases both wage offers and the incidence of strikes. Furthermore, while asymmetric information is still important in causing strikes, we find that it is the employer who is not fully informed about the level of emotionality within the union, thereby contributing to strike incidence. An empirical test using UK data provides support for the predictions. In particular, union size has a positive effect on the incidence of strikes and other industrial actions even when asymmetric information regarding profitability is controlled for. |
| Keywords: | strikes, expressive voting |
| JEL: | D03 D72 J52 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:12-162&r=lab |
| By: | Eugenio Severin; Claudia Peirano; Denise Falck |
| Abstract: | The use of technologies within educational settings has become a priority for governments of developing countries. Investment in Technologies for Education (TEd), which has the goal of improving the quality of education and making it relevant to 21st century realities, has grown steadily during the past decade. However, efforts involving the evaluation of such projects have been inadequate thus far. The evaluation of educational technology projects is critically important, since it allows us to learn from the experience of carrying out such programs while providing vital information on expected results. The present document is intended for those who design, implement, and make decisions with respect to TEd. Its purpose is to foster the development of increasingly rigorous monitoring and evaluation processes that in turn lead to richer experiences that are more focused, effective, and sustainable. |
| Keywords: | Education, educational technology, conceptual framework, education policy, indicators, reforms and initiatives, learning impact, educational resources, infrastructure |
| JEL: | I20 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:72598&r=lab |
| By: | Suresh Naidu |
| Abstract: | This paper estimates the political and economic effects of the 19th century disenfranchisement of black citizens in the U.S. South. Using adjacent county-pairs that straddle state boundaries, I examine the effect of voting restrictions on political competition, public goods, and factor markets. I find that poll taxes and literacy tests each lowered overall electoral turnout by 8-22% and increased the Democratic vote share in elections by 1-7%. Employing newly collected data on schooling inputs, I show that disenfranchisement reduced the teacher-child ratio in black schools by 10-23%, with no significant effects on white teacher-child ratios. I develop a model of suffrage restriction and redistribution in a 2-factor economy with migration and agricultural production to generate sufficient statistics for welfare analysis of the incidence of black disenfranchisement. Consistent with the model, disenfranchised counties experienced a 3.5% increase in farm values per acre, despite a 4% fall in the black population. The estimated factor market responses suggest that black labor bore a collective loss from disenfranchisement equivalent to at least 15% of annual income, with landowners experiencing a 12% gain. |
| JEL: | H7 N11 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18129&r=lab |
| By: | Joelle H. Fong (ARC Centre of Excellence in Population Ageing Research, Australian School of Business, University of New South Wales); John Piggott (ARC Centre of Excellence in Population Ageing Research, Australian School of Business, University of New South Wales); Michael Sherris (School of Risk and Actuarial Studies and ARC Centre of Excellence in Population Ageing Research, Australian School of Business, University of New South Wales) |
| Abstract: | This paper assesses the cost and risk faced by public sector, defined benefit plan providers arising from uncertain mortality, including longevity selection, mortality improvements, and unexpected systematic shocks. Using longitudinal micro data on Australian pensioners, we quantify the extent of longevity selection at both aggregate and scheme level. We also show that as the age-membership structure in a pension scheme matures, scheme-specific longevity selection risk and systematic shocks become quantitatively more important and have larger consequences for plan liabilities than aggregate selection risk or the impact of mortality improvements. |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:asb:wpaper:201217&r=lab |
| By: | Ghazala Azmat; Marc Möller |
| Abstract: | Do the contests with the largest prizes attract the most able contestants? Do contestants avoid competition? In this paper we show that the distribution of abilities plays a crucial role in determining contest choice. Positive sorting exist only when the proportion of high ability contestants is sufficiently small. As this proportion increases, contestants shy away from competition and sorting decreases. Eventually, contests with smaller prizes attract stronger participants, i.e. there exists negative sorting. We test our theoretical predictions using a large panel data set containing contest choice over three decades. We use exogenous variation in the participation of highly able competitors to provide empirical evidence for the relationship between prizes and sorting. |
| Keywords: | contests, prize structure, ability, sorting |
| JEL: | D82 M52 D02 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1298&r=lab |